California High Speed Rail

When Governor Newsom made his announcement about high-speed rail in his State of the State speech, he tried to have it both ways: he said “let's be real” about the project's prospects and defended truncating it to a Bakersfield-Merced line, but also insisted it was not a cancellation and he was certainly not sending the funds back to a Republican presidential administration.

Well, the Trump administration may on some level enjoy seeing the demise of high-speed rail, but it will still play the partisan game of demanding its money back anyway. Under the direction of Transportation Secretary Elaine Chao, who is married to Senate Majority Leader Mitch McConnell (R-KY), the FRA is canceling a $929 million grant and exploring ways to sue the state for the remainder of the $2.5 billion in HSR money it got from President Obama’s  stimulus funding in 2009.

Like the U.S. Department of Transportation's temporary freeze of Caltrain electrification funds two years ago, this move is entirely partisan. The language used by FRA head Ronald Batory in his letter to the state makes it clear. The letter gives several reasons for the FRA's decision to pull the funds, but none of them works with the timeline:

  • The California High-Speed Rail Authority, or HSRA, has been tardy in spending some of the funds appropriated—but the most recent example given is from an audit from two months ago, and the others go back to 2017.

  • The HSRA will not complete the project by 2022—but this has been known for many years, and even before the governor's speech, the HSRA was planning to open the initial operating segment between the Central Valley and the Bay Area in the late 2020s.

  • The HSRA has not submitted certain paperwork—but this goes back to 2016. 

The most charitable reading is that Newsom's hit on President Trump prompted Secretary Chao to direct the FRA to look for excuses to scuttle HSR in order to embarrass California Democrats, and once it did, it found many. But that raises the question, why was this not done in 2017? Congressional Republicans looked for any excuse to kill the project then, and convinced DOT to freeze Caltrain electrification funds as a power move against HSR. The late completion date was already known then, and yet the FRA took no action.

Another noticeable omission in the administration's reaction is the lack of overtly political language. There has not been any attempt by Republican politicians to mock California for the failure of HSR, even though Newsom handed them a great excuse to do so. House Minority Leader Kevin McCarthy, a longtime opponent of California HSR; two years ago he was openly calling for a freeze on the project in exchange for releasing the Caltrain electrification money. And yet, McCarthy’s current Twitter feed has anti-abortion, anti-immigrant, and generic political tweets but nothing about HSR. Trump, meanwhile, spat out three tweets about the subject, but that McCarthy is not amplifying the message speaks volumes: this is not about Republican opposition to HSR. This is about Republicans wanting to get back at a Governor who said “we are not returning the money to Trump."

As it is, we have reason to believe that California will keep most and probably all of the money. First, in the standoff two years ago, DOT ultimately did release the Caltrain electrification money, without any guarantee of an audit of HSR, as congressional Republicans from California demanded.

And second, the FRA's language is that it's only revoking a portion of the $3.5 billion grant, and “exploring every legal option” to claim back the entire amount. After DOT's arbitrary hold on the Caltrain electrification funds, and Trump's constitutionally dubious moves regarding immigration, promising to seek legal action sounds like a weak threat. 

Partisanship is key here: in the age of the 24-hour news cycle, both sides will forget the entire spat soon. Newsom will move on to other agenda items, such as the state’s housing crisis, and Trump will forget HSR was a political issue. There just isn't any follow-up from politicians who genuinely care about California HSR and want it canceled, such as McCarthy, and Trump himself does exactly not have the longest attention span in the political world. It's not likely that the FRA will seriously go after the $2.5 billion it threatened to sue the state for, and there's a very good chance it will restore the $929 million grant that it threatened to pull.

The feds are bluffing, but like most GOP bluffs, nobody tried bluffing very hard in the first place. This lack of commitment mirrors many Democrats’ lack of commitment to their own infrastructure projects. 

California will build HSR between Bakersfield and Merced; Newsom promised as much in his speech. Whatever the FRA tries to do to give Trump the upper hand won't matter—if there is any effect, it will be small. There will still not be any follow-up, since Newsom made it equally clear that constructing fast tracks outside the Central Valley, across the mountains to either the Los Angeles Basin or the Bay Area, was not a priority. The administration's announcement, like nearly everything else Trump does, is a distraction, rather than any indication of a serious change in facts on the ground.

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