In the latest sign that the Trump administration views the coronavirus pandemic as an existential threat to the American economy, Republican senators were warned during a closed-door meeting this week that failure to pass the White House's proposed stimulus package could lead to a catastrophic 20% unemployment rate.
According to multiple reports, Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow met with Republican senators Tuesday in a private, closed-door lunch on Capitol Hill. Multiple sources reported that Mnuchin made the dire prediction as a means to encourage senators to vote for the stimulus package favored by the White House.
At the height of the 2009 recession, unemployment barely topped 10%. Unemployment was estimated to reach 25% during the Great Depression in 1933.
Multiple businesses have already been effectively shuttered as states and cities implement measures to attempt to halt the spread of the virus. Numerous states have effectively ordered locations that are capable of accommodating more than 50 people to close their doors to large gatherings of people. Restaurants, travel, and the leisure industry have been hit particularly hard.
The details of the stimulus package are still very much in the air and are currently being hammered out between the White House and top congressional leaders on both sides of the aisle. However, the White House has hinted that some portion of the stimulus will involve direct cash payments to Americans who have been impacted by the crisis, as well as money to help businesses meet their short-term obligations and stay functional.
Although multiple sources who were present at the meeting indicated that Mnuchin used the 20% unemployment figure as a way to coax reluctant senators into voting for the bill, Treasury Department spokesman Monica Crowley said, "Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case."
The price tag of the stimulus package is rumored to be between $850 billion and $1 trillion. Mnuchin has publicly stated that it is the White House's desire to get stimulus checks sent out to Americans "Immediately. And I mean now, in the next two weeks."
However, the stimulus package first has to pass through a contentious gauntlet on Capitol Hill, where some Republicans are concerned about both the price tag of the bill, and where Democrats are upset that some of their pet special interests do not receive enough funding in the bill.
Senate Majority Leader Mitch McConnell (R-Ky.) has promised to streamline the bill through the Senate at "warp speed." The House, meanwhile, is not in session after House Speaker Nancy Pelosi (D-Calif.) allowed the House to recess last week after passing a $100 billion sick relief package.