The Department of Homeland Security (DHS) has initiated a formal probe into California’s handling of federal benefits, following allegations that state agencies distributed taxpayer-funded support to illegal migrants.
The inquiry, spearheaded under Title 8 authority, focuses on California’s Cash Assistance Program for Immigrants (CAPI).
Federal officials contend that the program may have improperly extended benefits to people who are not legally entitled to them, particularly those ineligible for Social Security benefits.
The DHS subpoena targets the Los Angeles County Department of Public Social Services (DPSS), demanding records of individuals who received Supplemental Security Income (SSI) since January 2021 despite being in the country illegally.
In a statement issued Monday, DHS Secretary Kristi Noem criticized California lawmakers for prioritizing illegal migrants over American citizens.
“Radical left politicians in California prioritize illegal aliens over our own citizens, including by giving illegal aliens access to cash benefits,” Noem stated.
“The Trump Administration is working together to identify abuse and exploitation of public benefits and make sure those in this country illegally are not receiving federal benefits or other financial incentives to stay illegally. If you are an illegal immigrant, you should leave now. The gravy train is over.
California has long drawn criticism from immigration enforcement advocates for allocating massive sums of public money toward services for non-citizens.
Among the most scrutinized programs is Medi-Cal, the state’s Medicaid alternative, which offers full medical coverage to illegal migrants meeting income guidelines.
Projections show the program will cost taxpayers $8.4 billion in the 2024-2025 fiscal year. Last year alone, over $9.5 billion went toward providing healthcare to roughly 1.5 million illegal migrants.
Meanwhile, House Republicans introduced a Medicaid overhaul targeting states that provide public healthcare coverage to illegal immigrants.
The proposal, if enacted, would strip billions in federal funding from states that offer Medicaid or similar programs to non-citizens. Seven Democrat-led states, including California, New York, Illinois, Oregon, Washington, Colorado, and Minnesota, currently maintain such initiatives.
Under the GOP plan, these states would be forced to shoulder a greater share of the financial burden. The federal government currently pays for 90% of Medicaid expansion costs, but that contribution would drop to 80% for states that extend benefits to illegal migrants. Axios reported that this shift could cost states billions in lost federal support.
Governor Gavin Newsom’s administration has already had to pull heavily from California’s rainy-day fund to sustain Medi-Cal, withdrawing $6 billion in the current fiscal year. The state’s financial reserves have dwindled to under $20 billion, according to figures from the California Budget and Policy Center.
Despite the ongoing budgetary crisis, Newsom issued new guidance Monday urging cities to prohibit homeless encampments on public land.
The move, backed by billions in state funding, encourages municipalities to clear public spaces such as parks, sidewalks, and bike trails of tents and sleeping bags.
“There’s nothing compassionate about letting people die on the streets. Local leaders asked for resources — we delivered the largest state investment in history. They asked for legal clarity — the courts delivered,” Newsom said in a statement.
His directive comes in the wake of a Supreme Court decision that upheld a ban on public camping in Oregon, a ruling that paved the way for enforcement measures against encampments in other states.
“Now, we’re giving them a model they can put to work immediately, with urgency and with humanity, to resolve encampments and connect people to shelter, housing, and care. The time for inaction is over. There are no more excuses,” he added.
Still, the governor stopped short of authorizing criminal penalties. The guidance specifically states that no individual “should face criminal punishment for sleeping outside when they have nowhere else to go.” It also forces cities in the Golden State to make “every reasonable effort to identify and offer shelter” to those being displaced.
While Newsom cannot legally mandate city compliance, he is using financial incentives as leverage, tying $3.3 billion in state funds to local adherence with the policy.
