The U.S. Department of Transportation announced Tuesday that it was pulling nearly $1 billion in federal funding from California’s high-speed rail project, following through with a threat from President Donald Trump to defund the project. In a press release, the department also said it was “actively exploring every legal option” to get back $2.5 billion already spent on the “now-defunct project.” Last week, California Gov. Gavin Newsom said in his “state of the state” address that his administration would focus on building out the train line between Bakersfield and Merced, leaving a long-promised connection between Los Angeles and San Francisco for later. “Right now there simply isn’t a path to get from Sacramento to San Diego—let alone from San Francisco to LA,” the governor said. The speech led many to conclude Newsom was scrapping the project entirely—including Trump, who tweeted last week that the state “has been forced to cancel the massive bullet train project.” In the same tweet, Trump argued that the state should give back all federal money committed to the project. “We want that money back now,” he wrote. Newsom later clarified his position on the train. A spokesperson for the governor told Curbed that the state of the state address was aimed at “refocusing and reprioritizing” the project “to get a finished section from Bakersfield to Merced.” In a letter to the California High Speed Rail Authority, federal railroad administrator Ronald Batory argues that the state has “failed to make reasonable progress” on the project and has not met benchmarks key to completing the train on time. Batory also highlights Newsom’s speech, calling his plan for the project “a significant retreat from the state’s initial vision.” In a statement yesterday, High-Speed Rail Authority CEO Brian Kelly called the transportation department’s decision “ll-advised and misguided.” Kelly said that environmental review for the project’s San Francisco to Los Angeles route would continue and that the agency’s “commitment to delivering the requirements of the grant agreements remains.” According to Batory’s letter, California will have until March 5 to challenge the decision. Kelly says the rail authority is preparing a “formal response” to federal transportation officials. A representative for Newsom did not immediately respond to a request for comment.<doc-sep>The Department of Transportation (DOT) said late Tuesday it plans to cancel $929 million in federal grants for a high-speed rail project in California after Gov. Gavin Newsom (D) said the state would scale back the effort. The DOT in a letter to the California High-Speed Rail Authority said the project has not progressed as originally laid out in its agreement with the government. The DOT additionally announced it would seek to recoup $2.5 billion in funds already allocated from the "now-defunct" rail project, CNN reported. ADVERTISEMENT President Trump Donald TrumpTrump lashes out after grand jury seated for New York criminal probe Schumer tees up vote on Jan. 6 commission bill Senators struggle to save Jan. 6 commission MORE in recent days has lashed out at California over the project, invoking its funds in his push for money to construct a wall along the southern border. In a tweet early Wednesday, he called on the state to return billions of "wasted" dollars. California now wants to scale back their already failed “fast train” project by substantially shortening the distance so that it no longer goes from L.A. to San Francisco. A different deal and record cost overruns. Send the Federal Government back the Billions of Dollars WASTED! — Donald J. Trump (@realDonaldTrump) February 20, 2019 Voters in 2008 approved plans for a high-speed rail that would have linked Los Angeles and San Francisco, with the project scheduled to be finished in 2022. Newsom during his State of the State address earlier this month said the existing plan was too expensive and urged legislators to scale back the project to connect parts of the state's Central Valley. ADVERTISEMENT He pushed back after Trump initially told the state it owed the government billions, tweeting, "This is CA’s money, allocated by Congress for this project. We’re not giving it back. "The train is leaving the station — better get on board!" Newsom tweeted. Updated at 9:19 a.m.<doc-sep>WASHINGTON—The Trump administration said Tuesday it would cancel almost $1 billion in funding for the California high-speed rail network, casting doubt on whether the state will be able to complete even the first phase of the troubled project. In a letter to state officials, Federal Railroad Administrator Ronald Batory said the administration is planning to revoke its grant agreement with the California High-Speed Rail Authority, and halt $928.6 million in future grant payments it was expected to make to fund the project through 2022. The FRA is also considering a legal effort to recover $2.5 billion in federal funds already spent on the project, which was originally set to link Los Angeles and San Francisco. California Gov. Gavin Newsom said last week that the state would focus on completing the first phase of the project, connecting the cities of Bakersfield and Merced, and revisit plans to extend the network south to Los Angeles and north to San Francisco. “And by the way, I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump, ” Mr. Newsom, a Democrat, said in his State of the State speech. Those remarks were widely interpreted as an admission the system wouldn’t be completed as designed, though Mr. Newsom has said his remarks were misinterpreted. Mr. Newsom’s plan “represents a significant retreat from the State’s initial vision and commitment and frustrates the purpose for which Federal funding was awarded (i.e., an initial investment in the larger high-speed rail system),” Mr. Batory wrote. The letter from Mr. Batory came hours after Mr. Trump weighed in via Twitter. “The failed Fast Train project in California, where the cost overruns are becoming world record setting, is hundreds of times more expensive than the desperately needed Wall!” Mr. Trump tweeted on Tuesday morning, referring to his proposal to erect a wall on the southern border of the U.S. Mr. Newsom accused the president of taking revenge for the decision by California and other states to challenge Mr. Trump’s declaration of an emergency to build a border wall. “It’s no coincidence that the Administration’s threat comes 24 hours after California led 16 states in challenging the President’s farcical ‘national emergency,’” the governor said in a statement. “This is clear political retribution by President Trump, and we won’t sit idly by. This is California’s money, and we are going to fight for it.” California Gov. Gavin Newsom at his State of the State address last week, in which he said the scope of the rail project would be scaled back. Photo: Rich Pedroncelli/Associated Press A former Transportation Department official questioned whether the FRA could snuff out the project so easily. “As much as the Trump administration would like to think they can simply decide to kill a major infrastructure project that has already created thousands of multiyear jobs, it doesn’t work like that,” said the official, who worked in the Obama administration. “It’s actually not as easy as sending a tweet, or even a letter. My money is on this project going forward.” In laying out the case for revoking the contract, Mr. Batory said that California had not made financial contributions to advance the project on a previously agreed-upon schedule. He cited a state expenditure of $47.9 million on final design and construction in December. That was nearly $100 million less than the state had committed to, he said. The FRA set a deadline of March 5 for the rail authority to contest its findings. The funding clash is another black eye for a project that was once billed as America’s pre-eminent investment in high-speed passenger rail, a successful transportation mode in countries around the world that has lagged behind in the U.S. California voters approved a $10 billion bond to fund the system in 2008, and the federal government agreed to $3.5 billion in grants. But the cost estimate ballooned for the full network, which at one point was slated to extend from San Francisco to Los Angeles, with future extensions planned to Sacramento and San Diego. The project cost was most recently estimated at $77 billion. —Alejandro Lazo contributed to this article. Write to Ted Mann at ted.mann@wsj.com<doc-sep>
President Trump Donald TrumpTrump lashes out after grand jury seated for New York criminal probe Schumer tees up vote on Jan. 6 commission bill Senators struggle to save Jan. 6 commission MORE on Wednesday blasted California's revised plans for a high-speed rail line, renewing his calls for the state to return billions in federal money for the project. "California now wants to scale back their already failed 'fast train' project by substantially shortening the distance so that it no longer goes from L.A. to San Francisco," Trump tweeted. "A different deal and record cost overruns. Send the Federal Government back the Billions of Dollars WASTED!" California now wants to scale back their already failed “fast train” project by substantially shortening the distance so that it no longer goes from L.A. to San Francisco. A different deal and record cost overruns. Send the Federal Government back the Billions of Dollars WASTED! — Donald J. Trump (@realDonaldTrump) February 20, 2019 The president's criticism of the infrastructure project comes a day after the Department of Transportation (DOT) sent a letter to the California High-Speed Rail Authority telling the agency it plans to cancel $929 million in federal grants for the rail effort. ADVERTISEMENT The DOT said the project has not progressed as originally laid out in its agreement with the federal government, and also announced that it would seek to recoup $2.5 billion in funds already allocated from the "now-defunct" rail project, CNN reported. The Trump administration's push to reclaim the government funds came after California Gov. Gavin Newsom (D) said the state would scale back plans for a high-speed rail line. Voters in 2008 approved plans for a high-speed rail that would have linked Los Angeles and San Francisco, with the project scheduled to be finished in 2022. Newsom, citing the costs associated with the project, urged legislators during his State of the State address earlier this month to scale back the project to connect parts of the state's Central Valley. Newsom has defended the state's plans against the latest round of criticism, and has accused the president of seeking "retribution" for California's role in a lawsuit against Trump's national emergency declaration to secure funding for a border wall. The governor noted that Trump cited the rail project in a pair of tweets on Monday morning complaining about the lawsuit. "This is clear political retribution by President Trump, and we won’t sit idly by," Newsom said in a statement. "This is California’s money, and we are going to fight for it." The rail funding dispute marks the latest standoff between Trump and California. The president has threatened in recent months to cut off disaster aid funding for the state if it did not change its forest fire prevention efforts.