White House backtracks on spending freeze, but pause on energy programs remains

The Trump administration on Jan. 29 retracted a memo implementing a broad freeze on federal spending programs after a US judge temporarily blocked the move amid claims that the White House policy was illegal.

However, White House Press Secretary Karoline Leavitt clarified on social media that President Donald Trump's executive order pausing new spending under the Inflation Reduction Act and Infrastructure Investment and Jobs Act for at least 90 days remains "in full force and effect."

In a one-page memo to the heads of federal agencies, Matthew Vaeth, acting director of the White House Office of Management and Budget (OMB), said a Jan. 27 memo establishing the broader spending freeze "is rescinded."

The rescinded OMB memo sparked widespread confusion earlier this week by directing federal agencies to pause grant and loan disbursements for programs, including clean energy initiatives, implicated by executive orders signed shortly after Trump took office. The memo ordered agencies to report on potentially affected programs by Feb. 10.

Twenty-three blue state attorneys general and a coalition led by a national nonprofit organization immediately filed separate lawsuits in the US District Court for the District of Columbia challenging the spending freeze. Judge Loren AliKhan issued a temporary restraining order Jan. 28 in response to the nonprofit group's suit to give the parties more time for expedited briefing.

The nonprofit coalition and attorneys general both argued in their initial complaints that the OMB directive violated the Administrative Procedure Act by failing to provide a reasoned basis for pausing potentially trillions of dollars in federal grant and loan disbursements.

The OMB's Jan. 27 memo "fails even to acknowledge the catastrophic practical consequences that an immediate, across-the-board freeze on federal grant programs will produce," the nonprofit groups said.

Leavitt wrote on social media that the OMB memo was rescinded "to end any confusion" created by AliKhan's injunction.

Sen. Patty Murray (D-Wash.), vice chair of the Senate Appropriations Committee, warned in a Jan. 29 statement that Senate Republicans still appear to be "intent" on confirming OMB director-nominee Russell Vought, who was acting OMB director in the first Trump administration.

Vought, one of the chief architects of the Project 2025 conservative policy blueprint, has argued that the Impoundment Control Act of 1974 — a law intended to limit a president's ability to withhold federal funding — is unconstitutional.

"This fight is far from over," Murray said.