Gateway, Second Avenue Subway Funding in Jeopardy

The U.S. Department of Transportation on Oct. 1 issued a statement reporting that the Gateway Program and the Second Avenue Subway Phase 2 project are under administrative review with respect to hiring practices. According the statement, USDOT “issued an interim final rule (IFR) barring race- and sex-based requirements from federal grants.”

According to the statement: “Until USDOT’s quick administrative review is complete, project reimbursements cannot be processed, including a $300 million disbursement for the 2nd Avenue Subway. The remaining federal funding for these projects totals nearly $18 billion.”

In response, the Gateway Development Commission posted a statement from CEO Thomas Prendergast: “GDC has received notification from FTA regarding a pause in disbursements for the Hudson Tunnel Project. GDC complies with all federal laws and regulations, and will continue to do so throughout the project. We look forward to continuing our productive relationship with the Administration, FTA, FRA, and the US Department of Transportation. In the meantime, we remain focused on keeping the project on scope, schedule, and budget.”

The Gateway Program and the Second Avenue Subway Phase 2 project are two of the largest infrastructure projects being built in the United States. It is not the first time that the Gateway Program has faced challenges under the Trump administration. During Trump’s first term, FTA gave the project a “medium-low” priority rating, making it making it ineligible for federal Capital Investment Grants.

Additionally in February 2025, DOT under the Trump administration rescinded its approval for a congestion pricing plan – essentially a toll for vehicular traffic in southern Manhattan – that helps provide funding for transportation projects, including the Second Avenue Subway extension. That program is currently in effect pending further legal challenges.