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Trump Admin. Says N.Y., N.J. Can’t Use Federal Funds to Pay for Essential Infrastructure Project

The federal spending bill signed last week by President Donald Trump relieves a funding crunch for one of America’s most urgent infrastructure needs, according to boosters of the New York City-area Gateway rail project.

The Trump administration’s response: Dream on. The U.S. Transportation Department says they’re prematurely counting on support from the Federal Transit Administration.

“As FTA has always done, the agency considers the comprehensive funding and financing plan proposed for a project when making its discretionary funding decisions, including any Department of Transportation federal loan requests for the project,” an agency representative wrote in an email. “In other words, no change was made by this bill to FTA’s loan-consideration policies.”

Whichever side is correct, the standoff marks another hurdle for Gateway, a $30 billion plan that includes a second Hudson River tunnel and other improvements to serve the nation’s busiest passenger-rail route. Trump has resisted funding the project, saying New York and New Jersey must contribute more toward the cost.

As the dispute drags on, Amtrak and New Jersey Transit’s sole link between the two states—a flood-damaged 108-year-old tunnel with a decaying power system—becomes increasingly unreliable.

“Gateway is a political pawn, plain and simple—a political hostage of Washington,” Jerry Zaro, chairman of the Gateway Program Development Corp., said Wednesday at the Rudin Center for Transportation Policy and Management, part of New York University. “This is a national disaster happening in slow motion, and we simply have to move ahead and get this thing built.”

Gateway supporters have hailed as a major step forward the appropriations bill signed by Trump on Feb. 15 to fund federal agencies through September. The legislation reversed a Trump policy that barred New York and New Jersey from using federal loans toward their cost share, according to Zaro and U.S. Senator Bob Menendez, a Democrat from New Jersey. Representative Jerry Nadler, a Democrat from New York, said “a significant portion” of the $650 million for Amtrak, the national passenger railroad, will go toward the Hudson tunnel.

Zaro said the bill stipulated that federal loans repaid with state funds should be considered part of the local share. If completed, he said, the Gateway project would double the number of people who live within 50 minutes of work.

“We would be able to run more trains—more jobs, $19 billion in economic activity,” Zaro said.

The Boston-to-Washington Northeast Corridor, where Gateway construction would take place, serves a region that is key to 20% of the nation’s gross domestic product, according to Amtrak. Some Gateway pieces are moving along, including preliminary work that’s underway on the $1.5 billion replacement of the Portal Bridge, a century-old New Jersey swing bridge prone to malfunctioning. But major delays have hampered tunnel construction, which is expected to cost $13 billion.

At the university’s transportation forum, Steve Cohen, the New York trustee for the Gateway Program Development Corp., said the project will benefit from “a congressional delegation in the House that is fully committed.” The House of Representatives in November went from control by Republicans to Democrats.

“The reality is this is going to get done—we can’t allow the current tunnel to fail,” Cohen said. “What’s at stake is really the national economy.”