Rescinded funding freeze memo 'just a taste' of chaos Vought would unleash: critics

The confusion and chaos triggered earlier this week by the Trump administration's federal funding freeze were compounded Wednesday when the Office of Management and Budget issued a new memo rescinding the previous announcement.

Shortly after White House Press Secretary Karoline Leavitt stated that the OMB had rescinded only the memo—not the funding freeze—in an effort to "end any confusion created by" a federal court's injunction blocking the directive, U.S. Rep. Alexandria Ocasio-Cortez (D-NY) said one thing was clear.

"No responsible senator of any party should vote to confirm [Russell] Vought to OMB," said the congresswoman.

The original order, which said all federal grants and loans would be halted starting at 5 p.m. ET Tuesday and which resulted in Medicaid payment portals being shut down across the country, and its subsequent rescission, offered "just a taste of the chaos Russ Vought would unleash," added Ocasio-Cortez, urging Americans to demand that their senators vote against President Donald Trump's nominee for OMB director.

Rep. Brendan Boyle (D-PA) echoed Ocasio-Cortez, saying the attempt to freeze federal grants was "straight out of Project 2025, the far-right blueprint crafted by Russell Vought."

Vought, who led the OMB during Trump's first term, is a co-author of the Heritage Foundation-led Project 2025, which calls for the president to "ignore laws that safeguard Congress' constitutional power of the purse," said Boyle.

That was what Monday evening's order did, critics have said this week, when it called for federal agencies to conduct a "comprehensive analysis" of their spending to ensure the use of grants and loans comply with Trump's executive orders, including those banning diversity, equity, and inclusion (DEI) initiatives and denying that transgender people exist.

Leavitt refused to answer a question at a press briefing Tuesday regarding whether the directive would impact Medicaid—but before the briefing was over, Democratic lawmakers said that payment portals for the healthcare program for low-income households and people with disabilities had been disabled due to the OMB memo.

Head Start early childhood education programs also saw an immediate impact, and Democrats warned that clinical trials could promptly be canceled without funding.

As Democratic lawmakers vowed to fight the administration's freeze and some called for the Senate Budget Committee to halt consideration of Vought's nomination on Tuesday, nonprofit groups and businesses filed a legal challenge, leading U.S. District Judge Loren AliKhan in the District of Columbia to grant a "brief administrative stay" directing the OMB not to freeze funds until a hearing scheduled for February 3.

Democrats and progressive advocates were briefly elated Wednesday afternoon when the OMB announced it was rescinding the previous memo—but Leavitt's subsequent comments soon added to the confusion over whether or not programs such as Meals on Wheels and Medicaid would be able to continue operating.

"In light of the injunction, OMB has rescinded the memo to end any confusion on federal policy created by the court ruling and the dishonest media coverage," said Leavitt. "The executive orders issued by the president on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments. This action should effectively end the court case and allow the government to focus on enforcing the president's orders on controlling federal spending. In the coming weeks and months, more executive action will continue to end the egregious waste of federal funding."

Mike Ollen, senior political adviser to Democratic Illinois Gov. JB Pritzker, who spoke out vehemently against the funding freeze on Tuesday, said the White House had been "clear as mud" about how Americans would be impacted by president's executive orders.

"Kick elderly folks off of Meals on Wheels, kick kids off of their healthcare, and then rescind the memo detailing it but not the policy itself," said Ollen. "Great work all around."

Bobby Kogan, senior director of federal budget policy for the Center for American Progress, said the rescission of the memo was "a profoundly welcome step," but noted that it's clear the White House is moving forward with "other illegal impoundments," including foreign assistance, Inflation Reduction Act, and Infrastructure Investment and Jobs Act funds.

"This won't be the last time they try to override the will of the American people," said Boyle. "Even now, the White House is still withholding funding that was approved on a bipartisan basis—including critical infrastructure investments. We must remain vigilant—because Trump and his far-right allies will continue to try and put programs that millions of middle-class families rely on at risk."