Mnuchin testifies as Senate GOP poised to offer slimmer COVID-19 relief bill

Capitol Hill -- With the collapse of bipartisan coronavirus relief talks, Senate Republicans are looking to introduce a scaled-down package as early as next week.

"We have a focused, targeted solution that we hope that the House would pass," Sen. John Barrasso, R-Wyo., a member of leadership, told reporters Tuesday, adding, "That's the goal, is to come back and vote to move to that."

The so-called "skinny" bill is an effort to garner support of nearly the entire GOP conference, something that was not achieved with the introduction of the Republicans’ $1 trillion HEALS Act in early August, focused on jobs, schools and liability protection. Nearly half of the GOP conference signaled opposition to that package, leaving its leader, Mitch McConnell, in a bind, requiring substantial Democratic support for any future package.

"We are very close to a bill that almost all GOP Senators can support," one Senate GOP aide told ABC News, something Republican leaders hope will pressure Democrats to return to the negotiating table or face political backlash.

The news came just before Treasury Secretary Steven Mnuchin testified before the House Coronavirus Select Subcommittee on Tuesday.

According to a draft of the legislation obtained by ABC News, Republicans intend to offer:

• A $300 weekly federal boost to unemployment benefits through the year's end, down from the $600 per-week check distributed under previous stimulus legislation which ended in July; loosens requirements for small business loans to be forgiven;
• An additional $258 billion for small business Paycheck Protection Program loans designed to allow those who have already borrowed to do so again;
• $29 billion for Health and Human Services to assist in the development and distribution of vaccines, therapeutics and diagnostics, and demands a plan for "how the vaccine distribution plan will focus efforts on high-risk, underserved and minority populations;
• $16 billion for testing and contact tracing; $105 billion for schools -- with substantially more going to those schools that have in-person classes.

And with rising concern about delays with the Postal Service ahead of the 2020 elections, Senate Republicans are looking to allot $10 billion in grant funding to help the cash-strapped agency. The postmaster general, Louis DeJoy, a GOP mega-donor, has come under fire from Democrats in the Senate and House, the latter of which intend to issue a subpoena to acquire documents related to a host of issues, including mail delays.

Still, the slimmed-down GOP bill is one that is sure to be dismissed by Democrats as inadequate, with Pelosi having called the HEALS Act "anorexic," and even a handful of Republicans who have refused any further spending related to the pandemic citing sky-high deficit concerns.

But the Senate GOP aide told ABC News that the legislation is expected to garner 51 Republican votes, two shy of conference unanimity.

Senate Republicans have been on daily conference calls throughout the August recess with Mnuchin and White House Chief of Staff Mark Meadows, including one this morning before the secretary testified before the House Select on the Coronavirus Crisis.

House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer have insisted that the administration agree to at least $2.2 trillion in relief for schools, state and local governments, small businesses, food security, unemployment and eviction assistance, and front-line worker aid. House Democrats passed a sweeping $3.4 trillion pandemic relief bill back in May, but the Senate Republican leader has refused to take it up saying it was too expansive and included Democratic "wish list" items unrelated to the pandemic.

In a recent letter to her Democratic caucus, the speaker said the president and Republicans "still do not comprehend the needs of the American people as lives and livelihoods are overwhelmed by the virus and its economic consequences."

The breakdown of bipartisan talks has grown more bitterly divisive over recent weeks.

After a phone call with Meadows less than a week ago, Pelosi dismissed the top White House official out of hand, referring to the former conservative North Carolina congressman as "what’s his name" and "not even the lead negotiator" but someone who was "staffing" Mnuchin.

"They’ve refused to meet," Mnuchin said Monday, accusing Democrats of acting in "bad faith," adding that he hopes McConnell "will enter new legislation next week" that will focus on "kids, jobs, (and) liability protection for small businesses."

During a hearing with the House Select Subcommittee on the Coronavirus Tuesday, Mnuchin was taken to task by Democrats who urged him to return to the negotiating table.

"Stop bragging about what we’ve already done. We have people who are hurting," admonished Rep. Maxine Waters, D-Calif. "If the children don't have a place to live and a bed to sleep in, school doesn't even matter...Please, please get back to the negotiating table. Forget about all of this name, blame mess...Let’s stimulate this economy. This is our job."

The president attempted to stave off some of the economic pain experienced by millions of Americans in the wake of this impasse, signing a series of executive orders including federally-boosted unemployment assistance and a deferral of payroll tax cuts, but the effect of the executive actions is unclear.

Mnuchin told lawmakers Tuesday that he still believes more needs to be done to address the pandemic.

"While we continue to see signs of a strong economic recovery, we are sensitive to the fact that more needs to be done," Mnuchin said. "We will continue to work with the Senate and House on a bipartisan basis…I believe that a bipartisan agreement still should be reached."

But Mnuchin's position puts him at odds with some Senate Republicans.

Some Republicans expressed surprise that GOP leaders were attempting what would be a futile effort, though noting that perhaps it was designed to "box in" Democrats politically.

"To be honest I’m surprised," a senior Senate Republican aide told ABC News.

But one Republican, Sen. John Kennedy of Louisiana, recently told reporters that the GOP effort to pass a bill without the necessary 60 votes for approval would be worth it.

"I can tell you this is my reason for doing it. We’ve spent a breathtaking amount of money which I think is along with the four bills that Congress has passed, and the actions taken by the chairman of the Federal Reserve...we held this economy together. And It’s been held together with duct tape and happy thoughts, but it's still been held together," said Kennedy, adding that small-business aid and more testing are key.

"I think additional money for testing, new types of testing continue to evolve every day, and I think it would be a smart investment to invest in new testing. I don’t think we could get back to normal as an economy or as a country until our schools open. They’re going to need help. They've incurred a lot of additional expense both in K-12 and in higher education, and that’s why I feel like this exercise is worth pursuing."

The Senate returns from recess next Tuesday, and there is very little time to address the increasing coronavirus crisis, as well as to avert a government shutdown by Sept. 30. Members expect to be out the entire month of October to focus on the campaign.

A former senior Republicans budget aide told ABC News recently that there is an expectation -- and indeed, already action underway -- that the two efforts will be merged into one, setting up a high-stakes showdown just a month before the election.