Feds drop appeal that sought to block funding for Gateway tunnel project

The federal government dropped an appeal that attempted to again block federal funding for the Gateway tunnel and other infrastructure projects in the region just weeks after asking a federal court to overturn a lower decision that found the funding freeze flagrantly violated law.

In a mandate issued by the U.S. 2nd Circuit Court of Appeals, court clerk Catherine O’Hagan Wolfe said New York, New Jersey, and the federal government agreed to dismiss the appeal. The federal government said just last month that it was moving forward with an appeal.

The $16 billion Gateway project will add new rail tunnels under the Hudson River, and is considered one of the most important infrastructure projects in the nation.

The court’s order does not detail how the parties came to an accord, but the Gateway funding freeze threatened political consequences in competitive House districts in New York and New Jersey, including in the 7th Congressional District. There, Rep. Tom Kean Jr. (R) faces former U.S. Navy helicopter pilot Rebecca Bennett (D) in what is expected to be the closest House contest in the state.

The Trump administration first froze funding for Gateway last September.

Russel Vought, the director of the federal Office of Management and Budget, at the time said the freeze was meant to ensure funds did not flow to “unconstitutional DEI principles.”

Trump, meanwhile, repeatedly said the freeze was meant as political punishment for Democrats amid a federal government shutdown.