Trump Cancels Nearly $1 BILLION Payment to CA; Tells Gov. Newsom He’s Exploring Clawback of Add’l. $2.5 BILLION!

And here's more on the clawbacks, from Breitbart:

The Trump administration announced Tuesday that it was canceling a federal grant to California worth nearly $1 billion after Gov. Gavin Newsom announced the cancelation of the state’s high-speed rail project last week.

Newsom used his “State of the State” address Feb. 12 to cancel the San Francisco-to-Los Angeles project, saying it “would cost too much and, respectfully, would take too long” to complete.

However, he told legislators he wanted to complete the portion of the bullet train under construction in the rural Central Valley, lest the state lose federal dollars granted to California by President Barack Obama as part of the 2009 stimulus: “I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump,” Newsom said.

The president had other ideas, and took to Twitter to demand that California return the money. Newsom rejected that demand, insisting: “This is CA’s money, allocated by Congress for this project. We’re not giving it back.”

But on Tuesday, the U.S. Department of Transportation’s Federal Railroad Administration (FRA) sent a letter to the California High-Speed Rail Authority, informing it that it was terminating its agreement with the state and therefore would refuse to provide the state with $928,620,000 allocated to the high-speed rail project.

The FRA listed several factors informing its decision, including the likelihood that the high-speed rail would not be completed by 2022, as contemplated by the original agreement. The state’s high-speed rail authority had also failed, according to the FRA, to provide “timely and satisfactory financial reports” to the federal government.

The Los Angeles Times reported additionally that the Department of Transportation said it was “actively exploring every legal option” to recover the other $2.5 billion granted by the federal government to California for the project.

And confirmed by CNN:

The US Department of Transportation announced Tuesday it is canceling $929 million in grant funds for California's high-speed rail system, escalating the Trump administration's efforts to regain all the federal money for the canceled rail project.

If built, the high-speed rail system would have run from San Francisco to Los Angeles. The department added in a statement that it "is actively exploring every legal option to seek the return from California of $2.5 billion in Federal funds (Federal Railroad Administration) previously granted for this now-defunct project."

The statement from the Department of Transportation heightens the Trump administration's quest to recoup federal money spent on the project that was originally granted in 2009. California Democratic Gov. Gavin Newsom announced last week that he was scrapping the project because it was too costly and would take too long.

That decision led President Donald Trump to demand all the money appropriated for the project by the federal government be returned.

Trump tweeted that California owed the federal government about $3.5 billion for the canceled project. "We want that money back now," he wrote. "Whole project is a 'green' disaster!"

The American Recovery and Reinvestment Act of 2009 provided a federal grant of $2.553 billion for the high-speed rail project and the Consolidated Appropriations Act for the fiscal year 2010 gave a grant of $929 million for the project. Trump derived the $3.5 billion figure from these two grant amounts. 

Newsom replied to the President in a tweet: "We're building high-speed rail," adding, "This is CA's money, allocated by Congress for this project. We're not giving it back."

Despite the legal threats from the administration, California is not under any obligation to return the money. 

The grants are based on agreements that require the California High-Speed Rail Authority to complete a 120-mile high-speed train track for the "initial central valley section" by the end of December 2022. 

The agreement does not require the California High-Speed Rail Authority to build trains for the track. This means the state could build out this segment of the high-speed rail track, and, based on the agreements, California would not owe any money to the federal government -- even if no trains were built for the track.

The FRA writes in the letter that the state "has materially failed to comply with the terms of the Agreement and has failed to make reasonable progress on the Project," which they said was supposed to be on track to be finished by 2022. The agency writes the state failed to "submit required critical grant deliverables," and "failed to take the appropriate corrective actions to ensure delivery of the Project."

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