Trump Administration Halts $18 Billion in NYC Infrastructure Funding Over DEI Concerns

The Trump administration has frozen approximately $18 billion in federal funding for two major New York City infrastructure projects—the Hudson River Tunnel and the Second Avenue Subway—pending a review to ensure disbursements comply with constitutional principles, Office of Management and Budget Director Russell Vought announced Wednesday. Vought stated on X: "Roughly $18 billion in New York City infrastructure projects have been put on hold to ensure funding is not flowing based on unconstitutional DEI principles."

The pause targets the $16 billion federal commitment to the Gateway Program's Hudson River rail tunnel, aimed at replacing century-old infrastructure between New Jersey and Manhattan, and over $2 billion for the Second Avenue Subway's Phase 2 extension from 96th to 125th Street in Harlem. Transportation Secretary Sean Duffy's Department issued an interim final rule Tuesday barring race- and sex-based contracting requirements from federal grants, deeming the Disadvantaged Business Enterprise (DBE) program "unconstitutional, counter to civil rights laws, and a waste of taxpayer resources." Letters notified New York officials that reimbursements, including a $300 million Second Avenue disbursement, are suspended pending administrative review for discriminatory practices.

The review, focusing on the largest U.S. infrastructure initiatives, aims for swift completion to expedite projects, but the ongoing government shutdown—triggered by Democratic rejection of a clean CR—has furloughed civil rights staff, prolonging the process. The Department of Transportation attributed the delay to Senate Minority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Hakeem Jeffries (D-N.Y.), stating: "Thanks to the Chuck Schumer and Hakeem Jeffries shutdown... USDOT's review of New York's unconstitutional practices will take more time."