Trump Rescinds Order Freezing Federal Funds Amid Controversy
On Wednesday, Trump rescinded an order he had made late on Monday night that froze up to $3 trillion in federal grants and loans.
The Monday-night order had caused widespread confusion across America.
Hospitals, schools, non-profits, research organisations, pre-school programmes, and police departments were left wondering if they had lost federal financial support.
The Medicaid system, which provides healthcare to millions of low-income Americans, faced significant interruptions.
By Tuesday afternoon, a federal judge had temporarily blocked the order in response to lawsuits claiming that Trump had no authority to freeze funds allocated by Congress.
Attorneys general in 22 states and the District of Columbia, all Democrats, united to challenge the order.
Consequently, on Wednesday, amidst this chaos, Trump's acting director of the Office of Management and Budget (OMB), Matthew J Vaeth, informed federal agencies that the Monday-night order had been "rescinded".
The scale of Trump's Monday-night order was extensive. It asserted that federal spending must align with "presidential priorities" while reviews are conducted, giving officials until 10 February to report to the OMB.
By that time, the OMB is likely to be headed by Russ Vought, Trump's nominee and chief author of Project 2025, aimed at transforming US governmental structure.
It is anticipated that a revised version of Monday night's order will emerge once Vought is in place, aiming for greater clarity. The Trump administration views this as part of a broader plan.
Last week, Trump undertook separate actions, barring certain spending he objected to, including programmes focusing on "diversity, equity, and inclusion", as well as non-governmental organisations he perceives as undermining national interests.
Additionally, he instituted a 90-day freeze on all foreign aid spending, jeopardising congressionally authorised foreign assistance, including military aid to Ukraine and essential medications distribution in Africa and developing countries.
All these actions are deemed illegal under the US Constitution, which grants Congress the power of the purse.
While Trump, like any president, may pause previously appropriated spending for review, his freezes are not intended to pause but to stop funding, an act known as "impounding".
In 1974, Congress enacted the Impoundment Control Act to counter Richard Nixon's attempts to withhold funds appropriated by Congress. This statute forbids presidential impounding.
Trump contends that the Impoundment Control Act is unconstitutional; however, as established in the 1975 case of Train v City of New York, the Supreme Court upheld the act's constitutionality.
Trump apparently desires the current Supreme Court to overturn its 1975 ruling, a rare occurrence especially given the unanimous decision.
Yet, as illustrated in the recent Dobbs v Women's Health Organization ruling, which overturned Roe v Wade, the present Supreme Court demonstrates little hesitation to reverse its precedents.
Meanwhile, Trump has issued a memo to all 2.3 million federal employees, offering them eight months of pay if they resign before 6 February; those who do not risk furlough or dismissal.
This memo likely bears the influence of Elon Musk, appointed to lead the so-called "department of government efficiency" after his dismissal of 80% of Twitter’s workforce in 2022.
However, it must be clear: these initiatives are not aimed at reducing the federal government’s size; rather, they seek to centralise control within Trump's domain.
Trump aspires to fill these positions with individuals more loyal to him than to the United States.
This attempted takeover of the US government forms part of a broader strategy to replace American democracy with an oligarchy.
Concentrated power fosters concentrated wealth, just as concentrated wealth encourages concentrated power; the two are inherently linked.
