Congress was unable to reach an agreement Sunday on a $1 trillion-plus stimulus package that gives cash to families and keeps small businesses afloat during the COVID-19 pandemic, deepening fears of economic chaos as Rand Paul of Kentucky became the first U.S. senator to confirm he has contracted the disease.

Democrats balked at the Senate Republicans’ push to set aside $425 billion for loans to select companies and industries, dubbing it a “slush fund” for the Treasury to direct as it sees fit. They said the benefits are tilted toward corporations instead of working people.

Senate Majority Leader Mitch McConnell, Kentucky Republican, dared Democrats to reject the Senate measure in a procedural vote Sunday as tales of joblessness and woe poured in from every part of the nation.

“This national crisis is not going to wait around if Congress slips back into conventional politics or haggles endlessly over the finer points,” Mr. McConnell said.

“In other words, it is just about time to take ‘yes’ for an answer,” he said.

The measure failed to get the 60 votes needed to advance or even a majority — 47-47. House Speaker Nancy Pelosi, California Democrat, said her troops will go back to the drawing board with their own bill and hope it is compatible with the Senate legislation.

An angry Mr. McConnell said Democrats continue to “dicker” in the face of a global emergency and need to step up and reach an agreement.

Senate Minority Leader Charles E. Schumer, New York Democrat, said Republicans knew about Democrats’ objections but offered the bill anyway. He said the corporate “bailouts” weren’t transparent and that states and hospitals needed more help.

“Changes are being made to the legislation, even as we speak,” Mr. Schumer said.

Schumer spokesman Justin Goodman said Sunday evening that “Leader Schumer and [Treasury Secretary Steven T.] Mnuchin are working late into the night, and they just had another productive meeting.”

President Trump, speaking from the White House, said he hopes Congress can rally around a bill that has been drafted.

“It’s a bold package. It’s a big package,” Mr. Trump said.

The president said he doesn’t want companies to use stimulus money for stock buybacks, as Democrats fear, though he also doesn’t want key industries to fail.

“We can’t let the cruise lines go out of business,” Mr. Trump said.

The president was upbeat as the Senate vote unfolded. He said there is pent-up demand and the economy will soar once the pandemic is defeated.

“You will see our economy skyrocket once this is over,” Mr. Trump said. “We will win the war.”

Washington doesn’t have much time to spare.

More than 33,000 people in the U.S. have been infected with the coronavirus that causes COVID-19 and about 400 have died, according to the Johns Hopkins University tracker. Governors have placed severe limits on commerce so people stay apart and break lines of transmission. Those limits have led to massive layoffs and fears that many businesses will not survive the crisis.

Wall Street has had a string of massive sell-offs, erasing the gains of Mr. Trump’s presidency and raising fears of a painful recession.

Mr. Mnuchin was optimistic early Sunday. He said legislation would extend “retention loans” to small businesses that keep their workers on the payroll, cut checks of $3,000 for the average family of four and boost unemployment insurance benefits. The plan calls on the Federal Reserve to offer $4 trillion in liquidity to prop up the economy through broad lending programs.

“I think we have a fundamental understanding, and I look forward to wrapping it up today,” Mr. Mnuchin told “Fox News Sunday.”

Yet his meetings with congressional leaders ended without a bipartisan deal.

Efforts to stem the economic bleeding unfolded as Mr. Paul, a Republican, announced he tested positive for infection from the coronavirus and went into isolation, thinning the ranks of senators on Capitol Hill.

The senator said he feels fine and doesn’t have symptoms but received a test out of “an abundance of caution” given his travel and schedule of events, spokesman Sergio Gor said.

“He was not aware of any direct contact with any infected person,” Mr. Gor said. “He expects to be back in the Senate after his quarantine period ends.”

The senator attended the same event in Louisville as two others who later tested positive. Mr. Paul doesn’t think he interacted with the two people.

Mr. Paul is the first senator to test positive, and the test result raised concerns about his recovery and the potential spread of the virus in the chamber.

“I’ve never commented about a fellow Senator’s choices/actions. Never once,” Sen. Kyrsten Sinema, Arizona Democrat, tweeted with a link to a reporter’s tweet about Mr. Paul’s reported use of the Senate gym. “This, America, is absolutely irresponsible. You cannot be near other people while waiting for coronavirus test results. It endangers others & likely increases the spread of the virus.”

Mr. Paul’s office stressed that the senator had no known contact with anyone with a confirmed infection and went into isolation once he learned his results.

“We want to be clear, Senator Paul left the Senate IMMEDIATELY upon learning of his diagnosis. He had zero contact with anyone & went into quarantine,” his office tweeted. “Insinuations such as those below that he went to the gym after learning of his results are just completely false & irresponsible!”

Two House members, Rep. Ben McAdams, Utah Democrat, and Rep. Mario Diaz-Balart, Florida Republican, previously announced positive test results.

Mr. Trump and Vice President Mike Pence were tested, but their results came back negative.

The coronavirus was discovered in Wuhan, China, in December. It has since infected over 325,000 people worldwide and resulted in more than 14,000 deaths. Italy is experiencing waves of death, particularly in its northern regions. It is approaching a world-worst 5,000 fatalities from COVID-19.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the U.S. is not necessarily on the same trajectory as Italy. He said Mr. Trump moved more aggressively to shut out travelers from China early on.

“It isn’t that they don’t know what they’re doing,” he said of Italy. “I think they have a situation in which they’ve been so overwhelmed from the beginning that they can’t play catch-up.”

Spain remained a worry spot, with nearly 30,000 infections and 2,000 deaths. German Chancellor Angela Merkel went into quarantine after a doctor who gave her a vaccine against pneumococcal infection tested positive for infection from the coronavirus.

Mr. Trump continued to blame China for being slow to warn the world about the virus.

“We could have saved a lot of lives around the world,” Mr. Trump said.

Mr. Trump has banned foreign nationals from entering the U.S. if they have been in China, Iran or certain European nations within the previous 14 days.

The U.S. shut down its northern and southern borders Friday to all but “essential” traffic and will return all illegal immigrants immediately, before they have a chance to gain a foothold.

The administration pushed back the tax filing deadline from April 15 to July 15 and, for college borrowers, the president suspended federal loan payments and interest for 60 days. Mr. Trump also waived standardized testing requirements for elementary and high school students this year.

The president has defended his efforts after some governors and mayors used the Sunday talk shows to complain about Mr. Trump’s refusal to use a Korean War-era law, the Defense Production Act, to force companies to produce ventilators and personal protective equipment for hospitals.

Federal Emergency Management Agency Administrator Peter Gaynor said the federal government will reimburse states that buy equipment on the global market and that his agency has been shipping out equipment “continuously.”

“It is a dynamic and fluid operation,” he told CNN’s “State of the Union.”

Illinois Gov. J.B. Pritzker, a Democrat, told the program it’s the “Wild West” on the open market, so the system “should have been a coordinated effort by the federal government.”

Former Vice President Joseph R. Biden, who will likely take on Mr. Trump in November’s election, said top experts sounded the alarm about the viral outbreak for months but the president fell short or minimized it.

“He failed to expeditiously get us enough tests, respirators, ventilators and other vital equipment when his peers in other countries did their duty and stood up for their people,” Mr. Biden said. “He ignored my warning not to take China’s word about their containment of the virus, too.”

Later Sunday, Mr. Trump said he had doled out hundreds of thousands of masks to hard-hit states from the national stockpile and that tens of thousands of face shields and gowns had been delivered to New York, as governors complain about a lack of action from the federal government.

Mr. Trump said he is sending “federal medical stations” to hard-hit states with thousands of beds to handle patients, and he has empowered the U.S. Army Corps of Engineers to build medical facilities in New York.

“This will be a great victory,” said Mr. Trump, repeatedly calling the virus an invisible enemy. “There’s never been anything like this. And it’s vicious. Some people recover well, and some people have a hard time. We all know that.”

He also said he is giving Washington state, California and New York “maximum flexibility” to use the National Guard as they see fit to combat the spread of the coronavirus. He said the governors of those states will be “in command” and he hopes they are up to the task.

As case counts mount, states and cities are relying on “social distancing,” in which people stay home or remain at least 6 feet away from others outside of their homes.

New York has by far the most cases of any state, with about 16,000. Washington state is next on the list with nearly 2,000. Over 100 people have died in New York.

New York Gov. Andrew Cuomo lashed out at people who are still congregating in New York City, especially in parks. He said they are arrogant, self-destructive and insensitive to others.

“I don’t know what they’re not understanding. This is not life as usual,” the Democrat said. “It has to stop, and it has to stop now. This is not a joke, and I am not kidding.”

Mr. Cuomo said he agreed with Mr. Trump’s push to see whether an antimalarial drug, (hydroxy)chloroquine, works with azithromycin antibiotics in combatting the coronavirus. He said a clinical trial will begin in his state Tuesday.

“We’re going to see if they work,” Mr. Trump said at his White House briefing.

Mr. Cuomo, however, joined others in pressuring Mr. Trump to use his powers under the Defense Production Act, and New York City Mayor Bill de Blasio said military intervention is needed.

“All military personnel who are medically trained should be sent to places where this crisis is deep, like New York, right now,” Mr. de Blasio said on “Meet the Press.” “The military is the best logistical organization in the nation. If there are ventilators being produced anywhere in the country, we need to get them to New York. Not weeks from now or months from now — in the next 10 days.”

He said his city is entering a worrisome stretch of the crisis.

“April is going to be worse than March. And I fear May will be worse than April. So bluntly, it’s going to get worse, a lot worse, before it gets better,” he said. “But what would be progress? Real, consistent social distancing being enforced, people living with it. And hospitals that can function.”

⦁ Gabriella Muñoz contributed to this report.

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