The Metropolitan Transportation Authority filed suit against the Trump administration for withholding $58 million in federal funding for the Second Avenue Subway extension to East Harlem. The lawsuit, filed in Washington's Court of Federal Claims, argues the federal government breached its contract by failing to disburse promised reimbursements for the $6.9 billion project.

Construction on the 125th Street extension was already underway when funding was suspended in October. The M.T.A. warned that the funding gap could trigger delays and cost overruns for a project that would create over 70,000 jobs and improve service to underserved Upper Manhattan neighborhoods. The agency had planned to award contracts for excavation work at the 106th Street station this month.

Governor Kathy Hochul blamed President Trump directly for jeopardizing commutes for 130,000 New Yorkers and thousands of union jobs. The funding freeze follows a similar dispute over the Gateway tunnel project, where federal funding was briefly withheld before a judge ordered its release. While the subway extension relies less on federal money than Gateway, the M.T.A. says continued uncertainty threatens to derail its 2032 completion timeline.