Gateway Tunnel Work Halts as Democrats Demand Immediate Restoration of $16B Federal Funding

WEEHAWKEN, New Jersey — U.S. Sen. Cory Booker and Rep. Mikie Sherrill joined fellow Democrats at a Hudson River construction site Friday to condemn the Trump administration’s suspension of federal funding for the $16 billion Gateway tunnel, which brought work to a standstill.

What Happened

Construction on the Gateway Project — a critical effort to build a new rail tunnel beneath the Hudson River connecting New Jersey and New York — paused after federal payments were suspended in October. Officials say the immediate pause threatens nearly 1,000 construction jobs and jeopardizes the project’s broader economic impact, estimated at roughly 95,000 jobs and $19.6 billion in activity.

Legal Fight Underway

The Gateway Development Commission (GDC) has filed suit in the U.S. Court of Federal Claims alleging breach of contract, while New York and New Jersey brought a separate case in the U.S. District Court for the Southern District of New York seeking emergency relief. The states asked for a temporary restraining order to restore funds and keep work moving for about 12 days while the court reviews the matter.

Courtroom Arguments

On Friday afternoon, New Jersey Solicitor General Jeremy Feigenbaum and Deputy Solicitor General Shankar Duraiswamy argued for the states before U.S. District Judge Jeannette Vargas. Duraiswamy warned that if federal funds lapse the states may need to use their own money to protect public health and safety at active sites — "there is literally a massive hole in North Bergen" — and to manage an orderly wind-down of construction. He also noted that GDC retains some residual funds that could extend activity for a short period.

Assistant U.S. Attorney Tara Schwartz countered that the states' claimed harms may not be irreparable if residual funds remain and argued the dispute belongs in the Court of Federal Claims. The defendants also argued the district court lacks jurisdiction. Judge Vargas did not issue an immediate ruling and said she would issue a written decision "shortly."

Political Reaction

Democratic lawmakers characterized the funding freeze as politically motivated and condemned reports that the administration linked restoring funds to renaming major transportation hubs. Rep. Mikie Sherrill called such a condition unacceptable, saying New Jersey will not "make deals" with the administration over essential infrastructure.

"He’s holding one of the most important infrastructure projects of the last century hostage because of his want-to-be king, petty, vindictive and cruel policies," Sen. Cory Booker said, noting that roughly 200,000 commuters cross the Hudson each day.

"There’s no making deals with this president. The goal post moves every five minutes, and he has broken his word over and over again … and the money is illegally being withheld, so there’s no need to deal," Rep. Mikie Sherrill said.

Other members of New Jersey’s congressional delegation, including Reps. Andy Kim and Josh Gottheimer, said they were working with partners on both sides of the aisle to restore funding and protect jobs. Sen. Booker criticized Republican lawmakers for rhetoric without swift action to safeguard the project.

Why It Matters

Beyond immediate job losses, officials emphasized practical risks: demobilizing construction crews and later remobilizing them takes time, and temporary funding gaps can cause delays and added costs that money alone may not immediately fix. The outcome of the legal challenges and any subsequent funding decisions will determine whether work resumes quickly or the project suffers longer-term setbacks.

The White House did not immediately respond to requests for comment.