Funding Freeze Lawsuit Threatens Halt to $16 Billion Hudson River Tunnel Project

The Gateway Development Commission has filed a lawsuit against the administration of U.S. President Donald Trump, seeking the immediate restoration of federal funds for the $16 billion Hudson River tunnel project linking New York and New Jersey. The legal action, filed in the U.S. Court of Claims, comes just days before construction is scheduled to stop, with the commission arguing that the U.S. Transportation Department unlawfully withheld more than $205 million that had already been approved. The commission warned that without funding, contractors cannot be paid, leaving unfinished construction sites, major financial penalties, and hundreds of workers at risk.

The dispute has quickly taken on political overtones. The White House has accused Democrats of blocking negotiations, while Democratic leaders say the funding freeze is arbitrary. Senate Majority Leader Chuck Schumer said the lawsuit would be unnecessary if the administration reversed its decision, while New York Governor Kathy Hochul and New Jersey Governor Mikie Sherrill backed the commission’s move and urged federal officials to release the funds. The project has previously faced resistance during Trump’s earlier term, reflecting ongoing tensions between the Republican administration and Democratic-led states over infrastructure priorities.

The tunnel project is considered critical to the Northeast transport network, supporting rail services operated by Amtrak and regional commuter lines. The existing Hudson River tunnel, built in 1910 and damaged during Hurricane Sandy in 2012, carries about 200,000 passengers daily through a region that generates roughly 10% of U.S. economic output. Nearly $2 billion has already been spent, with the broader initiative—including a new tunnel and rehabilitation of the old one—relying on roughly $15 billion in federal support. Officials warn that any failure of the aging tunnel without a replacement in place could severely disrupt one of the country’s most vital transportation corridors.

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