President Donald Trump’s budget office rescinded an order freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country, according to two people familiar with the matter.

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The full extent of the order was not immediately clear, but the directive sent to government agencies on Monday threatened to paralyze a vast swath of federal programs.

One day after the White House announced a temporary pause on federal loans and grants, it rescinded the freeze.

State, local agencies and other groups that receive federal grants were trying to understand the depths of the order's impact when it was walked back.

The website that states use to get Medicaid payments from the federal government is down, White House press secretary Karoline Leavitt said in a post on X, formerly Twitter.

Illinois was one of 22 Democratic-led states that filed suit Tuesday asking a federal court to block the sudden pause on funding, which was announced Monday evening. The freeze threatened to hold up trillions of dollars in funding for basic government functions like health care,

The Vermont senators and representative gave a joint statement expressing their concern of this "authoritarian" decision to freeze federal grants.

President Donald Trump’s budget office has rescinded a memo freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country.