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Governor Rell Continues to Urge Support on UI Extension, Renews Call for Congressional Action

For immediate release
December 7, 2010
Contact: (860) 524-7313

Governor M. Jodi Rell today joined 20 other governors in sending a letter (attached) to Congressional leaders urging swift action to extend unemployment benefits and 100 percent federal matching funds for those extended benefits through the end of 2011.

“Extending these benefits for those hardest hit by the economic downturn is not only the right thing to do, it's the right economic policy,” the governors wrote. “Unemployment insurance provides temporary, but critical, support for Americans fighting to find jobs Benefit checks are typically spent immediately, stimulating demand. As a result, unemployment insurance is one of the more effective government programs.” 

The letter cites a recent Department of Labor report shows that every $1 put into unemployment benefits generates $2 in economic activity. The same report indicates that since mid-2008 unemployment insurance programs have saved 1.6 million jobs per quarter, lowered the unemployment rate by 1.2 percentage points and reduced the decline in gross domestic product by 18.3 percent. 

“We recognize the fiscal concerns surrounding an extension of unemployment benefits,” the governors wrote.  “However, a temporary extension will not increase long-term deficits, and would provide a powerful boost to our economic growth. By contrast, at a time when our recovery is at its most fragile, failure to extend unemployment benefits will have dramatic ramifications. As a consequence of the benefit’s expiration, two million workers will lose benefits in December, right at the heart of the holiday season. Almost seven million workers will lose their benefits next year. Inaction will cause irreparable harm to workers in each of our states who continue to search in vain for employment in the face of the worst economy in recent memory.”

Congress has never failed to extend unemployment benefits when the national unemployment rate exceeded 7.2 percent.  The current national rate stands at 9.6 percent, with only gradual improvements expected in the coming months.

“All of us hope that the economic recovery will continue and accelerate,” Governor Rell said.  “Now, however, is not the time to leave millions of people – including thousands of Connecticut families – without the means to help support those families while they continue the search for gainful employment.”

On December 6, Governor Rell joined 13 other governors in urging Congress to extend the waiver of Unemployment Insurance loan interest two additional years through 2012.   Currently, the American Recovery and Reinvestment Act of 2009 (ARRA) provides a waiver of states’ payments of interest on UI trust fund loans through 2010.

“State loan interest payments that will come due in September 2011 place further hardship on states’ finances and could slow economic recovery,” the governors wrote in the December 6 letter attached.  “Extending the interest free loans would allow states to avoid increasing payroll taxes, reducing benefits, or both, while the economic recovery continues.”

Media contact: Nancy Steffens  (860) 263-6535


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