Judge permanently blocks Trump administration from freezing Hudson tunnel funds

A federal judge permanently blocked the Trump administration from freezing money for the $16.04 billion Hudson Tunnel Project, keeping one of the Northeast Corridor’s most fragile rail links funded as work continues under the Hudson River. The order preserves financing for a project essential to commuters, Amtrak riders and the freight and passenger traffic that depends on the corridor.

Judge Jeannette A. Vargas of the U.S. District Court for the Southern District of New York issued the permanent order on June 29, 2026, after first stepping in with a temporary restraining order on February 6, 2026. Vargas called the administration’s effort to block the money “flagrantly” illegal, turning aside a bid to withhold funds that had already been committed to the project.

New Jersey and New York sued in February 2026 after the Trump administration moved to withhold about $15 billion in federal funding for the Gateway tunnel program. Letitia James, the New York attorney general, said the legal fight ended with the release of all previously frozen funding for the Hudson Tunnel Project. New Jersey Attorney General officials challenged what they called an illegal attempt to cut off financing for a project already underway.

The tunnel project is meant to build a new rail tube between Manhattan and New Jersey while rehabilitating the 116-year-old North River Tunnel, which was damaged by Hurricane Sandy in 2012 and has needed frequent emergency repairs ever since. The existing tunnel carries about 200,000 passengers a day and about 425 trains daily. Construction began in 2023, and by January 2026 roughly 1,000 workers were on the job.

The Gateway Development Commission says the existing crossing is too old and too fragile to support the region’s growth.