White House rescinds federal funds freeze memo

The White House on Wednesday formally rescinded a controversial memo that had ordered a freeze on federal grants and loans to give agencies time to review programs for their compliance with President Donald Trump‘s agenda, NBC News reported.

The freeze, which had been set to take effect late Tuesday afternoon, was paused Tuesday by a federal judge to give her time to consider arguments by nonprofit groups challenging its legality.

The memo ordering the freeze had been issued by the Office of Management and Budget. It immediately sparked confusion about which programs would be affected and was suspected of causing Medicaid reimbursement portals to go offline for all 50 states on Tuesday.

Acting OMB Director Matthew Vaeth, in a new memo issued Wednesday, wrote, “OMB Memorandum M-25-13 is rescinded. If you have any questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”

NBC News obtained Vaeth’s new memo from a serious. A senior administration official confirmed to NBC that the original OMB memo is rescinded, and said that additional guidance is to come.

CNBC has requested comment from OMB.

– CNBC’s Kevin Breuninger contributed to this article.

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