Trump Froze Grants for a $16.04 Billion Rail Tunnel Over Democrats; a Judge Ruled It Unlawful

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Chapter 1 — Trump Claimed the Cutoff Himself

Chapter 2 — The Freeze Reached Workers and Public Budgets

Chapter 3 — Oversight Did Not Authorize the Freeze

1 · Trump Claimed the Cutoff Himself

1 · Trump Claimed the Cutoff Himself — select a subtopic

1.1 — Public Money Against Democrats

1 · Trump Claimed the Cutoff Himself

1.1 · Trump Claimed the Cutoff Himself

Public Money Against Democrats

Trump said he personally terminated funding for Gateway's New Jersey-New York rail tunnels because of Democrats. His Transportation Department froze the grants without finding that the project violated the law. The freeze stopped construction and raised public costs before a federal judge struck it down.

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Sources

[1]State of New Jersey v. U.S. Department of Transportation, No. 1:26-cv-00939-JAV, Opinion and Order, ECF 81 (S.D.N.Y. June 29, 2026), Jeannette A. Vargas, J., 59 pp.

[2]White House pool reports, October 15, 2025, report 8, preserved by the American Presidency Project

[3]Gateway Development Commission, Gateway Development Commission Resumes Hudson Tunnel Project Construction (February 24, 2026)

2 · The Freeze Reached Workers and Public Budgets

2 · The Freeze Reached Workers and Public Budgets — select a subtopic

2.1 — Borrowing to Keep Construction Alive

2.2 — Work Stopped, Then Had to Restart

2 · The Freeze Reached Workers and Public Budgets

2.1 · The Freeze Reached Workers and Public Budgets

Borrowing to Keep Construction Alive

Gateway's development commission exhausted its credit line while federal payments were frozen, and higher interest raised the states' costs. Freeze-related legal, administrative and financing costs were a large part of why its operating budget rose from $56.382 million to $77.567 million.

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Sources

[1]State of New Jersey v. U.S. Department of Transportation, No. 1:26-cv-00939-JAV, Opinion and Order, ECF 81 (S.D.N.Y. June 29, 2026), Jeannette A. Vargas, J., 59 pp.

[4]Gateway Development Commission, announcement of its breach-of-contract filing, republished by the New Jersey Governor's Office (February 3, 2026)

2.2 · The Freeze Reached Workers and Public Budgets

Work Stopped, Then Had to Restart

Construction stopped on February 6, affecting nearly 1,000 jobs. GDC announced on February 24 that those jobs would be restored. Court-ordered payments enabled work to resume, but fully restarting the sites took several weeks. Those interruptions delayed work on a project intended to replace reliance on an aging rail tunnel.

Read the full chapter — all the detail, fully footnoted →

Sources

[1]State of New Jersey v. U.S. Department of Transportation, No. 1:26-cv-00939-JAV, Opinion and Order, ECF 81 (S.D.N.Y. June 29, 2026), Jeannette A. Vargas, J., 59 pp.

[3]Gateway Development Commission, Gateway Development Commission Resumes Hudson Tunnel Project Construction (February 24, 2026)

[5]Noah Kolenda, Hudson Tunnel Project funding restored by federal judge, Mass Transit (July 2, 2026)

3 · Oversight Did Not Authorize the Freeze

3 · Oversight Did Not Authorize the Freeze — select a subtopic

3.1 — The Defense, the Ruling and Its Limits

3.2 — Where It Stands, and the Charge

3 · Oversight Did Not Authorize the Freeze

3.1 · Oversight Did Not Authorize the Freeze

The Defense, the Ruling and Its Limits

The Transportation Department said it was checking whether Gateway followed nondiscrimination rules. It never found a violation, and the court ruled that it could not suspend grants before finding one and following the required procedures. The government did win dismissal of the loan claims.

Read the full chapter — all the detail, fully footnoted →

Sources

[1]State of New Jersey v. U.S. Department of Transportation, No. 1:26-cv-00939-JAV, Opinion and Order, ECF 81 (S.D.N.Y. June 29, 2026), Jeannette A. Vargas, J., 59 pp.

3.2 · Oversight Did Not Authorize the Freeze

Where It Stands, and the Charge

As of October 10, construction is moving forward and the district court has struck down the grant freeze. The government withdrew its emergency-order appeal, but separately appealed the final judgment; a September order set its brief due November 30. Trump used public infrastructure funding against political opponents without a finding of grant noncompliance to justify the freeze. Workers and public budgets paid for that abuse of presidential power, which belongs in an impeachment case.

Read the full chapter — all the detail, fully footnoted →

Sources

[1]State of New Jersey v. U.S. Department of Transportation, No. 1:26-cv-00939-JAV, Opinion and Order, ECF 81 (S.D.N.Y. June 29, 2026), Jeannette A. Vargas, J., 59 pp.

[3]Gateway Development Commission, Gateway Development Commission Resumes Hudson Tunnel Project Construction (February 24, 2026)

[6]Gateway Development Commission, First Hudson Tunnel Project Tunnel Boring Machine Begins Mining (October 8, 2026)

[7]Second Circuit mandate, No. 26-282, docket entry 45.1, filed as S.D.N.Y. ECF 86 (September 17, 2026)

[8]District-court docket, State of New Jersey v. U.S. Department of Transportation, No. 1:26-cv-00939-JAV, entries 82, 85 and 86, mirrored by CourtListener/RECAP

[9]Notice of Appeal, ECF 85, State of New Jersey v. U.S. Department of Transportation (S.D.N.Y. August 28, 2026)

[10]Second Circuit, No. 26-2416, so-ordered scheduling notification, docket entry 21 (September 17, 2026)

[11]Second Circuit docket, State of New Jersey v. U.S. Department of Transportation, No. 26-2416, mirrored by CourtListener/RECAP

[12]Ivan Pereira, Trump openly threatens to use shutdown to target Democrats for cuts, ABC News (October 2, 2025)