democratic lawmaker

WASHINGTON — President Trump has seized on the government shutdown as an opportunity to reshape the federal workforce and punish detractors, meeting with budget director Russ Vought on Thursday to talk through “temporary or permanent” spending cuts that could set up a lose-lose dynamic for Democratic lawmakers.

Trump announced the meeting on social media Thursday morning, saying he and Vought would determine “which of the many Democrat Agencies” would be cut — continuing their efforts to slash federal spending by threatening mass firings of workers and suggesting “irreversible” cuts to Democratic priorities.

“I can’t believe the Radical Left Democrats gave me this unprecedented opportunity,” Trump wrote on his social media account. “They are not stupid people, so maybe this is their way of wanting to, quietly and quickly, MAKE AMERICA GREAT AGAIN!”

The post was notable in its explicit embrace of Project 2025, a controversial policy blueprint drafted by the Heritage Foundation that Trump distanced himself from during his reelection campaign. The effort aimed to reshape the federal government around right-wing policies, and Democrats repeatedly pointed to its goals to warn of the consequences of a second Trump administration.

Vought on Wednesday offered an opening salvo of the pressure he hoped to put on Democrats. He announced he was withholding $18 billion for the Hudson River rail tunnel and Second Avenue subway line in New York City that have been championed by both Democratic leaders, Senate Democratic leader Chuck Schumer and House Democratic leader Hakeem Jeffries, in their home state. Vought is also canceling $8 billion in green energy projects in states with Democratic senators.

Meanwhile, the White House is preparing for mass firings of federal workers, rather than simply furloughing as is the usual practice during a shutdown. White House press secretary Karoline Leavitt said earlier this week that layoffs were “imminent.”

“If they don’t want further harm on their constituents back home, then they need to reopen the government,” Leavitt said Thursday said of Democrats.

A starring role for Russ Vought

The bespectacled and bearded Vought has emerged as a central figure in the shutdown — promising possible layoffs of government workers that would be a show of strength by the Trump administration as well as a possible liability given the weakening job market and existing voter unhappiness over the economy.

The strategic goal is to increase the political pressure on Democratic lawmakers as agencies tasked with environmental protection, racial equity and addressing poverty, among other things, could be gutted over the course of the shutdown.

But Democratic lawmakers also see Vought as the architect of a strategy to refuse to spend congressionally approved funds, using a tool known as a “pocket rescission” in which the administration submits plans to return unspent money to Congress just before the end of the fiscal year, causing that money to lapse.

All of this means that Democratic spending priorities might be in jeopardy regardless of whether they want to keep the government open or partially closed.

Ahead of the end of the fiscal year in September, Vought used the pocket rescission to block the spending of $4.9 billion in foreign aid.

White House officials refused to speculate on the future use of pocket rescissions after rolling them out in late August. But one of Vought’s former colleagues, insisting on anonymity to discuss the budget director’s plans, said that future pocket rescissions could be 20 times higher.

Shutdown continues with no endgame in sight

Thursday was Day 2 of the shutdown, and already the dial is turned high. The aggressive approach coming from the Trump administration is what certain lawmakers and budget observers feared if Congress, which has the responsibility to pass legislation to fund government, failed to do its work and relinquished control to the White House.

Vought, in a private conference call with House GOP lawmakers Wednesday, told them of layoffs starting in the next day or two. It’s an extension of the Department of Government Efficiency work under Elon Musk that slashed through the federal government at the start of the year.

“These are all things that the Trump administration has been doing since January 20th,” said Jeffries, referring to the president’s first day in office. “The cruelty is the point.”

House Speaker Mike Johnson (R-La.) underscored Thursday that the shutdown gives Trump and Vought vast power over the federal government. He blamed Democrats and said “they have effectively turned off the legislative branch” and “handed it over to the president.”

Still, Johnson said that Trump and Vought take “no pleasure in this.”

Trump and the congressional leaders are not expected to meet again soon. Congress has no action scheduled Thursday in observance of the Jewish holy day, with senators due back Friday. The House is set to resume session next week.

The Democrats are holding fast to their demands to preserve health care funding and refusing to back a bill that fails to do so, warning of price spikes for millions of Americans nationwide.

The shutdown is likely to harm the economy

With no easy endgame at hand, the standoff risks dragging deeper into October, when federal workers who remain on the job will begin missing paychecks. The nonpartisan Congressional Budget Office has estimated roughly 750,000 federal workers would be furloughed on any given day during the shutdown, a loss of $400 million daily in wages.

The economic effects could spill over into the broader economy. Past shutdowns saw “reduced aggregate demand in the private sector for goods and services, pushing down GDP,” the CBO said.

“Stalled federal spending on goods and services led to a loss of private-sector income that further reduced demand for other goods and services in the economy,” it said. Overall CBO said there was a “dampening of economic output,” but that reversed once people returned to work.

How Trump and Vought can reshape the federal government

With Congress as a standstill, the Trump administration has taken advantage of new levers to determine how to shape the federal government.

The Trump administration can tap into funds to pay workers at the Defense Department and Homeland Security from what’s commonly called the “One Big Beautiful Bill” that was signed into law this summer, according to the CBO.

That would ensure Trump’s immigration enforcement and mass deportation agenda is uninterrupted. But employees who remain on the job at many other agencies will have to wait for government to reopen before they get a paycheck.

Mascaro, Boak and Kim write for the Associated Press. AP writers Chris Megerian, Stephen Groves, Joey Cappelletti, Matt Brown, Kevin Freking, and Mary Clare Jalonick contributed to this report.

WASHINGTON — A last-ditch effort by California Democrats to redraw the state’s congressional map for the 2026 election, countering a similar push by Texas Republicans, is now up against the clock.

Gov. Gavin Newsom said Monday that Democrats are moving forward with a plan to put a rare mid-decade redistricting plan before voters on Nov. 4. But state lawmakers will craft a “trigger,” he said, meaning California voters would only vote on the measure if Texas moved forward with its own plans to redraw Congressional boundaries to add five more Republican seats.

“It’s cause and effect, triggered on the basis of what occurs or doesn’t occur in Texas,” Newsom said. “I hope they do the right thing, and if they do, then there’ll be no cause for us to have to move forward.”

Democratic lawmakers in Texas on Monday left the state to deprive Republicans of the quorum needed to pass the new maps. Republican lawmakers voted 85 to 6 to send state troopers to arrest them and bring them back to the Capitol, a move that is largely symbolic, since the lawmakers won’t face criminal or civil charges.

The outcome of the dueling efforts between Texas and California could determine which party controls the House of Representatives after the 2026 midterm elections, which Democrats see as the last bulwark to President Trump’s actions in his second term. Trump has pushed Republicans to add more GOP seats in Texas, hoping to stave off a midterm defeat.

Democrats hold 43 of California’s 52 congressional seats. Early discussions among California politicians and strategists suggest that redrawn lines could shore up some vulnerable incumbent Democrats by making their purple districts more blue, while forcing five or six of the state’s nine Republican members into tougher reelection fights.

But nothing official can be done until state lawmakers return from recess to Sacramento on Aug. 18.

Democrats, who hold a supermajority in the Legislature, would have less than a month to draw a new map, hold hearings and negotiate the language of a bill calling for the special November election, leaving just enough time for voter guides to be mailed and ballots to be printed.

Democratic lawmakers and operatives said Monday that the timeline is doable, but they would have to act quickly.

California’s Democratic congressional delegation expressed consensus during a video meeting Monday with moving forward with a ballot measure that would allow mid-decade redistricting only if another state moves forward with it, according to a person familiar with the virtual meeting, and that the change would be temporary. They expressed their support for the independent commission.

California Assembly Speaker Robert Rivas said the Democratic caucus met Sunday night “to discuss the urgent threat of a continued, blatant Trumpian power grab — a coordinated effort to undermine our democracy and silence Californians.”

Democrats in the California Senate and Assembly held separate meetings to discuss redistricting. David Binder, a pollster who works with Newsom, presented internal polling that showed tepid early support among voters for temporarily changing state laws to allow the Legislature to draw new maps for elections in 2026, 2028 and 2030.

“Our voters must be empowered to push back,” Rivas said. “California has never backed down — and we won’t start now.”

Texas Democrats resist

Democratic lawmakers’ exodus from Austin on Monday denied Republicans the quorum necessary to proceed with a vote on a redrawn state map that could net Republicans five congressional seats.

Democratic lawmakers balked at threats from Republican Gov. Greg Abbott. The Texas House Democratic Caucus put out a statement riffing on a slogan made famous during the Texas Revolution: “Come and take it.” One member of the caucus noted that being absent was not a crime and that Texas warrants can’t be served in Illinois or New York, where many lawmakers have gone.

“There is no felony in the Texas penal code for what he says,” said Rep. Jolanda Jones, a Democrat. “He’s trying to get soundbites, and he has no legal mechanism.”

The Texas House Republican speaker, Dustin Burrows, said that Democrats leaving does not “stop this House from doing its work. It only delays it.”

But Abbott’s legal options to get his redistricting bill passed, by expelling Democrats or compelling their return, appear narrow, likely forcing the governor’s office to make challenges in courtrooms based in Democratic districts. Abbott has until the end of the year to secure new maps for them to be used in the state’s March 3 primaries.

At a news conference last week in Sacramento, Newsom compared Trump’s pressure on Abbott to add five Republican congressional seats as akin to his efforts to “find” 12,000 votes to win Georgia after the 2020 election.

“We’re not here to eliminate the commission,” he said. “We’re here to provide a pathway in ’26, ’28 and in 2030 for congressional maps on the basis of a response to the rigging of the system by the president of the United States. It won’t just happen in Texas. I imagine he’s making similar calls all across this country. It’s a big deal. I don’t think it gets much bigger.”

Escalation on a deadline

For decades, redrawing California’s electoral maps amounted to political warfare. In 1971, then-Gov. Ronald Reagan vetoed a redistricting plan that he called “a mockery of good government.” The California Supreme Court ultimately drew the lines, and did so again in 1991, when then-Gov. Pete Wilson rejected maps drawn by Democrats.

California’s state lawmakers last drew their own district lines in 2001, after members of both parties signed off on a plan drawn up to protect incumbents.

In 2008, California voters stripped state lawmakers of the power to draw their own districts by passing Proposition 11, which created an independent redistricting commission. Two years later, voters handed the power to redraw congressional district maps to the same panel by passing Proposition 20. That group drew the lines before the 2012 elections, and again after the 2020 census.

California set the date for its last statewide special election — the 2021 attempted recall of Newsom — 75 days in advance. County election officials would need at least that much time to find voting locations and prepare ballots for overseas and military voters, which must be mailed 45 days before election day, one elections official said.

“We need at least a similar timeline and calendar to what took place in 2021 for the gubernatorial recall election,” said Dean Logan, the top elections official in Los Angeles County.

Similarly, he said, counties will “need the funding provided upfront by the state to conduct this election, and the funding to do the redistricting associated with it, because counties are not prepared financially.”

The 2021 recall election cost California taxpayers about $200 million. The preliminary estimate for Los Angeles County to administer the redistricting election is about $60 million.

National fight over state lines

Republican strategist Jon Fleischman, former executive director of the California Republican Party, said Republicans nationally need to take state Democrats’ efforts to redraw the maps seriously — by pulling out their checkbooks.

“Our statewide Republican fundraising has atrophied because it has been over a generation since we had a viable statewide candidate in California,” he said. “The kind of money that it would take to battle this — it would have to be national funding effort.”

While Texas prompted California Democrats to take action, Fleischman said, the issue has enough momentum here that it ultimately doesn’t matter what Texas does.

“If Gavin Newsom places this on the ballot, it means he’s already done his polling and has figured out that it will pass because he cares more running for president that redistricting in California,” Fleischman said. “And he knows he can’t afford to make this play and lose.”

Former Gov. Arnold Schwarzenegger, a Republican who championed the ballot measure that created the independent redistricting commission, has not weighed in on the mid-decade redistricting efforts in Texas and California. But a spokesperson for the former governor made clear that he vehemently opposes both.

Since leaving office, Schwarzenegger has fought for independent map-drawing across the nation. Redistricting is among the political reforms that are the focus of the Schwarzenegger Institute at USC.

“His take on all of this is everyone learned in preschool or kindergarten that two wrongs don’t make a right. He thinks gerrymandering is evil,” said Daniel Ketchell, a spokesperson for Schwarzenegger. “It takes power from the people and gives it to politicians. He thinks it’s evil, no matter where they do it.”

Wilner reported from Washington, Nelson and Mehta from Los Angeles and Luna from Sacramento.

President Trump’s future presidential library has a growing list of corporate sponsors, and Democratic lawmakers are sounding alarms.

To settle Trump’s lawsuit over edits to a CBS “60 Minutes” broadcast, Paramount Global agreed to pay $16 million to help finance the future library and cover the president’s legal fees.

Walt Disney Co. earlier pledged $15 million to Trump’s library to resolve a defamation lawsuit over inaccurate statements about Trump by ABC News anchor George Stephanopoulos. And this spring, the nation of Qatar donated a $400-million Boeing 747-8 luxury jetliner for Trump’s use — a gift that ultimately will be registered to his library, whatever form it takes.

On Wednesday, a group of progressive lawmakers, led by U.S. Sen. Elizabeth Warren (D-Mass.), introduced the Presidential Library Anti-Corruption Act, a proposed measure that would require transparency and impose restrictions on donations to presidential libraries.

“This new bill will close the loopholes that allow presidential libraries to be used as a tool for corruption and bribery,” Warren told reporters on a Zoom call. “Slamming the door shut on apparent corruption at the highest levels of government is an important step forward and something everyone should get behind.”

For now, the lawmakers — including Sen. Richard Blumenthal (D-Conn.), Rep. Jared Moskowitz (D-Fla.) and Rep. Melanie Stansbury (D-N.M.) — lack support from Republicans in Congress.

Still, the measure is needed, the lawmakers said, because there are no rules that specifically target solicitation of gifts or payments by individuals and companies to try to curry favor with the president.

The bill would create a cap on contributions, prohibit donations from lobbyists and foreign governments and delay fundraising until a president leaves office, with a carve-out for nonprofits.

Violators would risk criminal or civil penalties, which could equal as much as the value of the gift.

The measure also would prohibit the conversion of a donation to personal use, as some have feared will happen with the acceptance of the Qatar plane.

“What is Qatar getting in exchange? … Nobody knows,” Warren said. “All of this shady stuff is happening because there are essentially no rules for presidential library donations.”

Under the legislation, quarterly disclosures would be required.

“People have a right to know who is, in effect, gaining favor with a president in office through donations to a library,” Blumenthal said. “These kinds of requirements ought to apply to both Republican[s] and Democrat[s], because the donation can be problematic no matter which party the president may belong to.”

Critics blasted former President Clinton for pardoning late fugitive commodities trader Marc Rich after his wife donated $450,000 to Clinton’s library.

In addition to the CBS “60 Minutes” and ABC settlements, Facebook parent company Meta donated $22 million to Trump’s library. The payment was part of Meta’s $25-million settlement to a lawsuit brought after Facebook banned Trump after the Jan. 6, 2021, attack on the U.S. Capitol.

The Elon Musk-owned social media platform X, formerly known as Twitter, donated $10 million.

Contributions to Trump’s inaugural celebrations this year that went beyond money spent are expected to be steered to the library as well as money raised from people who want to dine with Trump at Mar-a-Lago, Warren’s office said.

Warren and others previously raised the notion that Paramount’s settlement with Trump, in particular, could constitute a bribe. It has been widely believed that resolving the legal dispute with Trump was a prerequisite for getting the company’s pending $8-billion merger with David Ellison’s Skydance Media cleared by the Federal Communications Commission.

ST. PAUL, Minn. — Former Minnesota House Speaker Melissa Hortman laid in state in the Minnesota Capitol rotunda on Friday while the man charged with killing her and her husband, and wounding a state senator and his wife, made a brief court appearance in a suicide prevention suit.

Hortman, a Democrat, is the first woman and one of fewer than 20 Minnesotans accorded the honor. She laid in state with her husband, Mark, and their golden retriever, Gilbert. Her husband was also killed in the June 14 attack, and Gilbert was seriously wounded and had to be euthanized. It was the first time a couple has laid in state at the Capitol, and the first time for a dog.

The Hortmans’ caskets and the dog’s urn were arranged in the center of the rotunda, under the Capitol dome, with law enforcement officers keeping watch on either side.

The Capitol was open for the public to pay their respects from noon to 5 p.m. Friday. House TV was livestreaming the viewing. A private funeral is set for 10:30 a.m. Saturday. The service will be livestreamed on the Department of Public Safety’s YouTube channel.

Former Vice President Kamala Harris will fly to Minnesota for the funeral but won’t have a speaking role, according to her personal office. Harris expressed her condolences this past week to Hortman’s adult children, and spoke with Gov. Tim Walz, her 2024 running mate, who extended an invitation on behalf of the Hortman family, her office said.

His hearing takes a twist

The man accused of killing the Hortmans and wounding another Democratic lawmaker and his wife made a short court appearance Friday to face charges for what the chief federal prosecutor for Minnesota has called “a political assassination.” Vance Boelter, 57, of Green Isle, surrendered near his home the night of June 15 after what authorities have called the largest search in Minnesota history.

An unshaven Boelter was brought in wearing just a green padded suicide prevention suit and orange slippers. Federal defender Manny Atwal asked Magistrate Judge Douglas Micko to continue the hearing until next Thursday. She said Boelter has been sleep deprived while on suicide watch in the Sherburne County Jail, and that it has been difficult to communicate with him as a result.

“Your honor, I haven’t really slept in about 12 to 14 days,” Boelter told the judge. And he denied being suicidal. “I’ve never been suicidal and I am not suicidal now.”

Atwal told the court that Boelter had been in what’s known as a “Gumby suit,” without undergarments, ever since his transfer to the jail after his first court appearance on June 16. She said the lights are on in his area 24 hours a day, doors slam frequently, the inmate in the next cell spreads feces on the walls, and the smell drifts to Boelter’s cell.

The attorney said transferring him to segregation instead, and giving him a normal jail uniform, would let him get some sleep, restore some dignity, and let him communicate better. The judge agreed.

Prosecutors did not object to the delay and said they also had concerns about the jail conditions.

The acting U.S. attorney for Minnesota, Joseph Thompson, told reporters afterward that he did not think Boelter had attempted to kill himself.

The case continues

Boelter did not enter a plea. Prosecutors need to secure a grand jury indictment first, before his arraignment, which is when a plea is normally entered.

According to the federal complaint, police video shows Boelter outside the Hortmans’ home and captures the sound of gunfire. And it says security video shows Boelter approaching the front doors of two other lawmakers’ homes dressed as a police officer.

His lawyers have declined to comment on the charges, which could carry the federal death penalty. Thompson said last week that no decision has been made. Minnesota abolished its death penalty in 1911. The Death Penalty Information Center says a federal death penalty case hasn’t been prosecuted in Minnesota in the modern era, as best as it can tell.

Boelter also faces separate murder and attempted murder charges in state court that could carry life without parole, assuming that county prosecutors get their own indictment for first-degree murder. But federal authorities intend to use their power to try Boelter first.

Other victims and alleged targets

Authorities say Boelter shot and wounded Democratic state Sen. John Hoffman, and his wife, Yvette, at their home in Champlin before shooting and killing the Hortmans in their home in the northern Minneapolis suburb of Brooklyn Park, a few miles away.

Federal prosecutors allege Boelter also stopped at the homes of two other Democratic lawmakers. Prosecutors also say he listed dozens of other Democrats as potential targets, including officials in other states. Friends described Boelter as an evangelical Christian with politically conservative views. But prosecutors have declined so far to speculate on a motive.

Boelter’s wife speaks out

Boelter’s wife, Jenny, issued a statement through her own lawyers Thursday saying she and her children are “absolutely shocked, heartbroken and completely blindsided,” and expressing sympathy for the Hortman and Hoffman families. She is not in custody and has not been charged.

“This violence does not align at all with our beliefs as a family,” her statement said. “It is a betrayal of everything we hold true as tenets of our Christian faith. We are appalled and horrified by what occurred and our hearts are incredibly heavy for the victims of this unfathomable tragedy.”

An FBI agent’s affidavit described the Boelters as “preppers,” people who prepare for major or catastrophic incidents. Investigators seized 48 guns from his home, according to search warrant documents.

While the FBI agent’s affidavit said law enforcement stopped Boelter’s wife as she traveled with her four children north of the Twin Cities in Onamia on the day of the shootings, she said in her statement that she was not pulled over. She said that after she got a call from authorities, she immediately drove to meet them at a nearby gas station and has fully cooperated with investigators.

“We thank law enforcement for apprehending Vance and protecting others from further harm,” she said.

Karnowski writes for the Associated Press.

California leaders reached a tentative agreement Tuesday night on the state budget, which hinges on Gov. Gavin Newsom’s demand that the Legislature pass a housing reform proposal.

The eleventh-hour negotiations about the spending plan, which takes effect July 1, speak to the political challenge of overhauling longstanding environmental regulations to speed up housing construction in a state controlled by Democrats.

The party has been loath to do more than tweak the California Environmental Quality Act, or approve one-off exemptions, despite pressure from the governor and national criticism of a law that reform advocates say has hamstrung California’s ability to build.

The proposal is among a series of policies Newsom and Democratic lawmakers are expected to advance in the coming days as part of the $321.1-billion budget. The deal reflects the Legislature’s resistance to the governor’s proposed cuts to reduce a $12-billion budget deficit expected in the year ahead, citing uncertainty about the scope of the state’s financial problems.

“We appreciate the strong partnership with the Legislature in reaching this budget agreement,” said Izzy Gardon, a spokesperson for Newsom. “The governor’s signature is contingent on finalizing legislation to cut red tape and unleash housing and infrastructure development across the state — to build more, faster.”

The consensus comes after weeks of conversations about how to offset the deficit, caused by overspending in California, and start to address even larger financial problems anticipated in the future, including from potential federal policy changes.

The tentative deal largely relies on borrowing money, tapping into state reserves, and shifting funding around to close the shortfall. By reducing and delaying many of the governor’s proposed cuts, the budget continues a practice at the state Capitol of sparing state programs from immediate pain while avoiding taking on California’s long-term budget woes.

Assembly Republican Leader James Gallagher (R-Yuba City) said the budget deal papers over the state’s financial problems.

“We’re in this situation because of overspending,” Gallagher said. “We’ve made long-term commitments to programs that Democrats have championed, and now, just like everybody warned, the money is not there to support them all, and they don’t want to cut back their program that they helped expand.”

The cuts lawmakers and the governor ultimately agreed to will reduce the expansion of state-sponsored healthcare to undocumented immigrants and reinstate asset limit tests for Medi-Cal enrollees. The final deal, however, achieves less savings for the state than Newsom originally proposed.

The plan restores cost-of-living adjustments for child-care workers, which the governor wanted to nix, and rejects his call to cap overtime hours for in-home caregivers.

Democrats in the Legislature successfully pushed to provide another $500 million in funding for Homeless Housing, Assistance and Prevention grants. The governor originally resisted giving more money to counties, which he has chastised for being unable to show results for the billions of dollars in state funding they have received to reduce homelessness.

Assembly Budget Chair Jesse Gabriel (D-Encino) pushed back on the notion that the Legislature hasn’t done “real belt-tightening.” Lawmakers are trying to balance compassion and fiscal responsibility before making drastic cuts to safety net programs that Californians rely on, he said.

“That is the balance that we are trying to strike here with this budget of being responsible, of focusing on the work that we need to do regardless, but also understanding that there is a pretty high delta of uncertainty for a lot of reasons,” Gabriel said.

The budget also preserves Newsom’s plan to provide $750 million to expand the California Film and Television Tax Credit, a proposal supported by Hollywood film studios and unions representing workers in the industry.

The tentative agreement is expected to serve as a precursor to more challenging financial discussions about additional reductions in the months ahead.

California expects to lose federal funding from the Trump administration and state officials predict a potentially greater funding dilemma in 2026-27.

Here are few key elements of the budget deal, detailed in summaries of the agreement and legislation:

A housing caveat

Described colloquially as a “poison pill” inserted into the budget bill, the agreement between the Legislature and Newsom will only become law if legislators send the governor a version of a proposal initially introduced by Sen. Scott Wiener (D-San Francisco).

Wiener’s bill is expected to lessen the number of building projects that would require a full environmental review under CEQA and make the process of developing environmental impact reports more efficient.

Paired with another proposal that could exempt more urban housing developments from CEQA, the legislation could mark a significant change in state policy that makes it easier to build.

Newsom is effectively forcing the Wiener proposal through by refusing to sign a budget deal without the CEQA exemptions. The proposal was still being drafted as of Tuesday evening.

The governor declared lofty goals to build more housing on the 2018 gubernatorial campaign trail, but he has failed to spur enough construction to meet housing demand and make homes more affordable.

New York Times columnist Ezra Klein effectively called out the inaction in California caused by the state’s marquee environmental law and a lack of political will in his recent book “Abundance,” which increased pressure on the governor and other Democrats to reconsider their approach and push for more substantial fixes this year.

The CEQA reform bill must be passed by Monday under the budget agreement, which omits a separate Newsom call to streamline the Delta tunnels project.

Changes to Med-Cal funding

Medi-Cal cost overruns are causing major problems for the California budget. The challenges stem from a higher-than-expected price tag for the expansion of state-sponsored healthcare to all income-eligible undocumented immigrants and medical care for other enrollees.

Newsom’s budget proposal in May suggested substantial trims to the healthcare program for people who are undocumented. His plan included freezing new enrollment as of Jan. 1, requiring all adults to pay $100 monthly premiums, eliminating long-term care benefits and cutting full dental coverage. The changes offered minor savings in the year ahead but could save billions of dollars in future years.

Lawmakers ultimately agreed to require undocumented immigrant adults ages 19 to 59 to pay $30 monthly premiums beginning July 2027. They plan to adopt Newsom’s enrollment cap but give people three months to reapply if their coverage lapses instead of immediately cutting off their eligibility.

Democrats agreed to cut full dental coverage for adult immigrants who are undocumented, but delayed the change until July 1, 2026.

State leaders agreed to reinstate much higher limits than the governor originally proposed on the assets Medi-Cal beneficiaries may possess and still get coverage. The new limits would be $130,000 for individuals and $195,00 for couples, compared to prior limits of a few thousand dollars.

They also adopted Newsom’s proposal to withdraw Medi-Cal benefits for specialty weight-loss drugs.

Shifting money around

The negotiations resulted in less general fund spending than the Legislature proposed in a counter to Newsom’s budget revision in May, dropping from $232 billion to an estimated $228 billion for 2025-26.

Officials are using more money from California’s cap-and-trade program, which sets limits on companies’ greenhouse gas emissions and allows them to buy pollution credits from the state, including $1 billion next year. They are also using $300 million from climate change bonds instead of the general fund to pay for environmental programs.

Lawmakers and the governor agreed to delay a $3.4-billion payment on a loan to cover Medi-Cal cost overruns and increase the loan by another $1 billion next year.

Trump uncertainty

The plan continues an agreement to take $7.1 billion from the state’s rainy day fund to help cover the deficit and taps into another $6.5 billion from other cash reserves to balance the budget.

California leaders for months have warned about the so-called Trump effect on the state budget.

Financial analysts at UCLA predict that the state economy is expected to slow in the months ahead due to the effects of Trump’s tariff policy and immigration raids on construction, hospitality, agriculture and other key sectors.

Meanwhile, the state is warning that federal funding reductions to California could require lawmakers to adopt additional budget cuts in August or September, during a special session in the fall or early next year.

State officials expect future deficit estimates to range from $17 to $24 billion annually, according to an Assembly summary of the budget deal.

More to come

The final budget agreement is being publicly released in bits and pieces this week through a series of trailer bills that appear online at random hours.

Lawmakers are expected to pass a main budget bill on Friday and approve additional legislation by Monday, before the July 1 deadline for the budget to go into effect. Some legislation, such as the CEQA housing exemptions, will not appear in print until the end of the week.

Other decisions, such as reauthorizing California’s cap-and-trade program, will be considered later in the year outside of the budget process.