Trump Pulls Nearly $1B In Fed Cash From CA High Speed Rail: Gov Flips Out

P. Gardner Goldsmith | May 20, 2019
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What a difference a year makes.

Last year at about this time, I reported on the twin revelations that former California Governor Jerry Brown’s vaunted “budget surplus” had become a deficit, and his boondoggle “high speed rail” line from LA to San Francisco was even more over-budget than previously suspected. Then there were the revelations by State Assembly member Melissa Melendez that the CA government was taking increased state gas taxes and vehicle fees that were supposed to be used to fix the crumbling roads and bridges, and, instead, showering the lucre on, yeah, you got it, the bleeding high-speed rail project.

Now comes this…

President Trump just announced that he’s pulling $929 million of federal “funding” scheduled to be dumped into the public transit pit. And this appears to have upset current CA Governor, Gavin Newsom, to say the least. In fact, he’s so upset, he’s threatening to take the Trump Administration to court.

Writes Kathleen Ronayne NBC BayArea:

‘The Trump Administration's action is illegal and a direct assault on California,’ he said in an emailed statement. ‘This is California's money, appropriated by Congress, and we will vigorously defend it in court.’

Which is quite a bold, childish, and factually vacant statement for Newsome to make.

Perhaps Governor Newsom might want to look at a few facets of reality before he continues along these lines.

First, the US Constitution grants Congress absolutely zero “power” to fund any rail project, let alone a high-speed rail in California. Even the much ballyhooed “Trans-Continental Railroad” funded by Congress in the 1800s was not sanctioned by any provision of the Constitution. It was years overdue, deep, deep in the red, and was beaten by a private cross-country rail line built by the Great Northern. But do we hear about that in government schools, or do they promote the mythology that the federal “Trans-Continental Rail Road” was a great achievement, overlooking the waste and fraud?

As writers such Burton Fulsom and Tom DiLorenzo have noted, on the federal “Trans-Continental” scheme, contractors laid rails on permafrost knowing the foundations would move, and then double-billed when they had to do repairs. There never has been a government rail or subway system that has ever turned a profit. In all of human history.

Already, the CA high-speed rail project has proven to be a huge money-eating monster. Last year, Jerry Brown revealed that the overall estimate for the CA rail project would be $77.9 billion by the time a few trains might run on it in 2029, an increase in $13 billion from estimates offered two years earlier.

Even if this were a constitutional expenditure, it’s a financial disaster, and it’s no wonder why Trump is pulling the plug, and, in fact, might ask for some earlier hand-outs to be returned.

The Federal Railroad Administration's official word it was cancelling the money came several months after President Donald Trump and Newsom sniped at each other over the project. The FRA said in a statement that it's still exploring whether it can force California to return $2.5 billion the state has already spent.

But, evidently, current CA Governor Newsom wants to pretend he has some sort of moral high ground, claiming the money belongs to California.

Perhaps we can add another request of Governor Newsom before he expresses outrage at Donald Trump for Trump not sending more money to be buried in this wasteland of government rail foolhardiness. 

If Newsom wants to claim, “This is California's money, appropriated by Congress, and we will vigorously defend it in court,” could he tell his audience how this is anyone’s money, if it’s being handed out unconstitutionally by a federal government that had a budget deficit of $779 billion for the fiscal year of 2018 and is running a debt of $22 trillion this month?

This isn’t anyone’s money except the future taxpayers who are going to be forced to hand it over someday. It’s literally “potential” money, Governor Newsom, because your state is in the red, and so is the federal government. It’s fake, inflated bunches of cash based on US government “I Owe You” bonds that will be paid for my many generations who haven’t been born.

Newsom’s righteous indignation is founded on nothing.

Like a child throwing a fit because his bankrupt parents never got him the toy he wanted for his birthday, Newsom is in the impossible position of wanting something that is itself wasteful, will, based on the history of every other rail project, never run without eternal government subsidies, and will require money from the in-the-red feds to build.

Why not try a different route, Governor? Instead of stomping the proverbial political foot and whining, why not throw this project out and see if private interests find it worth their investment as a real rail project, the way Great Northern did with its trans-continental project in the 19th Century?

Why risk everyone’s money on something, forcing generations yet-unborn, when you could allow investors and consumers to show they value something?

Why complain about Donald Trump when he can look at the US Constitution, like you can, and see there’s not “power” granted to him to hand you this money from the unborn?

If Governor Newsome spent less time complaining and more time studying economics and the US Constitution, perhaps he’d not have embarrassed himself in this way.

But it is kind of fun seeing him flip out when Donald Trump simply conforms to his oath to uphold the Constitution.