An organization in charge of one of the largest infrastructure initiatives in the entire country is suing the Trump administration for withholding $15 billion in federal funding, equal to almost 90 percent of the project’s full cost.
For 11 years, Northeasterners have been waiting patiently for the construction of the Hudson Tunnel, a double-track tunnel bridging Manhattan and New Jersey to resolve bottlenecks and delays in the Northeast Corridor, the most heavily traveled portion of the entire national passenger rail system.
Construction finally started a year ago, with the goal to finish by 2035. But only a few months in, President Trump officially paused all federal funding for the project and put an administrative review in place to determine whether any contracts had been granted based on “DEI.”
Despite the Gateway Development Commission in charge of the project saying that it has responded to all inquiries from the government and is committed to complying with the anti-DEI requirement, funding has still not been resolved.
On Tuesday, the Commission filed a lawsuit against the Trump administration, claiming a breach of contract.
“DOT’s breach has jeopardized the project, threatened the livelihoods of the countless workers employed in its construction, endangered passengers who must rely on decaying, century-old rail infrastructure, and undermined the United States’ reputation as a reliable contracting party,” the lawsuit claims.
The Commission has been able to keep construction going for the past four months, despite the absence of $205 million it was set to receive by the federal government, by relying on reserves and a line of credit. But the “sources have dwindled,” the Commission said, and if funding does not resume by Friday, the project will shut down, risking up to 11,000 jobs.
“Gateway is the most important infrastructure project in the country, and tens of thousands of union workers depend on it moving forward,” New York Senator Chuck Schumer said.
A pause in construction “also increases the risk that the 116-year-old North River Tunnel – already a leading cause of delays that impact hundreds of thousands of daily riders – will shut down, severing the most heavily used passenger rail line in the country and leading to billions of dollars in lost time and productivity,” the Commission said in a press release.
The lawsuit claims that the Department of Transportation failed to identify any specific breach or noncompliance with the project and has instead targeted the project for its association with Democrats.
When announcing the decision in September 2025, ahead of the historic government shutdown, the DOT said that the review would take a long time “thanks to the Chuck Schumer and Hakeem Jeffries shutdown,” and called it “another unfortunate casualty of radical Democrats’ reckless decision to hold the federal government hostage to give illegal immigrants benefits.”
But even though the shutdown ended more than two months ago, the delay in the review process has persisted.
Last week, a White House spokesman claimed that it was “Chuck Schumer and Democrats who are standing in the way of a deal for the Gateway tunnel project by refusing to negotiate with the Trump administration,” and that the party was instead “prioritizing the interests of Americans over illegal aliens,” according to the lawsuit.
Also, last week, Congressional Democrats blocked a spending package that includes $64.6 billion in funding for the Department of Homeland Security.
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