WASHINGTON (AP) — President Donald Trump 's administration, citing the government shutdown, said Wednesday it was putting a hold on roughly $18 billion to fund a new rail tunnel beneath the Hudson River between New York City and New Jersey and an extension of the city's Second Avenue subway.
The White House budget director, Russ Vought, said on X that the step was taken due to the Republican administration’s belief the spending was based on unconstitutional diversity, equity and inclusion principles.
In a statement, Trump's Transportation Department said it had been reviewing whether any “unconstitutional practices” were occurring in the two massive infrastructure projects but that the shutdown, which began Wednesday, had forced it to furlough the staffers conducting the review.
The suspension of funds is likely meant to target Senate Democratic leader Chuck Schumer of New York, whom the White House is blaming for the impasse. He said the funding freeze would harm commuters.
“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,” he said on X.
The spending hold was a preview of how the messy the politics of the shutdown could get, with Vought later posting on X that $8 billion in funding for green energy projects in Democratic-led states would be canceled. The administration has shown a willingness to use its control of federal dollars to apply pressure on Democrats to reopen the government, with commuters and thousands of jobs hanging in the balance.
The agency working on the subway line said it was blindsided by the announcement. “For now, it looks like they’re just inventing excuses to delay one of the most important infrastructure projects in America,” read a statement from John McCarthy, policy chief and spokesperson for the New York state-controlled Metropolitan Transportation Authority.
At a news conference in New York City about the federal government shutdown, Gov. Kathy Hochul, D-N.Y., told reporters, “The bad news just keeps coming."
“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,” she said. “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.”
The Hudson River rail tunnel is a long-delayed project whose path toward construction has been full of political and funding switchbacks. It’s intended to ease the strain on a more than 110-year-old tunnel connecting New York and New Jersey. Hundreds of Amtrak and commuter trains carry hundreds of thousands of passengers per day through the tunnel, and delays can ripple up and down the East Coast between Boston and Washington.
In a 2023 interview with The Associated Press, Schumer said he and then-President Joe Biden were both “giddy” over the project.
Amtrak and the NJ Transit commuter rail system referred questions about the White House's announcement to the Gateway Development Commission, which is overseeing the tunnel project. Commission CEO Thomas Prendergast said the agency remains “focused on keeping the project on scope, schedule and budget.”
The commission did not address questions about the specifics of the funding suspension or what it means for the project.
The Trump administration specifically targeted New York City in putting a hold on the funding, but the move could also influence this year's election for governor in New Jersey.
The Democratic nominee, Rep. Mikie Sherrill, said on X that if elected, she would "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.”
Republican challenger Jack Ciattarelli's campaign said Sherrill owns the consequences of the shutdown.
“If Mikie Sherrill did her job as a congresswoman, we wouldn’t be in this mess,” Ciattarelli campaign consultant Chris Russell said by email.
Sherrill countered in a statement that “Washington Republicans must come to the table immediately to find a bipartisan consensus on a plan that reopens the government.”
The Second Avenue subway was first envisioned in the 1920s. The subway line along Manhattan’s Second Avenue was an on-again, off-again grail until the first section opened on Jan. 1, 2017. The MTA is working toward building the line's second phase, which is to extend into East Harlem.
Associated Press writers Anthony Izaguirre in Albany, New York, Jennifer Peltz in New York and Mike Catalini in Trenton, New Jersey, contributed to this report.
Russell Vought, Office of Management and Budget director, listens as he addresses members of the media outside the West Wing at the White House in Washington, Monday, Sept. 29, 2025, in Washington. (AP Photo/Evan Vucci)
