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MTA threatens to sue Trump administration over frozen 2nd Avenue subway funds
By
Ramsey Khalifeh
Published Feb 25, 2026
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Marc A. Hermann / MTA
By
Ramsey Khalifeh
Published Feb 25, 2026
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The MTA threatened to sue the Trump administration on Wednesday over its ongoing freeze of federal funding for the Second Avenue subway extension into East Harlem.
The U.S. Department of Transportation has halted all payments for the project since October, claiming it needed to review its contract standards. The White House also froze funding for the Gateway project, which will construct a new set of train tunnels beneath the Hudson River. Both orders came during the federal government shutdown last fall.
Earlier this month, a Manhattan federal judge ruled the federal government must release funding for the Gateway tunnels after New York and New Jersey filed a lawsuit. Now, the MTA is planning to do the same thing to release the Second Avenue subway funds if they aren’t released by March 6.
“If we don't have the resumption of reimbursements … We're going to have to actually follow our friends in the Gateway program and pursue a solution through the federal court, through the court process,” MTA Chair Janno Lieber said during a Wednesday board meeting.
The MTA gave the feds a deadline to pay at least $58 million in suspended payouts for the subway project. The U.S. DOT in 2023 approved a $3.4 billion grant for the extension, covering nearly half of its estimated $7.7 billion price tag.
MTA officials said they were blocked from accessing an online portal that allows them to file reimbursement claims with the federal transportation department, according to a letter from the agency’s attorney.
“DOT’s refusal to comply with its payment obligations has jeopardized the project and placed the MTA in an impossible position, requiring it to plug the gap by diverting critical transportation infrastructure funding from other priorities,” the letter said.
A spokesperson for the U.S. DOT did not immediately respond to a request for comment.
The letter also said the MTA had complied in December with the federal government’s request to review Second Avenue subway contracts issued to minority- and women-owned businesses. Trump administration officials initially said the funding would be frozen while they reviewed those contracts — but MTA officials said they haven’t heard from the feds since complying with the request.
Phase two of the Second Avenue subway, which will extend the line into East Harlem, is one of the most expensive train expansion projects ever built.
In August, the MTA board approved a nearly $2 billion contract to complete the bulk of the work for the project, which will expand the Q line by three stations into East Harlem at 125th Street. That contract covers work to dig out a new tunnel between 120th and 125th streets. It also covers the rehabilitation of a tunnel between 110th and 120th streets that was built and abandoned in the 1970s, when the MTA last attempted to build a Second Avenue subway in the neighborhood.
Over the next year, MTA officials plan to issue two more contracts to complete the work — one to dig out the new stations and another to build them. Agency officials warned that the lack of reimbursement from the feds might delay the entire project.
“There’s an excavation contract that needs to get awarded, and we can’t chance that impact to the project’s schedule and budget,” Lieber said.
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Ramsey Khalifeh
Ramsey Khalifeh is a transportation reporter on the NYC Accountability desk covering the largest transit system in the country. He was previously a general assignment reporter at Gothamist and worked on the Boston Globe's metro and copy desk. Got a tip? Email [email protected]
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Gothamist is funded by sponsors and member donations
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