By David Morgan and Patricia Zengerle

WASHINGTON (Reuters) – U.S. Republicans and Democrats faced difficult talks on Tuesday on how best to recover from the coronavirus pandemic, after Republicans unveiled a relief proposal days before millions of Americans lose federal unemployment benefits.

Senate Republicans announced on Monday a $1 trillion coronavirus aid package hammered out with the White House, which would slash the current expanded unemployment benefit from the $600 per week in addition to state unemployment, which expires on Friday, to $200.

Senate Majority Leader Mitch McConnell touted the proposal as a “tailored and targeted” plan to reopen schools and businesses, while protecting companies from lawsuits.

The plan sparked immediate opposition from both Democrats and Republicans. Democrats decried it as too limited, and too late, compared with their $3 trillion proposal that passed the House of Representatives in May.

Some Republicans called it too expensive.

The Republican proposal would give many Americans direct payments of $1,200 each, provide billions in loans to small businesses and help schools reopen.

The federal supplemental unemployment benefit has been a financial lifeline for laid-off workers and a key support for consumer spending. Democrats quickly denounced the cuts as draconian when millions of Americans cannot return to shuttered workplaces.

Many Republicans insist the high unemployment payout encourages Americans to stay home rather than go back to work. Their proposal would put the $200 weekly supplemental payment in place until states create a system to provide a 70% wage replacement for laid-off workers.

Democrats said the $200 suggestion is insufficient and would damage the economy, and scoffed at suggestions that people would rather stay home.

“People want to work, Republican friends. They just don’t have jobs to do it. We’re not going to let them starve while that happens,” Senate Democratic leader Chuck Schumer said in a Senate speech criticizing Republicans.

“Let’s get something done. America desperately needs our help,” he said.

Schumer and Democratic House Speaker Nancy Pelosi are due to meet later on Tuesday with Treasury Secretary Steven Mnuchin, after a session on Monday evening.

The partisan dispute comes as U.S. coronavirus cases have passed 4.3 million, with nearly 150,000 people killed in the country, and tens of millions out of work.

The Democratic-led House in May passed its $3 trillion coronavirus relief bill known as the “HEROES Act,” but the Republican-led Senate refused to consider it.

McConnell acknowledged that the Republican “HEALS Act” was just a starting point for negotiations that would need bipartisan support to become law.

In his remarks opening the Senate on Tuesday, McConnell accused Democrats of risking Americans’ well-being amid the health and economic crisis by playing politics.

“The HEALS Act is full of provisions that I would frankly dare my Democratic colleagues to actually say they oppose,” McConnell said.

(Reporting by David Morgan, Patricia Zengerle and Susan Cornwell in Washington; Additional reporting by Lisa Lambert in Washington; Writing by Patricia Zengerle; Editing by Bernadette Baum and Matthew Lewis)