Around the time that the American Recovery and Reinvestment Act (the Recovery Act) was being developed, a report co-authored by Christina Romer and Jared Bernstein indicated that passage of such an economic stimulus package could avert economic calamity. Yet now, with the unemployment rate hovering close to 10 percent, the president is setting about cutting federal spending by hundreds of billions of dollars in the coming years. The president's cuts are imprudent in the short run, given their potential to smother the burgeoning economic recovery before it can fully take hold, and could impair the federal government's ability to respond to economic or environmental disasters.

When Congress was debating the Recovery Act in early 2009, the fear was that unemployment could potentially hit nine percent, necessitating large federal outlays to combat the failing economy. The nation blew past that mark soon after passage of the bill, and yet somehow, those earlier arguments no longer apply. Does Congress no longer believe that kick-starting the economy through an expansion of the deficit is as fiscally responsible as it was in early 2009? Has the president quit caring about the plight of the unemployed?

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A letter from Obama to Congress sent June 12 suggests that this is not quite the case. In it, the president asks Congress to move $50 billion in aid to state and local governments to stay layoffs of thousands of teachers, firefighters, and police officers. Congress is attempting to approve a bill that would extend Unemployment Insurance funding for millions of unemployed workers. And although it dropped critical funding for health insurance assistance, there is some glimmer of recognition that Americans are struggling. It remains a mystery, however, why Congress and President Obama refuse to do more.

The economic outlook is still bleak; even the Office of Management and Budget (OMB) predicts unemployment to remain above eight percent until 2013. But not only is the number of unemployed seriously high, the duration of their unemployment is also startling. According to the Bureau of Labor Statistics, those seeking employment for more than 27 weeks is at the highest level since data have been available (1967). Another measure of the unemployed – one that includes workers marginally attached to the labor force and those employed part-time for economic reasons – is also remarkably high. In other words, we are in the midst of a deep employment crisis. Meanwhile, President Obama wants to give in to the deficit hysterics by pushing for real spending cuts (see our companion piece in this week’s Watcher.)

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The fiscal austerity game is a dangerous one. The president has taken up the mantle of spending restraint, but his proposed cuts will do little to reduce the short-term federal budget deficit and nothing to avert the looming crisis in the long-term fiscal outlook. The proposed cuts ignore the simple fact that the non-security areas of the federal government that are vital for the nation’s well-being have been living off of table scraps for years.

The president should be congratulated for putting emphasis on performance improvements and program evaluation. This makes government more effective and can result in modest savings through reduction of waste and fraud. Additionally, we acknowledge that the budget is on an unsustainable path. In the long term, there will be a need for progressive tax hikes and spending cuts across the board, including cuts to military spending.

However, the agencies and programs that will be slated for spending reductions in the short-run are those that protect our country, from a struggling economy to lead in our children’s toys to offshore oil drilling. Today, we are confronted by a devastating oil spill disaster and by a recession that has buffeted millions of families. Tomorrow’s crises are unpredictable, and cutting back on federal spending will mean that we will be left ill-prepared to cope with the next disaster, economic or otherwise.

The Minerals Management Service (MMS) used to be a relatively unknown federal office, charged with regulating the nation's natural gas, oil, and other mineral resources. MMS is now in the public eye, thanks to the BP Deepwater Horizon disaster in the Gulf of Mexico. Although mismanagement at MMS surely contributed to its failure to properly oversee BP’s operations, MMS officials could have performed more rigorous onsite inspections with additional resources.

Regulatory oversight, through federal offices such as MMS, costs money but provides important protections to the American people. While MMS will likely benefit from increased scrutiny as well as increased funding, other public protection agencies that have remained out of the spotlight will not fare as well in the coming fiscal years.

Cuts to the U.S. Environmental Protection Agency (EPA) could result in fewer inspectors for its air or water quality programs. The Department of Health and Human Services (HHS) could cut Food and Drug Administration inspectors, making it more likely that the nation suffers another E. coli outbreak. As the president and Congress pursue budget cutbacks, we are left to wonder: when will the next Deepwater Horizon occur, what will it be, and will we as a nation be prepared to respond to the disaster without the adequate resources to do so?