Trump administration releases $127 million in overdue funds for New York-New Jersey Gateway tunnel project president had called a 'future boondoggle'

The Trump administration on Wednesday released the rest of the funds it had been withholding for the construction of a major rail tunnel between Manhattan and New Jersey, New York Gov. Kathy Hochul said Wednesday.The federal government freed up the remaining $98 million due for the Gateway project that is increasing passenger rail capacity into Manhattan, as well as an additional $30 million in reimbursements for work that had been completed in January, Hochul said in a statement.The frozen funds were released in tranches over nearly two weeks after a federal judge blocked the Trump administration from withholding the money for the project that began construction in 2023. In compliance with that Feb. 6 order, the administration released $30 million on Feb. 13, followed by an additional $77 million earlier this week.The funding suspension, initiated on the eve of the Oct. 1 government shutdown, this month triggered a total work stoppage that threatened nearly 1,000 employees' jobs.Contractors are now being told to prepare to resume construction next week, the Democratic governor said in Wednesday's statement."Today's progress is significant, but we need certainty that Gateway funding will remain in place for the duration of the project," Hochul said. "The federal government has a legal obligation to fully fund Gateway, and New York will accept nothing less."Just two days earlier, President Donald Trump had slammed the project as a "future boondoggle," claiming in a Truth Social post that it will cost "many BILLIONS OF DOLLARS more than projected or anticipated."The federal government will not be responsible for any cost overruns associated with the $16 billion project, Trump asserted. In the same post, he denied reports that he had offered to release Gateway's federal funding on the condition that New York's Penn Station be renamed after himself. The station is named for its builder and original occupant — the Pennsylvania Railroad."These funds should never have been withheld in the first place," said New York Attorney General Letitia James, who had sued the Trump administration in conjunction with New Jersey acting Attorney General Jennifer Davenport."I am thrilled that hardworking New Yorkers can now get back on the job and move forward with the most important infrastructure project in the country," James said in a press release. "We will remain vigilant to ensure this funding continues uninterrupted, so that workers and commuters are never again left in limbo by the president's targeted and unlawful whims."The Hudson River tunnel project is the most important piece of the Gateway program, which aims to renovate a slew of public infrastructure in New York and New Jersey.The existing rail tunnel, known as the North River Tunnel, carries 200,000 passengers under the Hudson every day. It was constructed 116 years ago and was in need of repair even before 2012's Superstorm Sandy significantly damaged it, officials say.The Gateway project would fix the existing tunnel and create a new rail tunnel with two tracks connecting to Penn Station. The federal government and New York and New Jersey are funding the tunnel project. Amtrak has also committed over $1 billion to the project.Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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