Federal funding for NYC subway, NY-NJ rail projects on hold: Here’s why

Government shutdown starts: Who's working, what's open?

The government officially shut down overnight after Congress failed to pass a funding measure before the 12 a.m. Wednesday deadline. FOX 5 NY's Hayley Fixler has the latest details.

NEW YORK - The Trump administration is putting a hold on the $292 million federal mega grant intended to alleviate congestion for commuter trains traveling between New York and New Jersey. The pause also impacts funds for construction on the second phase of New York City’s Second Avenue subway.

The grant was awarded in 2021 under former President Joe Biden’s hard-fought, bipartisan $1 trillion infrastructure deal, but the federal government raised concerns over "unconstitutional" practices involving DEI.

FILE- In this May 25, 2017, file photo, a train moves through Penn Station in New York. The news that Amtrak is working with federal officials to do extensive repairs to its Hudson River rail tunnel while a plan to build a new tunnel languishes raise

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Here’s what we know so far about why these funds were placed on hold and what New York and New Jersey commuters should know:

‘Unconstitutional DEI principles’

What they're saying:

In a tweet posted Wednesday, White House budget director Russ Vought said step was taken due to the Republican administration’s belief that the money was "based on unconstitutional DEI principles," a reference to diversity, equity and inclusion.

In a statement, the USDOT said that both long-awaited Hudson River Tunnel and Second Avenue subway projects 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," the statement read.

A source, however, told the Associated press that a government shutdown that started at midnight meant that the Transportation Department employees responsible for reimbursing workers on the projects had been furloughed, so the money was being withheld.

"The bad news just keeps coming," New York Gov. Kathy Hochul said, adding that "they’re trying to make culture wars be the reason why."

"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."

MTA's Chief of Policy and External Relations provided a statement saying, "The federal government wants to immediately ‘review’ our compliance with rules they told us about moments ago. We’re reviewing their tweets and press releases like everyone else. For now, it looks like they’re just inventing excuses to delay one of the most important infrastructure projects in America."

Impacted projects

Hudson River Tunnel Project

Dig deeper:

The project will renovate the 1910 tunnel already carrying about 200,000 weekday passengers beneath the Hudson between New Jersey and Manhattan, a long-delayed upgrade after decades in which the government underfunded infrastructure.

The grant would be used to help complete the concrete casing for an additional rail tunnel beneath the river, preserving a right of way for the eventual tunnel.

In total, the project is expected to cost $16 billion and help ease a bottleneck for New Jersey commuters and Amtrak passengers going through New York City. Delays can ripple up and down the East Coast between Boston and Washington, D.C.

FILE — A crew works near an entrance of the unfinished Second Avenue subway line in New York, Dec. 14, 2016. (AP Photo/Seth Wenig, File)

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Second Avenue Subway Project 

The federal funding would also help expand Second Avenue Q train service into East Harlem.

In 2017, New York opened Q train stations on Second Avenue at 96th, 86th and 72nd streets in 2017 — the first phase of a project envisioned in the 1920s. The second phase of the project is expected to impact 300,000 riders daily, with three new stations opening at 106th, 116th and 125th Streets.