A federal judge has blocked the Trump administration from withholding $16 billion in congressionally approved funding for the Hudson River Gateway project, a critical rail tunnel connecting New York and New Jersey. U.S. District Judge Jeannette Vargas of the Southern District of New York issued a temporary restraining order on February 6, 2026, preventing the administration from suspending federal disbursements for the tunnel project while the legal case proceeds.
The Trump administration had frozen funding for the Hudson River Gateway project in September 2025, citing concerns about diversity, equity, and inclusion policies. The freeze halted construction and threatened to lay off about 1,000 workers on the site.
New York and New Jersey sued the Trump administration in early February 2026, arguing the funding freeze was unlawful. In her 11-page ruling, Judge Vargas found that “the public interest would be harmed by a delay in a critical infrastructure project.” The judge noted that plaintiffs had “adequately demonstrated that they would imminently suffer” harm from the continued suspension of funds.
The Hudson River Gateway project is one of the most significant infrastructure undertakings in the nation. The $16 billion tunnel would build new rail passages under the Hudson River and rehabilitate an existing tunnel, doubling capacity on the Northeast Corridor—the busiest passenger rail line in the United States. Federal grants fund roughly $12 billion, or 70%, of the project’s budget, with the remaining $4 billion coming through other U.S. sources.
The Trump administration appealed the judge’s order, requesting a temporary stay to delay implementation. However, the court order eventually allowed federal funding to flow again, and work on the project resumed in mid-February 2026. The Gateway Development Commission confirmed it had received the federal funding it had been owed.
The dispute over the Hudson River Gateway project reflects broader tensions between the Trump administration and Democratic-led states over federal infrastructure spending. The project was approved under the Biden administration and has support from both New York and New Jersey officials, who argue it is essential for regional transportation and the national economy.
Sources
- Wall Street Journal — Judge Vargas’s temporary restraining order blocking the Trump administration from freezing Hudson Tunnel funding on February 6, 2026
- Courthouse News — Judge Vargas’s 11-page ruling finding that public interest would be harmed by delay in the critical infrastructure project
- New Jersey Monitor — Gateway Development Commission lawsuit and New York-New Jersey state lawsuit over the funding freeze
- New York Governor’s Office — States’ legal action against the Trump administration for withholding $15 billion in federally committed funding
- Progressive Railroading — Federal grants funding 70% of the $16 billion Hudson Tunnel project budget
- NBC News — Temporary blocking of Trump administration’s suspension of federal disbursements for Gateway Tunnel project
- House.gov (Rep. Gottheimer) — Gateway Project job creation impact
