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2d ago

Treasury Secretary Warns Newsom Against Withholding $80 Billion in Federal Taxes

The warning comes as the Trump administration considers cutting billions in grants to California universities.

(L): Treasury Secretary Scott Bessent testifies before the House Financial Services Committee during a hearing on the state of the world's financial systems, on Capitol Hill in Washington DC on Wednesday, May 7, 2025. (R): Gavin Newsom speaks at the Vogue World: Hollywood Announcement at the Chateau Marmont in West Hollywood, CA on March 26, 2025.
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Overview

  • Treasury Secretary Scott Bessent said on X that California’s plan to withhold over $80 billion in federal tax payments would amount to criminal tax evasion under federal law.
  • Governor Gavin Newsom threatened to stop sending state tax dollars after CNN reported the Trump administration was preparing to cancel funding for the University of California and California State University systems.
  • White House spokesperson Kush Desai said no final decisions have been made on potential funding cuts to California, labeling any contrary suggestions as speculation.
  • California Assembly Speaker Robert Rivas urged the use of all legal and constitutional tools to defend the state’s interests, including considering withholding federal taxes.
  • Defense Secretary Pete Hegseth warned of zero tolerance for attacks on federal agents and floated deploying active-duty Marines to assist National Guard troops in Los Angeles protests against ICE.