Federal regulators pull $929M for California high-speed rail

By Nicholas Sakelaris

May 17 (UPI) -- The Trump administration has made good on its threat to pull nearly $1 billion in federal funding for a high-speed rail project in California, because it hasn't made significant progress.

The Federal Railroad Administration said Thursday it's terminated the agreement worth $929 million, which was reached under former President Barack Obama in 2010. Federal officials said California has "repeatedly failed" to comply with the terms of the agreement, and hadn't made "reasonable progress."


California Gov. Gavin Newsom said the decision amounts to illegal "political retribution" and is "a direct assault on California."

"This is California's money, appropriated by Congress, and we will vigorously defend it in court," Newsom said, promising a legal battle over the issue.

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An FRA letter accused the state of failing to forecast its construction schedule, report key milestones or show it can meet deadlines to get the train online by 2022. It cited repeated "deficiencies and errors."

The FRA is also considering ways to recapture $2.5 billion in grant money California has already spent for the project, U.S. Transportation Secretary Elaine Chao said.


State Building and Construction Trades Council President Robbie Hunter said the FRA's actions were a blow to working-class families and State Sen. Jim Beall said it's an "irrational decision" -- but Rep. Kevin McCarthy, former House majority leader and one of President Donald Trump's most vocal supporters in Washington, praised the move by saying it "ensures that we move on from the failed boondoggle."

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The project first drew the ire of the Trump administration when Newsom mentioned plans to scale back the $79 billion mega-project during his State of the State address in February.

"Right now, there simply isn't a path to get from Sacramento to San Diego, let alone from San Francisco to L.A.," he said.

Newsom has since focused the state's attention on getting the high-speed train running in the Central Valley. California officials said no construction changes are planned and the Central Valley plan is doable even without the federal money -- as long as revenue from cap-and-trade auctions perform well.

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