Gov. Newsom points to California exceptionalism, challenges Gov. Gavin Newsom is declaring California a model for the nation as opposed to what he calls incompetence and corruption in Washington

SACRAMENTO, Calif. -- California Gov. Gavin Newsom boldly declared his state a model for the nation Monday but said its leaders have failed to rein in the soaring cost of living and stem inequalities that are making it harder for people to achieve what he called the "California dream."

"We face serious challenges — some that have been deferred for too long," Newsom said in his inaugural address. "We face a gulf between the rich and everyone else — and it's not just inequality of wealth, it's inequality of opportunity."

Still, Newsom said it's California that can best defend U.S. values in the face of "incompetence and corruption" in Washington. He never mentioned President Donald Trump by name, but his speech was laced with sharp rebukes of Trump's policies, particularly on immigration.

"The future depends on us," he said. "And we will seize this moment."

Hours after taking the oath of office, Newsom proposed state-funded health care coverage for 138,000 young people living in the country illegally and reinstating a mandate for everyone to buy insurance or pay a fine — part of former President Barack Obama's health care law that was eliminated by Republicans in Congress last year.

The outgoing governor, fellow Democrat Jerry Brown, and other political dignitaries packed into a tent outside the Capitol in Sacramento for Newsom's address. A church choir from Compton and a Mexican-American band energized the crowd in a display of the 51-year-old Newsom's flashier style.

The crowd became hushed and somewhat subdued when Newsom first began his speech, but laughter soon broke out when Newsom's 2-year-old son, Dutch, wandered on stage dragging a blanket.

Newsom held him for part of the speech and, when he put him down, the 2-year-old alternated between hiding behind the podium and evading his mother's grasp while walking across the stage. Newsom's wife, Jennifer Siebel Newsom, eventually carried him off stage.

Newsom praised Brown, a longtime family friend, for his fiscal restraint but signaled an unmistakable shift in priorities. He barely mentioned climate change — one of Brown's signature issues — water or the high-speed rail line Brown has championed.

Instead, he focused on policies benefiting children and families, including early childhood education, health care and housing. He suggested California has failed to adequately care for suffering families. California is the world's fifth-largest economy but also has the nation's highest child poverty rate and largest homeless population.

"We have the resources to ensure a decent standard of living for all," he said. "It's not a question of whether we can do this, but whether we will."

He indicated he will be more willing to invest in those pricey priorities than Brown, who focused on saving money for a future recession and warned before leaving office that Democrats would overspend.

Newsom will deliver his first budget address Thursday, offering a look at whether he can make fresh investments while keeping California's reserves stocked, as he's pledged.

"For eight years, California has built a foundation of rock," he said. "Our job now is not to rest on that foundation. It is to build our house upon it."

Democratic lawmakers praised Newsom for his focus on early childhood education, while Republicans, who are in the minority, held off on harshly criticizing the new governor. Other statewide elected officials also were sworn in Monday, including Eleni Kounalakis, the state's first elected female lieutenant governor.

"Today California turns a page in its history," Assembly Speaker Anthony Rendon said. "With a new governor, we have the chance to reaffirm our commitment to be bold on behalf of the people who have elected us to serve."

Senate President Pro Tempore Toni Atkins said Newsom was "true to his word to bring big and bold ideas to the table," particularly his emphasis on affordable housing.

Republican Sen. Jim Nielsen said he is eager to work with Newsom on wildfire threats but is skeptical that California can afford his other proposals.

Newsom was light on specifics, but he brought a relatable touch to the speech by sharing life experiences. His parents divorced when he was young, and Newsom primarily lived with his mother, who he said worked three jobs. His father, William Newsom III, was a judge and friend of the wealthy Getty family.

Newsom pledged to launch a "Marshall plan" for affordable housing and invest in early childhood and higher education. Newsom and his wife, an actress and documentary filmmaker, have four children.

"All kids — not just the children of a governor and a filmmaker — should have a good life in California," he said. "No one should live in constant fear of eviction or spend their whole paycheck to keep a roof overhead."

While Brown was prone to quoting philosophers and peppering his speeches with Latin phrases, Newsom quoted labor icon Cesar Chavez and a young, unnamed immigrant woman he met in Los Angeles. He told the crowd that he will strive to bring together all Californians, from rural to urban, citizen to immigrant, Democrat to Republican.

"We will build one house for one California," he said.

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Associated Press writers Don Thompson and Jonathan J. Cooper in Sacramento contributed to this report.