WASHINGTON − The Trump administration withdrew a memo that imposed a freeze on federal grants and loans on Wednesday, following significant backlash from Congress and at least two lawsuits regarding budget control, according to White House press secretary Karoline Leavitt.

The Office of Management and Budget had sought to evaluate the grants and loans to ensure they were aligned with the administration’s goals, a move that lawmakers and legal experts criticized as unconstitutional, Leavitt explained to reporters on Tuesday.

Democratic lawmakers argued that the Constitution grants Congress authority over spending decisions. A federal judge had already issued a temporary halt against the Trump administration’s policy on Tuesday.

In a statement on Wednesday, Leavitt noted that “in light of the court’s injunction,” OMB is retracting its memo “to eliminate any misunderstandings regarding federal policy stemming from the court decision and misleading media reports.”

During an unrelated press briefing at the White House, Trump stated that the spending pause was needed to “swiftly address the scams, dishonesty, waste, and abuse that have occurred within our government for an extended period.”

Trump highlighted cuts such as $50 million in funds for condoms in Gaza and $180 million aimed at diversity, equity, and inclusion training programs. Additionally, a suspension of $1.7 billion in foreign assistance was reported, including $40 million intended for the World Health Organization, an organization Trump directed the U.S. to withdraw from, and $45 million meant for diversity scholarships in Burma.

“We are simply reviewing portions of the vast bureaucracy where there has been significant waste, fraud, and abuse,” Trump said. “Our goal is to quickly identify these issues so that we can direct funds to the right areas.”

Leavitt furthered that other executive orders regarding federal funding issued since Inauguration Day will “remain fully in effect and will be strictly enforced across all agencies and departments.”

“This decision should effectively resolve the court case and permit the government to concentrate on implementing the President’s directives regarding federal spending management. In the upcoming weeks and months, more executive measures will be introduced to eliminate the egregious misuse of federal funds,” Leavitt stated.

The administration’s choice came just as a federal judge in Rhode Island was preparing to consider a request from 22 mostly Democratic-led states and the District of Columbia for a temporary restraining order to block what they claimed could severely impact their budgets.

Chief U.S. District Judge John McConnell could have issued a ruling that extended longer than the temporary suspension imposed by U.S. District Judge Loren AliKhan on the previous day’s case initiated by a collection of nonprofits based in Washington.

On Capitol Hill, prominent members from both the Republican and Democratic parties supported the Trump administration’s decision.

“While it’s common for new administrations to review federal initiatives, this memo was excessive and created unnecessary confusion and concern,” stated Sen. Susan Collins, R-Maine, chair of the Appropriations Committee.

Sen. Patty Murray, the highest-ranking Democrat on the committee, expressed that despite the withdrawal of the memo, the administration continues to freeze funds based on its executive orders.

“I believe they’re still causing chaos,” Murray remarked. “They are still withholding billions in funds, and we will resist this.”

Senate Minority Leader Chuck Schumer, D-N.Y., suggested that the reversal by the Trump administration justified withdrawing Russell Vought’s nomination to lead the Office of Management and Budget, with a Senate committee vote on Vought’s nomination set for Thursday.

“Americans stood up, and Donald Trump retreated,” Schumer stated. “Now, Donald Trump needs to withdraw Russell Vought’s nomination.”

Skye Perryman, CEO of Democracy Forward, which spearheaded the legal challenge against the policy affecting nonprofits, health agencies, and small businesses, expressed relief that millions could “finally breathe easy.”

The Department of Veterans Affairs also affirmed late Tuesday that all grant, loan, and financial assistance programs were cleared to proceed under a White House memo that had threatened to halt such aid.

“Our team will persist in taking immediate legal actions to protect the American populace and will utilize legal processes to guarantee the restoration of federal funding,” Perryman asserted.

Meanwhile, the department indicated that it had determined that 44 financial aid programs would continue without interruption, regardless of whether the memo is reinstated.

“This will not affect VA healthcare, benefits, or those who benefit from them,” declared acting Veterans Affairs Secretary Todd Hunter in a statement.

Contributing: Sudiksha Kochi

(This story has been updated with further details.)