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.
Last week, newly-inaugurated California
Governor Gavin Newsom announced in his “State of the State” address that the “bullet
train” would no longer be built between Los Angeles and San Francisco because
it “would cost too much and, respectfully, would take too long.”
Newsom said the state would still build
a portion of the high-speed rail project in the Central Valley in an effort to
hold onto the federal funds that President Barack Obama’s administration had
allocated to the project: “I am not interested in sending $3.5 billion in
federal funding that was allocated to this project back to Donald Trump, Newsom
told legislators in the State Capitol in Sacramento.
But President Trump objected, demanding on Twitter: “California has been forced to cancel the
massive bullet train project after having spent and wasted many billions of
dollars. They owe the Federal Government three and a half billion dollars. We
want that money back now. Whole project is a “green” disaster!” Newsom responded:
“This is CA’s money, allocated by Congress for this project. We’re not giving
it back.” He also taunted the president, accusing him of “desperately searching
for some wall $$,” referring to Trump’s barrier on the U.S.-Mexico border.
That did not impress the president. On
Tuesday, the Federal Railroad Administration of the U.S. Department of
Transportation wrote to
California’s High-Speed Rail Authority, informing it that it had breached the
terms of its contract with the federal government and that $928,620,000 would
therefore no longer be available to the project.
Newsom objected, again: “This is California’s
money.” He also claimed Trump was taking revenge for California’s leading role
in filing a federal lawsuit against Trump’s national emergency declaration to
build the “wall.”
But that may not matter.
The state had grown accustomed to
leniency: the Obama administration modified the terms of the deal between the
federal government and the state several times, because it was ideologically
committed to high-speed rail.
For example, in “the final hours of the
Obama administration” in January 2017, the Los Angeles Times reported at the time, Obama extended the
deadline for the high-speed rail project from 2018 to 2022, so that California
might still access the nearly $1 billion in transportation funds that the Trump
administration is now “de-obligating.”
Trump is somewhat indifferent to
high-speed rail: he favors infrastructure spending, but wants to see the
projects built.
And as a world-famous developer, he
knows the rules of the game: deliver the project, or pay up. Legally California
may have no choice.
Norb Leahy, Dunwoody
GA Tea Party Leader
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