Newsom loses again.
California has quietly withdrawn its lawsuit against the Trump administration after losing nearly $4 billion in federal funding tied to the state’s troubled high-speed rail project — a major setback for Governor Gavin Newsom and a clear win for President Donald Trump’s push for fiscal accountability.
Court records show that California Attorney General Rob Bonta’s office filed paperwork on December 23 formally dismissing the lawsuit on behalf of the California High-Speed Rail Authority (CHSRA). The state had sought to force the federal government to reinstate funding that was pulled earlier this year.
The case was dismissed voluntarily and without prejudice, effectively ending California’s legal effort to reclaim billions in federal taxpayer dollars.
California Backs Down After Funding Pulled
State officials acknowledged that the federal government warned all work on the rail project remained financially “at risk,” meaning reimbursement was no longer guaranteed. According to a CHSRA spokesperson, this uncertainty made continuing the lawsuit impractical.
The authority blamed what it described as unreliable federal engagement and said the decision was made to move forward without federal participation. However, critics argue the lawsuit’s collapse underscores long-standing concerns about the project’s viability and management.
Trump Administration Calls Project a Costly Failure
The funding dispute began earlier this year when Transportation Secretary Sean Duffy announced the federal government would no longer support the long-delayed rail project, calling it a massive waste of taxpayer money.
Duffy pointed directly to years of missed deadlines, ballooning costs, and management failures under Democratic leadership in California.
“Federal funding is not a blank check,” Duffy said at the time. “After more than a decade, this project has failed to meet its commitments and cannot deliver results.”
President Donald Trump echoed those concerns, labeling the rail line a “high-speed train to nowhere” and pointing to escalating costs as evidence that federal taxpayers should no longer be on the hook.
Federal Review Cites Delays and Overspending
In a formal letter to CHSRA, the Federal Railroad Administration explained its decision to withdraw funding, citing repeated delays, major construction changes, and the failure to meet key performance benchmarks.
The agency noted that billions in federal funds had already been spent with limited progress, concluding the project could not be completed as originally promised.
State Turns to Private Investors
Facing the loss of federal support, California officials have announced a new strategy: seeking private investors and developers to help finance the project.
CHSRA recently launched a procurement process aimed at attracting private-sector involvement by summer 2026. CEO Ian Choudri claimed interest from investors remains strong and said partnerships could help deliver the project more efficiently.
State officials argue that combining private innovation with state funding could accelerate construction and control costs — claims skeptics say mirror promises made repeatedly over the past decade.
Taxpayers Still on the Hook
According to CHSRA, approximately 171 miles of the rail line between Merced and Bakersfield are currently under design or construction, with about 80 miles reportedly completed.
Despite losing billions in federal funding, state officials insist the project will continue using money from California taxpayers, primarily through voter-approved Proposition 1A and the state’s Cap-and-Invest program. Federal funds previously accounted for roughly 18 percent of total project costs.
A Political and Financial Blow to Newsom
For critics, the lawsuit’s dismissal represents a major political embarrassment for Governor Newsom and reinforces concerns about government waste and accountability.
Supporters of President Trump say the outcome validates his administration’s insistence on results-based funding and responsible stewardship of taxpayer dollars.
As California moves forward without federal backing, the episode has renewed debate over whether the high-speed rail project is a transformative infrastructure investment — or a costly symbol of failed leadership and unchecked spending.
