By David Lawder and Richard Cowan
WASHINGTON (Reuters) - U.S. Senate Republicans and White House negotiators were divided on Wednesday about next steps to respond to the coronavirus crisis, with at least one senator warning divisions could delay action long after enhanced unemployment benefits expire.
Congress faces a tight deadline as a $600-per-week federal supplement to state unemployment benefits approved in March expires at the end of July, which would sharply reduce payments to millions of Americans thrown out of work in the pandemic.
Several Republican senators said they were discussing temporarily extending unemployment benefits as a possible stopgap measure if a broad package could not be passed in the next 10 days, though a key adviser to President Donald Trump voiced objections to that idea on Wednesday.
Agreement within the Republican caucus would be just a first step before launching intensive negotiations with the Democratic leadership of the U.S. House of Representatives.
"I think we should do the whole thing, but if we can't get it done by next week, we cannot allow there to be a cliff in unemployment insurance," Senator Rob Portman, an Ohio Republican, told reporters. "We're still at 11% unemployment, about 17 million Americans out of work through no fault of their own."
Republican disagreements over a proposed $1 trillion opening offer in aid bill negotiations were laid bare on Tuesday, while Democrats are sticking by their demand for $3 trillion more to aid states, school districts, laid-off workers and healthcare efforts.
Republican Senator Kevin Cramer said it was "possible" that Congress would fail to reach a deal before leaving for an August recess.
While both parties agree on some concepts, such as more aid for small businesses and funds for coronavirus testing, they differ on Trump's desire for a general payroll tax cut and over whether to shield businesses from lawsuits if workers or customers get infected with the coronavirus.
A full extension of the extra $600 per week through the end of 2020 was part of a bill passed in May by the House. The measure forms the basis of their negotiating position. Senate Majority Leader Mitch McConnell still has not unveiled his coronavirus aid bill, seen as the Republicans' opening gambit.
Chad Stone, chief economist at the Center for Budget and Policy Priorities, a left-leaning Washington think tank, said the extra cash has helped prop up consumer spending in the face of the steepest economic downturn since the 1930s Great Depression.
"If that money goes away or gets reduced substantially, it will be a hit to the economy," Stone said.
But Republican lawmakers have argued that the extra $600 a week means that some people are earning more than they did at their prior jobs, discouraging them from returning to work.
"I'm not in favor of any premium extension for unemployment," said Senator David Perdue, a Georgia Republican. "What I'd prefer is if you want to give a few bucks to people, put it into a direct payment, but right now we have provided an incentive not to go back to work."
Treasury Secretary Steven Mnuchin agrees, but has not specified an appropriate amount for direct payments. He said on Tuesday he wants to "get something done by the end of next week" before the benefits expire.
Some Republican senators, like Mitt Romney of Utah, say they oppose direct payments. Senator Ted Cruz of Texas told CNN that he is a "hell no" on the Republican proposal in its current form, saying that it would spend too much, causing a "feeding frenzy" among Washington lobbyists.