Shutdown fight halts $18B for New York’s largest subway, rail projects

The Trump administration announced it would pause roughly $18 billion in federal funds for two major New York transportation projects — a move that appeared aimed at punishing Senate Minority Leader Charles E. Schumer (D-N.Y.) and House Minority Leader Hakeem Jeffries (D-N.Y.) for their refusal to back a Republican plan that would have averted a government shutdown.

In a post on X, White House budget director Russell Vought wrote that the grants for the 2nd Avenue Subway and the Hudson Tunnel to New Jersey, had been put on hold “to ensure funding is not flowing based on unconstitutional DEI principles.” DEI stands for diversity, equity and inclusion.

The Department of Transportation blamed Schumer and Jefferies for the delay, saying in a statement, “Without a budget, the Department has been forced to furlough the civil rights staff responsible for conducting this review.”

Even so, Democrats remained defiant Wednesday afternoon, once again voting down a Republican plan to extend funding until Nov. 21. The measure, which needed 60 votes, failed by the same 55-45 margin as it had before the shutdown deadline.

The administration’s latest move is part of a pattern in which it has sought to withhold or cancel transportation grants that did not align with its priorities. But pausing funds for two of the largest infrastructure projects in the country is a major escalation that was sharply criticized by Democratic lawmakers.

“We’re less than a day into this shutdown and Trump & Vought are illegally punishing Democrat-led states,” Sen. Patty Murray (D-Wash.) wrote on X. “This administration is clearly salivating at the opportunity to hurt people and using the shutdown THEY caused as the pretext to do it. This mafioso tactics WILL NOT WORK.”

Schumer’s office did not immediately respond to a request for comment.

When asked during a White House briefing about the decision to freeze billions in funds for the New York projects, Vice President JD Vance said: “I haven’t talked to Russ [Vought] about this morning, but look, I’m sure that Russ is heartbroken about the fact that he’s unable to give certain things to certain constituencies.”

The Transportation Department has sought to end programs that don’t align with its priorities. On Tuesday it issued an interim final rule barring race- and sex-based contracting requirements from federal grants.

The Hudson Tunnel project, also known as Gateway, would build new tunnels for commuter trains under the Hudson River. President Donald Trump delayed it during his first term, but the project received billions of dollars during the Biden administration. The first phase of the 2nd Street Subway opened in 2017. The second phase would expand the line into East Harlem.

New York Gov. Kathy Hochul (D) blasted the funding pause as “political payback and an attack” on the state and its residents. “Every New Yorker should be outraged.”

While administrations may seek to shape infrastructure projects, they often have done it by adding or rewriting the criteria for federal grant programs. The Trump administration, however, has been unusually aggressive about imposing its priorities. For example, it sought to revoke federal approval for New York City’s congestion pricing program. The move was blocked by a federal judge.