Elon Musk and Vivek Ramaswamy have begun identifying specific government programs that their Department of Government Efficiency (DOGE) would target in the next presidential administration, including California's high-speed rail project.
In 2008, California voters approved a plan to connect Los Angeles and San Francisco via electrified high-speed rail by 2030. Since then, the project's timeline has been repeatedly extended and its budget increased. As with other large infrastructure projects contingent on federal funding, California high-speed rail has been delayed by cronyism, political horse trading, and regulatory inefficiencies (parts of Southern California still haven't completed the necessary environmental reviews to lay track).
What was originally expected to cost $33 billion, 75 percent of which would be paid for by the federal government or private funders, has ballooned to over $128 billion.* In March, the then-CEO of the California High-Speed Rail Authority told lawmakers that the project would need roughly $100 billion more to be completed.
The project is funded primarily by federal grants and California's cap-and-trade program. Since 2009, it has received nearly $6.8 billion from the federal government. Revenue from the state's cap-and-trade program has generated $6.4 billion for the project, as of November 2023.
Despite 16 years and billions of dollars, high-speed rail in the Golden State has yet to transport a single passenger. With population declines in the state after the pandemic, expected ridership has fallen from 41 million people (2009 projection) to 28.4 million people (2024 projection). Nevertheless, funding for the project continues. The Rail Authority is currently constructing a 119-mile segment of track in the Central Valley, which it hopes to extend to 171 miles and complete between 2030 and 2033. The full 494-mile system was originally expected to be operational by then.
Any spending cuts proposed by DOGE would need congressional approval to be implemented, but there seems to be support in both chambers for ending federal funding for California high-speed rail. In November, Sen. Joni Ernst (R–Iowa) sent a letter to Musk and Ramaswamy recommending that DOGE target several public transit systems in California, including high-speed rail. Rep. Kevin Kiley (R–Calif.) has called the project one of the most wasteful in U.S. history.
Even with congressional support, DOGE will face an uphill battle to pull back grant money that has already been awarded, says Marc Scribner, senior transportation policy analyst at Reason Foundation (the nonprofit that publishes this magazine). While the Rail Authority has still not finalized a $3 billion federal grant awarded to them in 2023, the Biden administration will likely push to get this funding out the door before Donald Trump's inauguration. If this happens, the Trump administration's best play would be to simply not fund the project in the future, according to Scribner.
Centrally planned rail is a losing proposition, no matter the state or country. The Dallas-Houston high-speed rail project—which is being managed by Amtrak and has been awarded a $64 million federal grant—recently saw a key funder pull out. The investor claims to have lost $272 million on the project. China's bullet train system has spent more than $500 billion in the last five years for tracks that it might not need. As a result, the country's national railway operator is facing almost $1 trillion of debt and liabilities, according to The Wall Street Journal.
California's high-speed rail project has been a boondoggle for nearly two decades. Privatizing high-speed rail in the Golden State and rail transportation broadly would benefit taxpayers and train enthusiasts alike.
*UPDATE: The original version of the article understated the cost of the California high-speed rail project. For more, check out this Reason video.
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