Federal judge orders funding restored for $16-billion Gateway Tunnel
(UI) - A federal judge has ordered the Trump administration to permanently restore funding for the $16 billion Gateway Tunnel project, the New York Times reported, ruling that the suspension of federal reimbursements for the major rail infrastructure project violated federal law.
The ruling allows work to continue on the Gateway Program, which will construct two new rail tunnels beneath the Hudson River between New York and New Jersey while supplementing the existing 116-year-old tunnel system. The project is considered one of the nation's largest underground transportation infrastructure investments and is intended to improve capacity, reliability and resilience along the Northeast Corridor.
Funding for the project was suspended in September 2025, prompting construction delays and a temporary shutdown earlier this year after project funds were exhausted. New York and New Jersey challenged the funding freeze in federal court, arguing the action violated federal law. Construction resumed after a temporary restraining order was issued in February, said the New York Times.
Judge Jeannette Vargas ruled that the administration's suspension of funding was unlawful and barred future attempts to withhold grant reimbursements for the project. The Gateway Development Commission said construction is back on schedule following the resumption of federal funding, while litigation seeking damages related to the temporary shutdown remains pending.
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