Commercial Driver License Lapses Cost California $160 Million in Federal Funds
DOT Secretary Sean Duffy also threatened to withhold millions of dollars of federal funding from North Carolina if changes are not made to its CDL compliance efforts.
California Gov. Gavin Newsom’s office said the state faces a $2.9 billion budget deficit this year, which is the fourth year in a row that the state has had a multi-billion-dollar deficit.
And as the new state budget for this year is being calculated, the numbers used include a loss of federal funding.
This year’s shortfall comes despite growing revenues fueled by stock market gains and investments in artificial intelligence.
Newsom’s office outlined a behemoth $349 billion budget, though his proposal for how to spend all of that money is far from final. Lawmakers and the Democratic governor will spend the next several months fighting and negotiating over priorities — and cuts. Last year Democrats had to roll back their ambitious program to provide free health care to immigrants without legal status in the face of a $12 billion deficit.
This year, they will also face a $1.4 billion loss in federal funding after new federal policy changes to health care and food assistance programs for low-income people. Lawmakers have said repeatedly California is in no position to backfill that money. The budget doesn’t fully address the federal funding loss.
You would think that in the face of this new reality, California officials would be mindful of heeding federal demands for regulatory compliance. But this is California we’re talking about, which is living out a #Resistance fantasy despite the harsh new realities of policy enforcement.
Legal Insurrection readers will note that I have been covering the investigations of commercial driver’s license CDL) programs. The situation in California was so bad that the state promised to cancel 17,000 CDLs rather than get a fine from the Department of Transportation (DOT).
However, California officials failed to meet the deadline, so the new budget now must be recalculated. The feds are slashing the transportation funding to the state by $160 million.
The U.S. Department of Transportation said on Wednesday that it is withholding $160 million in federal funds from the state of California for failing to cancel more than 17,000 commercial driver’s licenses held by non-U.S. citizens.
The department said California failed to meet the agreed-upon deadline of Jan. 5 after an audit found that the state “illegally issued licenses with expiration dates extending years beyond a driver’s lawful presence and to grant commercial driver’s licenses to individuals who were ineligible to hold them.”
In November, according to the department, California agreed to revoke “every illegally issued license within 60 days and work with the Federal Motor Carrier Safety Administration so the agency could verify that the failures that allowed these licenses to be issued are corrected.”
Before New Year’s Eve, the California Department of Motor Vehicles announced that it has extended the cancellation date for impacted license holders.
#FMCSA announced Jan. 7 it is withholding nearly $160 million from #California for failing to cancel 17,000 non-domiciled #CDL by the previously announced Jan. 5 deadlinehttps://t.co/hyAvCY3je4#transportation #trucknews #trucking #TruckDrivers pic.twitter.com/nW360hANU7
— @todaystrucking (@Todaystrucking) January 9, 2026
California isn’t the only problem state. DOT Secretary Sean Duffy threatened to withhold millions of dollars of federal funding from North Carolina if changes are not made to its CDL compliance efforts.
On Thursday, Duffy’s office issued a statement saying he “exposed that 54% of North Carolina’s non-domiciled commercial driver’s licenses reviewed by the Federal Motor Carrier Safety Administration were issued illegally.”
…If North Carolina does not revoke all illegally issued licenses and change their processes, Duffy said the DOT will withhold nearly $50 million in federal funding.
“North Carolina’s failure to follow the rules isn’t just shameful – it’s dangerous,” said Duffy. “I’m calling on state leadership to immediately remove these dangerous drivers from our roads and clean up their system.”
“The level of noncompliance in North Carolina is egregious,” said FMCSA Administrator Derek Barrs. “Under Secretary Duffy, we will not hesitate to hold states accountable and protect the American people.”
🚨BREAKING: DOT Sec. Duffy exposes MASSIVE fraud in North Carolina: 54% of CDLs issued ILLEGALLY to foreign drivers.
NC faces losing $50 MILLION in federal funds unless they REVOKE every illegal CDL NOW.pic.twitter.com/DoxuTVLvCH
— Gunther Eagleman™ (@GuntherEagleman) January 9, 2026
Hopefully, Duffy keeps up the pressure, and our roads become safer for Americans.
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Comments
You have to understand that to a Democrat/Leftist neither laws nor penalties [or any consequences] apply to anything that they choose to do. Therefore, they will view this as Federal oppression to be resisted.
Subotai Bahadur
Queue the federal judge restraining order in 3, 2, 1……
Exactly my thought when I read the headline.
“You would think that in the face of this new reality, California officials would be mindful of heeding federal demands for regulatory compliance.”
“A mere flesh wound!”
This is as clear a demonstration as you’d ever want that the progressive community values their ideology over everything, and that progressive government officials will sacrifice funding to conform. Simplest thing in the world to regroup, say “our bad”, blame a predecessor, and fix the problem (for now), so as to get the money back.
They won’t do it. They simply won’t.
The vile, stupid and evil neo-communist/Islamofascist/Muslim supremacist Dhimmi-crats are criminals with the intellect of toddlers. They always must be watched, supervised, remonstrated and punished,
They’ll just raise taxes or some fee and blame Trump for it. The TDS addled progressives will agree and be confirmed that their insurrection is righteous.
Better yet if these fraud ridden States back slide like CA or refuse to come to immediate resolution then ‘in the interest of public safety and out of an abundance of caution’ revoke these non compliant States ability to issue a CDL that is valid outside their State.
“If North Carolina does not revoke all illegally issued licenses”
You know, instead of all their stupid oppressive planning for digital currency and wealth that they can freeze with the push of a button, perhaps Congress sh0uld spend time on federal digital commercial drivers’ licenses.