Trump Relents on Withholding Funds for Critical Hudson Tunnel Project

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The Trump administration has agreed to release $16 billion in federal funding for the Gateway rail tunnel project connecting New York and New Jersey, ending a four-month legal battle over the suspension of those funds. The decision comes after a federal judge ordered the administration to continue disbursing the funds while the litigation continues.

Why it matters

The Gateway tunnel project is considered the most urgent major infrastructure project in the U.S., as the current, aging tunnels under the Hudson River face increasing bottlenecks and service limitations. The federal government had previously pledged over $11 billion toward the project, making the administration's suspension of funds a significant setback.

The details

In late September, the Trump administration said it would stop the flow of federal funding for the Gateway tunnel project while reviewing the project's contracts for compliance with revised federal regulations. This suspension left the government owing about $205 million to the tunnel's planners, the Gateway Development Commission, and forced a halt to work on the project as well as the layoff of around 1,000 union workers.

• In late September 2025, the Trump administration suspended federal funding for the Gateway tunnel project.
• Earlier this month, Senate Minority Leader Chuck Schumer (D-NY) said he met with Trump over the project, and the president told him he would release the funds if Schumer agreed to pass resolutions in Congress putting Trump's name on Washington Dulles International Airport and New York Penn Station.
• Last week, a federal judge ordered the administration to continue disbursing the funds while the litigation continues.

What’s next

The federal judge's order requires the Trump administration to continue disbursing the $16 billion in funds for the Gateway tunnel project while the litigation continues.