(The Center Square) — Construction on a $16.6 billion tunnel project under the Hudson River remains on hold as a federal appeals court considers a move by the Trump administration to freeze funding for the massive infrastructure.
A federal judge on Friday ordered the Trump administration to restore funding pulled back by the U.S. Department of Transportation from the Gateway Development Commission’s Hudson Tunnel Project between New York and New Jersey.
But the Department of Justice appealed the ruling to the First Circuit Court of Appeals, and U.S. District Judge Jeannette Vargas on Monday gave the federal government until Thursday to release the funds while the appeal is being considered.
Work at the project’s five job construction sites in New York and New Jersey ground to a halt on Friday and Gateway officials said they can’t resume construction until the federal funding is restored. Nearly 1,000 workers have been laid off due to the freeze, the commission said.
A lawsuit filed by New York Attorney General Letitia James and acting New Jersey Attorney General Jennifer Davenport claimed the DOT’s decision to withhold the funding was not because of noncompliance with laws but because the President Donald Trump is “engaged in political retribution” against the states.
The legal challenge follows a lawsuit filed Monday in the U.S. Court of Federal Claims by the commission. That complaint made similar arguments about the funding cuts and asked the court to release “contractually obligated” grant and loan money for the project that was pulled back by the federal government.
The cuts were announced in October by Office of Management and Budget Director Russell Vought, who said funding for the Hudson Tunnel is “under administrative review” to determine if “to ensure funding is not flowing based on unconstitutional [diversity, equity and inclusion] principles.”
Several news outlets reported that the Trump administration offered to unfreeze the funding if Democrats in Congress agreed to rename Penn Station in New York and Dulles Airport in Washington, D.C. after the president.
The Gateway project, years in the making, calls for renovating the 1910 tunnel, which carries about 200,000 weekday passengers on Amtrak and NJ Transit beneath the Hudson between New Jersey and Manhattan. New York and New Jersey agreed last year to split the 30% local share of tunnel construction costs, a move required to apply for federal funding.
The upgrades are aimed at increasing capacity on the Northeast Corridor line between Newark and New York City and easing a bottleneck of rail traffic coming to and from the city.
Politicians from both New York and New Jersey have blasted the funding freeze, saying it puts thousands of good-paying jobs and the economy of both states at risk.
“Freezing Gateway funding is reckless and flat-out stupid,” Rep. Josh Gottheimer, D-NJ, said in a statement Tuesday. “This is the most important infrastructure project in the country — it keeps 200,000 commuters moving, protects thousands of union jobs, and safeguards a huge chunk of our national economy.
