By David Shepardson
WASHINGTON (Reuters) - A deal to fund the U.S. government through the end of September is expected to include less funding than initially proposed for building a new train tunnel under the Hudson River connecting New York City and New Jersey, two people briefed on the talks said.
A congressional committee in 2017 directed at least $900 million for the Gateway project to replace the existing century-old tunnel relied on by both Amtrak's busy Northeast Corridor Service and New Jersey Transit commuter trains.
Transportation Secretary Elaine Chao and other Republicans have said in recent weeks that President Donald Trump threatened to veto a funding bill if it included funding for the $30 billion Gateway project.
Two sources briefed on the matter said there will be as much as $541 million in federal money available to Gateway. The deal adds $2.9 billion in discretionary U.S. Transportation Department grants that the project could qualify for.
Proponents said have said the prior language guaranteed $900 million for the project and that a significant portion of Amtrak’s Northeast Corridor Account's $328 million funding could be used for Gateway.
The deal now will give $650 million to Amtrak’s Northeast Corridor Account. The railroad could direct additional funds to Gateway. New York and New Jersey will get $153 million in additional funding for State-of-Good-Repair and High-Density State formula funds that can be used for Gateway-related projects, aides said.
Trump’s opposition to the project angered Democrats and some Republicans. Lines in the current tunnel, heavily damaged during 2012’s Superstorm Sandy, could fail within a decade, hobbling commuting in the metropolitan area that produces 10 percent of U.S. economic output.
Chao has repeatedly said New York and New Jersey must provide direct funding for the project.
"New York and New Jersey are two of the richest states in the country. ... They need to step up,” Chao said this month.
The project focuses on a 10-mile segment of the Northeast Corridor, which carries over 200,000 Amtrak and New Jersey Transit passengers a day.
The budget deal also includes $10 billion in new infrastructure funding, aides said, including a $1 billion increase for airport improvement programs, a $1.2 billion increase for the Federal Railroad Administration and $600 million for new high speed broadband development.
Final details of the proposal were being completed. The text was expected to be released Wednesday and voted on by the U.S. House of Representatives on Thursday.
(Reporting by David Shepardson; Editing by David Gregorio)