The Trump administration rescinded on January 29 a memo issued by the Office of Management and Budget (OMB) calling for a funding freeze on thousands of federal programs, pending review by the administration. The OMB memo, released January 27, followed a controversial Executive Order (EO) from President Trump requiring all federal agencies to “temporarily pause all activities related to…disbursement of all Federal financial assistance, and other relevant agency activities.”
The withdrawal of the OMB memo was thanks to the quick and enormous pressure advocates and congressional champions put on the administration and to the work of organizations and the Attorneys General in 22 states and D.C., who swiftly brought legal challenges to OMB’s sweeping directive and demanded a temporary restraining order (TRO) be put in place. If allowed to proceed, the memo would have allowed the Trump administration to freeze funding that had already been approved by Congress for thousands of federal programs, including all of HUD’s vital affordable housing, homelessness, and community development programs. The White House later clarified that “direct assistance” programs, and specifically Section 8 rental assistance, would not be impacted; however, funding for other HUD programs, like the HOME Investment Partnership Program, which in some cases is used for rental assistance, would have been frozen. Other programs that provide funding for housing construction, affordable housing preservation, and the needs of people experiencing homelessness would have also been frozen.
In response to the lawsuits, a federal judge issued a temporary pause on implementation of OMB’s memo on January 28; this pause was slated to last until February 3, pending further review of the directive. With the memo rescinded, lawyers with the U.S. Department of Justice are arguing that the pending lawsuits against the memo should be considered irrelevant. However, a statement from White House Press Secretary Karoline Leavitt declaring the White House was not issuing “a rescission of the federal funding freeze” but rather a “recession of the OMB memo” created further confusion. A U.S. District Court Judge ordered the plaintiffs in the lawsuit to file a revised request that would expand the temporary restraining order to include any attempt to freeze federal funding, rather than focusing on the now-rescinded OMB memo specifically.
The Trump administration is expected to continue pursuing policies that would withhold congressionally approved funding for various programs and argues that while the OMB memo was rescinded, freezing funds related to diversity, equity, and inclusion initiatives, foreign aid, immigration assistance, and clean energy projects will continue.