US judge sets Friday hearing on suit to restore New York tunnel funding

By David Shepardson

WASHINGTON, Feb 4 (Reuters) – A U.S. judge will hold a hearing on Friday on the emergency request by New York and New Jersey to force the restoration of funding for the $16 billion Hudson River tunnel before construction is set to halt on Friday.

The states, which filed suit late on Tuesday, have asked for a temporary restraining order that would bar the U.S. Transportation Department from withholding funding for the project approved during the administration of President Joe Biden that is the linchpin of rail travel between New York and New Jersey.

The lawsuit filed by New York Attorney General Letitia James and Acting New Jersey Attorney General Jennifer Davenport said there is overwhelming evidence that USDOT’s reason for suspending funding was to punish New York’s Senate Democratic Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries “in retaliation for their refusal” to accept President Donald Trump’s budget.

U.S. District Judge Jeanette Vargas ordered a hearing for Friday at 1 p.m. ET and said the Justice Department must file any opposition to the states’ request by 11 a.m. on Friday.

On Monday, the Gateway Development Commission, which is managing the project, filed suit after saying it will be forced to halt construction on Friday without funding being restored, putting about 1,000 workers out of work and after $2 billion has been spent.

The White House and USDOT did not comment, but the White House last week said Democrats “are standing in the way of a deal for the Gateway Tunnel Project by refusing to negotiate with the Trump administration” on immigration issues.

Trump’s Republican administration has repeatedly targeted major transit and infrastructure projects in Democratic-led states.

Any failure of the existing Hudson tunnel, which was built in 1910 and heavily damaged by Hurricane Sandy in 2012, would hobble commuting in the metropolitan area that produces 10% of the country’s economic output and is used by over 200,000 travelers and 425 trains daily.

The initiative, which received about $15 billion in federal support, involves repairs to an existing tunnel and the construction of a new one for passenger railroad Amtrak and state commuter lines between New Jersey and Manhattan.

Trump, a former New York City real estate developer, refused to approve funding for the tunnel project in his first term. The Trump administration is also trying to kill Manhattan’s congestion pricing program aimed at reducing traffic and raising billions for mass transit.

(Reporting by David Shepardson in Washington; Editing by Chris Reese and Bill Berkrot)