Rail Projects on Hold as Trump Administration Freezes Infrastructure Funds

USDOT May Rescind $4 Billion Grant to California High-Speed Rail Authority

Amtrak’s eastbound Pennsylvanian passes ALTO tower as it approaches the Altoona Station. A second frequency on this route could be delayed or cancelled as a result of the Trump administration freezing infrastructure grants. Photo by Raymond Wambsgans used under Creative Commons 2.0. https://commons.wikimedia.org/w/index.php?curid=1096179

The Trump administration’s efforts to radically remake the federal government is having a chilling effect upon transit and passenger rail projects around the country. Even though an executive order freezing grants is under a temporary restraining order (TRO), transportation agencies say they cannot proceed with federally funded projects until the issues get resolved. Billions of dollars of grants have been thrust into limbo.

Further, Secretary of Transportation Sean Duffy January 29 issued a directive that calls for elimination of any reference to “climate change, greenhouse gas emissions, racial equality, gender identity, and diversity” in orders, regulations, funding agreements, rules, policy statements, etc., issued by the Biden administration.

“Funds that were discretionary awards, that haven’t been obligated, are sort of in question right now,” Pennsylvania Transportation Secretary Mike Carroll said at a state legislature budget hearing last week, “It doesn’t mean they’re lost. They’ve been paused, and we would be hesitant to go forward with the use of those funds absent an obligation.”

Affected projects in the Keystone State include a second frequency of Amtrak’s “Pennsylvanian” between Harrisburg and Pittsburgh. In December 2023, the Federal Railroad Administration (FRA) awarded $144 million to Pennsylvania to increase capacity on Norfolk Southern’s busy Pittsburgh Line to accommodate the new train.

The funding freeze is not limited to rail projects. A $500 million project to replace the Interstate 83 bridge over the Susquehanna River in Harrisburg could be delayed, as well.

On his first day in office, President Trump ordered federal agencies to immediately stop disbursing all funds appropriated through the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act. Attorneys general for 22 states and the District of Columbia sued to overturn the order and U.S, District Court Judge John McConnell Jr. of Rhode Island granted the TRO.

Last Friday, February 21, Judge McConnell heard arguments from attorneys for the states and federal government over a permanent injunction. His ruling could come as early as the end of this week.

In Virginia, a $729 million grant to the Virginia Passenger Rail Authority is on the line. Those funds would be put toward Phase II of the Transforming Rail in Virginia Program. The project will expand rail capacity on a 12-mile section of the Washington – Richmond rail corridor that is used by Amtrak, Virginia Railway Express, CSX, and Norfolk Southern. Among the components are a new Long Bridge over the Potomac River to eliminate a major bottleneck and allow Virginia to run more passenger trains.

Despite the TRO the Trump administration so far has refused to release funding for infrastructure and climate projects. The White House contends the freeze is necessary to ensure spending aligns with the President’s agenda. But New York Attorney General Leticia James, a nemesis of Trump’s, contends: “The law is clear: the President does not have the power to cut whatever spending he wants.”

Duffy’s memorandum reflects the administration’s priorities, which apparently do not include climate change or environmental justice. He states the memo’s purpose is to ensure his Department’s decision are based “upon sound economic analysis.”

However, it calls for preference in grant awards to be given to communities with above average marriage and birth rates. This most likely means affluent suburban communities rather than urban and rural population centers with lower household incomes. Thus, the administration would be more inclined to fund highway projects instead of transit.

MARTA, metropolitan Atlanta’s mass transit agency, has almost $280 million of federal grants executed and obligated. Many of the grants were submitted with applications that broadly mention racial equity, climate change, or DEI.

MARTA bills the federal government for reimbursement from unspent grant funds as it incurs eligible expenses. An agency spokesman said if the feds withhold or rescind grant money for authorized projects it may have to cancel or delay lower priority improvements.

Secretary Duffy’s order also states funding should not go to projects that “would depend on continuous or future DOT support or assistance.” This could hurt Amtrak, commuter railroads, and transit systems, almost all of which require subsidies and have a backlog of infrastructure improvements.

Rail projects are at risk of losing federal funds in other states, They include Massachusetts’ East – West Line, an upgrade to CSX’ Boston Line to accommodate two additional round trips between Boston and Springfield, and relocation of Indiana’s South Shore regional railroad to a new terminal at South Bend International Airport.

California’s high-speed rail line could lose $4 billion in federal grants authorized by the Biden administration. It has been in the cross hairs of Republican politicians locally and nationally going back to 2008, when voters approved a $10 bond issue to fund the project.

CAHSR is far behind schedule and way over budget. It was supposed to be complete by 2020 but now its first segment, between Bakersfield and Merced, won’t be ready until 2033, project managers say. There is no completion schedule for the full line, which will between Los Angeles and Francisco. In addition, the estimated project cost, which was originally $40 billion, is now more than $100 billion.

President Trump called the California project “the worst managed project I think I’ve ever seen.” He instructed Secretary Duffy to investigate the troubled railroad and said his administration might rescind $4 billion of federal funding.

“I am directing my staff to review and determine whether the (California High-Speed Rail Authority) has followed through on the commitments it made to receive billions of dollars in federal funding,” Duffy said at a February 20 news conference held at Los Angeles Union Station. “If not, I will have to consider whether that money could be given to deserving infrastructure projects elsewhere.” A contingent of demonstrators booed as he spoke.

During his first term President Trump clawed back a $929 million grant for the project. However, the Biden administration reinstated the grant and provided an additional $3 billion through the Infrastructure Investment and Jobs Act.

According to CaHSRA’s inspector general the project needs to raise an additional $6.5 billion to finish the 171-mile Bakersfield – Merced segment. Its current business plan calls for most of that money to come from federal grants, according to Associated Press. However, if the Trump administration rescinds the current grants the Authority faces an uphill battle to complete the project.

CaHSRA CEO Ian Choudri said he welcomes Secretary Duffy’s investigation. “With multiple independent federal and state audits completed, every dollar is accounted for, and we stand by the progress and impact made by this project. So far, the line has created 15,000 jobs with 50 major structures completed.

In the scheme of things $4 billion is just a tiny fraction of what the federal government spends each year. (It is also just over one percent of Elon Musk’s net worth.)

So why has the California high-speed project drawn the President’s wrath. It is probably a combination of three forces: Elon Musk’s slash and burn approach to cost cutting; the anti-rail sentiment that runs rampant among U.S. conservatives, and Trump’s desire to “own the libs” by blaming Joe Biden and California Gov. Gavin Newsome for the project’s failings.

CaHSRA’s failures are not just California’s. They are America’s. We have let our railroads devolve from the world’s best to on par with a third world nation. While sleek, modern high-speed trains can be found across Europe and Asia we have struggled to build the first mile of true HSR in the United States.

I had high hopes that the California project would have changed that because the Golden State historically has been a trend setter that other states follow. That may no longer be the case. Hopefully people at Amtrak and other entities that want to develop high-speed rail in the United States will learn from the project’s mistakes and build a better railroad.