Politics
Despite revenue increase, Newsom plans to pull from California's rainy day reserves
Gov. Gavin Newsom touted higher than expected tax revenues and a “modest surplus” in an unconventional preview of his $322.2 billion spending proposal for the upcoming fiscal year, but his office said he still plans to pull money from the state’s rainy day reserves to pay for policy priorities.
The Democratic governor delivered a selective presentation of his initial 2025-26 budget at Cal State Stanislaus on Monday that largely praised the state’s economic position under his leadership and made it difficult to understand the full scope of his spending plan. Newsom said details would be forthcoming at the end of the week.
The early, yet incomplete look at his proposal shows that Newsom’s annual spending plan has grown by $24 billion compared to the current budget enacted in July. The governor announced a projection of an extra $16.5 billion in tax revenue above his administration’s prior estimates, which the Department of Finance said is spread over three years.
“The top lines include a balanced budget, no deficits,” Newsom said.
The proposal kicks off the annual six-month process in which the governor and lawmakers negotiate a final spending plan to be approved in late June. Newsom’s presentation at a college campus in the Central Valley town of Turlock was an unusual twist on the ritual, driven by Newsom’s decision to travel to Washington, D.C., later this week for the funeral of former President Carter.
Because he presented the budget a few days earlier than initially planned, Monday’s rollout did not include the detailed budget document that typically accompanies the governor’s presentation.
Newsom described his proposal as making “significant commitments to accountability, transparency and results” and “maintaining fiscal discipline in a time of deep uncertainty.”
Despite the revenue increase, the cost of providing Medi-Cal coverage to seniors and more undocumented immigrants, offering pre-kindergarten to all 4-year-olds, creating a new $420-million tax break for Hollywood film studios and funding other signature Newsom policies leaves California with a spending problem.
Newsom’s office said he plans to withdraw another $7.1 billion from California’s rainy day reserves in the upcoming budget year, after declaring a fiscal emergency last year to take out $5.1 billion to balance the current budget and another $900 million from a safety-net reserve.
The decision to dip into the state’s savings account was part of an agreement made last year with lawmakers to also delay programs, cut spending and rely on the occasional accounting gimmick to solve a $46.8 billion deficit. California leaders were forced to reconcile a $31.7 billion deficit the prior year.
Senate President Pro Tem Mike McGuire (D-Healdsburg) said those tough decisions put California in a better financial position today.
“We look forward to taking a close look at the governor’s full proposal later this week,” McGuire said in a statement. “The major work will happen in the months ahead, when we’ll get down to brass tacks and craft a responsible and balanced budget which will help make California more livable and affordable.”
Assemblymember Carl DeMaio, a Republican elected in November to represent inland San Diego County, called the governor’s proposal “negligent” before Newsom even delivered his presentation.
“Gavin Newsom is in over his head and hopes that no one notices — but no amount of Enron-style accounting will change the alarming reality that Gavin Newsom has created a fiscal crisis,” DeMaio said in a statement, calling on his fellow lawmakers to reject the governor’s proposal.
Analysts warn that the financial outlook will worsen in the future with the potential for even greater economic upheaval under the incoming Trump administration.
The California Legislative Analyst’s Office in November predicted a largely balanced budget in 2025-26 with a shortage of $2 billion, while anticipating a deficit of about $20 billion in 2026-27 and an even higher shortfall by 2028-29 of about $30 billion.
The LAO reported that the California economy has been in a gradual slowdown over the last two years, with about 25% more unemployed workers overall and declining trends in consumer spending.
Newsom did not offer a deficit projection for future years and said he will share more when he presents his revised budget proposal in May.
Corrin Rankin, vice chair of the California Republican Party, criticized the governor for not doing enough to help regular Californians.
“Handing out tax breaks to Hollywood and spending on AI is great for the state’s billionaires,” Rankin said in response to Newsom’s presentation. “However, the rest of us feel like we’re drowning in growing costs and our lives haven’t been improved.”
Assembly Speaker Robert Rivas (D-Hollister) agreed that the state needs to tackle cost-of-living issues.
“We also need to prepare for challenges ahead and must show restraint with spending,” Rivas said in a statement. “I am committed to working with the governor and my colleagues on a budget that protects essential services and makes life more affordable.”
The Newsom administration has said President-elect Trump’s plan for international tariffs, uncertainty around federal Medi-Cal funding and threats to withhold disaster funding increase the likelihood of even greater budget uncertainty in the years ahead.
“We really have to see what fire and fury comes from Trump in the next few weeks and really get a sense,” Newsom said.
The governor is expected to leave for the Carter funeral after he spends time with President Biden Tuesday in California to celebrate the new Chuckwalla National Monument near Joshua Tree and the Sáttítla National Monument near the Oregon border.
Joe Stephenshaw, director of the California Department of Finance, will formally present the budget to the Legislature and answer questions on Friday.
Newsom plans to leave the state Saturday for a vacation with his family.
Elon Musk said he is “disappointed” by the costs of President Donald Trump’s “one big, beautiful bill” passed by Republicans in the House last week.
“I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing,” Musk told “CBS Sunday Morning” in an exclusive broadcast interview.
DEMS SLAM TRUMP ADMINS OVER ALLEGED $436B SPENDING BLOCK
Under President Donald Trump, the Elon Musk-led DOGE has slashed billions in what it deems wasteful government spending. Musk criticized Trump-endorsed “one big, beautiful bill” over the weekend. (Brandon Bell/Getty Images)
The remarks by Musk, who recently stepped back from running the Department of Government Efficiency, or DOGE, are in contrast to Trump, who backed the legislation, which still needs Senate approval.
The One Big Beautiful Bill Act passed 215 to 214 in the House. All Democrats and two Republicans, Reps. Thomas Massie, R-Ky., and Warren Davidson, R-Ohio, voted against the bill. House Freedom Caucus Chair Andy Harris, R-Md., voted “present.”
The bill is a victory for Trump and House Republicans, who overcame policy disagreements to deliver on Trump’s key campaign promises, including an extension of his 2017 tax cuts and no tax on tips, overtime and Social Security.
SENATE DEMS RAIL AGAINST ‘SHADOW SPEAKER’ BILLIONAIRE ELON MUSK: ‘NOT ELECTED TO ANYTHING’
Speaker of the House Mike Johnson (R-LA) speaks to the media after the House narrowly passed a bill forwarding President Donald Trump’s agenda at the U.S. Capitol on May 22. (Photo by Kevin Dietsch/Getty Images)
It aims to cut roughly $1.5 trillion in government spending. The U.S. government is still more than $36 trillion in debt and has spent $1.05 trillion more than it has collected in the 2025 fiscal year, according to the Treasury Department.
The bill still faces hurdles.
President Donald Trump and Tesla CEO Elon Musk speak to reporters near a red Model S Tesla vehicle on the South Lawn of the White House Tuesday, March 11, 2025, in Washington. (Pool via AP) (Pool via AP )
The Senate is tasked with passing its own version. Republican leaders are hoping to send the bill to Trump’s desk by the Fourth of July.
Fox News Digital’s Deirdre Heavey contributed to this report.
Politics
Trump set to pardon reality TV stars Todd and Julie Chrisley in bank fraud, tax evasion case
“Chrisley Knows Best” reality TV stars Todd Chrisley and Julie Chrisley may soon leave life in federal prison behind, thanks to President Trump.
The White House announced Tuesday that the president was set to pardon the imprisoned reality TV personalities nearly three years after they were convicted in 2022 of tax evasion and bank fraud. The Georgia couple gained popularity for their USA Network series, which showcased their luxurious lifestyle and zany family dynamic.
The White House posted a video of Trump on the phone with Todd and Julie’s 27-year-old daughter, Savannah Chrisley, who has publicly decried her parents’ conviction and the toll it has taken on their family. He called the younger Chrisley, who also starred in “Chrisley Knows Best,” “to inform her that he will be granting full pardons to her parents.”
“Trump Knows Best,” the tweet said.
A legal representative for the Chrisleys did not immediately respond to The Times’ request for comment on Tuesday.
A federal grand jury in Atlanta indicted the Chrisley parents on several charges including tax evasion, conspiracy and wire fraud. Prosecutors alleged the charges stemmed from a scheme, which lasted from 2007 to 2012, that involved the stars submitting fake financial statements to financial institutions to get loans worth millions of dollars. A second indictment was filed in February, and Todd, 56, and Julie Chrisley, 52, were convicted on all charges in June 2022.
In November of that year, the reality TV stars were sentenced to prison: Todd was sentenced to 12 years in federal prison and Julie received seven years. They also received 16 months probation each. In September 2024, Julie Chrisley was resentenced, but a federal judge upheld her seven-year sentence.
Since her parents’ convictions, Savannah has spoken out, strongly challenging the verdict. Over the years, she has alleged corruption in the court proceedings, described the alleged “nightmare” conditions of her parents’ prison facilities and touted plans to appeal their convictions — airing her grievances and hopes on her “Unlocked” podcast, “The Masked Singer” and even at the Republican National Convention in July, where she threw her support behind Trump. During the political event, she alleged her family “was persecuted by rogue prosecutors in Fulton County due to our public profile … and our conservative beliefs.”
“Donald J. Trump has only one conviction that matters, and that is his conviction to make America great again,” she added elsewhere in her RNC address.
On Tuesday, Savannah brought news of Trump’s intentions to pardon her parents to Instagram. Wearing a white and gold MAGA hat, Savannah shared her side of her call with President Trump.
“I have shed so many tears. The president called me personally as I was walking into Sam’s Club and notified me that he was signing … pardon paper[s] for both of my parents,” she said. “So both my parents are coming home tonight or tomorrow. I still don’t believe it’s real.
“The fact that the president called me — I will forever be grateful for President Trump, his administration and everyone along the way,” she said, adding later in her video she “vows” to stand alongside Trump and continue to expose “corruption.”
It is one of the more baffling story lines of Donald J. Trump’s second term. The president has said he wants to personally visit Fort Knox to ensure that no one has stolen the government-owned gold bars that are stored there.
Mr. Trump has not explained why any gold might be missing from the nation’s heavily guarded reserves. His own Treasury secretary, Scott Bessent, has insisted that there is no reason to worry. “All the gold is there,” Mr. Bessent emphatically told Bloomberg in February, at one point looking directly into a camera and addressing the American people.
Mr. Trump’s interest in the gold reserves has been largely overshadowed by his family’s involvement in various cryptocurrency ventures, which has raised ethical concerns about potential conflicts of interest.
The president has a long history of embracing conspiracy theories, and is known to be a fan of golden and gilded things. It is difficult to say what exactly is behind his recent fanning of unfounded fears about Fort Knox, which have been floating around since at least the 1970s.
A White House spokesperson did not respond when asked to comment for this story.
What is certain is that gold is on many investors’ minds these days. Generally seen as a safe place to park wealth during tumultuous periods, the precious metal has risen to record prices recently, in part because of the global economic uncertainty that the president’s shifting tariff policies caused.
Some of Mr. Trump’s allies, including his eldest son, serve as pitchmen for gold investment companies that advertise heavily on their podcasts or radio shows.
And some of them have been using fresh concerns about Fort Knox to make a profit.
The Gold Conspiracy That Wouldn’t Go Away
If nothing else, Mr. Trump’s Fort Knox obsession has resurfaced one of the deeper cuts in the American conspiracy theory catalog.
One reason the government holds onto such large stores of gold is to confer a sense of financial stability, even though the country moved off the gold standard in the 20th century. According to the United States Mint, 147.3 million ounces of gold, about half of the government’s stash, is held at Fort Knox.
The Kentucky facility, known formally as the United States Bullion Depository at Fort Knox, almost never allows visitors and is kept under famously heavy lock and key — an inaccessibility that may explain much of the intrigue around it.
One of the main early proponents of the idea that gold was missing from Fort Knox was a lawyer named Peter Beter, who earned a modicum of notoriety in the 1970s by spreading dark theories in a mail-order audio cassette series. Among other things, Mr. Beter believed that “organic robotoids,” controlled by Bolsheviks, had infiltrated the federal government.
By 1974, concerns about the gold reserves grew so intense that a congressional delegation and a few news outlets, including The New York Times, were invited to Fort Knox for a rare inspection. A reporter for The Times described the effect of seeing a vault 6 feet wide and 12 feet deep, stacked with 36,236 glistening gold bars, as “awesome.”
Another wave of concern crested in 2011, when then-Representative Ron Paul, the Texas Republican, introduced a bill calling for an inventory of the reserves. At a subcommittee hearing, Mr. Paul said people had become worried that “the gold had been secretly shipped out of Fort Knox and sold.” He added, “And, still others believe that the bars at Fort Knox are actually gold-plated tungsten.”
U.S. House of Representatives
The inspector general of the Treasury Department at the time, Eric Thorson, told Mr. Paul that audits were performed yearly, with “no exceptions of any consequence.”
U.S. House of Representatives
More recently, Mr. Trump’s first-term Treasury secretary, Steve Mnuchin, had a chance to check on the gold in August 2017, with Mitch McConnell, then the Senate majority leader, in tow. Photos were taken of the men among the gold bars.
“Glad gold is safe!” Mr. Mnuchin wrote on Twitter, now known as X.
Questions About Ft. Knox Bubble Up Again
The latest concerns appear to have taken off on Feb. 14, when the website ZeroHedge, which occasionally promotes conspiracy theories, tagged Elon Musk in a post on X. The post asked him to make sure the gold at Fort Knox is there.
“Surely it’s reviewed at least every year?” Mr. Musk replied.
“It should be. It isn’t,” ZeroHedge responded. (Mr. Bessent, the Treasury secretary, would later say that the gold is still audited annually.)
Senator Rand Paul of Kentucky, a Republican and the son of Ron Paul, chimed in, calling for an audit. “Let’s do it.”
The next day, Alex Jones, the “InfoWars” conspiracy theorist, said on his talk show that when he was a child, his great-uncle told him some of the gold was missing, and that the “deep state” was involved in the “crime of the century.”
Mr. Musk responded to this post as well. “It would be cool to do a live video walkthrough of Fort Knox!” he wrote.
Then came Glenn Beck, the conservative radio and TV host, who posted an open letter to Mr. Trump the next day, asking if he could take a camera crew to Fort Knox to “restore faith in our financial system.”
The chatter about the gold reserves was growing louder.
By Feb. 20, Mr. Trump was telling a press gaggle on Air Force One that he planned to go to Fort Knox to “make sure the gold is there.”
How the Conspiracy Theory Has Been Integrated Into Sales Pitches for… Gold
Since then, the idea that the government’s gold reserves may have gone missing has been integrated into the sales pitches of companies that trade in gold coins and gold investment accounts. The companies advertise heavily on Trump-friendly TV and internet shows.
InfoWars, The Dan Bongino Show, The Ben Shapiro Show, Triggered with Don Jr.
A number of “gold I.R.A.” companies have suggested that a future audit of Fort Knox could determine that gold is missing, setting off a crisis among Americans about the stability of the economy. Amid such chaos, the companies argue, privately held gold would be a lucrative safe haven for investors.
One of the companies, Birch Gold Group, is endorsed by the president’s eldest son and bills itself as “Donald Trump Jr’s gold company.” A recent article on Birch Gold’s website stated that the idea of an “empty Fort Knox” had gone “from conspiracy theory to mainstream concern.” A discovery that gold was missing from Fort Knox, the article stated, would be the “quickest way down for the U.S. dollar.”
“It is only those without physical gold exposure that feel the need to panic, perhaps with good reason, about the greenback’s admittedly dismal prospects,” states the article, which is accompanied by an offer for a “FREE gold IRA info kit.”
The younger Mr. Trump lauded his father’s plans to visit Fort Knox in a Feb. 24 episode of his online talk show, on which he regularly makes pitches for Birch Gold. “If it’s empty,” he said, “I would imagine there’s hell to pay.”
On Feb. 27, Lear Capital, a gold company that Mr. Beck promotes, posted, “As calls for a Fort Knox audit grow louder, investors should stay informed and consider their exposure to gold as part of a diversified portfolio.”
On Instagram, Rogan O’Handley, a conservative influencer who goes by the handle DC Draino, posted a plug for Donald Trump Jr.’s preferred gold company.
“If Fort Knox is empty, do you know what Gold prices will do?,” Mr. O’Handley wrote. “Get a **Free** info packet from Birch Gold – LINK IN MY BIO – to learn more about @birchgold’s tax-advantaged precious metals retirement plans.”
On another section of Birch Gold’s website, a “Message from Donald Trump Jr.” raised the possibility that his father’s administration could “revalue America’s gold reserves on the national balance sheet from their outdated book value of $42” — the price per ounce the government assigns for bookkeeping purposes — “to current market prices.”
This, he wrote, “could cause a surge in gold prices.” He added, “The potential upside for gold investors is substantial.” A gold I.R.A., he added, would be a great way to benefit. He did not mention that Mr. Bessent had publicly stated that he had no plans to revalue the gold reserves.
Above the message was a digitally altered photo of the president at a desk, showing off an important-looking signed document, a wall of gold bricks behind him.
Mr. Trump has still not visited Fort Knox.
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