Jeannette Vargas, a U.S. District Judge in the Southern District of New York, ruled on February 6, 2026, that the Trump administration must release over $16 billion in federal funding for the Gateway Hudson Tunnel Project. She granted a temporary restraining order in response to a lawsuit from New York and New Jersey.
Vargas stated that plaintiffs adequately showed the public interest would suffer harm from delays in the critical project. Additionally, she noted that states would face irreparable harm if operations shut down.
Construction halted earlier that day due to the freeze, affecting about 1,000 jobs. However the order allowed work to resume immediately.
Background of the Funding Dispute
The administration froze funds on September 30, 2025, amid a review of contractor selections and a government shutdown. President Donald Trump tied the release to renaming New York Penn Station and Washington Dulles International Airport after him.
Chuck Schumer, the Senate Minority Leader, denied Trump’s claim that he suggested the renaming and called it an “absolute lie.” Schumer added that the hold was a “disgrace” and Trump could restart the project easily.
The Gateway project aimed to build a new rail tunnel under the Hudson River to connect New York and New Jersey. It replaced aging infrastructure that caused frequent delays. Meanwhile ss one of the largest U.S. public works initiatives, it had already received billions in grants.
Reactions from State Officials
Letitia James, the New York Attorney General, hailed the ruling as a “critical victory for workers and commuters in New York and New Jersey.” She expressed gratitude that the court blocked the “senseless funding freeze” which threatened the regional project.
Jennifer Davenport, the New Jersey Acting Attorney General, stated the order ensured nearly 1,000 workers kept their jobs and continued tunnel work.
