The NY Observer ran a front-page article this week warning that New York could lose federal funding for both the Second Avenue Subway and the Long Island Railroad link to Grand Central Terminal if an agreement on the MTA's 2000-2004 capital program proposal is not in place by February. The article did not explain the February deadline, and cited only "Washington insiders" who insisted vaguely that the MTA and New York's political leaders had better get moving and strike a deal.

A number of individuals familiar with federal transit funding and MTA capital programming told the Campaign the argument is a lot of smoke. They said past MTA capital program proposals have hung in political limbo for extended periods without any federal funding repercussions, and noted that New York City newspapers had exaggerated the import of the "not recommended" rating received by the Long Island Railroad-Grand Central project in the Federal Transit Administration's "New Starts" report last fall (see MTR #219). If the capital program becomes deadlocked for a year or more, that could cause problems for a project of the LIRR-GCT's scale, according to the Campaign's sources. But any real deadline is well past February, they said.

Some said the report appeared to be an attempt to set up an artificial deadline with which to pressure NY State Assembly Speaker Sheldon Silver into an early deal over the MTA plan. Any real prospect of a withdrawal of federal support for the big New York projects would trigger a monumental political battle in Washington that the Clinton Administration could be drawn into.

Silver has said he will approve the MTA capital program only if it includes plans for a Second Avenue Subway that will run the entire length of Manhattan. The MTA capital program proposal includes NYC Transit's 125th Street-63rd Street Upper East Side "stubway" plan. MTA leaders have taken to calling the uptown segment a "first phase" of a longer line. But they say their plan wouldn't complete the stub line until 2015, and the project's draft environmental impact statement contains no plans for later phases.

The Empire State Transportation Alliance, a coalition of civic, environmental labor and business groups, has called for a $2 billion investment in the Second Avenue subway and $1.5 billion for the LIRR-Grand Central project during the 2000-2004 MTA program. The coalition says these levels would allow both projects to be completed together in 2012 (MTR #236). If finished in advance of a major addition to east side subway capacity, the LIRR-Grand Central project threatens to swamp the already-jammed Lexington Avenue subway with thousands more riders per day.