Funding Put on Hold
The Trump administration has halted nearly $18 billion in federal funding for two of New York City’s largest infrastructure projects, citing concerns over diversity, equity and inclusion policies. The freeze affects the Hudson River Tunnel Project and the Second Avenue Subway expansion, according to Office of Management and Budget Director Russell Vought.
Vought announced the move on social media, stating that the pause was to ensure taxpayer money is not distributed based on what he called “unconstitutional DEI principles.” The administration did not specify what triggered the review.
DOT Issues Interim Rule
The Department of Transportation later confirmed that it had issued an interim final rule barring race- and sex-based contracting requirements tied to federal grants. Transportation Secretary Sean Duffy argued that federal dollars should not subsidize infrastructure contracts based on what he described as discriminatory practices.
As part of the review, DOT sent letters to New York officials informing them that the two mega projects were now under administrative scrutiny. Federal reimbursements have been halted, including a pending $300 million disbursement for the Second Avenue Subway. The remainder of the federal funding under review totals nearly $18 billion.
Shutdown Adds Delays
The freeze comes as the federal government enters a shutdown following the failure of Congress to pass stopgap funding legislation. DOT acknowledged that the shutdown will delay the review process, since many civil rights staff responsible for evaluating the projects have been furloughed.
In a statement, the department linked the slowdown to what it called “the Chuck Schumer and Hakeem Jeffries shutdown,” criticizing the Democratic leaders for failing to reach a budget deal. The agency argued that the funding pause was separate from the shutdown, but noted that staffing cuts would lengthen the timeline.
Political Fallout
The decision to freeze funding for projects considered vital to New York’s transportation system has sparked immediate debate. The Hudson River Tunnel Project is a key part of the Gateway Program, intended to improve train travel between New York and New Jersey. The Second Avenue Subway is one of the most ambitious transit expansions in the city’s history.
While the Trump administration insists the review is necessary to prevent unconstitutional contracting practices, critics are expected to argue that the freeze jeopardizes urgently needed infrastructure improvements in one of the country’s busiest transit corridors.