Chicago’s bus lane proposal may not be dead after all. On Thursday, we noted that the city was forced to forfeit $153 million in federal funds to create 10 miles of special bus service because officials in the U.S. Transportation Department refused to allow more time for the city to approve a downtown congestion pricing plan. But Mayor Daley isn’t done fighting yet, and the feds may throw the city a bone. Here's the nugget buried deep in the Tribune yesterday:

The mayor also repeated his insistence that the federal government needed to be more flexible after the city failed to make a deadline to apply for a $153 million transit grant to help ease traffic gridlock

Daley said he had spoken with U.S. transportation officials, who agreed to hold over the grant money until President-elect Barack Obama’s administration takes office.

It now seems incoming Transportation Secretary Ray LaHood will have an immediate opportunity to help a fellow Illinoisan meet some transportation needs. We'll let you know if we learn of any further developments.

(H/T CTA Tattler)

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