GINGRICH: Affordability Requires Supply, Not Price Controls

One year into President Donald J. Trump’s second term, significant progress has been made on affordability.

Gasoline prices are at historic lows, interest rates and housing costs are declining, and many grocery prices have stabilized—or begun to fall. Inflation has dropped to 2.7 percent over the past year from a peak of 9 percent under the Biden administration. At the same time, real wages have grown by 4 percent. In 2025, Americans experienced the first overall price decline since 2020.

Still, many families continue to feel squeezed. This pressure reflects the lasting damage of the Biden administration’s demand-side policies of stimulus, wealth transfers, and massive government spending—along with long-term affordability challenges driven by decades of bad policies.

With the 2026 midterms approaching, there is an understandable desire on Capitol Hill to “do something.” But lawmakers should resist the temptation to reach for easy answers such as government-imposed price controls. Price controls are not market reforms. They are administrative attempts to override prices rather than address the conditions that make goods and services unaffordable in the first place. History shows that when government tries to control prices instead of expanding supply, the results are predictable—and damaging.

Consider the last time a Republican administration embraced price controls. In the early 1970s, the Nixon administration imposed wage and price controls in response to inflation and oil shocks. Gasoline price controls led to shortages, rationing, and long lines at the pump. More broadly, wage and price controls failed to solve inflation and contributed to stagflation—the toxic combination of rising prices and economic stagnation that made it harder for working families to afford necessities.

Rent control provides another enduring example. In New York City, rent controls reduced the supply of rental housing and discouraged maintenance of existing units. When prices are capped, new construction slows and upkeep suffers. The long-term result is fewer homes, lower-quality housing, and higher costs for everyone locked out of the controlled system.

The Republican Party learned from these failures. Ronald Reagan rejected price controls and embraced a supply-side agenda focused on expanding production and investment. Inflation fell from 13.5 percent to 4.1 percent not by freezing prices, but by restoring market signals—repealing gasoline price controls, cutting taxes to encourage capital investment, and expanding supply. The result was a sustained economic expansion that created roughly 20 million new jobs, raised wages, and restored confidence—the reason the era became known as “Morning in America.”

This history is worth revisiting as Republicans debate how to respond to today’s affordability challenges. Some are toying with price controls on credit card interest rates, prescription drugs, and other goods and services. There is little reason to believe these policies would behave any differently today than they have in the past.

Capping credit card interest rates would not eliminate risk. It would simply cause lenders to offer fewer cards—especially to lower-income and higher-risk borrowers. This would reduce access to credit rather than make it cheaper.

Similarly, pegging U.S. drug prices to what government-run health systems pay overseas would reduce access to lifesaving treatments. Europe was once the dominant player in bioscience research and development and manufacturing, but business fled to the United States when European countries imposed price controls. Now, Europeans get far less access to cutting-edge medicines, fewer jobs, and diminished economic opportunities. Adopting price controls in America will mean fewer breakthroughs—and a flight of capital and jobs to China.

Supporters of price controls often justify them by invoking so-called corporate greed. But corporate profit-seeking is not new. What has changed in many sectors is market structure—often shaped by government policy. Rules that raise barriers to entry or restrict supply tend to favor large incumbents and reduce competition. Price controls and profit caps do not punish this dynamic; they entrench it by driving out smaller competitors and replacing competition with political favoritism.

Health care illustrates the problem clearly. The Affordable Care Act imposed mandates and regulations that disrupted insurance plans and provider networks, restricted physician-owned hospitals, and reduced competition. Other rules, such as the medical loss ratio profit cap, created perverse incentives that allow insurers to earn more as total spending increases rather than decreases. Despite extensive government price-setting—including Medicare prices for more than 10,000 procedures—health care costs continue to rise.

The problem in health care is not a lack of government control over prices. It is a lack of transparent prices altogether.

You cannot have a functioning market without prices. Fortunately, President Trump advanced transparency rules in his first administration and is now strengthening them after lax enforcement under Joe Biden. His Great Healthcare Plan calls for “maximum price transparency” and that’s exactly right. The Patients Deserve Price Tags Act—in the House and Senate—would significantly strengthen price transparency rules and empower market forces to drive down prices and increase supply.

The administration’s new TrumpRX platform, which connects patients directly to lower-cost drug offerings from manufacturers, also moves the system closer to true prices free from middlemen distortions. The Most Favored Patient policy blueprint, developed by economists Steve Moore, Steve Forbes, and others, expands on price transparency and direct-to-patient drug sales to further simplify and bring accountability and affordability to the health care system.

Supply-side reforms cannot work when consumers, employers, and providers are shielded from real price signals. It makes little sense for Republicans to pursue tax and regulatory relief while simultaneously embracing command-and-control pricing. As Republicans build an affordability agenda, they should resist the temptation to imitate left-wing economics dressed up as consumer protection.

The conservative answer has never been to freeze prices. It has been to unleash production, expand competition, and let markets work.