What to do about the DOT Grant Freeze: Impacts, Risks, and Response

** This article will be updated as additional information becomes available, see bottom for updates.

On March 12, 2025, POLITICO reported that the U.S. Department of Transportation (DOT) had issued a memo directing its office to identify and review discretionary grants and cooperative agreements awarded between FY2022 and FY2025 that have not yet been fully obligated. The review targets projects seen as advancing climate action, equity, environmental justice, electric vehicle infrastructure, and bicycle-related infrastructure. If a project includes these components, DOT staff may be instructed to revise scopes or cancel funding.

Reportedly, teams are instructed to remove or replace project elements that conflict with current administration priorities. Projects may be flagged even if only part of the scope touches on equity, green infrastructure, or emissions reduction.

Key Impacts for Railtowns Members:

• Any DOT or FRA grant—including CRISI, RAISE, INFRA, SS4A, Reconnecting Communities, or cooperative agreements—may be subject to review if the project is not yet fully obligated and has overlap with out-of-favor project components.

• Projects including EV charging infrastructure, climate or emissions reduction goals, equity analysis, bike/ped improvements, or environmental justice components are especially vulnerable.

• Projects with phased funding may face review before future tranches are obligated, even if part of the funding has already been committed.

Immediate Actions for Communities:

1. Assess Grant Obligation Status: Determine whether your grant funding has been fully obligated through executed agreements or contracts. If not, your project is at risk.

2. Review Project Scope: Identify any components in your grant tied to equity, climate, emissions reduction, green infrastructure, pedestrian or bicycle infrastructure, or EVs.

3. Document Core Benefits: Ensure your project narrative clearly links infrastructure elements to transportation safety, system efficiency, economic development, and statutory program goals—not only climate or equity framing.

4. Engage DOT/FRA Contacts: Open communication with your project officer to understand how the new guidance may affect your specific award.

5. Preserve Records: Retain all documentation of project planning, milestones, and correspondence with DOT or FRA to strengthen your position in the event of cancellation or revision.

6. Communicate Proactively: Be ready to defend the public value of your project through safety data, economic impact projections, and Trump-aligned framing.

While grants have been rescinded in the past, I can find no evidence of such a broad ideological action that could devastate communities across the entire country.

This type of policy shift also raises deeper concerns about the credibility of the federal government when it comes to honoring its commitments. When funding decisions are reversed after award—based not on merit or compliance, but on shifting political ideology—it undermines the trust communities place in the grantmaking process. Local governments invest substantial time, planning, staff capacity, and public expectations based on federal award notifications. If those commitments can be walked back midstream, the ability of communities to plan, build, and deliver is fundamentally threatened. It sends a chilling signal to mayors, MPOs, DOTs, and their private-sector partners who rely on federal consistency to drive long-term infrastructure strategy.

Historical Grant Cancellation Precedents (For Context):

• California High-Speed Rail Grant Cancellation (2019): The Trump administration rescinded a single $929 million grant from California’s High-Speed Rail Authority, citing performance issues. California claimed the move was political. The Biden administration later restored the funds.

• State Rejections of Obama-Era Rail Grants (2010–2011): Republican governors in Florida, Wisconsin, and Ohio returned awarded federal rail grants, rejecting infrastructure investments aligned with federal policy goals. While the action was broad, it was initiated by the recipients, not the provider.

• Trump-Era Grant Rescoping and Delays (2017–2020): DOT shifted discretionary grant priorities to de-emphasize transit, equity, and climate investments. Several projects were informally sidelined or forced to revise scope. Importantly, however, the actions were forward-looking, not retroactive. The TIGER program was rebranded as BUILD, and criteria changes subtly discouraged urban, equity-focused, or climate-centered projects. Awards skewed toward rural road projects and politically aligned geographies, but the approach targeted future funding cycles rather than clawbacks of previously awarded funding.

What’s Different Now:

• This review is explicitly ideological and retrospective, targeting projects already awarded.

• It spans multiple fiscal years and applies across DOT programs.

• Unlike past shifts in grant criteria, this involves potential removal or cancellation of scope elements midstream, threatening project delivery, community partnerships, and public safety goals.

Railtowns.org is actively monitoring developments and working to equip communities with the tools and information to defend and preserve their already-awarded funding.

At the time of the original posting the text of the referenced memo had not been publicly released. Content subject to change as more information becomes available. 

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UPDATE March 13, 2025

I reviewed a copy of the recent U.S. Department of Transportation Grant Guidance that was mentioned by POLITICO before it was made public.

A quick summary:

Recent federal guidance indicates a shift in how the U.S. Department of Transportation (DOT) reviews competitive grant selections made after January 2021 that have not yet reached full funding obligation.

Under this updated approach, DOT agencies are being directed to reassess pending grants and cooperative agreements — especially those that include project elements tied to:

 • Equity or Diversity, Equity, and Inclusion (DEI) initiatives

 • Climate or greenhouse gas (GHG) reduction goals

 • Environmental Justice (EJ) benefits

 • Bicycle infrastructure or green infrastructure

 • Electric vehicle (EV) programs or charging infrastructure

These projects may now be subject to additional internal review to determine whether they align with current Executive Orders and Administration priorities. If they don’t, agencies are being asked to:

 • Modify the scope to remove or reduce disfavored elements,

 • Substitute alternative project components, or

 • Cancel the award if adjustments aren’t feasible.

Programs that include equity or climate elements solely because they were mandated by law or included in the original funding notice may still proceed, but only after heightened scrutiny.

This represents a notable shift in policy direction, with implications for both local governments and grant recipients who had prioritized equity, sustainability, or climate resilience in their original submissions.

What This Means for Rail-Hosting Communities:

For communities working to reduce blocked crossings, improve first responder access, or reduce noise and vibration — your core concerns remain valid. But if your proposed solution included equity framing, EV access, or climate mitigation benefits, you may need to reframe those elements in statutory or infrastructure terms. 

My advice? Don't wait to hear that your project has been modified, substituted, or cancelled. See the text above this update for suggested actions you can take now.

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UPDATE March 15, 2025

Important follow-up for all transit folks, particularly those in rural or midwestern communities:

Transportation For America published a great explainer on the new federal guidance requiring a review of competitive grant awards that include equity, climate, EV, and other elements now considered outside current Administration priorities.

What’s especially helpful in their piece is the data dive — including estimates that up to 40% of recent awards may include elements now at risk of removal or revision. Their graphics also make clear how many local and regional priorities could be sidelined and the surprising regions that could be impacted, even when those projects remain statutorily eligible.

You can read the article here: https://t4america.org/2025/03/14/usdots-new-memo-requires-a-review-of-competitive-grant-awards/