The Trump administration on Wednesday rescinded a blatantly unlawful federal aid shutdown, which threatened everything from government health care programs to food stamps, veteran resources, and more.
Matthew Vaeth, acting director of the Office of Management and Budget (OMB), issued a two-sentence memo Wednesday, saying that the federal funding shutdown “is rescinded.”
“If you have questions about implementing the President’s executive orders, please contact your agency general counsel,” the memo said.
The shutdown was already temporarily blocked by a federal judge after a group of nonprofits sued the administration, saying the move was unlawful since the funding had already been appropriated by Congress, and the administration did not have the authority to unilaterally withhold it.
As the lawsuit said:
The Memo fails to explain the source of OMB’s purported legal authority to gut every grant program in the federal government; it fails to consider the reliance interest of the many grant recipients, including those to whom money had already been promised; and it announces a policy of targeting grant recipients based in part on those recipients’ First Amendment rights and with no bearing on the recipients’ eligibility to receive federal funds.
Backlash to the initial funding shutdown was fierce, with everyone from GOP governors to organizations like Meals on Wheels, Head Start, and charities that assist unhoused veterans expressing concerns that the funding halt would prevent them from providing critical services.
The fate of Medicaid—a government-run health insurance program that serves more than 72 million Americans—was also hanging in the balance, with reports that state-run Medicaid portals went down after the funding shutdown was issued.
Democrats hammered Republicans for the shutdown and threatened to shut down votes in the Senate until it was lifted.
As criticism mounted, the Trump administration first tried to claim that the shutdown only applied to diversity, equity, and inclusion (DEI) programs, which was a lie.
White House Press secretary Karoline Leavitt was then peppered with questions from reporters during her first daily briefing about the pause, and she had no idea whether programs like Medicaid were impacted.
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Leavitt was later asked what the administration had to say to groups like Meals on Wheels that were worried about making payroll during the shutdown.
Leavitt said that groups who feel they are deserving of funding should call Trump’s nominee to lead OMB, Russ Vought, and make their case—even though the groups were already legally guaranteed to receive the funding as appropriated by Congress.
“The line to his office is open for federal government agencies across the board, and if they feel that programs are necessary and in line with the president’s agenda, then the Office of Management and Budget will review those policies,” she said.
Asked how organizations that rely on federal funding should make payroll, Trump Press Secretary Karoline Leavitt says they should call Russ Vought and make a case— Aaron Rupar (@atrupar.com) 2025-01-28T18:26:15.345Z
When backlash continued to mount, the Trump administration then blamed the media for the public fear about losing access to critical services.
“Welcome to the first dumb media hoax of 2025. OMB ordered a review of funding to NGOs, foreign governments and large discretionary contracts. It explicitly excluded all aid and benefit programs. Leftwing media outright lied and some people fell for the hoax,” White House Deputy Chief of Staff and slimeball Stephen Miller wrote on X.
A day later, the administration completely folded by rescinding the memo on the shutdown, but not before forcing Republican lawmakers to defend it by getting them on record supporting the chaotic, unlawful act that would have harmed millions of Americans.
“I fully support it,” House Speaker Mike Johnson told reporters on Tuesday. “This is the appropriate thing for a new administration to do.”
“This is not unusual for an administration to pause funding and to take a hard look and scrub of how these programs are being spent and how they interact with a lot of the executive orders that the president signed,” Senate Majority Leader John Thune, Republican of South Dakota, said.
Democrats, meanwhile, took a victory lap for helping create the outrage over the shutdown that got the administration to fold.
“This is Trump’s first major loss. When we fight, we win,” Rep. Alexandria Ocasio-Cortez of New York wrote on X.
“We may not have majorities in the House and the Senate,” she continued, “but we DO have the power to loudly educate and mobilize against the mass looting the Trump admin is attempting against our veterans, healthcare, education, and more.”
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