The Trump administration mounted a multipronged legal effort Monday to turn back an order to restore federal funding for the construction of the $16 billion Hudson River tunnel, getting the deadline to pay up pushed back by several days.
Attorneys for the federal Department of Transportation asked a judge to pause a temporary restraining order she issued late Friday, which mandated the agency lift a freeze on funding previously dedicated to the critical railway project, while it fights her decision in an appeal it initiated Sunday.
In a brief five-page order, Manhattan Federal Judge Jeannette Vargas denied the request, though granted a short administrative stay to let the government seek intervention from the 2nd Circuit Court of Appeals. The ruling means the Trump administration can continue to hold back the funds until 5 p.m. Thursday.
In the efforts to halt Vargas’ Friday order from taking effect, government lawyers said the DOT would be required to disburse the $200 million it has withheld so far by 1 p.m. Monday, “without any obvious mechanism” for getting it back if it ultimately prevails on appeal.
Vargas’ Monday order found the concern valid but outweighed by the public interest and harm posed to the states if the Gateway Development Commission were forced to shut down operations on the tunnel project.
“The states have shown limited ability to continue a critical infrastructure project from their own coffers,” Vargas wrote. “Moreover, and most compellingly, the states have demonstrated that the shutdown of operations will have an immediate and severe impact on the region’s economic interests.”
The Gateway commission has already started laying off construction workers, the judge’s order noted, and substantial delays could threaten 95,000 more jobs. She noted a prolonged delay was predicted to result in a loss of more than $7 billion to the local economy.
In a filing later Monday, lawyers for the federal government asked the appeals court to issue a further stay before the existing one expires on Thursday.
The back-and-forth came in a lawsuit filed by New York and New Jersey last week, which argued the states had fiduciary responsibility for the project and for maintaining the safety of any active construction sites after federal funds ran out. The suit was one of two brought seeking to stop the Trump administration’s monthslong interference in congressional funding for the tunnel.
At Friday’s hearing, an attorney for New Jersey said abandoning the ongoing construction, absent funds to keep it going, would be cataclysmic.
“Project sites cannot simply be abandoned,” Shankar Duraiswamy said. “There is literally a massive hole in the Earth in North Bergen, N.J., that must be secured.”
The feds have countered that the states have no claim to sue — and that any legal recourse must be pursued through a pending breach-of-contract claim filed last week by the bistate Gateway Development Commission, which is building the tunnel. That case alleges the feds violated their contract with the GDC by refusing to pay out funds promised by Congress.
Trump officials first announced a freeze on the funding last year, in the hours after the government shutdown began, blaming the project’s supposed “unconstitutional DEI principles” in contractor selection and purported noncompliance with newly implemented contracting rules.
A few weeks later, Trump said that he had “terminated” the project because it was personally important to Democratic Senate Minority Leader Chuck Schumer.
Later, after the GDC had demonstrated compliance with the new contracting rules, the White House claimed the funding remained frozen because of Democrats’ refusal to adopt the Republican administration’s hard-line immigration policies.
As The News reported last week, the president also said in recent negotiations that he’d stop interfering with the project if Schumer supported an effort to rename Penn Station and Dulles International Airport after Trump. Schumer rejected the deal.
