The changing of the guard in Washington, D.C. on January 20 will likely complicate the California High-Speed Rail Authority’s plans to fund construction of its Early Operating Segment in the Central Valley. A new administration, hostile to California generally and rail funding in particular, will be less willing than its predecessor to offer additional grant funding. Rather than wait out the new administration and hope for better results in 2028, now would be a good time for the Authority, the legislature, and the governor to scale back the project.

The most recent high-speed rail business plan, released in May, projects an additional $4.7 billion in federal funding to cover the projected $35.3 billion cost of the initial project scope, which includes connecting Merced to Bakersfield, funding “bookend” projects such as Caltrain electrification between San Jose and San Francisco, and covering administrative expenses. Of the $4.7 billion federal funding the Authority hopes for, only $221 million is included in submitted grant applications that the Biden Administration might approve in its waning days.

The remaining $4.5 billion would have to be approved by a Trump-controlled Department of Transportation. During the first Trump administration, no high speed rail (HSR) grants were approved and the Federal Railway Administration even attempted to cancel a grant previously approved under President Obama. Since the Authority has not spent all the grant money approved under President Biden, it may be vulnerable to another such retraction which would expand the fiscal hole beyond $4.5 billion.

Recently, congressional Republicans have shown their continuing opposition to the project. The House of Representatives’ FY 2025 transportation budget bill specifically forbids further funding of California high-speed rail. The Senate’s version contains no such restriction, and neither bill is likely to be enacted during the lame duck session. Although the House’s ban on high-speed rail funding probably won’t become law now, it is indicative of the GOP’s current stance on the issue. With Congressional Republicans looking for discretionary spending cuts to offset the fiscal impact of their planned tax reductions, high-speed rail will continue to be on the chopping block.

One key influencer on the second Trump administration, Elon Musk, also has a record of hostility to the California HSR. In a 2013 paper, Musk proposed hyperloop as a faster, lower-cost alternative to HSR, asking:

How could it be that the home of Silicon Valley and JPL – doing incredible things like indexing all the world’s knowledge and putting rovers on Mars – would build a bullet train that is both one of the most expensive per mile and one of the slowest in the world?

Although hyperloop has yet to be successfully commercialized (and may never be), Musk remains skeptical of California HSR. As recently as this September, he was still taking swipes at the project on X. If Musk takes the helm of a “Department of Government Efficiency” in the next Trump administration, high-speed rail funding in California and elsewhere would likely be high among the targets for cost savings.

The expected California response to a federal funding freeze will be to keep HSR going with state funds until a more friendly administration takes over. The first opportunity for a more receptive executive branch will come in 2029, shortly before the currently projected service inception date in the early 2030s, and the results of the 2028 election are by no means assured. Even if Democrats regain the White House, they may be operating in a fiscally constrained environment not conducive to major investments like renewed high-speed rail support.

A better alternative for California is to scale back this project, so that something useful can be completed with existing resources. One alternative would be to finish the 119 miles of track now under construction and connect it to existing track now used by the Amtrak San Joaquins service. This should provide travel time savings between Merced and Bakersfield even though the new track would not reach either terminus.

Marc Joffe is a federalism and state policy analyst at the Cato Institute.