CDL Dispute: California at Risk of $160M Funding Loss

Duffy Threatens to Withhold $160 Million from California Over CDL Licensing Dispute

Transportation Secretary Sean Duffy announced that the U.S. Department of Transportation (DOT) will withhold $160 million in federal funding from California. The decision comes after the state refused to follow new federal rules about who can get a CDL.

The DOT said California must stop issuing commercial driver’s licenses to people who are not U.S. citizens or lawful residents. Duffy said the state has ignored that rule.

Duffy Cites California’s CDL Noncompliance

During an interview with Fox News, Secretary Duffy sharply criticized California Governor Gavin Newsom, saying the state ignored federal directives. “Gavin Newsom has thumbed his nose at us,” Duffy said. “He’s refused to comply with the rules that have come from DOT, which is stop issuing these licenses, number one. And number two, go back and review all the licenses that you have issued and make sure it’s been done legally.”

Duffy added that the administration would begin withholding federal transportation funds as a result. “Gavin Newsom has said no,” Duffy continued. “So, one, I’m about to pull $160 million from California. And as we pull more money, we also have the option of pulling California’s ability to issue commercial driver’s licenses.”

He accused the governor of prioritizing undocumented immigrants over public safety, saying, “Gavin Newsom cares more about illegals getting commercial driver’s licenses than he does the citizens of his own state and the safety of Americans.”

What the Federal Rule Says About CDL Licensing 

The new DOT guidance requires all states to check the citizenship or legal residency of anyone applying for a CDL. The goal, according to federal officials, is to create one uniform national standard.

The DOT said this rule is meant to improve highway safety and protect national security. It also aims to make sure all CDL holders meet the same eligibility rules, no matter where they live.

California has chosen not to follow the new rule. The state continues to issue licenses to qualified drivers regardless of their immigration status, as long as they meet safety and testing standards.

California Defends Its CDL Program

Governor Newsom’s office defended the state’s policy and pushed back against Duffy’s claim.

A spokesperson said California follows all federal laws related to CDL licensing. The spokesperson added that taking away licenses from trained drivers could harm the economy and make it harder to move goods across the country.

California’s Department of Motor Vehicles (DMV) said that all commercial drivers must pass testing, background checks, and training requirements before receiving a license. The DMV argues that the program helps keep roads safe and supports the trucking industry’s workforce needs.

Federal Funding Threat and Next Steps

The $160 million that Duffy plans to withhold follows an earlier move that threatened $40 million in California funding, part of a broader effort to enforce compliance with new CDL rules. These funds often go toward road repair, safety programs, and maintenance.

Duffy said this initial move is only the beginning. If the state continues to issue CDL licenses in violation of federal rules, the DOT could expand the cuts. The department could even take away California’s authority to issue CDLs entirely.

News reports stated that this type of suspension could affect thousands of commercial drivers who depend on state-issued licenses to work. The move could also delay freight shipments and increase costs in an already tight trucking market.

Effects on Drivers and the Trucking Industry

If the DOT removes California’s ability to issue or renew CDL licenses, many drivers could lose the right to operate. Trucking companies would need to find new drivers or relocate operations.

Industry experts said this could cause confusion and raise costs for carriers. Some trucking associations said they are watching closely but are not taking sides in the political dispute.

Drivers who currently hold a CDL from California may face uncertainty in the coming months. Federal and state officials have not yet clarified how existing licenses would be handled if the state loses its authority.

Political and Legal Tensions

The conflict between Duffy and Newsom highlights a broader struggle between state and federal authority in transportation policy. California has often set its own rules on emissions, worker classification, and safety standards. The new CDL dispute adds another layer to those ongoing battles.

Federal officials insist that commercial driver licensing is a national issue that requires one standard. State leaders argue that they have the right to manage driver programs that best serve local needs.

As both sides hold firm, the disagreement could end up in court. For now, California’s CDL program continues to operate as usual.

What Comes Next

If California changes its licensing policy to meet federal requirements, the DOT could release the withheld funds. If not, the department may move forward with deeper funding cuts or other penalties.

Duffy said the DOT will “fight tooth and nail” to make sure all states comply with the new CDL rule. California officials have not said whether they plan to challenge the decision legally or negotiate with the administration.

The coming weeks will determine how the federal government enforces the rule and how the CDL dispute affects California’s trucking industry.