The Trump administration has frozen $18 billion in federal funding for major transit work in the New Jersey-New York region, halting progress on the Hudson Tunnel Project and the Second Avenue Subway extension.
The freeze was announced on X by Office of Management and Budget Director Russell Vought, an author of Project 2025, who said the action was intended to prevent federal dollars from being tied to “unconstitutional” diversity, equity and inclusion (DEI) requirements.
This comes during the first day of the government shutdown after the Senate failed to pass a continuing resolution on Tuesday. Vought is expected to make several budgetary moves during the shutdown. On Tuesday, Vought called the shutdown an “opportunity” for mass layoffs within the federal workforce.
What Does It Mean for New Jersey?
For New Jersey residents, the cancellation of Hudson Tunnel Project funds carries the greatest weight.
The project calls for construction of a new two-track tunnel under the Hudson River and rehabilitation of the existing North River Tunnel, which connects Secaucus and North Bergen to Penn Station in Manhattan. The North River Tunnel, more than 110 years old, is the only passenger rail link between New Jersey and New York City. Amtrak and NJ Transit rely on it daily, but age and storm damage from Hurricane Sandy in 2012 have left it prone to disruption.
The Hudson Tunnel plan is designed to modernize service on the Northeast Corridor, the busiest passenger rail line in the nation. Under the project, trains would shift into a new tunnel once completed, allowing repairs on the older structure before both are returned to full use. New Jersey officials have long argued that the project is essential to protecting commuter and intercity rail service.
NJ Transit completes nearly 60 million rail trips a year. The decision to cancel congressionally appropriated funds comes after a year of significant NJ Transit delays.
What Does It Mean for NYC?
In New York City, the funding freeze affects the Second Avenue Subway, a decades-long effort to expand the subway system on Manhattan’s East Side. The extension is considered one of the city’s most critical transit upgrades, with goals of easing congestion and improving access for underserved neighborhoods.
The unprecedented move adds new uncertainty for both projects, which have faced years of delays tied to cost, environmental review and political disputes between NJ/NY state leaders and Washington.
What Does the Government Shutdown Mean for You?
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.