Transportation Secretary Sean Duffy said Wednesday that the Transportation Department is withholding roughly $18 billion in funds for two New York City infrastructure projects, citing the partial government shutdown and “race- and sex-based contracting” requirements.
The announcement comes hours after the Senate rejected legislation to keep the government open, triggering a partial shutdown beginning Wednesday morning. He singled out the Hudson River Tunnel project and the Second Avenue Subway.
Republicans blame Democrats, especially Senate Minority Leader Charles E. Schumer and House Minority Leader Hakeem Jeffries, both from New York, for opposing a “clean” stopgap funding bill that would fund the government for seven weeks.
The Senate voted Tuesday to reject the bill passed by the House in September. The Senate also rejected a Democratic bill that would fund the government through October.
Democrats say GOP leaders have refused bipartisan negotiations to keep the government open.
“Thanks to the Chuck Schumer and Hakeem Jeffries shutdown, however, USDOT’s review of New York’s unconstitutional practices will take more time,” Duffy said in a statement. “Without a budget, the Department has been forced to furlough the civil rights staff responsible for conducting this review.”
Senate Majority Leader John Thune, R-S.D., said Wednesday the consequences of a shutdown were “pretty straightforward.”
“Vote to open up the government and that issue goes away, right?” Thune said to reporters. “I don’t control what they’re going to do. They’re going to manage the shutdown. And this is the game the Democrats are playing, and they know it.”
Office of Management and Budget Director Russ Vought signaled the freeze in a posting Wednesday on the social media platform X.
Jeffries responded with his own posting: “Again with this guy (and his baseless threats). Russ, you are the poster child for privilege and mediocrity. Get lost.”
Jeffries also discussed the projects at a later news conference.
“The Trump administration is targeting the jobs, thousands of jobs, of hardworking Americans, working-class Americans and blue-collar Americans who are going to lose the ability to work at the Second Avenue Subway site or at the other project that has been canceled relating to the Cross Harbor Tunnel,” he said.
“That is consistent with what the Trump administration has consistently done throughout their time in office: lose jobs, cause economic pain and hardship for the American people. It’s shameful, but it’s very consistent with the Trump administration’s track record of failing on the economy and targeting working-class Americans,” Jeffries said.
Schumer told reporters Wednesday that “He is using New Yorkers and New Jerseyites as pawns, and it’s a disgusting thing. It shows how little regard Vought and Trump have for working families.”
Duffy said DOT is focusing on the projects because they are “arguably the largest infrastructure initiatives in the Western Hemisphere.” Funding disbursements from DOT will be withheld until an administrative review of the occurrence of “unconstitutional practices” is complete, he said.
The threat to withhold the funding over diversity, equity and inclusion principles raises the prospect that New York could face a stoppage in federal aid that runs longer than a government shutdown.
Office of Management and Budget Director Russ Vought and President Donald Trump vowed Tuesday to use a government shutdown to consider ending entire programs that lose funding in a shutdown as well as imposing further cuts on the federal workforce.
“We can get rid of a lot of things that we didn’t want,” Trump said in the Oval Office. “They would be Democrat things.”
The DOT’s government shutdown planning document released Tuesday didn’t include plans to cancel project funding. In fact, many operations of the department’s agencies, like the Federal Highway Administration, were expected to be unaffected by a partial shutdown, because they receive funding outside of the annual appropriations process.
Duffy’s announcement is the latest instance when the Trump administration has gone toe-to-toe with New York City officials over transportation and infrastructure funding. During the first Trump administration, the White House proposed canceling funding for the Hudson River Tunnel Project aimed at easing congestion between New York and New Jersey.
The tunnel project received billions of dollars in federal funding from the Biden administration under the 2021 infrastructure law, including a $3.8 billion phased funding award in 2023.
The Second Avenue Subway project, an extension of the city’s subway system, received $3.4 billion from the Federal Transit Administration in 2023.
David Lerman and Aidan Quigley contributed to this report.
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