Trump caves on plan to hold tunnel money hostage after court smackdown

Trump administration officials have agreed to release $16 billion in federal funding for a critical tunnel project below the Hudson River — putting an end to a four-month legal battle the president started.

According to The New York Times, "Federal funding for the $16 billion Gateway rail tunnel between New York City and New Jersey, which had been suspended for more than four months, began to flow again on Friday after lawyers for the Trump administration told a federal judge on Friday that it would comply with her orders. The suspension had left the government owing about $205 million to the tunnel’s planners, the Gateway Development Commission, and forced a halt to work on the project last week, as well as the layoff of about 1,000 union workers, the commission said."

Passenger trains crossing between New York and New Jersey under the Hudson River, including the Northeast Corridor that includes America's only current high-speed rail line, have increasingly faced bottlenecks that limit service, as the current, aging tunnels need renovation and don't have enough capacity.

"The federal government had pledged more than $11 billion toward the tunnel project, which has been billed as the most urgent major infrastructure project in the United States," said the report. "But at the end of September, administration officials said they would stop the flow of that funding while they reviewed the project’s contracts for compliance with revised federal regulations."

Earlier this month, Senate Minority Leader Chuck Schumer (D-NY) said he met with Trump over the project, and the president told him he would release the funds if Schumer agreed to pass resolutions in Congress putting Trump's name on Washington Dulles International Airport and New York Penn Station. Schumer refused this offer.

Trump's effort to hold the funding hostage took a massive hit last week, when a federal judge ordered the administration to continue disbursing the funds while the litigation continues.