Governor Rell Calls on Congressional Delegation

to Extend Unemployment Aid, Overhaul System

            Governor M. Jodi Rell today announced she has asked the state’s Congressional delegation to work on renewing federal legislation that is providing extended unemployment benefits to Connecticut families struggling to find work amid the continuing economic slump. Governor Rell also asked lawmakers to work on a broader overhaul of the entire unemployment compensation system, saying the program must evolve with the changes in the nation’s economy and the shifting needs of the work force.

            “The toll this economy has taken on the families of Connecticut is truly heart-wrenching,” Governor Rell said. “Far too many families in our state are reeling from the loss of a job. A key federal program that has been providing much-needed assistance to these families – the Emergency Unemployment Compensation Act, known as ‘EUC-08’ – is scheduled to expire at the end of this year. I believe it is essential for Congress to renew this program so that people are not left stranded until the recovery gets in high gear and we once again see jobs being created.

            “The law has been an enormous help to states like Connecticut, where the unemployment rate has jumped sharply since the recession began,” the Governor said. “The law added a total of 33 weeks of unemployment assistance to the state’s basic benefit of 26 weeks. In this economy, those added weeks are a vital life-line for would-be workers looking for a new position.”

            In her letter, Governor Rell noted that Connecticut’s unemployment rate has generally held steady in recent months in the range of 7.8 percent to 8 percent. However, economists believe overall unemployment has not yet “peaked” and may not do so until the second half of 2010.

            At the same time, the Governor said Congress should undertake a comprehensive review of the entire unemployment compensation system, especially in light of the fundamental changes that have preceded and resulted from the current recession.

            “My economic advisors say this is a ‘structural recession,’ meaning the economy itself has changed,” Governor Rell said. “The financial services sector, for example, will never be the same again. Put simply, the majority of the people in that field who have recently lost their jobs cannot simply wait for good times to roll back around – that business will literally never be the same again and most of those jobs are gone forever. As our economy evolves, so must our unemployment compensation system.

            “The revised system must address the needs of our displaced workers, adapt to the changing nature of the economy and respond to the ongoing needs of the unemployed,” the Governor said.

            Governor Rell also asked the Connecticut delegation to work toward renewal of a provision in the federal stimulus package – known formally as the American Recovery and Reinvestment Act of 2009 – that has sharply reduced the cost of continuing health benefits for workers who lose their jobs. Under a federal law known as COBRA, workers who lose their jobs can elect to continue their health insurance but must pay the full cost – often far more than an unemployed person can afford.

            Under the stimulus, the federal government is currently paying 65 percent of the COBRA premiums for unemployed individuals. This benefit is also scheduled to end on December 31, 2009, and – light of continuing high unemployment – Governor Rell said Congress should extend it as well.