As part of a budget spat with Democrats that prompted a shutdown of the federal government, the Trump administration threatened to withhold money from the project, which its boosters consider vital for the nation’s busiest stretch of passenger railroad.
How long the Trump administration will withhold money and what it means for the tunnel is unclear. Work was continuing for the short term, because of the way it is budgeted.
But the mere threat is another remarkable obstacle for a project, known as Gateway, that’s been in the works for decades and is already under construction.
Whether all this means Trump plans to take an axe to the larger tunnel project or just needle it until Democrats reach a deal, it seems too soon to say. The Trump administration also threatened to withhold money for New York City’s Second Avenue Subway line.
Senate Majority Leader John Thune said “that issue goes away” if Democrats vote for a budget deal.
“I mean it’s pretty straight forward,” he told reporters on Capitol Hill. “I don’t control what they’re going to do. They are going to manage the shutdown. I mean this is the game that Democrats are playing and they know it. But they were willing to play it.”
New Jersey Gov. Phil Murphy, a Democrat who has touted his ability to work with Trump on some things, including getting the president to advance a related rail bridge in 2020, said Wednesday that he’s “confident that we’ll be able to work with the Trump Administration to keep Gateway moving forward. A project of this importance should be above politics.”
New York Gov. Kathy Hochul, a Democrat, echoed many others in her party who said, “every New Yorker should be outraged.”
The new tunnel is meant to supplement an existing tunnel beneath the Hudson that is over a century old.
In 2009, there was even a ceremonial groundbreaking for a previous version of the tunnel, which requires cooperation from the federal government, New York and New Jersey.
But in 2010, New Jersey’s then-Gov. Chris Christie, a Republican, pulled state funding for the rail link. Workers who had started digging the tunnel entrance had to fill it back in.
The idea was revived after Hurricane Sandy, which flooded the old tunnel and spurred a new attempt to build a new one.
The resurrection was orchestrated in part by former Sen. Bob Menendez, a New Jersey Democrat.
But then Gateway languished as President Donald Trump tried to use the tunnel as a bargaining chip during his first term. At one point, Trump offered Senate Minority Leader Chuck Schumer a deal: Schumer could have his tunnel if Trump got his border wall with Mexico.
Schumer didn’t take the deal.
In the years since, a big border-wide wall never happened, but after Biden took office in 2021, the tunnel project picked up steam.
Biden and Schumer began pouring billions of dollars into rail projects, including Gateway, and structuring the funds so that New York and New Jersey wouldn’t have to pick up as much of the tab as once expected.
The Democratic president visited Manhattan to announce money for the Hudson River tubes and celebrate “one of the biggest and most consequential projects in the country.”
By summer 2023, Schumer was declaring — in one of several such statements — that funding for the tunnel was locked in, beyond the reach of possible Republican attempts to undo it.
Even after Trump won reelection, it still looked like the tunnel would be safe. A Department of Transportation budget proposal earlier this year set aside $700 million for the tunnel and Republicans lawmakers who had questioned elements of Gateway seemed to back off their criticism.
All that changed, though, after Schumer and fellow Democrats declined to do a budget deal with Republicans that would avoid a government shutdown.
On Wednesday morning, White House budget director Russell Vought posted on social media that the administration is withholding “roughly $18 billion” from New York City infrastructure projects because of “unconstitutional DEI principles.”
Then the Department of Transportation outlined the particulars: it was reviewing spending because of DEI issues and because of the shutdown, pausing that review, creating a holdup for billions eventually needed to finish the tunnel, which is in early phases of construction, and the Second Avenue Subway.
Right now, the construction industry and laborers are caught in the middle.
Carlo Scissura, the head of the New York Building Congress, said he doesn’t expect any immediate effect on either project, but he’s not sure what the short or long-term effect could be.
“Here’s where it gets dicey when you talk construction,” he said in an interview. “If firms are eventually told this money is in jeopardy, then eventually they have to make decisions on whether they are still hiring people, are they still ordering materials – then it opens up the floodgates.”
The Gateway Development Development Commission, the bistate agency overseeing the tunnel project, said in a statement that it is “focused on keeping the project on scope, schedule, and budget” and called the Trump administration’s actions a “pause in disbursements.”
The Metropolitan Transportation Authority, which runs the subway system, said the administration “wants to immediately ‘review’ our compliance with rules they told us about moments ago. We’re reviewing their tweets and press releases like everyone else. For now, it looks like they’re just inventing excuses to delay one of the most important infrastructure projects in America.”
The MTA’s statement was a reference to the “interim final rule” the DOT was pointing to that was so fresh that it includes several placeholder areas that include things like, “Effective [INSERT DATE OF PUBLICATION IN FEDERAL REGISTER].”
