Judge Blocks Funding Freeze for $16B Gateway Tunnel Project

Ruling prevents shutdown of critical infrastructure project between New York and New Jersey

Published on Feb. 7, 2026

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A federal judge has ordered the Trump administration to restore $16 billion in funding for the Gateway Tunnel project, a massive infrastructure initiative to build a new rail tunnel between New York and New Jersey. The judge ruled that the states would suffer "irreparable harm" if the project was forced to shut down, citing the impact on workers, commuters, and the broader regional economy.

Why it matters

The Gateway Tunnel project is considered one of the most important infrastructure initiatives on the East Coast, as the existing, over 110-year-old tunnel is a major bottleneck for Amtrak and commuter rail service between the two states. Delays in the aging tunnel can lead to backups up and down the entire Northeast Corridor, impacting rail travel and commerce throughout the region.

The details

The Trump administration had announced it was halting the federal funding for the project, citing concerns about "unconstitutional spending" related to diversity, equity and inclusion principles. New York and New Jersey sued to block the funding freeze, arguing it would cause significant harm and job losses. The judge agreed, granting a temporary restraining order to restore the funding while the states' lawsuit proceeds.

  • On February 6, 2026, the Gateway Development Commission had said work would stop late that afternoon due to the federal funding freeze.
  • On February 7, 2026, the federal judge issued the ruling to restore the $16 billion in funding for the project.

The players

Jeannette A. Vargas

U.S. District Judge who ordered the Trump administration to restore funding for the Gateway Tunnel project.

Letitia James

New York Attorney General who called the ruling "a critical victory for workers and commuters in New York and New Jersey."

Donald Trump

Former U.S. President who had ordered the funding freeze for the Gateway Tunnel project.

Chuck Schumer

U.S. Senate Minority Leader from New York, whom the White House was blaming for the funding freeze.

Gateway Development Commission

The panel overseeing the Gateway Tunnel project, which had said work would stop due to the federal funding freeze.

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What they’re saying

“The Court is also persuaded that Plaintiffs would suffer irreparable harm in the absence of an injunction. Plaintiffs have adequately shown that the public interest would be harmed by a delay in a critical infrastructure project.”

— Jeannette A. Vargas, U.S. District Judge

“I am grateful the court acted quickly to block this senseless funding freeze, which threatened to derail a project our entire region depends on. The Hudson Tunnel Project is one of the most important infrastructure projects in the nation, and we will keep fighting to ensure construction can continue without unnecessary federal interference.”

— Letitia James, New York Attorney General

“Absolute lie. He knows it. Everyone knows it. Only one man can restart the project and he can restart it with the snap of his fingers.”

— Chuck Schumer, U.S. Senate Minority Leader (Twitter)

What’s next

The judge's ruling is a temporary restraining order, and the states will now seek a preliminary injunction to keep the funding in place while their lawsuit against the Trump administration continues.

The takeaway

This court decision represents a major victory for the Gateway Tunnel project, which is seen as crucial infrastructure for the Northeast region. It underscores the high stakes involved and the political battles that have surrounded the project's funding. Going forward, the focus will be on ensuring the project can move forward without further disruptions or delays.