NEWARK, N.J. - The adage says that one must spend money to make money, but NJ Transit is hoping to spend money to save money - specifically, the $271 million the federal government has demanded as repayment for a canceled New Jersey-New York rail tunnel.

NJ Transit's executive board Thursday approved selection of a Washington law firm that would charge $485 an hour to challenge the Federal Transit Administration (FTA) on the tab.

The measure passed unanimously, minus the vote of state Transportation Commissioner James Simpson, who recused himself because he is a former head of the FTA.

NJ Transit executive director James Weinstein defended the selection of Patton Boggs L.L.P., a firm with experience in large-scale construction projects and government contracts. In addition to the attorneys' rates, clerks and assistants at the firm will be paid $125 an hour and paralegals $90 an hour, according to Weinstein.

"We're fighting to keep $271 million. Whatever we pay the law firm is far less than what the federal government is asking us to pay them," he said.

On Oct. 27, Gov. Christie halted plans to build another rail tunnel under the Hudson River into Manhattan - the nation's most expensive public-works project - because of potential cost overruns he said could total $5 billion or more.

The federal government and the Port Authority of New York and New Jersey each had committed $3 billion to the $8.7 billion project. New Jersey's portion was $2.7 billion, and the state and Port Authority were responsible for overruns.

The second tunnel was projected to double train capacity between New Jersey and New York. When Christie pulled the plug, more than $600 million had been spent for engineering, construction, and environmental studies.

The FTA sent New Jersey a bill on Nov. 24 for its $271 million share, payable within 30 days.

"We feel that the position the government is taking is not nearly as clear as they would like to think it is," Weinstein said. "We feel very strongly about this and are going to pursue it."

Weinstein did not say what projects would be affected if the state were forced to pay the entire $271 million, but he noted that the amount represented a significant chunk of the agency's $3 billion budget.

Earlier this year, NJ Transit trimmed executive salaries, cut service, and raised fares up to 25 percent to address a $300 million budget shortfall.

Rail travelers could face another hit Jan. 1 if the commuter-tax benefit is not extended. Under the current plan, commuters can take up to $230 per month in pretax deductions; the benefit is scheduled to drop to $120 monthly if Congress does not act.