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Written by

Corrigan Salerno

Published on

September 10, 2025

The Trump administration’s inaction at USDOT may lead to FY2022 grants expiring at the end of Fiscal Year 2025, potentially putting millions in community projects at risk. Unless funding is obligated by September 30, 2025, many grant awardees could see their hard-earned federal support disappear.

After months of highly publicized obfuscation of the grant process, politicized delay, and systemic loss of agency staff capacity, we have received word that the U.S. Department of Transportation’s inaction under the Trump Administration may have been part of a broader strategy to allow unobligated discretionary grant awards to expire at the end of Fiscal Year 2025, potentially cancelling millions worth of project funding.

The Infrastructure Investment and Jobs Act set limits for how long funding was available to be obligated before lapsing. The last day of the 2025 fiscal year, September 30, 2025, represents the deadline for USDOT to obligate funding to awardees of many programs. As a result of this irresponsible management at the federal level, grant awardees may lose out on hard-earned funding.

Due to the lengthy timelines for new programs to be implemented under the IIJA, certain awards with expiring funds were only announced as recently as last year. Worse, recent attacks on projects that do not align with the Trump administration’s priorities may have left hundreds of projects stuck in review limbo if they failed to clear a new, post-award, project-by-project review process. Projects that previously received Fiscal Year 2022 grant awards under these programs but have not yet had grant agreements signed with or funding obligated by USDOT could be at risk.

If your community has an award with USDOT that has not been fully obligated or does not have a fully executed grant agreement, we recommend exploring your legal options before the potential September 30, 2025, cutoff for FY2022 awards.

The bipartisan Infrastructure Investment and Jobs Act provided billions of dollars in funding for transportation infrastructure projects and created dozens of new programs. Many of these programs distributed funding through competitive discretionary grants, which required staff from across the country to complete onerous and time-consuming applications to earn federal dollars for their projects. Thanks to what appears to be intentional inaction from the Trump administration, those efforts to secure funding to improve communities may ultimately be rendered pointless.

Under the Biden administration, the deployment of USDOT discretionary grants was marked by growing pains and lengthy deployment timelines, born out of inconsistent and underdeveloped processes, which left its successor to finalize many grants. However, as we have detailed over the course of the year, the Trump administration has decidedly increased the level of uncertainty injected into discretionary grant programs. The administration has been holding grantees to standards of evaluation that are completely different and unrelated to what they initially applied for, and is directly targeting projects that contain elements to address equity, climate, and even basic mobility improvements, such as bike lanes and sidewalks.

Despite court orders to unfreeze programs, the administration has continued to slow walk Infrastructure Investment and Jobs Act grants that do not align with its priorities over the course of the year, and did the same with the Neighborhood Access and Equity Program, slowing communication with grantees (either intentionally or as a result of understaffing) to delay the obligation of funds before having all unobligated funds rescinded in H.R.1, the 2025 GOP Budget Reconciliation Bill.

In what seems to be likely circumstances, USDOT may send a notice to awardees with expiring funds on the eve of September 30th (the end of the fiscal year), letting them know that they are not moving forward with grant agreements, intentionally leaving this notice to the last minute to run out of the clock so that grantees will not have time to file lawsuits before October 1st. This effort, similar in principle to pocket rescissions (in that it requires the executive branch to avoid spending on Congressionally approved funds), could potentially be repeated in future fiscal years for grant awards with lapsing funds.

Despite our efforts to illustrate the impact of rescissions, it doesn’t seem to matter which state, district, or elected official represents you—the administration has rescinded projects across the board. Representative Maloy, a Republican congresswoman from Utah, stated that they were unaware of transportation rescissions that hit their community. All federal representatives should be made aware of what a potential lapse brought on by USDOT’s inaction will look like for their communities.

More information and analyses to come.

Tags:

federal funding IIJA