West
Ex-Biden official running in blue state gubernatorial race must tackle key issue amid skyrocketing costs
California gubernatorial candidate and former Health and Human Services Secretary Xavier Becerra said the state may need to rein in its Medicaid program as it faces concerns about costs partly related to those in the country illegally using the system.
Becerra, a Democrat who previously served as the Golden State’s attorney general, explained his stance in an interview with Fox 11 Los Angeles this week.
“I believe we should eventually get there,” he said about allowing people to enroll in Medi-Cal even if they’re undocumented.
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Health Secretary Xavier Becerra testified before the House Judiciary Subcommittee on Immigration Integrity, Security, and Enforcement. (House Judiciary GOP / X)
“Can we afford to do it? That’s where a governor has to decide… if we can’t afford it, we have to be realistic. If we can’t afford it, how do we do it?” he added.
“But when you do the scrub… this is where it’s important, if you don’t have the dollars to do it, how do you do it? You need the money. California needs a balanced budget. You scrub it. If you find a way, you do it and don’t delay. But if you scrub it and you can’t figure out how to do it, then that’s the reality and that’s the choices we have,” the former Biden official continued.
The overall Medi-Cal program was originally expected to cost $6 billion until a California budget official revealed that it’s projected to cost $9.5 billion this fiscal year. The governor’s office then asked for two separate loans, totaling $6.2 billion.
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Illegal immigrants wait to be picked up at the southern border on May 23, 2024. (Bill Melugin/Fox News)
When asked by KCRA, Gov. Gavin Newsom, who is term-limited and will leave office in January 2027, said that while illegal immigrants in the program are not the whole issue, it’s a contributing factor.
“That’s partial,” Newsom said last month.
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“With tough fiscal choices ahead, Governor Newsom, jointly with Pro Tem McGuire and Speaker Rivas, will evaluate proposals to rein in long-term spending – including in Medi-Cal – while working to protect the core health and social services Californians rely on,” Newsom spokesperson Izzy Gardon said in a statement to Fox News Digital. The governor and his office have said rising costs have led to higher than expected Medicaid costs in other states that do not allow illegal immigrants to enroll.
“Immigration status doesn’t matter,” according to the California Department of Health Care services website, but Republicans have staunchly criticized allowing illegal immigrants in the program.
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Newsom and Trump face off. (Pool)
“Even Jerry Brown refused to expand Medi-Cal to all illegal immigrants because he knew it was fiscally irresponsible and unsustainable,” California Senate Minority Leader Brian Jones tweeted last month. “Now under Newsom, legal residents are paying the price both financially and in reduced access to healthcare. The public deserves answers: Why are the costs so much higher than what Newsom promised? What is Newsom’s plan to fix the financial disaster he created?”
The 2026 California governor’s race is expected to be contentious, as Becerra, former Rep. Katie Porter, former Los Angeles Mayor Antonio Villaraigosa, and Lt. Gov. Eleni Kounalakis are already in the race on the Democratic side. Reports swirl that former Vice President Kamala Harris could make her comeback into politics after losing the 2024 election by running for governor. On the Republican side, Riverside Sheriff Chad Bianco is currently in the race, and many others are expected to join him.
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FBI raid involving LA schools superintendent possibly tied to failed $6M AI deal, potential conflict
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The federal investigation into the Los Angeles Unified School District superintendent, whose home and school office were raided Wednesday, may be tied to a failed multimillion-dollar AI school contract involving a potential conflict of interest.
Alberto Carvalho previously awarded a $6 million contract, paying $3 million up front, to education technology company AllHere.
A former salesperson employed by the firm also had her Miami property raided the same day as Carvalho, according to public records cited by the Los Angeles Times. The woman, Debra Kerr, reportedly had close ties to Carvalho during his tenure leading Miami-Dade County Public Schools.
Spokesperson Jim Marshall confirmed to local media Miami Herald that “we searched a residence in Southwest Ranches today as part of this matter and have since cleared the scene.”
Superintendent Alberto Carvalho speaks during an event at the LAUSD headquarters in downtown Los Angeles on October 30, 2025. (Genaro Molina/Los Angeles Times via Getty Images)
In 2023, Carvalho secured a contract with AllHere to develop an AI chatbot called “Ed,” designed to help address student issues such as absenteeism.
It ultimately collapsed in 2024 after its founder, Joanna Smith-Griffi, was accused of embezzling funds amid data privacy risks and whistleblower concerns. She was later charged with securities fraud, wire fraud and identity theft.
Kerr further claimed in AllHere’s bankruptcy court filings that the company owed her commissions for helping secure its deal with LAUSD, according to education-focused outlet The 74.
While federal officials confirmed that search warrants were conducted Wednesday, they declined to reveal the nature of the investigation, noting that the warrants remain under seal.
Federal officials appear to carry cardboard outside a home in California. (KTTV)
However, sources told the LA Times that the investigation fell under the broad category of financial issues, and that the raid focused on Carvalho rather than the California school district.
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LAUSD released a statement saying the district is fully cooperating with federal officials.
“The LAUSD Board of Education understands that today’s news has raised questions across our school communities,” it said.
“The Board’s priority remains ensuring that our students, families, and employees experience a safe and welcoming learning environment. Teaching and learning continue across our schools. Los Angeles Unified continues to stay focused on our responsibility to serve students and our families.”
The superintendent has led the nation’s second-largest school district since 2022, overseeing the education of roughly 400,000 students. He was also unanimously reappointed to the position in September 2025.
Before moving to California, he spent 14 years leading Miami‑Dade County Public Schools, the nation’s fourth-largest school district.
The home of Alberto Carvalho, the superintendent of the Los Angeles Unified School District, is located in San Pedro, California. (KTTV)
Wednesday’s raids mark the latest controversy to engulf Carvalho.
In 2020, he helped secure a $1.57 million donation from a company that had a pending contract with the district, the Miami Herald reported.
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FBI agents appear to conduct a search warrant at a San Pedro home connected to Alberto Carvalho. (KTTV)
The funds reportedly went to an education nonprofit he founded, and the company’s online learning program, which was ultimately plagued with problems, was quickly scrapped.
In June 2021, the school’s inspector general determined that the donation, intended to benefit teachers, did not violate any policies but created the “appearance of impropriety,” the outlet said. The foundation was subsequently urged to return the funds, which reportedly had been distributed to teachers as $100 gift certificates.
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