Senate Democrats, in their infinite wisdom, say they have a plan to work with President Trump to tackle affordability. Their first proposal? A bill that could effectively cut off credit card access for poor people. 

In a video posted on social media Monday, Massachusetts Senator Elizabeth Warren outlined a series of bills Senate Democrats want passed to address affordability. She offered few specifics on most, promising to make housing more affordable and “protect rural hospitals.” Her opening pitch, though, was specific: capping credit card interest rates at 10 percent.

"Look, President Trump himself said that he wants to reduce interest rates on credit cards to 10 percent. I got the bill. I'm ready to go," Senator Warren said. "President Trump says he wants to do more on housing. We're ready. We have the bills ready to go. And besides that, we've got a whole bunch more that the American people have told us that they want on price gouging, on protecting our rural hospitals, on making sure that people have access to health care."

"We have a lot of work lined out that we can do. In fact, those may sound like lots of different pieces. They're not. They're all about economic power," she added. "And people have told us that's what they want. And we've got the team to deliver now."

Of course, there are a couple of problems with Senate Democrats’ proposal, mainly that if you put a price control on interest rates, you’re very quickly going to find that poorer Americans and those with bad credit increasingly find credit out of reach. 

Recommended
Reporter Nails What Thomas Massie Is Doing With This Hegseth Impeachment Push Matt Vespa More Data Have Poured Some Cold Water on the Idea That Republicans' Midterm Loss Was Due to Iran Dmitri Bolt

Higher interest rates are used to compensate banks for the risk of lending. Banks can’t just give out free money, and the less likely someone is to pay it back, the higher the interest rate they’re charged. That helps cover potential losses and makes lending worthwhile. Cap what banks can charge without reducing that risk, and they may simply stop lending to riskier borrowers, until, of course, Democrats push another bill to force risky lending, and then we could be looking at another recession. 

But here’s what makes this even more concerning. The vast majority of Americans actually support capping credit card interest rates. According to a Wall Street Journal poll, that number is as high as 79 percent of the country. So either Americans support a harmful policy despite its consequences, or they don’t understand what those consequences are. 

And we don’t have to speculate about them, we already have several case studies.

Arkansas has a cap written into its state constitution and regularly sees its stores flee to Texas. Illinois tried to cap rates in 2021, and loans to risky borrowers fell by 38 percent. There are also several international examples, and they saw massive declines in access to credit. That’s bad not just for people who need to borrow, but for the broader economy as well. Less access to credit means less spending, fewer sales, and less economic activity.

While President Trump has said he plans to work with congressional Democrats, he has not signaled what economic policies he might be willing to negotiate on, instead highlighting his willingness to moderate on deportation policy. But earlier this year, the president called for a 10 percent cap on credit card interest rates, accusing banks of earning too much profit in a speech that sounded like it came straight from the mouth of a red-blooded socialist.

It is unclear if that is something the president is still willing to do, but at the very least, this should serve as a warning: this is a socialist policy, a price control, and something nobody who stands for the free market should support.