Feds Suspend Billions for Chicago Transit Projects Amid 'Race-Based Contracting' Concerns

The federal government has frozen $2.1 billion in funding for Chicago infrastructure projects, Office of Management and Budget Director Russ Vought said Friday, citing concerns that the money could be used for what he described as "race-based contracting."

Vought announced the decision on social media, specifying that the pause affects the long-anticipated Red Line extension, which was set to break ground next year, as well as modernization work on the Red and Purple lines. "$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," he wrote.

The Red Line extension has been billed as one of the most significant transit expansions in Chicago in decades, as the Associated Press pointed out. The project is designed to add four stations on the city's South Side, improving access for underserved neighborhoods.

Local leaders expressed alarm at the decision, with Rep. Mike Quigley (D-Ill.) calling it "a very bad day for public transit in the country when it becomes weaponized" when reached for comment by AP. Quigley also added that:

"This was our prized baby and they know it. This was the most important new transit project in Chicago in 50 years"

Senate Majority Leader Chuck Schumer (D-N.Y.) criticized the decision, saying the halt would damage commuters and the broader economy. "Obstructing these projects is stupid and counterproductive because they create tens of thousands of great jobs and are essential for a strong regional and national economy," Schumer said.

The suspension follows a similar move earlier this week targeting New York, where $18 billion in infrastructure funding was put on hold, including support for a new rail tunnel under the Hudson River. In both cases, the administration has tied the freezes to concerns about contracting practices.

Transit researchers have warned that the funding freezes could force cities like Chicago and New York into court battles to argue they complied with federal grant requirements. Even if they succeed, experts note, delays will likely make the projects more costly.