WASHINGTON, Jan 20 (Reuters) – U.S. President Donald Trump, under pressure to address voter affordability concerns ahead of congressional elections this year, has recently pushed a number of major policy proposals aimed at boosting home ownership and reining in living costs.
Several of the proposals align the Republican president with Democratic lawmakers who have pushed such ideas in the past.
Trump is expected this week at the Davos meeting of global business leaders to provide more details on how his administration hopes to implement the proposals, which could have major implications for financial firms and investors while doing little to lower living costs, economists have warned.
This is where the proposals stand:
CRACKING DOWN ON WALL STREET LANDLORDS
Earlier this month, Trump said on his social media platform Truth Social that his administration was moving to ban Wall Street investors from buying single-family homes, in a bid to reduce home prices.
Wall Street investors owned about 3% of single-family rental homes in 2022, according to government data. Trump did not provide details on how he expected to implement the ban.
CREDIT CARD INTEREST RATE CAPS
Also via Truth Social, Trump this month proposed capping credit card interest rates at 10% for one year starting January 20, in a surprise move that blindsided lenders, according to industry sources, and sent financial stocks tumbling.
The administration has not said how it would impose a cap, which would have to be implemented by Congress, according to analysts who also noted previous bills aimed at capping credit card rates have never advanced.
White House press secretary Karoline Leavitt last week said Trump expected credit card companies to comply, even though banks have loudly opposed the proposal which they said will force them to reduce credit availability, hurting consumers.
Trump subsequently spoke with Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, about advancing legislative efforts she has pushed in the past to cap credit card rates and crack down on Wall Street landlords, Warren said.
Bloomberg subsequently reported on Friday that the administration is mulling an executive order to address credit card caps.
USING 401(K) PLANS FOR HOME DEPOSITS
Last week, White House economic adviser Kevin Hassett told Fox Business Network’s “Mornings with Maria” program that the administration plans to allow retirement savers to use their 401(k) funds to make a house down payment, adding more details would be released this week.
A 401(k) plan allows workers to save pre-tax earnings for retirement. Hassett said the administration was still exploring ways to allow the funds to be used without hurting retirement plans.
MORTGAGE BONDS PURCHASES
Also this month, Federal Housing Finance Agency Director Bill Pulte, at Trump’s behest, said that government-run mortgage finance giants Fannie Mae and Freddie Mac will buy $200 billion in mortgage bonds to bring down housing costs, with $3 billion already purchased. The initiative will be funded by liquidity on the pair’s balance sheets, he told Reuters in an interview.
The average rate on the popular 30-year fixed-rate mortgage fell to 6.06%, the lowest level since September 2022, following the move.
Pulte last year also floated the idea of a 50-year mortgage as a way to make houses more affordable than typical 30-year loans, although critics quickly argued that would have homeowners paying more in interest and taking longer to build equity.
HEALTHCARE PAYMENTS
Trump said last week that he plans to replace government subsidies for health insurance with direct payments to consumers, an idea that some experts have said would hurt lower-income Americans.
In a single-page proposal, the White House outlined a legislative plan it said would lower drug prices and insurance premiums, make costs more transparent, and hold insurance companies accountable. It did not provide a timeline, but a divided Congress is unlikely to pass major healthcare legislation quickly, policy experts said.
(Compiled by Michelle Price, editing by Deepa Babington)
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