After Trump (R) said He Froze "Democrat Projects," New York Officials are Suing the Administration over Abruptly Withholding Federal Funds on a Century-Old Subway Expansion Project. In a Lawsuit filed 3/17/3036, the Metropolitan Transportation Authority (MTA) said the U.S. Department of Transportation (DOT) again Withheld $58 million Contracted under Federal Law to Help Complete the $7 billion Second Avenue Subway Extension in Manhattan. Federal Dollars Pay nearly Half of the 1.76 Mile Extension's Total Cost.
“Everybody knows the Trump administration has been withholding money for New York infrastructure projects,” Janno Lieber, MTA Chair and CEO, said at a New York City Council Hearing. “We intend to get every cent of what has been promised.” The MTA’s 46-page Lawsuit Filed in the U.S. Court of Federal Claims, in Washington, DC, said the Federal Government hadn't Fulfilled its Grant Agreement on the Project’s Second Phase, which Extends the Q Train into Manhattan's East Harlem Neighborhood.
The Federal Government in 10/2025, Paused Funding on the Second Avenue Subway and the Gateway Tunnel Projects, over what it said were Issues related to Diversity, Equity, Inclusion (DEI) Programs, but Trump expressed it was Over a Political Fight with Congressional Democrats. The 3/17/2026 Lawsuit comes after New York and New Jersey Officials Successfully Sued the DOT to Recoup over $200 million in Funding Withheld for the Gateway Tunnel, a Rail Expansion Project Underneath the Hudson River between New Jersey and Manhattan.
In a Statement, Danna Almeida (R), a Department of Transportation Spokesperson, said the Agency was “committed to ensuring hardworking taxpayer dollars being spent responsibly. We are considering all legal avenues.” The White House Referred to the Transportation Department’s Comments. The Justice Department didn’t Respond to an Email Request for Comment.
Trump, a New York Real Estate Mogul, who called himself the “Builder President”, said He Froze Infrastructure Funds against Senate Minority Leader Chuck Schumer (D-NY), during the 2025 Federal Government Shutdown. In addition to telling FOX News He was “cutting” the Gateway tunnel project, Trump said he was Terminating “Democrat Projects," including in Manhattan as an Attack against Schumer, the Lawsuit said.
In a 3/17/2026 X Post, Schumer said East Harlem has waited over a Century for the Subway Line. “These projects are not political bargaining chips, they are lifelines for New York’s economy and union workers," He said. New York Gov. Kathy Hochul (D), said Work on the Subway Expansion is Underway, on Time, and on Budget, but the Funding Pause Puts this at Risk.
“We told Donald Trump that if he did not restore the funding for this project, we'd see him in court,” She said in a Statement. “Today, we are doing just that.” Under the 2021 Bipartisan Federal Infrastructure Law, the Biden (D) Administration Committed over $3.4 billion, under the Capital Investment Grants Program for the Second Avenue Subway Project. The Administration withheld Funds on the First Day of the Federal Government Shutdown in the Fall.
In an 10/1/2025 X post, Russell Vought, Director of the Federal Office of Management and Budget (OMB), said Funds had been Withheld on the Second Avenue Subway and Gateway Tunnel Projects over New York City’s Disadvantaged Business Enterprise Program, an Equity Initiative meant to Expand Participation in Federally Assisted Contracts. The Hold, Vought said, was to “ensure funding is not flowing based on unconstitutional DEI principles.”
The Expansion has been Planned since at least the 1920s but was Shelved First in the Great Depression, according to the Lawsuit. The Second Phase is expected to be Completed by 9/2032, MTA said. “DOT’s actions interfered with the MTA’s ability to rely on federal funding for the timely completion of the Second Avenue Subway and destroyed the MTA’s reasonable expectations regarding the fruits of the Agreement,” the Lawsuit said.
While Lieber told City Lawmakers the Pause hadn’t yet caused Delays, He said MTA is Set to Award a Contract worth roughly $1 billion for Excavation. Reimbursements haven’t been Returned by the Federal Government, which could Imperil the Project moving Ahead.
“We need to know the money’s available,” Lieber said. “And that’s why we had to take this action.” Workers on the Gateway Tunnel resumed Construction in Late February. The Gateway Tunnel is the Largest Infrastructure Project in the Country.
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