Fed Funds Flowing to Gateway Project Again After Court Ruling

Around $30 million worth of federal funding began flowing back towards the Gateway Project over the weekend, officials working on the project said, with tens of millions of dollars more projected to be delivered in the coming days.

The Trump administration, which has sought to halt the transfer of $205 million worth of reimbursement funds, was ordered by a court to unfreeze the money earlier this month.

The federal government told Manhattan Judge Jeannette Vargas that they’d do so on Friday, Feb. 13, after appealing the decision just days earlier.

An appeals court did not reverse a temporary restraining order issued by Vargas, which was what mandated that the funding be resumed. The federal government has indicated that it will continue to fight for a future re-freezing of the funding, however.

The $16 billion project is slated to place two new rail tunnels underneath the Hudson River. Roughly 1,000 construction workers were laid off at the time.

At the Feb. 13 hearing, an attorney for the federal Department of Transportation told Judge Vargas that the agency was “working hard” to release the aforementioned $30 million.

Assistant U.S. Attorney Tara Schwartz noted that the money still had to be processed by the U.S. Treasury Department, which would delay its transfer towards the Gateway Development Commission, which is overseeing the project; banks were closed on Monday, Jan. 16 due to President’s Day. Judge Vargas then ordered a “status report” on the movement of the funds by Tuesday, Feb. 17.

Upon completion, the Gateway Project would connect North Bergen, NJ with Penn Station. NY Governor Kathy Hochul and NJ Governor Mikie Sherill have joined forces to sue the Trump administration over the freeze, hence the current court proceedings.

“Today we made progress. $30 million has finally been released, and a court-ordered report will force transparency on the remaining funds. But the job isn’t done. Full funding must be restored now,” Governor Hochul said in a statement on Feb. 13.

“Here’s what’s at stake: 1,000 union workers laid off and 200,000 commuters who depend on a safe, reliable tunnel under the Hudson every single day,” she added.

Officials with the Gateway Development Commission have said that the project will eventually generate 11,000 total construction jobs, as well as $19.6 billion worth of economic activity.

The funding had been in limbo since last October, after the Trump administration claimed that the project’s contracting policy was based on “unconstitutional DEI principles.”

In the following months, the administration has cited U.S. Senator Chuck Schumer’s support for the project as another rationale for freezing the funds (Schumer is a longtime political opponent of President Donald Trump).

More recently, reports indicated that the Trump Administration vowed to unfreeze the funds if Schumer backed a plan to rename Penn Station and Dulles Airport in Virginia after Trump.

Trump himself then disputed this on Monday, Feb. 16, with a post on his Truth Social media app. He called the renaming ambitions a supposed instance of “MORE FAKE NEWS,” after pinning the idea on “certain politicians and construction union heads.”

The president also reiterated his blanket opposition to the entire project, which he called a “future boondoggle,” before further announcing that the federal government would not pay for any cost overruns that the project might have.