SACRAMENTO — Gov. Gavin Newsom signed a bill on Wednesday to provide $90 million to Planned Parenthood, a move intended to help offset the losses from recent federal cuts targeting abortion providers.
“These cuts were designed to attack and assault Planned Parenthood,” said Newsom, speaking at a news conference near the Capitol. “They were not abortion cuts; they were attacks on wellness and screenings and they were attacks on women’s healthcare.”
The Republican-backed “One Big Beautiful Bill Act,” signed last year by President Trump, blocked federal Medicaid funding from going to Planned Parenthood. More than 80% of the nearly 1.3 million annual patient visits to Planned Parenthood in California were previously reimbursed by Medi-Cal, the state’s version of Medicaid.
Sen. John Laird, who authored the legislation for the funding, Senate Bill 106, said the measure showed that California won’t back down. “This is us standing up to the immediate cut that was in that bill,” said Laird, (D-Santa Cruz). “This is how we are fighting back.”
Jodi Hicks, chief executive officer of Planned Parenthood Affiliates of California, thanked legislators for their support and said the organization could not survive without support from the state. She said Planned Parenthood would always fight against federal attacks but “needed an army” this time to stand beside them.
During the news conference, First Partner Jennifer Siebel Newsom expressed frustration with reporters for asking off-topic questions and said the media should be more concerned about women’s issues.
“All of these questions have really been about other issues,” she said. “This happens over and over and over again — (and we) wonder why we have such a horrific war on women in this country.”
Planned Parenthood offers a range of services, including abortions, birth control, cancer screenings and testings for sexually transmitted diseases. A coalition of states, including California, filed a lawsuit last year against the Trump administration over the cuts to the nonprofit. The states argue in the ongoing lawsuit that the measure violates the spending powers of Congress by singling out Planned Parenthood for negative treatment.
Senate Bill 106 has drawn ire from Republicans, who question why funding is going to Planned Parenthood when many hospitals in the state need more financial support.
“For rural Californians, this conversation is about access to care,” Sen. Megan Dahle (R-Bieber) said in a statement from the Senate Republican Caucus. “Hospitals are cutting services or facing closure, forcing families to drive hours for life-saving treatment. State lawmakers should prioritize stability for these communities.”
WASHINGTON — Donald Trump’s promises on affordability in 2024 helped propel him to a second term in the White House.
Since then, Trump says, the problem has been solved: He now calls affordability a hoax perpetrated by Democrats. Yet the high cost of living, especially housing, continues to weigh heavily on voters, and has dragged down the president’s approval ratings.
In a poll conducted this month by the New York Times and Siena University, 58% of respondents said they disapprove of the way the president is handling the economy.
How the economy fares in the coming months will play an outsize role in determining whether the Democrats can build on their electoral success in 2025 and seize control of one or both chambers of Congress.
With housing costs so central to voters’ perceptions about the economy, both parties have put forward proposals in recent weeks targeting affordability. Here is a closer look at their competing plans for expanding housing and reining in costs:
How bad is the affordability crisis?
Nationwide, wages have barely crept up over the last decade — rising by 21.24% between 2014 and 2024, according to the Federal Reserve. Over the same period, rent and home sale prices more than doubled, and healthcare and grocery costs rose 71.5% and 37.35%, respectively, according to the Fed.
National home price-to-income ratios are at an all-time high, and coastal states like California and Hawaii are the most extreme examples.
Housing costs in California are about twice the national average, according to the state Legislative Analyst‘s Office, which said prices have increased at “historically rapid rates” in recent years. The median California home sold for $877,285 in 2024, according to the California Assn. of Realtors, compared with about $420,000 nationwide, per Federal Reserve economic data.
California needs to add 180,000 housing units annually to keep up with demand, according to the state Department of Housing. So far, California has fallen short of those goals and has just begun to see success in reducing its homeless population, which sat at 116,000 unsheltered people in 2025.
What do the polls say?
More than two-thirds of Americans surveyed in a Gallup poll last month said they felt the economy was getting worse, and 36% expressed approval for the president — the lowest total since his second term began.
The poll found that 47% of U.S. adults now describe current economic conditions as “poor,” up from 40% just a month prior and the highest since Trump took office. Just 21% said economic conditions were either “excellent” or “good,” while 31% described them as “only fair.”
An Associated Press poll found that only 16% of Republicans think Trump has helped “a lot” in fixing cost of living problems.
What have the Democrats proposed?
The party is pushing measures to expand the supply of housing, and cut down on what they call “restrictive” single-family zoning in favor of denser development.
Senate Minority Leader Chuck Schumer (D-N.Y.) said Democrats plan to “supercharge” construction through bills like California Sen. Adam Schiff’s Housing BOOM Act, which he introduced in December.
Schiff said the bill would lower prices by stimulating the development of “millions of affordable homes.” The proposal would expand low-income housing tax credits, set aside funds for rental assistance and homelessness, and provide $10 billion in housing subsidies for “middle-income” workers such as teachers, police officers and firefighters.
The measure has not been heard in committee, and faces long odds in the Republican-controlled body, though Schiff said inaction on the proposal could be used against opponents.
And the Republicans?
A group of 190 House Republicans this month unveiled a successor proposal to the “Big Beautiful Bill,” the sprawling tax and spending plan approved and signed into law by Trump in July.
The Republican Study Committee described the proposal as an affordability package aimed at lowering down payments, enacting mortgage reforms and creating more tax breaks.
Leaders of the group said it would reduce the budget deficit by $1 trillion and could pass with a simple majority.
“This blueprint … locks in President Trump’s deregulatory agenda through the only process Democrats can’t block: reconciliation,” said Rep. August Pfluger (R-Tex.), who chairs the group. “We have 11 months of guaranteed majorities. We’re not wasting a single day.”
Though the proposal has not yet been introduced as legislation, Republicans said it would include a mechanism to revoke funding from blue states over rent control and immigration policy, which they calculated would save $48 billion.
President Trump has endorsed a $200-billion mortgage bond stimulus, which he said would drive down mortgage rates and monthly payments. And the White House, which oversees Fannie Mae and Freddie Mac — the two enterprises that back most U.S. mortgages — continues to push the idea of portable and assumable mortgages.
Trump said the move would allow buyers to keep their existing mortgage rate or enable new homeowners to assume a previous owner’s mortgage.
The Department of Justice, meanwhile, has launched a criminal investigation into Federal Reserve Chair Jerome Powell over the Fed’s renovation costs, as Trump bashed him over “his never ending quest to keep interest rates high.”
The president also vowed to revoke federal funding to states over a wealth of issues such as childcare and immigration policy.
“This is not about any particular policy that they think is harmful,” Rep. Laura Friedman (D-Burbank) said. “This is about Trump’s always trying to find a way to punish blue states.”
Is there any alignment?
The two parties are cooperating on companion measures in the House and Senate.
The bipartisan ROAD to Housing Act seeks to expand housing supply by easing regulatory barriers. It passed the Senate unanimously and has support from the White House, but House Republicans have balked, and it has yet to receive a floor vote.
A bipartisan proposal — the Housing in the 21st Century Act — was approved by the House Financial Services Committee by a 50-1 vote in December. It also has yet to receive a floor vote.
The bill is similar to its twin in the Senate, with Rep. French Hill (R-Ark.) working across the aisle with Rep. Maxine Waters (D-Los Angeles). If approved, it would cut permitting times, support manufactured-housing development and expand financing tools for low-income housing developers.
There was also a recent moment ofunusual alignment between the president and California Gov. Gavin Newsom, who both promised to crack down on corporate home buying.
What do the experts say?
Housing experts recoiled at GOP proposals to bar housing dollars from sanctuary jurisdictions and cities that impose rent control.
“Any conditioning on HUD funding that sets up rules that explicitly carve out blue cities is going to be really catastrophic for California’s larger urban areas,” said David Garcia, deputy director of policy at UC Berkeley’s Terner Center for Housing Innovation.
More than 35 cities in California have rent control policies, according to the California Apartment Assn. The state passed its own rent stabilization law in 2019, and lawmakers approved a California sanctuary law in 2017 that prohibits state resources from aiding federal immigration enforcement.
The agenda comes on the heels of a series of HUD spending cuts, including a 30% cap on permanent housing investments and the end of a federal emergency housing voucher program that local homelessness officials estimate would put 14,500 people on the streets.
In Los Angeles County, HUD dollars make up about 28% of homelessness funding.
“It would undermine a lot of the bipartisan efforts that are happening in the House and the Senate to move evidence-backed policy to increase housing supply and stabilize rents and home prices,” Garcia said.
The president’s mortgage directives also prompted skepticism from some experts.
“Fannie Mae and Freddie Mac were pressed to get into the riskier parts of the mortgage market back in the housing bubble and that was a part of the problem,” said Eric McGhee, a researcher at the Public Policy Institute of California.
In the roiling debate over California’s proposed billionaire tax, supporters and critics agree that such policies haven’t always worked in the past. But the lessons they’ve drawn from that history are wildly different.
The Billionaire Tax Act, which backers are pushing to get on the November ballot, would charge California’s 200-plus billionaires a one-time, 5% tax on their net worth in order to backfill billions of dollars in Republican-led cuts to federal healthcare funding for middle-class and low-income residents.
Critics of the proposal have argued that past failures of similar wealth taxes in Europe prove they don’t work and can cause more harm than good, including by driving the ultra-rich out. Among those critics is San José Mayor Matt Mahan, a tech-friendly Democrat who is contemplating a run for governor.
“Over the last 30 years, we’ve seen a dozen European countries pursue national-level wealth taxes,” Mahan said. “Nine of them have rolled them back. A majority have seen a decline in overall revenue. It’s actually shrunk the tax base, not increased it, and it’s because it creates a perverse incentive and drives capital flight.”
Backers of the measure acknowledge such failures but say that they learned from them and that California’s proposal is stronger as a result.
Brian Galle, a UC Berkeley tax law professor and one of four academic experts who drafted the measure, said if it gets on the ballot, every voter in the state will receive a copy of the full text, a one-page explainer on what it does, and nearly two dozen additional pages of “rules for preventing wealthy people and their army of lawyers from dodging” it.
Many of those rules, he said, are based on historical lessons from places where such taxes have failed, but also where they’ve succeeded.
“If you understand the actual lessons of history, you understand that this bill is more like the successful Swiss and Spanish wealth taxes,” Galle said. “Part of that is learning from history.”
Warnings from Europe
Since the 1990s, several European countries have repealed net wealth taxes, including Austria, Denmark, Finland, France and Germany.
A major example cited by critics of the California proposal is France, which implemented a much larger wealth tax on far more people, including many millionaires. The measure raised modest revenues, which fell as rich people moved out of the country to avoid paying, and the measure was repealed by the government of President Emmanuel Macron in 2017.
In a 2018 report on net wealth taxes, the Paris-based Organization for Economic Co-operation and Development found that European repeals were often driven by “efficiency and administrative concerns and by the observation that net wealth taxes have frequently failed to meet their redistributive goals.”
“The revenues collected from net wealth taxes have also, with a few exceptions, been very low,” it found.
Critics and skeptics of the California proposal say they expect California to run into all the same problems.
Mahan and others have pointed to a handful of prominent billionaires who already appear to be distancing themselves from the state, and said they expect more to follow — which Mahan said will reduce California’s “recurring revenue” beyond the amount raised by the one-time tax.
Kent Smetters, faculty director of the Penn Wharton Budget Model, which analyzes the fiscal effects of public policies, said net worth taxes in other countries have “always raised quite a bit less revenue than what was initially projected,” in large part because “wealth is easy, as it turns out, to try to reclassify or move around” and “there’s all these tricks that you can do to try to make the wealth look smaller for tax purposes.”
A bus in London promotes a campaign by British millionaires advocating for an end to extreme wealth and inequality.
(Carl Court / Getty Images)
Smetters said he expects that the California measure will raise less than the $100 billion estimated by its backers because billionaire wealth in California — much of it derived from the tech sector — is relatively “mobile,” as many tech barons can move without it affecting business.
“Policymakers have to understand that they’re not going to get nearly as much money as they often project from a purely static projection, where they’re not accounting for the different ways that people can move their wealth, reclassify their wealth, or even just move out of the state,” Smetters said. “So far, we only know of a few people — with a lot of money — who have moved out of the state, [but] that number could go up.”
Kevin Ghassomian, a private wealth lawyer at Venable who advises rich clients, said he expects the administrative costs of enforcing the tax to be massive for the state — and much greater than the drafters have anticipated.
On the front end, the state will face a wave of legal challenges to the tax’s constitutionality and its retroactive application to all billionaires living in the state as of the end of 2025.
Moving ahead, he said, there will be litigation from wealthy individuals whose departure from California is questioned or who dispute the state’s valuation of their net worth or individual assets — including private holdings, which the state doesn’t have extensive experience assessing.
Valuating such assets will be “a nightmare, just practically speaking, and it’s going to require a lot of administrators at the state level,” Ghassomian said, especially considering many California billionaires’ wealth is in the form of illiquid holdings in startups and other ventures with fluctuating market valuations.
“You could be a billionaire today, and then the market plummets, and now all of a sudden, you’re a pauper,” he said. “It could really lead to some unfair results.”
Lessons from Europe
Backers of California’s proposal said they have accounted for many of the historical pitfalls with wealth taxes and taken steps to avoid them — including by making it harder for wealthy Californians to simply shuffle money around to avoid the tax.
“There are a lot of provisions that are designed based on what has worked well in other countries with wealth taxes in the modern era, especially Switzerland, and there are also provisions meant to shut down some of the holes in some of the earlier wealth tax efforts, especially the France one, that were viewed as not successful,” said David Gamage, a University of Missouri tax law professor and another of the proposal’s drafters.
Galle said the Organization for Economic Co-operation and Development study found that many of Europe’s historical wealth taxes “hadn’t figured out how to solve the problem of what small businesses were worth,” so were more narrowly focused on publicly traded stock and real estate. “Over time, there was a lot of abuse where people shifted their assets to make them look privately held.”
The California proposal “tries to solve that problem” by including small businesses and other privately held wealth in their calculations of net worth, he said — and benefits from the fact that such wealth has gotten a lot easier to track and appraise in recent years.
Doing so would be a familiar exercise for many California billionaires already, he said, as it is hard to raise venture capital, for example, without audited financial statements.
Backers of the measure said it is harder for U.S. citizens to avoid taxes by moving abroad than it has been for Europeans, and that evidence from Switzerland and Spain suggests differing tax rates between a nation’s individual states do not cause massive interstate flight.
San José Mayor Matt Mahan, who might run for governor, opposes the proposed tax on California billionaires.
(Rich Pedroncelli / Associated Press)
For example, each state in Spain sets its own wealth tax rate, and Madrid’s is 0% — but that has not caused an exodus from other parts of Spain to Madrid, Galle said.
The risk of California billionaires avoiding the tax by simply moving to another U.S. state was further mitigated by the measure’s Jan. 1 deadline for avoiding the tax. Galle said the deadline “was intended to make it more difficult for individuals to concoct the kind of misleading, apparent moves that wealthy people have used in other places to try to avoid a wealth tax.”
Gamage said that “history shows if a tax on the wealthy can be avoided by moving paper around, claiming that you live in another location without actually moving your life there, moving assets to accounts or trusts nominally in foreign countries or other jurisdictions, you see large mobility responses.”
But when “those paper moves are shut down,” there’s much less moving — and “that’s the basis for the California model,” he added.
The outlook
Ghassomian, who said he has been “fielding a lot of inbound inquiries from clients who are just kind of worried,” said it is clear that the proposal’s authors “have done their homework” and tried to design the tax in a smart way.
Still, he said, he has concerns about the cost of administering the tax outpacing revenues, especially amid litigation. Residency battles alone with billionaires whose claims of departing the state are questioned could take “years and years and years” to resolve, he said.
“The revenue has to line up with expenditures, and if you can’t count on the revenue because it’s going to be tied up in courts, or it’s going to be delayed, then I think that creates some real logistical hurdles,” he said.
Smetters said predicting revenues from a tax on so many different types of assets is “really hard,” but one thing that has generally held true through history is that “most countries, even with less-mobile wealth, typically do not get the type of revenue that they were hoping for.”
David Sacks, a venture capitalist and President Trump’s AI czar who decamped from California to Texas, said on the sidelines of the World Economic Forum in Davos, Switzerland, last week that the measure was an “asset seizure” more than a tax, and that the state would be headed in a “scary direction” if voters approved it.
Darien Shanske, a tax law professor at UC Davis and another drafter of the proposal, said he and his colleagues did their best to “look at the lessons of the past, and apply them in a way that makes sense and is generally fair and administrable” — in a state where wealth inequality is rapidly growing and a wealth tax presents unique opportunities.
“Having a tax on billionaires does make particular sense in California because of the large number that live here and the large number who have made their fortune here,” he said.
Shanske said the proposed tax is designed to provide California a way to “triage” soaring healthcare premiums resulting from legislation enacted by the Trump administration and congressional Republicans. The proposal asks for contributions from people who will quickly recoup what they are taxed given the exponential growth of their assets, he said.
Emmanuel Saez, director of the Stone Center on Wealth and Income Inequality at UC Berkeley and another drafter of the measure, said many of the repealed European taxes targeted millionaires while providing loopholes for billionaires to avoid paying, whereas California’s measure is “exactly the reverse.”
He said the measure will raise substantial revenue in part because California billionaire wealth more than doubled from 2023 to 2025 alone, and is “the innovative and first-of-its-kind tax on the ultra-wealthy that the moment requires.”
Thomas Piketty, a French economist and author of “Capital in the Twenty-First Century,” called California’s proposed tax “very innovative” and “relatively modest” compared with massive wealth taxes after World War II — including in Germany and Japan — and said it would not only improve healthcare in the state but “have an enormous impact on the U.S. and international political scene.”
“In the current context, with a deeply entrenched billionaire class, wealth taxes meet even more political resistance than in the postwar context, and this is where California could make a huge difference,” he said. “The fact of targeting the revenue to health spending is also very innovative and can help convince the voters to support the initiative.”
Times staff writer Seema Mehta contributed to this report.
