WASHINGTON – The Trump administration will release more than $58 million in funds it had withheld from the Metropolitan Transportation Authority’s Second Avenue Subway extension, the U.S. Department of Transportation said in a letter sent just before a scheduled hearing today (April 16) on an MTA lawsuit seeking the money.
The DOT had been withholding the funds since last Oct. 1, saying it was reviewing whether the MTA was in compliance with new rules regarding contracts for disadvantaged business. According to the Gothamist news site, today’s letter to MTA CEO Janno Lieber said a review found “troubling information” that the MTA was considering race and sex in contract decisions, in violation of a 2025 executive order. But it also said that the MTA had complied with administration requirements and the funding would resume.
The MTA filed suit in the Court of Federal Claims in March, saying the government “improperly refused to disburse” the $58 million, part of $3.4 billion it had committed for the $7 billion project. [See “New York MTA sues …,” Trains.com, March 17, 2026].
“It shouldn’t have taken seven months and a lawsuit to get here,” Lieber said in a statement, “but with the federal government’s concession today on the courthouse steps, the MTA can now confidently forge ahead with Second Avenue Subway Phase 2. The billion-dollar contract approved at our March Board meeting is being awarded and contractors are mobilizing right away.”
New York Gov. Kathy Hochul said in a social media post that the administration “backed down. The freeze is over.” She called for the money to be released “immediately.”
DOT representative Danna Almeida said the agency’s actions assured taxpayers “their hard-earned dollars will not fund unconstitutional DEI [diversity, equity, and inclusion] initiatives … which historically cause project costs to balloon.”
Today’s decision follows an earlier loss for the DOT in a similar suit over funds withheld from the Hudson River Tunnel project [see “Appeals court says administration must continue …,” Trains.com, March 12, 2026]. The court loss came in an action by the states of New York and New Jersey, but the judge in a related case in the Court of Federal Claims said the government had breached its contract by withholding the funds. He dismissed the case as moot, however, since the earlier decision led to the release of the funds [see “Judge dismisses …,” March 13, 2026].
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