Update: White House Press Secretary Karoline Leavitt posted on X (formerly Twitter) that the White House has rescinded the Office of Management and Budget’s memo about the freeze, not the freeze itself.

“This is NOT a rescission of the federal funding freeze,” she posted. “It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.”

The White House Office of Management and Budget rescinded a freeze on federal grants and loans Wednesday following two lawsuits and outcries from affected organizations.

After ordering a pause on all federal grants and loans on Monday, the office rescinded that order Wednesday, according to The Hill. 

The order had called for federal agencies to perform a “comprehensive analysis” to ensure that funded programs complied with President Trump’s executive orders, including federal bans on diversity, equity and inclusion initiatives and limits on clean-energy spending. 

The OMB announcement created uncertainty about which programs would be affected, as well as chaos, after state Medicaid programs reported they were blocked from accessing federal payment portals.

The Trump administration came in with the goal of trimming the federal budget, attorney Matt Murer said during a Wednesday webinar by the Polsinelli law firm. Murer, who chairs the firm’s public policy and government investigations department, said that healthcare providers need to proactively think about their revenue streams and how they’re going to protect them going forward.

Before the announcement that the federal funding freeze had been rescinded, Ryan Thurber, a Polsinelli shareholder, said he would not be surprised if such an announcement was made. But he cautioned that it remains clear that a review of federal spending is a priority in the new administration and that the administration “clearly” already has a list of programs that it wants to review.

“Just because this approach didn’t work out the way they intended doesn’t mean they won’t try another,” Thurber said, emphasising that organizations need to inventory their federal funding streams and understand how any changes are going to affect their organizations. “Even if this round is over, the match is not,” he said.

After securing a stay on the funding freeze on Tuesday, Democracy Forward President and CEO Skye Perryman issued a statement saying the group was “proud of our courageous clients” for going to court to “stop the administration’s unlawful actions.”

“While we hope this will enable millions of people in communities across the country to breathe a sigh of relief, we condemn the Trump-Vance administration’s harmful and callous approach of unleashing chaos and harm on the American people,” Perryman said in a statement. “Our team will continue to bring swift legal actions to protect the American people and will use the legal process to ensure that federal funding is restored.”