Sec. Chao charged in her testimony that the federal government (specifically the Obama administration) did not reach a formal agreement with the states of New York and New Jersey to fund 50% of the project. She also told the T&I Committee that both states are using loan proceeds as their primary sources of funding for Gateway.

“According to Secretary Chao, the President is personally intervening to kill the most important infrastructure project in America because of a personal feud, and that's pretty shameful,” said Rep. Maloney. “The President's own transition team said Gateway would create over 30,000 jobs in the New York metro and should be our country's top priority—this is just crazy.”

New York Gov. Andrew Cuomo told reporters that President Trump is using the Gateway project as a political pawn in a chess game with Sen. Schumer. In November 2015, New Jersey Gov. Chris Christie, Cuomo, Amtrak, and the United States Department of Transportation and others announced an agreement that the states would cover half the cost of the project, and Amtrak and the federal government would provide funding for the other half. But, in December 2017, acting Federal Transit Administrator K. Jane Williams said in a letter to the governors that the funding agreement was “nonexistent.”

In a statement, Gov. Cuomo stressed the importance of the Gateway project to the entire Northeast corridor. Currently, only two rail tunnels under the Hudson River connect New York's Penn Station to New Jersey's Penn Station. The existing tubes used by Amtrak and New Jersey Transit are over 100 years old and were damaged by Hurricane Sandy in 2012. If one of the two tubes were forced to close for repairs, rail capacity through the tunnels would be reduced by 75%.

The Gateway program would increase capacity on tracks, tunnels, bridges, and stations, eventually create four new tracks, including a new two-track Hudson River tunnel. The program would also modernize other failing infrastructure including electrical systems and bridges.

“The federal government must fulfill its long-overdue promise before the tunnel fails, creating a true crisis for the region,” Gov. Cuomo said. “This is not a partisan issue. Leaders on both sides of the aisle as well as practically every regional stakeholder and transit expert agree these tunnels need to be replaced. The president should do the right thing and stop playing politics with our transportation network, which is the lifeblood of the Northeast region's economy.”

Senate Minority Leader Schumer, who released a Democratic-backed $1 trillion infrastructure plan on Wednesday, stated in published reports that the Gateway project “is a go,” and is part of a pending omnibus federal spending bill in Congress, despite the Trump administration's opposition. The Gateway project was not included in President Trump's $1 trillion infrastructure plan released earlier this year.

“The good news is we have bipartisan support for getting it done,” Sen. Schumer told reporters. “And from everything I hear, it's all-systems-move-ahead despite what the president had to say.”