White House Attempt to Freeze Federal Funds Sows Confusion

On January 27, the White House Office of Management and Budget (OMB) issued a memo ordering federal agencies to temporarily freeze outgoing federal dollars, pending a review of those funds for compliance with recent Executive Orders. The memo exempted “assistance provided to individuals” as well as Medicare and Social Security, but this conflicted with subsequent OMB instructions, which directed agencies to review initiatives that would fall within those categories, such as Medicare enrollment assistance and critical supports like nutrition and housing aid. Medicaid was also implicated, and states reported being locked out of their systems, unable to access funds.

Acknowledging the chaos and confusion, OMB issued a Q&A document that attempted to clarify and walk back the initial memo, noting “any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause.”

Federal Judge Blocked Funding Freeze

While this did little to quell the widespread concern about the memo’s reach, a federal judge temporarily blocked the funding freeze on Tuesday, minutes before it was set to take effect. OMB responded by rescinding the memo yesterday. This is a welcome reprieve. The administration’s effort to intercept funding already promised to states, businesses, nonprofits, and communities across the country would have damaged local economies, disrupted health and social service systems, and imperiled access to needed care.

Confusion Persists as White House Shifts Strategy

However, the rescission is likely a shift in strategy rather than direction. The White House is not expected to abandon its goal of capturing federal funding authorities historically—and legally—reserved for Congress, and other efforts to pause or redirect federal dollars through Executive Order are still underway. Looking ahead, the funding landscape will remain under threat, and uncertain.