| | | | |  | | By Dustin Gardiner and Blake Jones | Presented by California Resources Corporation / Carbon TerraVault | | | President Donald Trump’s Monday-night Truth Social post took his fixation with California water to new heights by claiming “the United States Military just entered the Great State of California and, under Emergency Powers, TURNED ON THE WATER." Not quite. Our Debra Kahn explains. And California Attorney General Rob Bonta said his office is reviewing a Monday order from Trump's budget office to freeze all federal aid with the exception of Social Security and Medicare, a move that could affect billions of dollars in grants to state and local governments. (More on this below.)
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Rep. Robert Garcia, a Democrat from Long Beach, will help lead Democrats' effort to respond to Elon Musk's efforts to slash spending on federal programs and agencies. | Mariam Zuhaib/AP | THE BUZZ: BARKING BACK — Democratic Rep. Robert Garcia says Democrats trying to play nice with Elon Musk on his crusade to slash federal government spending are kidding themselves. Garcia has a different strategy: go on the offensive against the Trump administration's Musk-led effort from the outset. He is the only California Democrat appointed to a new House Oversight subcommittee on the upstart Department of Government Efficiency, better known as DOGE, and will be central to his party’s response to proposed spending cuts. The panel is charged with evaluating proposals from DOGE leaders, Musk included, to overhaul federal agencies. Playbook spoke with Garcia over the phone from his office in Washington about why he’s deeply skeptical that Musk, a confidant of Trump, is truly interested in efficiency. Garcia argues the true aim of the project is to slash funding for safety-net programs and the Department of Education. “Their goal,” he said, “is to destroy our agencies, eliminate the Department of Education, and no state has more to lose in this DOGE fight than California.” Republican Rep. Marjorie Taylor Greene, the subcomittee’s chair and a Trump loyalist who has frequently clashed with Garcia, called Trump’s DOGE effort a “mandate from the American people” to “eliminate waste, fraud, abuse, and mismanagement within federal agencies. This conversation has been condensed and edited for clarity. Do you think the committee’s aims are entirely destructive? Or are there areas where you think it could be successful in finding unnecessary spending? Look, I would welcome a conversation on government efficiency. But I have zero confidence that Marjorie Taylor Greene or the Republicans on this committee are interested in that. They’ve been pretty clear in what they want to do: roll back the social-safety net. They’re talking about how to make Medicare work better — we know what that means, it means making Medicare provide less benefits to people. They’ve said they flat-out want to eliminate the federal government’s role in public education. It sounds like what you’re saying is that ‘government efficiency’ is a guise for broader political aims. Is that fair? That’s right. This committee is their way of trying to essentially forever damage our institutions and take away benefits from hard-working Americans. They are using terms like ‘government efficiency,’ which basically means eliminating departments and eliminating services, especially for working-class people. A handful of Democrats — California Rep. Ro Khanna comes to mind — have talked about finding a way to work with Musk on spending that Democrats consider wasteful. Do you think that’s the right approach? I think we need to be very honest about [Musk’s] intentions. You just have to read his social media platform to see what he wants to do. He wants to cut trillions of dollars from the federal government. There’s no way of doing that without essentially changing the way we deliver Social Security benefits to the public. There’s no way of doing that without eliminating or reducing benefits for veterans. We should be very clear that we should not be giving the reins to benefits for working-class people over to the richest man on the planet. I think it is insane to start with the premise that we’re going to work with Elon Musk, Marjorie Taylor Greene and, quite frankly, Donald Trump on their scheme to remake the federal government. Californians pay a disproportionate share of the federal government’s revenue relative to the benefits the state receives … Well, the most. We’re essentially giving more to the federal government than taking back — dramatically more. Yet, we have the most to lose as it relates to our public school students, our veterans and so much more. Where does California stand to lose the most? People are asleep at the wheel in understanding the threat to public education that we’re about to face over the next four years. I don’t think people understand how dependent schools are — especially K-12, but also community colleges and universities — on federal funds. When it comes to helping the most vulnerable students, it’s almost completely federally funded. This worldview that you take care of your own kid … does not take into consideration the needs so many kids and families have. GOOD MORNING. Happy Tuesday. Thanks for waking up with Playbook. You can text us at 916-562-0685 — save it as “CA Playbook” in your contacts. Or drop us a line at dgardiner@politico.com and bjones@politico.com, or on X — @DustinGardiner and @jonesblakej. WHERE’S GAVIN? In Los Angeles, working with emergency officials responding to the fires. DON’T MISS IT: POLITICO AT USC — Join POLITICO’s own Chris Cadelago, Sasha Issenberg and Jonathan Martin alongside other political luminaries like James Carville and Reince Priebus at USC’s annual Warschaw Conference on Practical Politics on Thursday, Jan. 30. Throughout the day, panelists from politics, government, media and academia will discuss “The Trumping of America: Why and What’s Next.” Please register via Zoom or email California Editorial Director Julia Marsh at jmarsh@politico.com for an in-person invitation.
| | | | A message from California Resources Corporation / Carbon TerraVault: California's carbon capture future is here! With federal approval of the Golden State's first Carbon Capture and Storage project — led by California Resources Corporation (CRC) — our state is at the forefront. While other companies give up on California, CRC is eager to partner with Governor Newsom to meet California's climate goals. Approval of CCS in Kern County is an historic opportunity to lead on climate, while creating good-paying clean energy jobs. Let's get to work. Learn more. | | | |  | LOS ANGELES | | | 
Los Angeles Mayor Karen Bass. | Mark Schiefelbein/AP | HOMEWARD BOUND — Los Angeles Mayor Karen Bass announced Monday that all Palisades residents could re-enter evacuated areas, just days after fielding criticism from Trump over the uncertainty of the city’s timeline. Trump at a briefing in Los Angeles on Friday had urged the mayor to let people back into their damaged properties within 24 hours. Bass said she expected that would be possible “within a week” — which, Trump retorted, was “actually a long time.” Some residents at the meeting interjected to support the president’s statements, venting their frustrations over the wait. Zach Seidl, a spokesperson for the mayor’s office, said that it was always the plan to let residents back as soon as possible — and that Trump’s visit did not affect the timeline. Some residents in the Palisades had already gained access to their properties before today. On Monday in the Pacific Palisades, during a news conference yards away from the damage, Bass suggested the presidential trip was successful. “And as a matter of fact, they have followed up,” she said about the White House. Bass, who is under intense pressure from the president and Palisades residents to accelerate rebuilding timelines, said the next step is to allow the EPA to remove debris and hazardous waste but could not commit to a solid schedule. “It would be nice if [the EPA] could say, ‘By next week, on this day, at this time, it will be done.’ But, you know, that's impossible to do.” Steve Soboroff, a longtime Palisades resident and newly named chief recovery officer, and the mayor will be reviewing major contracting firms, including AECOM, to assist in recovery efforts. They said they expect to have a decision this week. — Nicole Norman
| | SAN FRANCISCO | | | 
San Francisco City Hall. | Getty Images | SANCTUARY BY THE BAY — The San Francisco Board of Supervisors will vote today on a resolution to reaffirm the city’s status as a sanctuary for undocumented immigrants, a rebuttal of Trump’s demands that cities and local law enforcement help carry out his order of mass deportations. The board has unanimously sponsored the resolution from Supervisor Jackie Fielder, a progressive elected last year. But the action is entirely symbolic. Fielder said that’s because the city’s existing sanctuary law is ironclad, having withstood a prior court challenge during Trump’s first term. Fielder, however, said there is room for the city to go further by providing more support to undocumented immigrants seeking legal aid. Currently, she said, there’s a waiting list of roughly 1,200 migrants seeking counsel through the city’s nonprofit partners. She said while San Francisco talks big about protecting immigrants, “we don’t necessarily provide commiserate funding.” But Fielder’s request could face a tough road as Mayor Daniel Lurie and the supervisors grapple with a budget deficit of nearly $1 billion. Lurie has also been hesitant to criticize Trump, arguing voters want him focused on the city’s comeback. In a video posted Friday, Lurie said he supports San Francisco’s immigration policies. But he didn’t respond to Trump by name, a clear shift from prior mayors who’ve gone head-to-head with him. “Our policies make us safe,” Lurie said in an Instagram post. “Their purpose is to ensure that all residents can feel secure interacting with first responders and local law enforcement.”
| | STATE CAPITOL | | | 
Nvidia CEO Jensen Huang. | Chip Somodevilla/Getty Images | NOT STONKS — Sacramento’s budget savants are watching the tech-heavy Nasdaq apprehensively after American artificial intelligence and chipmakers saw their valuations tumble Monday. The cause was the Chinese upstart AI company DeepSeek, which rattled investors when it announced it had trained a sophisticated chatbot at a fraction of the price and with less computing power than American competitors. A sustained downturn in the sector could eat into capital gains and high-paying tech jobs at California companies — both of which power the state’s progressive tax structure, as we’ve reported. “In the first half of 2024, stock pay alone at four major technology companies accounted for almost 10 percent of the state’s total income tax withholding,” the California Legislative Analyst's Office said in November. One of those companies is Santa Clara-based Nvidia, which saw its share price plummet nearly 17 percent by the time markets closed on Monday. California firms’ valuations could rebound, preventing a budget hit, but an enduring loss would dent the state’s revenue just after it turned a massive deficit into a minuscule surplus with budget cuts, reserve spending and complicated funding maneuvers.
| | | | Power shifts, razor-thin margins, and a high-stakes agenda. We’ve transformed our coverage—more reporters, more timely insights, and unmatched policy scoops. From leadership offices to committee rooms, caucus meetings, and beyond, our expert reporting keeps you ahead of the decisions that matter. Subscribe to our Inside Congress newsletter today. | | | | | | | CLIMATE AND ENERGY | | | 
Flames rise after a major fire erupted at the Moss Landing Power Plant, about 60 miles south of San Francisco, earlier this month. | KSBW via AP | FRIENDLY FIRE — A fire at the world’s largest lithium-ion battery in Moss Landing is prompting a California Democrat to use the playbook she developed against oil and gas drilling on one of her party’s own darlings — the energy storage industry. Read more about what she wants and who among her colleagues is already pushing back in last night's California Climate.
| | TOP TALKERS | | OUT OF THE CROSSHAIRS — Kentucky Rep. James Comer appears to have not included any California cities in a letter that he sent to Democratic mayors of major cities that might not be in compliance with the federal government’s new immigration policies. “In addition to the efforts of the Trump Administration to ensure federal immigration enforcement can proceed unimpeded, Congress must determine whether further legislation is necessary to enhance border security and public safety,” Comer wrote. BIG FREEZE — Trump’s budget office ordered an expansive freeze of all federal financial services on Monday, which could affect households receiving federal assistance like SNAP food aid, along with federal funding for energy and other infrastructure projects. Social Security and Medicare will not be affected by the freeze. “The use of Federal resources to advance Marxist equity, transgenderism and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” reads the memo obtained by POLITICO. As our colleagues Jennifer Scholtes and Nicholas Wu report, "The new order could affect billions of dollars in grants to state and local governments while causing disruptions to programs that benefit many households. There was also widespread confusion over how the memo would be implemented and whether it would face legal challenges." Within hours, Bonta signaled a legal challenge was coming: "Make no mistake—any pause to critical funding would hurt families and threaten public health & safety," California's AG wrote. "We’re prepared to protect CA's people and programs from @POTUS' reckless and dangerous actions."
| | | | A message from California Resources Corporation / Carbon TerraVault:  
| | | | | AROUND THE STATE | | — Derek Kinnison, a Lake Elsinore resident who was pardoned for taking part in the Jan. 6 attack on the Capitol, was met with a standing ovation at a church in Temecula. (Press Enterprise) — Lurie’s “hiring freeze” at San Francisco City Hall is aimed at helping the city address a $876+ million general fund deficit. But the rollout has been messy in practice. (Mission Local) — New Yorker reporter M.R. O’Connor recounts his experience embedding with SoCal firefighters in the Eaton Fire. (The New Yorker)
| | | | New Year. New Washington. New Playbook. With intensified congressional coverage and even faster delivery of policy scoops, POLITICO’s reimagined Playbook Newsletter ensures you’re always ahead of the conversation. Sign up today. | | | | | | | PLAYBOOKERS | | BIZ MOVES — The Public Policy Holding Company is growing its footprint in California, acquiring TrailRunner International — a multi-continental communications firm founded in Truckee that still has an office of 15 employees in the Lake Tahoe resort town. PPHC, the bipartisan parent company of several government and public affairs firms in the U.S., bought Sacramento-based Lucas Public Affairs last year and KP Public Affairs in 2022 as part of a broader shift toward West Coast investments. It’s set to close this latest deal April 1. PEOPLE MOVES — Doug Emhoff, the husband of former Vice President Kamala Harris, will return to corporate law as a partner at Willkie Farr & Gallagher. — Robert Traynham will be president and CEO of the Faith & Politics Institute. He previously has been global spokesperson for Meta, and is a professor at Georgetown University and a Senate GOP alum. — Aaron Sobaski joined the firm Buchalter as a shareholder in the Orange County office. He was previously a partner at Sheppard Mullin. BIRTHDAYS — Rep. Linda Sánchez … former Rep. Brian Bilbray … Matt Gelman at Microsoft … Judge Dean Pregerson … Courtney Subramanian … BELATED B-DAY WISHES — (was Monday): Reuven Firestone ... Avram Miller … (was Sunday): Assemblymember Mia Bonta WANT A SHOUT-OUT FEATURED? — Send us a birthday, career move or another special occasion to include in POLITICO’s California Playbook. You can now submit a shout-out using this Google form. CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this subscriber-only service offers, click here. Want to make an impact? POLITICO California has a variety of solutions available for partners looking to reach and activate the most influential people in the Golden State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Rebecca Haase to find out how: rhaase@politico.com.
| | | | A message from California Resources Corporation / Carbon TerraVault: California's climate future is here. With federal approval of the Golden State's first Carbon Capture and Storage (CCS) project — led by California Resources Corporation – our state is once again at the forefront!
As Governor Newsom has made clear, CCS will be vital to achieving carbon neutrality, since there simply is no other way to eliminate all carbon emissions in a growing economy.
CRC is committed to leading the way. While some companies are giving up on California, we're doubling down on partnering with the Governor to help meet our state's climate goals, while growing our clean energy economy in the process.
The historic approval of this CCS project in Kern County represents an opportunity for California to once again lead the climate future, while providing energy workers with good-paying clean energy jobs. It's a win-win for our climate and our economy. Let's get to work.
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