A federal judge in Manhattan has directed the Trump administration to reinstate financial support for the Hudson River rail tunnel project between New York and New Jersey, preventing an imminent shutdown of the $16 billion infrastructure effort. The ruling was issued on Friday, shortly before work was scheduled to halt following an administrative freeze of funds that jeopardized the continuation of the project.
Earlier, the administration had suspended funding as part of broader fiscal actions connected to the government shutdown and concerns expressed by a senior federal budget official regarding adherence to spending guidelines tied to diversity, equity, and inclusion. United States District Judge Jeannette A. Vargas granted a temporary restraining order at the request of both states to prohibit the administration from withholding allocated funds during the pendency of their preliminary injunction proceedings.
In her decision, Judge Vargas emphasized the irreparable harm that the states would encounter without the injunction, citing the significant public interest in advancing this critical infrastructure project.
Attempts to secure comment from the White House and the Department of Transportation on the ruling were unanswered as of Friday evening.
New York Attorney General Letitia James hailed the decision as an essential win for regional commuters and laborers alike, stating the court's rapid intervention helped avert delays that could cripple a project of national importance. She affirmed the commitment to ensure the project proceeds free from unwarranted federal obstruction.
The Gateway Development Commission, the governing body managing the project, had warned of an impending work stoppage late Friday afternoon precipitated by the funding suspension. This pause threatened immediate layoffs affecting approximately 1,000 workers and put thousands of additional jobs at risk in the longer term.
While the exact timeline for construction to recommence remains undetermined, the commission conveyed its readiness to resume activities promptly once funding is restored to minimize disruption and restore employment.
The new tunnel aims to alleviate pressure on the existing century-old structure facilitating Amtrak and commuter rail across the Hudson River, which suffers frequent delays that ripple through East Coast transportation networks. The states, along with the Gateway Development Commission, recently initiated litigation seeking to overturn the administration's freeze and reinstate federal financing.
The halt in funding was understood to be linked to political maneuvering involving Senate Minority Leader Chuck Schumer, with the administration attributing blame for a prior government shutdown to him. Inquiries about potential concessions linked to naming rights for transit hubs, including Penn Station and Dulles International Airport, elicited denials and public disputes between involved parties.
During a hearing related to the lawsuit, a New Jersey attorney highlighted urgent needs for relief, pointing out safety and health risks posed by an exposed excavation site in North Bergen should the project be abandoned even temporarily. He warned of the difficulty in remobilizing the workforce and restarting the project after layoffs, adding that prolonged funding suspensions could ultimately derail the entire initiative.
Conversely, the government's legal representative contested the projections of dire consequences, noting a lack of clear evidence on the duration for which the Gateway Development Commission could maintain the construction sites without active work.
Judge Vargas inquired directly about site maintenance capabilities and was informed that the commission could sustain them for weeks or possibly months; nonetheless, the states would continue to endure harm from reliance on outdated rail infrastructure resulting in persistent delays.