Republicans Reject Another Donald Trump Economic Proposal
WASHINGTON ― Republican lawmakers panned former President Donald Trump's promise to cap credit card interest rates at around 10% if he returns to the White House in November, saying it would harm Americans' access to credit.
It's only the latest campaign pitch from the GOP's presidential nominee to get a cool reception on Capitol Hill, including his promise to make in vitro fertilization treatments free , and his pledge to bring back a controversial deduction for state and local taxes.
"Credit card companies that are forced to cut interest rates by 10% are going to be equally then forced to not issue credit to a lot of people," Sen. Kevin Cramer (R-N.D.), a member of the Senate Banking Committee, explained to HuffPost when asked about Trump's new proposal.
"If you want to work with the industry and find different ways to make it available to people, while also keeping interest rates lower, great. But yeah, mandating a cap doesn't seem like a great idea," he added.
Sen. Mike Rounds (R-S.D.) said lawmakers should instead focus on reducing prices for gas, food, and energy.
"If you reduce the interest rate on credit cards, you reduce the availability of credit for people that need those cards," Rounds said.
Trump made the surprise pledge to temporarily cap credit card interest rates at a rally in New York last week, continuing his sales pitch to working-class voters as he seeks to defeat the Democratic presidential nominee, Vice President Kamala Harris. He has also promised eliminating taxes on tips, tax-free overtime pay and no income tax on Social Security benefits, ideas that while popular would balloon the national debt.
"While working Americans catch up, we're going to put a temporary cap on credit-card interest rates," the GOP presidential nominee said. "We can't let them make 25% and 30%."
The average annual percentage rate charged on credit cards in September was 24%, according to data from the Federal Reserve.
The Wall Street Journal's editorial board came out sharply against Trump's idea over the weekend, warning it would increase credit card fees and comparing it to the policybook of progressive Sen. Bernie Sanders (I-Vt.). "It's bad enough to have a Democratic Party that ignores economics," the board wrote in an op-ed published Sunday. "What's the point of a Republican Party that follows suit?"
Sen. Thom Tillis (R-N.C.), another member of the Senate Banking Committee, warned that capping credit card interest rates would be "disruptive" to the financial system. He also compared the idea to Harris' proposed federal ban on price gouging, which Republicans oppose.
"When you do arbitrary caps, it's sort of like Harris wants to do. She calls it price gouging, but what she's really talking about is price controls, which never really worked well," Tillis said.
"People need to understand that fiddling with the market like that, while maybe well-intentioned, is not a good idea," he added.
