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2/4/2026
The Gateway Development Commission (GDC) on Monday filed a lawsuit against the federal government in the U.S. Court of Federal Claims seeking judgment that would release contractually obligated grant and loan funds for the Hudson Tunnel project.
If additional funding does not become available by Friday, construction of the rail tunnel between New York and New Jersey will be suspended, commission officials said in a press release.
The $16 billion Hudson Tunnel project is a key component of the Gateway program to improve rail transportation in the Northeast Corridor. It calls for construction of a new two-track rail tunnel beneath the Hudson River and rehabilitation of the existing century-old North River tunnels that currently connect New Jersey and New York City. The existing tunnels are crucial for Amtrak and New Jersey Transit trains to transport passengers between New York City and New Jersey daily.
The majority of the project's budget is funded by federal grants. The U.S. Department of Transportation and GDC have been legally bound to the terms of Capital Investment Grants, Federal-State Partnership Grant and RAISE Grant agreements, as well as Railroad Rehabilitation and Investment Financing loans, since July 2024, when full funding for the tunnel project was secured, commission officials said.
More than $1 billion worth of construction and investment has already been made into building the tunnel.
Despite its contractual commitments to fund the project, the Trump administration has suspended the release of the federal government's contractually obligated funds since Oct. 1, 2025, according to the commission. The lawsuit asserts that the Trump administration's shifting explanations for suspending the funds are unlawful. The commission is controlled by Amtrak and the governors of New York and New Jersey.
The Hudson Tunnel is essential to the future of New York and the economy of the entire region, New York Gov. Kathy Hochul said in the press release, noting that 200,000 commuters daily depend on the trains that travel under the Hudson River to and from New York City and New Jersey.
"For months, Donald Trump and his enablers in Washington have illegally withheld committed funding for this project in a brazen act of political retribution intended to hurt New Yorkers, putting thousands of union jobs and billions of dollars in economic benefits at risk," Hochul said.
Added New Jersey Gov. Mikie Sherrill: "I made a commitment to fight for Gateway and New Jersey’s economy, which is why we’re taking action to hold the Trump administration accountable for breaching its contract."