Ebola costs encourage budget flexibility among U.S. Republicans

WASHINGTON (Reuters) - Worries about Ebola are chipping away at some congressional Republicans' support for maintaining across-the-board spending caps on U.S. government agencies and the military.

An increasing number of Republicans are speaking out in favor of Ebola "emergency" funds, which would be passed outside of the normal budget process, and would not require offsetting spending cuts or explicit sources of revenue.

"I think we're going to give the money that's needed," Republican Representative Blake Farenthold of Texas told Reuters, when asked about emergency funds. "If they need more, they need to ask for it."

Farenthold and others open to special measures for Ebola generally insisted that any broad increase in spending would need to be paid for with cuts. And the pre-election pledges to fight Ebola from rank and file Republicans and some party leadership could still have strings attached.

But concerns about the disease are adding to pressures on the 20-month-old "sequester" spending caps. These include the growing costs of fighting Islamic State militants in Iraq and Syria, maintaining U.S. military superiority over a more aggressive Russia and addressing a surge of child migrants from Central America. Some see concern over Ebola paving the way for other action.

Lawmakers and aides now expect an emergency funding request from the Obama administration within days to provide more money for the Centers for Disease Control and other agencies to stop the virus from spreading in West Africa and in the United States. A White House spokeswoman declined to comment on any Ebola request.

"Whatever the CDC thinks they need, we'll give it to them," Senate Republican leader Mitch McConnell said in a recent MSNBC interview, referring to Ebola funding.

Congress' deficit-cutting fervor has cooled somewhat as an economic rebound and tax increases have more than halved the government’s deficits to $483 billion last fiscal year from the recession-driven $1 trillion-plus that were prevalent when the controls were enacted in 2011.

Approving emergency funds is probably the easiest way for Congress to circumvent the budget caps. Congress did this in August when it approved $16 billion to speed medical care to veterans languishing on long waiting lists at Veterans Affairs Department clinics and hospitals.

Lawmakers could also raise caps through a one-or-two year budget agreement like one crafted last year.

The most difficult change would be a comprehensive budget deal in Congress that ends seven future years of caps.

Many Republican lawmakers, including Farenthold, a member of the conservative Tea Party faction, have been chafing at the spending controls on the military and are talking more openly about easing the sequester outright. Farenthold said he hoped to be able to work with Democrats to target alternative cuts.

"I think there’s a good chance it gets replaced at some level," Republican Representative Tom Cole said of the sequester. He said the building pressures from Ebola and other "international imperatives," along with lower deficits, mean that Congress has a better chance of reaching an agreement to change sequester.

"The stars are beginning to align so that we can achieve something, but it will have to be a compromise," the ally of House Speaker John Boehner told Reuters.

Although he supports offsetting savings, he said Republicans may be more open to allowing higher tax revenue to be an offset to spending if it is part of a broader tax reform plan that boosts economic growth. Previously, he has ruled out any tax increases after the "fiscal cliff" tax hikes were passed in January 2013.

There is still broad resistance to anything that could be interpreted as a tax increase among the party's most conservative wing, but more conservatives are talking about the need for a sequester replacement. The relatively modest size of Ebola funding makes it less controversial. International Medical Corps, a non-profit group working in West Africa, estimates that it will cost $1.6 billion over the next six months to bring the disease under control.

    "I didn’t vote for sequestration, I’m for ending it," Representative Jim Jordan said. Jordan, one of the most conservative Republicans in Congress, told Reuters the "pressing" issues from Ebola to Islamic State represent emergencies that need funding, though he added that he will insist on spending reductions elsewhere in the budget to offset increases in spending for Ebola and the military.

"Let's hope (Ebola) forces the hand to increase military spending and make savings and reductions other places so that we actually are treating taxpayers with the respect that they deserve," he said. A year ago, he vowed that Republicans would stay united in defending the spending caps.