Earlier this week, the administration announced it is moving to sharply reduce the federal dollars that now go to protect mass transit, along with the region's airports and seaports.
Grants from Homeland Security to the MTA will be cut by $42 million, a decrease of 27 percent. And for the Port Authority, the grants are being slashed by $11 million, a cut of 25 percent.
After a couple of days of getting clobbered by comments from New York Democrats and Republicans, the Obama administration fired back.
The Department of Homeland Security suggested that they're not the problem when it comes to security funding. Federal officials blame the city for sitting on a pile of money.
The letter from Homeland Security Secretary Janet Napolitano was addressed to Republican Congressman Peter King.
"We are concerned that more than 275-million dollars in federal funding has not yet been drawn down," she wrote.
According to DHS officials, the money was earmarked for city port and transit security 4 years ago.
Congressman King says he wasn't aware that the money existed and wonders why the administration didn't speak up sooner.
King has been one of the Obama administration's harshest critics on the issue. He and Senator Chuck Schumer have accused the Department of Homeland Security of short-changing the city on it's share of anti-terror funds.
"You can slice and dice the numbers any way you want, but the bottom line is funding is being cut at a time when threats to New York are on the rise," Senator Schumer said.
The controversy cast a shadow over the President's visit to NYPD headquarters on Thursday as President Obama thanked law enforcement for their efforts in the failed Times Square bombing attempt.
The debate is certain to continue because now New York officials say they can't spend the 275-million. They say it's being held up by the federal bureaucracy.
However, in a statement, the Mayor's office seemed to extend an olive branch.
"We look forward to working with DHS to speed up the FEMA approvals necessary to release the money we need for important security projects," the statement read.