As a former California state assemblyman who spent four years on the Budget Committee, I had a front-row seat to Sacramento’s obsession with “pulling down” federal dollars, turning welfare programs into a free-for-all.
Then-state Auditor Elaine Howle ran a lean operation, issuing spot-on reports about waste and vulnerabilities — and getting ignored time and again. California maximized payments for SNAP, Medi-Cal, and unemployment insurance with little regard for fraud controls.
That same reckless mindset has fueled scandals across blue states, with Minnesota serving as the appetizer to California’s main course of fiscal disaster.
Minnesota’s Feeding Our Future fraud — where crooks were convicted last March of pocketing $250-300 million in federal child nutrition funds by claiming phantom meals for kids — was a mere fraction of what was to come.
Today, Minnesota’s likely fraud toll has ballooned, with nearly $9 billion in suspected Medicaid scams since 2018, involving fake providers, ghost services, and out-of-state hustlers. Despite 80 charged, 50-plus guilty pleas, and assets like luxury cars forfeited in the Feeding Our Future scam, recoveries are a drop in the bucket. State agencies have ignored red flags, paralyzed by fears of discrimination lawsuits — or even just being labeled “racists.” And that allowed fraudsters to run wild.
But if Minnesota’s the starter, California’s the feast.
The Golden State’s Covid-19 unemployment insurance debacle at the Employment Development Department (EDD) was a masterclass in negligence: $177 billion paid out, with fraud hitting $20 billion by official counts and up to $32.6 billion by independent estimates. Scammers exploited lax ID checks, using stolen Social Security numbers for bogus claims while the real workers who owned those SSNs labored for their daily bread.
The financial recoveries? Pathetic.
And now, in an effort to repay $20-23 billion in federal loans, businesses have been slapped with their fifth year of Federal Unemployment Tax Act (FUTA) surcharges — $84 per employee extra in 2025, rising yearly. In other words, Gavin Newsom’s California punishes job creators for his government’s failure. Interest could soon top $1 billion annually, with ongoing unemployment insurance shortfalls piling on.
Then there’s the expansion of Medi-Cal to cover illegal aliens, fully implemented in 2024. Promised costs: $3 billion or more a year. Actual costs: $9.5 billion, with $8.4 million coming from the General Fund in 2024-25, enrollment nearing 2 million, and per-person expenses soaring.
California isn’t legally allowed to spend federal money on covering illegal aliens. But through the magic of financial fungibility, California has figured out how to force taxpayers in Texas and Florida to pick up the tab. This must stop.
Facing a big budget blowout, Sacramento froze new adult enrollments from January 2026, axed dental benefits for this group, and slapped on $30 monthly premiums starting in 2027. All of this is projected to save roughly $80 million short-term but billions over time.
Yet it still drains resources from citizens, pulling in indirect federal funds while exposing taxpayers to runaway costs.
Hellbound and Down 
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