A federal judge on Monday ordered the Trump administration to permanently abandon its efforts to suspend funding for a $16 billion rail tunnel under the Hudson River, describing those attempts as “flagrantly” illegal.
Judge Jeannette A. Vargas of the Southern District of New York said that the administration violated federal guidelines when it stopped reimbursing the tunnel’s builders for their expenses in September. The suspension forced a shutdown of the construction project and led to a brief layoff of about 1,000 workers in New York City and New Jersey in February.
Federal officials said that the payments were stopped while the project’s hiring practices were reviewed. But Judge Vargas noted that President Trump had indicated in interviews that there were political reasons for stopping the tunnel project, which was a favorite of Senator Chuck Schumer, the Democratic minority leader from New York.
“We’re cutting a $20 billion project that Schumer fought for 15 years to get, and I’m cutting the project,” the judge quoted Mr. Trump as saying in October. “The project is gonna be dead. It’s just pretty much dead right now.”
The project, known as Gateway, would supplement two 116-year-old single-track tunnels under the Hudson between Manhattan and New Jersey. Mr. Schumer had called it the most critical infrastructure project in the United States.
The project ran out of money about five months after the federal government stopped making payments. The states of New York and New Jersey jointly sued the Trump administration in federal court in Manhattan, seeking an emergency order to end the suspension.
On Feb. 6, the day that work on the tunnel stopped, Judge Vargas granted a temporary restraining order. The Trump administration opposed that order and continued to press its case but never disputed that the suspension “flagrantly violates federal law,” the judge said.
In declaring the suspension of funding illegal, Judge Vargas also said that the federal government could not attempt to suspend payment of the federal grants again.
Catherine Rinaldi, executive vice president of the Gateway Development Commission, which oversees the project, said that before federal funding was frozen, the tunnel project “was on schedule and on budget, and we have made significant progress since federal funding for the project resumed in February.”
In response to the judge’s decision, Gov. Kathy Hochul of New York and Gov. Mikie Sherrill of New Jersey, both Democrats, released a joint statement with Letitia James, the attorney general of New York, and Jennifer Davenport, the attorney general of New Jersey.
“We are grateful that a federal court has once again agreed that the Trump administration’s decision to freeze billions of dollars in grants for the Gateway Tunnel Project is flagrantly unlawful,” their statement said. “This victory sends a clear message: The Trump administration’s attempt to halt Gateway funding will not stand.”
The federal Department of Transportation said that it remained “committed to ensuring hard-working taxpayer dollars are being spent responsibly and do not fund unconstitutional, discriminatory contracting practices.”
The decision on Monday did not complete litigation over the suspension. The development commission is still suing the Transportation Department for monetary damages resulting from the forced shutdown of the project.
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