WASHINGTON—House Speaker Nancy Pelosi (D., Calif.) and Treasury Secretary Steven Mnuchin are making a late push to try to reach a coronavirus-relief deal before the election, despite skepticism on Capitol Hill that an agreement is possible at this stage.
The two talked on the phone for 50 minutes Tuesday morning, one day after House Democrats unveiled a new, less expensive version of their previous aid package. The new bill shaved the price tag to $2.2 trillion, down from $3.5 trillion, and was expected to come up for a vote in the House potentially as soon as Wednesday. Mrs. Pelosi and Mr. Mnuchin were also expected to talk again Wednesday.
The string of conversations suggested the two officials were making a substantive attempt to see whether they could agree on a stimulus package to bolster the country’s health and economic recovery from the pandemic. Mrs. Pelosi told reporters after the meeting Tuesday that she was hopeful she could reach a deal with Mr. Mnuchin this week.
“Our conversation was a positive one. We’ll get back together tomorrow to see how we can find common ground,” Mrs. Pelosi said Tuesday on MSNBC.
White House chief of staff Mark Meadows said he had spoken with Mr. Mnuchin, along with President Trump. “So hopefully we’ll make some progress and find a solution for the American people,” Mr. Meadows told reporters.
Mrs. Pelosi and Mr. Mnuchin have struck deals on coronavirus aid in the past and just last week reached an agreement on a separate spending bill that is expected to pass the Senate on Wednesday. Still, lawmakers have been downbeat about the chances of reaching a new bipartisan accord on coronavirus aid with just five weeks left before the election.
Many Republicans have resisted a large new round of spending and expressed more confidence that the economy is continuing to recover, after a sharp slump earlier this year.
“The fact that both sides are actually engaging, which was a much better place than we were at, is a big deal,” said Rep. Josh Gottheimer (D., N.J.) who has been working with Republicans and Democrats to push for more coronavirus relief. “Now we’ve got to land the plane.”
Some Democrats were more optimistic that Mrs. Pelosi and Mr. Mnuchin might be more likely to reach an agreement without Mr. Meadows, who participated in previous talks that collapsed. But conservatives see Mr. Meadows as having a closer eye on spending.
“Conservative voters won’t show up at the polls if candidates spend irresponsibly, and Mnuchin should at minimum spend the money he still has before he asks for trillions more,” said David McIntosh, president of conservative group Club for Growth.
Mrs. Pelosi said Tuesday night the House would vote on the bill as part of her negotiations with the White House.
“The legislation that we plan to send to the floor will formalize our proffer to Republicans to come to negotiations to address the health and economic catastrophe in our country,” Mrs. Pelosi wrote in a letter to House Democrats Tuesday night. Previously, some Democrats had expected her to wait on a vote if the negotiations were going well.
Centrist Democrats facing tough races had pushed Mrs. Pelosi to restart negotiations, even if it meant accepting a more modest deal. A few weeks ago, House Majority Leader Steny Hoyer (D., Md.) drew up an outline of how a $2.2 trillion proposal could work, and last week Mrs. Pelosi said the House would produce new legislation.
Liberal lawmakers signaled Tuesday that they would likely back the new Democratic bill, even though many had pressed to include more spending, not less.
“The progressives want more in terms of monthly stimulus checks, in terms of rent relief, but I think there is a hope that we get something done,” said Rep. Ro Khanna (D., Calif.).
The new bill includes around $2.6 trillion in spending, offset by around $400 billion in revenue for an overall cost of around $2.2 trillion, bringing Democrats and Republicans closer together on an overall spending level. Mr. Meadows has said that the administration could support a roughly $1.5 trillion deal, although that figure remained too high for some Republicans on Capitol Hill.
Democrats’ new bill includes another round of direct checks to Americans, at $1,200 per taxpayer and $500 per dependent, and would renew the $600 in supplemental federal unemployment aid that expired in late July. The package would extend the Paycheck Protection Program, which ended Aug. 8, leaving more than $130 billion in funding unused.
The House bill would eliminate the $10,000 cap on the amount of state and local taxes that taxpayers can deduct from federal taxable income for just the 2020 taxable year. The earlier House bill eliminated it for 2020 and 2021.
One of the biggest sticking points between Democrats and Republicans has been whether to allocate more funding to cash-strapped state and local governments—aid that many in the GOP have opposed. House GOP leaders have counseled their members to vote against the new bill.
“This bill is yet another unserious, partisan messaging bill from Speaker Pelosi,” a spokeswoman for House Minority Whip Steve Scalise (R., La.) said Tuesday. “It has zero chance of becoming law, and Republicans won’t support it.”
In the bill released Monday, House Democrats included $436 billion for state and local governments, as well as a 15% increase in food-stamp benefits. The legislation also includes money for restaurants, airlines, child-care centers and performance venues hit hard by the pandemic.
To offset some of the cost, Democrats included provisions that would partially reverse changes that Congress made in March’s economic-relief law. Back then, lawmakers agreed to relax rules on how businesses can use losses incurred in 2018 through 2020 to offset past and current income. Democrats later argued that the provision gave away too much tax revenue to companies and high-income business owners.
The latest proposal would make several changes. Notably, it would prevent corporations from taking current losses and claiming them against taxes paid at the old 35% tax rate.
The bill would also tap uncommitted money tied to the Federal Reserve’s emergency-lending programs.
—Richard Rubin contributed to this article.
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8