US Senate Republicans have proposed a plan that will cut down the $600 weekly allowance for unemployed Americans to $200 per week.
The proposal sets the stage for negotiations with Democrats who have called it “totally inadequate”.
The plan includes $100bn for schools and issuing stimulus payments of up to $1,200 to most Americans.
Under the plan, the payment would replace a $600 boost to unemployment benefits during the pandemic.
The US has already spent more than $2.4tn on virus relief measures, sending billions of dollars in aid to businesses and individual households. But economists have warned since the spring that more would be necessary.
Senator Mitch McConnell said Republicans wanted to see how existing programmes were working, but had now produced a “tailored and targeted draft” to address the economic fallout of the pandemic.
The proposal would reduce the $600 weekly unemployment benefit supplement to $200 until states can set up a more targeted system that replaces 70% of a person’s previous wage.
The reduction reflects worries that the current benefits discourage workers from returning to work, since an estimated two thirds of recipients are getting more from unemployment than they did working.
Mr McConnell said Republicans “want to continue” the unemployment supplement, which expires this week. “But we have to do it in a way that does not slow down reopening.”
As well as money for direct payments to families and to help schools, Republicans said they want to put in place legislation to shield businesses from workers’ coronavirus health claims.