The Trump administration has officially rescinded $4 billion in federal funding for California's high-speed rail project, dealing a major blow to one of the state's most ambitious infrastructure efforts. The move, announced Wednesday by Transportation Secretary Sean Duffy, follows weeks of warnings and reignites a long-standing feud between former President Donald Trump and California Governor Gavin Newsom.
In a letter to California High-Speed Rail Authority CEO Ian Choudri, Federal Railroad Administration Acting Administrator Drew Feeley wrote that the state had "breached the commitments" in its funding agreements, citing chronic delays, budget shortfalls, and what the administration characterized as an "inability to complete" key project milestones.
"After over a decade of failures, CHSRA's mismanagement and incompetence has proven it cannot build its train to nowhere on time or on budget," Duffy said in a statement. Trump echoed the sentiment on Truth Social, calling the project "Severely Overpriced, Overregulated, and NEVER DELIVERED," and labeling Newsom "incompetent."
Newsom responded swiftly, calling the action illegal and vowing to "explore all options to fight this illegal action." In a post on X, the governor added, "Won't be taking advice from the guy who can't keep planes in the sky."
The California High-Speed Rail System, first approved by voters in 2008 with a $10 billion bond, was initially designed as an 800-mile corridor connecting San Francisco to Los Angeles with eventual extensions to Sacramento and San Diego. The full project was projected to cost $33 billion and be completed by 2020. Updated estimates now put the cost between $89 billion and $128 billion.
The current phase focuses on a 171-mile segment between Merced and Bakersfield in the Central Valley. According to the FRA's 315-page termination report, that section remains short $7 billion in identified funding and has not yet begun laying track.
Despite the setbacks, California officials maintain the project remains viable. "These are legally binding agreements, and the Authority has met every obligation," said Choudri. "This is no time for Washington to walk away on America's transportation future." The authority claims that 171 miles are under active construction or design, with over 50 structures completed and more than 15,500 jobs created.
The federal funding dispute is the latest development in a saga stretching back more than a decade. Trump previously revoked a $929 million grant in 2019, which was restored by the Biden administration in 2021 after California successfully sued. Wednesday's rescission targets an additional $4 billion awarded to the state under Biden-era transportation grants.
Transportation Secretary Duffy suggested the administration may seek to claw back more federal funds. "Newsom and California's high-speed rail boondoggle are the definition of government incompetence and possibly corruption," he wrote on X.
Newsom currently has a proposal before the state legislature to extend $1 billion in annual funding over the next 20 years to complete the Merced-Bakersfield segment. Federal officials, meanwhile, have stated that clawbacks could continue if California fails to meet further construction benchmarks.
