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The Trump administration on Wednesday rescinded a budget memo that would have frozen money flowing to grant programs, including those going to schools.
However, a White House spokeswoman said on X that withdrawing the memo does not mean that federal funding will be restored.
“This is NOT a rescission of the federal funding freeze,” Karoline Leavitt posted. “It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.”
Asked about the issue at a press conference Wednesday, Leavitt said the pause “means no more funding for illegal DEI programs. It means no more funding for the Green New Scam that has cost American taxpayers tens of billions of dollars. It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies.”
That leaves significant confusion about how grants will be affected going forward. The White House did not immediately respond to a request for clarification.
On his first day in office, President Donald Trump signed executive orders to withhold funding from all diversity, equity, and inclusion programs, as well as those that acknowledge gender identity or transgender people. Those orders remain in effect.
The stated purpose of the budget memo, issued Monday by the Office of Management and Budget, was to stop money from going out while officials looked for evidence of programs that were not aligned with administration directives within existing grant programs. That would include programs that had elements of what the memo called “Marxist equity, transgenderism, and green new deal social engineering policies.”
The order carried widespread implications for schools and child care providers, as well as education research and nonprofits whose work supports education and vulnerable children and families. Federal grants support everything from charter school startup costs to trainings for teachers and parents to emergency response programs.
The wording of the order also sparked widespread confusion about its scope. Multiple states reported that Head Start payment portals were frozen Tuesday morning, preventing preschool providers from accessing money they need for daily operations. Later in the day, the administration clarified that the order was not intended to include Head Start or large formula grant programs such as Title I, which sends billions of dollars to high-poverty schools.
Legal experts also said the order was illegal, violating laws that govern when and how presidents can decide not to spend money authorized by Congress.
Several states and organizations filed lawsuits against the order. A federal judge issued a temporary order late Tuesday blocking the freeze from going into effect.
The two-sentence memo rescinding the order instructs agency directors to consult with their general counsel if they have questions about implementing executive orders.
Other Trump executive orders remain in effect.
The memo rescinding the first budget memo was shared by Democracy Forward, the advocacy group whose lawsuit led to the temporary injunction. Democracy Forward brought the lawsuit on behalf of the National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and SAGE, a group that advocates for LGBTQ elders.
“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,” Democracy Forward President and CEO Skye Perryman said in a statement.
A separate lawsuit was brought by a coalition of Democratic state attorneys general.
This is a developing story and will be updated.
Erica Meltzer is Chalkbeat’s national editor based in Colorado. Contact Erica at emeltzer@chalkbeat.org.
