Transportation Secretary Sean Duffy on Monday defended the suspension of funding for two significant NYC transportation projects, avoiding confirming whether the halt was retaliatory for the government shutdown. He also took the opportunity to criticize New York Sen. Chuck Schumer regarding the shutdown.

The projects in question are the long-awaited Second Ave. subway extension to East Harlem and the creation of a new tunnel under the Hudson River to increase train traffic between New York and New Jersey. Funding was put on hold by the Trump administration early last Wednesday, coinciding with the onset of the federal shutdown.

At the time, Duffy and Office of Management and Budget Director Russell Vought stated that the decision was due to the MTA and Gateway Development Commission allegedly violating a rule only published hours earlier.

This rule, entered into the federal register on Friday, prohibits using race- or sex-based criteria to determine if a contractor qualifies as a “Disadvantaged Business Enterprise” under a Reagan-era program intended to direct big contracts to disadvantaged small businesses.

Duffy addressed reporters at Newark Airport Monday after visiting with air traffic controllers working without pay during the ongoing federal shutdown. He attributed the shutdown to Congressional Democrats, who are delaying their votes to fund the government until an agreement on healthcare costs is reached with the Republican majorities in both chambers.

When asked if the funding freeze for the Second Ave. and Hudson River Tunnel projects was meant to penalize Democratic states post-shutdown, Duffy sidestepped the question, simultaneously faulting Senate Minority Leader Chuck Schumer (D-New York).

“Several months ago I sent out a letter telling everyone who receives federal money to follow the law,” Duffy said

“There has been a tendency with some of these projects to look at race and sex as a [marker of a] disadvantaged business as opposed to the size of the company — this is unconstitutional, it’s contrary to law,” he said. “We had sent out notice, again, months ago. We let them know that this was going to go under review.”

“When the shutdown happened, our civil rights division, most of it was furloughed,” he added. “So the review process is going to take longer than what we would anticipate.”

The legality of sex- and race-based considerations in the DBE process is still a live issue, currently being litigated in federal court in the Eastern District of Kentucky.

As to whether the agencies leading the Hudson River Tunnel and Second Ave. subway projects were warned that their DBE practices were about to come under review, sources at both the Gateway Development Commission and the MTA told The News that last Tuesday was the first they’d heard of any such plan.

Asked if he was calling the projects illegal ahead of the completion of USDOT’s review, Duffy then walked back his claim that the agencies were breaking the law.

“What I’m saying is it’s up for review,” Duffy said. “There’s been issues in New York, not using [the Disadvantaged Business Enterprise Program] appropriately — looking at the race and the sex of a business as opposed to the size of the business, which is what the law was intended for.”

The Transportation secretary insisted that the Trump administration supports the projects.

“We’re not trying to shut down these projects – to the contrary, we’re trying to make sure these projects move forward, move forward fast. They’re important,” he said.

“The question is why would Chuck Schumer, who says he cares about the projects, shut down the government so we don’t have the staff to review the contracting authority used on these projects and if it’s done constitutionally?”

In a statement to The News on Monday, Schumer said Democratic lawmakers were ready to negotiate

“We’re ready to work with Republicans to reopen the government, and end the health care crisis that faces tens of millions of Americans,” Schumer said. “But it takes two sides to have a negotiation. We need Senate Republicans to come to the table.”

“Meanwhile, [President] Donald Trump and Speaker Johnson seem to be on another planet because trying to stop the very popular and vital Gateway tunnel and Second Ave. subway mega-projects only screws New York and New Jersey commuters, threatens countless construction jobs and stymies our entire economy,” he added.

Federal funding for both projects serves largely to reimburse money already spent, and both GDC and MTA have said work on their respective projects can continue for now.

“Everyone gets the message that New York is getting picked on, ” MTA Chairman Janno Lieber said Monday. “We’re hoping and expecting that rationality will prevail when the shutdown in resolved.”

“They want to perform a review that we’re in compliance with a rule they sent to us after they announced the review,” Lieber said. “We’re going to be able to comply with that.”

Last week, asked about the same issue, Lieber sought to assure New Yorkers that the MTA’s contracting principles would remain.

“We’re going to continue, most importantly, to have an aggressive minority- and women-owned business program in the state-funded side of our capital program,” he said.

The Trump administration announced last week that two transit projects in Chicago — a city to which Trump is attempting to deploy the National Guard — have also been denied funding on similar grounds.

Originally Published: October 6, 2025 at 6:55 PM EDT