White House Rescinds Federal Aid Freeze In MN

MINNESOTA — A federal aid freeze announced this week by the Trump Administration has been rescinded, multiple sources are reporting Wednesday afternoon.

CNN reported that it has obtained a memo from a Trump administration official communicating that the freeze is rescinded.

The New York Times also reported the freeze was rescinded, citing two sources familiar with the matter.

On Tuesday, a federal judge had temporarily blocked the plan to halt the distribution of trillions of dollars in federal grants and loans until a hearing could be held Monday morning.

Before that, the funding freeze had already begun to impact Minnesota, with some cities in the Second District reporting delays in grants meant to support local law enforcement and public safety.

"We have received word from two #MN02 cities that they have been notified by DOJ that their COPS grants to local law enforcement have been put on hold," Second District Democratic Rep. Angie Craig said on social media.

"Withholding critical funding approved by Congress to hire police officers makes #MN02 communities less safe."

On a national level, Jeff Stein of The Washington Post reported on issues with the Medicaid payment system.

Gov. Tim Walz weighed in on the freeze, stating: "President Trump has just shut off funding for law enforcement, farmers, schools, veterans, and health care. Minnesota will do what we can to keep the lights on, but we cannot fill the nearly $2 billion hole this will put in the state budget’s each month. I do not believe this decision was constitutional and we will work diligently to reverse it, but we are preparing for every eventual outcome to help Minnesotans weather this storm."

Walz said he has reached out to Trump and his supporters in Congress seeking answers, but he does not yet understand the intent of the "unprecedented decision, nor we do know the extent to which it will impact our state."

"Shutting off this funding will have a devastating impact on peoples’ lives – from cancer patients, to securing our prisons," Walz added. "President Trump is leaving states out in the cold without any guidance or explanation. Minnesota needs answers. We will see President Trump in court."

The White House provided limited details about the extent of the freeze.

“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.

While the full effect on Minnesota programs is unclear, the memo said Medicare and Social Security benefits were unaffected by the pause.

But it’s unclear if Medicaid, food stamps, disaster assistance and other programs were affected. Even grants that have been awarded but not spent were supposed to be halted.

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

Court battles are imminent, and Democratic New York Attorney General Letitia James plans 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.”

The pause takes effect at 4 p.m. CT Tuesday, and it's unclear from the memo how sweeping it will 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 has left countless people who are dependent on that money wondering how they will 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.