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Without contradicting President Donald Trump, who canceled the $16 billion Gateway rail Tunnel earlier this month, U.S. Transportation Secretary Sean Duffy said the tunnel is under review, a process slowed by the federal government shutdown “We’re in the process of reviewing those projects. The problem is our staff has been furloughed and we have one person doing these reviews,” Duffy said at a Tuesday press conference at LaGuardia airport His announcement is the first clarification provided by federal officials since Trump’s Oct. 15 statement that Gateway is canceled. Duffy’s statement comes after last week’s letter from New Jersey congressional delegates demanding the president retract his termination announcement and honor the 2024 funding Gateway agreements. While not mentioning Gateway by name, Trump referred to canceling two Manhattan projects on Oct. 15, championed by U.S. Sen. Chuck Schumer of New York. The move was seen as retribution for Democrats holding up the federal budget to renew tax credits that expire on Nov. 1 for affordable health insurance premiums. “I’ve talked to local senators who’ve expressed their concerns, and I said the solution is really easy, open the government,” Duffy said. “Let my staff come back in, let’s do the reviews and if there is compliance, we’re going to move forward without delay.” The cancelation catapulted the ongoing Gateway Project to build a new rail tunnel under the Hudson River into a hot topic in the contentious race for New Jersey governor. The election is Nov. 4. Democratic candidate and U.S. Rep. Mikie Sherrill vowed to sue the Trump administration to honor the Gateway commitment on “day one”. Her Republican opponent former Assemblyman Jack Ciattarelli said he’d work with the Trump administration and the congressional delegation to ensure Gateway funding stays in place. The review Duffy referred to was announced on Oct. 1. A notice from the Federal Transit Administration froze federal reimbursement payments for Gateway and the subway extension while the agency conducts a review to determine if the projects comply with a new rule that was finalized less than 24 hours earlier. That action raised concerns about how long work could continue without reimbursement on five Gateway projects under construction that employs roughly 11,000 workers in New Jersey, New York and in the Hudson River. The interim final rule, which was signed on Sept. 30, bars the consideration of race or gender in contracts awarded under a Disadvantaged Business Enterprises program, which includes businesses owned by people of color and women. The investigation centers on whether the process to award contracts was “unconstitutional and discriminatory.” “We’ve telegraphed that we have concerns about how contracts are given to disadvantaged businesses, it’s unconstitutional to base that solely on race or sex,” Duffy said Tuesday. Contracts for the Gateway work underway were awarded in 2023 and 2024. The $16 billion project has Disadvantaged Business Enterprises goal of awarding 20% or $6.8 billion in contracts to DBE businesses, Gateway officials said. The Oct. 1 federal rule was proposed after a Sept. 23, 2024, decision by a U.S. District Court judge on a case brought in Kentucky. That ruling said the Disadvantaged Business Enterprises program’s statutory race-and gender-based presumptions don’t comply with the Constitution’s promise of equal protection under the law. The court said the government may only use race in a “narrowly tailored fashion. Two executive orders issued by Trump followed in January and March address that and other diversity, equity and inclusion requirements in the federal government.
