WASHINGTON — Trump administration officials warned Senate Republicans on Tuesday that the coronavirus outbreak in the United States could cause the unemployment rate to reach 20 percent, according to two sources familiar with the discussion.
The warning came during a closed-door lunch on Capitol Hill in which Secretary of the Treasury Steven Mnuchin presented a White House stimulus plan that could cost at least $1 trillion. The prediction was first reported by Bloomberg News. White House economic adviser Larry Kudlow also attended the lunch.
As the stock market struggles and the health of the economy is in serious jeopardy, previously reluctant Republicans are becoming much more open to approving an aid bill that large.
That estimated unemployment rate would be double the highest rate from the period around the Great Recession from 2007 to 2009, when it reached 10 percent in October 2009, according to the Bureau of Labor Statistics. Before then, the unemployment rate had not been that high since late 1982 through the first half of 1983 when it peaked at 10.8 percent.
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Of course, Americans experienced the worst unemployment during the Great Depression in the 1930s. Estimates say that the unemployment rate hit 25 percent in 1933. The Bureau of Labor Statistics, however, said that it was difficult to measure unemployment because there was little statistical data on the extent or the nature of joblessness across the country.
Earlier this week, New York City Mayor Bill de Blasio issued a stark warning.
“We have the historical playbook, and this, if you want to know what this whole thing is going to play out as, one part the Great Recession we went through a few years ago, one part the Great Depression, one part the 1918 flu epidemic,” he said in an interview on MSNBC’s “Morning Joe,” saying those are three models to use in considering how to manage the outbreak.
The U.S. coronavirus outbreak that has intensified in recent days has prompted companies to lay off workers as health officials at the federal, state and local levels tell people to practice social distancing — not congregate in large groups and to work from home if possible — in order to help flatten the curve of its spread.
Mnuchin said at the White House coronavirus task force briefing and at the Capitol on Tuesday that the administration is interested in giving a major boost to the economy with Congress’ help with a massive stimulus package. Part of that plan that Mnuchin presented to Republicans and previewed publicly Tuesday would include $250 billion in payments to Americans that could begin being disbursed at the end of April if Congress agrees to the proposal.
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President Donald Trump tweeted Wednesday morning that for the people who are now out of work as a result of the containment policies, “money will soon be coming to you.”
Still, the Senate hasn’t passed the second coronavirus aid package yet that the House passed. In the House, Rep. Louie Gohmert, R-Texas, held it up Monday, and Sen. Rand Paul, R-Ky., held it up in the Senate on Tuesday.
Senate Majority Leader Mitch McConnell, R-Ky., said repeatedly Tuesday that the Senate will not adjourn until it passes additional stimulus packages.