The Trump administration has placed $2.1 billion in Chicago transit funding on hold as the federal government shutdown extends into its third day.
Budget Director Russell Vought said the suspension targets the Red Line Extension and the Red and Purple Modernization Project, citing concerns over race-based contracting.
The move follows similar actions in New York and Democratic states, where billions in clean energy and transport projects have also been frozen.
As discussions over federal funding stall, the White House is weighing broader job cuts across federal agencies, potentially affecting thousands of workers nationwide.
Chicago projects halted amid federal shutdown
Russell Vought announced on X that Chicago’s Red Line Extension and Red and Purple Modernization Project would not receive funding for now.
$2.1 billion in Chicago infrastructure projects–specifically the Red Line Extension and the Red and Purple Modernization Project–have been put on hold to ensure funding is not flowing via race-based contracting. More info to come soon from @USDOT.
He stated that the decision was made to ensure federal money was not flowing through contracting practices under review.
The suspension comes at a critical time for Chicago’s transit system, which has long relied on federal investment to modernise infrastructure and expand rail lines.
The decision also positions Chicago alongside other Democratic-led states where projects have been frozen.
Earlier this week, the administration suspended $18 billion in New York infrastructure projects and $8 billion in clean energy funding.
These measures are part of a broader strategy during the shutdown, which President Donald Trump has signalled may also be used to justify significant cuts to the federal workforce.
Shutdown strategy linked to federal job cuts
President Trump has repeatedly suggested that the ongoing shutdown could be used to reshape the federal government.
He has discussed using the budget standoff to justify firing thousands of federal workers and scaling back programmes he argues are favoured by Democrats.
Vought met with Trump on Thursday to discuss the scope of potential job reductions, with a decision expected soon.
The administration has indicated that funding will be directed towards its priorities, while withholding money from projects seen as inconsistent with its approach.
House Speaker Mike Johnson told reporters that the White House intends to continue applying pressure through selective funding decisions, warning that the impact of the shutdown will intensify if it continues.
Chicago singled out in wider political clash
Chicago has long been a focal point for Trump’s criticism.
He has previously threatened to send in the National Guard to tackle crime in the city, framing it as a Democratic stronghold with persistent problems.
By targeting Chicago’s transit projects, the administration is underscoring the political dimensions of the funding freeze, making the city emblematic of the broader conflict between Republicans and Democrats over federal spending priorities.
The suspension of transit funding highlights how the shutdown is being used not just as a budgetary standoff, but as leverage in shaping federal investment.
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