President Donald Trump on Wednesday released the remaining $127 million in previously frozen federal funding for the Gateway Tunnel expansion and renovation of the Northeast Corridor rail line from New Jersey to New York.
The decision follows months of legal and political battles after the Trump administration froze roughly $205 million in federal reimbursements for the project in October.
The Gateway Development Commission said in a statement that it is working to quickly get boots on-scene and construction back on track.
“We are working with our contractors to deploy these funds to resume work as soon as possible. Letters will be sent to contractors today, and construction activities are expected to resume next week,” the commission wrote in its statement. “We continue to pursue all avenues to secure access to the full amount of federal funding for the Hudson Tunnel Project, including our lawsuit.”
A federal appeals court earlier this month allowed a judge’s order to take effect that would restore funding previously halted by the Trump administration, and all amounts owed have now been disbursed.
New Jersey Gov. Mikie Sherrill (D-NJ) said in a release Wednesday that the funding freeze left 1,000 construction workers idle and the funding restoration and bridge completion will prompt a boon in the economy.
“It could lead to almost 100,000 jobs in the region,” Sherrill said. “It has a huge economic impact of about $20 billion. And this is an area of the country responsible for about 20% of the nation’s GDP. So really, a huge jobs and economic driver. Not to mention the 200,000 commuters that take the tunnel every day to fuel a lot of business throughout the region.”
Sherrill also used the Gateway Project halt to rip Trump on the “pretty big economic and jobs challenges that he’s facing.”
“The fact that the President of the United States … who has some pretty big economic … challenges that he’s facing, would then further hit the economy like this, was bewildering and illegal,” Sherrill said. “We took him to court because I care deeply about jobs and the economy, even if the federal government doesn’t seem to … We have seen the funds released and he continues to remain in court — but we’re just seeing again and again that what he’s doing is illegal.”
New York Gov. Kathy Hochul (D-NY) called the funding release a “major win” after a preliminary court victory and conversation with Trump.
Trump, who has repeatedly criticized the project as a “boondoggle” that could face cost overruns, had earlier declared the federal government would not cover any excess expenses beyond existing commitments.
Democratic leaders in New York and New Jersey had sued the Trump administration for being in breach of the contract signed by former President Joe Biden‘s administration in 2024. The next court date regarding the broader funding trouble was supposed to be a federal appellate court hearing scheduled for Feb. 23.
The $16 billion Gateway Tunnel project includes plans to build two new rail tunnels underneath the Hudson River between New Jersey and New York and address concerns with the existing tunnels, some of which were damaged during Hurricane Sandy in 2012.
The Washington Examiner reached out to the White House for comment.
