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Trump Administration Halts $18 Billion for New York’s Gateway Tunnel and Second Avenue Subway Over DEI Dispute

Transportation officials say a new rule on contracting prompted an administrative review, now stalled by shutdown furloughs.

Russell Vought, Office of Management and Budget director, listens as he addresses members of the media outside the West Wing at the White House in Washington, Monday, Sept. 29, 2025, in Washington. (AP Photo/Evan Vucci)
FILE - President Joe Biden arrives at the construction site of the Hudson Tunnel Project, Jan. 31, 2023, in New York. (AP Photo/John Minchillo, File)
Office of Management and Budget Director Russ Vought said the administration would withhold $18 billion for New York infrastructure projects on Day 1 of the government shutdown.
Construction on the new JPMorgan Chase & Co. headquarters at 270 Park Ave. in New York, US, on Wednesday, Aug. 20, 2025. The biggest US bank has been building a massive new skyscraper on Park Avenue, packed with amenities, for its headquarters, which will house about 10,000 employees. Photographer: David Dee Delgado/Bloomberg

Overview

  • OMB Director Russell Vought announced the pause, saying the move ensures federal dollars are not awarded based on “unconstitutional DEI principles.”
  • The Department of Transportation said the Hudson Tunnel and Second Avenue Subway are under administrative review for possible unconstitutional contracting practices and pointed to an interim rule barring race- and sex-based requirements.
  • DOT indicated the review cannot proceed because civil rights staff responsible for it are furloughed during the federal shutdown, delaying decisions and payments.
  • New York officials and project leaders warned the freeze threatens timelines, construction jobs and daily commutes, and said they are assessing next steps.
  • Separately, a federal judge issued a preliminary injunction blocking DHS from cutting counterterrorism grants to several states as lawsuits challenge reallocations alleged to target jurisdictions over immigration cooperation.