On a frigid February morning, as New Yorkers streamed through Manhattan’s crowded streets beneath the silent electronic toll readers that had been tracking vehicles for barely a month, Transportation Secretary Sean Duffy signed a letter igniting an extraordinary constitutional confrontation. With a swift signature on February 19, 2025, Duffy informed Governor Kathy Hochul that the federal government was revoking its approval of New York City’s congestion pricing program–the pioneering traffic management system charging drivers $9 to enter Manhattan below 60th Street.
Before the ink dried, President Trump celebrated on social media with characteristic bombast: “CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!” – punctuated by an image of himself adorned with a crown. Within hours, the Metropolitan Transportation Authority filed a meticulously crafted federal lawsuit challenging the action as an unprecedented seizure of executive authority.
This showdown transcends the pedestrian question of whether drivers should pay to enter Manhattan’s congested core. At stake is a profound constitutional riddle: Can a presidential administration unilaterally erase a state transportation program that required years to develop, survived exhaustive environmental review, secured formal federal approval, and now operates with hundreds of millions in sunk investment? The answer will echo far beyond New York’s gridlocked avenues, potentially recalibrating the balance of federal-state power for generations.
The congestion pricing saga emerges at the collision point of two tectonic forces in American governance – the pendulum swing of presidential policy priorities and the bedrock constitutional principle of federalism that grants states sovereign space to craft local solutions. When these forces clash, as they now do over Manhattan’s streets, what erupts is not merely policy disagreement but constitutional drama with seismic implications.
The roots of this conflict reach back to 2019, when the New York Legislature enacted the Traffic Mobility Act, establishing what would become America’s first comprehensive congestion pricing system. The law emerged through years of public debate, legislative deliberation, and grassroots advocacy – a democratic response to Manhattan’s legendary gridlock and the Metropolitan Transportation Authority’s chronic underfunding. Yet because this innovative solution required tolling federal-aid highways, it needed federal blessing.
What followed was a meticulous four-year environmental review process culminating in November 2024 with the Value Pricing Pilot Program Agreement – a carefully negotiated compact between federal and state authorities that authorized implementation. This agreement represented not merely regulatory approval but a covenant between levels of government, with mutual obligations and expectations precisely delineated.
When congestion pricing launched on January 5, 2025, its effects manifested instantly and measurably. Traffic volumes plunged, with 1.2 million fewer vehicles penetrating the Central Business District in January than projected. Travel times contracted dramatically – crossings into Manhattan from New Jersey and the outer boroughs accelerated 10-30%. Inside the zone, weekend traffic flowed measurably faster, while subway ridership swelled, increasing more rapidly within the congestion zone than across the broader transit system.
Perhaps most striking, fears of economic devastation dissolved into evidence of vitality. Foot traffic in Business Improvement Districts within the zone surged 4.6% compared to January 2024. Broadway theaters witnessed a 17% attendance leap with corresponding revenue growth. Retail sales within the congestion zone exceeded the previous January by $900 million. The program was fulfilling its promise – forging a more efficient, economically vibrant, and environmentally sustainable urban core.
Against this canvas of measurable success, the Trump administration launched its assault. Secretary Duffy’s termination letter advanced two central arguments: first, that the program’s “cordon pricing” structure transgressed Value Pricing Pilot Program authority by providing no toll-free alternative; second, that establishing tolls primarily to generate transit revenue rather than reduce congestion violated the program’s foundational purpose.
These justifications appear plausible until scrutinized through administrative law principles, particularly the doctrine articulated in the landmark 1983 Supreme Court case Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. – arising, ironically, from another transportation safety policy reversal following presidential transition.
In State Farm, the Supreme Court established that when an agency reverses established policy, it shoulders a heavier burden of justification than when it acts initially. The Court held that an agency “changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change”. This requirement fortifies governance against pendulum-like policy lurches that undermine the stability and predictability essential to effective civic planning.
The Court refined this principle in subsequent cases, holding that when prior policy “has engendered serious reliance interests,” the agency must provide “a more detailed justification” accounting for these interests. In the congestion pricing context, New York’s $500 million implementation investment and the bonds secured against anticipated toll revenue epitomize the substantial reliance interests demanding careful consideration.
Yet Secretary Duffy’s termination letter offers no acknowledgment of these investments, no analysis of the economic and environmental consequences of abrupt termination, and no engagement with alternatives to complete cancellation. It simply declares the program terminated and directs New York authorities to cease operations by March 21, 2025.
This procedural deficiency compounds a more fundamental problem – the absence of explicit federal authority to terminate the program unilaterally. The Value Pricing Pilot Program Agreement contains no provision authorizing unilateral federal termination. Instead, it explicitly contemplates that only the Triborough Bridge and Tunnel Authority could “decide to discontinue tolls,” requiring cooperation with FHWA to “return the Project to its original operating condition”.
The asymmetrical structure of this provision strongly suggests federal termination rights were never contemplated. This raises a fundamental question extending beyond transportation policy: Can one party to an intergovernmental agreement unilaterally dissolve that agreement without express termination rights? The answer, in both contract law and intuitive fairness, appears negative–particularly when the agreement specifically addresses discontinuation by only one party.
NYU Constitutional-law professor Roderick Hills Jr. captured the dubious legal foundation of the administration’s action, noting that Duffy’s letter cites “no statutory language authorizing the rescission,” instead relying on “long-standing history” of the VPPP while failing to cite “any agency or official ever mentioning the criterion that he just invented out of thin air”.
Federal regulations governing cooperative agreements impose additional constraints. Under 2 C.F.R. §§ 200.340-342, termination is permitted only in specific circumstances: recipient noncompliance, recipient consent, or pursuant to specific agreement terms. None apply here. Duffy’s letter alleges no noncompliance by New York authorities, who have meticulously adhered to agreement terms. New York has emphatically not consented to termination. And as noted, the agreement itself provides no federal termination right.
Perhaps most troubling, terminating the program would likely resurrect traffic congestion and elevate emissions—yet FHWA conducted no National Environmental Policy Act review of these impacts. This procedural omission contrasts starkly with the years-long environmental analysis preceding program approval. The Supreme Court has consistently held that agencies cannot disregard environmental consequences when taking major federal actions; they must take the requisite “hard look” at environmental impacts. The administration’s failure to conduct any environmental assessment before attempting to terminate congestion pricing represents a conspicuous violation of NEPA’s mandate.
Beyond these legal infirmities lies a deeper paradox: The administration’s action contradicts its own stated policy principles. Just weeks before attempting to terminate congestion pricing, Secretary Duffy issued an order prioritizing projects “that utilize user-pay models”—precisely what congestion pricing embodies. Days before that, Duffy told state transportation officials: “I think that you guys know how to do your jobs, and I think we should rethink the way we’re doing business together by giving you all a lot more autonomy and a lot more authority, a lot more freedom to do the projects that you know are important in your communities”. This rhetoric of federalism and local control stands in stark contrast to the centralizing impulse behind the termination attempt.
The administration’s action also threatens broader innovation in urban transportation policy. Several major American cities—including Los Angeles, San Francisco, and Seattle—have been studying congestion pricing as a solution to their mobility challenges. The federal attempt to terminate New York’s pioneering program risks chilling this innovation nationwide, potentially deterring other cities from pursuing similar approaches to urban congestion and transit funding. It substitutes political calculation for evidence-based policymaking, undermining the tradition of states as “laboratories of democracy” that Justice Brandeis eloquently articulated.
This collision between administrative expediency and legal principle has created a political standoff as the March 21 deadline approaches. MTA Chair Janno Lieber has stated unequivocally that the congestion pricing program “will continue” past the deadline, emphasizing that “the tolling system will not be shut down without a court order”. Governor Hochul has declared “orderly resistance” to the federal decree, vowing to fight the termination through legal channels.
The litigation will likely pivot on technical questions of administrative law and contractual interpretation. Yet beneath these legal intricacies lies a more profound issue: the tension between political expediency and institutional stability in our federal system. When intergovernmental agreements become vulnerable to dissolution with each administration change, the predictability essential to effective governance crumbles. When political calculation displaces empirical analysis in policymaking, our collective capacity to address complex social challenges diminishes. When executive authority operates unconstrained by procedural safeguards, democratic accountability withers.
Congestion pricing represents more than a transportation policy innovation; it embodies a principled approach to urban governance—one that acknowledges the true costs of automobile dependency, internalizes environmental externalities, and prioritizes the efficient movement of people over vehicles. Its implementation in New York culminated decades of debate, research, and advocacy. Its early success validates the vision of its proponents and the meticulous planning of its implementers. The attempt to terminate it constitutes not merely policy reversal but an assault on the deliberative processes that produced it and the empirical evidence that sustains it.
The program includes specific equity measures designed through democratic processes to address concerns about economic burden. Low-income drivers with federal adjusted gross income under $50,000 receive a 50% discount after the first 10 trips in a calendar month. Zone residents earning under $60,000 qualify for tax credits equivalent to tolls paid. These provisions reflect the thoughtful balancing of competing interests that characterizes well-functioning democratic governance.
As we await judicial resolution of this dispute, we should remember that our federal system functions optimally when all governance levels operate with mutual respect and procedural integrity. The Trump administration’s attempt to terminate congestion pricing jeopardizes this delicate balance, substituting political impetuosity for principled governance. In doing so, it threatens not only a promising urban policy innovation but also undermines the institutional foundations that make such innovations possible.
Legal experts anticipate the case could eventually reach the Supreme Court, as it involves “the kind of administrative, interpretive decision of a statute that the Supreme Court really likes to get its hands on”. The most likely near-term outcome involves a preliminary injunction allowing continued operation while courts examine the merits—a process potentially extending well into 2026.
The constitutional principles at stake transcend the immediate policy question, touching on fundamental aspects of democratic governance in our federal system. How courts resolve this dispute will shape not just congestion pricing’s future but the broader landscape of federal-state relations for years to come. It will establish precedent regarding the stability of intergovernmental agreements, the procedural requirements for agency policy reversals, and the balance between empirical policymaking and political expediency in our system of separated powers.
In the meantime, New Yorkers continue experiencing the benefits of reduced congestion, improved air quality, and increased economic vitality that the program has delivered. The cameras remain active, the tolls continue flowing, and the fundamental constitutional questions raised by this confrontation proceed through our judicial system—a testament to the enduring strength of our constitutional design even in an era of heightened political polarization.
Liam Blank is a transportation policy consultant specializing in regional rail integration and transit governance reform. He chairs the Transportation & Infrastructure Committee at the City Club of New York and previously served as Associate Director of the Permanent Citizens Advisory Committee to the MTA.
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