Feds threaten to pull $160M from California over immigrant license rules

Washington D.C.  – U.S. Transportation Secretary Sean Duffy escalated his feud with California on Sunday, warning that he intends to revoke millions in federal funds and possibly strip the state of its ability to issue commercial driver’s licenses (CDLs). The move, Duffy said, comes after repeated refusals by Gov. Gavin Newsom’s administration to comply with new federal rules restricting who can obtain a commercial license.

Speaking on Fox News’ Sunday Morning Futures, Duffy accused California of “knowingly and illegally” issuing CDLs to noncitizens. “So, one, I’m about to pull $160 million from California,” he said. “And as we pull more money, we also have the option of pulling California’s ability to issue commercial driver’s licenses.”

The warning follows a month of rising tension between the Department of Transportation and California officials. At the heart of the dispute is a set of emergency regulations the Trump administration enacted on Sept. 29, tightening eligibility for CDLs. Under those rules, only three specific classes of visa holders — primarily certain temporary workers and humanitarian visa recipients — can now apply. States are also required to verify each applicant’s immigration status through a federal database before issuing a license.

California officials argue they are already following those rules. Eva Spiegel, a spokesperson for the California Department of Motor Vehicles, said the administration “has no legitimate basis” to withhold federal funds. “The federal government previously allowed commercial driver’s licenses for asylum seekers and refugees,” Spiegel said in a statement. “California is in compliance with these regulations and will remain in compliance with federal law.”

Duffy insists otherwise. He said Sunday that California “unlawfully issued tens of thousands” of licenses to immigrants who no longer hold valid work permits. “You have 60,000 people on the roads who shouldn’t have licenses,” Duffy said. “They’re driving fuel tankers, they’re driving school buses, and we’ve seen some of the crashes on American roadways that come from these people who shouldn’t have these licenses.”

The dispute stems from a nationwide CDL audit launched after a fatal crash in Florida, in which a truck driver allegedly in the country illegally made a U-turn and killed three people. Investigators later found improperly issued commercial licenses in several states, including California, Colorado, Pennsylvania, South Dakota, Texas, and Washington.

Duffy said that of 145 licenses reviewed in California, roughly 25% should never have been issued. He cited at least four cases where drivers’ work permits had expired years earlier, yet their CDLs remained valid.

The Newsom administration has dismissed the accusations as politically motivated. When Duffy first floated the threat last month, a spokesperson for the governor pointed to California’s safety record, noting that its CDL holders have lower crash rates than the national average — and lower even than Texas, which issues the most commercial licenses in the country.

Still, the financial stakes are high. California faces losing $160 million in federal highway transportation funds, along with possible restrictions on issuing CDLs — a blow that could ripple through the state’s logistics and agricultural industries.

Duffy has also threatened to withhold an additional $40 million over what he claims is California’s failure to enforce English-language testing for commercial drivers, another requirement under a Trump-era executive order.

In its official response, California said it enforces all language and safety standards consistent with federal law. But Duffy, clearly unswayed, said the state has “30 days to get right” before the funding is cut off.

The clash marks yet another front in the broader political fight between the Trump administration and blue states like California — one that now extends from immigration enforcement and environmental standards to who can sit behind the wheel of an 18-wheeler.