Anchor baby

California Gov. Gavin Newsom, who earlier this year moved to deny state tax-deferred status to newly created "Trump Accounts" for newborns, has reversed course. In July he signed SB180, requiring California to treat the federal accounts the same as other IRAs for state tax purposes. Newsom is now promoting the accounts alongside the state's own CalKIDS program, which he launched in 2022 and has compared to Hillary Clinton's proposed "baby bonds."

Trump Accounts provide a $1,000 initial investment for American-born children to save for college, while CalKIDS offers smaller amounts, $100 or $25 depending on birth year, but is open to children regardless of immigration status if they are enrolled in public schools. Newsom announced a new partnership with Invest America, the organization behind the Trump Accounts, calling on employers and philanthropists to make donations split between a child's CalKIDS and Trump Account. State Treasurer Fiona Ma is leading outreach efforts for the initiative, which critics say could face scrutiny over eligibility and fund allocation.