The Trump administration’s decision to freeze $18 billion in federal funding for two of New York City’s most ambitious infrastructure projects has set off a political firestorm, threatening thousands of jobs, the daily commutes of hundreds of thousands, and the economic future of the region. Announced on October 1, 2025—the same day the federal government entered a shutdown after Congress failed to pass a stopgap funding bill—the move affects both the long-awaited Gateway Hudson Tunnel Project and the Second Avenue Subway extension. The stated reason? A review to ensure the projects’ contracts do not violate constitutional law by relying on diversity, equity, and inclusion (DEI) principles.
Russell Vought, the White House budget director, made the announcement on X, writing, “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.” He specifically identified the Hudson Tunnel Project and the Second Avenue Subway as the targets of the freeze. According to NBC News, this abrupt halt came just hours after the government shutdown began, with Vought emphasizing the administration’s belief that race- and sex-based contracting requirements are “unconstitutional, counter to civil rights laws, and a waste of taxpayer resources.”
The U.S. Department of Transportation (USDOT) followed up, stating it had issued an interim final rule barring such requirements from federal grants and had notified New York authorities that both projects were under administrative review. “Until USDOT’s quick administrative review is complete, project reimbursements cannot be processed, including a $300 million disbursement for the 2nd Avenue Subway,” the department explained. Yet, the review itself is stalled—ironically—because the government shutdown has led to the furlough of the civil rights staff responsible for conducting it. “Thanks to the Chuck Schumer and Hakeem Jeffries shutdown, however, USDOT’s review of New York’s unconstitutional practices will take more time,” the DOT said, laying blame on the Democratic congressional leaders from New York.
For New Yorkers and New Jerseyans, the timing could hardly be worse. The Gateway Hudson Tunnel Project, with a price tag exceeding $16 billion, is designed to add a much-needed new rail tunnel beneath the Hudson River, supplementing a 110-year-old structure that serves as the main artery for Amtrak and New Jersey Transit trains between New York and New Jersey. Every day, more than 300,000 commuters rely on this corridor, and delays can ripple up and down the East Coast, from Boston to Washington. The Second Avenue Subway, meanwhile, has been a dream since the 1920s, with its first phase finally opening in 2017. The next phase, extending the line from 96th Street to 125th Street in East Harlem, was greenlit for funding only in August.
Regional leaders wasted no time voicing their outrage. Senate Democratic leader Chuck Schumer, a longtime champion of the Gateway tunnel, blasted the freeze as a blow to commuters and the economy. “Obstructing these projects is stupid and counterproductive because they create tens of thousands of great jobs and are essential for a strong regional and national economy,” Schumer posted on X, according to the Associated Press. House Minority Leader Hakeem Jeffries was even more blunt, writing, “Again with this guy (and his baseless threats). Russ, you are the poster child for privilege and mediocrity. Get lost.”
Governor Kathy Hochul, speaking at a news conference in New York City, lamented, “The bad news just keeps coming. They’re trying to make culture wars be the reason why.” She continued, “That’s what a partnership with Washington looks like as we’re standing here. We’ve done our part. We’re ready to build. It’s underway. And now we realize that they’ve decided to put their own interpretation of proper culture ahead of our needs, the needs of a nation.”
Representative Jerrold Nadler, whose district covers much of Manhattan, didn’t mince words either. In a statement, he called the freeze “shameful political retribution,” warning, “These aren’t just local transportation projects. This unprecedented political retribution could put our nation’s entire economy at risk. Experts have long warned that a Hudson Tunnel failure could trigger a regional recession that drags down the entire U.S. economy. The freeze will immediately hurt American families, Republicans and Democrats alike. More than 150,000 good-paying American jobs are on the line, and more than 300,000 commuters a day, of every political stripe, depend on these projects to keep the region moving. It should concern every American that the Trump Administration is willing to harm working families and our nation’s economy to punish Democrats. This freeze must be reversed immediately.”
The Gateway Development Commission, overseeing the tunnel’s construction, tried to strike a steady note. CEO Thomas Prendergast told Eyewitness News that the agency remains “focused on keeping the project on scope, schedule, and budget.” Still, the commission offered no specifics about how the funding freeze would affect the project’s timeline or completion.
The political reverberations stretch beyond New York. In neighboring New Jersey, the freeze has become a flashpoint in the upcoming gubernatorial election. Democratic candidate Mikie Sherrill vowed on X to “fight this tooth-and-nail and sue the Trump administration to finish this critical, job-creating infrastructure project to reduce congestion and improve quality of life in New Jersey.” Her Republican opponent, Jack Ciattarelli, has so far remained silent, though Sherrill was quick to point out his close alignment with Trump’s policies.
Amid the partisan crossfire, the underlying stakes remain starkly practical. The Hudson River rail tunnel is a lifeline for the Northeast Corridor, the nation’s busiest passenger rail line. A failure or prolonged disruption could, as experts cited by Representative Nadler have warned, trigger a regional recession with national implications. The Second Avenue Subway, while perhaps less nationally critical, is vital for relieving chronic overcrowding on Manhattan’s East Side and connecting underserved neighborhoods in East Harlem.
Why now? The Trump administration’s move comes as part of a broader campaign to roll back DEI initiatives in federal programs, arguing that such policies are discriminatory and unconstitutional. The Department of Transportation’s interim final rule barring race- and sex-based contracting requirements is now being tested on some of the largest infrastructure projects in the Western Hemisphere. The administration’s critics, however, see the freeze as a thinly veiled act of political vengeance—an attempt to punish Democrats and their constituents, with commuters and workers caught in the crossfire.
For now, the projects’ future hangs in the balance. With the government shutdown stalling the very review that prompted the freeze, no one can say when—or if—the funds will be released. The Metropolitan Transportation Authority, which oversees the Second Avenue Subway, has yet to comment on the impact. Meanwhile, the daily lives of hundreds of thousands of commuters, the jobs of tens of thousands of workers, and the economic health of a region—and, potentially, the nation—remain in limbo.
As political leaders on both sides dig in, New Yorkers and New Jerseyans are left wondering whether the trains that keep their cities—and their lives—moving will ever get back on track.
