Trump freezes $2.1B in Chicago transit funding citing "race-based contracting"

On Oct. 3, 2025 OMB Director Russell Vought announced the administration would put on hold $2.1 billion in federal disbursements for the CTA's Red Line Extension and Red and Purple Modernization projects.

The U.S. Department of Transportation published an interim final rule affecting the DBE and ACDBE programs on Sept. 30, 2025, and said it sent letters to the CTA on Oct. 3 to open administrative reviews of the two projects.

The Federal Transit Administration executed a Full Funding Grant Agreement that contractually obligated $1.9 billion for the Red Line Extension earlier in 2025.

The Rescissions Act of 2025 was signed into law on Jul. 24, 2025, using the Impoundment Control Act's special rescission procedures. That law does not permit the President to unilaterally cancel already-obligated funds without Congress approving a rescission under the ICA process. [CRS;

Local officials, including Mayor Brandon Johnson, condemned the pause and said the city would pursue legal options and demand restoration of disbursements. The CTA and 🌽Illinois delegation said the pause threatens project schedules and jobs.