No more punishing taxpayers for Sacramento’s failures

Fraud and mismanagement aren’t isolated incidents in Gavin Newsom’s California, they have become systemic failures with real, painful consequences for our local families, small businesses, and farmers.

During the pandemic, Sacramento took a disastrous “pay now, verify later” approach to unemployment. They threw out common sense safeguards and invited massive fraud on the taxpayer’s dime. The result? At least $32 billion in fraudulent payments went out the door, including up to $1 billion sent directly to state prison inmates, murderers, and death row occupants.

Worse yet, despite sitting on a massive $98 billion budget surplus in the past, Governor Newsom refused to pay back the federal government. Today, California is the only state in the nation that still has an outstanding federal unemployment debt, a staggering $18 billion tab.

Because Sacramento failed to pay its bills, our local job creators are being punished with automatic, massive federal payroll tax hikes. Enough is enough.

That is why I have officially introduced the Creating Accountability in Loan (CAL) Repayment Act.  Here is a television story on the bill.

Our bill is rooted in a simple principle: states must be held accountable for their financial negligence, and taxpayers should never be forced to bail out government incompetence. Specifically, the CAL Repayment Act will:

• Force State Accountability: Require states with outstanding federal unemployment debt to use any flexible federal funding they receive to pay off that debt first before spending money on anything else.

• Protect Small Businesses: Halt the unfair, compounding payroll tax increases on employers by forcing states to clear their balances.

• Establish Strict Enforcement: Mandate that any state violating these rules must immediately repay the misused federal funds back to the treasury within five business days.

We cannot allow Sacramento’s negligence to crush the businesses that keep the Central Valley’s economy moving. I recently took to the pages of the New York Post to publish an op-ed exposing this absolute disaster, calling out how California’s fraud has become a systemic failure under Gavin Newsom. Now, I am taking that exact fight directly to the House floor.