Factbox: US President Trump’s proposals to address living costs

WASHINGTON, Jan 20 (Reuters) – U.S. President Donald Trump, under pressure to address voter concerns about affordability ahead of this year’s midterm elections, has recently pushed a series of major policy proposals aimed at boosting home ownership and controlling the cost of living.

Several of the proposals align the Republican president with Democratic lawmakers who have promoted these types of ideas in the past.

At the Davos meeting of global business leaders this week, Trump is expected 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 reduce living costs, economists have warned.

This is where the proposals are:

TAKING ACTION AGAINST WALL STREET OWNERS

Earlier this month, Trump said on his Truth Social social media platform that his administration was taking steps to ban Wall Street investors from purchasing single-family homes, in an attempt to drive down 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.

LIMITS ON CREDIT CARD INTEREST RATES

Also via Truth Social, Trump this month proposed capping credit card interest rates at 10% for “one year beginning January 20,” in a surprise move that took lenders by surprise, 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 that previous bills aimed at capping credit card rates never advanced.

White House press secretary Karoline Leavitt said last week that Trump expected credit card companies to comply, even though banks have strongly opposed the proposal, which they said would force them to reduce the availability of credit, harming consumers.

Trump later spoke with Sen. 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 considering an executive order to address limits on credit cards.

USING 401(K) PLANS FOR HOUSING DEPOSITS

Last week, White House economic adviser Kevin Hassett told Fox Business Network’s “Mornings with Maria” that the administration plans to allow retirement savers to use their 401(k) funds to make a down payment on a home, adding that more details will be released this week.

A 401(k) plan allows workers to save their pre-tax earnings for retirement. Hassett said the administration was still exploring ways to allow the funds to be used without harming retirement plans.

PURCHASE OF MORTGAGE BONDS

Also this month, Federal Housing Finance Agency Director Bill Pulte, at Trump’s urging, said government mortgage finance giants Fannie Mae and Freddie Mac will buy $200 billion in mortgage bonds to reduce housing costs, of which $3 billion have already been purchased. The initiative will be financed with liquidity from 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.

Last year, Pulte also floated the idea of ​​a 50-year mortgage as a way to make homes more affordable than typical 30-year loans, though critics quickly argued that would cause homeowners to pay more interest and take longer to build equity.

HEALTH CARE 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 say would hurt low-income Americans.

In a single-page proposal, the White House outlined a legislative plan that it said would reduce drug prices and insurance premiums, make costs “more transparent” and hold insurance companies accountable. He did not provide a timeline, but a divided Congress is unlikely to quickly pass major health care legislation, policy experts said.

(Compiled by Michelle Price, edited by Deepa Babington)