Trump administration says it will cancel California's $929M high-speed rail grant

The Trump administration is vowing to terminate a $929 million federal grant to the California High-Speed Rail Authority, according to a letter sent from the Department of Transportation on Tuesday.

It is unclear whether the federal government has the legal authority to withhold the grant, and California officials is likely to challenge the move in court. The department is also “actively exploring every legal option” to take back $2.5 billion in federal grant funds already given to the state for the rail line that was designed to go from Los Angeles to San Francisco.

The battle over money is just the latest round between California and the Trump administration, which have fought over immigration, environmental and criminal justice issues.

On Monday, Xavier Becerra, the California attorney general filed a lawsuit challenging President Trump's emergency declaration on the border.

The high-speed rail was a signature project of former Gov. Jerry Brown. Last week, his successor, Gov. Gavin Newsom, announced that he planned to scale back the project, which state officials have said would cost $77 billion. Mr. Newsom said he would direct the rail authority to focus on a portion of the plan in the Central Valley, which he said would create much-needed jobs in the region.

A day after Governor Newsom's announcement, President Trump tweeted that the state owed the federal government $3.5 billion, adding “we want that money back now.”

Gov. Newsom said the decision to attempt to withhold money was retribution for the state's lawsuit over the border, pointing out that the president tied the two issues together in a tweet Tuesday morning.

“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,'” Governor Newsom said in a statement. “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.”