White House rescinds federal funds freeze memo – NBC New York

• The White House formally rescinded a controversial memo that had ordered a freeze on federal grants and loans.
• The freeze, which had been set to take effect late Tuesday afternoon, was paused Tuesday by a federal judge to give her time to consider arguments challenging its legality.
• The memo ordering the freeze had been issued by the Office of Management and Budget.

The White House on Wednesday formally rescinded a controversial memo that had ordered a freeze on federal grants and loans to give agencies time to review programs for their compliance with President Donald Trump‘s agenda, NBC News reported.

The freeze, which had been set to take effect late Tuesday afternoon, was paused by a federal judge until Monday to give her time to consider arguments by nonprofit groups challenging its legality.

The memo ordering the freeze had been issued by the Office of Management and Budget. It immediately sparked confusion about which programs would be affected and was suspected of causing Medicaid reimbursement portals to go offline for all 50 states on Tuesday.

Acting OMB Director Matthew Vaeth, in a new memo issued Wednesday, wrote, “OMB Memorandum M-25-13 is rescinded. If you have any questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”

NBC News obtained Vaeth’s new memo from a source. A senior administration official confirmed to NBC that the original OMB memo is rescinded, and said that additional guidance is to come.

CNBC has requested comment from OMB.

Senate Minority Leader Chuck Schumer, D-N.Y., told reporters Wednesday, “As you know, Donald Trump just rescinded his horrible OMB freeze,” and called on Trump to “rescind Russell Vought’s nomination” for director of OMB.

“Russell Vought is the chief cook and bottle washer,” Schumer said. “We believe they’ll come back and try to do this in other ways. Russell Vought sat in my office and said he was going to do it.”

“We don’t believe they’ll stop,” Schumer said. “This has been their goal, to hurt what they’re basically doing is being lawless, to hurt families, to help their billionaire friends. And so they’re going to keep at it. We’re going to keep at it. I don’t think this would have happened except for the outcry throughout America.”

Skye Perryman, CEO of Democracy Forward, the advocacy group handling the lawsuit for the nonprofits challenging the original memo, credited that suit and the judge’s stay of the freeze for leading the Trump administration to abandon the funding freeze.

“We are proud of our courageous clients — who represent communities across the nation — for going to court to stop the administration’s unlawful actions,” said Perryman.

 “While we hope this will enable millions of people in communities across the country to breathe a sigh of relief, we condemn the Trump-Vance administration’s harmful and callous approach of unleashing chaos and harm on the American people,” Perryman said.

– CNBC’s Kevin Breuninger contributed to this article.

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