On December 29, 2017, the Trump administration announced that it had no intention of upholding Obama administration’s unofficial agreement to pay 50 percent of the cost of the Gateway Program, a slew of infrastructure improvements, including a new cross-Hudson rail tunnel between New York and New Jersey. “We consider it unhelpful to reference a nonexistent 'agreement' rather than directly address the responsibility for funding a local project where 9 out of 10 passengers are local transit riders,” K. Jane Williams, the Federal Transit Department’s Deputy Administrator informed state and program officials.
The news was as welcome as snakes let loose in Times Square ten minutes before midnight. Democratic New York Governor Andrew Cuomo stayed mum; a spokesman for departing New Jersey Governor Chris Christie remained “confident.” Which left Republican Representative Rodney Frelinghuysen to state the obvious: "There has long been agreement among federal, state, and local officials that the Gateway project is an urgent national infrastructure priority."
But there were signals that all was not well on the funding front. Just two weeks earlier, after the two governors agreed to secure a 35-year, nearly $2 billion federal loan to finance their portion of the project, a Trump official pronounced the effort “entirely unserious.”
The Trump administration can scarcely pull together the scaffolding for an infrastructure plan, much less money for Gateway, despite Trump’s own claims of support. Details and deadlines for the great infrastructure reveal shift again and again. Despite being an “urgent national infrastructure priority,” the troubled Gateway Program continues to be held hostage to partisan political jockeying. But the White House and Congress aren’t only ones stalling. With a mega-project like Gateway, there’s plenty of blame to go from Washington to Trenton and Albany and back again.
This article appears in the Winter 2018 issue of The American Prospect magazine. Subscribe here.
Everybody was in the room where it happened. Shortly after Labor Day, Senate Minority Leader Chuck Schumer went to the White House to talk trains and tunnels with President Trump. Present were two junior senators, Kirsten Gillibrand of New York and Cory Booker of New Jersey; New York and New Jersey representatives; and Governors Chris Christie of New Jersey and Andrew Cuomo of New York. The president’s key people were there, too: Transportation Secretary Elaine Chao; John Kelly, the president’s chief of staff; Gary Cohn, the chief economic adviser; and Mick Mulvaney, the budget director.
New York and New Jersey had secured a pledge from the Obama administration for federal funding to cover half the cost of the Gateway Program, estimated to be up to a $30 billion undertaking to rebuild and replace the more than century-old rail, tunnel, and bridge networks that move people between New York City and northern New Jersey, and up and down the spine of the Northeast from Boston to Washington.
In the wake of Christie’s 2010 veto of the $9 billion Access to the Region’s Core (ARC) project, the Obama administration ultimately pledged to move ahead with the broader Gateway project. But Trump is methodically dismantling anything remotely redolent of the first African American president’s legacy.
Although preliminary construction on the Hudson River tunnels has already begun, completing the project could take more than a decade.
The country’s largest metropolitan region is at risk of massive gridlock if a rail shutdown or slowdown forces riders to pile into vehicles and onto the congested roads into New York City and the highways between the New England and mid-Atlantic states. As long-suffering air passengers in and out of LaGuardia Airport can attest, plane travel is not a good substitute either.
Republicans spun the White House Gateway meeting as a positive step. Cuomo found it “productive” but “inconclusive,” leaving Booker to underscore the obvious: “President Trump,” the senator said in a statement, “has made plenty of promises on infrastructure, which so far have fallen flat.” More likely the meeting was another set piece of political theater.
THE TRUMP ADMINISTRATION has no comprehensive infrastructure policy, and no commitment to seek the appropriations that Gateway requires. The administration sent Congress a budget plan that zeroes out important sources of funding for Gateway. The $1.5 trillion tax cut will only add to these fiscal pressures.
William Howard Taft was president when the original Pennsylvania Station and the Hudson River Tunnel opened nearly 110 years ago. Today, the tunnels are decaying monuments to America’s failure, unique among the world’s developed countries, to continue to invest and maintain its public transportation assets. Hurricane Sandy inundated those tunnels for the first time in history, closing them for days and leaving behind a residue that continues to eat away at the concrete and steel—making Gateway more urgent, if remote, than ever.
Rail has advantages over the region’s perpetually clogged highways and congested airports. But delays, derailments, fires, and other hazards turn New York–area rail travel into a journey of existential frustration for the commuters and visitors who also endure Penn Station’s mobbed concourses, dank passageways, and sour waiting areas.
“For the average New Yorker, whether it’s Gateway or subways, all of the region-wide breakdowns in infrastructure are all of a piece,” says John Raskin, executive director of the Riders Alliance, a New York City transit advocacy group. “A breakdown at Penn Station or in a tunnel under the Hudson River is part of the story that is the same story as subway malfunctions and other infrastructure failures that come from decades of under-investment.”
The Northeast Corridor economy generates $3 trillion, roughly one-fifth of the country’s gross domestic product. For area workers, Manhattan is the obvious choice—wages in every sector are higher than elsewhere in the region. But Manhattan is punishingly expensive to live in, and commuting is a way of life.
An August 2017 report published by the Regional Plan Association, a New York-New Jersey-Connecticut economic research organization, calculated that rail trips in and out of Penn Station have tripled in the past 25 years. The RPA projects that work trips will continue to increase by 2040. Much of the travel between New York and Boston or Washington is done on Amtrak, as air travel has fallen out of favor for short hauls.
Gateway is crucial for modernizing the Hudson River tunnels that Amtrak owns and operates. Preliminary construction has already begun. Once the new tunnel opens, the original tunnels would be closed and rebuilt. Amtrak officials conduct regular inspections and monitor the condition of the saltwater-compromised concrete. But constructing the new tunnel could take up to a decade.
The tunnel comprises just one component of the Gateway program. There are eight other projects, including building new bridges to replace the Portal Bridge, another century-old span (which opens for ships and sometimes gets stuck open). Penn Station, the busiest in North America, needs a total overhaul and is also part of the Gateway rebuilding. The upgrades affect Amtrak, along with the Long Island Rail Road—operated by the Metropolitan Transportation Authority (MTA), New York City’s regional network—and New Jersey Transit, the statewide commuter rail network.
But there is no discernable Plan B to replace federal funding. Private industry would be unwilling to take on all the risks—even public-private partnerships depend on government dollars. Building a new rail tunnel and related infrastructure is simply too big and expensive a feat to pull off without some help from Washington—even for well-off states like New Jersey and New York.
DELAYED INFRASTRUCTURE spending for metropolitan New York is now complicated by Trump, but the current inertia has deeper roots in the personality clashes, parochial turf battles, and competing priorities of the two states. In the United States, New Jersey has the most denizens crossing state lines for work, and most of them head to New York jobs. Hundreds of thousands of people swarm through Penn Station every weekday, most of them via commuter rail or subway lines. But there are no votes for New York politicians in New Jersey, and cross-river projects perceived to benefit New Jersey residents typically get short shrift.
“New York is very different from every other region because there is no one government agency that does any kind of regional planning,” says Philip Mark Plotch, a former MTA planning manager and assistant professor of political science at Saint Peter’s University in Jersey City. So New Jersey and New York governors take care of their own.
Although the Port Authority of New York and New Jersey comes the closest to being a regional agency, Plotch adds, it has its own priorities and interests. The authority oversees a roster of transportation networks, including airports, bridges, tunnels, ports, the Port Authority Trans-Hudson (PATH) commuter rail network, and the World Trade Center complex.
Through the Port Authority, Christie and Cuomo enjoyed a transactional relationship. While the agency had been created to provide an efficient framework to build, operate, and maintain major transportation assets, it has long since morphed into a soft landing space for political cronies of governors. It also served as a kitty to fund pet projects that governors could not finance elsewhere in their states’ budgets.
Like his fellow conservative Republican governors, Chris Christie took great pride in deep-sixing public transit projects.
It further served as a vehicle for political payback. The 2013 Bridgegate scandal featuring Christie’s Port Authority people manufacturing traffic jams in a northern New Jersey city as political retribution against its Democratic mayor signaled the end of Christie’s gubernatorial career.
Yet Christie had already sealed his place in regional infamy with his decision to cancel the project that led Amtrak to set up Gateway. ARC had already broken ground when Christie killed it. The project running from North Bergen, New Jersey, to a station in Macy’s Midtown Manhattan department store would have offered relief to New Jersey Transit’s miserable New York–bound commuters. Christie quickly glommed onto ARC’s nickname: “the tunnel to Macy’s basement.”
Like fellow conservative Republican Governors Rick Scott in Florida, John Kasich in Ohio, and Scott Walker in Wisconsin, Christie took great pride in deep-sixing public transit projects. He declared that ARC was headed for cost overruns (a claim later found to be overstated). The state had to pay back a portion of federal funding, but Christie promptly used the state contribution to stave off a gas tax hike and build highway projects like the Pulaski Skyway in northeastern New Jersey, and for other politically motivated ends.
Two years later, Hurricane Sandy pushed the Atlantic Ocean into upper New York Harbor and into the Hudson and East Rivers. Amtrak officials had considered allowing Penn Station to flood but chose the train tunnels instead. Sandy closed down the Northeast Corridor for days, producing mind-numbing traffic jams as train commuters turned to cars and buses. Despite that huge heads-up, Cuomo and Christie continued to spar over paying for the Hudson River crossing projects until 2015, when the Obama administration publicly shamed the two men into a deal: The states would pay 50 percent of the costs and the federal government would fund the remaining half of the program.
Yet the prolonged conflicts and delays over investment in transportation infrastructure operate within the political parties as well as between them. After the ARC debacle, Cuomo did not want to talk about tunnels unless the federal government planned to chip in. For most of his tenure, he had focused like a laser on other New York infrastructure projects, including LaGuardia Airport and Moynihan Station across the street from Penn Station. His signature accomplishment was the $4 billion replacement of the Tappan Zee Bridge (renamed the Mario M. Cuomo Bridge after his late father, a former New York governor, much to local residents’ dismay). The new Hudson River span upriver from New York City connects suburban Rockland and Westchester counties—two critical suburban voting blocs. The sum total of the projects raises the governor’s infrastructure profile, an important consideration for a man whose name has long been in the mix of possible 2020 Democratic presidential contenders.
But the ongoing MTA subway crisis, itself the product of inadequate long-term investment, shredded Cuomo’s getting-big-stuff-done reputation in a New York minute. As subway commuters endured the daily hell of getting around, Cuomo and New York Mayor Bill de Blasio engaged in a war of words over whether the city or the state was responsible for the subway’s dire condition and who should pay up. Yet both men and their predecessors brought on the current crisis by failing to prioritize rail maintenance.
According to a recent New York Times investigation, state transportation officials regularly steered MTA funds to all sorts of people and places, including ski resorts the state manages, and failed to keep or hire the key officials required to run one of the world’s largest subway networks. New York mayors have either reduced funding or declined to provide additional dollars. Plagued with deficits, the authority coped by borrowing, and now spends a good chunk of its budget on debt payments.
More subway mishaps in early 2017 raised the stakes. Transportation advocates redirected New Yorkers’ fury from City Hall to Albany by pointing out that it was the governor, not the mayor, who controls the agency and has the real power to fix the mess.
“Cuomo is not down here riding the trains and the subways,” says Laurie Williams, a Long Island Rail Road commuter who works in the city. “This is a huge thing—it impacts millions of people every day.”
The governor finally declared a state of emergency at the MTA, at roughly the same time that Amtrak, which owns and operates Penn Station, launched its intensive repair program after several derailments. (Paid out of existing funding, the repairs had long been shunted aside by other station projects and scheduling concerns.) The one-two punch prompted Cuomo to catastrophize about a “summer of hell,” which prompted a snide threat from Chris Christie, who wanted to “smack” him for not being “more disciplined.”
The much-feared commuter chaos at Penn Station never quite materialized. But the bad optics of the Cuomo-DeBlasio-Christie crosstalk not only illuminated the travesty that is transit in New York and New Jersey; it distracted from the summer’s fight to fund Gateway. It also exposed the region’s institutional defects that undermine cooperation and turn transportation policy into crisis management rooted in a failure to plan for the future.
SHORTLY BEFORE PRESIDENT Obama’s Treasury Department turned out the lights, officials published a hefty report, “40 Proposed U.S. Transportation and Water Infrastructure Projects of Major Economic Significance.” Northeast Corridor rail improvements that included Gateway made the cut. The report identified the four major barriers for completion of the projects: inadequate funding, increasing capital costs, lack of consensus, and regulatory problems. The report singled out Gateway specifically, not for its funding difficulties but for its “lack of consensus among multiple public and private partners.”
After the ARC debacle, New York Governor Andrew Cuomo did not want to talk about tunnels unless the federal government planned to chip in.
The Gateway Program Development Corporation, the organization tasked with coordinating the project with the federal government, and its partner agencies, including Amtrak, New Jersey Transit, and the Port Authority, are hurtling into the unknown. Transit has usually gotten short shrift in attention and dollars in a country that prioritizes highways and air travel. Major transportation projects do not advance without a significant federal funding component, and Gateway is no exception.
The local partners have identified their funding contributions for one project, the Portal North Bridge. The New Jersey state transit agency’s roughly $400 million contribution relies on a federal Railroad Rehabilitation and Improvement Financing (RRIF) loan backed by state transportation fund revenues and additional trust fund revenues. The Port Authority also received a $300 million RIFF loan and contributed additional authority net revenues. A pending Federal Transit Administration Capital Investment Grant (CIG) would provide roughly half of the remaining funds. With New Jersey’s Transportation Trust Fund reliant on gas taxes and other monies, and the Port Authority collecting tolls, fees, and rents, among other revenue generators, taxpayers could certainly see price hikes in local taxes, tolls, and other fees. (Amtrak has sent more than $300 million to the project to date; its tunnel contribution has yet to be determined.)
The trouble is that the bridge funds add up to far less than the multi-billions Gateway needs, especially if the federal money falls through. Trump’s first budget eliminated the FTA’s Transportation Investment Generating Economic Recovery (TIGER) grants and CIG funding, which kickstart projects nationwide. (There are two CIG grant applications in progress, one for the bridge and another for the tunnel.) The 2018 House appropriations bill also eliminated funding for TIGER grants, while the Senate version funds them. Both the House and the Senate fund the capital grants, though the Senate proposal provides more money.
Although public-private partnerships could play a role in Gateway, it is highly unlikely that a single private company would take on the megaproject without a sweetener such as tolls—and there are no tolls for the rail bridges and tunnels. One scenario that could prove attractive to a private entity might involve fixed payments made by Amtrak or New Jersey Transit. These “availability payments” could be leveraged against the rail operators’ revenues or their tunnel usage. New York and New Jersey might also make payments that dedicate a fixed amount of state revenues to a private entity. California, Colorado, and Florida have recently used availability payments for major transportation projects.
The complex governance, mercurial political players, and general Washington dysfunction pose barriers that are as difficult to overcome as financing. “In New York, I can’t even imagine anybody thinking that the politics are conducive to any kind of partnership,” says Robert Puentes, president of Eno Center for Transportation, a Washington, D.C.-based think tank.
Gateway has sought advice from private firms. An August Request for Information attracted nearly 50 American and international firms, which offered suggestions about everything from procurement and design to construction and financing. Some of the firms suggested that certain technical components of the project could be broken up into smaller contracts to minimize private-sector risks, which would make Gateway a more attractive investment prospect. But when firms ask about federal funding, no one can give them an answer.
Watch This Space: The entrance to the future Hudson River tunnels. (We could be watching for a long time.)
THE GATEWAY PROGRAM is being mowed down in the ideological crossfire. Tepid platitudes from Secretary Chao about the project being “an absolute priority” fail to instill confidence, since the infrastructure package promised by Trump has not materialized. Last June, the Department of Transportation sent another ominous signal by withdrawing from Gateway’s Board of Trustees. In a terse, one-paragraph letter to the board chair, the department noted that it does not sit on the boards of local transportation projects, a pronouncement overlooking other development corporations that involved the department, such as New York’s Moynihan Station and Union Station in Washington, D.C.
“It sends the signal that [the Department of Transportation is] not going to be playing an active role in the project; it’s going to be the local players that are going to be funding and planning this work,” says Richard Barone, RPA’s vice president for transportation, of the department’s decision, adding that the department may only play an oversight and technical assistance support role.
Gateway is the poster child for the types of projects that many Trump administration ideologues want the federal government to exit. When it comes to public transportation, there is a “If you want it, you pay for it” mentality at work in Washington.
The Republican tax reform program complicates cobbling together the funding for Gateway, since it does not support the kind of private-sector infrastructure investments that Republicans have traditionally touted as alternatives to using public-sector money. The tax-exempt private activity bonds, or PABs, that would make Gateway more attractive to private investors are on the chopping block in the House (which may bring other projects across the country to a halt and force a scramble for new financial plans). According to Politico, Democratic Representative Elizabeth Esty of Connecticut told the bipartisan Problem Solvers Caucus that Chao had assured her the problem “would be fixed in the infrastructure bill—they’re aware that [the elimination of PABs] is a big problem.”
Yet the GOP tax legislation will send the national deficit soaring, all but assuring that Trump Republicans are likely to rediscover their inner deficit hawks when the time comes to talk about infrastructure. The vitality of one of the country’s prime economic engines appears to be of little concern to red-state Republicans who cannot stomach sending billions to the Northeast. After Representative Rodney Frelinghuysen, the New Jersey Republican who chairs the House Appropriations Committee and represents parts of several northern New Jersey counties near Manhattan, managed to steered $900 million to Gateway in the House 2018 fiscal budget, other Republicans like Ted Budd of North Carolina lobbed verbal grenades at the allocation, calling it an earmark.
“How long are urbanists and progressives going to go along with a system of federalism that in reality extracts money from urban areas … and doesn’t return money to those areas for things that really matter to us, and instead widens highways in rural Alabama with tax dollars that are paid in New York and California?” says David Bragdon, executive director of the TransitCenter, a New York City think tank.
The decades-long ordeal to transform the Hudson River crossings into assets worthy of the 21st century is in a precarious place. Amtrak officials warn that the tunnels have less than 20 years (if not much less) left. Catastrophic structural failure or another hurricane could close them again. But a more mundane scenario is likely: Amtrak decides that one tunnel is too hazardous and orders a shutdown. The closure of one tunnel would reduce rail capacity by 75 percent: Instead of 24 trains every hour, there would be six.
“If you lose those tunnels, you don’t get from Boston to Washington anymore on a train without getting off. You’ll get on a local train or take the ferry over to New Jersey. It’s going to be a real pain in the butt and it’s going to add to your travel, or you are not going to do it,” says Barone. But crises like the 2007 Minneapolis bridge collapse and the Flint water debacle have not convinced Congress to speed up on infrastructure.
Constructing a megaproject in a climate of ideologically driven austerity and hostility to paying for transit demands what Plotch of Saint Peter’s University calls an “effective public-sector champion” in Politics Across the Hudson, his book on the Tappan Zee Bridge construction. On Capitol Hill, Schumer and Frelinghuysen have the interest, clout, and tactical skills to fill that role, but they are likely to be outvoted.
Gateway needs other powerful allies to drive home the reality that supporting passenger rail in the Northeast is integral to the regional and national economy. Raising the profile of the project should fall to the governors and members of Congress of the eight northeastern states and the District of Columbia that are under the aegis of the Northeast Corridor Commission, a rail advisory planning body established by Congress nearly a decade ago.
“You need everyone from Congress, from Boston to D.C., to come together to make a series of investments in the Northeast Corridor and … to be pushing and lobbying hard, as a bloc,” says Barone.
A permanent Gateway executive director could lead this effort. But whether that position will command a big enough megaphone will depend on the individual selected. A pick could be announced by the first quarter of 2018. Polling data and the commuter rail and subway crises demonstrate that the riding public can be a powerful pressure group, but neither commuters nor business leaders have yet to be effectively harnessed to support Gateway. And Trump remains disdainful of states that tend to elect Democrats, even at grave public cost.
The United States has arrived at a point in its history where the political norms have eroded so much that Washington continues to undermine a critical project and ignore the economic consequences of failing to improve train travel to and through New York City for millions of people. Gateway is a core transportation modernization project for the country, not a nice-to-have novelty on some over-ambitious wish list. It urgently requires an infusion of capital, since there are no alternatives and no cheap fixes. The main obstacle is not tunneling under the Hudson. It’s getting the right people in the room to make the big bucks happen.