Judge orders Trump administration to resume funding Hudson Tunnel Project

MANHATTAN (CN) — A federal judge on Friday ordered the Trump administration to restore more than $200 million in federal funding for a new rail tunnel under the Hudson River, on the very day the project ran out of cash and was winding down construction.

U.S. District Judge Jeannette Vargas, a Joe Biden appointee in the Southern District of New York, granted a temporary restraining order just hours after presiding over an emergency hearing on the project’s fate.

In an 11-page ruling, Vargas found that “the public interest would be harmed by a delay in a critical infrastructure project.”

Without funding, state lawyers for New York and New Jersey warn that the $16 billion Hudson Tunnel Project will be left abandoned, posing a “substantial public safety and public health threat.”

“There is literally a massive hole in the earth in North Bergen, New Jersey, that has to be secured,” said Shankar Duraiswamy of the New Jersey Attorney General’s Office in the hearing.

New York and New Jersey filed a lawsuit earlier this week, accusing the Trump administration of “political retribution” in its withholding of allocated federal funds for the highly anticipated Hudson Tunnel — a massive infrastructure effort aimed at increasing reliability for Amtrak and NJ Transit riders. 

Set to be completed by 2035, supporters say the tunnel is becoming ever more critical as the existing 116-year-old Hudson River rail tunnels continue to deteriorate following damage from Hurricane Sandy in 2012.

In 2023, then-President Joe Biden committed to pumping more than $6 billion of federal funding into the initiative. But in September, the Trump administration abruptly announced an indefinite freeze on federal funding for the project, claiming the contracts were under review for potential violations of the federal ban on diversity, equity and inclusion initiatives. 

The Justice Department claims that the states lack standing to sue in Manhattan’s federal court, where they filed the case. But the state attorneys on Friday argued that their complaint is similar to the various other cases against the Trump administration’s withholding of federal funding.

In January, for instance, the administration was scrutinized for cutting off $10 billion in child care and housing funds for five Democratic-led states. Suing states in that case won a temporary restraining order to get the money back.

New York and New Jersey are seeking a similar order in this infrastructure case.

“We have consistently seen funding-freeze TROs [temporary restraining orders],” said Jeremy Feigenbaum of the New Jersey Attorney General’s Office.

While she didn’t immediately rule from the bench on the state’s motion, the judge did express skepticism at the government’s claim that the states could merely fund the tunnel construction themselves.

“I think they’re saying they're going to have to fund this wind-down because New York and New Jersey cannot provide all of this funding,” Vargas said.

According to the states, the freeze of Hudson Tunnel funding was an arbitrary and capricious violation of the Administrative Procedure Act because it was based purely on “the president’s desire to punish political rivals.”

They pointed to President Donald Trump’s own statements about the project, in which he appeared to dangle it over the heads of congressional Democrats — and specifically Senate Minority Leader Chuck Schumer, who represents New York — to urge them to the negotiating table on federal budget issues. In October, Trump boasted on social media that he was “cutting a $20 billion project that Schumer fought for 15 years to get.”

Last week, an administration official suggested the project was conditional on Democrats accepting a budget deal to fund widespread and controversial immigration enforcement efforts. 

“It’s Chuck Schumer and Democrats who are standing in the way of a deal for the Gateway tunnel project by refusing to negotiate with the Trump administration,” White House spokesperson Kush Desai said in a statement amid budget negotiations.

The states claim statements like this demonstrate that the funding freeze was merely a “politically motivated attempt to punish and coerce those with whom the president disagrees.”

It’s the second lawsuit this week aimed at restoring Hudson Tunnel construction. On Monday, the Gateway Development Commission filed a complaint in the U.S. Court of Federal Claims, similarly accusing the administration of unfairly jeopardizing the yearslong project to the detriment of workers and commuters.

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