White House Budget Director Russ Vought said Wednesday the Trump administration is now withholding $18 billion in federal funding for two New York City infrastructure projects – including the Hudson River rail tunnel project connecting New Jersey and New York.
In a social media post, Vought said the previously approved federal funding for the Hudson tunnel project, as well as the city’s 2nd Avenue subway project, “have been put on hold to ensure funding is not flowing based on unconstitutional DEI principles.”
Vought’s announcement comes on the first day of a partial federal government shutdown after the lawmakers in the Republican-controlled Congress failed to pass a funding bill that would have kept the government open. The Trump administration has blamed the impasse on Democrats, who are led by Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, both from New York City.
The U.S Transportation Department said Wednesday the funds for the two infrastructure projects would not be distributed while the USDOT is reviewing New York’s “discriminatory unconstitutional contracting processes.” This review was prompted by the president’s executive order earlier this year targeting diversity, equity and inclusion programs.
On Tuesday, the USDOT issued an interim final rule that removes race and gender-based contracting requirements for projects receiving federal grants.
The $16 billion Hudson Tunnel project, a key part of the Gateway program, is a multiphase infrastructure project to build a new two-track rail tunnel beneath the Hudson River and rehabilitate the existing 115-year-old Noth River Tunnel that was damaged by Superstorm Sandy in 2012. Transportation officials in both New York and New Jersey view the tunnel project, already under construction, as critical to expanding transportation capacity.
Gateway Development Commission (GDC) CEO Thomas Prendergast confirmed the commission has been notified that the federal funds are paused.
"GDC complies with all federal laws and regulations, and will continue to do so throughout the project," Prendergast. "We look forward to continuing our productive relationship with the Administration, FTA, FRA, and the US Department of Transportation. In the meantime, we remain focused on keeping the project on scope, schedule, and budget."
Rep. Josh Gottheimer, a Democrat who represents North Jersey’s 5th Congressional District, criticized the Trump administration’s decision to withhold the federal funding.
“Donald Trump’s attack on the Gateway Train Tunnel is not only an assault on mass transit, but it’s also an attack on the economy, labor, and American competitiveness,” Gottheimer said. “If Trump wants America to win and to create jobs, he will immediately unfreeze the funding I helped negotiate and secure for the Gateway Train Tunnel in the Bipartisan Infrastructure Bill. Enough chaos — time for a little common sense."
