US Republicans introduce $1tn pandemic recovery plan which could cut unemployment payments

Proposals pave way for talks with Democrats, who have defended weekly benefits received by millions

US Senate Republicans have proposed an additional $1 trillion (£776bn) coronavirus stimulus package that could cut unemployment payments by two-thirds.

Under the plans introduced by Senate majority leader Mitch McConnell on Monday, some 32 million Americans on unemployment amid the Covid-19 pandemic could see supplemental $600 (£466) unemployment payments cut to $200 (£155).

Schools would also receive a $100bn (£777m) boost and most Americans would see bonus payments of up to $1,200 (£932), under the plan.

But those proposals, which pave the way for talks with Democrats, have been described as “totally inadequate”.

However, whilst some Democrats complain the latest coronavirus stimulus package could be too limited, some Republicans have called it too expensive.

That criticism comes after the Republican-led Senate refused to consider a $3 trillion (£2.3t) coronavirus stimulus package known as the “HEROES Act”, which passed the Democrat-led House of Representatives in May.

Mr McConnell on Monday called the “HEROES Act” a “socialist manifesto” and urged Democrats to work with Republicans on their plan, called the “HEALS Act.”

“We have one foot in the pandemic and one foot in the recovery,” said Mr McConnell.

“The American people need more help. They need it to be comprehensive, and they need it to be carefully tailored to this crossroads.”

Mr McConnell’s “tailored and targeted” proposals would also see $190 billion (£148bn) made available as small business loans, and $100 billion (£78bn) set aside to protect seasonal and low-income businesses.

States would also pay up to 70 per cent in previous wages – or $500 (£389) – in place of the $600 (£466) weekly unemployment benefits due to end on Friday.

The extra payments – which exceeded the former wages of some workers – have been a sticking point for many Republicans, who say they discouraged Americans from returning to work.

Others say the payments have provided an unexpected boost to consumer spending, and protected those whose jobs do not exist during the pandemic.

Senate Democratic leader Chuck Schumer described the Republican plan on Monday as “weak tea, when our problems need a much stronger brew”.

He also argued that some states would be unable to implement unemployment changes, due to outmoded state computer systems that left many waiting weeks for previous coronavirus-related assistance.

Democrats say they will oppose a Republican plan to protect businesses and schools from liability lawsuits as they reopen with the coronavirus pandemic – which has now led to 150,000 American deaths and 4.3 million cases.

The Republican stimulus proposal also included non Covid-19 measures, such as $1.8 billion (£1.4bn) set aside to construct a new FBI headquarters in Washington DC.

Those plans have been championed by US president Donald Trump, who owns a hotel across the street from the current building.