Trump administration pulls $4 billion in federal funding for California's bullet train project

The Hindu

17-07-2025

The U.S. government has revoked federal funding for California's high-speed rail project, intensifying uncertainty about how the State will make good on its long-delayed promise of building a bullet train to shuttle riders between San Francisco and Los Angeles.
The U.S. Transportation Department announced it was pulling back $4 billion in funding for the project, weeks after signalling it would do so. Overall, a little less than a quarter of the project's funding has come from the federal government. The rest has come from the State, mainly through a voter-approved bond and money from its cap-and-trade programme.
President Donald Trump and Transportation Secretary Sean Duffy both have slammed the project as a "train to nowhere".
"The Railroad we were promised still does not exist, and never will," Mr. Trump wrote on Truth Social. "This project was Severely Overpriced, Overregulated, and NEVER DELIVERED."
Latest blow to California
The loss marks the latest blow to California by the Trump administration, which has blocked a first-in-the-nation rule to phase out the sale of new gas-powered cars, launched investigations into university admission policies and threatened to pull funding over transgender girls being allowed to compete in girls sports.
It also comes as rail project leaders are seeking private investment to help pay for its estimated price tag of more than $100 billion.
Voters first approved the project in 2008 and it was supposed to be operating this decade. But cost estimates have consistently grown and its timeline pushed back.
State officials are now focused on building a 119-mile (192-kilometre) stretch connecting the Central Valley cities of Bakersfield and Merced that is set to be operating by 2033. The California High Speed Rail Authority is slated to release a report this summer to state lawmakers with an updated funding plan and timeline for the project.
Authority officials wrote in a letter earlier this month that the Trump administration made up its mind about revoking funding before thoroughly reviewing the project. They noted that more than 50 structures have already been built, including underpasses, viaducts and bridges to separate the rail line from roadways for safety.
'Illegal'
"Cancelling these grants without cause isn't just wrong — it's illegal," authority CEO Ian Choudri said in a statement Wednesday. "These are legally binding agreements, and the Authority has met every obligation, as confirmed by repeated federal reviews, as recently as February 2025."
The authority has asked potential private investors to express their interest by the end of the month.
Democratic Governor Gavin Newsom said the State will keep "all options on the table" to fight the revocation of federal funds.
"Trump wants to hand China the future and abandon the Central Valley. We won't let him," he said in a statement.
The State has "no viable plan" to complete even the Central Valley segment, said Drew Feeley, acting administrator of the transportation department's Federal Railroad Administration, in a report released last month. He called the project a "story of broken promises" and a waste of taxpayer dollars.
California Democrats also have criticised project spending. Democratic Assemblymember Rebecca Bauer-Kahan said at a budget hearing earlier this year that her constituents "overwhelmingly believe" high-speed rail spending "has been irresponsible".
Mr. Newsom plans to extend the State's cap-and-trade program, a key funding source for the project which is set to expire at the end of 2030, through 2045.
The program sets a declining limit on the total amount of greenhouse gas emissions large emitters can release. Those polluters can buy allowances from the state needed to pollute, and about 45 per cent of that money goes into what's known as the Greenhouse Gas Reduction Fund, according to the Independent Emissions Market Advisory Committee, a group of experts that reviews the program.
The fund helps pay for climate and transportation projects, including high-speed rail.
The bullet train project receives 25% of the money from the fund, which ends up being a little less or a little more than $1 billion annually, depending on the year. Newsom in May proposed guaranteeing $1 billion a year for the project from the fund, but lawmakers have not agreed to that.