October 23, 2025 at the Gateway Tunnel site near West 30th Street and 11th Avenue in Hudson Yards, New York City.
New York Daily News | Tribune News Service | Getty Images
A New York federal judge on Friday lifted a freeze on funds withheld by President Donald Trump’s administration for a $16 billion project to overhaul critical rail infrastructure in New York and New Jersey.
The Gateway project will build a new commuter rail tunnel between Manhattan and New Jersey and rehabilitate the 100-year-old tunnel, which is used by more than 200,000 travelers and 425 trains each day.
The existing Hudson Tunnel was severely damaged by Hurricane Sandy in 2012 and requires frequent emergency repairs, disrupting service on the nation’s most heavily used passenger rail service.
U.S. District Judge Janet Vargas in Manhattan issued the interim ruling after New York and New Jersey announced they would halt construction due to lack of funding.
Vargas said states are likely to succeed in arguing that the Trump administration’s directive to freeze funds is arbitrary and violates the legal process for changing policy.
The White House and Department of Transportation did not immediately respond to requests for comment on the ruling.
New Jersey Acting Attorney General Jennifer Davenport and New York Attorney General Letitia James issued statements praising the ruling.
“The Trump administration must immediately end this campaign of political retribution and allow work to continue on this critical infrastructure project,” Davenport said. The states said in a Jan. 3 lawsuit that President Trump’s Republican administration froze the funds in a “brazen act of political retaliation” against Democratic leaders. They said a halt to construction would hamper critical infrastructure projects, damage the economy and incur the costs of holding idle construction sites.
The Trump administration has withheld $205 million in reimbursement for the project since Oct. 1. Trump has reportedly demanded that Washington Dulles Airport and New York’s Penn Station be renamed to him in exchange for unfrozen funding, drawing strong criticism from Democrats. He told reporters Friday that he is not proposing to rename Dulles or Penn Station. President Trump did not comment on Vargas’ decision.
The Department of Transportation announced on September 30 that it would freeze funding until it reviews projects for compliance with new prohibitions on race- and gender-based considerations in contract decisions.
The Gateway Development Commission notified the department that it had reviewed and made changes to ensure compliance with regulations, but received no response, according to the complaint.
Gateway said the suspension would put 1,000 construction workers out of work and said President Trump’s decision puts passengers who must rely on “100-year-old aging rail infrastructure” at risk.
Gateway previously said work had already been suspended.
Democrats criticize Trump’s withholding of funds
President Trump asked Sen. Chuck Schumer last month to support renaming Washington Dulles Airport and Penn Station, but the New York Democrat told the White House he did not have the authority to do so, sources told Reuters. President Trump told reporters Friday that Schumer suggested renaming Penn Station and “many people” suggested renaming Dulles Station. In a social media post, Schumer criticized Trump’s claims about Penn Station, calling them “absolute lies.”
Sen. Cory Booker, a New Jersey Democrat, said at a news conference near the project Friday that President Trump is holding the tunnel hostage because “it seems like he wants to put his name on everything.” Since returning to office in January, the Republican president has put his name on prominent buildings in Washington, a proposed class of Navy warships, a visa program for wealthy foreigners, a government-run prescription drug website and a federal savings account for children.
New York State Sen. Kirsten Gillibrand (D) called President Trump’s proposal ridiculous.
“These naming rights cannot be traded as part of a negotiation, and neither can the dignity of New Yorkers…The president continues to prioritize his own narcissism over the high-paying union jobs this project will provide and the extraordinary economic impact the Gateway Tunnel will have.”
The project was allocated about $15 billion in federal aid under former President Joe Biden. Nearly $2 billion has been spent on the project so far.
