by Nikita Biryukov, New Jersey Monitor
The Trump administration froze billions in funding for New York infrastructure projects this week, including money paying for new trans-Hudson River tunnels carrying New Jersey’s rail traffic into New York City.
Russel Vought, director of the federal Office of Management and Budget, said on social media that the projects are being delayed “to ensure funding is not flowing based on unconstitutional DEI principles.”
The cuts would affect the $16 billion Hudson Tunnel project, known as Gateway, and New York City’s expansion of the 2nd Avenue subway, Vought said.
The tunnel project is critical to mass transit between New York and New Jersey. NJ Transit’s northeast corridor line — the busiest commuter rail line in the nation — runs through aging tunnels that the project would replace.
Those tunnels were severely damaged during Hurricane Sandy, and failures there could snarl commutes within a region that accounts for 10% of the nation’s economic output.
The U.S. Department of Transportation in a statement said it had chosen to pause funding for the projects because of their size, calling them “arguably the largest infrastructure initiatives in the Western Hemisphere” but nodded to political motivations by attacking Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, both New York Democrats.
“Thanks to the Chuck Schumer and Hakeem Jefferies (sic) shutdown, however, USDOT’s review of New York’s unconstitutional practices will take more time. Without a budget, the Department has been forced to furlough the civil rights staff responsible for conducting this review,” the department said in an unattributed statement.
The attack is a reference to the ongoing federal government shutdown, which began Wednesday after Republicans who hold majorities in both chambers of Congress failed to reach an agreement with Democrats on government funding amid an impasse over Affordable Care Act subsidies that help low-income Americans pay for health insurance.
Those subsidies would expire at the start of 2026 under the One Big Beautiful Bill Act, the GOP bill that extended tax cuts enacted in Trump’s first term.
The department said the shutdown would extend its review of the projects but did not provide a timeline, adding the funding was frozen under a yet-to-be-enacted rule that bars race and sex-based contracting requirements in federal grants.
The development led to some sniping in New Jersey’s governor’s race, with Democratic nominee Rep. Mikie Sherrill criticizing Trump for “targeting New Jersey by gutting this funding” and claiming GOP opponent Jack Ciattarelli will not fight to make sure the tunnel project is completed. Ciattarelli campaign spokesman Eric Arpert said Sherrill “owns this shutdown and is responsible for any negative impacts on Gateway tunnel project and other NJ priorities.”
Thomas Prendergast, CEO of the Gateway Development Commission, a bistate body tasked with overseeing construction of the tunnels and other Gateway projects, in a statement said the commission “complies with all federal laws and regulations” and would continue to do so.
“We remain focused on keeping the project on scope, schedule, and budget,” Prendergast said.
Top officials at NJ Transit and the New Jersey Department of Transportation said they were not warned of the funding freeze ahead of time, but appeared unworried about its impact on the new trans-Hudson tunnels.
“As you know, the project is scheduled for completion in 2035. That’s a long time away, and this is a temporary issue. I’m sure it’ll work out,” said NJ Transit CEO Kris Kolluri, a former Gateway Commission CEO. “I think everybody on our side of the river wants to ensure there’s compliance, and I’m sure they will.”
New Jersey Transportation Commissioner Fran O’Connor noted the freeze did not impact other projects in Gateway’s portfolio, including the Portal North Bridge, which would replace a 115-year-old bridge that takes trains across the Hackensack River and risks snarling train traffic outside of New York City.
But he added it is unclear when federal funding for new tunnels crossing the Hudson River might resume.
“We’re going to have to wait and see,” O’Connor said following an unrelated event in Vineland. “I don’t have a crystal ball on that.”
The immediate impact of the freeze is unclear, though the U.S. Department of Transportation said it would block a pending $300 million reimbursement for the 2nd Avenue Subway.
Gov. Phil Murphy, a Democrat who said he was proud to work with Trump’s first administration on the Portal North Bridge, appeared hopeful the pause would be short-lived.
“With millions of commuters depending on the Hudson Tunnel Project and tens of thousands of jobs on the line, I’m confident that we’ll be able to work with the Trump Administration to keep Gateway moving forward,” Murphy said in a statement. “A project of this importance should be above politics.”