By David Lawder and Richard Cowan
WASHINGTON (Reuters) - The top Democrats in the U.S. Congress and White House negotiators on Monday said they had made progress in talks on a new coronavirus relief bill, though the administration said President Donald Trump could act alone if no deal is reached.
A key sticking point remains what to do about the $600-per-week enhanced unemployment benefit, a key lifeline for the tens of millions of Americans thrown out of work during the pandemic, which expired on Friday.
"We're making some progress on certain issues, moving closer together," Senate Minority Leader Chuck Schumer told reporters after Monday's talks. "There are a lot of issues that are still outstanding. But I think there is a desire to get something done as soon as we can."
Schumer, House of Representatives Speaker Nancy Pelosi, Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows spent about two hours in talks on Capitol Hill. Mnuchin reported "a little bit of progress" in the talks.
"We're open to a bigger package if we can reach an agreement," Mnuchin told reporters. But Meadows later shot down that idea.
Trump said at a news conference late on Monday that the administration was having "a very good discussion" with Pelosi and Schumer, but the problem was they wanted in include bailouts for Democratic-led cities and states to address problems unrelated to the pandemic.
"They want a trillion dollars for that. ... We don't think that's fair," he said.
Congressional Democrats and Republicans remain far apart on next moves, with Democrats standing behind a $3 trillion plan that passed the House in May and Republicans raising concerns over their own $1 trillion proposal laid out by Senate Majority Leader Mitch McConnell last week.
McConnell, who has not joined the bipartisan negotiations, blamed Pelosi and Schumer for the lack of a deal.
"The Democratic leaders insist publicly they want an outcome. But they work alone behind closed doors to ensure a bipartisan agreement is actually not reached," he said on the Senate floor.
After passing more than $3 trillion in relief legislation early in the crisis, Congress last week missed the Friday deadline to extend the enhanced unemployment payments that have played a key role in propping up the U.S. economy.
Mnuchin and Meadows have taken the Republican lead in talks since McConnell's plan last week met immediate resistance from some of his fellow Senate Republicans.
With a final deal still in doubt, the White House is seriously considering unilateral action to defer worker payments on payroll taxes, Stephen Moore, a member of Trump's economic recovery task force, told Reuters. He said such a move would inject up to $300 billion into the U.S. economy. The tax payments fund Social Security, Medicare and Medicaid.
Trump said he could prevent evictions and suspend collection of payroll taxes from employees through executive orders.
Trump could also unilaterally waive compliance for federal regulations that slow the formation of businesses and infrastructure projects, according to experts.
"The president is always considering executive action in the absence of congressional leadership," White House adviser Kellyanne Conway said when asked about possible unilateral action.
The extension of enhanced federal unemployment benefits has proved to be a major stumbling block in the talks, and a top Federal Reserve official warned that failure to secure some form of extension would result in a weaker economy.
McConnell is also demanding that comprehensive legislation include protection against COVID-19-related lawsuits for businesses, schools and churches. But Democrats have rejected the idea, and a source familiar with the negotiations said last week the White House had indicated it could go along with a bill that did not include the liability measure.
Hours before the talks were due to resume, Pelosi told CNN she would not go along with Republican proposals to slash the weekly $600 unemployment benefit.
The White House and congressional Republicans want to trim the weekly jobless aid, and have rejected as too costly the state and local assistance package that was included in legislation passed by the Democratic-led House in May.
Republicans favoring a reduction in the unemployment aid have said it is a disincentive for people to go back to work.
However, Dallas Federal Reserve Bank President Robert Kaplan told Bloomberg TV on Monday that economic data does not show the $600-a-week benefit hurts the overall job market.
There are some areas where lawmakers and the Trump administration may be able to come together quickly.
Both Republicans and Democrats want to renew a moratorium on evictions, which had spared Americans the stress of being left homeless while out of work because of the pandemic. The moratorium expired on July 24.
Likewise, there is broad support for another round of direct payments to taxpayers.
(Reporting by David Lawder, Patricia Zengerle, Richard Cowan, Ann Saphir, Jeff Mason, Pete Schroeder and Doina Chiacu; writing by David Morgan, Tim Ahmann and Patricia Zengerle; Editing by Scott Malone, Jonathan Oatis, Tom Brown and Jane Wardell)