Congressional Leaders Weigh Narrow Covid-19 Relief Bill

House Majority Leader Steny Hoyer (D., Md.) indicated Sunday that Democrats may be open to a bill without state and local aid, which they have long insisted on in talks with Republicans.

“We need to act,” he said on CNN. “If acting means we’re not going to get everything we want, we think state and local is important, and if we can get that, we want to get it. But we want to get aid out to the people who are really, really struggling and are at great risk.”

House Speaker Nancy Pelosi (D., Calif.) and Treasury Secretary Steven Mnuchin held a 30-minute phone call Sunday afternoon, a spokesman for Mrs. Pelosi said. Mrs. Pelosi believes in the necessity of state and local aid and told Mr. Mnuchin during the call that the two parties should find a compromise on liability protections, the spokesman said. They are expected to speak again Monday.

The bipartisan group is preparing to split their proposal into two parts, according to people familiar with the talks, segmenting $160 billion in state and local aid and liability protections into their own legislation. The other $748 billion in aid, covering $300 a week to state unemployment benefits for four months, $300 billion in aid to small businesses, and $35 billion for health-care providers, among other measures, would be the second bill.

Staff for Senate GOP leadership have started reviewing elements of the bipartisan group’s proposal that have support from both parties, one of the people said.

The bipartisan group’s proposal on liability protections will call for requiring plaintiffs in coronavirus-related lawsuits to prove that a defendant acted with gross negligence to expose people to the virus, according to a person familiar with the proposal. Mr. McConnell’s original proposal on liability protections would have created a gross negligence standard, a step that Democrats had been hesitant to embrace earlier in the talks.

Congress faces a series of coming deadlines to pass a new aid package. Current government funding lasts through Dec. 18, and lawmakers have aimed to approve more coronavirus aid in conjunction with a broader spending package. A number of coronavirus relief provisions approved in the spring will expire at the end of the year, further prodding lawmakers to agree soon to more aid.

A new wrinkle in the negotiations on the full-year spending bill emerged over a long-running push to end surprise medical billing. On Friday night, Democratic and GOP leaders of four congressional committees announced a rare bipartisan, bicameral agreement, also supported by the White House, to install new patient protections and put in place a new system for resolving billing disputes.

Mr. McConnell indicated opposition to including it in the year-end spending bill, a senior Democratic aide said. A senior GOP aide said Republicans were reviewing the 400-page proposal.

Surprise billing typically occurs when a patient is treated at a hospital that is in their insurance network by a medical professional who isn’t, which can lead to crippling medical charges.

President Trump has called for the next coronavirus aid package to include a new round of direct payments to Americans. “I want to see checks going for more money than they’re talking about going to people,” he said in an interview with Fox News that aired Sunday.

Sen. Joe Manchin (D., W.Va.), a member of the informal group of Republicans and Democrats working on the joint aid proposal, said on Fox News Sunday that he expects “we’ll have a bill produced for the American people tomorrow—$908 billion.” He said the group was on a call all day Saturday, “and we’ll be on the call again this afternoon to finish things up.”

Mr. McConnell indicated earlier this week that the liability measures at the center of the bipartisan talks were likely to be insufficient to earn GOP support.

Sen. Bill Cassidy (R., La.) said Sunday that he didn’t know if Mr. McConnell would allow the full bipartisan measure to come up for a vote.

“We’ve got to do something for the American people,” he said on CNN’s “State of the Union.” “What Leader McConnell decides to do, I don’t have control over. I only can do what I can do.”

Mr. Cassidy said he wished the Senate could approve both state and local aid and liability protections. But he said talks between congressional leaders over such an agreement had stalled.

“It would be great if we could pass that. It doesn’t seem that we can,” he said.

While lawmakers are racing to finish up their work this week, House Speaker Nancy Pelosi (D., Calif.) has raised the possibility of staying in Washington through the holidays if necessary, vowing not to leave town until another aid bill is approved.

—Nick Timiraos and Kristina Peterson contributed to this article.

Write to Andrew Duehren at [email protected] and Harriet Torry at [email protected]