The Trump administration announced Friday that it has withdrawn its appeal of a 2nd Circuit Court of Appeals ruling that barred the Department of Transportation from halting $16 billion in federal funding for the Gateway Tunnel project. The decision follows a June district‑court order that found the funding freeze violated federal law.
Legal background
In October, Office of Management and Budget Director Russell Vought placed the Hudson Tunnel funding under “administrative review,” claiming the money might be flowing based on unconstitutional diversity, equity and inclusion principles. New York Attorney General Letitia James and acting New Jersey Attorney General Jennifer Davenport sued, alleging the freeze was political retribution by President Trump.
U.S. District Court Judge Jeannette Vargas ruled the freeze “flagrantly” violated federal law and issued an injunction requiring the release of the funds. The administration’s appeal sought to overturn that injunction, but the appeal has now been dismissed.
Impact on commuters and jobs
New Jersey Governor Mikie Sherrill, a Democrat, hailed the development as a “big victory for millions of New Jersey commuters and for the nearly 100,000 jobs the Gateway Tunnel Project will create.” The project will renovate the 1910 Hudson River tunnel, which carries roughly 200,000 weekday passengers on Amtrak and NJ Transit between New Jersey and Manhattan.
Both New York and New Jersey have agreed to cover 30% of the local construction costs, a prerequisite for receiving federal assistance. The upgrades aim to increase capacity on the Northeast Corridor and ease a long‑standing bottleneck in rail traffic.
Political reactions
Lawmakers from both states condemned the earlier funding freeze, warning it would have jeopardized thousands of well‑paying jobs and the regional economy. The administration’s decision to drop the appeal is being framed as a win for the commuting public and for the states’ infrastructure priorities.
While the Trump administration has faced criticism for its approach to federal spending, this move demonstrates a willingness to respect court rulings that protect essential transportation projects.
Original reporting: KTBS 3 (Shreveport) — read the source article.
