California Governor Gavin Newsom has expressed support for President Donald Trump and his administration's efforts to investigate fraud and wasteful spending within the state.
The spotlight on potential financial mismanagement intensified following a YouTube video by independent journalist Nick Shirley, which highlighted alleged fraud in Minnesota's child day care centers. According to the Daily Caller, during an exclusive interview with MS Now's Jacob Soboroff, Newsom addressed the administration's decision to freeze federal child care funding, with Press Secretary Karoline Leavitt suggesting a possible investigation into California.
Newsom remarked, "Well, I think it was, lets bring it on. Fraud in terms of child care? Hey, [if] you think for a second anyone countenances fraud. So if he has some unique insight and information, I look forward to partnering with them."
Newsom further emphasized his stance against fraud, stating, "Cant stand fraud. Cant stand waste and abuse," while criticizing the Trump administration's handling of taxpayer funds. The U.S. Department of Health and Human Services (HHS) announced a freeze on federal child care payments to Minnesota on December 30, a move that could potentially extend to other Democrat-led states, including California.
This freeze is expected to impact $7 billion for the Temporary Assistance for Needy Families program, $2.4 billion for the Child Care Development Fund, and $870 million for social services grants, as reported by CBS News.
In response to the scrutiny over California's financial practices, Trump took to Truth Social to announce the commencement of a fraud investigation into the state, writing, "California, under Governor Gavin Newscum, is more corrupt than Minnesota, if thats possible??? The Fraud Investigation of California has begun. Thank you for your attention to this matter!"
Newsom's office, in turn, issued a statement to the Daily Caller News Foundation, dismissing Trump's claims as baseless and attacking his credibility. "HAHAHAHA. Donald Trump is a deranged, habitual liar whose relationship with reality ended years ago," the statement read.
Newsom's office defended the governor's record, highlighting efforts to combat fraud and protect taxpayers. "Since taking office, hes blocked over $125 BILLION in fraud, arrested criminal parasites leaching off of taxpayers, and protected taxpayers from the exact kind of scam artists Trump celebrates, excuses, and pardons," the statement continued. The office also referenced previous posts on X, countering accusations related to the state's policies.
California has long faced scrutiny over its spending practices, with ongoing issues such as homelessness, crime, and unfinished projects burdening taxpayers. The state has been accused of wasteful spending and fraud, including $32.6 billion in Pandemic Unemployment Assistance payouts, $24 billion on homelessness since 2019, and $16 billion tied up in the unfinished high-speed rail project.
Additionally, California has struggled with a persistent budget deficit, with the Legislative Analyst's Office admitting to a $5 billion error in the 2026-27 deficit estimate.
The state anticipated a nearly $13 billion budget problem for 2026-2027, but recent updates revealed significant discrepancies. Over the past three fiscal cycles, California has faced substantial deficits, including $27 billion in 2023-2024, $55 billion in 2024-2025, and $15 billion in 2025-2026.
As Trump initiates an investigation into California's financial practices, the specifics of the administration's approach remain uncertain.
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