Rep. Vince Fong of California has today said on X that the state borrowed more than $20 billion from the federal government for unemployment insurance and has not repaid the debt, leaving businesses to cover it through automatic payroll tax hikes. Fong also said Gov. Gavin Newsom’s administration lost billions to fraud, including about $1 billion sent to prisoners. Online users reacted after the clip, with some business owners saying they are paying for the unpaid balance and others questioning who should cover the cost.
In the clip, Fong says California “borrowed over $20 billion from the federal government to provide… actual unemployment to those that needed it during the pandemic.” He says California is “the only state right now in the union that has not paid back its unemployment debt,” and that “the payroll taxes in California are going up on every single business” to cover a debt “the state of California should have paid off… immediately.”
He adds that the state budget is “gonna spend over $600 million just to pay the interest on the debt without paying down the principal,” and that “we’ve got to address that.” The footage does not show what was said before or after this excerpt.
According to Fong, Gov. Gavin Newsom “refuses to pay back what he owes,” so businesses are “footing the bill with automatic payroll tax hikes.” This video does not mention those fraud claims.
Other reporting has treated the loan and the fraud as related but separate problems. CalMatters noted that other states also borrowed during the pandemic and that California is the only one that has not repaid, while calling the widespread belief that fraud alone explains the red ink erroneous.
The outlet reported that the Newsom administration and the Legislature have allowed a federal payroll tax increase to slowly retire the debt rather than paying it off at once.
How Viewers Are Responding to the Unemployment Debt Clip
Some commenters backed Fong and focused on the cost to employers. A restaurant owner wrote, “Yup, we own restaurants here, and we are paying for Newsom’s incompetence,” adding, “here we are trying to employ people and Newsom just makes it harder at every turn.”
Another user said, “Fact check: 100% true,” and a separate commenter urged people to “Vote Republican up and down the ballot, if you are tired of the state’s mismanagement.”
Others questioned who should carry the bill. One reply asked, “If businesses shouldn’t pay the price, that means you want to pass the cost down to the citizens. Right?”
Another said businesses “also got massive loans that have been forgiven.”
Away from X, the reporting splits the same way. Senate Minority Leader Brian Jones said, “Every other state paid down its debt, but not California. Now, businesses that survived shutdowns, kept employees on payroll, and held their communities together will pay for Gavin Newsom’s failures.”
California’s unpaid unemployment debt is still unresolved, and Fong’s clip adds one more moment to the argument over who should cover it. Whether the state repays the balance directly, or employers keep absorbing the federal tax hike, is now part of that wider debate.
