By Tracy Rucinski and David Shepardson

Oct 8 (Reuters)Two U.S. Republican senators pushed back against proposals to provide cash grants for airlines, saying there are still unused federal loans for the sector and that no other Fortune 500 companies have received taxpayer-funded grants.

U.S. airlines received a $50 billion bailout in March, half in payroll support that was primarily composed of cash grants and half in federal loans. They have been asking for another $25 billion in payroll aid to protect jobs for another six months.

“No one wants to see layoffs, but we have a responsibility to ensure that taxpayer resources are used in an appropriate and equitable manner,” Senators Pat Toomey and Mike Lee said in a joint statement.

Their comments come as lawmakers contemplated standalone legislation to help the struggling airline sector after the Trump administration walked away from talks over a larger COVID-19 stimulus package.

However, on Thursday U.S. President Donald Trump said talks with Congress have restarted over further COVID-19 economic relief and that there was a good chance a deal could be reached.

House of Representatives Speaker Nancy Pelosi was scheduled to have another conversation with Treasury Secretary Steven Mnuchin on Thursday, aide Drew Hammill said. She is also due to hold her weekly news conference at 10:45 a.m. (1445 GMT), when more details could emerge.

Airlines shares were sharply higher on Thursday, extending gains a day earlier on hopes for more aid.

American Airlines AAL.O and United Airlines UAL.O began the furlough of 32,000 workers last week, and tens of thousands more at those airlines and others have agreed to voluntary leaves or reduced hours.

American and United have each secured some $5 billion in Treasury loans, though data released earlier this week showed that only 60% of the $25 billion fund, which carries restrictions on executive compensation and share buybacks, had been tapped.

(Reporting by Tracy Rucinski in Chicago and David Shepardson in Washington, Editing by Franklin Paul and Bill Berkrot)

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