On October 1, 2025, the Trump administration ignited a political and legal firestorm by announcing it would withhold nearly $18 billion in federal funding for two of New York City’s most ambitious infrastructure projects: the long-awaited Hudson River rail tunnel and the extension of the Second Avenue subway into East Harlem. The move, which coincided with the start of a federal government shutdown, has sent shockwaves through New York’s political establishment and raised alarms among transit advocates, commuters, and business leaders alike.
At the heart of the administration’s decision lies a contentious debate over diversity, equity, and inclusion (DEI) policies. According to the Associated Press, White House budget director Russ Vought declared on X that the funding freeze was imposed because the administration believes the projects rely on “unconstitutional DEI principles.” Specifically, the Trump team argues that New York State’s requirement for minority- and women-owned business participation in public works violates the Constitution. The Department of Transportation formalized the order, stating it would conduct a review to determine “whether any unconstitutional practices are occurring.”
The projects in question are not minor undertakings. The Gateway Hudson River Tunnel Project is intended to relieve the burden on a more than 110-year-old tunnel connecting New York and New Jersey—a vital artery through which hundreds of thousands of Amtrak and commuter rail passengers travel daily. The Second Avenue subway extension, meanwhile, represents a decades-long effort to expand transit access to East Harlem, a historically underserved neighborhood. As The Associated Press reported, both projects are already under construction and had received partial funding under the Biden administration, with $3.4 billion earmarked for the subway and $6.8 billion for the tunnel.
The funding freeze drew immediate and sharp criticism from New York’s leaders. Senate Democratic leader Chuck Schumer, whose state stands to lose thousands of jobs and critical infrastructure improvements, did not mince words. “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 said on X. Governor Kathy Hochul echoed his frustration at a news conference, lamenting, “You can't make this up, folks. Just keeps getting worse and worse. They're trying to make culture wars be the reason why, culture wars over the tens of thousands of jobs that we've created with these infrastructure products that were literally talked about for decades.”
The Metropolitan Transportation Authority (MTA), which oversees the subway expansion, was caught off guard. John McCarthy, the MTA’s policy chief and spokesperson, accused the administration of “inventing excuses to delay one of the most important infrastructure projects in America.” He added, “The federal government wants to immediately ‘review’ our compliance with rules they told us about moments ago. We’re reviewing their tweets and press releases like everyone else.”
For many observers, the timing of the funding hold was no coincidence. As reported by Daily Kos, the Department of Transportation issued an interim final rule just a day before the announcement, abruptly removing race- and sex-based presumptions of social and economic disadvantage from federal contracting programs. This effectively dismantled the Disadvantaged Business Enterprise Program, which had long allowed small, minority- and women-owned businesses to compete for federal contracts. The administration’s critics argue that the new rule and the funding freeze are part of a broader backlash against racial justice initiatives that gained momentum following the murder of George Floyd in 2020.
Rev. Al Sharpton, a prominent civil rights leader, minced no words in his condemnation. “With one jab he [Trump] sought to weaken the gold-standard requirements for Black, women and other businesses who historically have not had their shot at contracts,” Sharpton wrote in an email, as quoted by the New York Daily News. “Then he dealt a crushing left hook to Black and brown New Yorkers who were counting on better subway access to East Harlem, as well as New Jersey residents who deserved safe access under the Hudson River. Even by Donald Trump’s standards, he has reached a new low in his crusade to push disadvantaged communities deeper into the margins.”
Legal experts and good government advocates believe the administration’s order is likely to face significant challenges in court. Rachael Fauss, an analyst at Reinvent Albany, told the Daily News, “The administration changing the rules arbitrarily, midstream, and there's real harm to the MTA as a result of this and New York City as a whole because of the transit security funding.” David Glasgow, executive director of NYU’s Meltzer Center for Diversity, Inclusion and Belonging, framed the move as part of a larger effort to “claw back progress on racial justice across the country.”
Despite the uncertainty, the agencies responsible for the projects remain determined to press on. The Gateway Development Commission, which oversees the tunnel, did not address the specifics of the funding hold but emphasized its commitment to keeping the project “on scope, schedule and budget.” CEO Thomas Prendergast stressed, “The work complies with all federal laws and regulations and will continue despite the Trump administration's push to cut its funds.” Amtrak and New Jersey Transit, both key players in the tunnel project, referred inquiries to the commission.
The political reverberations of the funding freeze extend beyond New York City. In New Jersey, the decision has already become a flashpoint in the forthcoming gubernatorial election. Democratic nominee Mikie Sherrill pledged 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, placed the blame squarely on Sherrill, with his campaign consultant Chris Russell stating, “If Mikie Sherrill did her job as a congresswoman, we wouldn’t be in this mess.”
For commuters, the stakes could not be higher. The Hudson River tunnel is a lifeline for the Northeast Corridor, and delays or disruptions ripple far beyond New York and New Jersey, affecting train service up and down the East Coast. The Second Avenue subway, first envisioned in the 1920s and finally partially opened in 2017, represents both a triumph of persistence and a symbol of the challenges facing urban infrastructure in the United States.
While the Trump administration insists its actions are about upholding constitutional principles and ensuring efficiency, critics view the move as a politically motivated attack on urban America and a setback for efforts to promote equity in public contracting. The battle lines are drawn not only in courtrooms but also in the court of public opinion, with the future of New York’s infrastructure—and the principles guiding its construction—hanging in the balance.
As legal challenges mount and political rhetoric intensifies, the fate of the Hudson River tunnel and Second Avenue subway will serve as a litmus test for the nation’s commitment to both modern infrastructure and inclusive economic opportunity. For now, one thing is clear: the road—or rail—forward promises to be anything but smooth.
