WASHINGTON—Democratic leaders and White House officials sounded cautiously upbeat notes after another round of talks Monday on a new coronavirus aid package, under rising pressure to strike a deal as millions of Americans go without a $600-a-week federal jobless supplement, while President Trump floated potential executive actions.
The two sides remain at odds on whether to cut the jobless supplement or provide aid to financially strapped states and localities, how much money to allocate for controlling the virus and for food stamps, and myriad other issues. But they have signaled progress in recent meetings.
On Saturday, House Speaker Nancy Pelosi (D., Calif.) and Senate Minority Leader Chuck Schumer (D., N.Y.), along with Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows, emerged from an hourslong sit-down to say their conversation had been the most productive to date.
After two hours of more talks Monday, Messrs. Mnuchin and Meadows left Mrs. Pelosi’s office to brief Senate Majority Leader Mitch McConnell (R., Ky.) and said discussions would resume Tuesday.
“We are really getting an understanding of each side’s position and we’re making some progress on certain issues, moving closer together,” said Mr. Schumer, while saying the sides remained far apart on other issues. “I think there is a desire to get something done as soon as we can.”
Mr. Schumer said the talks focused on issues including the GOP and Democratic spending figures for school safety and food aid, and how far that money would go.
A Democratic aide said much of the discussion focused on how much funding should go to schools and what proportion of that should go to those that reopen for in-person learning. Democrats are pushing for more overall funding and for less of it to be tied to reopening, arguing that schools that are conducting remote learning have comparable expenses.
“We’re open to a bigger package if we can reach an agreement,” Mr. Mnuchin said after the meeting. Asked if negotiators were getting closer on a bigger package, Mr. Mnuchin said “a little bit.”
In a step that could bolster the GOP negotiating position, Trump administration officials began early discussions about taking unilateral action if congressional talks on the relief package collapse, said people familiar with the matter.
Mr. Trump told reporters at the White House on Monday that he is considering issuing executive orders to help people affected by the pandemic, including taking steps to prevent people from being evicted from their homes. He also said he was open to taking executive action to suspend the collection of the payroll tax, an idea Republicans and Democrats in Congress had rejected and didn’t include in their proposals.
“So we’ll be talking about that,” Mr. Trump said when asked about suspending the tax. “But we’re having a very good discussion with Nancy Pelosi and Chuck Schumer,” he said.
Messrs. Mnuchin and Meadows didn’t talk about the White House taking unilateral action in Monday’s meeting, Mr. Schumer said.
Some of the president’s outside allies have publicly and privately advocated for him to suspend the payroll tax without congressional signoff. In an opinion article in The Wall Street Journal on Sunday, two conservative allies of the president argued that Mr. Trump has the authority to order the Internal Revenue Service to suspend the tax if he declares a national economic emergency.
Stephen Moore, a conservative economist who co-wrote the op-ed, has spoken to senior administration officials about his proposal. “For Trump to talk about it would dramatically increase his marketing power with Pelosi,” Mr. Moore said of the plan to suspend the payroll tax. “You need a walking-away strategy.”
The tax code gives the Treasury Secretary authority to delay tax filing and collection as a result of presidentially declared disasters. The administration used this authority to delay a series of tax deadlines until July 15. The law doesn’t necessarily give the administration the ability to make sure that employers, who collect payroll taxes, pass any savings from delayed payments on to workers. And it doesn’t allow the administration to actually cut the tax; that would require further action from Congress.
Administration officials and others familiar with the matter said the discussions about taking executive actions are still in their early stages, adding that the White House is still focused on reaching an agreement with members of Congress. In addition to eviction protection, administration officials have discussed executive actions aimed at helping people whose enhanced job benefits have run out, the officials said.
Mr. Trump on Monday accused Democrats of “slow rolling” the bill, asserting that they want “bailout money” for states.
The White House has emphasized jobless aid and preventing evictions, and pushed for a narrower bill to address those quickly, which Democrats rejected in favor of continuing talks on a broader agreement.
In the talks, the Democrats and Republicans are starting several trillion dollars apart, but jobless aid remains a central focus.
In May, House Democrats passed a $3.5 trillion package that included $1 trillion for municipalities and extended the $600 weekly jobless supplement through January.
Senate Republicans last week proposed an alternative, a roughly $1 trillion measure that would cut the supplement to $200 a week before shifting to a system that would provide enough money, when combined with state benefits, to cover 70% of a worker’s prior wages.
The Republican plan omitted money for states and cities, though it would grant municipalities more flexibility in using federal aid that was appropriated in an earlier relief package.
Mr. McConnell has taken steps to set up votes early this week in a bid to demonstrate that the GOP-led Senate was taking action.
One measure Republicans expected to take to a vote would allow states to give workers either a flat $200 weekly sum or an amount of no more than $500 that, when combined with state benefits, would be equivalent to two-thirds of a person’s lost wages. The expanded benefits would run until the end of year. The measure comes from Sens. Ron Johnson (R., Wis.) and Mike Braun (R., Ind.).
Any GOP measure would need some Democratic support to pass in the Senate.
—Kristina Peterson contributed to this article.
Write to Siobhan Hughes at siobhan.hughes@wsj.com and Andrew Restuccia at Andrew.Restuccia@wsj.com
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