Governor Malloy calls on Federal Government to pay unemployment benefits for Sikorsky shutdown adding its “unacceptable that Connecticut taxpayers be made to pay for the failures of Republicans in Washington.”
It is unacceptable for Connecticut taxpayers to be paying for the failure of Republicans in Washington, but the Sikorsky situation isn’t the right example. And don’t get me wrong, I want to blame the Republicans for absolutely everything too.
However, as Governor Malloy reveals in this situation, losing contact with the truth undermines the effectiveness of one’s rhetoric;
According to a blog post written by Stamford Advocate and Hearst Newspaper Group reporter, Brian Lockhart, “Democratic Gov. Dannel Malloy Friday said he wants the federal government to fully reimburse Connecticut and all states for the cost of unemployment benefits and administering those benefits to workers impacted by the government shutdown.”
Lockhart writes that, “In Connecticut Malloy was referring specifically to Sikorsky Aircraft in Stratford, which Wednesday announced will furlough about 2,000 workers, effective Monday.
The company said the inability of Congress and the White House to reach a federal budget agreement and end the government shutdown has severely hampered its ability to manufacture and support helicopters used by the military.”
Lockhart quotes Malloy as saying, “These workers and many more throughout Connecticut are out of work because House Republicans insist on playing childish political games. Families are suffering, and it’s unacceptable…As many of these workers begin applying for unemployment benefits, it’s also unacceptable that Connecticut taxpayers be made to pay for the failures of Republicans in Washington.”
Three cheers for the condemnation of the Congressional House Republicans.
Right on about the fact that it is unacceptable that families are suffering as a result of the idiotic political maneuvers of the Congressional House Republicans.
But Malloy’s statement about Connecticut taxpayers picking up the tab for the unemployment benefits is exactly the reason so many small business people think many Democrats simply don’t understand what owning a small business is all about.
Having paid my share of unemployment taxes for my employees let me take a shot at explaining to Governor Malloy how things work when it comes to unemployment taxes.
Unemployed workers are paid benefits from a fund that is paid for by businesses, not directly by state government and its taxpayers.
Employers pay federal and state unemployment taxes. These funds are used to pay for the operation of the unemployment system and the benefits that go out to unemployed workers.
The amount of unemployment tax a Connecticut business pays depends on the number of employees they have and the company’s history of creating unemployed workers. A business is charged a base rate, but if it lays off workers due to a lack of business, that unemployment tax rate increases.
With Connecticut’s unemployment rate stuck at about 9 percent for so long, Connecticut’s unemployment fund, like those in most states, run out of money and the states had to borrow money from the federal government to meet their obligations when it came to paying unemployment benefits.
The Great Recession was so bad that as of two and half years ago, more than 30 states, Connecticut included, had already borrowed more than $41 billion from the federal government.
That money must be paid back, with interest, and the way it is paid back is by charging businesses a higher federal unemployment tax. Experts have reported that even at the higher rate, it may take Connecticut more than a decade to pay back the money that Connecticut has already been borrowed.
That isn’t to say we shouldn’t be upset about the Republicans and their antics, but the money for unemployment benefits that are resulting for their stupidity is actually being paid for by Connecticut’s businesses that are already burdened with trying to pay back the money Connecticut had to borrow to pay for unemployment benefits over the last few years.
If the governor wants to lobby the federal government to help Connecticut’s businesses he should be demanding that the President and Congress do something to reduce the burden for those states that had to borrow billions.
Small businesses are the foundation of Connecticut’s economy. Governor Malloy has spent hundreds of millions on corporate welfare to “persuade” successful businesses to add a few hundred jobs in Connecticut. Instead of wasting money on those big ticket items, state government should be focusing in on ways to help small business succeed.
The unemployment tax issue is a perfect example and that problem isn’t resolved by demanding that the federal government pay for Sikorsky’s unemployment benefits for the next few weeks.