The Trump administration has decided to withdraw $4 billion in federal funding from California’s high-speed rail project, citing excessive costs and unmet promises.
What Happened: President Donald Trump announced via his Truth Social account on Wednesday that the U.S. Department of Transportation is retracting the $4 billion in government funding allocated for California’s high-speed rail project. Trump criticized the project as being “severely overpriced, overregulated, and never delivered.”
The Transportation Department also stated that there was no feasible way forward for the high-speed rail project, and it is contemplating the potential withdrawal of additional funding, describing the project as “grossly over budget,” reported Reuters.
The Federal Railroad Administration’s report last month highlighted missed deadlines, budget shortfalls, and questionable ridership projections. It revealed that California had not secured the additional $7 billion required to construct the initial 171-mile segment between Merced and Bakersfield, and no track has been laid for the project.
The California High-Speed Rail System, a two-phase project aimed at linking San Francisco to Los Angeles and Anaheim, has seen its budget balloon from an initial $33 billion to $128 billion. The project has been criticized for not identifying an additional $7 billion needed for an initial segment and for not commencing track laying.
California officials have denounced the move, with Governor Gavin Newsom calling it illegal and vowing to explore all options to fight it.
Why It Matters: The Trump administration’s decision to revoke funding for the high-speed rail project comes amid a series of legal and policy clashes with California.
Earlier in July, the Trump administration sued California over its egg regulations, blaming the state for a nationwide surge in egg prices. This move further intensifies the ongoing tensions between the federal government and the state.
Meanwhile, California has been pushing forward with significant legislative changes, including fast-tracking housing construction to address its housing crisis. The withdrawal of federal funding for the high-speed rail project is likely to have a substantial impact on California’s infrastructure and transportation plans.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
