The U.S. Department of Transportation (USDOT) has paused more than $2.1 billion in funding for two major Chicago Transit Authority (CTA) projects — the Red Line Extension and the Red and Purple Modernization Program — pending a review of the city’s contracting practices.
According to an announcement from the Office of Management and Budget (OMB), the decision follows a new federal rule barring race- and sex-based contracting requirements from infrastructure grants. The rule, issued earlier this month, is part of a broader effort to ensure compliance with constitutional and civil rights standards in federally funded projects.
USDOT said in a statement that the administrative review aims to “ensure no additional federal dollars go toward discriminatory or illegal contracting practices.” The agency emphasized that the move is not a cancellation but a temporary pause while the review is completed.
OMB Director Russell Vought confirmed the review Friday, posting on X that the freeze would remain in effect until the agency determines whether any violations occurred.
City officials, including Chicago Mayor Brandon Johnson, criticized the decision, warning that it could delay critical infrastructure upgrades and harm communities awaiting long-promised transit improvements.
The announcement follows a similar funding freeze earlier this month involving $18 billion in New York City infrastructure projects, which were also placed under review for compliance with the same rule.
The reviews come amid an ongoing federal government shutdown, which the Transportation Department said may delay completion of the analyses due to reduced staffing levels.
USDOT maintained that it is committed to conducting the reviews “as quickly as possible so reimbursements can move forward.”