Trump is keeping a New York tunnel project in limbo, and it could have major effects on the economy

Lawmakers in Congress are heading toward a March 23 deadline for the nation’s latest spending bill, which is set to include border wall funding and potentially even gun control legislation — but it won’t contain funding for a Hudson River tunnel between New York and New Jersey, which could play a role in protecting the nation’s economy.

In the lead-up to the upcoming budget deadline, President Donald Trump has come out vehemently opposed to the Gateway Program, an infrastructure project that would improve access between New Jersey and New York. The project would replace the ailing Portal Bridge in Kearny, New Jersey, and build a new tunnel underneath the Hudson River, allowing the current aging tunnels — which faced significant damage during Hurricane Sandy in 2012 — to undergo renovation without affecting commuters. The cost would be $24 to $30 billion, which the Obama administration had pledged to split 50/50 between the federal government and New York and New Jersey in 2015.

The original proposed budget includes $900 million in funding for the Hudson River tunnel, though lawmakers were told Trump would veto any budget that includes the Gateway funding. As a result, the project’s federal funding is currently in limbo and facing a significant cut.

The Washington Post reported Wednesday that the Trump administration “appeared to have succeeded in blocking” the $900 million in funding, and NJ.com noted that the spending bill no longer specifically mentions the Gateway project. However, the Hill noted that the project could indirectly receive $540 to 541 million under the spending bill through Amtrak’s Northeast Corridor Account and the Federal Transit Administration’s High-Density States and State of Good Repair grant programs.

Though New York and New Jersey Republicans, including House Appropriations Committee Chairman Rep. Rodney Frelinghuysen, have been pushing for the tunnel, other GOP members of Congress have opposed federal funding for the project. Ten House Republicans penned a letter to House Speaker Paul Ryan on March 14 urging him to remove the Gateway funding from the upcoming spending bill.

The funding cut marks the latest blow the Trump administration has dealt to New Jersey and New York, which were particularly hurt by Republicans’ recent tax reform bill. It also continues the ongoing saga of the project’s fate under the Trump administration — and though the focus may be on the Hudson River, this political scuffle could have broader consequences for the nation’s economy.

This isn’t the first time Republicans have opposed tunnel funding

The Hudson River tunnel debate goes back to 2010, when then-New Jersey Gov. Chris Christie blocked the Access to the Region’s Core tunnel, a predecessor to the Gateway project that would have resulted in two new Hudson River tunnels. Christie killed the project, which was scheduled for completion in 2018, over concerns that ballooning costs would put too much of a burden on taxpayers.

Christie and New York Gov. Andrew Cuomo, along with U.S. senators from New York and New Jersey, then announced a framework for the Gateway project in November 2015 with the split funding between the federal government and states. Under the Obama administration, the project moved forward in cooperation with the federal government; according to the Gateway Program Development Corporation, the Federal Railroad Administration began work on an environmental impact statement for the tunnel with New Jersey Transit in May 2016. The tunnel and portal bridge projects were accepted into the U.S. Department of Transportation’s Capital Investment Grants pipeline in July 2016.

The Trump administration, however, has since wavered in its stance toward the Gateway tunnel. The Trump transition team gave the Gateway project the number one spot on a priority list of emergency and national security projects, and Transportation Secretary Elaine Chao called the project an “absolute priority” in May 2017. In September, New Jersey lawmakers met with Trump about the project, and reportedly came out feeling “optimistic” about the project’s future.

Yet the Trump administration has also sought to impose hurdles on the project, even before the current spending negotiations. Trump has proposed funding cuts for the Federal Transit Administration’s Capital Investment Program, also known as the “New Starts” program, which would eliminate a major source of Gateway’s federal funding. The Gateway program entered the first phase of the New Starts program in July 2016. Trump first proposed cutting funding for the program in March 2017, and his proposed Fiscal year 2019 budget included phasing out the program over the course of the next decade.

Chao has also sharply changed her tune on the Gateway tunnel. Despite her assurance for the program’s future in May, the transportation secretary said in early March that Trump was simply being “cordial” during his September meeting with state lawmakers, and that New Jersey lawmakers “spun the results of that meeting as they wanted the meeting to be.”

“The president is concerned about the viability of this project and the fact that New York and New Jersey have no skin in the game,” Chao told Rep. Sean Patrick Maloney (D-N.Y.), according to NJ.com. “They need to step up.”

House Republicans have also previously sought to block the federal funding. A September proposal in the House to cut the $900 million in Gateway funding and transfer $400 million to a fund that all states could compete for ultimately failed in a vote of 260-159.

It’s unclear why the Trump administration has reversed its early support of the Gateway project — although it’s possible it could be tied to Trump’s ongoing disagreements with Senate Minority Leader Chuck Schumer (D-N.Y.), who is one of the project’s key proponents.

“This is vitally important to the northeast corridor and to the entire U.S. economy,” Schumer said in a statement to Politico. “Jobs, income, and growth are all at stake. No one should be playing politics with it.”

The Gateway tunnel’s failure could have nationwide effects

Despite the Trump administration’s opposition, there are reportedly still options for the tunnel’s federal funding in addition to the states’ contributions. A Democratic aide cited by the Washington Post suggested that the program could benefit from general Transportation Department funding in the current spending bill, although it wouldn’t specifically be earmarked for Gateway.

Though the Gateway project is limited to a 10-mile stretch between New Jersey and New York, its potential failure could have wide-reaching effects, particularly if one of the current tunnels has to be closed for renovations without the Gateway tunnel to pick up the slack.

Over 200,000 travelers on Amtrak and New Jersey Transit journey through the tunnel each day, Reuters noted, and the closure of just one tunnel would cut capacity down to 21,000 riders per day. The number of trains that could travel through the tunnel would be reduced by 75% to just six trains per hour, Bloomberg noted.

Time is running out to avert a disaster, however: Amtrak estimates that the current infrastructure could fail within 10 to 15 years due to saltwater damage.

“If we have to pull one of those tunnels out of service, that would literally cause a traffic Armageddon in the region,” Sen. Cory Booker (D-N.J.) told Chao in May. “That’s the level of urgency that we have before us.”

Closing one of the tunnels would have a massive effect on both New Jersey commuters and New York businesses. According to Bloomberg, as of 2014, 8% of all New Jersey workers commute to Manhattan, and New Jerseyans make up nearly 13% of Manhattan’s workforce. As a result, New Jersey commuters contribute more than $3 billion in income tax revenue to New York’s economy.

The tunnels’ potential failure also would affect more than just New Jersey and New York. The Hudson River tunnel is part of the broader Northeast Corridor, which extends for 457 miles from Washington, D.C., to Boston and is the most heavily used passenger rail line in the U.S.

According to a report published by the Northeast Corridor Commission, the region covered by the Northeast Corridor includes 17% of the population and accounts for 20% of the nation’s GDP. It is the fifth largest economy in the world, ranked between France and Germany and a one-day “unexpected loss” of the Northeast Corridor would have an impact of $100 million on the U.S. economy. As a result of the Northeast Corridor’s broad economic value, Schumer predicted in December 2016 that a failure of the Hudson River tunnel could result in a recession not only within the New York metropolitan region, but also nationwide.

“[Trump’s] baseless opposition to this project is hurtling the region toward economic disaster,” Cuomo said, according to the New York Daily News. “I am sure there are politics at work here but I am also sure there are other venues to play politics that don’t jeopardize the future of the Northeast United States.”