USA: The Gateway Tunnel programme to add rail capacity between New York and New Jersey, the next phase of New York’s Second Avenue Subway project and Chicago’s metro Red Line metro extension are all facing funding cuts amid the US federal government shutdown.
On October 1, Russ Vought, head of the White House Office of Management & Budget, announced on social media that approximately $18bn in funding for the trans-Hudson Gateway Programme and the next phase of the Second Avenue Subway would be paused pending a review to ‘ensure funding is not flowing based on unconstitutional DEI principles’. DEI refers to the diversity, equality and inclusion policies which have been a frequent target of the Trump administration’s ire.
Roughly $18 billion in New York City infrastructure projects have been put on hold to ensure funding is not flowing based on unconstitutional DEI principles. More info to come soon from @USDOT.
— Russ Vought (@russvought) October 1, 2025
In a statement, the US Department of Transportation said that New York state’s ‘two mega projects — the Second Avenue Subway and the Hudson Tunnel — are under administrative review to determine whether any unconstitutional practices are occurring. The Department is focusing on these projects because they are arguably the largest infrastructure initiatives in the Western Hemisphere, and the American people want to see them completed quickly and efficiently.
‘Until USDOT’s quick administrative review is complete, project reimbursements cannot be processed, including a $300m disbursement for the Second Avenue Subway. The remaining federal funding for these projects totals nearly $18bn’, it added.
The pause in SAS funding comes just over a month after a $2bn design and build contract was awarded to the Connect Plus Partners joint venture of Halmar International and FCC Construction to extend the Q Line north by 2·8 km from 96th Street to 125th Street. SAS Phase 2 comprises approximately 2 km of twin-bore running tunnels, station shell construction at 116th and 125th Streets, and reuse of an existing tunnel segment originally built in the 1970s.
Gateway focus
Responding to the pause in its project’s federal funding, Gateway Development Commission CEO Tom Prendergast said the project promoter had ‘received notification from the Federal Transit Administration regarding a pause in disbursements for the Hudson Tunnel Project. GDC complies with all federal laws and regulations and will continue to do so throughout the project. We look forward to continuing our productive relationship with the [Trump] administration, FTA, FRA and the US Department of Transportation. In the meantime, we remain focused on keeping the project on scope, schedule, and budget.’
The Gateway programme covers construction of a second pair of railway tunnels to take the Washington DC – New York – Boston Northeast Corridor under the Hudson River between New York City and New Jersey. The construction of 4 km of twin-bore tunnels and 2∙2 km of new alignment by 2035, and rehabilitation of the existing 1910 twin-bore North River Tunnel by 2038, will increase capacity on a critical section of the main line.
The cost is being split 70:30 between the federal government and local partners. These are the states of New York and New Jersey and the Port Authority of New York & New Jersey.
Chicago on hold
On October 5, USDOT issued a further statement confirming that it planned to withhold $2·1bn in public transport funding for the state of Illinois, primarily affecting urban rail projects being managed by Chicago Transit Authority.
The department said that ‘USDOT issued an interim final rule barring race- and sex-based contracting requirements from federal grants. To continue implementation of this rule, USDOT today sent letters to the Chicago Transit Authority to inform them that two projects — the CTA Red Line Extension and the CTA Red and Purple Modernisation Programme — are also under administrative review to determine whether any unconstitutional practices are occurring. This is in addition to reviews of New York’s Second Avenue Subway and Hudson Tunnel projects.’
Illinois governor JB Pritzker accused President Trump of ‘holding bipartisan funding hostage. It’s attempting to score political points but is instead hurting our economy and the hardworking people who rely on public transit to get to work or school.’
At a time when federal agents are sowing chaos in Chicago, the Trump administration is holding bipartisan funding hostage.
— Governor JB Pritzker (@GovPritzker) October 3, 2025
It’s attempting to score political points but is instead hurting our economy and the hardworking people who rely on public transit to get to work or school. https://t.co/h8zzqI3awR
