In a two-sentence memo, the White House rescinded the spending freeze announced with great fanfare just two days prior and which we previously reported on here. The broad scope of the directive suspended all federal financial assistance implicated by President Trump’s recent barrage of Executive Orders, leaving federal funding recipients scrambling to understand the extent of the freeze.
The White House press secretary stated that the rescindment is intended to “end any confusion on federal policy created by the court ruling and the dishonest media coverage,” and emphasized that President Trump’s Executive Orders remain in full force and effect.
The suspension had been immediately challenged in at least two lawsuits and was temporarily stayed by a federal judge for further proceedings. The withdrawal of the directive may not end the litigation and at least one federal judge appeared skeptical that the withdrawal mooted the need for a temporary restraining order.
While many federally funded organizations can breathe a sigh of relief for the moment, employers should expect the Trump administration to continue pursuing the underlying intentions of the directive and the policies laid out in the President’s Executive Orders. Further action to review federal funding and advance priorities such as eliminating diversity, equity, and inclusion efforts and dismantling “woke” culture should be anticipated.
Ballard Spahr’s Labor and Employment Group is monitoring new developments from the second Trump administration and regularly issuing alerts and advising employers across the nation on the far-reaching changes enacted by the administration.