Federal judge halts Trump-era funding freeze, unlocking more than $16 billion and restoring momentum to the Hudson River rail tunnel linking New Jersey and New York
A major legal victory for New Jersey commuters, construction workers, and the region’s fragile transportation network arrived late Friday night, when a federal judge ordered the Trump administration to lift a sweeping freeze on more than $16 billion in federal funding tied to the long-awaited Gateway rail tunnel project beneath the Hudson River.
The ruling immediately revives one of the most consequential infrastructure investments in the nation and prevents what state leaders warned would have been an abrupt shutdown of active worksites on both sides of the river.
In a sharply worded decision, U.S. District Judge Jeannette Vargas of the Southern District of New York concluded that delaying the release of the funds would directly undermine the public interest, particularly given the essential role the project plays in regional mobility, economic stability, and national transportation reliability. The court agreed with New York and New Jersey that the federal freeze placed a critical infrastructure program in jeopardy at a moment when large-scale rail resiliency projects are already operating under compressed timelines.
For New Jersey, the stakes could not be higher.
The Hudson River tunnel initiative sits at the heart of the Gateway Program, an interconnected series of rail improvements designed to modernize and protect the most heavily traveled passenger rail corridor in the United States. The Northeast Corridor carries more than 2,200 train movements every day and serves roughly 800,000 passenger trips daily, making it not only the backbone of regional commuting but a central artery of the national economy.
The lawsuit filed by New York and New Jersey argued that without the previously committed federal support, contractors would be forced to suspend operations, labor crews would be sent home, and months of coordinated construction planning would be lost. The court’s order effectively prevents that scenario and clears the way for stalled payments to resume.
The Gateway Development Commission, which oversees delivery of the Hudson Tunnel Project, welcomed the ruling and said that work will resume immediately once the funds are formally released. Officials confirmed that project teams are prepared to restart site operations without delay, restoring construction schedules and bringing workers back to active assignments in both states.
The timing of the decision is particularly critical for New Jersey, where the existing North River Tunnel — built more than a century ago — remains one of the most vulnerable and overburdened pieces of transportation infrastructure in the country. Damage sustained during Superstorm Sandy continues to affect long-term reliability, and every day of deferred replacement or rehabilitation increases the risk of cascading service failures across the region.
Transportation planners have repeatedly warned that a prolonged disruption to the trans-Hudson rail crossing would cripple commuter flows into New York City, disrupt intercity rail travel along the East Coast, and produce significant economic losses for employers and workers alike. For New Jersey’s business community, port operations, and professional services sector, uninterrupted rail access is a non-negotiable requirement for sustained growth.
Beyond transportation performance, the funding dispute also placed a spotlight on the broader economic implications for large-scale infrastructure development across the state. The Hudson Tunnel Project supports thousands of skilled construction and engineering jobs, long-term supplier contracts, and specialized technical services that feed directly into New Jersey’s construction and infrastructure economy. Industry leaders have closely tracked the case as a signal of federal reliability for future major public works.
The restored funding path is expected to stabilize project timelines, protect multi-year labor commitments, and allow the Gateway Program to maintain coordinated sequencing with other Northeast Corridor improvements. State officials have emphasized that preserving continuity between projects is essential to minimizing future service disruptions for riders and avoiding cost escalations caused by stop-and-start construction cycles.
The ruling also reinforces New Jersey’s broader strategy of aggressively defending federal infrastructure commitments when delays threaten public safety, economic security, or long-term mobility planning. Legal and transportation officials in both states framed the lawsuit as a necessary step to ensure that already-approved funds could not be withheld without substantial justification, particularly for projects with national transportation implications.
For residents tracking the future of major transportation and construction initiatives across New Jersey, the decision represents a powerful signal that landmark projects can still move forward even amid federal uncertainty, and that legal remedies remain available when state and regional infrastructure is placed at risk. Readers can follow related developments across New Jersey’s expanding construction landscape through Sunset Daily’s ongoing coverage of the state’s most consequential building and infrastructure efforts.
With the funding freeze lifted, the Gateway Program once again stands positioned to deliver what transportation planners describe as the most urgent infrastructure investment in the country — a modernized, resilient, and higher-capacity rail connection that will serve New Jersey commuters, national rail travelers, and the entire Northeast economy for generations to come.
