The controversy traces back to October when the previous administration terminated funding amid disputes over the federal budget, with ongoing review but no reinstatement of funds.

The Gateway Development Commission warns that construction of the Hudson Tunnel Project could pause if federal funding is not restored in the coming days, with funds set to run out and a two-week wind-down at active sites in New York, New Jersey, and the Hudson River.

Since October, the GDC has continued work using available funding and credit but has drawn down nearly all sources and cannot sustain construction without new funds; a pause would immediately threaten about 1,000 local jobs and potentially affect roughly 11,000 construction jobs on current projects, with broader economic impacts including delays to the North River Tunnel and service for hundreds of thousands of riders.

Four major procurements remain affected by any federal funding pause, including the Hudson River Tunnel Project and the New Jersey Surface Alignment Project, which cannot start in 2026 until funding resumes.

The White House and federal agencies attribute the freeze to budget fights amid broader shutdown dynamics, while critics say the move undermines infrastructure funding and harms workers and regional economies.

Backers say the project will generate about 72,000 jobs and $19 billion in economic activity, and will relieve rail bottlenecks from Washington to Boston and beyond.

New York and New Jersey agreed to cover about 30% of local costs to qualify for federal funding, and in 2024 secured roughly $12 billion in federal funding through FTA grants and Build America Bureau loans to support the local share.

Officials warn the delay could be permanent or lengthy, creating uncertainty about restoration timelines and heightening concerns among New Jersey and New York leaders about economic impacts and regional mobility.

Union leaders and local officials condemn the funding halt and are calling for immediate restoration to protect jobs and curb economic damage.

The debate in Congress shows bipartisan support for the project, with figures like Senator Tom Kean Jr. underscoring its importance to the Northeast Corridor and urging restoration of federal funding.

Funding for the project partly comes from a $1.2 trillion federal infrastructure package signed in 2021, intended to distribute substantial new federal spending over five years.

The project’s latest phase began in 2023 with a planned 2035 opening, building on a long history of stalled proposals and cancellations.