Trump Vows No Federal Payment for Gateway Tunnel Cost Overruns

By Charlie McCarthy | Monday, 16 February 2026 01:38 PM EST

President Donald Trump on Monday stated that the federal government will cover “not one dollar” in cost overruns for the Gateway rail tunnel project connecting New York and New Jersey.

In a Truth Social post, Trump labeled the $16 billion Hudson River tunnel initiative a potential “boondoggle,” warning it could escalate into runaway spending similar to California’s high-speed rail program.

“I am opposed to the future boondoggle known as ‘Gateway,’ in New York/New Jersey, because it will cost many BILLIONS OF DOLLARS more than projected or anticipated,” Trump wrote. “Under no circumstances, will the Federal Government be responsible for ANY COST OVERRUNS — NOT ONE DOLLAR!”

The president emphasized that while the federal government is willing to meet with state officials to ensure “hard work and proper planning is done, NOW,” Washington taxpayers will not bear any responsibility for overruns.

The Gateway project, described as one of the nation’s most significant infrastructure efforts, would add two new rail tubes under the Hudson River, a critical route for approximately 200,000 daily commuters. Congress has authorized $16 billion for the project, with the federal government pledging more than $11 billion.

Federal funding was suspended for over four months as the administration reviewed contracts for compliance with revised regulations. Reports indicate that about $205 million in reimbursements had been delayed, resulting in a construction pause and temporary layoffs of approximately 1,000 union workers.

Last week, following a court order, the administration began releasing funds, sending $30 million to the Gateway Development Commission, with the remainder expected to follow. Department of Transportation officials stated they are complying with the court’s directive.

New York Democratic Governor Kathy Hochul and Senate Minority Leader Chuck Schumer, D-N.Y., criticized the funding freeze, demanding full and immediate restoration of resources.

State attorneys general from New York and New Jersey filed lawsuits against the administration, arguing that the suspension harmed workers and disrupted project progress.

Trump positioned his stance as fiscal responsibility, referencing California Democratic Governor Gavin Newsom’s “Railroad to nowhere” as a cautionary example of cost overruns and mismanagement. He also dismissed reports that he sought to condition funding on renaming Penn Station after him as “FAKE NEWS,” asserting the idea was originated by others.

The ongoing dispute highlights broader tensions between Washington and Democrat-led states regarding infrastructure priorities, regulatory compliance, and spending discipline.

While construction remains paused pending full reimbursement, Trump’s message was clear: The federal government will support critical projects but not provide blank checks for cost overruns.

With billions in taxpayer dollars at stake, the Gateway debate has emerged as a flashpoint in the administration’s efforts to curb what it considers wasteful spending while advancing major infrastructure upgrades.