Judge Permanently Bars Feds From Freezing Gateway Funds

The Trump administration has been permanently barred from freezing funds for further construction of the Hudson River Tunnels portion of the Gateway project after a ruling from a federal described the actions as “flagrantly” illegal.

The $16 billion project to build a new rail link between Newark, NJ, and Penn Station, which is part of a broader transformation of the Northeast Corridor, involves the construction of two new tunnels under the Hudson River. The two existing tunnels, which first opened for service 116 years ago, will be fortified as well.

The current tunnel system was severely damaged during Superstorm Sandy in October 2012 and rail service ever since has been hampered by frequent service interruptions. Local transit officials believe that tens of thousands of commuters will be at risk of losing safe passage from New York to New Jersey if the damaged tunnels aren’t replaced.

The latest court ruling would appear to put a cap on a saga that led to chaos this February, after the Trump administration halted $205 million worth of reimbursements that went into effect last September began resulting in mass layoffs; around 1,000 workers temporarily lost their jobs while the court battles ensued.

Judge Jeanette A. Vargas of the Southern District of New York then put a temporary injunction on the freezing of funds after New York and New Jersey filed suit, which slowly led to the resumption of reimbursements after the federal government said that it would comply with the court order and did not file an appeal.

Judge Vargas has now cemented that injunction, which the Trump administration has continued to oppose otherwise, with her new ruling on June 29. Although the money frozen last year has reportedly been fully restored, Vargas wrote that any resumed shutdown of funds would result in “irreparable harm” to the project.

The Trump administration claimed that last year’s freezing of funds was made necessary by what it described as the project’s “unconstitutional” Diversity, Equity, and Inclusion (DEI) contracting rules.

However, plaintiffs argued that the freeze was pursued due to President Donald Trump’s dislike of certain Democratic politicians who represent New York—namely Senator Chuck Schumer, who was singled out by Trump in public comments on the project.

“The [Gateway] project in New York. It’s billions and billions of dollars that Schumer has worked 20 years to get. It’s terminated. . . . It’s terminated because the Democrats are so foolish,” Trump said in September.

It was then reported that Trump offered to unfreeze the funds if Democrats supported a move to name Penn Station and Virginia’s Dulles Airport after himself. Trump insisted that was not true.

New York Attorney General Letitia James, Governor Kathy Hochul, Governor Mikie Sherill, and New Jersey Attorney General Jennifer Davenport praised the outcome in a joint statement.

“We are thrilled that a federal court has once again agreed that the Trump administration’s decision to freeze billions of dollars in grants for the Gateway Tunnel Project is flagrantly unlawful,” they said. “This is the most important infrastructure project in the nation, and thanks to our litigation, 1,000 people are back on the job and construction continues every day.”

The Regional Plan Association, an infrastructure advocacy group that supports the Hudson River Project, also appeared enthused by the new ruling.

“Major infrastructure projects require stable, predictable federal partnerships—not unnecessary delays and uncertainty. We urge the administration to comply fully with the court’s ruling and keep this project moving forward,” RPA President and CEO Tom Wright said in a statement.