California is halting its plans for a high speed rail after spending billions in federal funds on the project. Now Trump wants the money back but California doesn’t want to pay.
Trump has a plan though, and California probably won’t like it.
Trump to Use ‘Nuclear Option’ to Recover $2.5 Bn More from California’s Failed High-Speed Rail Project
The Trump administration announced this week that it was canceling nearly $1 billion in grant money for California’s now-defunct high-speed rail project — and President Donald Trump is coming for the other $2.5 billion.
The $2.5 billion has already been spent — but California has failed to deliver the high-speed rail (on time, or at all) as promised.
Therefore, the Trump administration argues, the state has to repay federal taxpayers.
The Los Angeles Times quoted Stanford law professor David Freeman Engstrom, a Stanford law professor, describing Trump’s effort as a “nuclear option.”
The practice of recovering money after a breach of contract, while common in the private sector, was virtually unheard of in government, he explained.
“There is a reluctance to penalize misspending by local government agencies. … Almost never do those violations result in terminations, in part because federal agencies are set up to distribute money, not take it back, and they also lack funding for strict grant enforcement,” the Times added.
California’s new Democrat Governor Gavin Newsom is claiming this is political retribution.
The Sacramento Bee reports:
Newsom claims ‘retribution’ after Trump administration demands high-speed rail funds back
The Trump administration, stepping up its fight with California over the state’s struggling high-speed rail project, said Tuesday it plans to rescind a $928 million federal grant.
The action could imperil the first phase of the project, connecting the major cities of the San Joaquin Valley, which is dependent on federal funding.
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. Congress appropriated the money in 2010.
Among other things, the federal agency said Gov. Gavin Newsom’s plans to downsize the project represent “a significant retreat from the state’s initial vision and commitment and frustrates the purpose for which federal funding was awarded.”
Newsom, in a prepared statement, said “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 (seeking funding for a border wall).’ 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.”
How is it California’s money if it came from the federal government. Isn’t that taxpayer money?