The two federal grants represent about one-fourth of all the funding for the project to date — money critical to completing the Central Valley portion and finishing environmental reviews for other segments between San Francisco and Los Angeles. If the funds are lost or tied up in a long legal battle, the state would probably have to either make up the money elsewhere or further curtail the project.
…“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, referring to Trump’s emergency declaration to secure funding for his wall on the Mexican border. “The President even tied the two issues together in a tweet this morning. This is clear political retribution by President Trump, and we won’t sit idly by. This is California’s money, and we are going to fight for it.”
…“But let’s be real,” Newsom said in the speech to lawmakers. “The current project, as planned, would cost too much and respectfully take too long. There’s been too little oversight and not enough transparency.… Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A. I wish there were. However, we do have the capacity to complete a high-speed rail link between Merced and Bakersfield.”
In the hours that followed Newsom’s speech, Trump demanded that California return $3.5 billion in federal funds, and headlines proclaimed the Democratic governor was abandoning the ambitious project championed by his predecessors — a story line that Newsom denied and one that his team has scrambled to correct.
…Whether the Trump administration can actually cancel the $929-million grant, which in legal terms is called “de-obligating” the funds, remains unclear. The possibility of ordering a refund of the $2.5-billion grant that is already being spent is even a bigger legal uncertainty.
…The federal action to terminate the grant wades into uncharted legal territory.