OMB Director Vought freezes $18 billion in congressionally-appropriated NYC infrastructure funds, citing pretextual DEI review
On October 1, 2025, the first day of the government shutdown, OMB Director Russell Vought announced a freeze of approximately $18 billion in Infrastructure Investment and Jobs Act funds earmarked for two major New York City projects — the Gateway Hudson River Tunnel and the Second Avenue Subway extension — claiming a review was needed to ensure funds were not "flowing based on unconstitutional DEI principles." The freeze blocked reimbursements already owed, including an immediately due $300 million disbursement, and targeted projects in districts represented by Senate and House Democratic leaders Chuck Schumer and Hakeem Jeffries. Critics and legal experts said the DEI rationale was pretextual and that the Impoundment Control Act prohibits such unilateral executive withholding of appropriated funds.
Actors
- Russell Vought (OMB Director)
- Office of Management and Budget
On October 1, 2025 — the first day of the federal government's FY2026 shutdown — OMB Director Russell Vought announced a freeze of approximately $18 billion in congressionally-appropriated infrastructure funds designated for two major New York City projects: the Gateway Hudson River Tunnel project (~$16 billion) and the Second Avenue Subway extension. Vought stated the funds would be held pending a review to ensure they were not "flowing based on unconstitutional DEI principles." The freeze immediately blocked reimbursements already owed to the projects, including a $300 million disbursement that was due that same day. The targeted projects sit in congressional districts represented by Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries — the two highest-ranking Democrats in Congress.
The funds were appropriated through the Infrastructure Investment and Jobs Act (IIJA), passed by Congress and signed into law in 2021. Under the Impoundment Control Act of 1974, the executive branch cannot unilaterally withhold congressionally-appropriated funds; if the President wishes to decline spending money Congress has directed, the law requires a formal rescission request to Congress. No such request was filed. Legal experts and budget watchdogs described the DEI rationale as pretextual — the Gateway and Second Avenue projects had been in progress for years with no prior DEI concerns raised by OMB — and noted that the administration applied no comparable freeze to comparable infrastructure spending in Republican-led districts.
A similar freeze targeting $2.1 billion in congressionally-appropriated infrastructure funds for Chicago followed on October 3, again in a Democratic-led district. The pattern — selectively withholding appropriated funds from Democratic congressional leaders' districts during a government shutdown, under a shifting pretextual rationale — illustrated the executive branch substituting political preference for the lawful congressional appropriations process.
Why we recorded this
The Impoundment Control Act of 1974 prohibits the executive branch from unilaterally withholding congressionally-appropriated funds; the President must spend what Congress appropriates or seek formal rescission. OMB's freeze of $18 billion in IIJA-appropriated infrastructure funds — offered with a pretextual DEI rationale, applied selectively to projects in districts led by Democratic congressional leaders — is a textbook impoundment that substitutes executive political preference for a lawful congressional spending decision. The Standing records this as an executive branch defying the statutory appropriations process to punish political opponents.
Sources
- White House freezes $18 billion in New York City infrastructure funding — NBC News primary accessed June 21, 2026
- Trump administration freezes $18 billion in infrastructure funding to New York, home of Schumer and Jeffries — CBS News secondary accessed June 21, 2026
- Trump administration freezes $18 billion in New York City infrastructure projects, Vought says — CNBC secondary accessed June 21, 2026
See also
- Trump administration fires 4,200 federal workers via shutdown RIFs, wielding budget lapse as workforce reduction tool
- Trump directs Pentagon to redirect $8B in R&D funds to military pay, bypassing Purpose Statute and congressional reprogramming
- OMB deletes GEFTA back-pay guarantee from shutdown guidance, claiming furloughed workers not entitled to statutory protection
- OMB Director Vought announces 10,000+ federal shutdown layoffs, vowing to use budget lapse for permanent workforce cuts
- EPA used litigation to circumvent Clean Air Act rulemaking, seeking to vacate Biden PM2.5 soot standard