Judge Unfreezes Funding for $16B New York-New Jersey Rail Tunnel

The Gateway Project will build a new commuter rail tunnel and repair an aging, hurricane-damaged tunnel.

Published on Feb. 7, 2026

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A federal judge has unfrozen $205 million in funding that was withheld by the Trump administration for the $16 billion Gateway Project to overhaul critical rail infrastructure between New York and New Jersey. The existing Hudson Tunnel, used by over 200,000 travelers and 425 trains daily, was heavily damaged by Hurricane Sandy in 2012 and needs frequent emergency repairs that disrupt travel on the nation's most heavily used passenger rail line.

Why it matters

The Gateway Project is a crucial infrastructure undertaking to modernize and fortify the rail connection between New York and New Jersey, which is vital for the regional and national economy. The Trump administration had frozen the funding in what the states called "political retribution" against Democratic leaders, jeopardizing the project and thousands of construction jobs.

The details

The federal judge ruled that New York and New Jersey were likely to succeed in their claims that the Trump administration's directive to freeze the funds was arbitrary and violated legal procedures. The Department of Transportation had cited new prohibitions against race- and sex-based considerations in contracting as the reason for the funding freeze, but the Gateway Development Commission said it had already conducted a review to ensure compliance.

  • On February 7, 2026, a federal judge in New York unfroze the $205 million in federal funds that had been withheld.
  • The existing Hudson Tunnel was heavily damaged by Hurricane Sandy in 2012.

The players

Jeannette Vargas

A U.S. District Judge in Manhattan who handed down the temporary ruling to unfreeze the Gateway Project funds.

Donald Trump

The former U.S. President whose administration had withheld the $205 million in reimbursements for the Gateway Project, which the states said was an act of "political retribution" against Democratic leaders.

Gateway Development Commission

The organization overseeing the Gateway Project, which informed the Department of Transportation that it had conducted a review to ensure compliance with new contracting regulations.

Jennifer Davenport

The New Jersey Acting Attorney General who praised the judge's ruling and called on the Trump administration to "drop this campaign of political retribution immediately."

Letitia James

The New York Attorney General who also issued a statement praising the judge's decision to unfreeze the Gateway Project funds.

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What they’re saying

“The Trump Administration must drop this campaign of political retribution immediately and must allow work on this vital infrastructure project to continue.”

— Jennifer Davenport, New Jersey Acting Attorney General

“These naming rights aren't tradable as part of any negotiations, and neither is the dignity of New Yorkers ... The president continues to put his own narcissism over the good-paying union jobs this project provides and the extraordinary economic impact the Gateway tunnel will bring.”

— Kirsten Gillibrand, New York Senator

What’s next

The judge's temporary ruling unfreezing the funds is expected to allow construction on the Gateway Project to resume after a work stoppage.

The takeaway

This case highlights the politicization of critical infrastructure projects and the need for bipartisan cooperation to address the country's aging transportation systems, which are vital for the regional and national economy.