Trump To Withhold Billions Of Dollars From Gateway Tunnel And Second Ave. Subway Projects

The Trump administration is planning to withhold billions of dollars from one of the nation’s largest public works projects in direct retaliation for the government shutdown, which Republicans are blaming on Senate Minority Leader Chuck Schumer and fellow Democrats.

White House budget director Russell Vought said Wednesday the administration is withholding “roughly $18 billion” from New York City infrastructure projects because of “unconstitutional DEI principles.” He specifically cited funding for the massive bistate Gateway Program, which includes a new train tunnel under the Hudson River to connect New York and New Jersey, and New York City’s Second Avenue Subway line.

The Department of Transportation had written New York to inform the state the two projects were under administrative review to determine whether the state was subsidizing infrastructure contracts with taxpayer money based on discriminatory principles, referring to DOT’s Disadvantaged Business Enterprise Program.

A spokesperson for the Transportation Department, in a statement, blamed Democratic leaders in Congress for the shutdown and said it led to the agency furloughing civil rights staff responsible for conducting the 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 remaining federal funding for these projects totals nearly $18 billion,” the spokesperson said. “Thanks to the Chuck Schumer and Hakeem Jefferies shutdown, however, USDOT’s review of New York’s unconstitutional practices will take more time. Without a budget, the Department has been forced to furlough the civil rights staff responsible for conducting this review.”

The Transportation Department on Tuesday issued an interim final rule that “removes race and sex-based presumptions of social and economic disadvantage that violate the U.S. Constitution.”

Trump delayed the tunnel project during his first term. Then President Joe Biden and Schumer (D-N.Y.) directed billions of dollars toward it in an attempt to Trump-proof the tunnel. For months, Trump has not questioned the project and directed hundreds of millions of dollars toward it in a budget proposal. It is expected to employ thousands of union laborers in New York and New Jersey and elements of it are already under construction.

Vought’s announcement is expected to be challenged in court by interested parties, though it’s not clear who will seek an injunction first.

The New York Metropolitan Transportation Authority is already battling the administration over its attempt to kill a tolling program meant to fund the agency. A judge is expected to rule in that case any day.

New York Gov. Kathy Hochul said Wednesday morning that things keep getting “worse and worse,” citing the funding freeze.

“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 projects that were literally talked about for decades,” she said.

Rep. George Latimer (D-N.Y), who represents commuter-rich New York City suburbs in Westchester County, called the move an act of political revenge by the president.

“Political revenge. Clearly outlined by Trump, time and again. He sees the U.S. as Blue and Red, and Blue states are enemies. As he has said many times, he hates his enemies; he is the retribution. Has he announced any rescission of any projects in Florida or Texas?” Latimer said in a text message.

The Transportation Department under Secretary Sean Duffy has rescinded grants and held up funds for projects with components that didn’t align with the administration’s priorities — like those geared at promoting DEI, bike travel and green infrastructure. Liberal cities, including New York, have been a constant target for the administration, and the move by Vought to inflict even more pain on Democratic strongholds during a government shutdown is one of many tools the administration plans to use to pressure congressional Democrats to reach a deal to fund the government.

Spokespeople for Schumer, the MTA and the Gateway project did not immediately respond to a request for comment.

Rep. Rob Menendez (D-N.J.) called the Trump administrative vindictive.

“They will go after any community for any reason, and I think they're using the shutdown as a reason to settle political score,” he said.

Rep. Pete Aguilar, the Californian who chairs the House Democratic Caucus, said the move was about extracting pain.

“This isn't about policy priorities for them,” he said. “This is shameful, and it's tough, and it shows that we don't have true negotiating partners.”