Mnuchin warns jobless rate could hit 20 percent without federal response: report

Treasury Secretary Steven Mnuchin told Republican Senators Tuesday that without government intervention the U.S. could hit 20 percent unemployment because of the coronavirus, Bloomberg reported, citing people familiar with the matter.

The Treasury secretary did not predict the U.S. would reach that level, but said he believed the outbreak has the potential to do more economic damage than the 2008 financial crisis as he argued for financial stimulus to hourly workers and businesses hurt by “social distancing” amid the outbreak.

“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 told Bloomberg.

Mnuchin made some of the administration’s most explicit calls yet for economic stimulus amid the pandemic earlier on Tuesday, calling for checks to be disbursed directly to Americans.

However, Mnuchin and White House National Economic Council Director Larry Kudlow reportedly encountered pushback from Senate Republicans Tuesday on some of their proposals, including on the direct payments and a proposed bailout of the airline industry.

“It won’t help the economy just throwing money at a problem,” Senate Judiciary Chair Lindsay Graham (R-S.C.) said after the lunch meeting. “I don’t know why giving a thousand dollars on top of their paycheck makes any sense now because there’s no economy to participate in. I’d rather take that money and shore up health care systems.”