TL;DR: On October 1, 2025, the Trump administration froze $18 billion in federal funding for two major NYC infrastructure projects, citing a review of “unconstitutional DEI principles.” The move coincided with a federal government shutdown and affects areas represented by top Democratic leaders.
🔹 Key Points
Funding Freeze Announced
- On October 1, 2025, OMB Director Russ Vought froze approximately $18 billion in federal funding for two NYC infrastructure projects: the Hudson Tunnel Project and the Second Avenue Subway.
- The freeze was announced hours after the federal government shutdown began due to Congress failing to pass stopgap funding.
Reason for the Freeze
- Vought stated the freeze is to allow a U.S. Department of Transportation (DOT) review into whether the projects support “unconstitutional DEI principles.”
- The review is required by a Trump administration executive order directing scrutiny of all federal spending linked to diversity, equity, and inclusion (DEI) policies.
Shutdown Impact
- The DOT said the review process will "take more time" because of staff furloughs caused by the shutdown.
- The DOT blamed Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, both Democrats from New York, for the shutdown.
Projects Affected
- Hudson Tunnel Project (Gateway): A $16 billion+ project to build a second rail tunnel under the Hudson River, critical to Northeast rail service.
- Second Avenue Subway (Phase 2): A $6 billion subway expansion in Manhattan’s East Side, aimed at reducing congestion and expanding service.
Political Reactions
- Schumer said the move is “a blatant attempt to punish New York for political reasons.”
- Jeffries accused the administration of “weaponizing infrastructure funding to score political points.”
- New York Governor Kathy Hochul called the freeze “devastating.”
Administrative and Legal Consequences
- The freeze blocks immediate disbursements, including a $300 million payment for the Second Avenue Subway.
- Thousands of union jobs and project timelines are at risk.
- Legal challenges are expected but may take time to resolve.
🔹 Broader Context
Executive Orders & DEI Crackdown
- The freeze is part of a broader Trump administration effort to dismantle DEI-linked programs across sectors including healthcare, education, and transportation.
- Official memos cite a need to stop funding for “Marxist equity, woke gender ideology, and social engineering policies.”
Political Targeting Allegations
- Critics say the freeze disproportionately impacts Democratic districts, particularly those represented by Schumer and Jeffries.
- The administration argues the action ensures compliance with President Trump’s “lawful priorities.”