A federal judge in New York has hit pause—again—on the battle over billions meant for a critical rail link beneath the Hudson River, temporarily suspending her own order that would have forced the Trump administration to release long-frozen funding.
The ruling puts the spotlight back on the $16 billion Hudson River Tunnel Project, a centerpiece of the broader Gateway initiative connecting New York City and New Jersey. Just days earlier, the court had directed federal officials to restore funding that had been on ice for four months. That decision would have required the immediate release of up to $200 million.
Instead, the judge opted for a brief timeout. Her order is now on hold until Thursday evening, giving an appeals court space to review an emergency request from the government. She declined, however, to grant a longer delay, pointing to the sharp economic fallout the two states say they are already facing as construction activity grinds to a halt.
According to the states, the funding freeze has forced work stoppages and threatens ripple effects across the region’s economy. Federal officials countered that once the money is released, there may be no clear path to claw it back if the government ultimately wins on appeal.
At the heart of the dispute is a project designed to build a new rail tunnel between Manhattan and New Jersey while rehabilitating an aging, century-old passage that carries more than 200,000 passengers and hundreds of trains every day. That existing tunnel was badly damaged during Hurricane Sandy in 2012 and has required frequent emergency fixes ever since—often disrupting traffic along the busiest passenger rail corridor in the country.
Construction crews halted work late last week, with project managers saying activity will resume only after funds begin flowing again.
New York and New Jersey officials have accused the administration of using the freeze as political leverage, calling it a retaliatory move aimed at their Democratic leadership. Project backers say roughly $205 million in reimbursements have been withheld since early October.
The standoff has grown more heated amid reports that the former president sought high-profile renamings—of Washington Dulles Airport and New York’s Penn Station—as part of discussions over releasing the funds, a claim that has fueled sharp criticism from Democrats.
The tunnel project had been promised about $15 billion in federal backing during the previous administration, with close to $2 billion already spent. For now, its future hinges on what happens next in court—and how long the pause button stays pressed.
