Democrats want to remove a provision of Trump's One Big Beautiful Bill Act (OBBA) before reopening the government, but Republicans argue the line item they want removed is allowing California to use a "loophole" to draw down funds from the federal government to help pay for the state's ballooning cost of healthcare for illegal immigrants.

The White House released a memo on Wednesday during the first day of the government shutdown fight indicating Democrats want to repeal Trump reforms in his "big, beautiful bill" that aimed to close this alleged backdoor tactic. However, California Gov. Gavin Newsom's office and left-leaning health policy experts insist claims that California is using this tactic are not true.

"When Democrats say, as they keep saying, that there is no federal money or any taxpayer money going for illegal immigrant healthcare because it's illegal and barred by federal law, it's simply not true," said Steve Hilton, a former Fox News host now running to replace Newsom as governor of California. 

Hilton claimed that California has been using a complex Medicaid provision known as a "provider tax" to obtain matching federal dollars, which then gets pooled into the money used by the state to pay for its healthcare offered to undocumented immigrants.

WHITE HOUSE MEMO SAYS DEMOCRATS' PLAN COULD SPEND $200B ON HEALTHCARE FOR ILLEGAL IMMIGRANTS

"If [federal dollars] are funding non-emergency healthcare for ineligible immigrants, the sole cause is provider taxes," Michael Cannon, a health policy expert at the CATO Institute told Fox News Digital. 

Cannon, however, suggested Republicans shot themselves in the foot by choosing only to limit the scope of eligibility around provider tax funds in the OBBBA, saying no more could go to states providing illegal immigrants healthcare, and they should have just quashed them altogether. 

"What they did was that Republicans preserved the ability of states to use provider taxes to fund healthcare for undocumented immigrants using Medicaid," he argued.

However, Newsom's office insisted to the Los Angeles Times that the claim California is utilizing a provider tax "loophole" to fund illegal immigrant healthcare is simply not true. It is effectively impossible to make a determination one way or the other because states do not keep records on how provider tax funds from the federal government are spent. 

"This is false — CA does not do this," Gardon said in a one-line email to the LA Times. Newsom's office did not reply to Fox News Digital's request for comment in time for publication.

FED AUDIT, EMERGENCY MEDICAID UNDERCUT DEMS ON ILLEGAL IMMIGRANT HEALTH COVERAGE 

Other healthcare policy experts agree as well that this is not happening.

"The so-called California loophole references a provision in the law that ends a waiver of the uniformity requirements for provider taxes. This provision has nothing to do with using federal funds to pay for care for undocumented immigrants," Jennifer Tolbert, a healthcare expert at the nonprofit healthcare research organization KFF. 

"But the White House makes the claim that California uses the money they get from the provider tax to pay for care for undocumented immigrants." 

Chris Pope, a health policy expert from the Manhattan Institute, argues California is also using emergency care claims to draw down even more funds to help pay for its ballooning cost of being the first state in the nation to offer comprehensive healthcare coverage for anyone regardless of their immigration status. 

Federal law does not permit federal funds to be used for non-emergency medical care for illegal immigrants, but it does not prohibit them from being used for emergency care for these folks.  

"The enormous and open-ended discretion Medicaid gives states to claim federal funding makes it hard for the feds to ensure that the program’s expenditures are reserved for its intended purposes," Pope wrote in an Op-Ed for the New York Post Friday. "Until that changes, the Democratic claim that federal money isn’t being used on illegal immigrants is simply not true."

The Department of Homeland Security (DHS) announced Friday that federal agents arrested more than 1,000 illegal aliens in Illinois as part of Operation Midway Blitz, a sweeping crackdown on those who sought refuge under the state’s sanctuary policies.

The operation — led by Immigration and Customs Enforcement (ICE) and U.S. Border Patrol — launched Sept. 8 in honor of Katie Abraham, who was killed in Illinois by a drunk driver later identified as illegal alien Julio Cucul-Bol. The initiative was designed to take "the worst of the worst" off the streets of Chicago and other parts of the state, according to a press release from DHS.

"During Operation Midway Blitz, our brave DHS law enforcement has made more than 1,000 arrests across Illinois, including of pedophiles, child abusers, kidnappers, gang members and armed robbers," DHS Assistant Secretary Tricia McLaughlin said in a statement. 

"Operation Midway Blitz is making Illinois safe again." 

ICE OFFICERS IN ILLINOIS TARGETED BY ILLEGAL IMMIGRANTS WHO USED 'VEHICLES AS WEAPONS,' OFFICIALS SAY

Federal authorities highlighted several of the criminals arrested during the operation, including:

Rafael Alberto Tolentino Martinez, an illegal alien from Mexico, who has been convicted of aggravated domestic battery against a 3-year-old child, according to DHS.

Pedro Avendano Andres, an illegal alien from Mexico, who has previously been arrested for domestic battery, aggravated battery and "causing a circumstance that would endanger a child," as noted in the release.

Aziz Kamal, a "deportable" lawful permanent resident, who has previously been charged with second-degree rape, indecent liberties and assault and has an arrest for a sex offender registration violation, according to DHS.

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Marco Geronimo Ocampo, an illegal alien from Mexico, who has previously been arrested for armed robbery, sexual assault, kidnapping, property damage, domestic battery and possession of drug paraphernalia and has a conviction for criminal sexual abuse by force, according to the news release.

Mohamed Fagel, an illegal alien from Mauritania, who has previously been arrested for battery against a public official, robbery, resisting law enforcement and disorderly conduct, according to DHS.

Erick Rios, an illegal alien and confirmed gang member of MS-13, who has multiple prior arrests, including violating a bail bond, criminal damage to property, mob action, consumption of liquor by a minor, a DUI and a final order of removal, DHS said.

Leonardo Jose Paredes Varela, an illegal alien with several prior arrests including domestic battery, assault, shoplifting and theft, according to the news release.

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Jesus Rafael Gonzalez-Teran, an illegal alien, who was arrested on charges of battery, assault and possession of controlled substances, according to DHS.

Ludwing Jeanpier Parra-Perez, an illegal alien and confirmed member of the violent Venezuelan gang Tren de Aragua, according to DHS.

Isaac Josue Rodriguez Arguelles, an illegal alien with previous charges for assault with a weapon, as noted in the release.

Earlier Friday, federal agents arrested more than a dozen protesters outside an ICE processing facility in Broadview, Illinois, a suburb of Chicago. DHS Secretary Kristi Noem also said she and her staff were denied entry to a government building in Broadview when they stopped to use the restroom.