Silicon Valley business leaders are worried the tech capital may take a major hit if Republicans de-fund a key infrastructure project in one of the nation’s busiest commuter corridors. | AP Photo Tech leaders: Economy will take hit if GOP cuts Bay Area rail line

SAN FRANCISCO — With President Donald Trump threatening to punish “out of control” California, Silicon Valley business leaders are worried the tech capital may take a major hit if Republicans de-fund a key infrastructure project in one of the nation’s busiest commuter corridors.

Such a move, they say, could cost 10,000 jobs, affect 60,000 commuters a day, and deal a multi-million dollar blow to the economy.


House Majority Leader Kevin McCarthy, R-Bakersfield and Rep. Jeff Denham, R-Atwater, have taken the lead in objecting to $600 million in federal funding to finish electrification of the popular Caltrain rail line that stretches from San Jose to San Francisco, home to thousands of workers at tech giants including Google, Facebook, LinkedIn and Twitter.

McCarthy’s objection is rooted in the project’s funding, which is linked to funding for California's controversial High Speed Rail project, which he has vehemently opposed. McCarthy and Denham outlined their objections in a letter to newly confirmed Secretary of Transportation Elaine Chao, who will make a final determination on the project after a congressional review period ends on Feb. 17.

But Silicon Valley Leadership Group CEO and president Carl Guardino argues that de-funding the final leg of a major Bay Area transportation project would affect more than 9,600 jobs in the tech region alone.

He added that such a move would also affect jobs "all across the country, in red states, too.'' Cars and components are under contract to be built in Florida, Virginia, Wisconsin and Colorado, he noted. And in Salt Lake City alone, he said, 500 jobs are directly tied to the project.

Guardino told POLITICO California on Thursday that he is mystified by the opposition of GOP House members to the final leg of a project that has been 15 years in the making. The project could allow Caltrain to double its current standing-room-only capacity to provide relief to 120,000 daily commuters.

"Leader McCarthy has proven to be a strong ally and advocate for Silicon Valley's innovation economy,'' said Guardino. "We believe that there's misunderstanding at the staff level in trying to link high speed rail with our effort,'' he said. The two projects, he said, "are not linked."

Guardino said he does not want to believe that the White House or Republicans intentionally intend to punish Silicon Valley. "Why would one want to damage an aspect of America's economy that not only produces innovation and job creation, but is incredibly valuable from the perspective of GDP?" he asked.

The plan has sharply divided California’s House delegation along party lines: every member of the GOP caucus has backed McCarthy in supporting the de-funding, while every House Democrat from the state supports the project.

"California’s high-speed rail project is inherently flawed and under its current business plan, the project deserves no Federal funding and should not waste precious California taxpayer dollars by spending the taxpayers’ Prop 1A funds,’’ McCarthy said in a statement emailed to POLITICO California.

"The best way to clear any concerns about this grant application and demonstrate that the project is entirely separate of high-speed rail would be to not use high-speed rail funds for this project," he said.

Voters in 2008 approved Proposition 1A, a $10 billion bond for the state’s high speed rail project, although critics like McCarthy have noted that cost estimates have since grown to more than $60 billion.

Republicans repeatedly resisted efforts by the Obama administration to boost that funding, both in a 2009 stimulus package and a 2010 omnibus appropriations measure.

But Seamus Murphy, spokesman for Caltrain, said that approving the electrification project in the Bay Area does not mean high speed rail will have a foothold there, as Republicans appear to suggest.

He said the funding setup is the direct result of a 2012 move made by the state Legislature, which doled out some of the high speed rail money and required that it be used specifically to upgrade commuter rail systems around the state. Caltrain, under that action, was allocated $600 million for the electrical upgrade project.

“The fact that we’re receiving high speed rail money doesn’t mean this is a high speed rail project,’’ Murphy said. “This is a case of doing exactly what the Legislature mandated — offering immediate benefits to commuters.”

