After inciting widespread panic on Monday afternoon with a memo from the White House Office of Management and Budget (OMB) detailing a freeze on federal grants, pursuant to executive orders signed by President Donald Trump, the administration has rescinded the memo, the Associated Press reports.

As the week began, the freeze jeopardized more than $3 trillion in funding and sent nonprofits organizations into a frenzy of uncertainty. The OMB memo cited a mission to ensure taxpayers relief in the face of inflation, create a safer country, and end “‘wokeness’ and the weaponization of government.” The freeze would affect a broad range of social sector activities across the country, including preschool programs, food banks, disaster relief efforts, and public health organizations.

The administration’s decision to retract its memo came on the heels of a lawsuit filed by Democracy Forward, the National Council of Nonprofits, American Public Health Association, Main Street Alliance, and SAGE. The lawsuit, which prompted a federal judge to delay the freeze until at least Monday, claimed the freeze violates the First Amendment of the United States Constitution and the Administrative Procedure Act. Another lawsuit from 23 state attorneys general (AG) was filed on Tuesday.

The state AGs’ lawsuit reads, "The OMB Directive violates the APA and is unconstitutional. The substantial confusion created by the OMB Directive and unlawfully withheld funding pursuant to the OMB Directive’s directive will result in immediate and devastating harm to Plaintiff States."

“We are glad that this memo has been rescinded. The chaos unleashed by the uncertainty and lack of adequate notice [Monday] should never have happened. Nonprofits are vital partners for government, and payment for the services they provide should never have been in question,” said National Council of Nonprofits president and CEO Diane Yentel. “Right now, we will celebrate this victory for nonprofits and the people they serve across the country. But we will remain vigilant for any further actions that harm nonprofits’ ability to serve their communities.”

(Flickr/Gage Skidmore)