Politics
Newsom called it a 'gimmick.' Now he’s using the trick to lower California’s massive deficit
With a windfall of cash five years ago, Gov. Newsom said he was doing away with a state budget “gimmick” one of his predecessors relied on to shave about $800 million off a deficit during the Great Recession.
The accounting trick, adopted in 2009, delayed state worker payroll from the end of one fiscal year on June 30 to the start of the next on July 1. A decade later Newsom spent nearly $1 billion to end the subterfuge, with one caveat.
“If I use it in six years, in a recession, forgive me,” Newsom said.
At his urging, Newsom and lawmakers have agreed to use the budget gimmick next year even though California isn’t in a recession.
The tactic is one of several maneuvers Democrats are relying on to reduce a historic budget deficit of at least $37.9 billion by pushing their spending problem forward to another year.
Of the $17.3 billion in budget reductions Newsom and Democrats have agreed to so far, only $3.6 billion are actual cuts.
Lawmakers made the first of those cuts Thursday and passed a budget trailer bill that lowers unspent funding allocations in 2022-23 and 2023-24 by $1.6 billion. Though Newsom touted the changes as part of an “early action” deal to shrink the deficit in April, many of the reductions won’t be reflected in legislation until June or later.
At least so far, Newsom and lawmakers are largely relying on mechanisms other than cuts to shrink the deficit: borrowing $5.2 billion, delaying and deferring $5.2 billion in funding for state-sponsored programs to subsequent years and tapping into $3.4 billion from separate state funds. Democrats also agreed to draw down at least another $12.2 billion from the rainy day fund to cover their spending.
Budget watchers and Republican lawmakers criticized the strategy, saying that resorting to clever accounting now and dipping into California’s savings account while the economy remains strong will make the state more vulnerable to drastic cuts if a recession hits in the years ahead and revenue declines.
Newsom’s critics blame the governor and Democrats for overspending and causing the deficit. The “gimmick” is an example of what his critics view as Democrats failing to make the kind of tough choices that California households are forced to weigh when they spend more money than they bring in.
“They are doing things that you normally do in a recession and there is no recession here,” said David Crane, president of Govern for California, a nonprofit that seeks to oppose the influence of labor unions on state government. “You shouldn’t have to be dipping into reserves to meet a budget deficit if your revenues are 50% higher than they were when you came into office.”
General fund revenues, which the state uses to pay for most public services, were $140 billion when Newsom took office in in 2018-19. The governor’s January budget assumes revenues of more than $214 billion, an increase of 53%, for the upcoming fiscal year when Democrats plan to cut the rainy day fund in half.
According to the UCLA Anderson Forecast in March, California’s economy is growing faster than the rest of the nation and the possibility of a U.S. recession is fading. Newsom regularly trumpets the strength of the state economy.
“While there are still challenges ahead — notably, state and local government finance, homelessness and out-migration — the forces driving California’s economy remain robust,” UCLA economists wrote.
H.D. Palmer, a spokesperson for the governor’s Department of Finance, said the cuts Democrats have agreed to so far are part, but not all of the solution to the budget woes with more decisions coming in June. He also pointed to the fact that more than 70% of the general fund is spent on K-12 education, healthcare and human services.
“If you don’t agree with these solutions, that’s fine. What specific proposals would you offer up to offset that in terms of programmatic reductions?” he asked of budget critics.
Assembly Republican leader James Gallagher of Yuba City said he would start by funding the fundamentals, such as education, infrastructure and public safety, and then deciding what else the state has resources for.
Newsom often promotes all the one-time funding in his prior budgets, which he said would be easy to stop if the state swung from surplus to shortfall. But he has continued to support many of his expensive political priorities, such as the expansion of Medi-Cal to all eligible low-income immigrants, regardless of their legal status. A state audit also found that California has failed to monitor the effectiveness of its costly homelessness programs, which Newsom and lawmakers have spent $20 billion on over the last five years.
“A $73-billion deficit is no joke,” Gallagher said. “It’s a serious problem we’ve got to address. It makes me think that the governor just wants to ride this out until the end of his term and just leave this problem to somebody else.”
A combination of delayed tax deadlines and overspending based on inaccurate budget projections created the budget shortfall, which happens when spending exceeds projected revenues.
Newsom and lawmakers expected revenues to fall below projections because of a declining stock market, high interest rates and increased inflation, but the deficit is much worse than the state accounted for last June. The Newsom administration last pegged the deficit at $37.9 billion in January, though a more recent estimate from the Legislative Analyst’s Office suggests it could be up to $73 billion by the time the governor unveils his revised budget proposal in mid-May.
The state budget in California is largely dependent on income taxes paid by its highest earners. Revenues are prone to volatility, hinging on capital gains from investments, bonuses to executives and windfalls from new stock offerings, and notoriously difficult for the state to predict.
The governor repeatedly blames the shortfall problem on a decision by the federal government to delay the deadline to file 2022 income tax returns from April to November of last year due to winter storms.
In a typical budget year, state government has tax receipts in hand before the governor unveils a revised budget proposal in mid-May and before he reaches a final spending agreement with lawmakers in June. The tax delay forced lawmakers and the governor to enact the current budget in July based on estimates of how much money the state would collect in tax revenues by the November deadline. Those estimates were wildly off.
The legislation approved Thursday goes back and reduces unspent funding in the prior and current budget years. The changes include cutting $45 million for protecting communities from wildfire, $88 million for watershed resilience and reduces funding to expand broadband internet access by $34 million, among other trims.
The bill was part of the “early action” lawmakers and the governor announced that they would take in April to lower the deficit by $17.3 billion before the May revise. But only $3.3 billion of the reductions he claimed they would make can be adopted in law now, and the majority will be included in the final budget agreement, along with other reductions, approved this summer.
“We put forward this early action plan to protect our progress and safeguard core programs so that we could spend time and energy on the more challenging decisions to close the remaining budget gap responsibly,” said Senate President Pro Tem Mike McGuire (D-Healdsburg) during floor debates in the Senate on Thursday. “And we’re gonna do just that.”
Democrats are attempting to offset the budget crisis before May, when an updated estimate might show an even deeper shortfall. Democrats also took an unusual step of requiring the state finance department to subtract the $17.3 billion from the estimated deficit before the budget is revised in May, making the shortfall appear smaller before many of the changes are reflected in law.
“This budget is nothing but smoke and mirrors, backroom deals done by the party in control,” said Sen. Brian Dahle (R-Bieber).
Delaying payroll from June 30, 2025 to July 1, 2025 is among the changes that Democrats agreed to, but will not vote on until this summer.
While Crane, a political donor of Assembly Speaker Robert Rivas and dozens of other lawmakers, opposes Newsom’s decision to use the budget gimmick again, he said the “biggest sin” is the decision to dip into the state’s reserves in the absence of a recession. Newsom will have to declare a budget emergency in order to do so under state law.
“My one hope is that by the time the May revise comes around, he’s able to say I’m no longer going to have to dive into reserves,” Crane said.
Politics
Dan Bongino officially leaves FBI deputy director role after less than a year, returns to ‘civilian life’
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Dan Bongino returned to private life on Sunday after serving as deputy director of the Federal Bureau of Investigation (FBI) for less than a year.
Bongino said on X that Saturday was his last day on the job before he would return to “civilian life.”
“It’s been an incredible year thanks to the leadership and decisiveness of President Trump. It was the honor of a lifetime to work with Director Patel, and to serve you, the American people. See you on the other side,” he wrote.
The former FBI deputy director announced in mid-December that he would be leaving his role at the bureau at the start of the new year.
BONDI, PATEL TAP MISSOURI AG AS ADDITIONAL FBI CO-DEPUTY DIRECTOR ALONGSIDE BONGINO
Dan Bongino speaks with FBI Director Kash Patel as they attend the annual 9/11 Commemoration Ceremony at the National 9/11 Memorial and Museum in New York City on Sept. 11, 2025. (Michael M. Santiago/Getty Images)
President Donald Trump previously praised Bongino, who assumed office in March, for his work at the FBI.
“Dan did a great job. I think he wants to go back to his show,” Trump told reporters.
FBI DIRECTOR, TOP DOJ OFFICIAL RESPOND TO ‘FAILING’ NY TIMES ARTICLE CLAIMING ‘DISDAIN’ FOR EACH OTHER
“After his swearing-in ceremony as FBI Deputy Director, Dan Bongino paid his respects at the Wall of Honor, honoring the brave members of the #FBI who made the ultimate sacrifice and reflecting on the legacy of those who paved the way in the pursuit of justice and security,” the FBI said in a post on X. (@FBI on X)
Bongino spoke publicly about the personal toll of the job during a May appearance on “Fox & Friends,” saying he had sacrificed a lot to take the role.
“I gave up everything for this,” he said, citing the long hours both he and FBI Director Kash Patel work.
“I stare at these four walls all day in D.C., by myself, divorced from my wife — not divorced, but I mean separated — and it’s hard. I mean, we love each other, and it’s hard to be apart,” he added.
The FBI’s J. Edgar Hoover headquarters building in Washington on Nov. 2, 2016. (AP Photo/Cliff Owen, File)
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Bongino’s departure leaves Andrew Bailey, who was appointed co-deputy director in September 2025, as the bureau’s other deputy director.
California has tried all manner of design in choosing its governor.
Democrat Gray Davis, to name a recent example, had an extensive background in government and politics and a bland demeanor that suggested his first name was also a fitting adjective.
Republican Arnold Schwarzenegger, by contrast, was a novice candidate who ran for governor on a whim. His super-sized action hero persona dazzled Californians like the pyrotechnics in one of his Hollywood blockbusters.
In the end, however, their political fates were the same. Both left office humbled, burdened with lousy poll numbers and facing a well of deep voter discontent.
(Schwarzenegger, at least, departed on his own terms. He chased Davis from the Capitol in an extraordinary recall and won reelection before his approval ratings tanked during his second term.)
There are roughly a dozen major candidates for California governor in 2026 and, taken together, they lack even a small fraction of Schwarzenegger’s celebrity wattage.
Nor do any have the extensive Sacramento experience of Davis, who was a gubernatorial chief of staff under Jerry Brown before serving in the Legislature, then winning election as state controller and lieutenant governor.
That’s not, however, to disparage those running.
The contestants include a former Los Angeles mayor, Antonio Villaraigosa; three candidates who’ve won statewide office, former Atty. Gen. Xavier Becerra, schools Supt. Tony Thurmond and former Controller Betty Yee; two others who gained national recognition during their time in Congress, Katie Porter and Eric Swalwell; and Riverside County’s elected sheriff, Chad Bianco.
The large field offers an ample buffet from which to choose.
The rap on this particular batch of hopefuls is they’re a collective bore, which, honestly, seems a greater concern to those writing and spitballing about the race than a reflection of some great upwelling of citizens clamoring for bread and circuses.
In scores of conversations with voters over the past year, the sentiment that came through, above all, was a sense of practicality and pragmatism. (And, this being a blue bastion, no small amount of horror, fear and loathing directed at the vengeful and belligerent Trump administration.)
It’s never been more challenging and expensive to live in California, a place of great bounty that often exacts in dollars and stress what it offers in opportunity and wondrous beauty.
With a governor seemingly more focused on his personal agenda, a 2028 bid for president, than the people who put him in office, many said they’d like to replace Gavin Newsom with someone who will prioritize California and their needs above his own.
That means a focus on matters such as traffic, crime, fire prevention, housing and homelessness. In other words, pedestrian stuff that doesn’t light up social media or earn an invitation to hold forth on one of the Beltway chat shows.
“Why does it take so long to do simple things?” asked one of those voters, the Bay Area’s Michael Duncan, as he lamented his pothole-ridden, 120-mile round-trip commute between Fairfield and an environmental analyst job in Livermore.
The answer is not a simple one.
Politics are messy, like any human endeavor. Governing is a long and laborious process, requiring study, deliberation and the weighing of competing forces. Frankly, it can be rather dull.
Certainly the humdrum of legislation or bureaucratic rule-marking is nothing like the gossipy speculation about who may or may not bid to lead California as its 41st governor.
Why else was so much coverage devoted to whether Sen. Alex Padilla would jump into the gubernatorial race — he chose not to — and the possible impact his entry would have on the contest, as opposed to, say, his thinking on CEQA or FMAP?
(The former is California’s much-contested Environmental Quality Act; the latter is the formula that determines federal reimbursement for Medi-Cal, the state’s healthcare program for low-income residents.)
Just between us, political reporters tend to be like children in front of a toy shop window. Their bedroom may be cluttered with all manner of diversion and playthings, but what they really want is that shiny, as-yet unattained object — Rick Caruso! — beckoning from behind glass.
Soon enough, once a candidate has entered the race, boredom sets in and the speculation and desire for someone fresh and different starts anew. (Will Atty. Gen. Rob Bonta change his mind and run for governor?)
For their part, many voters always seem to be searching for some idealized candidate who exists only in their imagination.
Someone strong, but not dug in. Willing to compromise, but never caving to the other side. Someone with the virginal purity of a political outsider and the intrinsic capability of an insider who’s spent decades cutting deals and keeping the government wheels spinning.
They look over their choices and ask, in the words of an old song, is that all there is? (Spoiler alert: There are no white knights out there.)
Donald Trump was, foremost, a celebrity before his burst into politics. First as a denizen of New York’s tabloid culture and then as the star of TV’s faux-boardroom drama, “The Apprentice.”
His pizzazz was a large measure of his appeal, along with his manufactured image as a shrewd businessman with a kingly touch and infallible judgment.
His freewheeling political rallies and frothy social media presence were, and continue to be, a source of great glee to his fans and followers.
His performance as president has been altogether different, and far less amusing.
If the candidates for California governor fail to light up a room, that’s not such a bad thing. Fix the roads. Make housing more affordable. Help keep the place from burning to the ground.
Leave the fun and games to the professionals.
Politics
Kamala Harris blasts Trump administration’s capture of Venezuela’s Maduro as ‘unlawful and unwise’
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Former Vice President Kamala Harris on Saturday evening condemned the Trump administration’s capture of Venezuelan dictator Nicolás Maduro and his wife, calling the operation both “unlawful” and “unwise.”
In a lengthy post on X, Harris acknowledged that Maduro is a “brutal” and “illegitimate” dictator but said that President Donald Trump’s actions in Venezuela “do not make America safer, stronger, or more affordable.”
“Donald Trump’s actions in Venezuela do not make America safer, stronger, or more affordable,” Harris wrote. “That Maduro is a brutal, illegitimate dictator does not change the fact that this action was both unlawful and unwise. We’ve seen this movie before.
“Wars for regime change or oil that are sold as strength but turn into chaos, and American families pay the price.”
SEE PICS: VENEZUELANS WORLDWIDE CELEBRATE AS EXILES REACT TO MADURO’S CAPTURE
Vice President Kamala Harris had strong words for the Trump administration’s capture of Venezuelan leader Nicolás Maduro. (Montinique Monroe/Getty Images)
Harris made the remarks hours after the Trump administration confirmed that Maduro and his wife were captured and transported out of Venezuela as part of “Operation Absolute Resolve.”
The former vice president also accused the administration of being motivated by oil interests rather than efforts to combat drug trafficking or promote democracy.
“The American people do not want this, and they are tired of being lied to. This is not about drugs or democracy. It is about oil and Donald Trump’s desire to play the regional strongman,” Harris said. “If he cared about either, he wouldn’t pardon a convicted drug trafficker or sideline Venezuela’s legitimate opposition while pursuing deals with Maduro’s cronies.”
SECOND FRONT: HOW A SOCIALIST CELL IN THE US MOBILIZED PRO-MADURO FOOT SOLDIERS WITHIN 12 HOURS
President Donald Trump shared a photo of captured Venezuelan President Nicolás Maduro aboard the USS Iwo Jima after Saturday’s strikes on Venezuela. (Donald Trump via Truth Social)
Harris, who has been rumored as a potential Democratic contender in the 2028 presidential race, additionally accused the president of endangering U.S. troops and destabilizing the region.
“The President is putting troops at risk, spending billions, destabilizing a region, and offering no legal authority, no exit plan, and no benefit at home,” she said. “America needs leadership whose priorities are lowering costs for working families, enforcing the rule of law, strengthening alliances, and — most importantly — putting the American people first.”
MADURO’S FALL SPARKS SUSPICION OF BETRAYAL INSIDE VENEZUELA’S RULING ELITE
CIA Director John Ratcliffe, left, President Donald Trump and Secretary of State Marco Rubio watch U.S. military operations in Venezuela from Mar-a-Lago in Florida early Saturday. (Donald Trump via Truth Social)
Maduro and his wife arrived at the Metropolitan Detention Center in Brooklyn late Saturday after being transported by helicopter from the DEA in Manhattan after being processed.
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Earlier in the day, Trump said that the U.S. government will “run” Venezuela “until such time as we can do a safe, proper and judicious transition.”
Harris’ office did not immediately respond to Fox News Digital’s request for comment.
Fox News Digital’s Jasmine Baehr contributed to this report.
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