Commission sues Trump administration over refusal to restore New York tunnel funding

The commission overseeing a massive $16 billion Hudson River tunnel, the linchpin of rail travel between New York and New Jersey, filed suit to force the Trump administration to restore funding just days before construction is set to halt on Friday.

U.S. President Donald Trump said in October he had terminated the project and the Transportation Department has refused to release any funding for the project approved during the prior administration.

The Gateway Development Commission, created by New York and New Jersey in 2019 to oversee the project, filed suit late Monday in the U.S. Court of Claims, saying the U.S. Transportation Department breached its contractual obligations by withholding more than $205 million without any legal basis and was seeking to punish Democrats over last fall's government shutdown.

The commission's suit said that, without federal funding this week, it "will be unable to pay its contractors to continue construction activities, causing work on this critical project to grind to a halt—leaving unfinished work sites with massive holes in the ground, threatening the livelihoods of the many hundreds of construction employees working on the project, burdening GDC with astronomical costs in delays and penalties, and putting into question the future viability of the project."

The White House and USDOT did not immediately comment, but the White House said last week that Democrats "are standing in the way of a deal for the Gateway Tunnel Project by refusing to negotiate with the Trump administration. There is nothing stopping Democrats from prioritizing the interests of Americans over illegal aliens and getting this project back on track.”

Democratic Senator Chuck Schumer of New York said the "lawsuit would be unnecessary if President Trump did the right thing for New York and New Jersey and lifted his arbitrary freeze."

Trump's Republican administration has repeatedly targeted major transit and infrastructure projects in Democratic-led states. New York Governor Kathy Hochul and New Jersey Governor Mikie Sherrill -- both Democrats -- praised the lawsuit and urged Trump to relent.

Any failure of the existing Hudson tunnel, which was built in 1910 and heavily damaged by Hurricane Sandy in 2012, would hobble commuting in the metropolitan area that produces 10% of the country's economic output and is used by 200,000 travelers daily.

Nearly $2 billion has been spent on the project. The initiative, which received about $15 billion in federal support -- involves repairs to an existing tunnel and the construction of a new one for passenger railroad Amtrak and state commuter lines between New Jersey and Manhattan.

Gateway said it told USDOT that it was in compliance with federal law.

Trump, a former New York City real estate developer, refused to approve funding for the project in his first term. The Trump administration is also trying to kill Manhattan's congestion pricing program introduced last year, designed to reduce traffic and raise billions in funds for mass transit.

-Reporting by David Shepardson in Washington; Editing by Christian Schmollinger and Michael Perry/Reuters