Trump Administration Quietly Reverses Federal Grant Freeze After Judge’s Block

Washington, D.C. – The Trump administration has quietly withdrawn its controversial order to freeze all federal grants and loans just one day after a federal judge temporarily blocked the move. The decision to backtrack came amid mounting legal challenges from state attorneys general and advocacy groups, who argued that the freeze would have caused widespread economic and social disruption.

Democratic attorneys general from 22 states, along with the District of Columbia, spearheaded the legal fight against the measure, which had sent shockwaves through state agencies, public health organizations, and small businesses. The abrupt policy shift, issued late Tuesday, led to confusion and uncertainty before the Office of Management and Budget (OMB) rescinded the order in a brief two-sentence memo on Wednesday.

“OMB Memorandum M-25-13 is rescinded,” the memo, signed by acting director Matthew Vaeth, simply stated. “If you have any questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”

The initial freeze, which was part of a broader set of executive actions issued in the administration’s opening days, faced immediate backlash. Many organizations that rely on federal funding were left scrambling to determine how the order would affect their operations, prompting a wave of lawsuits seeking urgent judicial intervention.

The legal battle culminated in a ruling by U.S. District Judge Loren AliKhan, who blocked the funding freeze just hours before it was set to take effect. AliKhan’s order ensured that federal agencies, state governments, and nonprofit groups would continue to receive funding as allocated by Congress, averting what some officials feared could have been a financial crisis in key sectors.

The Trump administration’s swift reversal highlights the intense scrutiny and legal resistance facing its early policy moves. While the White House has yet to comment on its decision to withdraw the order, critics argue that the administration’s aggressive approach to executive authority is already facing serious legal roadblocks.

Legal experts say the episode underscores the limits of presidential power when it comes to federal funding, which is controlled by Congress. The administration’s willingness to walk back the order suggests a recognition that prolonged legal battles could weaken its broader agenda.

Despite this setback, Trump’s team has signaled that more executive actions are forthcoming, with insiders suggesting that further attempts to reshape federal funding priorities could be on the horizon. However, after this early legal defeat, opponents are prepared to challenge future moves in the courts, setting the stage for continued battles over the administration’s policies.

With the freeze lifted, agencies and organizations affected by the original order have resumed normal operations, but the brief financial turmoil has left many wondering what other policy shifts could come next.