The U.S. Department of Transportation on Friday said it would withhold $2.1 billion in previously awarded for two Chicago Transit Authority infrastructure projects, citing a rule issued earlier in the week barring Disadvantaged Business Enterprise programs for federally funded projects.

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"

Transportation officials said Friday the fiscal cliff isn't as bad as first thought, but layoffs and service cuts are still a possibility.

The $570 million reduction from previous estimates provides only temporary relief. The fiscal cliff jumps to $789 million in 2027.

Chicago became the second major US city to have billions of dollars in federal funding for infrastructure projects paused on Friday.