The federal government insisted on Friday that it was moving to restart payments for the stalled Gateway project after state officials raised alarms that no money had been received nearly a day after funding was to resume under a court order.
Assistant U.S. Attorney Tara Schwartz told District Court Judge Jeannette Vargas during an emergency conference called Friday afternoon that the Department of Transportation had moved to restart payments to the Gateway Development Commission, the bistate agency that is overseeing the $16 billion project to build new rail tunnels under the Hudson River, but processing delays would keep funds out of Gateway’s hands until early next week.
“All the payments go to Treasury first, and so there are reimbursement requests that the agency has approved and sent to Treasury already, but Treasury now has to process them, and that can take up to a business day,” Schwartz said.
Vargas earlier found that the government had likely withheld payments to the Gateway commission improperly.
Some funds could arrive by Tuesday or later next week, Schwartz said. In all, the states have sought more than $205 million in past-due reimbursements of congressionally approved funds the Trump administration has withheld since late September.
Overall, Congress has approved roughly $15 billion in funding for Gateway.
The rail tunnel project has been at the center of a fight between the Trump administration and elected Democrats in New Jersey and New York since October, when President Donald Trump said he was canceling the project, one of the biggest infrastructure projects in the nation. Construction on the tunnels totally ceased last Friday, when the Gateway commission said the line of credit it was using to continue work during the funding freeze ran out.
Vargas last week ordered the federal government to restart payments for the project but stayed her order until 5 p.m. Thursday, Feb. 12, to allow the government time to appeal the order. An appeals court declined to reverse Vargas’s preliminary restraints.
Vargas directed the federal government to provide an update on the status of federal funding by 3 p.m. Tuesday.
Gov. Mikie Sherrill (D) said at a press conference in Secaucus Friday morning that she expected the federal government to resume payments by 1 p.m., adding the state would continue to push for funding to be restored if the administration illegally withheld it in violation of court orders.
“I would remind people that that would be illegal and the president would be breaking the law,” she said. “If that is the case, then we would be back in court fighting them.”
State officials have said the stoppage immediately cost more than 1,000 jobs and was expected to add between $15 and $20 million in monthly costs.
They’ve warned it could cost thousands more jobs and billions of dollars in economic activity as trains on the nation’s busiest commuter rail line are directed to existing trans-Hudson tunnels that still bear damage from Hurricane Sandy, leading to frequent train cancellations or delays.
The Trump administration has offered shifting reasons for why it seeks to prevent construction on the project from continuing.
It first said the project may have violated “unconstitutional DEI principles,” then said it froze payments to check compliance with new rules for its disadvantaged business program. Later, it said it was actually checking compliance with the old rules.
In January, the White House claimed it had frozen the money because of an impasse with Democrats over funding for the U.S. Department of Homeland Security.
Trump has repeatedly indicated partisanship is driving the decision.
“What we’re doing is we’re cutting Democrat programs that we didn’t want,” he said on Fox News in October.
— by Nikita Biryukov, New Jersey Monitor February 13, 2026
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