What to Know in Washington: Trump Escalates California Fight

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The Trump administration said yesterday that it will cancel more than $900 million in federal grants earmarked for an ambitious California high-speed rail project, escalating a feud between the White House and the state over several of the president’s policies.

Gov. Gavin Newsom (D), who took office in January, said last week that the rail project as planned “would cost too much and take too long,” and he would instead finish roughly 120 miles of track already under construction in the state’s Central Valley. The Transportation Department responded in a statement yesterday that it was exploring legal options to recoup $2.5 billion in federal funds already granted to the project by the Federal Railroad Administration, Ryan Beene and Romy Varghese report.

“This is clear political retribution by President Trump, and we won’t sit idly by,” Newsom said in a statement yesterday. “This is California’s money, and we are going to fight for it.”

Trump has lambasted California’s high-speed rail project, in the works for more than a decade, as wasteful and called for the state to return federal funding.

“We want that money back now. Whole project is a “green” disaster!” Trump said in a tweet last week. “The failed Fast Train project in California, where the cost overruns are becoming world record setting, is hundreds of times more expensive than the desperately needed Wall,” he tweeted yesterday.

Trump also targeted the state over its lawsuit to block the president from diverting funds from the federal budget to pay for his promised border wall. California sued the administration with 15 other states on Monday.

“As I predicted, 16 states, led mostly by Open Border Democrats and the Radical Left, have filed a lawsuit in, of course, the 9th Circuit!” he wrote yesterday. “California, the state that has wasted billions of dollars on their out of control Fast Train, with no hope of completion, seems in charge!”

Meanwhile, talks between California and federal officials on vehicle emissions and fuel economy standards have also broken down without a deal, three people familiar with the matter said. The EPA had been meeting with California’s Air Resources Board in pursuit of a compromise as the federal agencies aim to finalize by late March or early April a replacement for Obama-era fuel efficiency regulations that automakers are seeking to modify. For now, no further discussions are scheduled, Beene reports.


Photo: SAUL LOEB/AFP/Getty Images

Trump surveys California wildfires with Newsom, then lieutenant governor, in November.

Courts May Take Time to Weigh In on ‘Emergency’

Challengers to Trump’s emergency declaration filed lawsuits to block the president’s plan within days, but so far they don’t seem to be in a rush to get immediate redress from the courts, Kartikay Mehrotra reports.

California didn’t seek urgent injunctive relief, which would allow a federal judge to fast-track proceedings. Neither did the parties in the other three cases filed since Trump’s declaration. California is the first to get a hearing date, and still won’t appear before a San Francisco magistrate judge until May 21.

The lack of urgency may reveal a dilemma at the heart of the case: There’s no clear emergency that requires the immediate commandeering of federal budget funds to create a thousand-mile wall along the southern U.S. border. Things could change, however, if the president moves forward.

The American Civil Liberties Union also filed a lawsuit against the declaration on behalf of the Sierra Club, claiming the plan to circumvent Congress to acquire necessary funding to build a border wall is unconstitutional, Mehrotra and Patricia Hurtado report.

Resistance in Congress: Democrats have introduced several measures to counter Trump’s authority to build a wall without congressional consent. The various proposals would make it harder for the federal government to acquire private land along the border or repurpose federal funds for the construction of a barrier. While the Republican-controlled Senate will likely block these measures, Democrats will be able to force a floor vote on a resolution to disapprove the emergency declaration.

Democrats are seeking to curtail the use of federal funds for the wall in several bills. BGOV legislative analysts Sarah Babbage and Michael Smallberg take a closer look at each of those bills and what they would do.

Elections & Politics

Sanders 2020 Cashes In: Sen. Bernie Sanders (I-Vt.), the self-described democratic socialist who gained a national following when he challenged Hillary Clinton for the 2016 Democratic presidential nomination, raised more than $4 million yesterday from 150,000 individual donors after announcing another White House run, according to his campaign. That haul makes Sanders, by far, the top fundraiser among 2020 Democratic candidates on day one of their presidential bids. Read more from Kim Chipman.

Georgia Exhibit A in Push to Revive ‘Preclearances’: House Democrats used a field hearing in Georgia to start building their case for still-to-come legislation seeking stronger federal oversight of the way states conduct elections.

Black voters were disproportionately affected by Georgia’s use of exact-match signature requirements on absentee ballots; by the closing of more than 200 polling places; and by the purge of 1.5 million voter registrations over four years, advocates told a House subcommittee yesterday. States became emboldened to make changes once their proposals no longer had to be pre-approved by the Justice Department, witnesses told the House Administration Subcommittee on Elections, which held the hearing. Read more from Chris Marr.

Trump’s Deutsche Bank Loans: Top Deutsche Bank executives were so concerned after the 2016 election that the Trump Organization might default on about $340 million of loans while Trump was in office that they discussed extending repayment dates until after the end of a potential second term in 2025, according to people with knowledge of the discussions.

Members of the bank’s management board, including then CEO John Cryan, were leery of the public relations disaster they would face if they went after the assets of a sitting president, said the people, who asked for anonymity because the discussions were private. The bank ultimately decided against restructuring the loans to the Trump Organization, which come due in 2023 and 2024, and chose instead not to do any new business with Trump while he is president, one of the people said. Read more from Gavin Finch, Steven Arons and Shahien Nasiripour.

What Else to Know Today

Government Offices in D.C. Closed: U.S. federal offices in the Washington, D.C. area will be closed today, the Office of Personnel Management said, as the area braces for a winter storm. Emergency employees and telework employees will work, according to the OPM advisory.

Trump to Tap Jeffrey Rosen for Deputy AG This Week: Trump plans to nominate Jeffrey Rosen as his new deputy attorney general as soon as this week, according to people familiar with the matter. Rosen, now deputy secretary of the U.S. Transportation Department, would replace Rod Rosenstein, who oversaw the investigation led by Special Counsel Robert Mueller. Read more from Jennifer Jacobs.

Trump to Meet Austrian Chancellor: Austrian Chancellor Sebastian Kurz, the millennial who became Europe’s youngest head of government because he took on Angela Merkel over migration policy, is set to meet Trump today. The 32-year-old was flagged to Trump as a “rock star” of the European conservatives last year by the U.S. ambassador to Germany, Richard Grenell — currently tipped as a candidate to be the American envoy to the United Nations.

Talks will span trade and security — both sensitive issues that Kurz plans to bring up, delicately. Austria’s OMV AG — partly state-owned — is a major backer of the Nord Stream 2 gas pipeline from Russia that the U.S. is threatening with sanctions. German carmakers targeted by U.S. tariffs are big buyers of Austrian industrial goods and car parts. Read more from Matthias Wabl.

Making Up Lost Rule Comment Time: Chairmen of eight congressional committees recently asked the Office of Management and Budget to direct federal agencies to immediately reschedule all canceled public hearings and meetings, and reopen or extend public comment periods for rulemakings that spanned the shutdown. The OMB yesterday did not return a request for comment. However, a senior administration official said at the end of January that each individual agency controls its own comment periods for rules, not OMB. Read more from Cheryl Bolen.

An Environmental Border Fight: The need to control carrizo cane, a pernicious plant on the banks of the Rio Grande along the U.S.-Mexico border, is a rare element of border security that Republicans and Democrats agree on. But an agreement on how much to spend fighting the problem is an issue. Last week’s $321 billion government spending and border security package only provided $1 million to address the hundreds of miles of cane along the river. U.S. Customs and Border Patrol has estimated it would cost $2.75 million per mil e to dig and replace it with native vegetation. Tiffany Stecker takes a closer look at a lesser known border funding fight.

Education Department Probe: A top Education Department official tried to pressure the agency’s inspector general to end an investigation into the decision to reinstate a troubled college accreditor, congressional Democrats said. Deputy Secretary Mitchell “Mick” Zais asked Acting Inspector General Sandra Bruce to reconsider an investigation of the department’s decision to reinstate the Accrediting Council for Independent Colleges and Schools, five top Democrats told Secretary Betsy DeVos in a letter yesterday. Read more from Emily Wilkins.

Trump’s Space Force Pivot: Trump said in 2018 that the dangers posed to satellites that make modern warfare possible required a new military branch, an idea that came to be known as the Space Force. After months of debate, Trump yesterday signed an order creating a more modest Space Force that would sit within the Air Force, similar to how the Marine Corps sits within the Navy. Here’s what to know about the new force by Justin Bachman and Travis Tritten.

North Korea Summit: For much of the past four decades, North Korea’s nuclear ambitions have focused on a sprawling complex nestled in the mountains north of Pyongyang. All of that could come to an end after Trump and leader Kim Jong Un meet next week. The dismantlement of the Yongbyon Nuclear Scientific Research Center has emerged in recent months as a potential outcome from a second summit between the leaders planned for Feb. 27-28 in Vietnam. Moon Chung-in, a special adviser to South Korea’s president, told Bloo mberg last week that Kim had agreed to close the plant and allow inspectors — possibly giving the U.S. valuable insights into Kim’s weapons programs.

A deal to shutter Yongbyon would represent Trump’s first tangible victory toward reducing Kim’s nuclear capacity since he granted an unprecedented meeting last June. Read more from Youkyung Lee and Jon Herskovitz.

Syria Reconstruction: Syria accused the U.S. of sabotaging improved ties with Arab nations that could be key to rebuilding the war-shattered country. The U.S. has pressured allies to block moves to reinstate Syria into the Arab League, President Bashar al-Assad’s media adviser, Buthaina Shabaan, said in an interview yesterday in Moscow on the sidelines of a Middle East conference hosted by the Kremlin-backed Valdai Club. While symbolic, the restoration of Syria’s suspended membership has the potential to transform Damascus’s ties with the rest of the region, unlocking much-needed funds to rebuild after eight years of civil war.

Secretary of State Mike Pompeo “went to the Gulf states and sent someone to Lebanon in order to stop the normalization of relations with Syria,” Shabaan said. “It is an open secret really that the Americans are the ones who issued orders because they want to complete their agenda in Syria.” Read more from Henry Meyer.

Ethics Watchdog Rejects Ross’s Financial Disclosure: The top federal ethics watchdog has rejected Commerce Secretary Wilbur Ross’s 2017 financial disclosure form. The Office of Government Ethics declined to certify Ross’s latest financial disclosure because after reporting that he had sold off his shares in BankUnited that year, he actually sold the stock in October 2018. According to a later filing, he said he mistakenly believed that the shares had been sold earlier. Read more from Bill Allison.

To contact the reporter on this story: Zachary Sherwood in Washington at zsherwood@bgov.com

To contact the editor responsible for this story: Loren Duggan at lduggan@bgov.com

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