Chicago’s infrastructure plans have hit an unexpected obstacle as the Trump administration paused $2.1 billion in federal funding for major transit projects. The freeze affects the CTA Red Line Extension and the Red and Purple Modernization Project, citing concerns over race- and gender-based contracting practices.

Federal officials want to ensure that taxpayer dollars are distributed fairly and legally. Russell Vought, Director of the Office of Management and Budget, confirmed the decision on X, stating that the projects will remain on hold until a thorough review is completed. The U.S. Department of Transportation said both projects are under administrative review to determine whether any discriminatory or non-compliant practices have occurred.

Earlier this month, USDOT issued a new rule requiring firms to demonstrate eligibility individually for federal grants rather than relying on group identity, removing automatic assumptions based on background. Officials emphasized that Americans want projects completed efficiently and fairly, without favoritism.

This follows a similar freeze of roughly $18 billion in New York infrastructure funding, signaling a broader federal approach. Chicago officials have not provided a full response but warned the funding pause could delay critical transit upgrades and impact thousands of jobs. For now, both projects remain in limbo. Federal money may resume if the reviews clear the projects, or remain blocked if violations are confirmed. The administration has made clear that federal funding will only support projects that comply with constitutional contracting standards.