White House plans to cancel federal funds for California rail line

Washington, Feb 20 (IANS) The White House has said that it plans to cancel about $929 million in federal grant money for California's high-speed rail project and announced that it would seek a return of $2.5 billion in funds that were already allocated for the project.

The announcement was made by the US Transportation Department in a letter on Tuesday, The Washington Post reported.

The development comes a week after Gavin Newsom, the state's Governor, declared that the originally proposed rail project was too expensive for the state and that California would instead use the federal funds to complete a shorter segment of the rail through the Central Valley.

In the letter to the California High-Speed Rail Authority, the Department said the state had failed to make "reasonable progress" on the rail project, which voters approved in 2008 and had a previously agreed-upon deadline of 2022.

The Department also said it would be "exploring every legal option to seek the return from California of $2.5 billion in federal funds".

In a tweet earlier on Tuesday before the announcement, President Donald Trump asserted the failed project had record-setting costs "hundreds of times more expensive" than his proposed US-Mexico border wall.

He has targeted the project in the past too saying that it "wasted many billions of dollars" and that it was a "green disaster".

In response to Trump and the announcement, Governor Newsom said: "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'.

"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."