TWO SUITS BROUGHT AGAINST ADMIN FOR WITHHOLDING GATEWAY TUNNEL FUNDING

The bi-state Gateway Development Commission (GDC) filed suit in federal court on Monday against the United States, alleging that the Department of Transportation (USDOT) has unlawfully withheld federal payments for construction of the Hudson Tunnel Project between New York and New Jersey.

The Hudson Tunnel is a central component of the Gateway Program and is intended to replace the 116-year-old North River Tunnel, which carries all Amtrak and NJ Transit rail traffic between New Jersey and New York Penn Station. Failure of the existing tunnel would severely disrupt rail service in the Northeast Corridor, with significant national economic consequences.

In its complaint, GDC contends that USDOT has breached multiple grant and loan agreements by suspending payments that were previously approved. The commission argues that the funding freeze is politically motivated, citing statements by “senior executive branch officials” linking the suspension to the project’s characterization as a “Democratic program.”

On Tuesday, New York and New Jersey Attorneys General Letitia James and Jennifer Davenport filed a separate lawsuit seeking to compel the release of the funds. Their filing accuses the Trump administration of making an unlawful and politically driven decision to withhold federal dollars already committed to the nation’s largest public works project, citing public statements by the president.

USDOT began withholding payments for the Hudson Tunnel and the Second Avenue Subway projects in October, stating that it could not process reimbursement requests while it conducted a review of the projects. According to the department, the review is intended to determine whether “any unconstitutional practices” are occurring, following a determination that certain race- and sex-based presumptions used in the federal Disadvantaged Business Enterprise (DBE) program violate the U.S. Constitution.

The DBE program is designed to increase participation by small businesses in federally funded transportation projects. GDC has stated that it provided extensive documentation demonstrating that the Hudson Tunnel project complies with the administration’s updated DBE requirements.

GDC has continued construction using available reserves and credit while federal payments have been paused. However, the commission confirmed during its January 27 board meeting that those funds would be fully exhausted by February 6, forcing an immediate halt to construction and the loss of nearly 1,000 jobs.

An extended shutdown could place approximately 11,000 construction jobs at risk, along with the estimated 95,000 jobs and $19.6 billion in economic activity the project is expected to generate overall. GDC also warned that further delays increase the risk of a shutdown of the existing North River Tunnel, which is already a major source of service disruptions for passenger rail operations in the region.

“For months, GDC has worked cooperatively with its federal partners to meet their requirements for restoring funding,” the commission said in a statement. “GDC responded thoroughly and promptly to each request for information about the project’s federally mandated DBE program and provided documentation that the project is in compliance with the administration’s latest regulations.”

“Our goal has always been to work with our federal partners and get funding flowing again,” said GDC CEO Tom Prendergast. “At the same time, we must hold the federal government to its contractual obligations so that construction is not halted.”

On Thursday, multiple sources reported that President Trump has conditioned release of the GDC funds on renaming both New York Penn Station and Washington Dulles Airport in his honor.

Lawmakers renew calls for action as health concerns linger

On the third anniversary of the 2023 Norfolk Southern train derailment that released hazardous chemicals into the E. Palestine, Ohio community, lawmakers and labor leaders renewed calls for Congress to pass stalled rail safety legislation, warning that little has changed to prevent similar disasters.

At a Feb. 3 press conference, U.S. Reps. Chris Deluzio (D-Pa.), Mike Rulli (R-Ohio), and John Garamendi (D-Calif.) urged movement on the Rail Safety Act of 2025, which has not advanced since being assigned to a House subcommittee.

“Some people, especially in D.C., seem to have forgotten about the derailment — but I haven’t, and I won’t,” Deluzio said. “We have to make rail safer.”

First-term Ohio Senator Jon Husted, who was appointed to fill the seat vacated by now-Vice President JD Vance, is looking to revive the subject in the Senate. Husted has drafted legislation that closely follows the language that Vance and then-Senator Sherrod Brown (D-OH) had introduced in the last Congress.

Regular readers of this bulletin may recall CRC objected to sections of the earlier iteration. In the Brown/Vance bill, host commuter railroads would be forced to install and incur the cost of wayside detectors for the benefit of tenant freight operators.

Health effects still under investigation

The derailment released more than one million pounds of vinyl chloride and other chemicals into the air and water, prompting widespread reports of headaches and respiratory issues in the weeks that followed.

Juliane Beier, an assistant professor of medicine at the University of Pittsburgh, is leading a long-term study of liver and thyroid health among residents living within 10 miles of the site. About 30 percent of participants tested so far show blood markers associated with liver damage, though Beier said the findings are not yet clearly linked to the derailment.

(Read more here.)

• In a January 23 letter to Congresswoman Cindy Hyde-Smith, USDOT Secretary Sean Duffy revealed plans for a department-wide reorganization.  Hyde-Smith is chair of the House Appropriations Subcommittee on Transportation, Housing and Urban Development.

  Per the letter, “operating Administrations within the Department are revising their organizational structures,” including both the Federal Railroad Administration and the Federal Transit Administration. According to the Secretary, “these reorganizations are in response to Executive Order 14210 titled “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative.”  He goes on to note that the primary goal is reducing the Federal workforce while enhancing efficiencies and eliminating redundant functions.

  During the first year of the second Trump Administration, FTA and FRA staffs had already been significantly reduced by RIFs, buyouts and early retirements.  Under this new roadmap, FRA’s Office of Railroad Development, which handles grants, will be reduced from 240 people to 179 people.  

• The Trump Administration this week proposed to strip workforce protections from certain federal employees. By reclassifying 50,000 senior career employees to at-will status, the administration is removing the ability of employees to appeal suspensions, demotions or firing to the Merit Systems Protection Board. 

• The Brotherhood of Maintenance of Way Employees Division (BMWED) has petitioned the U.S. Court of Appeals for the Sixth Circuit to review and overturn a Federal Railroad Administration (FRA) decision granting a partial waiver of federal track safety inspection requirements sought by the Association of American Railroads (AAR). BMWED argues that the FRA’s December 5, 2025 decision was arbitrary, capricious, unsupported by substantial evidence, and contrary to law, and asks the court to vacate the agency’s approval of the waiver, which modifies requirements under 49 C.F.R. §§ 213.233(c) and (d) governing inspection frequency and defect remediation.

   

WHAT WE’RE READING

• California government, MTC reach terms on bridge loan ahead of potential funding measure vote (Mass Transit)

• Transit-oriented development bill introduced in Congress (Smart Cities Dive)

• Caltrain’s Plans to Accommodate New Ridership Ahead of Super Bowl (MA Chronicle)

• South Shore Line Test Trains on New Monon Corridor (Indiana105.com)

• Lawmakers, labor and local leaders urge rail safety reforms (Progressive Railroading)

• One-on-one with MBTA GM Phillip Eng: Aging infrastructure, planned upgrades & more (NBC10 Boston)

• Will Charlotte let the new transit authority launch the long-delayed Gateway Station? (WFAE 90.7)

• US House bill would fund transit safety ambassadors (Smart Cities Dive)

• Shapiro wants to start talks now for extra transit funding for 2027 (Mass Transit)

• Free rides, civil rights and the legacy of Rosa Parks in 2026 (Metro Magazine)