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Trump administration restores funding to Manhattan subway project after NY sues

NEW YORK (AP) 鈥 The Trump administration has agreed to resume funding a key Manhattan subway project after .

The U.S. Department of Transportation said in a federal court filing Thursday that it has completed its review of the Second Avenue subway line project, and will begin reimbursing state transit officials again for construction costs.

Janno Lieber, MTA’s CEO, said the reversal means 鈥渓ong-awaited transit justice鈥 will soon come to neighborhoods in upper reaches of Manhattan. The is building new stations northward along Manhattan鈥檚 Upper East Side, bringing subway service to parts of the Harlem neighborhood.

鈥淚t shouldn鈥檛 have taken seven months and a lawsuit to get here,” he said in a statement.

The federal Department of Transportation said the agreement means taxpayers’ 鈥渉ard-earned dollars will not fund unconstitutional DEI initiatives,鈥 referring to diversity, equity, and inclusion principles. The administration argued that use of DEI principles has led to soaring costs on federal projects and is unconstitutional.

鈥淭his has always been about securing the best deal for the American taxpayer and ensuring their dollars are spent efficiently and fairly,鈥 the agency said in a statement.

Lieber, Thursday, called the dispute “an 鈥渦nnecessary waste of the public’s time and money鈥 since the state agency was complying with the administration’s new rules regarding minority and women-owned businesses in federal projects.

鈥淭he whole point was they sent us a letter saying we didn’t make the standards of the new rules before they even issued the new rules,鈥 he said. 鈥淚t was just a bunch of gamesmanship.鈥

The USDOT had withheld roughly $60 million from the Second Avenue project as it launched its review. Overall, the project is supposed to cost $7.7 billion, with the federal government covering around $3.4 billion.

The dispute over the Second Avenue subway was among a number of major transportation projects in New York and New Jersey that Trump has sought to scuttle as he feuded with Democratic leaders in those states.

The administration in October also for a massive new rail tunnel between New York and New Jersey. A federal judge in February, however, ordered federal officials to for the tunnel project under the Hudson River.

Last year, the USDOT for New York’s congestion fee and threatened to pull funding from the state if it did not abandon the toll, which is imposed on drivers entering the busiest part of Manhattan.

But a federal judge ruled last month that the agency to unilaterally rescind approval of the $9 fee.

Copyright © 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.

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