U.S. Treasury Secretary Steven Mnuchin spoke to Republican senators about the $1 trillion coronavirus stimulus package being hammered out between the White House and congressional Democrats on Tuesday, warning them that the U.S. unemployment rate could reach as high as 20% if the bill is not passed. While Mnuchin said he is confident that a stimulus plan will be approved by the Senate, he emphasized just how important it is to pass a robust relief package for workers and businesses.
In an interview with CNBC, he clarified that his 20% figure was a hypothetical calculation made to illustrate a point: Around 40% of all Americans work for companies with fewer than 500 employees, and if around half of them get laid off, then the unemployment rate would top 20%.
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The stimulus package being crafted -- the third one to be developed in recent days -- would deploy between $850 billion and $1 trillion toward measures that would assist businesses and individuals across the country. In addition to helping support some of the harder hit industries, such as airlines, the government would also send cash directly to citizens via check. Key Republican senators are reportedly close to an agreement among themselves about what they'd like to see, and what they could accept, in such a bill. However, whatever agreement they come to will have to be reconciled with the plan being crafted in the House of Representatives, where the Democrats hold sway.
A difficult time for the market
Over the past month, the Dow Jones Industrial Average has lost over 10,000 points, around a third of its total value, and the broader S&P 500 index -- a better gauge of the market as a whole -- has fallen 29%. Most companies' stocks have experienced significant declines, although there have been exceptions. Some healthcare companies, such as Teladoc and Moderna, have climbed in value significantly over the past few weeks as demand for their services and products -- or optimism about their potential to aid in stemming the crisis -- has surged.
