Judge Permanently Blocks Trump's 'Flagrantly Illegal' Freeze of Hudson Tunnel Funds.

A federal judge on June 29, 2026, permanently barred the Trump administration from freezing federal funding for the Hudson Tunnel, a $16 billion rail project under the river between New Jersey and New York. U.S. District Judge Jeannette Vargas ruled that the administration’s move to suspend the grants “flagrantly violates federal law,” the New Jersey Monitor reported.

What the Judge Ruled

Judge Vargas issued a permanent injunction, the strongest form of court order, blocking the administration from cutting off the money again. The ruling ends the latest attempt to halt construction on the tunnel, part of the larger Gateway program to replace the century-old, storm-damaged rail crossing into Manhattan.

The court found the freeze was not a close call. Suspending grants that Congress had already committed, Vargas wrote, flagrantly violates the law.

The Funding Trump Tried to Cut

The money was locked in long before the freeze. In July 2024, the Gateway Development Commission secured a $6.88 billion grant from the Federal Transit Administration and $4.06 billion in federal loans, completing roughly $12 billion in federal support for the project.

Starting October 1, 2025, the administration withheld about $205 million in reimbursements the project was owed. By early 2026, the commission had already drawn more than $1 billion and was building. A prolonged freeze would have stopped the work and put nearly 1,000 jobs at risk.

Why It Was Illegal

Congress controls federal spending. When it appropriates money for a project, the president does not get to cancel it because he dislikes who benefits. That limit is the heart of the case.

Trump made the reasoning easy to trace. He said publicly that he personally decided to “terminate” the funding “because the Democrats are so foolish.” A freeze justified by political payback, not law or policy, is exactly what courts have repeatedly struck down as an unlawful impoundment of funds Congress directed.

Why It Matters

The Hudson Tunnel freeze is one piece of a broader practice. The administration has withheld congressionally appropriated money from states and projects it sees as political opponents, and courts have ruled against it again and again.

Each ruling reaffirms a simple boundary. The power of the purse belongs to Congress, and a president cannot use federal funds as a reward for loyalty or a punishment for dissent. A permanent injunction on a project this large makes that boundary harder to ignore.

What You Can Do Now

Use the letter below to ask your members of Congress to pass legislation that bars the executive branch from withholding congressionally appropriated funds as political retaliation, so states and projects do not have to sue every time to get money they are owed.
Call your senators and representative at (202) 224-3121. Tell them the courts keep ruling these freezes illegal, and that Congress should defend its own spending power instead of leaving it to litigation.
Watch for an appeal. The administration may challenge the injunction. If it does, that is the moment to call again and tell your representatives where you stand.