Treasury Secretary Steven Mnuchin raised the possibility with Republican senators that without government intervention, the U.S. could see 20% unemployment, according to people familiar with the matter.
Mnuchin discussed the scenario on Tuesday as he proposed an economic stimulus of $1 trillion or more.
Mnuchin didn’t predict unemployment would reach that level, the people said, but told the senators that he believes the economic fallout from the coronavirus outbreak is potentially worse than the 2008 financial crisis. Extraordinarily high unemployment, he said, is a possibility if lawmakers don’t swiftly provide financial assistance to wage workers and small- and medium-sized businesses.
“During the meeting with Senate Republicans today, Secretary Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case,” Treasury spokeswoman Monica Crowley said.
Mnuchin’s comments come amid a rising sense of urgency at the White House and on Capitol Hill to confront the virus threat, both economically and from the public health direction.
CNN reported that a 20% unemployment rate would be double the unemployment rate during the Great Recession and the highest in the U.S. since the Great Depression. By its calculations, it would mean more than than 32 million Americans out of a job.