WASHINGTON (Reuters) — U.S. House of Representatives Speaker Nancy Pelosi on Thursday said legislation to help airline companies survive the fallout from the coronavirus pandemic was a matter of national security and could only move through Congress with guarantees that lawmakers will work on a more comprehensive aid bill.

In an interview with Bloomberg TV, Pelosi also expressed confidence that she and Treasury Secretary Steven Mnuchin will be able to reach an agreement on the amount of aid in new legislation to "crush" COVID-19 cases, which are still rampant in the United States.

Pelosi said there was "a clear understanding" that airlines aid had "to be in the context of a fuller bill. They don't have to happen at the same moment but they have to be happening with the assurance that we will go beyond the assistance to the airlines."

Earlier, at a weekly news conference, Pelosi said, "There is no standalone bill without a bigger bill."

The Democratic speaker particularly wants to dispatch hundreds of billions of dollars to state and local governments to help them grapple with falling revenues and worries of laying off police, firefighters and other front-line workers as the pandemic hobbles the U.S. economy.

Rather than pass a comprehensive bill, along the lines of a measure approved in mid-May by the Democratic-controlled House, the Trump administration is focused on providing separate "standalone" bills.

Besides helping struggling U.S. airlines, they want to deliver another round of $1,200 direct payments to Americans.

U.S. stocks, which have been highly sensitive to the talks, dipped following Pelosi's comments at her press conference.

"We're at the table. We want to continue the conversation. We've made some progress, exchanging language, and then, so we'll see how we connect," Pelosi told reporters referring to negotiations with Mnuchin.

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Coronavirus aid hopes evaporate as Trump ends talks with Democrats

Prospects for more aid for Americans struggling through the COVID-19 pandemic and U.S. airlines seeking to avert a wave of layoffs crumbled on Tuesday when President Donald Trump ended negotiations with Congress over a large coronavirus bill.

Senate Majority Leader Mitch McConnell, at a news conference in his home state of Kentucky, said, "We do agree that another rescue package is needed. We have vast differences about how much we should spend." He said the looming Nov. 3 U.S. elections have made it harder to reach a bipartisan compromise.

Earlier on Thursday, Trump told Fox Business network in a telephone interview about talks, "Now they are starting to work out." Two days ago, he cut off negotiations via a post on Twitter, saying there would be no more talks on a deal until after the Nov. 3 presidential and congressional elections.

Pelosi spoke to Mnuchin on Wednesday evening and the two were scheduled to talk again on Thursday, according to Pelosi aide Drew Hammill.

Democrats have been pushing for $25 billion in new aid to alleviate airline companies' planned layoffs. But they have called for at least $2.2 trillion in wide-ranging aid, while top Trump aides have signaled a willingness for around $1.6 trillion.

Trump, who was diagnosed last week with COVID-19, is trailing Democratic presidential candidate Joe Biden in public opinion polls less than a month before the election.

Worries over the pandemic top voters' concerns and Trump has gotten low marks on his handling of it.

Meanwhile, White House economic adviser Larry Kudlow told Fox News that the U.S. economic recovery does not depend upon another stimulus bill, despite warnings from Federal Reserve Chairman Jerome Powell that action was needed.

But Kudlow added that the administration wants to see "standalone" bills to provide additional unemployment assistance, an extension of the Paycheck Protection Program small business loans, stimulus checks for individuals and education aid.

All these components would make for a package with a high price tag -- possibly well beyond anything Senate Republicans would support.

Two conservative Republicans, Sens. Mike Lee and Pat Toomey, on Thursday questioned any new aid to U.S. airlines, saying that no other Fortune 500 firms have received taxpayer-funded grants and that they should rely on existing long-term federal loans.

"The excess capacity of the airline sector will not be resolved in the near future and continuing to force the entire payroll obligation onto the taxpayers is not sustainable," Toomey and Lee said in a statement.

Many Senate Republicans have balked at spending anything over $1 trillion in new aid, with some of them opposed doing anything beyond the more than $3 trillion enacted earlier this year.

McConnell, a Republican, wants to concentrate in the weeks before the election on confirming Amy Coney Barrett to the U.S. Supreme Court vacancy created by the death of Justice Ruth Bader Ginsburg.

(Reporting by Patricia Zengerle, Susan Heavey, Lisa Lambert, David Morgan, Susan Cornwell and Richard Cowan; Editing by Chizu Nomiyama and Alistair Bell)

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