SPRINGFIELD — President Donald Trump’s budget office on Wednesday rescinded an order freezing spending on federal grants after a day of widespread confusion and a promise from Illinois Gov. JB Pritzker to fight the directive "with everything we have." 

The Monday evening order from the White House Office of Management and Budget sparked uncertainty over a crucial financial lifeline for states, schools and organizations that rely on trillions of dollars from Washington and left the White House scrambling to explain what would and wouldn’t be subject to a pause in funding.

The White House confirmed that OMB pulled the order Wednesday in a two sentence notice sent to agencies and departments, but said that Trump’s underlying executive orders targeting federal spending in areas like diversity, equity and inclusion and climate change, remained in place.

The freeze was scheduled to go into effect at 5 p.m. Tuesday, but was stayed by a federal judge until at least Monday after an emergency hearing requested by nonprofit groups that receive federal grants. An additional lawsuit by Democratic state attorneys general, including Illinois’ Kwame Raoul, was also pending.

For a day, the order sowed chaos and confusion across the country as states and organizations heavily reliant on federal funds suddenly could not access those resources.

In Illinois, the response from the state’s Democratic leaders was defiant.

"Let’s be clear, this is a demonstration of cruelty against people who depend on us, working families who rely on federal assistance to pay their rent, people who need help paying their utility bills, parents who need critical programs like Head Start for quality affordable child care, and 3.5 million Illinoisans who get their health insurance through Medicaid,” Pritzker told reporters at an abruptly called press conference in Chicago on Tuesday evening. 

The governor was joined by Lt. Gov. Juliana Stratton and Raoul, the latter of whom co-led a coalition of 22 attorneys general who sued on Tuesday to block the funding freeze.

Pritzker repeatedly called the order illegal and unconstitutional, as it halted spending that had been authorized by Congress and mandated by federal law.

Nevertheless, his administration began working furiously on contingency plans, directing state agencies to report on its potential effects. 

The impact to Illinois could be drastic if federal funds are cut off. The state is already staring down a more than $3 billion budget deficit in the fiscal year that begins in July. 

Pritzker, who will deliver his budget address to state lawmakers in the state Capitol in three weeks, did not offer specifics on potential impacts to the state’s spending plans on Tuesday.

But he acknowledged that "we cannot make up for billions of dollars of Medicaid that might be taken away from the state of Illinois" or the "hundreds of millions of dollars that … might be taken away from universities." 

When rolling out the order, Trump administration officials said programs that provide direct assistance to Americans would not be affected by the freeze, such as Medicare, Medicaid, Social Security, student loans and food stamps.

However, Illinois state agencies throughout Tuesday reported trouble accessing Medicaid systems. More than 3 million people in Illinois receive Medicaid, the nation’s health care coverage for people with low incomes and disabilities.

The White House later confirmed a nationwide "outage" but said that no payments were affected and the system was restored by the end of the day.

But Pritzker, long a Trump foe, said that the president and his administration "have not earned the benefit of the doubt," accusing them of "either lying to us" or being "critically incompetent" in the delivery of services.

"This is what happens when you staff the federal government full of ‘Project 2025’ contributors that don’t have any experience governing and don’t think that the laws apply to them," Pritzker said, referencing the blueprint published by the conservative think tank The Heritage Foundation.

"The consequences of their actions are not hypothetical," he said. "They are not numbers on a spreadsheet. These are real people, ordinary Americans struggling to afford groceries, rent and health care."

Other programs that could have been affected include:

• Child Care and Development Block Grant (CCDBG), which provides funding that supports child care for more than 140,000 Illinois children from low-income families;
• Low Income Home Energy Assistance Program (LIHEAP), which assists more than 300,000 low-income households with their energy bills;
• Programs serving seniors, people with disabilities, various state and local economic development efforts, infrastructure projects and disaster mitigation. 

Even with the spending freeze now rescinded, the upheaval it created is perhaps a sign of things to come in Trump’s second act.

In the first week of his second term, Trump signed a flurry of executive orders. Among them, he pardoned more than 1,500 people convicted of crimes related to the Jan. 6, 2021, attacks on the U.S. Capitol. He also withdrew the U.S. from the Paris climate accords and the World Health Organization.

Trump also began a promised crackdown on immigration and signed an order seeking to end birthright citizenship, which makes anyone born in the United States, regardless of the legal status of their parents, a U.S. citizen.

The president has also sought to reshape the federal workforce, offering buyouts to any workers who leave their jobs by next week. 

Pritzker, in a message posted to his social media channels Tuesday evening, acknowledged that the fight over federal funding, like on other topics, is likely just beginning.

"This is going to be a hard four years, and I think we’re going to have to fight in the days ahead, weeks ahead and months ahead to preserve these services for you," Pritzker said, speaking directly to the camera. "But I think we’ll win. We’re Illinois. We’re strong, we hang together. We will win." 

The Associated Press contributed to this story.