Trump administration rescinds pause in federal spending

Author(s):

Richard Payerchin

Key Takeaways

The White House rescinded a spending pause that affected programs like Medicaid, following a federal judge's intervention.
The initial directive led to confusion and criticism, with concerns about Medicaid funding and accusations of an illegal power grab.
The rescission aimed to clarify federal policy amid court rulings, while the president's executive orders remain in effect.
Mandatory benefits, such as Medicaid, were confirmed to continue without pause, ensuring uninterrupted access to essential services.

President’s priorities are not changing, and there was to be no pause to Medicaid and some other spending programs, White House says.

medicaid website view: © Postmodern Studio - stock.adobe.com

The White House has rescinded a federal spending pause that caused confusion about the flow of money to various programs around the country, including Medicaid.

A two-sentence memo rescinded the Jan. 27 memo from White House Office of Management and Budget (OMB) Acting Director Matthew J. Vaeth. Earlier this week, he said 5 p.m. Jan. 28 would be the time “federal agencies must temporarily pause all activities related to obligation or disbursement of all federal financial assistance,” including but not limited to foreign aid, nongovernmental organizations, diversity, equity and inclusion, “woke gender ideology,” and the green new deal. President Donald Trump campaigned on boosting American strength and safety, fighting inflation, unleashing American energy and manufacturing, Making America Healthy Again, and more, Vaeth wrote.

The order and deadline set off a flurry of questions about funding for services including Medicaid. Lawmakers reported states no longer had access to their Medicaid portals, although it was unclear how physician reimbursement could have been affected. Democratic lawmakers also loaded social media with criticisms and claims of an illegal power grab by the president.

That directive was blocked by a federal judge until at least Feb. 3, and on Jan. 29, it was rescinded, according to reports by Politico and CNN. Those news outlets reported obtaining copies of the follow-up OMB memo.

“OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel,” the memo said, referring to the earlier memorandum’s formal title, according to CNN.

Politico noted it contained no other details on the updated direction. That outlet reported White House Press Secretary Karoline Leavitt issued a statement that the budget office pulled the memo “to end any confusion on federal policy created by the court ruling and the dishonest media coverage.” But Politico reported she said the president’s more narrowly tailored executive orders “remain in full force and effect and effect and will be rigorously implemented by all agencies and departments.”

The second memo was prompted by the court case, not any change in the president’s priorities, Leavitt said the afternoon of Jan. 29 in a post on social media site X, formerly Twitter.

“This is NOT a rescission of the federal funding freeze. 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.”

On Jan. 28, the White House published “Online Q&A Regarding Memorandum M-25-13,” stating specifically that mandatory benefits including Medicaid would continue without pause.

“Q: Why was this pause necessary?

“A: To act as faithful stewards of taxpayer money, new administrations must review federal programs to ensure that they are being executed in accordance with the law and the new president’s policies,” the White House explanation said.

The Hill also reported Leavitt issued a longer statement arguing the second memo should end the court case that was prompted by the Jan. 27 memo.