Trump administration freezes New York City infrastructure funds

The Trump administration has frozen about $18 billion for two major infrastructure projects in New York City to ensure that funding is not “flowing based on unconstitutional DEI principles,” a top official said Wednesday.

The funding is earmarked for the Hudson River Tunnel Project and the Second Avenue Subway project, said Office of Management and Budget Director Russell Vought.

Vought announced the freeze in posts on the social media site 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,” Vought wrote.

DEI refers to diversity, equity and inclusion policies, which have become a target for the Trump administration.

It was not immediately clear what triggered the freeze on that basis.

But the Department of Transportation later said that Secretary Sean Duffy’s “position on the DBE program is clear – subsidizing infrastructure contracts with taxpayer dollars based on discriminatory principles is unconstitutional, counter to civil rights laws, and a waste of taxpayer resources.”

The DOT in a statement, said it had issued “an interim final rule (IFR) barring race- and sex-based contracting requirements from federal grants,” and that it had sent “letters to New York to inform them that their two mega projects – the 2nd Avenue Subway and Hudson Tunnel – are under administrative review to determine whether any unconstitutional practices are occurring.”

“The Department is focusing on these projects because they are arguably the largest infrastructure initiatives in the Western Hemisphere, and the American people want to see them completed quickly and efficiently,” the DOT said.

“Until USDOT’s quick administrative review is complete, project reimbursements cannot be processed, including a $300 million disbursement for the 2nd Avenue Subway. The remaining federal funding for these projects totals nearly $18 billion. 

Vought’s announcement came on the first day of the shutdown of the U.S. government after Congress failed to pass stopgap funding bills that would have kept federal agencies and services operating at normal capacity for at least another seven weeks.

The funding freeze is not a result of the shutdown, but the DOT said that its review of the projects will take longer than normal because of the shutdown.

“Thanks to the Chuck Schumer and Hakeem Jefferies shutdown, however, USDOT’s review of New York’s unconstitutional practices will take more time,” the DOT said, referring to the Senate’s minority leader and and House minority leader, who are both Democrats from New York City.

“Without a budget, the Department has been forced to furlough the civil rights staff responsible for conducting this review.

“This is another unfortunate casualty of radical Democrats’ reckless decision to hold the federal government hostage to give illegal immigrants benefits,” the DOT said.