Judge blocks Trump administration from freezing Hudson Tunnel funding again
A federal judge ended the latest freeze on Gateway Tunnel money, calling it illegal and clearing the way for work under the Hudson River to continue.
A federal judge permanently barred the Trump administration from freezing Gateway Tunnel grants again on June 29, 2026, ending the latest attempt to halt money for the $16 billion Hudson Tunnel Project and clearing the way for construction to keep moving under the Hudson River. The ruling kept open a project that carries enormous daily traffic between New Jersey and Manhattan.
U.S. District Judge Jeannette Vargas called the administration’s suspension of the grants “flagrantly violates federal law.” Her order extended an earlier restraining order and blocked the government from freezing the money again after the dispute had already forced months of uncertainty and a work stoppage earlier this year.
The Hudson Tunnel Project would build a new commuter rail tunnel under the Hudson River and rehabilitate the existing North River Tunnel, which dates to 1910 and was heavily damaged by Superstorm Sandy in 2012. NJ TRANSIT and Amtrak run about 425 trains each weekday through the tunnel, carrying more than 200,000 passenger trips a day.
In July 2024, the Gateway Development Commission secured a $6.88 billion Federal Transit Administration grant and $4.06 billion in federal RRIF loans, completing a $12 billion federal funding commitment. The federal government later suspended release of contractually obligated funds beginning October 1, 2025, withholding about $205 million in reimbursements. By early February 2026, the Gateway Development Commission put the project’s construction and investment draw at more than $1 billion, and a funding pause would have shut down work and put nearly 1,000 workers at risk.
New York Gov. Kathy Hochul, New Jersey Gov. Mikie Sherrill, New York Attorney General Letitia James and New Jersey Attorney General Jennifer Davenport called the ruling “flagrantly unlawful.” 1,000 people were back on the job and construction continued every day. The administration tied the freeze to a review of contracting practices and alleged DEI violations, while Donald Trump called it punishment in a broader spending fight. The states and the Gateway Development Commission had also taken the dispute to the U.S. Court of Federal Claims.
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