Nobody that is serious and not just being vaguely and impractically nostalgic proposes to recreate the old Penn Station.
Substantial parts of the old Penn Station are slated for a rebuild and significant modification. One specific change that is gaining traction is to take over the road that exists between the Penn Plaza building and Madison Square Garden, which since 9/11 remains unused, and replacing that entire space with an open high ceilinged concourse adjacent to what is known as the Rotunda on the Amtrak side. MTA is leading the charge on that with collaboration from both NJT and Amtrak.
https://new.mta.info/system_modernization/penn-station-reconstruction
It will most likely be a typical PPP funded thing. Neither Moynihan nor this proposed project has or will use significant money that could otherwise have been spent on some other transit project, since quite a bit of it is collateralized with earnings from those structures, including leases paid by Amtrak for using the facility.