Trump administration officially pulls $4B from California high-speed rail
AI-generated summary reviewed by our newsroom.
- Trump administration rescinds $4B in federal grants for California rail project.
- State leaders dispute legality of defunding, cite ongoing Central Valley work.
- Federal audit cites mismanagement; state eyes Cap-and-Trade to replace funds.
It’s official.
The Trump administration has announced it is pulling $4B in unspent federal grants for California’s high-speed rail project.
“This is California’s fault,” U.S. Secretary of Transportation Sean Duffy said Wednesday evening in a statement. “(Gov. Gavin) Newsom and the complicit Democrats have enabled this waste for years.”
Newsom quickly issued a response to the federal government’s decision, describing the defunding of the California project as “Trump’s latest gift to China.”
“Trump wants to hand China the future and abandon the Central Valley,” Newsom said in a news release. “We won’t let him.”
A legal battle over the money may be on the horizon, as both Newsom and Ian Choudri, CEO of Calfornia’s High-Speed Rail Authority, called the rescission of the money “illegal” on Wednesday. Though the decision was not unexpected, it could create further delays for the project in the Central Valley.
The rescinded grants — a $929 million award from 2010 and $3 billion award from 2023 — were earmarked for the construction of a downtown Fresno station, and extensions from Shafter to Bakersfield and Madera to Merced. They came under threat in February, when President Donald Trump directed Duffy to launch an audit to determine whether the money should be stripped.
In the months since, Trump continuously signaled his intention to defund the California project, as he did during his first term by pulling $1 billion that was later restored during Joe Biden’s presidency. Trump has long criticized the California project over its lack of progress toward connecting the state’s major urban centers.
It was initially envisioned as a Los Angeles-to-San Francisco line that would cost up to $33 billion and be operational by 2020. But the project has been plagued by delays and cost increases in the 17 years since California voters first approved a bond for its construction. The latest estimates indicate completing the project as originally envisioned could top $100 billion.
The main focus today is the completion of a 172-mile Bakersfield-to-Merced railway by 2033, and fully-funded construction is underway on 119 miles between Shafter and Madera.
Determining whether the state is capable of completing the Central Valley stretch by 2033 was also the focus of the federal audit. Its findings were released last month in a scathing report that concluded the state’s rail authority has made little progress and misrepresented its ability to finish the Bakersfield-to-Merced line.
In a Wednesday letter to Choudri, Duffy reiterated the federal government’s position that the state’s rail authority has broken the terms of the two grant agreements in question.
“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 Wednesday. “It’s time for this boondoggle to die.”
Newsom calls rail defunding ‘illegal’
Newsom and Choudri on Wednesday disputed the claim that the project has made minimal progress. They noted active construction across the Central Valley, including more than 50 major railway structures and 60 miles of guideway being complete.
But Wednesday’s announcement from the federal government did not come as a surprise to them.
California’s high-speed rail leaders have already pivoted to seeking a steady flow of funding for the project through the state’s Cap-and-Trade program. The program generates public dollars from companies that buy credits at state auctions to offset their greenhouse gas emissions. Newsom has proposed that the program be extended to 2045 and allocate $1 billion annually for high-speed rail.
Henry Perea, a rail authority board member from Fresno, previously told The Fresno Bee he expects that the state will sue the Trump administration over this decision — as it did during Trump’s first term.
In his Wednesday statement, Choudri said the cancellation of the federal grants “isn’t just wrong — it’s illegal.”
“These are legally binding agreements, and the Authority has met every obligation, as confirmed by repeated federal reviews, as recently as February 2025,” he said.
Newsom said the state is “putting all options on the table to fight this illegal action.”
This story was originally published July 17, 2025 at 5:00 AM.
