Trump administration rescinds freeze on federal grants, ending spending feud with Congress

WASHINGTON − The Trump administration rescinded a freeze Wednesday on federal grants and loans after setting off a firestorm in Congress and at least two lawsuits disputing who controls spending priorities, according to White House press secretary Karoline Leavitt.

The Office of Management and Budget aimed to review grants and loans to ensure they complied with his priorities, which lawmakers and legal experts blasted as unconstitutional, Leavitt told reporters on Tuesday.

But congressional Democrats insisted the Constitution gives Congress the power to control spending decisions. A federal judge on Tuesday had temporarily blocked the Trump administration policy.

In a statement to reporters on Wednesday, Leavitt said “in light of the injunction” OMB is pulling back its memo “to end any confusion on federal policy created by the court ruling and the dishonest media coverage.”

Trump’s other executive orders on federal funding issued since Inauguration Day will “remain in full force and effect and will be rigorously implemented by all agencies and departments,” Leavitt added.

“This action should effectively end the court case and allow the government to focus on enforcing the President’s orders on controlling federal spending. In the coming weeks and months, more executive action will continue to end the egregious waste of federal funding,” Leavitt said.

The Trump administration’s decision came shortly before a federal judge in Rhode Island was set to consider a request by 22 mostly Democratic-led states and the District of Columbia for a temporary restraining order blocking a policy that they said could have a devastating effect on their budgets.

Chief U.S. District Judge John McConnell in Providence could have issued an opinion that was longer in duration than the temporary pause U.S. District Judge Loren AliKhan imposed on Tuesday in a separate case brought by a group of nonprofits in Washington, D.C.

On Capitol Hill, top Republicans and Democrats both endorsed the Trump White House’s move.

“While it is not unusual for incoming administrations to review federal programs and policies, this memo was overreaching and created unnecessary confusion and consternation,” said Sen. Susan Collins, R-Maine, the chairwoman of the Appropriations Committee.

Collins’ Democratic counterpart on the powerful Senate panel, Sen. Patty Murray of Washington, called the Trump administration’s decision “an important victory for the American people.”

“Still, the Trump administration − through a combination of sheer incompetence, cruel intentions, and a willful disregard of the law − caused real harm and chaos for millions over the span of the last 48 hours which is still ongoing,” Murray said in a statement.

Senate Minority Leader Chuck Schumer, D-N.Y., said the Trump White House’s reversal should justify withdrawing Russell Vought’s nomination to head the Office of Management and Budget. A hearing on Vought’s nomination is scheduled Thursday.

“Americans fought back and Donald Trump backed off,” Schumer said in a statement. “Now Donald Trump needs to rescind Russell Vought’s nomination.”

Skye Perryman, CEO of Democracy Forward, which led the legal challenge to the policy for nonprofits, health agencies and small businesses, said millions of people can “breathe a sigh of relief.”

The Department of Veterans Affairs announced late Tuesday that all its grant, loan and financial assistance programs were approved to continue under a White House memo that threatened to halt the aid.

“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,” Perryman said.

In the meantime, the department said it determined 44 financial assistance programs would continue uninterrupted even if the memo is reinstated.

“This will have no impact on VA health care, benefits or beneficiaries,” Veterans Affairs Acting Secretary Todd Hunter said in a statement. USA Today