Gov. Gavin Newsom, a Democrat who has built his political brand pugnaciously trolling President Trump, put aside the partisan warfare on Friday and urged California parents to sign up their children for investment accounts bearing the president’s name.
“I’m enthusiastic about encouraging people to get a Trump account,” Mr. Newsom said during a news conference in San Francisco. “It’s one of the best things he’s done.”
Trump accounts became available last month as investment vehicles that parents can open for their children under 18. The federal government will deposit $1,000 into accounts for babies born during Mr. Trump’s second term.
But in California, where Mr. Trump is deeply unpopular, Mr. Newsom said the branding could be problematic. He urged his state’s residents “to not fall prey to the politics or the cynicism or maybe even the fear.”
“It’s not Trump’s money,” he said. “It’s your child’s money.”
As he heralded the accounts as “really outstanding” in a rare moment of bipartisanship, Mr. Newsom pointed out that he had created similar programs in California — long before Mr. Trump did. He said he was inspired by one of the president’s rivals, Hillary Clinton, the former Democratic senator and secretary of state who lost to Mr. Trump in the 2016 presidential election.
Mr. Newsom recalled reading about Ms. Clinton’s 2007 proposal for $5,000 “baby bonds” when he was the mayor of San Francisco before going on to establish savings accounts for the city’s kindergartners.
In 2022, as California governor, Mr. Newsom created “CalKIDS” child savings accounts that provide students up to $1,500 to save for college or career training. The state has funded more than six million CalKIDS accounts worth more than $2.3 billion, according to Mr. Newsom’s office, but only one million of them have been claimed.
The state creates accounts for all babies born in California since July 1, 2022, based on birth certificate data from public health officials. It also uses school enrollment data to create accounts for eligible public school students.
As he nears the end of his two terms as governor in January — and weighs a possible run for president — Mr. Newsom is trying to get eligible families to claim their state accounts. On Friday, Mr. Newsom, the father of four children, announced a new partnership between the state and Invest America, the organization behind the Trump accounts. Together, they are calling on employers and philanthropists to make donations that will be split between a child’s CalKIDS account and his or her Trump account.
“He’s the first Democratic governor in the country to step forward so clearly and to endorse these accounts,” said Brad Gerstner, a Silicon Valley tech investor who founded Invest America and promoted the creation of Trump accounts.
The state and federal accounts are similar in that both are designed to accumulate savings for children through investments, gifts and government contributions. But CalKIDS is promoted as a college savings plan, and the funds must be spent on qualified education expenses.
Trump accounts focus more on building long-term investment growth for everything from college to a house down payment or retirement. When children turn 18, the accounts transition into Individual Retirement Accounts, and portions are taxed under I.R.A. rules as ordinary income. Some families may benefit more from using existing vehicles, like 529 college savings accounts, because they have different tax advantages.
Lauren Stansell, a financial planner in San Francisco, has had some clients who don’t want to consider opening a Trump account because they object to anything affiliated with the president, she said. She has begun calling them 530A accounts, their name based on the I.R.S. code, as much as possible, she said.
“Yes, they have his name on them and they were from him,” Ms. Stansell, co-chief executive at the YeskeBuie financial planning firm, said. “But my guess is they will continue on long after he’s no longer part of our political system.”
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