Although work is underway on the Gateway Development Commission’s $16 billion Hudson Tunnel project between New Jersey and New York on both sides of the river, its status remains unclear after President Donald Trump declared the project “finished” during an Oct. 15 White House event.
On the first day of the current government shutdown, the U.S. Department of Transportation announced it is withholding $18 billion in funding for the Second Avenue Subway Extension and Tunnel project while it conducts a review of the hiring practices of disadvantaged business firms in light of a new interim final rule it issued on its DBE program.
The DOT announcement left open the possibility that federal dollars could return to the projects after the review. But Trump said the White House is closing the programs “permanently.”
“It’s thousands of people and it’s billions of dollars,” Trump said. “We’re getting rid of a lot of things we never wanted.”
Gateway representatives declined to comment. The agency was formed by New York and New Jersey to lead infrastructure projects on a section of the Northeast Corridor between Newark, NJ and Penn Station in Manhattan, a particularly busy stretch of passenger rail line.
DOT representatives did not immediately respond to inquiries about funding and the status of the project.
The Hudson Tunnel project had moved forward with an expected federal-local funding split of 70 to 30. Last year, Gateway signed an agreement with the Federal Transit Administration for a $6.9 billion capital investment grant and $4.1 billion in low-interest loans, in addition to a $3.8 billion grant from the Partnership for Intercity Passenger Rail and 1,000 million of Amtrak dollars.
The reasoning behind the termination appeared to be entirely political, rather than any problem with the project itself, as Trump referenced Republicans’ disagreements with Democrats and the government shutdown.
“The Gateway program is a critical economic driver — not just for New York, not just for the Northeast Corridor, but for the entire nation,” Carlo Scussura, president and CEO of the New York Building Congress, said in a statement. “However, it continues to be played as a political football while there are real jobs, thousands of them, as the future of transport for an entire region.”
Trump said Russell Vought, director of the White House Office of Management and Budget, is killing “a large number of Democratic projects” and also referenced efforts by Senate Minority Leader Chuck Schumer (D-N.Y.) to fund the project.
“Tell him it’s over,” Trump repeated.
In a statement, Schumer called the measure “petty vindictive politics that would knock out hundreds of thousands of New York and New Jersey commuters, choke our economy and kill good-paying jobs.”
It was also unclear from the president’s comments whether his administration will also move to complete the Second Avenue subway project, and possibly also a couple of Chicago transit projects that DOT also said it was reviewing in connection with the DBE rule.
The New York projects as a whole involve 15,000 union jobs, Gov. Kathy Hochul (D) said during an interview on MSNBC. He indicated that the state may sue to protect the funding.
“We will always win in court,” Hochul said.
The Hudson Tunnel project covers 9 miles of track, including 2.8 miles of two-tube tunnel with an outside diameter of 28 feet. between Manhattan and North Bergen, NJ Its scope includes related work such as construction of a concrete shell at Hudson Yards and stabilization of a portion of the riverbed and repairs to the 115-year-old North River Tunnel.
During the shutdown, the Trump administration has also said it is canceling hundreds of Energy Department grants totaling a combined $7.6 billion and has moved to lay off thousands of federal workers, in addition to freezing funding for transit projects in New York and Chicago.
The Senate has stalled on two versions of a stopgap spending bill, one favored by Republicans that has already passed the House and another sponsored by Democrats that would extend health care subsidies expiring under the Affordable Care Act.
The Republican bill again failed to reach the necessary three-fifths threshold on October 16.
