Treasury Secretary Steven Mnuchin floated a new $916 billion coronavirus relief offer late Tuesday that would scale back proposed unemployment benefits to offer a second round of tax rebate checks.

Mnuchin said in a statement that he walked Speaker Nancy Pelosi through the plan, which he’d previously vetted with President Donald Trump and House and Senate GOP leaders.

The proposal builds off of a slightly smaller framework for a $908 billion package unveiled last week by a bipartisan group of Senate and House lawmakers, who have been working to nail down language on liability protections for businesses, health care providers and educators.

Mnuchin said the administration’s proposal would provide a “robust” liability shield as well as money for state and local governments. Sources familiar with the plan said it includes $160 billion for states and localities like the bipartisan plan would.

But it would considerably scale back the $180 billion for unemployment insurance the Senate and House group has been discussing, which would provide an extra $300 weekly federal benefit for four months.

Instead, the package includes $164 billion for direct payments to household worth up to $600 per person, according to House Minority Leader Kevin McCarthy. That’s half the amount for adults in the $2 trillion March aid package, but it’s a boost from $500 per child.

Top Democrats weren’t sold on the prospect, even though they back additional rebate checks.

While Pelosi and Senate Minority Leader Charles E. Schumer said the offer represented “progress,” they argued the bipartisan group’s plan was superior and that it was “unacceptable” to cut back the unemployment provisions to just $40 billion.

“People can’t live on the UI payment that’s not enhanced,” House Majority Leader Steny H. Hoyer, D-Md., told reporters.

A $600 federal unemployment benefit lapsed in late July; beneficiaries briefly received an extra $300 in August and September, but now are living on state benefits alone, which averaged roughly $319 per week at the end of October.

Unemployment recipients are “out of a job, they’re not getting income,” Hoyer said. “And I think targeting it to them is a more efficient way of giving money to people who need it” than sending rebate checks out to all households.

Still, a White House offer of more than $900 billion with the blessing of top congressional Republicans appeared a positive step in the long-stalled pandemic response talks.

To buy more time to work out a final bargain on an aid package as well as fiscal 2021 appropriations and other unfinished business, lawmakers introduced a one-week stopgap funding measure Tuesday.

The continuing resolution would extend funding for all federal agencies through Dec. 18, avoiding a partial government shutdown starting Friday at midnight. The bill would also renew several expiring health care programs and temporarily stave off cuts to certain hospital payments.

The House plans to vote on the one-week bill on Wednesday. Senate Majority Leader Mitch McConnell said his chamber would take it up “as soon as we get it.”

Liability limbo

Despite apparent progress on a $900 billion-plus pandemic relief measure, the details of liability protections continued to vex negotiators.

McConnell on Tuesday called for abandoning the two biggest sticking points: liability protections and aid to state and local governments.

“What I recommend is we set aside liability and set aside state and local and pass those things that we agree, on knowing full well we’ll be back at this after the first of the year,” McConnell told reporters.

Schumer and Pelosi quickly rejected McConnell’s proposal. “He’s sabotaging good-faith negotiations because his partisan, ideological effort is not getting a good reception,” Schumer said at a news conference. Pelosi in a statement called McConnell’s suggestion “appalling.”

The members of the bipartisan group largely disagreed with McConnell’s suggestion that a bipartisan agreement on state and local aid and liability protections was out of reach.

Sens. Angus King, I-Maine, and Judiciary Chairman Lindsey Graham, R-S.C., who had been negotiating language on the liability portion, said late Tuesday they were “very close” to agreement between the two of them and hoped to finalize language by Wednesday.

King said they hope it “will equally dissatisfy both sides but get us to a place where we can pass the bill.”

Sen. Mitt Romney, R-Utah, a member of the bipartisan group, earlier in the day said lawmakers had a “general agreement” to propose a short-term moratorium on lawsuits that would “give states six months to come up with their own legislation” on liability protection.

King and Graham were trying to work through how to deal with injuries that occurred in 2020. Romney’s initial proposal was to provide immunity except for cases of gross negligence or willful misconduct, but Democrats argue that exception is too narrow.

Romney said King and Graham made a “real advance” toward a compromise with a proposal to provide defendants with “an affirmative defense” to prevent excessive liability claims.

Romney also said he favored creating health standards that employers must follow through the Occupational Safety and Health Administration to be protected from lawsuits.

Romney added the group had “made a lot of progress on state and local but there are a number of questions that are still unanswered.” He said there was general agreement to distribute 40 percent of the money directly to localities, but they hadn’t figured out the exact formula yet, including the mix of funds based on population or revenue shortfalls.

Foreign-trade zones, pensions

Meanwhile Senate Finance Chairman Charles E. Grassley, R-Iowa, said talks were ongoing with House Ways and Means Chairman Richard E. Neal, D-Mass., about a package of tax, trade and pension provisions.

Grassley said an administration push to restore a provision dropped from the U.S.-Mexico-Canada trade pact implementing legislation that could subject manufacturers in “foreign-trade zones” located near ports of entry to tariffs wasn’t resolved yet.

He said he favored the White House position, arguing leaving the provision out was unintentional, but that industry lobbying to maintain the status quo was fierce.

“It ought to be easy to resolve, because it was just an oversight that it wasn’t included” in the USMCA law, Grassley said. “Now that it wasn’t done, and some are taking advantage of it, they don’t want to give it up. So if we’d done it right in the first place, they wouldn’t have it. So it’s kind of an intellectually dishonest position.”

Critics of the provision argue that it was the White House that dropped the provision from its proposed implementing bill in the first place after stakeholders weighed in against it.

Grassley and Neal are also working toward a compromise to shore up cash-strapped union pension plans that could collapse in the coming years.

Grassley said no deal’s been reached yet after about 10 days of talks — though that could change any moment — but Republicans’ top concern is preventing the federal government from being a “perpetual backstop.”

Late Tuesday, Neal said the talks were going well and that he hoped he and Grassley could close out some open issues on Wednesday. Neal, however, refused to comment on whether legislation to crack down on surprise medical bills would hitch a ride on the year-end package.

Border, veterans disputes

Negotiations also continued on the underlying omnibus spending bill for fiscal 2021, but several sticking points remained unresolved, Senate Appropriations Chairman Richard C. Shelby said Monday. He appeared hopeful about finding a compromise to Trump’s $2 billion request for border wall construction that Democrats oppose.

“I think there’s a way to work that out,” Shelby, R-Ala., told reporters.

Also unresolved was a dispute over whether to exempt from statutory spending limits about $12.5 billion to pay for a program that gives veterans access to private health care outside the VA system in certain circumstances. House Democrats and Senate Republicans want to exempt that money to allow for additional spending in other nondefense programs without breaching the spending caps.

But McCarthy and the Trump administration have resisted that plan based on fiscal concerns. Shelby said a potential compromise may involve exempting some of the veterans funding and leaving some of it under the spending caps.

“I just don’t believe we’ll turn our backs on the veterans,” Shelby said.

Lauren Clason, Paul M. Krawzak, Niels Lesniewski, Jennifer Shutt and Doug Sword contributed to this report.