A major Chicago transit expansion is now at risk, as the Chicago Transit Authority (CTA) takes legal action to restore billions in federal funding tied to two critical projects.

On March 20, the CTA filed a lawsuit against the U.S. Department of Transportation and the Federal Transit Administration (FTA), seeking the immediate restoration of funding obligated to CTA for the Red Line Extension (RLE) and Red and Purple Modernization projects.

According to an agency release, the FTA committed to providing funds for the projects, including nearly $2 billion in federal grant funding for the Red Line Extension. FTA officials signed Full Funding Grant Agreements for both projects, most recently, for the Red Line Extension on January 10, 2025. In October 2025, the federal government paused all funding for both projects.

“We are fully committed to the success of these projects, and we will take every step necessary to ensure that they move forward,” said CTA Acting President Nora Leerhsen. “The Red Line Extension is a historic investment into the Far South Side of Chicago that will transform public transit and create new economic opportunity for the communities it will serve.”

She added: “Our work on the Red and Purple Modernization Project, which is ongoing, has resulted in four new, fully accessible and modern stations. These are both meaningful, impactful projects, and we are working closely with community leaders, elected officials, and other stakeholders to ensure that both are seen through to completion.”

The lawsuit, filed in federal court in the Northern District of Illinois, outlines the harm to residents and the risk to the project created by the funding pause. It describes how the USDOT and the FTA have not adhered to their own statutory and regulatory requirements regarding funding suspensions.

Court Grants CTA Temporary Restraining Order

On March 24, the U.S. District Court for the Northern District of Illinois granted CTA a temporary restraining order, ruling that the suspension of federal funding for the Red Line Extension and Red and Purple Modernization projects was “impermissible.”

"Today, the CTA secured a major victory for the Red Line Extension and the residents of Chicago’s Far South Side,”  Leerhsen said. “CTA promised the community that it would fight for RLE, and this ruling is a massive step toward restoration of funding for this historic project. RLE will provide transit access and opportunity for generations to come, and we are fully committed to seeing it move forward."

Unless the federal government obtains a stay of the temporary restraining order, the ruling requires payments to resume by Friday, March 27, at 10 a.m.

Timeline of Federal Action and Financial Impact

On October 3, 2025, the White House Office of Management and Budget announced a funding pause on $2.1 billion in Chicago infrastructure projects. The same day, the FTA notified CTA that the agency was reviewing the projects.

CTA responded immediately and, on October 21, 2025, the agency provided more than 1,000 pages of detailed information in response to federal requests. On December 1, 2025, USDOT requested additional information. CTA provided the information and certified its compliance on December 10, 2025.

Since that certification, according to the agency, USDOT has not communicated with CTA regarding this matter or resumed funding.

The prolonged pause “threatens continued progress” on the Red Line Extension and Red and Purple Modernization projects. “If funding is not promptly restored, CTA will be forced to stop work on both projects,” the agency wrote in a release.

While the Red and Purple Modernization project is nearing “substantial completion,” initial work for the Red Line Extension began four years ago. Work crews have been clearing trees, demolishing properties, removing water lines, and performing other tasks in preparation for major construction activities.

Editor’s Note: This article was originally published March 23, 2026, and was updated March 26, 2026, for continued relevancy on the Chicago Transit Authority’s lawsuit against the U.S. Department of Transportation and the Federal Transit Administration.