Newsom’s FIERY Rebuke to Trump’s FRAUD Probe

Man speaking with flags in the background

President Trump has launched a federal fraud investigation into California while simultaneously freezing $10 billion in federal funding to five Democrat-led states, marking the most aggressive federal action against blue state welfare programs in recent memory.

Story Highlights

Trump announces California fraud probe via Truth Social, calling state “more corrupt than Minnesota”
HHS freezes $10 billion in federal funding for child care and social services across five blue states
Investigation targets CalWORKs, Child Care Development Fund, and Social Services Block Grant programs
Newsom fires back, calling Trump a “deranged liar” while claiming California blocked $125 billion in fraud
Low-income families may face immediate disruption to child care subsidies and welfare benefits

Trump Administration Takes Swift Action Against Democrat States

President Trump announced on January 6, 2026, through Truth Social that a “Fraud Investigation of California has begun,” targeting Governor Gavin Newsom’s administration for alleged corruption in federal welfare programs. The Department of Health and Human Services simultaneously froze approximately $10 billion in federal funding to California, Colorado, Illinois, Minnesota, and New York. HHS spokesperson Andrew Nixon stated the freeze ensures “federal taxpayer dollars are used for legitimate purposes” rather than enabling fraudulent schemes.

The investigation focuses on programs including the Child Care Development Fund, CalWORKs cash assistance, and the Social Services Block Grant. Trump’s announcement came after retweeting a New York Post story highlighting the funding freeze, emphasizing his administration’s commitment to rooting out waste in Democrat-controlled states. This represents a significant escalation in federal oversight of state-administered welfare programs, particularly those serving low-income families.

Minnesota Scandal Sparks Broader Federal Scrutiny

The California investigation stems from revelations of massive fraud in Minnesota’s child care programs, exposed through viral social media videos by influencer Nick Shirley. The Minnesota scandal involved improper payments at immigrant-run child care centers, leading Governor Tim Walz to order an audit and ultimately drop his reelection bid. Conservative activists have drawn parallels between Minnesota’s fraud and California’s troubled history with welfare program oversight, including billions lost during COVID-19 unemployment fraud.

California has documented vulnerabilities in its welfare systems, with $108 million already lost through CalWORKs cash benefits fraud. A December 2025 state audit flagged weaknesses in CalFresh calculations, adding the Department of Social Services to a high-risk list. These systemic issues provide the Trump administration with justification for heightened federal scrutiny, particularly given California’s massive reliance on federal social services funding.

Newsom Launches Counterattack Against Federal Investigation

Governor Newsom’s office responded aggressively to Trump’s announcement, dismissing the investigation as politically motivated retaliation. Newsom’s spokesperson called Trump a “deranged, habitual liar,” claiming the governor has “blocked over $125 billion in fraud” during his tenure. State Senator Scott Wiener characterized the funding freeze as illegal, arguing it has “nothing to do with fraud and everything to do with politics” given that red states with documented fraud issues remain untargeted.

🚨BREAKING: President Trump announces fraud investigation into California under Gavin Newsom, declares it “more corrupt than Minnesota.”
Forget DOGE, send in @NickShirley and his iPhone. pic.twitter.com/v15fNGfeXe

— Daniel Cohen (@DanielCohenTV) January 6, 2026

California officials report receiving no formal notice of the investigation despite the public announcement and funding freeze. Newsom himself stated “Bring it on… I can’t stand fraud” during a recent interview, positioning himself as both anti-fraud and anti-Trump. This defensive posture reflects the political stakes involved, as any proven fraud could damage Newsom’s national ambitions while vindicate Trump’s claims about Democrat mismanagement of taxpayer funds.