A federal judge on Friday ordered the Trump administration to restore billions of dollars in funding for a new rail tunnel under the Hudson River, known as the Gateway Project, delivering what New York and New Jersey officials called a “critical victory” for commuters and construction workers.
Politically charged reports also emerged that President Donald Trump offered to release the tunnel funding if Senate Minority Leader Chuck Schumer supported renaming New York’s Penn Station and Washington’s Dulles International Airport after the president.
According to published accounts of Trump’s remarks, “Chuck Schumer suggested that to me, about changing the name of Penn Station to Trump Station,” with Trump adding that “Dulles Airport is really separate.”
Schumer later called that claim an “absolute lie,” saying “only one man can restart the project and he can restart it with the snap of his fingers.”
On Friday, U.S. District Judge Jeannette A. Vargas granted a temporary restraining order requiring the administration to release the money while the states pursue a broader injunction in their lawsuit challenging the freeze.
In her written decision, Vargas wrote that “plaintiffs have adequately shown that the public interest would be harmed by a delay in a critical infrastructure project,” underscoring the risk of shutting down work on the $16 billion Hudson Tunnel Project.
New York Attorney General Letitia James praised the ruling, saying it represented “a critical victory for workers and commuters in New York and New Jersey.” Her statement added that the funding freeze “threatened to derail a project our entire region depends on.”
The Gateway Development Commission said construction on the tunnel — designed to relieve congestion and replace aging infrastructure that serves more than 200,000 passengers a day — was set to halt without the funds. The commission warned the pause could immediately cost about 1,000 jobs, with tens of thousands more at risk if funding remained stalled.
New Jersey Acting Attorney General Jennifer Davenport also condemned the suspension, saying the Trump administration “must drop this campaign of political retribution immediately and must allow work on this vital infrastructure project to continue.”
The lawsuit brought by New York and New Jersey argues that the administration’s decision to withhold funds was unlawful. The states contend the freeze violated federal procedures and jeopardized both the ongoing construction and the longer-term economic health of the region.
The funding hold began in late 2025, when the federal government halted reimbursements to the Gateway Development Commission amid a broader dispute over compliance reviews and contract criteria, including diversity provisions. The administration later suggested that the pause was part of a wider budget impasse.
The Trump administration has appealed Judge Vargas’ ruling and asked for a brief pause in enforcement to allow appellate review.
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