White House chief of staff Mark Meadows, left, and Steven Mnuchin, the US Treasury secretary, are leading stimulus negotiations on behalf of the White House © AFP via Getty

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Donald Trump said his administration could quickly reach a stimulus deal if Democrats abandoned “partisan demands”, after previously accusing the opposition party of trying to bail out cities and states under its control.

Mr Trump addressed the stalemate on Capitol Hill on Wednesday after Mitch McConnell, the top Senate Republican, said the body could remain in session next week, as lawmakers and the White House delay summer holidays to address the economic fallout from the pandemic.

“We’re certainly going to be in next week,” Mr McConnell said. “We’ll see what happens after that.”

The Senate had been scheduled to break for recess, but lawmakers have faced growing calls to stay in Washington to hammer out an agreement on extending economic benefits that ran out at the end of last month.

Mr Trump said he was considering executive action to prevent evictions and also to cut the payroll tax, as his economic team continued to hold talks with Nancy Pelosi, the Democratic speaker of the House, and Chuck Schumer, the top Democrat in the Republican-controlled Senate.

“We’ve been negotiating in good faith with Democrat leaders in the House to extend relief payments,” Mr Trump said. “If Democrat leaders put partisan demands aside, we would reach an agreement very quickly.”

The president has accused Democrats of using the cover of the Covid-19 crisis to try to funnel money into cities and states that are in trouble because of “bad management” by the party. Democrats argue the assistance is needed to prevent mass lay-offs of government workers.

Ms Pelosi and Mr Schumer on Wednesday met Mark Meadows, White House chief of staff, and Steven Mnuchin, Treasury secretary, to continue talks that have already stretched on for more than a week. Mr McConnell has so far not directly participated in the negotiations.

After talks concluded on Wednesday, Mr Meadows said there was “still no agreement”. Mr Mnuchin said both sides would meet again on Thursday, and that while talks were productive, there were still a “lot of significant issues”.

“Our objective is to try to reach an understanding on the major issues by Friday,” Mr Mnuchin said. “If we can’t reach an agreement on the major issues, it is going to be hard to complete a deal.”

Ms Pelosi told reporters after Wednesday’s meeting that she was “optimistic that there is a light at the end of the tunnel, but how long that tunnel is remains to be seen”.

Mr Meadows later told CNN that if “significant progress” had not been made by the end of the week, the president was “prepared” to act on his own, through an executive order, to extend extra unemployment benefits and continue to temporarily halt evictions.

Congress has already appropriated nearly $3tn in economic relief in response to the coronavirus crisis. But as many states struggle with rising numbers of Covid-19 infections and as benefits introduced in earlier funding packages run out, politicians are under pressure to spend more ahead of the November election, on programmes ranging from extra funding for the US Postal Service to enhanced unemployment benefits.

More than 25m Americans have filed for unemployment insurance since the coronavirus outbreak began. A supplementary $600 a week in jobless benefits was introduced in March as part of the $2tn Cares Act. That extra assistance ran out last week.

Democrats want the $600-a-week extra unemployment assistance to continue at least until the end of the year, but some Republicans have argued too many Americans are now earning more from benefits than they were at work.

Republican senators Mitt Romney, Susan Collins and Martha McSally introduced a measure on Wednesday that would gradually phase out the extra benefits between now and the end of the year.

Under their proposal, individual states, which administer unemployment insurance, could pay out a flat rate of $400 in additional federal benefits per week, or allocate $500 per week in August, $400 per week in September, and then either a flat $300 per week or an amount equating to 80 per cent of wages for the rest of the year.

Ms Collins and Ms McSally are both facing tough re-election battles this November, in Maine and Arizona, respectively.

The US Chamber of Commerce welcomed the senators’ proposals, saying the bill “strikes a sensible balance of maintaining vital income support during the pandemic while avoiding disincentives for returning to work”.

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