Annie Karni and Jennifer Medina

<h1>WASHINGTON — A day after California filed a lawsuit challenging President Donald Trump’s emergency declaration on the border, the Transportation Department said it was exploring legal options to claw back $2.5 billion in federal funds it had already spent on the state’s high-speed rail network.</h1>

The Trump administration also said it was terminating a $929 million federal grant to the California High-Speed Rail Authority, according to a letter the Transportation Department sent Tuesday.

The $77 billion Los Angeles-to-San Francisco bullet train, which has been a goal of California transportation planners for decades, has long faced opposition from Trump and other Republicans. But on Tuesday morning, the president explicitly tied the rail line to efforts to stymie construction of the Mexican border wall.

“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!” Trump wrote on Twitter.

Gov. Gavin Newsom of California, who announced last week that he was scaling back the project, said the Transportation Department’s move was retaliation for the border wall lawsuit, filed Monday with 15 other states.

“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,'” Newsom 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.”

The battle over money is just the latest clash between California and the Trump administration, which have fought over immigration, environmental and criminal justice issues. Xavier Becerra, the California attorney general, has been a vociferous critic of the administration and has filed 46 lawsuits against it so far.

On Tuesday, Trump disparaged the way California had spent the rail money and the state’s role in the national emergency lawsuit. California “has wasted billions of dollars on their out of control Fast Train, with no hope of completion, seems in charge!” the president tweeted.

A White House spokesman declined to comment, referring questions to the Transportation Department. A spokesman for the agency said the reason for canceling the grant was clearly laid out in a letter from Ronald Batory, the administrator of the Federal Railroad Administration.

Batory wrote that the federal funds were being pulled because the California High-Speed Rail Authority had “failed to make reasonable progress on the project.”

The Transportation Department said in a separate statement Tuesday that it was “actively exploring every legal option” to seek the return of the $2.5 billion. That threat, however, was not mentioned in Batory’s letter.

Late Tuesday, a Trump administration official pointed to Newsom’s remarks last week as an indication that the project was too costly and would “never be constructed as planned.”

Given that acknowledgment, the official said, the administration had a responsibility to taxpayers to “cancel the financial support for this boondoggle.”

The lawsuit over the emergency declaration, filed in U.S. District Court in San Francisco, argues that Congress controls spending and that the president does not have the power to divert funds for the construction of a wall.

Speaking to reporters Tuesday in the Oval Office, Trump said that he had been expecting the court challenge but was not fazed. “We’re going to be very successful with the lawsuit,” he said, adding, “It’s an open and closed case.”

The court challenge raises thorny legal issues over the scope of emergency powers granted to a president. Trump’s declaration is the first time a president has invoked emergency power statutes to circumvent Congress after it rejected funding for a specific policy being pushed by the White House.

It is also unclear whether the federal government has the legal authority to withhold the grant from California, and state officials are likely to challenge the move in court.

Dan Richard, who stepped down Tuesday as chairman of the board of the high-speed rail project, noted that the letter from the Trump administration said the federal government “intends to” terminate the agreement, rather than saying it was canceling it outright. He said he believed this gave California time to press for an agreement to keep the $929 million.

“Of course it’s a serious matter — the federal government has a lot of power in this situation,” he said. “I’m hoping that the phrase ‘intends to terminate’ gives an opportunity for parties to resolve this issue.”

The project has been a major employer in California’s Central Valley, where bridges and overpasses have been built. “We have to keep in mind that we’ve got real human beings working on this right now, thousands of them, whose jobs are at risk,” Richard said.

The high-speed rail project was a signature issue of former Gov. Jerry Brown. Last week, a day after his successor, Newsom, announced that he planned to scale back the project, the president posted on Twitter that California owed the federal government $3.5 billion, adding, “We want that money back now.”

Newsom replied that the president was wrong that the project had been canceled. “Fake news,” Newsom tweeted. “We’re building high-speed rail, connecting the Central Valley and beyond. This is CA’s money, allocated by Congress for this project. We’re not giving it back.”

The high-speed rail plan has faced stiff opposition from Republicans for years, and it has never been clear how, exactly, the project would be financed. Last year, state officials said the cost of the project was likely to balloon to $100 billion, and the rail authority had so far come up with about a third of that. But Brown championed the initiative, which was the most expansive public transit project under construction in the country. Newsom never appeared to share that enthusiasm.

“Let’s level about high-speed rail,” Newsom said last week in the State of the State speech in Sacramento, adding, “Right now, there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA.”

Aides to Newsom later appeared to walk back his comments, saying he was not shelving the project and simply wanted to focus on the Central Valley first.

Rep. Kevin McCarthy of California, the Republican leader, said in a statement Tuesday that it was time “to move on from the broken high-speed rail project and redirect our efforts to infrastructure projects that work for Californians.”

The $929 million in funds that the Trump administration says it plans to take back have not yet been transferred to California. That money has been allocated but not disbursed, meaning that the money is still in the hands of the federal government. To obtain those funds, California was obligated to match a previous grant of $2.6 billion in stimulus money. As of Tuesday, the state had matched 38 percent of that.

This article originally appeared in <a id="0af31a5e-64bf-4d4b-a4d6-e5e83cee0aef" href="https://www.nytimes.com/2019/02/19/us/trump-cancels-california-high-speed-rail-grant.html">The New York Times</a>.

Trump Administration Wants California to Pay Back $2.5 Billion for High-Speed Rail

The Trump administration also said it was terminating a $929 million federal grant to the California High-Speed Rail Authority, according to a letter the Transportation Department sent Tuesday.

Trump administration wants California to pay back $2.5 billion for high-speed rail

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Annie Karni and Jennifer Medina

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Trump administration wants California to pay back $2.5 billion for high-speed rail