Trump demands California repay $2.5 billion in bullet train funds

The Trump administration canceled $929 million in funds earmarked for California's high-speed rail project and demanded the state pay back $2.5 billion in funds already spent.

Governor Gavin Newsom vowed to fight for the money, saying it was California's money and the administration's move was politically motivated because the state is suing Trump over his emergency declaration.

I think the American taxpayer would disagree with the governor about whose money he was spending.


"California, the state that has wasted billions of dollars on their out of control Fast Train, with no hope of completion, seems in charge!" the president tweeted.

The train project has faced repeated cost overruns and delays since California voters approved it in 2008.  The Trump administration argued Tuesday that the state hasn't provided required matching dollars and can't complete certain construction work by a 2022 deadline.

Newsom declared in his first State of the State address last week that he planned to scale back the project and focus immediately on building 171 miles (275 kilometers) of track in central California.  His office said he still plans to complete the full line, although he said the current plan would cost too much and take too long.

He's pledged to continue environmental work on the full line, which is required to keep the federal money.

But the U.S. Department of Transportation said Newsom's comments last week reinforced the administration's concerns about the project.

"Governor Newsom presented a new proposal that represents a significant retreat from the State's initial vision and commitment and frustrates the purpose for which Federal funding was awarded," read the letter outlining the case for cancelling the money.

The Transportation Department is exploring ways to reclaim the money and vows to use every legal means to get it back.

The grant agreement between California and the federal government, signed in 2010, outlines several scenarios in which the federal government could take the money back.  It can take the money back, for example, if the grantee fails to make "adequate progress" or "fails to complete the project or one of its tasks" or if the state doesn't meet its matching fund requirements.

If the federal government decides to take the money back, it doesn't have to wait for California to write a check.  The agreement states the federal government could offset the money it would pay California for different transportation or other projects.

So Newsom is bluffing.  Any reasonable interpretation of the state's "adequate progress" on the project would force the state to pay back the cash.  By California's own reports from the High Speed Rail Authority, the project is hopelessly behind, is massively over budget, and will never carry enough passengers to make the line economically feasible.  It's the most magnificent white elephant ever created, and it's high time to put the project — and the state — out of its misery.

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