White House Rescinds Federal Aid Freeze In Michigan

MICHIGAN —A federal aid freeze announced this week by the Trump Administration has been rescinded, multiple sources are reporting Wednesday afternoon.

CNN reported that it has obtained a memo from a Trump administration official communicating that the freeze is rescinded.

The New York Times also reported the freeze was rescinded, citing two sources familiar with the matter.

The move comes after a federal judge in Washington, D.C. temporarily blocked the freeze on Tuesday afternoon, delaying it by one week and setting a hearing for Monday, NBC reported.

“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” Matthew Vaeth, the acting director of the Office of Management and Budget, wrote in a memo late Monday.

The White House had offered few details about the scope of the freeze. While the full effect on Michigan programs is unclear, Trump administration officials clarified Tuesday that programs that provide direct assistance to Americans would not be affected, such as Medicare, Medicaid, Social Security, student loans and food stamps. They also defended the funding pause, saying Trump was following through on his promise to turn Washington upside down if elected to a second term.

Democrats and independent organizations questioned the legality of the Republican administration’s funding freeze, characterizing it as capricious and illegal because Congress had already authorized the funding.

Court battles were imminent Tuesday, and Democratic New York Attorney General Letitia James planned to ask a Manhattan federal court to block the Republican president’s moves, calling it an “unconstitutional pause on federal funding.”

“More lawlessness and chaos in America as Donald Trump’s Administration blatantly disobeys the law by holding up virtually all vital funds that support programs in every community across the country," Senate Minority Leader Chuck Schumer, a Democrat from New York, said in a statement. “If this continues, the American people will pay an awful price.”

The grants help people “in red states and blue states, support families, help parents raise kids, and lead to stronger communities,” Schumer said, adding that “it will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities.”

Despite Trump saying Medicaid would not be affected, Michigan Attorney General Dana Nessel said the funding freeze would affect several services across the state, including Medicaid and Head Start.

"We hear and share your direct and dire concerns," Nessel said. "My team is working at full speed today to discern what these orders mean and the extent of their immediate impacts, and request an immediate legal remedy to restore funding provided by Congress, require this administration to comply with the law, and to stop this absurd and unprecedented attack on these programs."

Nessel closed saying her office plans to take legal action to protect the programs and restore their services.

The pause was to take effect at 5 p.m. ET Tuesday, and it was unclear from the memo how sweeping it would be. Vaeth said that all spending must comply with Trump's executive orders, which are intended to undo progressive steps on transgender rights, environmental justice and diversity, equity and inclusion, or DEI, efforts.

Vaeth wrote that “each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders.”

Washington is a hub of spending that flows to various departments, local governments, nonprofits and contractors, and the memo left countless people who are dependent on that money wondering how they would be affected.

The pause is the latest example of how Trump is harnessing his power over the federal system to advance his conservative goals. Unlike during his first term, when Trump and many members of his inner circle were unfamiliar with Washington, this time he's reaching deep into the bureaucracy.

“They are pushing the president’s agenda from the bottom up," said Paul Light, an expert on the federal government and professor emeritus of public service at New York University.

He also said there are risks in Trump's approach, especially with so many voters reliant on Washington.

“You can’t just hassle, hassle, hassle. You’ve got to deliver.”

“Are you stopping NIH cancer trials?” Sen. Amy Klobuchar, a Democrat from Minnesota, wrote on social media, referring to the National Institutes of Health.

Sen. Patty Murray of Washington and Rep. Rose DeLauro of Connecticut, the top Democrats on the Senate and House appropriations committees, expressed “extreme alarm” in a letter to Vaeth.

"This Administration’s actions will have far-reaching consequences for nearly all federal programs and activities, putting the financial security of our families, our national security, and the success of our country at risk," they wrote.

The Associated Press contributed reporting.