White House cancels spending freeze that threatened chaos

Donald Trump's administration last night withdrew a memorandum that caused widespread disruption by freezing all federal loan and grant spending, but a White House spokesperson insisted they were not backing down from their fight to curb what they regard as government waste.

- Chris Stein

In a brief memo, the White House Office of Management and Budget (OMB) said it rescinded a policy announced on Monday that temporarily paused trillions of dollars in government support for everything from social services to security programmes, in Trump's first policy reversal since taking office last week.

A federal judge temporarily blocked the order on Tuesday, but only after it had thrown into question whether the government would continue honouring its obligations to pay for an array of programmes, including the health insurance for disabled and low-income Americans provided by Medicaid.

However, the White House press secretary, Karoline Leavitt, attempted to downplay the OMB's move. "This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo," Leavitt wrote on X.

"Why? To end any confusion created by the court's injunction. The President's EOs [executive orders] on federal funding remain in full force and effect, and will be rigorously implemented."