Biden restores $929 million in funding for the California high-speed rail project that was cancelled by Trump

Buttigieg Biden
Transportation secretary Pete Buttigieg and President Joe Biden.

  • Biden’s administration restored $929 million in grant funding for California’s high-speed rail.
  • Trump’s administration cancelled the funding after he called the rail project “a ‘green’ disaster!”
  • The train will get passengers from San Francisco to Los Angeles in 2 hours and 40 minutes.
  • See more stories on Insider’s business page.

President Joe Biden’s administration has restored about $929 million in funding for the California high-speed rail project, reversing a cancellation by President Donald Trump’s administration.

In May 2019, the administration said the state hadn’t stuck to its original plan for the high-speed rail between San Francisco and Los Angeles. The Federal Railway Administration mentioned in a letter that month California’s “repeated failure to submit critical required deliverables” and make progress on the project.

California and its High-Speed Rail Authority responded this year with a legal action against a grouping of federal agencies and officials, including the transportation secretary Pete Buttigieg.

They requested that the grant funding be restored, saying the Trump administration’s cancellation was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”

The parties entered talks in March, according to Reuters. A month later, Biden introduced a sweeping infrastructure proposal with about $80 billion for upgrades to Amtrak and other federal and state rail services, although high-speed rail projects were notably absent.

The parties reached a settlement on Thursday, June 10, which restored the funding and barred California from bringing future claims over the funding cancellation.

California politicians praised the funding, with House Speaker Nancy Pelosi releasing a statement saying it was “great news for our state and nation.” She said the funding would keep the “transformative project moving down the track.”

California Governor Gavin Newsom announced the news on Thursday night, saying the project had more than 35 active construction with an average of about 1,100 workers on site each day.

“Tonight’s action by the federal government is further proof that California and the Biden-Harris Administration share a common vision – clean, electrified transportation that will serve generations to come,” he said in a statement.

California voters in 2008 approved $9.95 billion in bonds to partially fund the project. In the 12 years prior to that, the state had spent about $60 million on “pre-construction” activities, according to the state’s Legislative Analyst’s Office, a nonpartisan advisory group. The total project was expected to cost about $68 billion.

When completed, the train promises to be among the quickest in the US. Hitting speeds over 200 miles per hour, it will make the trip from San Francisco to Los Angeles in about 2 hours and 40 minutes, according to the state.

The project officially broke ground in January 2015 under Governor Jerry Brown.

Newsom and Trump traded tweets about high-speed rail in 2019, before the Trump administration cancelled the $929 million.

“California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars,” Trump said on Twitter. “They owe the Federal Government three and a half billion dollars. We want that money back now. Whole project is a ‘green’ disaster!”

Newsom called Trump’s tweet “fake news,” adding: “This is CA’s money, allocated by Congress for this project. We’re not giving it back.”

Construction on the first leg was expected to be completed in 2029.

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The White House offers to cut infrastructure plan down to $1.7 trillion

amtrak joe biden
President Joe Biden.

  • The White House presented a $1.7 trillion infrastructure counteroffer to Republicans.
  • It slashes the $2.25 trillion price tag substantially and reduces funding for roads and bridges.
  • The counteroffer came after a GOP group did not meet a Tuesday deadline to bring a new offer.
  • See more stories on Insider’s business page.

President Joe Biden has offered to cut down the cost of his infrastructure plan – the American Jobs Plan – from $2.25 trillion to $1.7 trillion, presenting a counteroffer to Republicans on Friday.

The offer did not address the $1.7 trillion American Families Plan, which is largely focused on care-economy measures, so the initial $4.1 trillion combination of packages would now come to about $3.2 trillion.

White House press secretary Jen Psaki said that officials including Transportation Secretary Pete Buttigieg and Commerce Secretary Gina Raimondo offered up the reduced package.

“In our view, this is the art of seeking common ground,” Psaki said.

Psaki said that proposed funding for broadband was reduced to match that of Republicans, and proposed funding for roads, bridges, and major projects was also reduced to be more in line with senators’ proposals. Investments in research and development, supply chains, manufacturing, and small businesses will be shifted into different legislative pushes.

But the White House said it would continue to push for funding for critical transportation infrastructure, especially railways.

Psaki also said the White House planned to reiterate the president’s unwillingness to raise taxes on Americans making under $400,000, such as through a gas tax and user fees.

“He believes that the extraordinarily wealthy, that companies – many of whom have not paid taxes in recent years – can afford a modest increase to pay for middle-class jobs,” Psaki said.

Republicans had previously offered a $568 billion counteroffer to the White House, well below the $2.25 trillion originally proposed and still substantially lower than the new counteroffer. It would preserve Trump-era tax cuts, which are directly countered in Biden’s proposed funding.

After the GOP group met with Biden last week to discuss its $568 billion counterproposal, Biden gave them a Tuesday deadline to bring him a new plan to negotiate, but that never happened.

Instead, the group met with Buttigieg and Raimondo, and a new plan wasn’t introduced, with the senator from West Virginia who led the Republican plan, Shelley Moore Capito, telling reporters after the meeting that there was “progress, but we still got a ways to go.”

“I think they’re digesting what we proposed, and I think the plan is for them to react to that,” Capito added.

Capito’s office said in a statement to Insider that Friday’s White House offer was “well above the range of what can pass Congress with bipartisan support” and that Republicans and the White House still differed on what’s considered infrastructure, how much should be spent on it, and where that money should come from.

“Based on today’s meeting, the groups seem further apart after two meetings with White House staff than they were after one meeting with President Biden,” Capito’s office said. “Senate Republicans will further review the details in today’s counteroffer and continue to engage in conversations with the administration.”

Separately this week, Capito also floated using unused unemployment benefits to fund infrastructure after April’s weak jobs report, which caused a growing number of GOP-led states to end Biden’s weekly $300 unemployment benefits early.

The White House’s counteroffer comes as Democrats are increasingly calling on Biden to ditch negotiations with Republicans and act big on infrastructure legislation.

Psaki said the negotiations were an art of a “different kind of a deal – a deal for the working people.”

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