Trump Administration Rescinds Nearly $1 Billion In Funds For California High-Speed Rail

Gov. Gavin Newsom called the action “illegal” and accused the Trump administration of exacting “political retribution.”

The Trump administration says it has terminated an agreement with California that would have directed nearly $1 billion toward the state’s high-speed rail project.

The U.S. Transportation Department said Thursday in a statement that it would “deobligate” $928,620,000 in funds for the project, saying the California High-Speed Rail Authority “repeatedly failed to comply” with the agreement and “has failed to make reasonable progress.” The department announced its intention to end the agreement with California in February.

In a statement on Thursday, California Gov. Gavin Newsom (D) accused the Trump administration of exacting “political retribution.”

“The Trump Administration’s action is illegal and a direct assault on California, our green infrastructure, and the thousands of Central Valley workers who are building this project,” Newsom said.

He added: “This is California’s money, appropriated by Congress, and we will vigorously defend it in court.”

Newsom’s mention of “political retribution” may have been a reference to California’s role in lawsuits challenging the president’s declaration of a national emergency in order to fund his wall at the U.S.-Mexico border.

“It’s no coincidence that the Administration’s threat comes 24 hours after California led 16 states in challenging the President’s farcical ‘national emergency,’” Newsom said after the department announced its intention to rescind the funds in February.

Sen. Dianne Feinstein (D-Calif.) on Thursday called the department’s decision “deeply concerning” and echoed Newsom’s warning that California would fight it in court.

“These are funds that Congress appropriated and the president obligated,” she said in a statement. “They cannot be legally withdrawn.”

Art Pulaski, chief officer of the California Labor Federation, warned that the department’s move could “kill thousands of good, family-supporting jobs our state desperately needs.”

The department, however, cited changes in the projected route for the project and claimed California had “abandoned its original vision.”

In his Feb. 12 State of the State address, Newsom reiterated what he said during his gubernatorial campaign last year: that he planned to refocus the high-speed rail project to link Merced and Bakersfield, a Central California route that by car can take up to three hours. The high-speed rail was initially expected to take passengers from San Francisco to Los Angeles, but the project has been repeatedly delayed after costs doubled from initial projections, private investment failed to materialize and public support for the project deteriorated.

The project is now estimated at $77.3 billion, and the state has already spent about $2.5 billion in federal funds from a stimulus package enacted by Congress and signed by President Barack Obama in 2009.

The department said Thursday it is exploring “all options” to get that $2.5 billion returned. It’s not clear whether the department will have legal recourse to do so.

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