Treasury Secretary Steven Mnuchin, left, walks to a meeting with Senate Minority Leader Sen. Chuck Schumer, D-New York, in his office on Capitol Hill in March. Credit: Andrew Harnik | AP

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WASHINGTON — One of the most celebrated pieces of the massive $2.3 trillion coronavirus relief package that’s just over 2 weeks old is on life support with no deal in sight to resuscitate it.

According to the latest projections, the U.S. Small Business Administration’s $349 billion appropriation for loans to eligible firms, which are forgiven if they use the money to keep workers on their payrolls, will run out of money by Friday.

The White House and Republican leaders want to boost that amount to $600 billion to give more small businesses an opportunity to get relief before the funding dries up. Democrats see an opportunity to fix flaws in the so-called Paycheck Protection Program that have become apparent since its April 3 rollout, as well as tack on hundreds of billions of dollars more for state and local governments and hospitals that are still bleeding cash.

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Their case has been bolstered by groups like the National Restaurant Association, which wants changes to the program in addition to more funding, and the U.S. Chamber of Commerce, which supports a related small-business loan fund that’s also short of cash.

On Saturday, the bipartisan leadership of the National Governors Association — including Democratic Gov. Andrew Cuomo, from Senate Minority Leader Chuck Schumer’s home state of New York — asked for as much as $500 billion in federal aid for states.

That’s far in excess even of what Schumer and House Speaker Nancy Pelosi, D-California, have proposed so far, and doesn’t include additional direct aid to local jurisdictions. But Cuomo and Maryland Gov. Larry Hogan, a Republican, said without more funds, “states will have to confront the prospect of significant reductions to critically important services all across this country.”

Talks between top Democratic leaders and their negotiating partner, Treasury Secretary Steven Mnuchin, got off to a seemingly positive start Friday. Schumer said a phone call with Mnuchin had been “constructive” and added that a bipartisan deal was possible “early next week.”

But sources familiar with the discussions say not much progress was made over the weekend, due in part to the Easter holiday. After it became clear that the small-business lending fund had burned through roughly half its money in one week, with the daily “burn rate” only ramping up, GOP leaders on Saturday appeared to undercut attempts at a compromise.

“American workers are in crisis,” Senate Majority Leader Mitch McConnell of Kentucky and House Minority Leader Kevin McCarthy of California said in a joint statement. “Nobody except Washington Democrats seems to be unclear on this fact or confused about the urgency.”

The initial $349 billion in the huge relief bill President Donald Trump signed March 27 was intended to cover payroll, rent, mortgage interest and utility costs for eligible firms that apply before June 30. Loan amounts can be for up to 250 percent of monthly payroll expenses, and eight weeks’ worth of debt is forgiven if loan recipients use the money for intended purposes and spend at least three-fourths of the money on payroll.

To Democrats, the answer is simple: a negotiated solution that pumps more money into the SBA loan fund, but also moves in their direction in three chief areas. Pelosi’s office said it told Mnuchin in their call Friday that the SBA cash infusion “must not solidify the disparity in access to capital faced by many small businesses in underserved areas.”

The Democrats’ alternative to the Republicans’ two-page bill adding $251 billion to the small-business fund would set aside only half of the money for the existing program. An extra $125 billion would be allocated differently, including $60 billion for smaller financial institutions that specialize in lending to minority-owned businesses and those without established relationships with the big banks that dominate the existing SBA program.

An additional $50 billion would replenish funding for disaster loans of up to $2 million each available to businesses for “economic injury.” According to Democrats, the $50 billion appropriation would subsidize some $300 billion in additional loans.