President Donald Trump acknowledged on Monday a "big flare up" of Covid-19 cases, but divisions between the White House and Senate Republicans and differences with Democrats posed fresh challenges for a new federal aid package with the US crisis worsening and emergency relief about to expire.
Trump convened GOP leaders at the White House as Senate Majority Leader Mitch McConnell prepared to roll out his US$1 trillion package in a matter of days. But the administration criticised the legislation's money for more virus testing and insisted on a payroll tax cut that could complicate quick passage. The timeline appeared to quickly shift.
"We've made a lot of progress," Trump said as the meeting got under way.
But the President added, "Unfortunately, this is something that's very tough."
Lawmakers returned to a Capitol still off-limits to tourists, another sign of the nation's difficulty containing the coronavirus. Rather than easing, the pandemic's devastating cycle is rising again, leaving Congress little choice but to engineer another costly rescue. Businesses are shutting down again, many schools will not fully reopen and jobs are disappearing, all while federal aid will expire in days.
Without a successful federal strategy, lawmakers are trying to draft one.
"We have to end this virus," House Speaker Nancy Pelosi said on Monday on MSNBC.
She said any attempt by the White House to block money for testing "goes beyond ignorance".
The political stakes are high for both parties before the November election, and even more so for the nation, which now has registered more coronavirus infections and a higher death count of 140,800 than any other country.
McConnell and House GOP leader Kevin McCarthy huddled with Trump, Vice-President Mike Pence, Treasury Secretary Steven Mnuchin and acting chief of staff Mark Meadows.
Mnuchin vowed passage by month's end, as earlier benefits expire, and said he expected a fresh US$1tr jolt of business tax breaks and other aid would have a "big impact" on the struggling economy.
Back at the Capitol, McConnell downplayed his proposal as simply a "starting point" for eventual discussions. Not only does he face pressure from the White House, but splits within his ranks have chiselled away at his majority power and left him relying on Democrats for votes.
"The question before the Senate this week is, 'Where are we now?'" the Kentucky Republican said as he opened the chamber.
The package from McConnell, being crafted behind closed doors, is expected to include US$75 billion to help schools reopen. It is also expected to provide a new boost in unemployment benefits, a fresh round of direct US$1200 cash payments to Americans below a certain income level, and a sweeping five-year liability shield against coronavirus lawsuits.
But the administration was panning the proposal's US$25b in new funds for virus testing and tracing, said two Republicans familiar with the discussions. Trump was also reviving his push for a payroll tax break, said another Republican. Both spoke on the condition of anonymity to discuss the private talks.
Trump insisted again on Sunday that the virus would "disappear," but the President's view did not at all match projections from the leading health professionals straining to halt the alarming US caseload and death toll.
On a conference call with the nation's governors Monday, Pence called the rising numbers in Sunbelt states "serious". And a sombre McConnell said that "it's not going to magically disappear", during a visit to thank front-line workers at a hospital in his home state of Kentucky last week.
Senate Democratic leader Chuck Schumer warned Monday his side will block any effort from McConnell that falls short.
"We will stand together again if we must," Schumer said in a letter to colleagues.
The New York Democrat is reviving his strategy from the last virus aid bill that forced Republicans to the negotiating table after McConnell's original bill was opposed by Democrats. This time, the House has approved Pelosi's sweeping US$3tr effort, giving Democrats momentum heading into negotiations.
Trump raised alarms on Capitol Hill when he suggested last month at a rally in Oklahoma that he wanted to slow virus testing. Some of Trump's GOP allies want new money to help test and track the virus to contain its spread. And one of the Republicans familiar with the process said about half of the US$25b previously approved remains unspent. Senate Democrats are investigating why the administration has left so much on the table.
The payroll tax break Trump wants also is dividing his party because that tax is used to finance Social Security and Medicare. Cutting it only adds to the nation's rising debt load at a time when conservatives are wary of any new spending. McConnell is straining to keep the bill's total price tag at $1tr.
During Monday's White House meeting, Trump put economist Art Laffer on speaker phone to discuss a health care provision backed by Newt Gingrich and key conservatives in Congress, according to a person familiar with the exchange and granted anonymity to discuss it. It would require hospitals and providers to disclose some prices to patients before receiving medical care, putting Trump's executive actions into law.
The proposed virus aid package would be the fifth, following the US$2.2tr bill passed in March, the largest US intervention of its kind. While many Republicans hoped the virus would ease and economy rebound, it's become clear more aid is needed as the first round of relief runs out.
The federal US$600-a-week boost to regular unemployment benefits is to expire at the end of the month. So, too, the federal ban on evictions from millions of rental units.
With 17 straight weeks of unemployment claims topping one million - typically about 200,000 - many households are facing a cash difficulties and losing employer-backed health insurance.
Despite flickers of an economic upswing as states eased stay-at-home orders in May and June, the jobless rate remained in double digits, higher than it ever was in the last decade's great recession.
Pelosi's bill, approved in May, includes US$75b for testing and tracing to try to get a handle on the virus spread, funnels US$100b to schools to safely reopen and calls for US$1tr to be sent to cash-strapped states to pay essential workers and prevent layoffs. The measure would give cash stipends to Americans, and bolster rental and mortgage and other safety net protections.
In the two months since Pelosi's bill passed, the US has had 50,000 more deaths and 2 million more infections.