Trump administration to cancel $929 million in California high-speed rail funding

Gavin Newsom, a Democrat (shown above), declared during his State of the State address last week that he was shelving plans for the $77 billion rail project that had been championed by environmental groups, admitting that "as now planned, [it] would cost too much and take too long". Mr Newsom is fighting the president over emergency funding for the border wall, so the Trump administration is going after the state's rail funding.

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.

Democratic Governor Gavin Newsom called it "political retribution" for the California-led lawsuit against Mr Trump's national emergency declaration.

The administration's move comes amid escalating tensions between it and Democratic leaders of the most populous USA state.

Still, the U.S. Department of Transportation said Newsom's remarks reinforced concerns about the project's ability to deliver. "We're not giving it back", he tweeted last week in response to Trump's threats.

The agreement does not require the California High-Speed Rail Authority to build trains for the track.

The Obama administration awarded the state a total of $3.5 billion in 2010 and California voters in 2008 approved almost $10 billion in bond proceeds.

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Republican lawmakers in the Golden State responded to Newsom's pullout from the project last week by calling for a referendum vote on Newsom's plan to build a much shorter, 171-mile railway through the state's Central Valley.

The FRA is also considering a legal effort to recover $2.5 billion in federal funds already spent on the project, which was originally set to link Los Angeles and San Francisco. This is CA's money, allocated by Congress for this project.

The Federal Railroad Administration, in a letter to the California High-Speed Rail Authority, said it intends to terminate the grant effective March 5, saying state officials had failed to comply with the terms of the funding.

"Unfortunately, President Trump is playing politics with California's jobs, infrastructure, and economy", he said in an emailed statement.

"Abandoning high speed rail entirely means we will have wasted billions of dollars with nothing but broken promises and lawsuits to show for it", Newsom said. Jerry Brown, after costs doubled from initial projections, private investment failed to materialized and public support for the project deteriorated.

But in this case, Bauer said, "the governor unwittingly gave the federal government a reason to back away from the project". The Trump administration argues that California hasn't provided required matching dollars and can't complete work by a 2022 deadline. Newsom said preliminary work on the entire system would continue and that he would seek more federal and private funding. Instead it could withhold money from other transportation projects.

(Copyright © 2015. All Rights Reserved.)
 
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