This article is more than 1 year old

This article is more than 1 year old

The US Department of Transportation has announced plans to cancel $929m in federal grant funds for California’s high-speed rail project, in a move the state’s governor called “political retribution” for its lawsuit against Donald Trump’s declaration of a national emergency.

The announcement came a day after California led a coalition of 16 states to sue the Trump administration over the president’s decision to declare a national emergency to build a wall along the US-Mexico border.

On Tuesday, the department announced it would be withdrawing the federal grant funds that were yet to be paid toward the $77bn rail endeavor, which Trump last week labelled a “‘green’ disaster”.

The department also “is actively exploring every legal option to seek the return from California of $2.5bn in federal funds FRA (Federal Railroad Administration) previously granted”, according to the statement released Tuesday.

California governor Gavin Newsom said: “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’.”

He said: “The president even tied the two issues together in a tweet this morning. 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.”

However, the FRA said the California High-Speed Rail Authority, the state-run organization tasked with overseeing the project “has materially failed to comply with the terms” of the agreement that promised $929m in federal funds for construction.

In response to Newsom’s remarks, Trump tweeted asking for the return of “three and a half billion dollars”. Newsom responded by tweeting that the money was “allocated by Congress for this project. We’re not giving it back.”

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The high-speed rail project represents a multi-decade effort to connect eight of California’s largest cities by what was conceived as America’s first bullet train. In 2008, voters approved almost $10bn in funding for a plan to to lay down hundreds of miles of new track, but years of protest and lawsuits have forced the authority to rework its plans.

Phase one, a 520-mile long plan connecting downtown San Francisco, Los Angeles and Anaheim with cities in the Central Valley, was expected to be completed in 2029, but that has since been pushed to 2033.

Last week, Newsom said during his State of the State address, that the high-speed railway project as currently planned, would cost too much and take too long”.

Opponents of the ambitious project interpreted his comments as a declaration that “the train to nowhere has finally stopped” and that Newsom was canceling the leg of the plan that extended the railway from San Francisco to Los Angeles. But Newsom’s office later clarified that he meant only that “we have to be realistic about the project”.

“The train is leaving the station – better get on board!” the governor wrote.

FRA administrator Ronald Batory argued on Tuesday that Newsom had “presented a new proposal that represents a significant retreat from the state’s initial vision and commitment and frustrates the purpose for which federal funding was awarded”.

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The authority “has failed to make reasonable progress”, Batory wrote in a letter to Brian Kelly, the FRA’s chief executive, adding that it will not complete the project by the end of 2022, as was previously agreed upon.

The federal government’s moves are the latest point of friction between the Trump administration and California, which has styled itself as the Democratic-led “resistance” to the administration. Newsom, less than two months into his tenure, has appeared more eager to hit back at Trump than former California governor Jerry Brown. The lawsuit is California’s 46th against the Trump administration.

Using a broad interpretation of his executive powers, Trump declared an emergency last week to obtain wall funding beyond the $1.4bn Congress approved for border security. The move allows the president to bypass Congress to use money from the Pentagon and other budgets.

Trump’s use of the emergency declaration has drawn bipartisan criticism and faces a number of legal challenges. Still the president has told reporters he expects to prevail.

“I think in the end we’re going to be very successful with the lawsuit,” Trump told reporters, calling it an “open and closed” case.

Trump had earlier singled out California for its lead role in the suit, seeking to link the state’s high-speed rail project to his plan for the wall.

On Twitter, Trump claimed the “failed Fast Train project” was beset by “world record setting” cost overruns and had become “hundreds of times more expensive than the desperately needed Wall!”