Republican measure would include additional direct payments to Americans, as well as liability protection for business.

Republicans in the United States Senate on Monday announced their version of a $1 trillion coronavirus aid package hammered out with the White House, paving the way for negotiations with Democrats on a plan to help Americans before expanded unemployment benefits for millions expire this week.

Senate Majority Leader Mitch McConnell announced what he called a “tailored and targeted” plan focused on getting children back to school, employees back to work and support for a healthcare system grappling with an illness that has killed 150,000 Americans.

He urged Democrats to compromise with Republicans on the plan, called the “HEALS Act”.

“It will take bipartisan cooperation to make the HEALS Act into law for the American people,” McConnell said, in a speech that also blasted a bill that the Democratic-led House of Representatives passed in May.

McConnell said the plan would would provide for direct payments to Americans of $1,200 each, as well as incentives for manufacturing personal protective equipment for healthcare workers in the US, rather than China. It also includes “strong legal liability protection” for corporations, a top priority of Republicans, he said.

Republicans want to reduce the expanded unemployment benefit from the current $600 per week, which expires on Friday, to $200, paid in addition to state unemployment benefits, and to extend the program for two months. After that, the benefit would switch to 70% of a worker’s previous wages, to a maximum of $500 a week including state unemployment benefits.

The package also included $1.75b in spending for the construction of a new headquarters of the Federal Bureau of Investigation in Washington, DC, a part of the package that seemed to catch some Republicans off guard that they blamed on pressure from the White House.

Senate Democrats immediately described the Republican proposal as “totally inadequate”.

Speaking on the Senate floor, Democratic Leader Chuck Schumer said the Republicans’ aid plan would cut federal unemployed relief by 30 percent and is “unworkable”.

An aide to US House Speaker Nancy Pelosi said she would be meeting with Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows, and Schumer later on Monday to discuss coronavirus relief.

With US unemployment still at a high 11.1 percent and hiring potentially slowing in July, the economy is likely to weaken further without more government aid, economists say.

What is needed, many say, is continued extra aid for tens of millions of unemployed Americans, along with more funding for state and local governments and more grants for struggling small companies, many of which could go out of business.

Yet even with the viral outbreak intensifying and nearly half of Americans whose families have endured a layoff saying they fear those jobs are lost forever, Congress is nowhere close to agreeing on the outlines of a package despite the Republican proposals on Monday.

The debate coincides with worrisome signs about the job market and the economy.

The number of laid-off workers who have applied for unemployment benefits has topped one million every week for 18 straight weeks. Before the pandemic, that figure never exceeded 700,000. Real-time data shows that Americans’ visits to shops and restaurants have leveled off after having grown in May and June. Air travel fell last week compared with the week before.

The Democratic-led House has already approved legislation that would extend the existing $600 federal top-up in state unemployment benefits beyond this week, but Republicans have balked at the notion. They point to research showing that, counting the $600 a week in federal aid, roughly two-thirds of those out of work are receiving more money from their jobless benefits than they earned at their previous jobs.

The research has fuelled Republican concerns that the extra aid has discouraged some of the unemployed from returning to work, potentially slowing the recovery.

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