Trump to Use ‘Nuclear Option’ to Recover $2.5 Bn More from California’s Failed High-Speed Rail Project
The Trump administration announced this week that it was canceling nearly $1 billion in grant money for California’s now-defunct high-speed rail project — and President Donald Trump is coming for the other $2.5 billion.
The $2.5 billion has already been spent — but California has failed to deliver the high-speed rail (on time, or at all) as promised.
Therefore, the Trump administration argues, the state has to repay federal taxpayers.
The Los Angeles Times quoted Stanford law professor David Freeman Engstrom, a Stanford law professor, describing Trump’s effort as a “nuclear option.”
The practice of recovering money after a breach of contract, while common in the private sector, was virtually unheard of in government, he explained.
“There is a reluctance to penalize misspending by local government agencies. … Almost never do those violations result in terminations, in part because federal agencies are set up to distribute money, not take it back, and they also lack funding for strict grant enforcement,” the Times added.
On Tuesday, the Federal Railroad Administration of the U.S. Department of Transportation wrote to California’s High-Speed Rail Authority, informing it that it had breached the terms of its contract with the federal government and that $928,620,000 would therefore no longer be available to the project.
Newsom objected, again: “This is California’s money.” He also claimed Trump was taking revenge for California’s leading role in filing a federal lawsuit against Trump’s national emergency declaration to build the “wall.”
But that may not matter.
The state had grown accustomed to leniency: the Obama administration modified the terms of the deal between the federal government and the state several times, because it was ideologically committed to high-speed rail.
Trump is somewhat indifferent to high-speed rail: he favors infrastructure spending, but wants to see the projects built.
And as a world-famous developer, he knows the rules of the game: deliver the project, or pay up.
Legally California may have no choice.
https://www.breitbart.com/politics/2019/02/22/trump-to-use-nuclear-option-to-recover-2-5-billion-more-from-californias-failed-high-speed-rail-project-private-sector/