The Trump administration has ordered an immediate pause on more than $11 billion worth of U.S. Army Corps of Engineers projects, citing funding constraints caused by the ongoing government shutdown.
The move marks one of the largest federal project suspensions in recent history and underscores the administration’s growing use of the shutdown as leverage to reshape federal spending priorities.
Russell Vought, director of the White House Office of Management and Budget and a key architect of President Donald Trump’s budget strategy, announced the decision Friday on X.
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“The Democrat shutdown has drained the Army Corps of Engineers’ ability to manage billions of dollars in projects,” he wrote, adding that the suspended funds concern “lower-priority projects” in major cities including New York, San Francisco, Boston, and Baltimore.
The Army Corps of Engineers, a 37,000-member agency comprising both civilian and military personnel, has yet to comment publicly on the directive. The Corps oversees critical infrastructure work ranging from flood control and port maintenance to military construction and disaster recovery — projects that are now in limbo as the shutdown drags on.
According to administration officials, the paused projects are part of a broader effort to reassess and potentially cancel federal spending viewed as inconsistent with Trump’s fiscal agenda. Vought — who co-authored Project 2025, a conservative blueprint for overhauling the federal government — has been the first to announce layoffs, funding freezes, and project cancellations tied to the shutdown.
The decision is the latest escalation in what the White House calls an “opportunity” to downsize the federal bureaucracy. Both Trump and Vought have framed the shutdown as a chance to realign spending with what they describe as “national priorities” while cutting off funding for programs they associate with Democratic strongholds.
On the day the shutdown began, the administration froze roughly $18 billion in funding for two major infrastructure projects in New York City and canceled an additional $8 billion for climate-related projects in Democratic-leaning states. Two days later, the Office of Management and Budget confirmed that another $2.1 billion in Department of Transportation funds earmarked for Chicago’s transit system had been suspended.
The White House has also indicated that thousands of federal jobs are at risk. Vought announced last week that more than 4,000 reduction-in-force notices had already been issued, with total cuts expected to surpass 10,000. However, a federal judge on Wednesday temporarily blocked the administration from carrying out those layoffs, ordering the government to halt all terminations until further review.
The project freeze is expected to ripple through industries connected to federal contracting and infrastructure development. Many of the affected projects fall under flood prevention, harbor dredging, and coastal resilience initiatives — sectors that rely heavily on long-term federal commitments. A prolonged pause could delay regional construction schedules, stall procurement deals, and strain local economies dependent on public works spending.
Analysts note that the move represents a significant break from prior shutdown strategies. Historically, agencies have been allowed to continue work deemed essential to public safety or national security. The Trump administration’s broad definition of “lower-priority projects” appears to extend beyond that standard, potentially setting a precedent for more politically targeted shutdown actions.
Budget analysts say the administration’s selective targeting of Democratic-leaning states suggests a political dimension to the funding pause. Several of the cities listed — including New York, San Francisco, and Boston — have clashed repeatedly with Trump over climate policy, immigration enforcement, and infrastructure funding.
Still, Trump and Vought have maintained that the measures are necessary to “restore fiscal discipline” and prevent what they describe as wasteful spending.
The move has also rekindled debate in Congress over the political use of shutdowns as a governing tool. Democrats have accused the administration of weaponizing the lapse in appropriations to pursue ideological goals, while Republican allies argue that the cuts are a legitimate effort to trim federal inefficiency.
Meanwhile, state officials and contractors affected by the funding suspension are warning of immediate economic fallout. Several ongoing Army Corps projects, including coastal protection work in Massachusetts and flood-control upgrades in Baltimore, were already under construction when the freeze was announced. Industry groups say contractors could face layoffs within weeks if payments are delayed.
The Trump administration’s attempt to exempt the military from the shutdown was opposed by lawmakers.
The shutdown — now entering its third week — continues to stall a wide range of federal operations. Key agencies, including the Environmental Protection Agency, Department of Transportation, and Housing and Urban Development, have reported limited staff and suspended services. The Office of Management and Budget has not provided a timeline for when the paused Army Corps projects might resume.
If the funding impasse continues, analysts warn that the economic drag could deepen. U.S. Treasury Secretary Bessent has warned that the shutdown costs the economy $15bn a day, urging Democrats to end the impasse. Infrastructure spending has been one of the few bipartisan drivers of U.S. growth in recent years, and halting $11 billion in projects could shave tenths of a percentage point off GDP in the near term.