WASHINGTON — The Trump administration is halting reimbursements on nearly $18 billion in federal commitments to two of New York City’s largest infrastructure projects — the Hudson Tunnel and the Second Avenue Subway expansion — pending a review of contracting practices.
White House budget director Russell Vought said on Wednesday the move is tied to concerns over “unconstitutional DEI principles” in infrastructure contracting, a reference to diversity, equity, and inclusion practices that the administration is trying to stamp out.
The projects are part of the multibillion-dollar Gateway Program and the Metropolitan Transportation Authority’s long-delayed Second Avenue subway, both of which rely heavily on federal support.
The U.S. Department of Transportation has formally notified New York officials that the projects are under administrative review to determine whether the state has steered contracts using race- or gender-based criteria in violation of federal law. The review specifically cites DOT’s Disadvantaged Business Enterprise program.
On Tuesday, DOT issued an interim final rule removing “race and sex-based presumptions of social and economic disadvantage” from federal contracting programs.
Until the review is complete, the department says it cannot process federal reimbursements. That includes a $300 million payment for the Second Avenue subway that was scheduled for release this year. In total, DOT said nearly $18 billion in remaining federal funding for the two projects is now on hold.
The agency added that the ongoing federal government shutdown has complicated the process by forcing the furlough of civil rights staff responsible for conducting the review. No timeline for completing the review has been provided.
The Hudson Tunnel Project is central to Amtrak’s Gateway Program, which would add a new two-track tunnel under the Hudson River and eventually double rail capacity between New Jersey and New York. The project is critical for both Amtrak’s Northeast Corridor and NJ Transit commuter operations, as the existing North River Tunnels — now 113 years old — suffered extensive damage during Hurricane Sandy in 2012.
The Second Avenue Subway project aims to relieve congestion on Manhattan’s Lexington Avenue Line by extending service north through East Harlem, with new stations planned at 106th, 116th, and 125th streets.
