Trump Administration Releases Second Avenue Subway Funding

The Trump administration has finally released seven months’ worth of withheld funding to the Metropolitan Transportation Authority (MTA) after a pending court battle.

Janno Lieber, the state transit agency’s chairman, announced that work on Phase 2 of the Second Avenue Subway extension would now continue as planned. In October, President Donald Trump’s Department of Transportation (U.S. DOT) halted funding for the train line extension through East Harlem — along with billions more for other infrastructure projects.

The exact amount of funding released by the federal government was $58 million, which was owed as of March 2026, according to the MTA.

The funding freeze immediately followed the MTA board approving an approximately $2 billion tunnel boring contract in August 2025 for the next phase of the Second Avenue Subway, which will extend the Q train line between East 96th and East 125th streets.

Lieber said the contract can now officially be executed.

“It shouldn’t have taken seven months and a lawsuit to get here, 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,” Lieber said in a statement. “Today’s MTA is determined to expand our network and give riders more and better service. Long-awaited transit justice for East Harlem is just the beginning.”

The funding dispute coincided with a federal government shutdown led by Senate Democrats over health care subsidies that were expiring under the Affordable Care Act. However, the White House claimed it was not an act of political retribution, but an effort to end the state’s preference for awarding contracts to prioritizing Disadvantaged Business Enterprises (DBE).

While it initially claimed prioritizing disadvantaged contractors was a civil rights violation, DOT later claimed it had been holding the funding based on the assertion that the MTA was out of compliance with the DBE program.

An MTA source added clarity.

While the funding halted with DOT telling the agency it was out of compliance with the DBE program, the administration, after months of no communication as to how the MTA could amend the compliance issue, informed them on Thursday that the project was in compliance.

“Thanks to President Trump and Secretary [Sean Duffy], taxpayers can rest assured their hard-earned dollars will not fund unconstitutional DEI initiatives, including contracts which historically cause project costs to balloon,” a U.S. DOT spokesperson said in a statement. “This has always been about securing the best deal for the American taxpayer and ensuring their dollars are spent efficiently and fairly.”

The extension is estimated to cost $6.9 billion at the end of the day, but Gov. Kathy Hochul plans a westward expansion of the Q train from Lexington Avenue to Broadway once Phase 2 is completed, she announced in her 2026 State of the State speech.

Trump’s efforts to shut down transportation programs in the tri-state area were shot down following a federal judge ruling against the U.S. DOT’s withholding of $200 million for the Gateway Tunnel project — a rail passage beneath the Hudson River — in February.

Then in March, New York State beat back another attempt to end congestion pricing in Manhattan.

Mark Hallum can be reached at mhallum@commercialobserver.com.