Donald Trump said he was preparing to issue executive orders to help Americans bear the economic brunt of the pandemic, as the White House and Democrats remained at loggerheads over new stimulus legislation.

White House and Treasury officials have held days of talks with Democratic leaders on another rescue plan, as millions of Americans remain out of work. The US president is using the threat of executive action to persuade Democrats to move closer to his position.

Outstanding issues include whether to renew $600-a-week in emergency unemployment benefits, which ended last week. Democrats also want the rescue package to include almost $1tn to help cities and states dealing with falling tax receipts and dramatically rising healthcare costs.

On Twitter Mr Trump signalled his interest in extending emergency unemployment assistance — without specifying a level — and pushed his proposal for a reduction in the payroll tax, which is used to finance social insurance programmes such as social security and Medicare.

“I’ve notified my staff to continue working on an executive order with respect to payroll tax cut, eviction protections, unemployment extensions and student loan repayment options,” he wrote.

Mr Trump has repeatedly accused the Democrats of playing politics. But Chuck Schumer, the top Democrat in the Senate, accused the president of doing the same. He said negotiations had been difficult because Republicans wanted to “pinch pennies” during a national emergency.

“The president and his aides and his party in Congress are not even awake to the crisis in our country,” Mr Schumer said on Thursday.

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Another 1.2m Americans applied for jobless benefits last week, the US labour department said on Thursday. While the claims were down from the previous week, concerns are rising that recent spikes in Covid-19 cases in sunbelt states will slow the economic recovery.

Mr Trump faces a conundrum because he is wants a stronger economy to boost his re-election odds, but has come under intense fire for his handling of the pandemic, including for pushing states to reopen more quickly.

His threat to use executive action came as Nancy Pelosi, the Democratic speaker of the House of Representatives, and Mr Schumer prepared to hold another day of talks with Mark Meadows, White House chief of staff, and Steven Mnuchin, the Treasury secretary.

Negotiators have repeatedly said they hope to strike a deal this week, but appeared to remain far apart after talks on Wednesday. Democrats want a $3.4tn package, while Republicans have pushed for something closer to $1tn. Mr Trump has accused the Democrats of wanting to bail out cities and states that he asserts are badly run by Democrats.

Mitch McConnell, the Republican Senate majority leader, has not taken part in the bipartisan talks, but Mr Meadows and Mr Mnuchin have met with him regularly. He has had to contend with a Republican caucus that is sharply divided over how to prop up the economy. The Kentucky senator acknowledged on Wednesday that as many as 20 Republican senators thought the US had “already added enough to the national debt”.

Mr McConnell told reporters that he had met Mr Trump on Thursday morning, but provided no details about the meeting.

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Richard Shelby, a veteran Republican senator, said the Democrats and Republicans remained at “an impasse” and that the odds of both sides reaching any agreement in the coming days “doesn’t look promising”.

Mr Shelby said he thought Mr Trump could do a “lot of things” by executive order, including suspending the payroll tax. But Chuck Grassley, another longtime Republican senator, poured cold water on the idea. In addition to questioning whether Mr Trump had the legal authority, he said the idea made no economic sense.

Meanwhile, a union-backed push to extend payroll support for US airlines until the end of March is gaining steam. Sixteen Republican senators on Wednesday signed a letter supporting another $25bn for airlines to avoid mass furloughs. Their support for the additional aid, already backed by a majority of lawmakers in the Democratic-controlled House, raises pressure to include it in a final package.

The airlines received $50bn in aid in March to keep pilots, flight attendants and other employees on payroll until September 30, with the expectation that passenger traffic would have recovered by then. But data from the Transportation Security Administration shows traffic is still down 75 per cent compared with a year ago.

Aviation unions have pushed to have the payroll support programme extended. Sara Nelson, president of the Association of Flight Attendants-CWA, which represents almost 50,000 flight crew, said her members had “burnt up congressional phone lines over the past week”.

Follow Demetri Sevastopulo and Lauren Fedor on Twitter: @dimi and @laurenfedor

Via Financial Times