Treasury Secretary Scott Bessent sharply criticized California Governor Gavin Newsom’s proposed tax on a federal compensation fund for victims of government weaponization during a White House briefing Thursday, dismissing the plan with a blunt rebuke.
Bessent stated that when asked about Newsom’s proposal to tax President Donald Trump’s $1.776 billion fund, he remarked, “There’s no cure for stupid.”
The fund is intended to compensate individuals the Trump administration claims were harmed by political weaponization of federal agencies under previous administrations.
Trump and his allies have repeatedly accused federal authorities of targeting conservatives, political opponents, and other Americans through investigations, prosecutions, and regulatory actions.
Newsom’s proposal would require California residents receiving payments from the fund to pay taxes on those amounts, creating a potential clash between the Democratic governor and the Trump administration over whether such compensation should be treated as taxable income.
Bessent’s comment reflects the administration’s opposition to any state-level effort to claim portions of the payments.
Newsom, a frequent critic of Trump, has positioned California as a leading counterweight to the administration’s agenda. The two have clashed on immigration, climate policy, federal funding, and law enforcement priorities.
The proposed tax could escalate tensions if California moves to collect revenue from residents receiving federal compensation.
The dispute comes as Trump continues to make government weaponization a central theme of his second term. The administration has stated that the compensation fund aims to address abuses by federal agencies and restore public trust.
It remains unclear how many individuals would qualify for payments under the fund or how the administration would determine compensation amounts.
