Congressman Jim Himes

U.S. Representative of Connecticut’s 4th District since 2009, Representative Jim Himes serves on the Committee on Financial Services and the Permanent Select Committee on Intelligence. He began his comments by saying that it has been an excruciatingly frustrating time in Congress, an embarrassment to Congress and to the country. We do not, he said, want a situation where nobody wins and everybody loses. There are indications the worst may be over.

In a recent poll he took of the concerns of his constituents, the two biggest issues noted were (i) debt and the deficit and (ii) jobs and the economy. Mr. Himes noted these are related and cannot be addressed separately. We cannot slash the deficit and throw the country into depression. We need balance.

The shutdown and threat of default hurt the economy and sullied the country’s image. It has clearly been a counterproductive policy that Mr. Himes does not believe we will have to face again. There are now serious negotiations underway that Mr. Himes believes will lead, as a minimum, to a modification of sequestration, a clearly crude device. It is possible, but far less likely that we will get a bigger deal involving (i) modifications to our long term obligations of social security and Medicare, and (ii) tax revision that will eliminate preferential loopholes and special deductions.  There are entrenched interests on both sides.

As for the Affordable Care Act, (i) the website is a big problem; (ii) ACA has many attractive features such as closing the donut hole for drug costs, expanded availability of insurance, and controls of certain costs, but it is a complex undertaking and there are problems. The President was wrong to say that all those who have health care plans they like will be able to keep them. ACA does not do enough to tame ongoing inflation of health care costs.

He also noted (i) political dysfunction is healing itself slowly as certain Republican leaders work to tame the Tea Party faction; (ii) we haven’t managed the economy as well as we could have but it surprises, such as with the recently announced higher than expected growth; (iii) energy independence is good for us both economically and politically, and (iv) education is important.

In the Q&A, Mr. Himes noted the following:

Members of Congress are not exempt from the ACA. Members of Congress and their staff are required to leave their current plan and purchase insurance on exchanges, starting January 1. They will continue to get the employer contribution.

Tort reform to ease the pressure on healthcare costs is important both to reduce insurance costs and the costs of unnecessary defensive medical procedures. We cannot eliminate liability entirely but steps can be taken. The issue has not been addressed adequately in ACA. It needs to be.

The middle class has been hammered in the last decade by rising costs for such things as education and healthcare, stagnant income and the tumultuous economy. At the same time, there is far too much money sloshing around in the political system. The situation has been made worse by the Citizens United decision and will probably be made worse yet by the case currently being considered in the Supreme Court.  Mr. Himes said his efforts to fight this trend so far have come to naught. It will probably take a huge scandal to turn things around.

We cannot stop the banks from taking risks, but we cannot have them and other financial institutions putting the entire economy at risk and calling on the government to bail out the system. Glass Steagall limited bank risk, but we cannot simply return to Glass Steagall. AIG was an insurance company and Bear Stearns a brokerage firm. The financial system is far more complicated than it used to be.

Many derivatives are necessary to, for example, lock in a cost of oil or allow a farmer to hedge against future price fluctuations.  Others, such as the complex derivatives surrounding real estate investments, have caused great grief. Requiring trading on exchanges and through clearing houses can help, but there are cases where private banking transactions are helpful. It’s complex.

Intelligence services were granted great leeway after 9/11, too much leeway. There may be the occasional rogue agent, but most of the players are professional, hardworking people who respect the Constitution but have a serious job to do. We need to strike the right balance.

The annual deficits have come down significantly, but we do have large accumulated obligations. We want to reduce the deficits but not kill the economy. Mr. Himes says he is unlikely to introduce a bill to reduce entitlements, but he’ll support one.

He cannot say that banks that took over troubled financial institutions are being victimized unfairly by the government suing them for transgressions at these institutions prior to their being acquired. The buyers bought them after doing due diligence, estimating their exposure and agreeing on a price they could live with. 

Mr. Himes is for responsible gun control. He is also for trade agreements, so long as issues such as protection of intellectual property (particularly in Asia), environmental issues and working conditions are dealt with appropriately.

The issue on food stamps is not whether to cut them back or not, but the size of the cutback, $5 billion (Democratic proposal) or $40 billion (Republican proposal). The cost of the food stamps program should come down as the economy recovers.