Christie, a rising star in the GOP with a reputation as a fearless protector of the taxpayers' money, announced on Thursday that he was pulling the plug on the project because of runaway costs - a decision that led to an outcry from Democrats who said it would cost the state thousands of badly needed construction jobs and cripple New Jersey's long-term economy.
But after meeting for nearly an hour Friday with U.S. Transportation Secretary Ray LaHood, the governor agreed to listen to ideas for pressing ahead with the project, known as ARC, for Access to the Region's Core. It is the biggest public transit project under way in the nation.
"The fact that the ARC project is not financially viable and is expected to dramatically exceed its current budget remains unchanged," Christie said in a statement. He added, though, that LaHood "presented several options to potentially salvage a trans-Hudson tunnel project."
LaHood said a working group from the Transportation Department and NJ Transit - the commuter railroad that is overseeing the project - will review the options and report back to Christie within two weeks.
Neither Christie nor LaHood would disclose any of the ideas under discussion.
Sen. Frank Lautenberg, D-N.J., who led the effort to secure federal funding for the project, welcomed the reprieve.
"Good judgment finally prevailed," he said. "I think the governor realized he made a mistake by declaring the ballgame over."
The tunnel, which has been in the works for about 20 years, would run underneath the Hudson River, connecting New Jersey with Manhattan. Currently, NJ Transit and Amtrak share a century-old two-track tunnel that is operating at close to capacity.
The new tunnel would more than double the number of NJ Transit trains that could pass under the river, reducing congestion and delays. Officials also said it would create 6,000 construction jobs and add at least 40,000 new jobs after it is completed in 2018.
The federal government and Port Authority of New York and New Jersey had each pledged $3 billion to the project. New Jersey had committed $2.7 billion. Construction began last year under Democratic Gov. Jon Corzine, the man Christie defeated, and more than a half-billion dollars has been spent so far.
But over the years, the cost projections have nearly doubled. It started at $5 billion in 2005, and federal officials put the price tag in recent months at $9 billion to $10 billion. Christie this week estimated the cost at $11 billion to $14 billion, and warned: "I simply cannot put the taxpayers of the state of New Jersey on what would be a never-ending hook."
Christie's spokeswoman, Maria Comella, said the winding-down of the project will continue while its fate is decided in the coming weeks.
Christie has become nationally known for his budget slashing and blunt talk. He cut state aid to school districts by $820 million for the current academic year and has clashed with the state teachers union over his demand that they accept wage freezes and start paying some of their health insurance costs.
Brigid Harrison, a political science professor at Montclair State University, said Christie's decision to kill the tunnel is going to be unpopular. She said the governor "is absolutely right that projects like this have notorious cost overruns," but added those concerns can probably be addressed without killing the project.
"We now have the governor in the state of New Jersey who's the newly christened darling of the conservative wing of the Republican Party killing the largest publicly financed construction project in the country," she said. "That burnishes his conservative credentials. There's a risk that this will be viewed as short-term pandering with great cost."
Associated Press Writers David Porter in Newark, Wayne Parry in Atlantic City and Bruce Shipowski and Beth DeFalco in Trenton contributed to this report.