California will spend $2.5 billion to help the Los Angeles area recover from recent deadly wildfires under a relief package signed Thursday by Democratic Gov. Gavin Newsom.

The president raised the possibility of withholding aid to California unless the state changes its water policy.

New brush fires broke out Thursday across Southern California as firefighters continued to battle some of the state’s most destructive blazes. A brush fire shut down the northbound lanes of the 405 ...