WASHINGTON – The new Gateway rail tunnel under the Hudson River would be eligible for federal funding but not given earmarked funds in a 2018 omnibus spending bill agreed to by congressional leaders.

“The omnibus makes funding available to begin construction on the Gateway project via major increases to Amtrak, Capital Investment and other accounts,” a senior Republican aide said.

House Appropriations Committee Chairman Rodney Frelinghuysen, R-N.J., is retiring at the end of the year from Congress.
House Appropriations Committee Chairman Rodney Frelinghuysen, R-N.J., is retiring at the end of the year from Congress. Bloomberg News

The omnibus is expected to be voted on by the House on Thursday followed by the Senate most likely on Friday.

President Trump had threatened to veto the omnibus if it contained a $900 million appropriation for Gateway that the House approved in September as part of a Transportation and Housing and Urban Development spending bill.

Gateway, which would connect New Jersey to Manhattan through a rail tunnel, is supported by the House Appropriations Committee Chairman Rodney Frelinghuysen, R-N.J., and the ranking Democrat, Rep. Nita Lowey of New York, both of whom represent districts in the New York City suburbs.

Frelinghuysen, who is retiring at the end of the year, stood his ground on the issue, which was widely publicized as a face-off between Trump and Senate Democratic Minority Leader Chuck Schumer of New York, who also supports Gateway.

U.S. Transportation Secretary Elaine Chao recently criticized New Jersey and New York officials for not having “skin in the game” by pledging partial funding of the project, even though the two states have pledged to make payments on federal loans. Two federal Railroad Rehabilitation and Improvement Financing loans totaling the $4.29 billion for the Gateway Hudson Tunnels project would be repaid by New York and New Jersey.

Officials from the two states want to treat the loan repayments as part of their local share, but Chao insisted earlier this month that her department considers it to be part of the federal share.

The $13.6 billion project, which includes $2.17 billion in estimated interest costs, would develop a new two-track tunnel under the Hudson River serving an estimated 189,700 daily riders on Amtrak and New Jersey Transit Path trains.

The new tunnel would replace the North River Tunnel owned by Amtrak which is more than 100 years old and needs to be taken out of service in order to be rehabilitated.

Under the compromise, Chao will have a hand in doling out the federal money. Much of it will go directly to Amtrak, which needs a new rail tunnel for its North East Corridor service.

The 2018 spending bill provides Amtrak with $650 million for the North East Corridor account and $250 million for its Rail State of Good Repair account for use on the Washington, D.C. to Boston corridor.

DOT’s rail account will be increased by $1.2 billion to $3.1 billion in fiscal 2018, with $250 million of the increase used for Positive Train Control grants.

Nationwide transit Capital Investment Grant funding will be $2.6 billion, with some of that money available to New Jersey Transit, which shares the Hudson River tunnel with Amtrak.

That's contrary to the Trump administration's effort to cut funding.

The president proposed 2019 budget calls for eliminating the Federal Transit Administration’s Capital Investment Grant (CIG) New Starts program, which provides federal funds for transit rail, including subways, light rail, commuter rail, bus rapid transit and ferries.

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