White House Wants California to Return $2.5 Billion High-Speed Rail Funding

February 20, 2019, 10:56 AM UTC

The U.S. Department of Transportation (DOT) is canceling a $929 million grant to the California High-Speed Rail project and “actively exploring every legal option” for the return of $2.5 billion it has already contributed, it said Tuesday.

California governor Gavin Newsom tied the move to the state’s legal battle with the federal government over President Trump’s declaration of a national emergency on the Mexican 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 in a statement.

Last week Newsom revealed that California would reduce the scope of the rail project, first envisioned as a link between coastal Los Angeles and San Francisco, to a shorter stretch between Bakersfield and Merced in the agricultural Central Valley. He called the larger version of the project too expensive, slow, and opaque. One recent official estimate put costs at $77 billion, with other estimates predicting growth to $100 billion.

That led Trump to demand the return of all federal money appropriated for the project. “We want that money back now,” he tweeted. “Whole project is a ‘green’ disaster!”

The DOT compounded this sentiment in a letter Tuesday, stating that California “materially failed to comply with the terms of the agreement and has failed to make reasonable progress on the project.”

In response, a California state Senate staffer involved in the project told the Los Angeles Times that delays and changes to infrastructure projects are common. “Just look at any highway project,” said the staffer. “They are never done on schedule or on budget. They are often not done within the original scope.”

Federal clawbacks of so-called obligated, or committed, funds are also pretty much unprecedented, he added.