• Trump administration has frozen $205 million in federal funding since October 1
• Democrats criticize Trump's demand that landmarks be renamed for him in exchange for funding
• Suspension would affect 1,000 workers, could threaten rail infrastructure and economic output

NEW YORK/WASHINGTON, Feb 6 (Reuters) - U.S. District Judge Jeannette Vargas said on Friday she will issue a written ruling "very shortly" on an emergency request by the states of New York and New Jersey to lift a four-month-old freeze on federal funding for the $16 billion Hudson Tunnel Project.

Vargas held an hour-long hearing on Friday on the request ahead of plans to suspend work at 5 p.m. ET (2200 GMT), after President Donald Trump's administration refused to restore funding, the Gateway Development Commission said.

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The project involves repairing an existing rail tunnel and building a new one under the Hudson River, expanding a route that is the linchpin of rail travel between Manhattan and New Jersey.

Any failure of the existing Hudson Tunnel, which was built in 1910 and heavily damaged by Hurricane Sandy in 2012, would disrupt a commuter route used by more than 200,000 travelers and 425 trains daily - including passenger railroad Amtrak - in a metropolitan area that produces 10% of U.S. economic output.

A lawyer for the state of New Jersey, Shankar Duraiswamy, said at the hearing that a work stoppage would force the states to expend significant resources securing idle construction sites.

"Project sites cannot simply be abandoned. There is literally a massive hole in the earth in North Bergen, New Jersey, that must be secured," Duraiswamy said.

Justice Department lawyer Tara Schwartz countered that the states and their project partners could continue to fund construction without the federal government.

"The states claim there's this parade of horribles that's going to occur if they have to put hammers down," Schwartz said. "But the GDC (Gateway Development Corporation) is funded by the states, federal government and Amtrak ... so it's not clear why the states can't keep the project going."

The Transportation Department has withheld $205 million in reimbursements since October 1 for the project.

Trump has demanded that Washington Dulles Airport and New York's Penn Station be renamed for him in exchange for unfreezing billions of dollars in funding for the project, drawing strong criticism from Democrats.

Gateway said that the suspension would idle 1,000 construction workers and that Trump's decision had endangered passengers who had to rely on "decaying, century-old rail infrastructure."

Gateway had previously said work was already suspended.

DEMOCRATS CRITICIZE TRUMP FOR WITHHOLDING FUNDS

Trump last month asked U.S. Senator Chuck Schumer to back the renaming of Washington Dulles Airport and Penn Station, but the New York Democrat told the White House he did not have the power to rename them, a source familiar with the matter told Reuters.

The White House did not respond to a request for comment and Schumer's office declined to comment.

U.S. Senator Cory Booker, a Democrat from New Jersey, told a press conference near the project on Friday that Trump was holding the tunnel hostage because he "seems to want to put his name on everything."

Since returning to office in January, the Republican president has affixed his name to prominent Washington buildings, a planned class of Navy warships, a visa program for wealthy foreigners, a government-run prescription drug website, and federal savings accounts for children.

New York Senator Kirsten Gillibrand, a Democrat, called Trump's suggestion ridiculous.

"These naming rights aren't tradable as part of any negotiations, and neither is the dignity of New Yorkers ... The president continues to put his own narcissism over the good-paying union jobs this project provides and the extraordinary economic impact the Gateway tunnel will bring."

The project was allocated about $15 billion in federal support under former President Joe Biden. Nearly $2 billion has been spent on the project so far.

https://www.reuters.com/world/us/work-be-suspended-16-billion-new-york-city-tunnel-project-friday-2026-02-06/