White House Restores $1 Billion Windfall to California Bullet Train Project

The Biden administration’s decision to drop the previous administration’s effort to recoup nearly $1billion in grants will help the nation’s largest infrastructure project move forward with a renewed sense of optimism.

Artist’s rendering of a California high-speed rail trainset. (California High-Speed Rail Authority photo)

(CN) — California’s high-speed rail project got a much-needed boost Friday when the federal government agreed to restore nearly $1 billion in grant funding for the embattled infrastructure project. 

The U.S. Department of Transportation came to a settlement with the state of California regarding $929 million in federal grants that the Trump administration tried to rescind in 2019 when California Governor Gavin Newsom announced near-term changes to the scope of the project. 

“Restoring nearly $929 million in grant funding back to California’s high-speed rail project will continue to spur job creation, advance the project and move the state one step closer to getting trains running in California as soon as possible,” Newsom said Friday in a prepared statement. 

The Biden administration was widely anticipated to make the move, given that the Trump administration often went out of its way to tussle with the state of California, which is seen by conservatives as emblematic of a big-government, tax and spend philosophy. 

The largest infrastructure project in the United States has been buffeted by Republicans and Democrats alike as the project has faced consistently snarled by right-of-way lawsuits, cost overruns and schedule delays. 

The cost of the project has ballooned from an initial price tag of $32 billion to nearly $100 billion by recent estimates. In reaction to increasing costs and schedule delays, Newsom announced during his first State of the State speech, that he was reducing the immediate scope of the project — originally designed to connect Los Angeles to San Francisco in around 2 1/2 hours — to focus on the Central Valley section that connects Bakersfield to Merced. 

Trump used that reduction to argue California violated the stipulations of the grant funding of $929 that had already been awarded to the state and attempted to recoup the funds. 

The fight persisted in the form of a lawsuit filed by California, but once President Joe Biden defeated Trump last November, most pundits expected the fight to end. 

“The department is excited about reestablishing this important relationship with the state of California and is committed to fulfilling its oversight responsibilities,” said Amit Bose, deputy administrator of the Federal Railroad Administration. “This settlement is an important step in advancing an economically transformational project in California.”

The statement is an important symbol for the state of California, which will need more federal funding to finish both the Central Valley portion of the rail and ultimately the original vision of a high-speed rail network spanning the entire Golden State. 

Supporters of high-speed rail say an electrified network of high-speed trains can provide Californians with a more climate-friendly alternative to interstate travel, while furnishing a proof-of-concept for high-speed rail in America — a concept that has worked well in other places throughout the world. 

“With this settlement, it’s clear we once again have a strong federal partner on this challenging but transformative project,” said Brian Kelly, the CEO of the California High Speed Rail Authority. “We appreciate FRA’s expression of confidence that we are getting this project on the right track.”

The authority is the public body instantiated for the sole purpose of overseeing the construction of the rail network and its early operation. Once up and running, the authority will turn the project over to private partners that will seek to run the network at a profit to lift the burden from state taxpayers. 

Many critics are wary that ridership numbers in the Central Valley will be sufficient to make the project self-sustainable in the early going, but supporters say demand will increase once more connections are made. 

The Central Valley segment includes a 119-mile segment from Bakersfield to Merced and is currently under construction. 

Construction continues on an elevated section of high-speed rail track near downtown Fresno, California. (Courthouse News photo / Matthew Renda)

The authority says there is an average of 1,100 workers on the job at any given moment, bolstering contentions from Democrats that infrastructure projects are not as wasteful as critics contend, but also provide a net benefit to the economy by providing stable high-paying jobs. 

The Biden administration is currently negotiating a large infrastructure package with Republican senators, but the president’s initial budget included the allocation of $80 billion for the expansion and maintenance of railways in the United States. 

Transportation Secretary Pete Buttigieg has said he would like to see the United States lead the world in high-speed rail. And while he demurred when asked if the feds were poised to contribute to the bullet-train project in California, he did say the money was to create new tracks across the country. 

“What’s great about the scale of the American Jobs Plan is it’s going to support both of those things: maintenance that we’ve needed to do all along, and a chance to build new routes and expand what Americans can access,” Buttigieg said in April. 

With Friday’s announcement, there is a renewed sense of optimism around the project that has been absent for the past several years. However, a lot of work remains to complete the project — including overcoming a deep sense of bipartisan skepticism regarding the project’s cost and feasibility. 

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