A $ 600 (£ 459) jobless allowance paid weekly to tens of millions of unemployed Americans expired overnight after Republicans and Democrats failed to strike a deal on its extension.
Friday was the deadline for a coronavirus relief deal, which complements state benefits which are mostly well below $ 600.
Republicans want a relief plan smaller than the one passed by the Democratic-controlled House of Representatives.
Talks have resumed in Washington.
Unemployment has skyrocketed during the coronavirus pandemic, with 30 million Americans currently receiving unemployment benefits.
The US economy contracted at an annual rate of 32.9% between April and June – the biggest drop in decades.
- Millions of Americans “hanging on a thread”
- The US economy suffers the sharpest contraction in decades
The $ 600 payments are part of a $ 2.2 billion package passed by Congress in March as the coronavirus pandemic forced businesses to shut down.
But Congress did not anticipate the current resurgence of the virus, compounding the impact on the economy.
Two senior Democrats – US House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer – meet with two top Trump aides – Treasury Secretary Steven Mnuchin and US Chief of Staff White House Mark Meadows.
Ms Pelosi has made it clear that she is still opposed to any short-term agreement on the $ 600 relief payments.
The Covid-19 pandemic has killed at least 152,384 people in the United States – the highest death toll in the world.
‘An impossible situation’
Ms Pelosi on Friday rejected a Republican proposal to extend benefits for just a week, pending a full deal.
Republican Mark Meadows said Democrats have rejected reasonable offers and “what we are seeing is usual Democrat policy.”
Many unemployed people have already received their last top up of $ 600.
Danielle Grant, a single mom in San Francisco, told CBS that without the $ 600 relief, she would have a hard time paying her monthly mortgage and other bills. “I am already strapped for financial resources. It’s an impossible situation, ”she said.
His arts public relations firm lost business when museums and other venues were forced to close in the pandemic.
Ms Pelosi said the Republican leadership “and maybe the White House doesn’t understand the gravity of the situation”.
She said she rejected the one-week extension proposed by President Donald Trump’s team because such a move would happen “if you are on the path” to a deal, and “we are not.”
Democrats also rejected a subsequent White House proposal to reduce the weekly payment from $ 600 to $ 400 for the next four months.
Democrats want to maintain the $ 600 weekly supplement next year and are pushing for a new federal stimulus package to help states weather the crisis.
President Trump took to Twitter to attack both Ms Pelosi and Senior Senate Democrat Chuck Schumer for the standoff.