Leaders of Gateway train tunnel project sue Trump administration over withheld money

WASHINGTON – The future of the single most critical infrastructure project in the United States now rests with the courts. Leaders of the Gateway Program, a multi-billion-dollar effort to build a new rail tunnel under the Hudson River and repair the existing one, have filed a federal lawsuit against the Trump administration, alleging the Department of Transportation is unlawfully withholding vital funds and jeopardizing the nation's economic security.

The legal challenge marks a dramatic escalation in a long-simmering feud between officials in New York, New Jersey, and the federal government over funding for the project. Project developers warn that without an immediate infusion of federal money, preliminary work on the massive undertaking could grind to a halt within days, triggering costly delays and increasing the risk of a catastrophic failure in the existing century-old tunnel.

This lawsuit brings the high-stakes battle over infrastructure policy, federal-state partnerships, and presidential priorities into a new, contentious arena.

A Project on the Brink

The lawsuit, filed by the Gateway Program Development Corporation (GDC), targets the Department of Transportation (DOT) and the Federal Transit Administration (FTA). It argues that the administration is acting in an "arbitrary and capricious" manner by refusing to release funds appropriated by Congress and failing to advance the project through required federal review processes.

At the heart of the immediate crisis is access to funding for essential pre-construction activities. The GDC claims it has been blocked from using federal dollars to complete engineering, planning, and property acquisition, even as the states of New York and New Jersey have committed to their share of the costs.

• Imminent Shortfall: According to project leaders, existing funds for the GDC are set to be exhausted by the end of this week. A shutdown, even a temporary one, would mean disbanding expert teams and incurring significant remobilization costs later.
• Legal Argument: The lawsuit contends that the administration is illegally stonewalling the project by refusing to assign it a satisfactory rating in the federal grant process, a necessary step to unlock major funding streams. The GDC asserts it has met all legal and financial criteria.

The Sticking Point: Who Pays?

The dispute is fundamentally about how to pay for the estimated $13 billion Hudson Tunnel portion of the broader $30 billion Gateway Program. An informal agreement was reached under the Obama administration for the federal government to cover 50% of the cost, with New York, New Jersey, and the Port Authority covering the rest. The Trump administration has rejected this formula.

• The Original Understanding: The 50/50 cost-sharing plan was widely seen by state leaders as the bedrock of the project's financial feasibility. This model has been used for other major infrastructure projects across the country.
• The Administration's Stance: Transportation Secretary Elaine Chao and other officials have publicly stated there is "no such agreement" for a 50% federal share. The administration has insisted that federal loans taken out by the states must be counted as part of the local contribution, a creative accounting method that dramatically shifts the financial burden onto the states.
• The Local Commitment: New York and New Jersey have already budgeted billions for the project and argue they have met their end of the bargain. They view the administration's position as a politically motivated effort to derail a project vital to a region often at odds with the White House.

A Century-Old Chokepoint

The urgency behind the Gateway Program stems from the fragile state of the existing North River Tunnels, which opened for service in 1910. The two tubes are a linchpin of the Northeast Corridor, the busiest rail line in North America.

The tunnels sustained significant damage during Hurricane Sandy in 2012, when they were inundated with millions of gallons of corrosive saltwater. The chloride from the salt continues to eat away at the concrete, electrical systems, and signal infrastructure. Amtrak, which owns the tunnels, has stated that one of the two tubes may need to be taken out of service for extensive repairs within the next several years, a move that would have devastating consequences.

• Economic Lifeline: The tunnels carry over 200,000 passenger trips each weekday on Amtrak and NJ Transit trains. The Northeast Corridor as a whole generates an estimated $50 billion in annual economic activity, representing roughly 20% of the U.S. gross domestic product.
• A Single Point of Failure: Closing one of the two tubes for repairs without a new tunnel in place would reduce rail capacity by 75%. This would cripple commuter transit into New York City, snarl regional travel, and, according to analysts, cost the national economy an estimated $100 million per day.

The Path Forward: Courts and Congress

The lawsuit injects a new layer of uncertainty into the project's timeline. While project proponents hope for a swift legal victory that forces the DOT to act, such cases can be protracted, potentially delaying the project for months or even years.

All eyes will also be on Congress, which holds the power of the purse. Key congressional leaders, particularly from the Northeast, have been staunch advocates for Gateway and have successfully included funding for it in appropriations bills, only to see the administration refuse to disburse the money. The ongoing legal battle may spur lawmakers to exert greater pressure or write more explicit directives into future spending legislation.

• Immediate Risk: If work stops, the project's overall cost will inevitably rise. The GDC will lose momentum and face the difficult task of reassembling its specialized workforce once funding is secured.
• The Legal Battle: The court will be asked to decide whether the executive branch has overstepped its authority by effectively vetoing a congressionally supported project through administrative delay and reinterpretation of funding rules.
• Long-Term Uncertainty: Ultimately, the fate of the Gateway Program—and the economic health of the entire Northeast—hangs in the balance. The outcome of this lawsuit will not only determine the future of a tunnel but also set a major precedent for how the nation's most complex and expensive infrastructure projects are funded and executed in an era of intense political division.