WASHINGTON, Dec 9 (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Wednesday that President Donald Trump would rather send $600 checks to Americans as part of a new coronavirus aid package than supplemental unemployment benefits, arguing that it would put more people back to work more quickly.

Mnuchin, speaking to reporters on a videoconference, said the $916 billion plan he proposed on Tuesday evening would use $40 billion to extend base unemployment benefits and spend $140 billion on direct payments.

A $908 billion bipartisan plan under negotiations by congressional leaders had called for $180 billion for unemployment benefits, including a supplemental payment of $300 a week for idled workers for 16 weeks. The $600 checks would go to both unemployed workers and those with jobs, and families would also get $600 per child, Mnuchin said.

"We obviously want to get people back to work. By sending out checks, we're putting money into the economy for people. This will have the impact of creating demand, which will have the impact of creating jobs," Mnuchin said.

"There are a lot of people who like checks, including the President, and there's a lot of support both among Republicans and Democrats," he added.

He said he was "cautiously hopeful" that the two parties could reach agreement on aid to support the economy until COVID-19 vaccines are widely available.

Haggling over aid proposals continued on Wednesday as the House of Representatives passed a one-week government funding measure to buy more time on a broader spending package and coronavirus relief

Mnuchin said that aside from the debate over unemployment benefits, the two major sticking points were disagreements over new funds for state and local governments and demands to shield businesses, school districts and non-profit groups from coronavirus-related lawsuits.

The Treasury proposal roughly mirrors the bipartisan proposal in other areas, including $160 billion for state and local governments, $320 billion for small businesses, and $82 billion for schools, with other funds for transportation, the postal service, child care and Community Development Financial Institutions to help under-served communities. (Reporting by David Lawder. Editing by Gerry Doyle)