Trump Administration Reverses Course, Will Release 2nd Ave. Subway Funding

The federal government will restart payments for the $7 billion project after a monthslong battle with the MTA.

Apr. 16, 2026 at 7:37pm

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A serene, cinematic painting of a solitary subway entrance in New York City, with warm sunlight casting deep shadows across the scene, capturing the quiet anticipation and perseverance behind this critical transportation project.The release of federal funding breathes new life into the long-awaited Second Avenue subway extension, a vital infrastructure project for New York City.NYC Today

The federal government has agreed to release nearly $60 million in withheld funding for New York City's Second Avenue subway extension, ending a monthslong battle with the Metropolitan Transportation Authority (MTA). The U.S. Department of Transportation had previously held up the funding due to a review of the MTA's race- and sex-based criteria for working with disadvantaged businesses, but is now satisfied with the authority's adjustments to those criteria.

Why it matters

The release of this critical federal funding will allow the $7 billion Second Avenue subway project to move forward after months of uncertainty. The project is a major infrastructure priority for New York City, aiming to ease congestion on the crowded Lexington Avenue line.

The details

The MTA had sued the federal government for breach of contract over the delayed reimbursements. A lawyer for the government said in a letter filed in Federal Claims Court that it would restart the payments, after the MTA argued it was already in compliance with the department's policy changes and that there was no good reason to withhold the funding.

  • The federal government agreed to release the funding on Thursday, April 16, 2026.

The players

Metropolitan Transportation Authority (MTA)

The agency that runs New York City's subway system and sued the federal government over the withheld funding.

U.S. Department of Transportation

The federal agency that had held up the funding due to a review of the MTA's criteria for working with disadvantaged businesses.

Roberta Kaplan

A lawyer for the MTA who questioned the federal government's rationale for withholding the funding.

Judge Philip S. Hadji

The judge presiding over the hearing on the funding dispute between the MTA and the federal government.

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What they’re saying

“The federal government was now satisfied with New York's adjustments to those criteria.”

— Sean Clayton, Acting Deputy Director, U.S. Department of Transportation

“She also criticized the government's contention that it wanted to ensure the federal funds were 'expended consistent with the Constitution,' noting that every new administration could have a different interpretation of the law.”

— Roberta Kaplan, Lawyer for the MTA

What’s next

The MTA will now be able to resume construction on the $7 billion Second Avenue subway extension project, which is a major infrastructure priority for New York City.

The takeaway

This reversal by the Trump administration highlights the political nature of infrastructure funding decisions and the potential for changing federal priorities to disrupt critical local projects. The MTA's legal challenge ultimately prevailed, but the monthslong battle underscores the need for more stable and predictable funding mechanisms for large-scale public transit initiatives.