Trump Takes Back $1 Billion from California over Bullet Train Fiasco
Move follows refusal from Gov. Gavin Newsom to return funds to federal government
The Trump Administration is terminating a federal agreement and taking back $1 billion in funding from California following the failure of the state's high-speed rail project, according to reports.
The move follows a refusal from Governor Gavin Newsom - a Democrat whose ex-wife Kimberly Guilfoyle is now dating Donald Trump Jr. - to return the funds to the federal government - at President Trump's request - following the rail project's failure.
The dispute will likely set up yet another legal fight between California and the White House.
The Federal Railroad Administration said a statement released Thursday that California has "repeatedly failed to comply" with the agreement and "failed to make reasonable progress on the project."
It adds that the Californian officials have "abandoned its original vision of a high-speed passenger rail service connecting San Francisco and Los Angeles, which was essential to its applications for FRA grant funding."
The FRA also said it was still exploring "all options" to retrieve the remaining $2.5 billion in federal funds it had already awarded for the project from the state.
In a statement Thursday, Gov. Newsom called the termination "political retribution," claiming the move is illegal and "a direct assault on California."
In total, Trump's Department of Transportation took back a whopping $928.6 million in previously agreed-upon federal funding for the doomed high-speed rail project.
According to a report by The Wall Street Journal, the Trump administration made good on its threat to cancel nearly $1 billion in funding for California’s troubled high-speed rail project after Gov. Gavin Newsom said he would scale back its scope.
In a letter Thursday to the head of the California High-Speed Rail Authority, Federal Railroad Administrator Ronald Batory confirmed the move the administration had floated in February, officially terminating the Transportation Department’s agreement to provide an additional $928.6 million to help pay for the project. ...
The withdrawal of the federal dollars calls into question whether California will be able to finish even a shortened high-speed rail line using just its own money.
The high-speed rail authority sent a letter in March to the Transportation Department asking it not to follow through on its threat to revoke funding, according to Mr. Batory.
According to the Daily Wire, Newsom has already lambasted the Trump administration's rescission of previously agreed-upon funding as both politically motivated and, indeed, illegal.
"This is California’s money, appropriated by Congress, and we will vigorously defend it in court," Newsom said.
"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," he continued.
As the Journal also notes, the Trump administration had already previously funded the California high-speed rail project to the tune of $2.5 billion.
The California high-speed rail project has been troubled since its inception.
As CNBC observes, the Transportation Department noted as much in its press release today explaining the pulling of funding:
In a release, the FRA — part of the U.S. Department of Transportation — said California’s rail authority "repeatedly failed to comply with the terms of the FY10 agreement and has failed to make reasonable progress on the project. Additionally, California has abandoned its original vision of a high-speed passenger rail service connecting San Francisco and Los Angeles, which was essential to its applications for FRA grant funding."
The Transportation Department appears to be correct that California has abandoned its original San Francisco-to-Los Angeles route.
Instead, as the Journal previously reported in February, Newsom said in his State of the State annual address that "he instead would focus on completing a first stage, already underway, that would run between the agricultural cities of Bakersfield and Merced."
That first leg of the project runs roughly 119 miles.
The original authorization for California's high-speed rail project was 2008's Proposition 1A ballot initiative, which authorized nearly $10 billion in bonds for the construction of a high-speed rail system.
Newsom was recently elected to be California governor and began in January.
He previously served as California lieutenant governor and as San Francisco mayor.