Donald Trump is being blamed for California’s “balanced budget” with a $12 billion shortfall. The nonprofit watchdog, CalMatters, said the state’s leadership has continually failed to make necessary budget reductions to stem off California’s three-year fiscal crisis, including the failure to cut cash payments and Medi-Cal benefits to illegal immigrants. Is that Trump’s fault?
Newsom is standing firm on his “healthcare for all” agenda including providing it to ineligible (illegal) immigrants. The Los Angeles Times reported up to 55% of all of the state’s illegal immigrants are on Medi-Cal. The Times estimated the cost to California taxpayers is $9.5 billion and that will rise.
The federal government has issued a subpoena to investigate the state’s payment of Social Security benefits to ineligible “aliens” via the state’s Cash Assistance Program for Immigrants. Homeland Security Secretary Kristi Noem said, “Radical left politicians in California prioritize illegal aliens over our own citizens, including giving illegal aliens access to cash benefits.”
Newsom claimed he would cut Medi-Cal but flip-flopped to keep dental benefits for another year and will not charge illegals a $30/month premium to keep benefits. Plus, the legislature voted to return to an “asset test” for Medi-Cal eligibility but the governor refused that opening the door for more persons to obtain welfare benefits.
The standard asset test—bank accounts, stocks, and bonds—is $2,000 for individuals and $3,000 for couples. Thirty-seven states use the $2,000/ $3,000 asset test, but California has NO asset limits. It removed all limits in 2024. The legislature wanted to return to its 2023 standard, 138% of the poverty level, and that would have saved the state over $1 billion. Newsom rejected that, too, instead putting the state at risk at falling short on illegal immigrants benefits as it did last fiscal year. CalMatters predicts the state will have a $30 billion budget shortfall by the end of the 2026 fiscal year because of Newsom’s refusal to cut welfare benefits to illegals.
Beginning in January 2026, adults without legal status will be frozen out of the state’s welfare program, at least on paper.
Lastly, the state has not updated its Assisted Living Waiver Program budget and enrollment information, but it appears there is still a “freeze” to new recipients being placed into care. There are over 12,000 persons on the ALW waitlist but there are more approved facilities. If the placement freeze remains the 12,000 on the waitlist will stay there.