The White House budget office rescinded a memo ordering a broad freeze on federal grants and loans after Republican senators “hit the ceiling” over the order, which caught them completely by surprise and created confusion in their home states.
Republican senators were careful not to criticize President Trump publicly after the Office of Management and Budget (OMB) released a broadly worded memo Monday that appeared to freeze broad swaths of federal funding but privately they were livid, according to Senate sources.
“Republicans were starting to hit the ceiling because the state governments, people in our states were coming to us saying, ‘Wait, wait, wait, wait. What does this mean? Does it mean we’re going to lose funding for X, Y, Z?’” said one Republican senator who requested anonymity to discuss the uproar behind closed doors caused by the memo.
“As drafted the initial memo sounded so broad, and it sounded like a new order. It sounded like it was a new freeze, which was super confusing,” the senator added.
A second Republican senator who requested anonymity said the memo the White House budget office dropped on Monday was “shocking” and caused a lot of confusion throughout the Senate Republican conference.
“We were all hyperventilating because of the pause on federal funds and programs,” the lawmaker said.
Republican senators led by Senate Appropriations Committee Chair Susan Collins (R-Maine) and Sen. Lisa Murkowski (R-Alaska) told the White House directly that the OMB directive was written far too broadly.
They pressed White House staff for answers about how the funding freeze would impact the delivery of federal services.
“I made clear that I thought it was too sweeping, that it was causing a lot of confusion and consternation in my state, particularly for non-profit organizations, and I’m glad that it’s apparently been rescinded,” Collins said Wednesday afternoon.
Collins and Murkowski are both critical votes for getting Trump’s Cabinet nominees through the Senate.
The memo issued Monday by acting OMB director Matthew Vaeth instructed that “federal agencies must temporarily pause all activities related to obligation or disbursement of all federal financial assistance and other relevant agency activities that may be implicated by executive orders” issued by President Trump.
Those orders included a 90-day pause on most foreign development assistance, the termination all federal diversity, equity and inclusion (DEI) programs and a pause on climate programs funded by former President Biden’s Inflation Reduction Act.
A Senate source said Collins and Murkowski communicated their concerns directly to White House officials.
Murkowski said constituents in her state were “shut out” of the federal Payment Management Services web portal, which is run by the Department of Health and Human Services.
Murkowski told The Hill that she heard a lot of feedback from people in Alaska after the OMB issued its order later Monday.
“I met first thing this morning with the Head Start folks from Alaska and of course Head Start was to be one of those not touched [by the funding freeze] but yesterday no one was able to access the portal,” she said Wednesday.
“It’s what everybody was talking about yesterday,” she said.
Sen. Jerry Moran (R-Kan.) said the “lack of information” about how exactly the OMB directive would impact local funding needs caused constituents to “pick up the phone.”
“I think the lack of information is what captures people that they would pick up the phone and call or email us. They don’t know what it means. Once they get the chance to ask the questions, the level of anxiety is significantly diminished,” he said.
“Who we mostly heard from were communities, cities who had a grant. Trying to figure out what does this mean to the grant. Our answer is ‘we’re trying to find that out,’” he said.
Republican senators said the funding directive also appeared to catch incoming members of Trump’s Cabinet, such as Transportation Secretary Sean Duffy, completely by surprise.
“There was quite a bit of consternation within the administration,” said a GOP senator. “Sean Duffy, who just got confirmed, his staff just had a heart attack when they saw the memo. They weren’t consulted on it at all. They knew nothing about it.”
Sen. Mike Rounds (R-S.D.) said senators didn’t get any advanced warning about Monday’s OMB memo and recommended that White House officials might communicate more in advance before dropping these kinds of sweeping orders on Congress.
“It’s always appreciated and sometimes can make it a little bit easier to be implemented or in some cases to help sell the plan to the public,” he said of giving lawmakers a heads up on future directives.
“That’s his choice,” he said of Trump. “I think every White House goes through that growing stage of who’s in [the know] and what they need to talk about and what they should hold private until it’s actually released.”
Asked if he was caught by surprise, Rounds said: “Oh yeah.”
Sen. Shelley Moore Capito (R-W.Va.) heard from constituents in West Virginia who were alarmed by the broad freeze on grants, loans and other assistance.
“I’ve heard from several West Virginians with concerns about OMB’s memo that indicated the freezing of federal grants, loans, and other financial assistance programs,” she said. “That memo has been rescinded and I support this pause for us, and these recipients, to be able to fully understand and prepare for any potential freeze or changes.”
Kendra Davenport, the president and CEO of Easterseals, a non-profit group the provides services to children, adults with disabilities, seniors and veterans, said the White House budget directive from Monday disrupted services across the country, including in many Republican-leaning states.
She said her affiliates across the country were caught completely off guard by the memo.
“There was no preamble to the chaos that took place,” she said and urged the White House to provide more guidance.
“The payment system that we utilize to draw down on federal funds that our affiliates competed for and were awarded … was shut off. That happened in the morning Eastern Standard Time,” she said of the chaos that erupted on Tuesday morning.
“We couldn’t access funds to make payroll, to apply operationally to keep programs that are paid week to week,” she said, citing Head Start, Housing and Urban Development, and job training for seniors as some of the federal programs that were immediately impacted.
Another Republican senator characterized Monday’s memo as an unforced error.
“Chaos is never good,” the senator said.
Even after the White House budget office rescinded the Monday memo with a new memo released on Wednesday, there was some confusion remaining about what federal funding would remain frozen.
White House press secretary Karoline Leavitt said in a statement Wednesday that that Trump’s executive orders halting foreign assistance, terminating DEI programs and others referenced in the OMB memo from Monday remain “in full force and effect.”
“In light of the injunction, OMB has rescinded the memo to end any confusion on federal policy created by the court ruling and the dishonest media coverage. The Executive Orders issued by the president on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments,” Leavitt said in a statement.
