Gov Newson said in a statement on Tuesday that "it's no coincidence that the administration's threat comes 24 hours after California led 16 states in challenging the president's farcical "national emergency".
The Trump administration, stepping up its fight with California over the state's struggling high-speed rail project, said Tuesday it plans to rescind a $928 million federal grant.
California Democratic gubernatorial candidate Gavin Newsom speaks after being elected governor of the state during an election night party in Los Angeles, California, U.S. November 6, 2018.
California is leading a 16-state coalition in challenging Trump's power to declare an emergency so he can accelerate his plans for a wall on the U.S. -Mexico border.
Still, the U.S. Department of Transportation said Newsom's remarks reinforced concerns about the project's ability to deliver.
Newsom responded, tweeting that the state would not give back any money and that the president is just "desperately searching for" money for the border wall. The current project, as planned, would cost too much and respectfully take too long.
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A full-scale mock-up of a high-speed train is seen in Sacramento in 2017. The price of the project skyrocketed from $45 billion to $77 billion.
Newsom, the newly elected California governor, has said the rail project is too expensive to link the two big cities and is suggesting the project be scaled back. The department added in a statement that it "is actively exploring every legal option to seek the return from California of $2.5 billion in Federal funds (Federal Railroad Administration) previously granted for this now-defunct project".
The project has faced cost overruns and years of delays.
If the federal government decides to take the money back, it doesn't have to wait for California to write a check.
"There are 47 other cities across California that are not complying with their planning requirements in one way or another", Newsom said. The move allows the president to bypass Congress to use money from the Pentagon and other budgets.
California Gov. Gavin Newsom, meanwhile, vowed to fight to keep the money, alleging that the move by the federal government was retaliation for the lawsuit.
The Trump administration is planning to withdraw nearly $1 billion in pending funding for California's long-awaited high-speed train project, citing cost overruns and inefficiencies.
"It would be very important to avoid anything that would disrupt the economic recovery in the Central Valley that has been brought about by high-speed rail", he said.