One of the elevated sections of the high-speed rail under construction in Fresno, California. The project has seen skyrocketing cost estimates and repeated schedule overruns. | Rich Pedroncelli/AP Photo transportation Trump administration trying to claw back California high-speed rail money

The administration Tuesday threatened to withdraw almost a billion dollars in federal funds allocated to a high-speed rail line in California, but the state's governor counterpunched by suggesting the threat was retaliation for fighting President Donald Trump's "national emergency" declaration on a border wall.

On Tuesday evening, the Transportation Department threatened to cancel $929 million in federal funds earmarked for California's high-speed rail project, after Gov. Gavin Newsom announced plans last week to scale back the project.


And DOT said it wants to go even further, saying it's "actively exploring every legal option" to seek the return of $2.5 billion in federal funds that have already been granted for what the agency calls a "now-defunct" project. Newsom has said the state will still aim to complete a smaller segment of the route than had originally been envisioned, from Bakersfield to Merced.

In a statement, 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.'"

Newsom further suggested that Trump himself "tied the two issues together" in a tweet earlier Tuesday. "As I predicted, 16 states, led mostly by Open Border Democrats and the Radical Left, have filed a lawsuit in, of course, the 9th Circuit! California, the state that has wasted billions of dollars on their out of control Fast Train, with no hope of completion, seems in charge!" Trump tweeted.

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"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," Newsom said.

The ill-fated project, originally envisioned to connect San Francisco and Los Angeles, has seen skyrocketing cost estimates —the latest of which suggest it would cost at least $77 billion to complete — and repeated schedule overruns.

Federal Railroad Administration chief Ronald Batory wrote to California High-Speed Rail Authority chief Brian Kelly today outlining the decision, which takes effect March 5.

The letter says that the project has "materially failed to comply with the terms" of the agreement between the state and the federal government, and that Newsom's announcement "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."