White House Rescinds Federal Aid Freeze In Illinois

ILLINOIS — A federal aid freeze announced this week by the Trump Administration has been rescinded, multiple sources are reporting Wednesday afternoon.

CNN reported that it has obtained a memo from a Trump administration official communicating that the freeze is rescinded.

The New York Times also reported the freeze was rescinded, citing two sources familiar with the matter.

On Tuesday, a federal judge had temporarily blocked the plan to halt the distribution of trillions of dollars in federal grants and loans until a hearing could be held Monday morning.

Before the freeze was rescinded, Gov. JB Pritzker's office said that the state of Illinois was shut out of Medicaid, reports Chicago Sun-Times. The health insurance program, which is funded by the federal government, covered about 3.9 million people in Illinois in 2023.

The Trump administration’s abrupt pause on trillions of dollars in federal grants and loans as his administration conducted an ideological review of spending prompted backlash, and opponents warned it could cause widespread disruption in health care research, education programs and other initiatives in Illinois.

“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” Matthew Vaeth, the acting director of the Office of Management and Budget, wrote in a memo late Monday.

The White House offered few details about the scope of the freeze after it was announced. While the full effect on Illinois programs is unclear, Trump administration officials clarified Tuesday that programs that provide direct assistance to Americans would not be affected, such as Medicare, Medicaid, Social Security, student loans and food stamps. They also defended the funding pause, saying Trump was following through on his promise to turn Washington upside down if elected to a second term.

However, Illinois state agencies on Tuesday reported issues accessing federal funding sites and disbursement systems, including Medicaid systems, which are used to manage and distribute previously authorized federal funds.

"The US Constitution does not grant the President this unilateral authority," Pritzker said Monday. "In Illinois, we will stand against unlawful actions that would harm millions of working families, children, and seniors."

Democrats and independent organizations questioned the legality of the Republican administration’s funding freeze, characterizing it as capricious and illegal because Congress had already authorized the funding.

U.S. Congressman Brad Schneider (IL-10) announced Tuesday he had joined 153 House Democrats in sending a letter to the Trump administration regarding the executive order. The letter "specifically urges the Trump Administration to disclose a full list of the frozen Inflation Reduction Act and Bipartisan Infrastructure Act initiatives," according to Schneider's office.

"This unconstitutional action must be met immediately with force and resistance, so the American people can receive the stable support and assistance from the federal government that they deserve," Schneider said.

Court battles were imminent on Tuesday, and Democratic New York Attorney General Letitia James planned to ask a Manhattan federal court to block the Republican president’s moves, calling it an “unconstitutional pause on federal funding.”

“More lawlessness and chaos in America as Donald Trump’s Administration blatantly disobeys the law by holding up virtually all vital funds that support programs in every community across the country," Senate Minority Leader Chuck Schumer, a Democrat from New York, said in a statement. “If this continues, the American people will pay an awful price.”

The grants help people “in red states and blue states, support families, help parents raise kids, and lead to stronger communities,” Schumer said, adding that “it will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities.”

Before it was blocked by a judge, the pause was to take effect at 4 p.m. Central Tuesday, and it was unclear from the memo how sweeping it would be. Vaeth said that all spending must comply with Trump's executive orders, which are intended to undo progressive steps on transgender rights, environmental justice and diversity, equity and inclusion, or DEI, efforts.

"House Republicans are hobnobbing at Trump's golf resort in Miami while the President plans to shut down research funding on childhood cancer, Alzheimer’s, diabetes, & so much more at 5PM," U.S. Senator Dick Durbin (D-Illinois) said Tuesday on X. "Members should immediately return to DC to work w/Dems to undo this threat created by Trump."

"Outrageous and illegal. Trump's EO freezing federal grants is a gut punch to families that will jeopardize: care for our veterans, funding for hospitals, child care, food and cleaner drinking water for our kids, support for law enforcement, disaster relief," U.S. Senator Tammy Duckworth (D-Illinois) said Tuesday on X.

Congressman Bill Foster (IL-11) released the following statement:

"Trump's order to indiscriminately freeze federal aid and grants is illegal, willfully ignorant, and cruel. Federal funding that provides essential assistance, like helping families heat their homes, keeping health care centers open, ensuring our kids are fed, and housing the vulnerable is now in jeopardy."

Vaeth wrote that “each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders.”

Washington is a hub of spending that flows to various departments, local governments, nonprofits and contractors, and the memo has left countless people who are dependent on that money wondering how they would be affected.

The pause is the latest example of how Trump is harnessing his power over the federal system to advance his conservative goals. Unlike during his first term, when Trump and many members of his inner circle were unfamiliar with Washington, this time he's reaching deep into the bureaucracy.

“They are pushing the president’s agenda from the bottom up," said Paul Light, an expert on the federal government and professor emeritus of public service at New York University.

He also said there are risks in Trump's approach, especially with so many voters reliant on Washington.

“You can’t just hassle, hassle, hassle. You’ve got to deliver.”

“Are you stopping NIH cancer trials?” Sen. Amy Klobuchar, a Democrat from Minnesota, wrote on social media, referring to the National Institutes of Health.

Sen. Patty Murray of Washington and Rep. Rose DeLauro of Connecticut, the top Democrats on the Senate and House appropriations committees, expressed “extreme alarm” in a letter to Vaeth.

"This Administration’s actions will have far-reaching consequences for nearly all federal programs and activities, putting the financial security of our families, our national security, and the success of our country at risk," they wrote.

The Associated Press contributed reporting.