(Adds agreement released, reaction, comments from lawmakers, trims)
WASHINGTON, March 21 (Reuters) - A deal to fund the U.S. government through the end of September released late Wednesday will not include any directed funding for building a new rail tunnel under the Hudson River connecting New York City and New Jersey.
A congressional committee in 2017 directed at least $900 million for what is known as 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.
Democratic aides said Wednesday there will be as much as $541 million in federal money available to Gateway under the deal. The deal adds $2.9 billion in discretionary U.S. Transportation Department grants that the project could qualify for.
"On the Gateway tunnel, there is no earmark for the project in the bill. Funding for the project will be at the discretion of the Trump administration," Doug Andres, a spokesman for House of Representatives Speaker Paul Ryan, said
Transportation Secretary Elaine Chao and other Republicans said in recent weeks that President Donald Trump threatened to veto a budget bill if it included funding for the $30 billion Gateway project.
Proponents have said the prior language guaranteed $900 million for the project and that a significant portion of Amtraks Northeast Corridor Account's $328 million funding could be used for Gateway.
The deal now will give $650 million to Amtraks Northeast Corridor Account, but the Federal Railroad Administration must sign off on any projects. 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.
Trumps opposition to the project angered Democrats and some Republicans. Lines in the current tunnel, which was heavily damaged during 2012s Superstorm Sandy and connects New Jersey to New York City's Penn Station, could fail within a decade, hobbling commuting in the metropolitan area that produces 10 percent of U.S. economic output.
Carlo Scissura, who heads the New York Building Congress, said the "lack of direct funding for the Gateway Program, the most critical infrastructure project in America, is extremely troubling. Gateway is essential to the economic health of our region and our country, and it must be a national priority."
John Porcari, interim executive director of the Gateway Development Corp, said, "Between this available funding for Gateway and strong commitments from our two states, we look forward to advancing Gateway construction as quickly as possible."
Chao has repeatedly said New York and New Jersey must provide direct funding for the project.
The Gateway project focuses on a 10-mile segment of the Northeast Corridor, which carries over 200,000 Amtrak and New Jersey Transit passengers a day. (Reporting by David Shepardson; Editing by David Gregorioand Leslie Adler)