Media members and workers from the Metropolitan Transportation Authority (MTA) stand in a tunnel section during a tour of the site of the Second Avenue Subway tunnel expansion, a major infrastructure project beneath the Harlem section of Manhattan in New York City, New York, U.S., November 23, 2021. REUTERS/Mike Segar

By David Shepardson

WASHINGTON (Reuters) -The federal government is withholding $18 billion for the Hudson Tunnel reconstruction project and Second Avenue Subway, two of New York City's biggest construction projects, the White House budget chief said on Wednesday.

The hold was announced hours after a partial government shutdown began and is the latest effort to pressure Democrats in Congress over the shutdown.

Senate Democratic Leader Chuck Schumer from New York has been a strong proponent of both projects and is leading Democratic opposition to President Donald Trump's plan to continue government funding.

"Roughly $18 billion in New York City infrastructure projects have been put on hold to ensure funding is not flowing based on unconstitutional DEI principles," said White House Office of Management and Budget director Russ Vought on X, referring to diversity, equity and inclusion efforts.

The U.S Transportation Department said it would not process a $300 million reimbursement for the subway project pending an administrative review, adding that it will take more time because staff responsible for conducting the review have been furloughed in the shutdown.

In its statement, USDOT blamed Schumer and House Democratic Leader Hakeem Jeffries of New York for the shutdown.

The $17.2 billion Hudson River tunnel project -- which received more than $11 billion in federal grants -- is repairing an existing tunnel, and building a new one for passenger railroad Amtrak and state commuter lines between New Jersey and Manhattan.

Any failure of the current Hudson tunnel, which was heavily damaged during 2012's Superstorm Sandy, would hobble commuting in the metropolitan area that produces 10% of the country's economic output.

The Biden administration awarded $3.4 billion for the Second Avenue Subway project that extends the line to provide improved transit service to Harlem.

USDOT said it had sent letters to New York about the state of the review that is determining if the state is engaged in any discriminatory practices.

Amtrak, New York Governor Kathy Hochul and Schumer did not immediately comment. Trump, a former New York City real estate developer, refused to approve funding for the projects in his first term.

USDOT has also repeatedly threatened New York transit funding.

In August the department said it may withhold 25% of federal transit funding for New York state's Metropolitan Transportation Authority if the agency does not improve safety for subway track maintenance workers.

The Trump administration is also trying to kill Manhattan's

congestion pricing program introduced early this year, designed to reduce traffic and raise billions in funds for mass transit.

The Trump administration has also threatened to withhold MTA funding over subway crime.

(Reporting by Doina Chiacu and David Shepardson; Editing by Chizu Nomiyama and Chris Sanders)