White House proposes new $916 bn stimulus plan for COVID-19 aid

The White House has unveiled a $916 billion stimulus proposal in a final dash to break a months-long deadlock over new aid for the coronavirus-stricken US economy before President Donald Trump leaves office in January.

This happened after congressional Democrats shot down a suggestion for a pared-down plan from the Senate's leading Republican, Majority Leader Mitch McConnell.

Treasury Secretary Steven Mnuchin on Tuesday announced the plan, which he said includes "money for state and local governments and robust liability protections for businesses, schools and universities."

The proposal comes weeks before Trump is slated to hand over power to President-elect Joe Biden and a new Congress takes office.

The United States is currently struggling with the world's worst Covid-19 outbreak that has caused the worst economic downturn in a century.

The new proposal is slightly larger than a $908 billion compromise unveiled by a bipartisan group of senators last week.

Mnuchin said he presented the package to Democratic House Speaker Nancy Pelosi, and had reviewed it with Trump and Republican Senate Majority Leader Mitch McConnell.

The Democrats' rejection once again casts uncertainty on the adoption of a new stimulus package before Biden's inauguration on January 20. And time is running out, as federal and state assistance for millions of Americans expires on December 26.

Democrats and Republicans in Congress, along with the Trump administration, have been negotiating for months but have been unable to agree on a successor bill to the $2.2 trillion CARES Act passed earlier this year to support the American economy.

The CARES Act included a programme of loans and grants for small businesses, one-time payments of as much as $1,200 to all Americans, and an expansion of the unemployment safety net, which economists credited with preventing an even worse downturn.

But much of that aid has expired, and Republicans and Democrats for months have sparred over how much to spend in another bill, and what to spend it on.

Earlier on Tuesday, McConnell suggested that lawmakers pass a targetted coronavirus relief plan that did not include the liability protections or the state and local government aid, as those have been among the more contentious provisions during months of arguments in Washington about a fresh coronavirus package.

But both Pelosi and Senate Democratic Leader Chuck Schumer dismissed McConnell's idea and accused him of trying to obstruct bipartisan efforts to reach a deal.

Late on Tuesday, Pelosi and Schumer said in a statement it was progress that McConnell had signed off on the $916 billion offer, but bipartisan talks were the best hope for a solution.

Lawmakers enacted $3 trillion in COVID-19 aid earlier this year but have not been able to agree on fresh relief since April. Both House and Senate leaders have said they will not leave town this year without approving more help.

President-elect Joe Biden, a Democrat, said on Tuesday that Congress should immediately fund vaccine distribution this month in case early efforts by the Trump administration stall.

(with inputs from agencies)