Gateway tunnel work to resume after Trump DOT ordered to release funds
Gateway tunnel work to resume after Trump DOT ordered to release funds
Eduardo Cuevas, USA TODAYWed, February 18, 2026 at 9:13 PM UTC
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NEW YORK − Construction on the nation’s largest infrastructure project can resume after a court ordered the Trump administration to release funding it had withheld to gain leverage over congressional Democrats from New York.
On Feb. 18, New York Attorney General Letitia James announced the U.S. Department of Transportation released nearly $130 million in funding for the $16 billion Gateway tunnel project in an ongoing lawsuit. The rail tunnel project, under the Hudson River between New Jersey and New York, is meant to bolster tunnels along the Northeast Corridor, the busiest passenger rail line in the United States.
The funding resuming is a blow to President Donald Trump, who had vowed to terminate the project in a budget fight with Senate Minority Leader Chuck Schumer, D-New York.
"This funding freeze was unlawful from the start," James, who has herself been targeted for legal retribution by Trump, said in a statement. "We took swift action in court, and now every dollar that was illegally withheld has been released."
The Manhattan-based U.S. Attorney’s Office, representing federal officials in court, declined to comment. Neither the White House nor the U.S. Department of Transportation immediately responded to requests for comment.
Construction had already started at several sites before federal officials abruptly pulled funding. Around $2 billion had already been spent on the project, New York officials said.
New York State Governor Kathy Hochul and Attorney General Letitia James stand together before New York City Mayor Zohran Mamdani's inauguration Jan. 1, 2026.
The project would create nine miles of new passenger rail tracks with a two-tube tunnel, and it would fix the existing 116-year-old tunnels, currently used by Amtrak and New Jersey Transit trains, that were damaged during Superstorm Sandy in 2012. Just one tunnel failing could cost the nation's largest regional economy billions of dollars annually, equivalent to over 30,000 jobs, according to the non-profit Regional Planning Association.
Trump, a former New York real estate mogul who has called himself the "builder president" but has failed to pass an infrastructure investment bill, put the project to a halt in the fall during the federal government shutdown. On the first day of the shutdown, on Oct. 1, federal officials withheld grants to the Gateway project and the Second Avenue Subway construction, in Manhattan, citing New York City’s Disadvantaged Business Enterprise program, an equity initiative meant to expand participation in federally assisted contracts.
"I'm cutting the project," Trump told Fox News.
"The project is going to be dead," he said. "It is pretty much dead right now."
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Construction on the Hudson Gateway Tunnel project to connect New Jersey to Penn Station on October 17, 2025 in New York City. President Donald Trump "terminated" the $16 billion Hudson River tunnel project.
Trump had also reportedly wanted New York's Penn Station and Virginia's Dulles International Airport renamed after him in order to drop his freeze on billions of federal dollars on the Gateway project. Trump later said his staff floated the idea, not him.
In early February, the project stopped, affecting about 1,000 workers, due to lack of funding.
On Feb. 3, New York and New Jersey attorneys general sued the administration to release funding. U.S. District Judge Jeannette A. Vargas then issued a temporary restraining order in Manhattan federal court, and later required funds be released with updates on payment of all present and future disbursements.
The federal government owed about $230 million, according to James’ office. On Feb. 13, officials released $30 million, followed by an additional $77 million released Feb. 17, James’ office said. The Gateway Development Commission, the joint corporation between New Jersey and New York overseeing the project, received the remaining funds, about $127 million, via wire the morning of Feb. 18.
President Donald Trump delivers a speech in Clive, Iowa, on Jan. 27, 2026, on energy and the economy.
Tom Prendergast, CEO of the commission, said in a Feb. 18 statement that contractors would be notified in the afternoon that work will resume next week. The project now has more than $205 million available to fund work, he said.
A day earlier, New York Gov. Kathy Hochul, a Democrat, stood alongside union leaders and workers at a project worksite in New York City. She said Trump's halt put thousands of jobs at risk.
"Today’s progress is significant, but we need certainty that Gateway funding will remain in place for the duration of the project," Hochul said in a Feb. 18 statement. "The federal government has a legal obligation to fully fund Gateway, and New York will accept nothing less."
Hamed Nejad, Chief Engineer of the Gateway Development Commission, is shown as he gives NorthJersey.com a tour of the Tonnelle Avenue Project site, Wednesday, February 4, 2026, in North Bergen.
The Building and Construction Trades Council of Greater New York, which represents workers on the project, didn’t immediately respond to requests for comment.
The Northeast Corridor serves about 800,000 passenger trips daily, the commission said. The section of the project, between New Jersey and Manhattan, is the busiest portion of the corridor.
Eduardo Cuevas is based in New York City. Reach him by email at [email protected] or on Signal at emcuevas.01.
This article originally appeared on USA TODAY: Gateway project to resume after Trump DOT ordered to release funds
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