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February 18, 2012

February 21, 2012

18Feb2012

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Obama Uses Old Ideas for Sequester

CQ TODAY ONLINE NEWS
Feb. 10, 2012 – 10:59 p.m.

By Paul M. Krawzak, CQ Staff

Lawmakers are likely to look closely at President Obama’s fiscal 2013 tax and spending plan, which will be released Monday — not for any initiatives he may propose but rather for ideas on how to avoid $1.2 trillion in automatic spending cuts over the next nine years.

Taken as a whole, the president’s budget will offer a replacement for the spending “sequester” required by last August’s debt limit law (PL 112-25); his alternative would rely on the tax increases and other savings he has advocated previously.

Obama will officially unveil his budget during remarks at Northern Virginia Community College in Annandale, Va., where he is expected to highlight proposals to promote education that he previewed during his State of the Union address last month.

The president also will recommend some other targeted spending increases, including hundreds of billions of dollars for infrastructure projects and job creation.

Senior administration officials said the budget would propose to reduce accumulated deficits by more than $3 trillion over a decade, in addition to almost $1 trillion in savings baked into the debt limit law. If adopted in full, the president’s budget would make the sequester unnecessary, an administration official said.

But lawmakers who are looking for options for avoiding the sequester beyond those proposals included in the budget may be disappointed. An administration official made clear the president intends to leave it up to Congress to work out the details of any alternative that falls short of adopting his recommendations.

Republicans are likely to be even more unhappy because Obama will rely on tax increases to help close the budget gap.

Under Obama’s budget request, the deficit would rise to $1.33 trillion, or about 8.5 percent of gross domestic product, in the current fiscal year from $1.296 trillion in fiscal 2011. The White House says the estimated $901 billion deficit in fiscal 2013 would equal about 5.5 percent of GDP.

As he has in the past, Obama will urge Congress to allow the 2001 and 2003 tax cuts for families that earn more than $250,000 annually to expire on schedule at the end of this year. The administration said that would generate almost $1 trillion in revenue over 10 years.

Half From Taxes

In a presidential election year during which little may be accomplished on Capitol Hill, finding a way to avoid the sequester is likely to be a top legislative concern. Many Republicans and some Democrats view the scheduled automatic cuts — half of which would come from defense programs — as potentially disastrous for the military.

Scott Lilly, a senior fellow at the Center for American Progress and former top Democratic House appropriations aide, calls the sequester the “huge sort of gorilla lurking behind the curtain.” And to Lilly, “Everything pales by comparison.”

Obama has threatened to veto any outright repeal of the sequester, but he has urged Congress to find what he calls a balanced alternative to it.

The president’s budget would achieve $1.5 trillion of its $3 trillion in deficit reduction through increased revenues, guaranteeing the plan will be dismissed in the Republican-dominated House.

Spending cuts in the budget request are based on measures that Obama proposed to the now-defunct Joint Select Committee on Deficit Reduction in September, as the panel was struggling to agree on a plan to cut the deficit by $1.5 trillion over a decade. They include $360 billion in cuts to Medicare, Medicaid and other federal health care spending and $278 billion in cuts to non-health mandatory spending, including agricultural subsidies and federal civilian retirement.

The deficit reduction committee shut down in November when it was unable to reach a consensus, which left a range of federal programs including defense facing $1.2 trillion in automatic spending cuts under the terms of the law.

Lawmakers from both sides of the aisle, starting with Senate Budget Chairman Kent Conrad, D-N.D., said it would be useful if Obama were to propose an alternative to the automatic spending cuts, while also acknowledging uncertainty about whether the sequester might be avoided.

“I think it’s a big issue,” said Sen. Jeff Sessions of Alabama, top Republican on the Budget panel. “It could really be helped if the president would make some suggestions about where his administration could save money.”

Sen. Rob Portman, R-Ohio, said he is particularly concerned about the effects of the automatic cuts on the Pentagon. Military leaders have “laid out some very serious concerns about their ability to provide for our national defense in the face of the additional cuts,” Portman said.

And Sen. Ben Nelson, D-Neb., said he is hoping for guidance from the White House. “If there isn’t something in there, I don’t think it’s wild to say that there will be efforts to try to find an alternative to sequestration in another way,” Nelson said. “When push comes to shove, I think everybody will be looking for a suitable alternative, not just a way out.”

Pressure Will Rise

While pressure is sure to build to deal with the threat of the sequester, which would take effect next January, observers are divided over the odds for success before the election.

Steve Bell, senior director of the Economic Policy Project at the Bipartisan Policy Center and a former top Senate Republican budget aide, said he doubts there will be any action to replace the sequester before an expected post-election, lame-duck session.

“I believe they will not be able to agree” before the election, Bell said, adding that repealing the automatic cuts could be a hard sell to some Republican senators.

Lilly sees it as more likely that there will be agreement on an alternative to the fiscal 2013 spending cuts before November.

“I don’t think they can put that off until the lame duck,” Lilly said. “By the time they get back from the election in mid- November they’re going to be within six weeks of this horrific reshaping of federal agencies with massive across-the-board cuts.”

Budget experts already are crunching the numbers to estimate how cuts of $109 billion will be made for fiscal 2013 if Congress does not block the sequester. About $16 billion would be cut from mandatory programs, mostly Medicare, and the rest to come from what amounts to the government’s basic operating budget, discretionary appropriations.

The debt limit law separates discretionary spending into defense, which includes the Pentagon and expenses related to nuclear weapons, and everything outside of defense. About $39 billion in fiscal 2013 would be cut from non-defense appropriations in fiscal 2013 and almost $55 billion would be cut from defense.

 

End of Earmark Ban Is Unlikely

By Humberto Sanchez

Roll Call Staff

Feb. 13, 2012, Midnight

 

Senate Minority Leader Mitch McConnell surprised many colleagues when he agreed to an earmark moratorium in November 2010.

Most Senate Republican leaders are hoping earmarks make a comeback, but after bowing to pressure from House Republicans and conservative elements in their Conference in 2010, some concede it might be difficult to roll back a self-imposed limit that remains politically popular with the GOP base.

The current temporary moratorium adopted by Senate Republicans and Democrats is set to expire at the end of this Congress, but with Republicans looking to control the House and Senate after the November elections, a return to Congressionally directed spending appears unlikely anytime soon.

“I am a … recovering earmarker, like many of us are around here,” Senate GOP Conference Chairman John Thune (S.D.) said.

“But I do think that the process has been abused. If we are ever going to return to an era where Congress has more of a role when it comes to appropriations, I think it’s going to be with significant changes and reforms. But at this point, everybody is sort of in agreement that the best thing to do is to keep the ban on.”

Sen. Roy Blunt (Mo.), Republican Conference vice chairman, said he could see a possibility for the return of earmarks. Blunt is a member of the Appropriations Committee, which, until the moratorium, had been the typical venue for earmarking.

Senate Minority Whip Jon Kyl (R-Ariz.) also said he believes that earmarks could return but only under a clear definition.

“There are still some questions about exactly what an earmark is,” said Kyl, who is retiring at the end of the year. “We have to have a common definition that everyone agrees to … and it’s fine with me to have that done in statute.”

But Senate Republican Policy Committee Chairman John Barrasso (Wyo.) thinks earmarks could be gone for good: “I think the American people are right that earmarks have been a significant problem. That is why I support the moratorium.”

Asked whether he thinks they will return, Barrasso said, “Hopefully no time soon.”

Minority Leader Mitch McConnell (R-Ky.) is key to how the Senate Republicans handle the issue.

As a longtime member of the Senate Appropriations Committee, McConnell is no stranger to earmarks and is known for his savvy political instincts.

That is why there was a collective gasp when McConnell — who had been an eloquent defender of the practice as one of Congress’ core responsibilities in controlling the power of the purse — agreed to the moratorium in November 2010.

McConnell’s move was more political necessity than a change of heart, sources said.

One Republican lawmaker said the Kentucky lawmaker was pushed to the right on the issue by the new makeup of the Conference after the 2010 elections, which saw a wave from tea-party-inspired candidates.

“He can count,” the lawmaker said. “That is the Mitch McConnell I know.”

McConnell’s spokesman pointed to his vote, and that of other GOP leaders, in favor of a permanent earmark ban amendment and to his speech in November 2010 in which he declared he had heard voters’ discontent and pledged to lead by example on “changing the way we do business, even on things we have defended in the past, perhaps for good reason.”

But since that speech, McConnell has not publicly weighed in on the debate other than voting for earmark-limiting amendments offered by other Senators.

The Senate GOP adopted a temporary ban for the current Congress after House Republican leaders made the move. But questions remain if the moratorium will be made permanent, given that champions continue to press for votes in the Senate.

Sens. Pat Toomey (R-Pa.) and Claire McCaskill (D-Mo.) have pledged to take every opportunity to force a vote on a proposal to make the current two-year moratorium permanent. A possible vote could come this week in connection with the surface transportation bill on the Senate floor.

The Senate voted earlier this month, 40-59, against making the ban permanent, with most GOP leaders (except for Blunt) supporting the proposal. Overall, seven Democrats voted for the ban and 13 Republicans voted against it.

Even without an amendment, what Senate GOP leaders decide could be dictated by the House GOP position and the posture of the next president. President Barack Obama opposes Congressional earmarks.

Speaker John Boehner (R-Ohio) “is not going to allow earmarks, so the question is moot,” one senior Republican aide said.

Senate Democrats are also not all on the same page regarding earmarks, but their top leaders all support going back to allowing Member-directed spending.

Earmarks have also suffered from recent scandals, which made the term “a dirty word,” said Steve Ellis, vice president of budget watchdog group Taxpayers for Common Sense. Lobbyists and lawmakers have gone to jail in recent years for linking campaign contributions to earmarks.

But there are still some GOP old bulls who believe earmarks should come back.

“I supported the moratorium to clean up the earmark process and to help as a part of the leadership gain consensus within our caucus, so I supported that,” said Sen. Lamar Alexander (Tenn.), who served as Republican Conference chairman before stepping down from leadership at the beginning of this year.

“But I’m still not ready permanently, to tell some Tennessean who comes and says to me: ‘What are you going to do about the Center Hill Dam, which is unsafe and which, if it fails during a flood, will put four feet of water into the city of Nashville?’ I’m not comfortable saying to them, ‘Well, all I can do about it is give you President Obama’s telephone number,'” he said.

But, sensing their momentum, earmark foes hope that the more they bring the issue up, the more political pressure will come to bear.

“I think [that] to vote against a moratorium on earmarking would be a very dangerous vote,” McCaskill said at a press conference last week.

 

President’s budget makes pay raise proposal official

Govexec.com

By Kellie Lunney

President Obama has proposed a 0.5 percent pay raise for federal workers in 2013, ending a two-year civilian pay freeze that began in 2011.

The White House’s fiscal 2013 budget request, however, also includes a proposal to increase the amount federal employees contribute to their government pensions by a total of 1.2 percent over three years beginning in 2013. The administration estimates the increase would save the government $27 billion over the next decade; officials estimate the current two-year pay freeze will save $60 billion over 10 years.

Neither proposal comes as a big surprise. In January, The Washington Post reported the administration would propose a 0.5 percent pay raise in its budget, and the White House has said it opposes legislative efforts to extend the current salary freeze.

In September 2011, Obama released a deficit reduction proposal that recommended increasing the amount federal employees contribute to their pensions over three years at a rate of 0.4 percent annually beginning in 2013. “While federal agency contributions for currently accruing costs of employee pensions would decline, these employers would pay an additional amount toward unfunded liabilities of the retirement system that would leave total agency contributions unchanged over the 10-year budget window,” the plan stated.

At the time, Obama called the changes “modest adjustments to federal retirement programs.”

In addition, the president’s fiscal 2013 budget would eliminate the Federal Employees Retirement System Annuity Supplement for new employees. That recommendation also was in the September deficit reduction plan.

“Overall, these changes are not expected to have a negative impact on the administration’s ability to manage its human resources, nor inhibit the government’s ability to serve the American people,” the budget document stated.

The president also is recommending the creation of a Commission on Federal Public Service Reform to look at ways to modernize federal personnel practices in areas including compensation, performance and mobility.

Federal employee unions praised the Obama administration’s support for ending the pay freeze, but were not pleased about the recommendation to increase the amount workers chip in for their pensions. “We are disappointed that the administration is asking federal employees to once again shoulder the burden of our deficits by increasing their pension contributions with no corresponding increase in the benefit,” said Matt Biggs, legislative and political director at the International Federation of Professional and Technical Engineers.

“This attack on federal retirements is a sop to the right wing,” said John Gage, president of the American Federation of Government Employees. “The GOP has insisted on huge federal retirement cuts in the highway bill and payroll tax conference, and this only serves to fan the flames.”

There are several proposals pending in Congress that would extend the federal pay freeze and raise the amount feds contribute to their retirement benefits. For a list of some of those proposals, see our Feb. 9 Pay and Benefits Watch column.

“Some people may say that at least it’s not as bad as the Republican proposals,” said Carl Goldman, executive director of the American Federation of State, County and Municipal Employees Council 26. “That’s a heck of a standard to judge what is correct and just.”

 

Expert: U.S. Must “Modernize” Cyber Defense Strategy

Published on Security Management (http://www.securitymanagement.com)

By John Wagley    

Created 02/10/2012 – 16:46

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02/13/2012

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By John Wagley

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Market-based incentives, rather than traditional regulations, may be more effective in countering cyber threats, according to one expert.


In order to effectively combat today’s cyber threats, the U.S. needs to focus more on creating new market-based incentives–allowing companies to develop their own cyber defenses–rather than creating new kinds of security regulations that can sometimes be burdensome and ineffective, according to Larry Clinton, president of the Internet Security Alliance.

The private sector is already being “extremely responsive” to cyber threats, said Clinton, speaking at a House Energy and Commerce subcommittee hearing Wednesday. He noted one estimate that the private sector will spend $80 billion on cyber security in 2011; by comparison, the Department of Homeland Security’s entire spending request for 2012 is just $57 billion.

But the current sophistication and frequency of ongoing cyber attacks has become overwhelming to many private sector organizations, he said. Attacks including Advanced Persistent Threats are carried out by highly sophisticated attackers. And, “[p]erhaps most indicative of these attacks, is that if they target a system, they will invariably compromise, or ‘breach’ it.” Clinton gave his testimony at a time when Congress is increasingly debating several major bills aimed at strengthening the country’s cyber security.

Companies presently have many sophisticated technologies and best practices to strengthen their defenses, Clinton said. The main challenge to cyber security is, in fact, more about economics than technology, he said. Many of these tools and strategies “are not…used because of cost and complexity.”

But creating new security requirements can be expensive and challenging to apply across diverse industries and organizations, he said. They can also be too slow to keep pace with the rapidly-evolving cyber threat.

The government could more effectively assist the private sector by creating new types of market incentives that could help companies take advantage of existing tools and best practices, he said. Incentives could come in the form of tax breaks, grants, and liability reforms that could help private sector organizations take greater advantage of security practices including information sharing, he said.

One existing House bill, from the Intelligence Committee, aims to increase public-private information sharing and create new market incentives for security. Another bill, from the Homeland Security Committee, aims to strengthen information sharing and to clarify the government’s authority over cyber security.

 

DHS budget would double cyber spending to $769 million

Nextgov.com

By Aliya Sternstein
02/13/2012

The Homeland Security Department nearly doubled its 2013 funding request for cybersecurity in an otherwise slimmed-down budget.

There is bipartisan support for improving computer network defenses, so the outlook may be positive for obtaining much of the proposed $769 million from Congress. The funding would go toward the National Cyber Security Division for protecting federal networks and coordinating with the private sector on safeguarding critical infrastructure systems such as utility grids.

In 2011, Homeland Security Secretary Janet Napolitano asked for $459 for the division. The Infrastructure Protection and Programs Directorate, which oversees the program and other cyber-related initiatives, also would be boosted from $888.2 million in estimated spending this year to $1.2 billion in fiscal 2013. By comparison, the Pentagon has asked for only a $200 million increase over last year’s $3.2 billion cyber request.

“Essential services, ranging from disaster assistance to Social Security to national defense . . . rely on a safe, secure and resilient government information and communications infrastructure,” President Obama stated in his budget. “Threats to this infrastructure — whether from criminal elements or nation-states — continue to grow in number and sophistication, creating the potential that essential services could be degraded or interrupted, and confidential information stolen or compromised, with serious effects.”

The Secret Service computer crime squad, a Homeland Security unit, would receive $55 million, or 4 percent, over this year’s request.

In addition, Homeland Security wants $10 million for online piracy probes, amid a fierce global debate between the entertainment industry and Internet companies over how to monitor the Web for intellectual property theft.

Overall, Napolitano would reign over a smaller department in 2013, with spending down $191 million, or 0.5 percent, from this year’s enacted level.

The total $39.5 billion budget proposes slicing $155 million from the Transportation Security Administration, including cuts to screening operations. It would subtract $105 million for the purchase and installation of explosives detection systems, providing $117 million versus $223 million this year.

It is unclear how much money would be devoted to rebuilding a failed $1.1 billion virtual fence along the Southwest border, but total funding for border security, fencing, infrastructure and technology would decrease from $400 million to $327 million. Instead of paying for the Secure Border Initiative network, spending would cover, in part, detection, surveillance and communications systems tailored to each region along the U.S.-Mexico boundary.

For immigration enforcement, the department would shift funding from jailing illegal aliens to instead electronically monitoring some individuals. Immigration and Customs Enforcement’s policy would be to only detain criminals, repeat immigration law violators, recent entrants and fugitives, according to White House budget documents.

A controversial DHS fingerprinting program called Secure Communities, which checks a suspect’s FBI prints against the department’s IDENT biometric database to determine immigration status, has been under fire for targeting innocents and minor offenders. “For low-risk individuals, ICE will work to enhance the effectiveness of alternatives to detention, which costs significantly less than detention,” the budget request states.

Homeland Security has asked for flat funding for immigration verification programs, such as e-Verify, an online service employers use to check the legal status of new hires. In both fiscal 2012 and fiscal 2013, the administration asked for $132 million. E-Verify is mandatory for federal contractors but voluntary elsewhere in the private sector.

The Homeland Security cuts would include administrative costs, such as overtime and travel, as well as some Federal Emergency Management Agency grants set for restructuring.

The House Homeland Security Committee this week plans to hold a hearing to question Napolitano about her 2013 budget priorities. The panel’s ranking Democrat, Rep. Bennie Thompson, D-Miss., said in a statement, “The consolidation of preparedness grants into one small pot is a cause for concern,” but added he understood the reality of financial constraints and was pleased to see cybersecurity and border security enhancements.

 

Submitted Statement — Senate Armed Services Committee (Budget Request)

As Submitted by Secretary of Defense Leon E. Panetta, Capitol Hill, Washington D.C., Tuesday, February 14, 2012

 

Chairman Levin, Senator McCain, members of the committee. I appreciate the opportunity to appear before you to discuss the President’s budget request for Fiscal Year 2013 (FY13).

Let me begin by first thanking you for your support for our service members and our military families. These brave men and women, along with the Department’s civilian professionals who support them, have done everything asked of them and more during more than a decade of war.

 

Defense Strategy Review

The FY13 budget request for the Department of Defense was the product of an intensive strategy review conducted by the senior military and civilian leaders of the Department with the advice and guidance of President Obama. The total request represents a $614 billion investment in national defense – including a $525.4 billion request for the Department’s base budget, and $88.5 billion in spending to support our troops in combat.

The reasons for this review are clear: first, the United States is at a strategic turning point after a decade of war and substantial growth in defense budgets. Second, with the nation confronting very large debt and deficits, Congress passed the Budget Control Act of 2011, imposing limits that led to a reduction in the defense budget of $487 billion over the next decade.

Deficit reduction is a critical national security priority in and of itself. We at the Department decided that this crisis presented us with the opportunity to establish a new strategy for the force of the future, and that strategy has guided us in making the budget choices contained in the President’s budget. We are at an important turning point that would have required us to make a strategic shift under any circumstances. The U.S. military’s mission in Iraq has ended. We still have a tough fight on our hands in Afghanistan, but over the past year we have begun a transition to Afghan-led responsibility for security– and we are on track to complete that transition by the end of 2014, in accordance with our Lisbon commitments. Last year, the NATO effort in Libya also concluded with the fall of Qadhafi. And successful counterterrorism efforts have significantly weakened al-Qaeda and decimated its leadership.

But despite what we have been able to achieve, unlike past drawdowns when threats have receded, the United States still faces a complex array of security challenges across the globe: We are still a nation at war in Afghanistan; we still face threats from terrorism; there is dangerous proliferation of lethal weapons and materials; the behavior of Iran and North Korea threaten global stability; there is continuing turmoil and unrest in the Middle East; rising powers in Asia are testing international relationships; and there are growing concerns about cyber intrusions and attacks. Our challenge is to meet these threats and at the same time, meet our responsibility to fiscal discipline. This is not an easy task.

To build the force we need for the future, we developed new strategic guidance that consists of these five key elements:

First, the military will be smaller and leaner, but it will be agile, flexible, ready and technologically advanced.

Second, we will rebalance our global posture and presence to emphasize Asia-Pacific and the Middle East.

Third, we will build innovative partnerships and strengthen key alliances and partnerships elsewhere in the world.

Fourth, we will ensure that we can quickly confront and defeat aggression from any adversary – anytime, anywhere.

Fifth, we will protect and prioritize key investments in technology and new capabilities, as well as our capacity to grow, adapt and mobilize as needed.

 

Strategy to FY13 Budget

We developed this new strategic guidance before any final budget decisions were made to ensure that the budget choices reflected the new defense strategy.

While shaping this strategy, we did not want to repeat the mistakes of the past. Our goals were: to maintain the strongest military in the world, to not “hollow out” the force, to take a balanced approach to budget cuts, to put everything on the table, and to not break faith with troops and their families. Throughout the review we made sure this was an inclusive process, and General Dempsey and I worked closely with the leadership of the Services and Combatant Commanders, and consulted regularly with members of Congress.

As a result of these efforts, the Department is strongly united behind the recommendations we are presenting today. Consistent with Title I of the Budget Control Act, this budget reflects $259 billion in savings over the next five years and $487 billion over the next ten years compared to the budget plan submitted to Congress last year. Under the five year budget plan, the base budget will rise from $525 billion in FY13 to $567 billion in FY17. When reduced war-related funding requirements are included, we expect total U.S. defense spending to drop by more than 20 percent over the next few years from its peak in 2010, after accounting for inflation.

This is a balanced and complete package that follows the key elements of the strategy and adheres to the guidelines we established. The savings come from three broad areas:

First, efficiencies – we redoubled efforts to make more disciplined use of taxpayer dollars, yielding about one quarter of the target savings;

Second, force structure and procurement adjustments – we made strategy-driven changes in force structure and procurement programs, achieving roughly half of the savings;

Finally, compensation – we made modest but important adjustments in personnel costs to achieve some necessary cost savings in this area, which represents one third of the budget but accounted for a little more than 10 percent of the total reduction.

Changes in economic assumptions and other shifts account for the remainder of the $259 billion in savings. Let me walk through these three areas, beginning with our efforts to discipline our use of defense dollars.

More Disciplined Use of Defense Dollars

 

If we are to tighten up the force, I felt we have to begin by tightening up the operations of the Department. This budget continues efforts to reduce excess overhead, eliminate waste, and improve business practices across the department. The more savings realized in this area, the less spending reductions required for modernization programs, force structure, and military compensation.

As you know, the FY12 budget proposed more than $150 billion in efficiencies between FY 2012 and FY 2016, and we continue to implement those changes. This budget identifies about $60 billion in additional savings over five years. Across the military services, new efficiency efforts over the next five years include:

The Army proposes to save $18.6 billion through measures such as streamlining support functions, consolidating IT enterprise services, and rephasing military construction projects;

The Navy proposes to save $5.7 billion by implementing strategic sourcing of commodities and services, consolidating inventory, and other measures;

The Air Force proposes to save $6.6 billion by reducing service support contractors and rephasing military construction projects;

Other proposed DoD-wide efficiency savings over the next five years total $30.1 billion, including reductions in expenses in the Office of the Secretary of Defense and the Defense Agencies.

Additionally, we are continuing the initiative to improve the Department’s buying power by seeking greater efficiency and productivity in the acquisition of goods and services. We are strengthening acquisition support to the warfighter, executing acquisitions more efficiently, preserving the industrial base, and strengthening the acquisition workforce. This budget assumes that these policies produce savings of $5.3 billion over the next five years.

In terms of military infrastructure, we will need to ensure that our current basing and infrastructure requirements do not divert resources from badly needed capabilities.

As we reduce force structure, we have a responsibility to provide the most cost efficient support for the force. For that reason, the President will request that Congress authorize the Base Realignment and Closure process for 2013 and 2015. As someone who went through BRAC, I realize how controversial this process can be for members and constituencies. And yet, it is the only effective way to achieve infrastructure savings.

Achieving audit readiness is another key initiative that will help the Department achieve greater discipline in its use of defense dollars. The Department needs auditable financial statements to comply with the law, to strengthen its own internal processes, and to reassure the public that it continues to be a good steward of federal funds. In October 2011, I directed the Department to emphasize this initiative and accelerate efforts to achieve fully auditable financial statements. Among other specific goals, I directed the Department achieve audit readiness of the Statement of Budgetary Resources for general funds by the end of calendar year 2014, and to meet the legal requirements to achieve full audit readiness for all Defense Department financial statements by 2017. We are also implementing a course-based certification program for defense financial managers in order to improve training in audit readiness and other areas, with pilot programs beginning this year. We now have a plan in place to meet these deadlines, including specific goals, financial resources, and a governance structure.

These are all critically important efforts to ensure the Department operates in the most efficient manner possible. Together, these initiatives will help ensure the Department can preserve funding for the force structure and modernization needed to support the missions of our force.

 

Strategy-driven Changes in Force Structure and Programs

It is obvious that we cannot achieve the overall savings targets through efficiencies alone. Budget reductions of this magnitude require significant adjustments to force structure and investments, but the choices we made reflected five key elements of the defense strategic guidance and vision for the military.

1. Build a force that is smaller and leaner, but agile, flexible, ready and technologically advanced

We knew that coming out of the wars, the military would be smaller. Our approach to accommodating these reductions, however, has been to take this as an opportunity – as tough as it is – to fashion the agile and flexible military we need for the future. That highly networked and capable joint force consists of: an adaptable and battle-tested Army that is our nation’s force for decisive action, capable of defeating any adversary on land; a Navy that maintains forward presence and is able to penetrate enemy defenses; a Marine Corps that is a “middleweight” expeditionary force with reinvigorated amphibious capabilities; an Air Force that dominates air and space and provides rapid mobility, global strike and persistent ISR, and; National Guard and Reserve components that continue to be ready and prepared for operations when needed.

To ensure an agile force, we made a conscious choice not to maintain more force structure than we could afford to properly train and equip. We are implementing force structure reductions consistent with the new strategic guidance for a total savings of about $50 billion over the next five years.

These adjustments include:

    Gradually resizing the active Army to 490,000, eliminating a minimum of eight BCTs and developing a plan to update the Army’s brigade structure;

    Gradually resizing the active Marine Corps to about 182,100, eliminating six combat battalions and four Tactical Air squadrons;

    Reducing and streamlining the Air Force’s airlift fleet by retiring all 27 C-5As, 65 of the oldest C-130s and divesting all 38 C-27s. After retirements, the Air Force will maintain a fleet of 275 strategic airlifters, and 318 C-130s – a number that we have determined is sufficient to meet the airlift requirements of the new strategy, including the Air Force’s commitment for direct support of the Army;

    Eliminating seven Air Force Tactical Air squadrons – including five A-10 squadrons, one F-16 squadron, and one F-15 training squadron. The Air Force will retain 54 combat-coded fighter squadrons, maintaining the capabilities and capacity needed to meet the new strategic guidance;

    Retiring seven lower priority Navy cruisers that have not been upgraded with ballistic missile defense capability or that would require significant repairs, as well as retiring two dock landing ships.

    The strategy review recognized that a smaller, ready and agile force is preferable to a larger force that is poorly trained and ill-equipped. Therefore, we put a premium on retaining those capabilities that provide the most flexibility across a range of missions. We also emphasized readiness. For fiscal 2013, the Department is requesting $209 billion in the base budget for Operation and Maintenance, the budget category that funds training and equipment maintenance among other aspects of operations. That represents an increase of six percent compared to the enacted level in 2012, even though the overall base budget will decline by one percent. Striking the right balance between force structure and readiness is critical to our efforts to avoid a hollow force, and we will continue to focus on this area to ensure that we make the right choices.

 

2. Rebalance global posture and presence to emphasize Asia-Pacific and the Middle East

    The strategic guidance made clear that we must protect capabilities needed to project power in Asia-Pacific and the Middle East. To this end, this budget:

        Maintains the current bomber fleet;

        Maintains the aircraft carrier fleet at a long-term level of 11 ships and 10 air wings;

        Maintains the big-deck amphibious fleet;

        Restores Army and Marine Corps force structure in the Pacific after the drawdown from Iraq and as we drawdown in Afghanistan, while maintaining persistent presence in the Middle East;

    The budget also makes selected new investments to ensure we develop new capabilities needed to maintain our military’s continued freedom of action in face of new challenges that could restrict our ability to project power in key territories and domains. Across the Services, this budget plan requests $1.8 billion for FY13, and a total of $3.9 billion over the next five years, for enhancements to radars, sensors, and electronic warfare capabilities needed to operate in these environments.

    Other key power projection investments in FY13 include:

        $300 million to fund the next generation Air Force bomber (and a total of $6.3 billion over the next five years);

        $1.8 billion to develop the new Air Force tanker;

        $18.2 billion for the procurement of 10 new warships and associated equipment, including two Virginia-class submarines, two Aegis-class destroyers, four Littoral Combat Ships, one Joint High Speed Vessel, and one CVN-21-class aircraft carrier. We are also requesting $100 million to develop the capability to increase cruise missile capacity of future Virginia-class submarines;

        $2.2 billion in FY13 for the procurement of an additional 26 F/A-18E/F Super Hornet aircraft;

        $1.0 billion in FY13 for the procurement of 12 EA-18G Growler aircraft, the Navy’s new electronic warfare platform that replaces the EA-6B.

        $38 million for design efforts to construct an Afloat Forward Staging Base planned for procurement in FY14. This base can provide mission support in areas where ground-based access is not available, such as counter-mine operations, Special Operations, and ISR.

 

3. Build innovative partnerships and strengthen key alliances and partnerships

     The strategy makes clear that even though Asia-Pacific and the Middle East represent the areas of growing strategic priority, the United States will work to strengthen its key alliances, to build partnerships and to develop innovative ways to sustain U.S. presence elsewhere in the world.

     To that end, this budget makes key investments in NATO and other partnership programs, including:

        $200 million in FY13 and nearly $900 million over the next five years in the NATO Alliance Ground Surveillance system. This system will enable the Alliance to perform persistent surveillance over wide areas in any weather or light condition.

        $9.7 billion in FY13, and $47.4 billion over the next five years, to develop and deploy missile defense capabilities that protect the U.S. homeland and strengthen regional missile defenses. The request includes the Phased Adaptive Approach that is being deployed first in Europe and is designed to protect NATO allies and forces from ballistic missile threats.

        $800 million for the Combatant Commanders exercise and engagement program. Jointly with the State Department, we will also begin using the new Global Security Contingency fund that was established at our request in the FY12 legislation.

 

     The new strategy also envisions a series of organizational changes that will boost efforts to partner with other militaries. These include:

        Allocating a U.S.-based brigade to the NATO Response Force and rotating U.S.-based units to Europe for training and exercises;

        Aligning an Army BCT with each regional Combatant Command to foster regional expertise;

        Increasing opportunities for Special Operations Forces to advise and assist partners in other regions, using additional capacity available due to the gradual drawdown from the post-9/11 wars.

 

4. Ensure that we can confront and defeat aggression from any adversary – anytime, anywhere

    The strategic guidance reaffirmed that the United States must have the capability to fight more than one conflict at the same time. Still, the strategic guidance recognizes that how we defeat the enemy may well vary across conflicts.

    This budget invests in space, cyberspace, long range precision-strike and the continued growth of special operations forces to ensure that we can still confront and defeat multiple adversaries even with the force structure reductions outlined earlier. It also sustains the nuclear triad of bombers, missiles and submarines to ensure we continue to have a safe, reliable and effective nuclear deterrent.

    Even with some adjustments to force structure, this budget sustains a military that is the strongest in the world, capable of quickly and decisively confronting aggression wherever and whenever necessary. After planned reductions, the FY17 joint force will consist of:

    An Army of more than one million active and reserve soldiers that remains flexible, agile, ready and lethal across the spectrum of conflict, with 18 Divisions, approximately 65 Brigade Combat Teams, 21 Combat Aviation Brigades and associated enablers.

    A Naval battle force of 285 ships – the same size force that we have today –that will remain the most powerful and flexible naval force on earth, able to prevail in any combat situation, including the most stressing anti-access environments. Our maritime forces will include 11 carriers, 9 large deck amphibious ships (although we should build to 10 such ships in FY18), 82 guided missile cruisers and destroyers, and 50 nuclear powered attack submarines.

    A Marine Corps that remains the nation’s expeditionary force in readiness, forward deployed and engaged, with 31 infantry battalions, 10 artillery battalions and 20 tactical air squadrons.

    An Air Force that will continue to ensure air dominance with 54 combat coded fighter squadrons and the current bomber fleet, with the Joint Strike Fighter in production and the next generation bomber in development. Our Air Force will also maintain a fleet of 275 strategic airlifters, 318 C-130s and a new aerial refueling tanker.

 

5. Protect and prioritize key investments, and the capacity to grow, adapt and mobilize

    The force we are building will retain a decisive technological edge, leverage the lessons of recent conflicts and stay ahead of the most lethal and disruptive threats of the future.

     To that end, the FY13 budget:

        Provides $11.9 billion for science and technology to preserve our ability to leap ahead, including $2.1 billion for basic research.

        Provides $10.4 billion (base and OCO) to sustain the continued growth in Special Operations Forces;

        Provides $3.8 billion for Unmanned Air Systems by funding trained personnel, infrastructure, and platforms to sustain 65 USAF MQ-1/9 combat air patrols with a surge capacity of 85 by FY16. We slowed the buy of the Reaper aircraft to allow us time to develop the personnel and training infrastructure necessary to make full use of these important aircraft. We also protected funding for the Army’s unmanned air system Gray Eagle;

        Invests $3.4 billion in cyber activities, with several initiatives receiving increased funding relative to last year. The scale of cyber threats is increasing and we need to be prepared to defeat these threats, mitigate the potential damage, and provide the President with options to respond, if necessary. We are investing in full spectrum cyber operations capabilities to address the threats we see today and in the future. The Department is also pleased to see progress being made in Congress regarding cyber legislation and is supportive of the bipartisan legislation being introduced by Senators Lieberman and Collins;

        Provides $1.5 billion to fund the Department’s Chemical and Biological Defense program.

    At the same time, the strategic guidance recognizes the need to prioritize and distinguish urgent modernization needs from those that can be delayed – particularly in light of schedule and cost problems. Therefore this budget identifies about $75 billion in savings over the FYDP resulting from canceled or restructured programs. Key modifications and associated savings over the FYDP include:

        $15.1 billion in savings from restructuring the Joint Strike Fighter by delaying aircraft purchases to allow more time for development and testing;

        $1.3 billion in savings from delaying development of the Army’s Ground Combat Vehicle due to contracting difficulties;

        $2.2 billion in savings from curtailing the Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System (JLENS) due to concerns about program cost and operational mobility;

        $4.3 billion in savings from delaying the next generation of ballistic missile submarines by two years for affordability and management reasons;

        $0.8 billion in savings from delaying selected Army aviation helicopter modernization for three to five years.

 

    We will also terminate selected programs, including:

        The Block 30 version of Global Hawk, which has grown in cost to the point where it is no longer cost effective, resulting in savings of $2.5 billion;

        Upgrades to High Mobility Multipurpose Wheeled Vehicles (HMMWVs); we will focus our modernization resources on the Joint Light Tactical Vehicle, resulting in savings of $900 million; and

        The weather satellite program, because we can depend on existing satellites, resulting in savings of $2.3 billion;

 

    We have also invested in a balanced portfolio of capabilities that will enable our force to remain agile, flexible and technologically advanced enough to meet any threat. We will ensure that we can mobilize, surge, and adapt our force to meet the requirements of an uncertain future. To that end, ground forces will retain the key enablers and know-how to conduct long-term stability operations, and the Army will retain more mid-grade officers and NCOs. These steps will ensure we have the structure and experienced leaders necessary should we need to re-grow the force quickly.

 

    Another key element is to maintain a capable and ready National Guard and Reserve. The Reserve Component has demonstrated its readiness and importance over the past ten years of war, and we must ensure that it remains available, trained, and equipped to serve in an operational capacity when necessary. We will maintain key combat support capabilities and ensure that combat service support capabilities like civil affairs are maintained at a high readiness level. We will also leverage the operational experience and institute a progressive readiness model in the National Guard and Reserves in order to sustain increased readiness prior to mobilization.

 

    In keeping with the emphasis on a highly capable reserve, this budget makes only relatively modest reductions in the ground-force reserve components. Over the next five years, the Army Reserve will be sustained at 205,000 personnel, the Army National Guard will marginally decrease from 358,200 to 353,200 personnel, and the Marine Corps Reserve will sustain an end-strength level of 39,600 personnel. The Navy Reserve will decrease from 66,200 to 57,100 personnel over the next five years. Over the same span, the Air Force Reserve will decrease from 71,400 to 69,500 personnel, and the Air National Guard will decrease from 106,700 to 101,200 personnel.

 

    Another key part of preserving our ability to quickly adapt and mobilize is a strong and flexible industrial base. This budget recognizes that industry is our partner in the defense acquisition enterprise. A healthy industrial base means a profitable industrial base, but it also means a lean, efficient base that provides good value for the taxpayers’ defense investments and increases in productivity over time.

 

Ensuring Quality of the All-Volunteer Force

 

    Now to the most fundamental element of our strategy and our decision-making process: our people. This budget recognizes that they, far more than any weapons system or technology, are the great strength of our United States military. All told, the FY13 budget requests $135.1 billion for the pay and allowances of military personnel and $8.5 billion for family support programs vital to the well-being of service members and their families.

 

    One of the guiding principles in our decision making process was that we must keep faith with our troops and their families. For that reason, we were determined to protect family assistance programs, and we were able to sustain these important investments in this budget and continue efforts to make programs more responsive to the needs of troops and their families. Yet in order to build the force needed to defend the country under existing budget constraints, the growth in costs of military pay and benefits must be put on a sustainable course. This is an area of the budget that has grown by nearly 90 percent since 2001, or about 30 percent above inflation – while end strength has only grown by three percent.

 

    This budget contains a roadmap to address the costs of military pay, health care, and retirement in ways that are fair, transparent, and consistent with our fundamental commitments to our people.

 

    On military pay, there are no pay cuts. We have created sufficient room to allow for full pay raises in 2013 and 2014 that keep pace with increases in the private sector. That means for 2013, we propose a pay increase of 1.7 percent for service members. However, we will provide more limited pay raises beginning in 2015 – giving troops and their families fair notice and lead time before changes take effect. Let me be clear: nobody’s pay is cut in this budget nor will anyone’s pay be cut in the future years of this proposal.

 

    This budget devotes $48.7 billion to health care costs – an amount that has more than doubled over the last decade. In order to continue to control the growth of these costs, we are recommending increases in health care fees, co-pays and deductibles to be phased in over four to five years. None of the fee proposals in the budget would apply to active duty service members, survivors of service members who died on active duty, or retirees who retired due to disability. Most of the changes will not affect the families of active-duty service members – there will be no increases in health care fees or deductibles for families of active duty service members. Those most affected will be retirees – with the greatest impact on working-age retirees under the age of 65 still likely to be employed in the civilian sector. Even with these changes, the costs borne by retirees will remain below levels in most comparable private sector plans – as they should be.

 

    Proposed changes include:

        Further increasing enrollment fees for retirees under age 65 in the TRICARE Prime program, using a tiered approach based on retired pay that requires senior-grade retirees with higher retired pay to pay more and junior-grade retirees less;

        Establishing a new enrollment fee for the TRICARE Standard/Extra programs and increasing deductibles;

        Establishing a new enrollment fee for the TRICARE-for-Life program for retirees 65 and older, also using a tiered approach;

        Implementing additional increases in pharmacy co-pays in a manner that increases incentives for use of mail order and generic medicine;

        Indexing fees, deductibles, pharmacy co-pays, and catastrophic caps to reflect the growth in national health care costs.

 

    We also feel that the fair way to address military retirement costs is to ask Congress to establish a commission with authority to conduct a comprehensive review of military retirement. But the President and the Department believe that the retirement benefits of those who currently serve should be protected by grandfathering their benefits. For those who serve today I will request there be no changes in retirement benefits.

 

Fully Supporting Deployed Warfighters

 

    The costs of Overseas Contingency Operations (OCO) are funded separately from the base budget in a stand-alone FY13 request of $88.5 billion. That funding level represents a decrease of $26.6 billion from the FY12 enacted level.

 

    This year’s OCO request, which ensures that deployed troops have all the financial resources they need to conduct their challenging missions, primarily supports operations in Afghanistan but also requests relatively small sums for the Office of Security Cooperation in Iraq (OSC-I) and the repair or replacement of equipment redeploying from Iraq.

 

    Our FY13 OCO request includes funding for added personnel pay and subsistence for deployed forces; communications; mobilizing Reserve Component units; transportation; supplies; deployment and redeployment of all combat and support forces; force sustainment; and sustainment and replenishment of war reserve stocks.

 

     For FY13 we request $5.7 billion in funding for the Afghan National Security forces (ANSF). It is critically important that we maintain sufficient financial support to ANSF so that they can ultimately assume full security responsibility across Afghanistan.

 

    Much tough fighting lies ahead in Afghanistan, but the gradually improving situation permits the remainder of the U.S. surge force to redeploy by the end of September 2012, leaving 68,000 U.S. troops in Afghanistan at that time. The FY13 OCO request assumes a continued level of about 68,000 troops in Afghanistan. While future changes in troop levels may be implemented during FY13, those decisions will be based on advice from field commanders about conditions on the ground.

 

    In Iraq, OCO funding supports continued security assistance and cooperation with Iraqi Security Forces through the OSC-I in the areas of common interest, including counterterrorism, counter-proliferation, maritime security, and air defense. This funding is critical for the U.S. to strengthen its long-term partnership with Iraq. Additionally, to ensure that U.S. forces redeployed from Iraq are ready and equipped for future operations, this funding replenishes equipment and stocks for these forces.

 

A Balanced Package

 

    Members of the committee: putting together this balanced package has been a difficult undertaking and, at the same time, an important opportunity to shape the force we need for the future. I believe we have developed a complete package, aligned to achieve our strategic aims. We have achieved buy-in from the Service Secretaries, the Service Chiefs, Combatant Commanders, and the senior enlisted leaders of the Department.

 

    Our strategy review preceded and guided the budgeting process. This strategy-first approach enabled the Department to balance strategic priorities, place individual budget decisions within a broader strategic context, and ultimately, to guide us in making some tough choices.

 

    As a result, the FY13 request is a carefully balanced package that keeps America safe and sustains U.S. leadership abroad. As you take a look at the individual parts of this plan, I encourage you to do what the Department has done: to bear in mind the strategic trade-offs inherent in any particular budget decision, and the need to balance competing strategic objectives in a resource-constrained environment.

 

    Each decision needs to be judged on the basis of the overall strategy that it supports, recognizing that unwinding any one piece puts our whole package in jeopardy. The bottom line is that I believe there is little room for modification to preserve the force and capabilities we believe are needed to protect the country and fulfill assigned missions.

 

    Ultimately that means we will need your support and partnership to implement this vision of the future military. I understand how tough these issues can be, and that this is the beginning and not the end of this process. Make no mistake: the savings we are proposing will impact all 50 states. But it was this Congress that mandated, on a bi-partisan basis, that we reduce the defense budget, and we need your partnership to do this in a manner that preserves the strongest military in the world. This will be a test of whether reducing the deficit is about talk or action.

 

    My hope is that now that we see the sacrifice involved in reducing the defense budget by almost half a trillion dollars, Congress will be convinced of its important responsibility to make sure that we avoid sequestration. That would be a doubling of the cuts, another roughly $500 billion in additional cuts that would be required to take place through a meat-axe approach, and that we are convinced would hollow out the force and inflict severe damage on our national defense.

 

    So the leadership of this department, both military and civilian, is united behind the strategy that we have presented, and this budget. I look forward to working closely with you in the months ahead to do what the American people expect of their leaders: be fiscally responsible in developing the force for the future – a force that can defend the country, a forced that supports our men and women in uniform, and a force that is, and always will be, the strongest military in the world.

 

Commander addresses a maturing cyberspace domain

by Capt. Tamara Fischer-Carter
Air Force Space Command Public Affairs

2/15/2012 – PETERSON AIR FORCE BASE, Colo. — Space and cyberspace superiority, acquisition strategies and industry partnerships, and the need for Science, Technology, Engineering, and Mathematics Education were highlighted by the Air Force Space Command commander during a speech at Broadmoor Hall Feb. 7 in Colorado Springs, Colo.

General William Shelton kicked off the Armed Forces Communications and Electronics Association Cyberspace 2012 Symposium addressing government and industry professionals in the cyber domain.

The general spoke to updates on AFSPC’s cyber mission and shared some of the challenges associated with a growing cyberspace domain.

“Some of these challenges include establishing some much needed lanes in the road, adjusting the acquisitions process to reflect the nature of cyber products, and expediting a fundamental culture shift across the AF from a cyberspace support mindset to one of cyberspace operations,” said the AFSPC commander.

“Our military’s reliance on cyberspace is hard to fully comprehend because our reliance on networked capabilities is so ubiquitous it’s taken for granted,” the general said comparing the ease of networked capabilities to plugging in a utility.

“It shouldn’t be hard, and in this age of information-enabled warfare, that utility mindset is the way it should be for our warfighters,” General Shelton said.

Still, he acknowledged with the significant revision to the Air Force’s basic cyber doctrine, the cyber business is in its formative stages with rules still being written and skill sets yet defined.

“We’ve moved on from the term computer network operations to a much more active description of what our service is tasked to provide: cyberspace superiority,” said the general. “Cyberspace superiority describes our mission to gain advantage in, from and through cyberspace at the times and places of our choosing, even when faced with opposition. We have defined three sub-disciplines of cyberspace superiority: cyberspace force application, cyberspace defense, and cyberspace support.”

General Shelton mentioned operating within the cyber domain calls for a unique type of thinking with regard to definitions of offensive and defensive cyberspace capabilities.

“Our new Air Force doctrine document thoroughly discusses cyberspace operations, and it goes into great detail on how the basic principles of war such as mass, maneuver, surprise and others, apply in cyberspace,” the general said. “But the document does not fully define exactly what is offense, what is defense, or things like show of force and effects-based operations.”

General Shelton discussed his goal of seamless integration from terrestrial networks to airborne networks, to space-based networks.

“If we’re going to be successful with cross domain solutions, it’s clear to me our networks must move data without regard to which physical layer is being used,” said the general.

General Shelton also acknowledged budgetary constraints and highlighted cyberspace priorities in light of fiscal responsibilities.

“We’ll focus first on passive defense, then defensive counter cyberspace; cyberspace ISR and situational awareness; persistent network operations; data confidentiality and integrity systems; and the cyberspace air and space operations center,” said the general. “We round out our priorities with offensive counter cyberspace, contingency extension, and influence operations.”

General Shelton also emphasized cyberspace acquisition and sustainment should produce agile programs of record while addressing the challenges associated with keeping pace with a domain which changes rapidly.

“The Joint Space Operations Center Mission System, or JMS, program will have a huge impact on just about everything we do in space,” said the general.

Acting as the hub, JMS will revolutionize Space Situational Awareness capabilities, taking inputs from a huge variety of radar and optical, ground- and space-based, space weather, and many other types of sensors, General Shelton said.

“JMS is a great example of how an industrial age acquisition system just isn’t agile enough for an information age program,” said the general. “The system is too slow, too stodgy, and the requirements it places on program developers are too cumbersome.”

The general said streamlined acquisition requires everyone to streamline their expectations and process. He said streamlined acquisition is especially important to cyber acquisition process.

“In cyber, state of the art hardware can become antiquated before the ink is dry on the check that paid for it–and software is even worse,” the general said.

Cyber systems change on a timescale of days or months versus the timescales of an aircraft that change over years the general said.

“Success will require agreement and commitment by all organizations up front to make streamlined acquisition a priority,” said the general.

“History has shown that industry advances in information technology develop much more quickly than DoD can purchase and apply them,” said the general emphasizing the need for industry’s ideas to move forward since they are not bound by the government acquisition process.

The underlying support for industrial advances is through education as the general recognized.

Technical education is often referred to as STEM–science, technology, engineering and mathematics, General Shelton said the lack of graduates in America (within these skill sets) could constitute a national security issue in the broadest sense.

He emphasized the need for an exciting STEM curriculum and financial incentives to keep students interested in STEM-based subjects throughout high school and college.
General Shelton also called for partnership between industry, non-profit educational institutions, educators in school districts, colleges and universities to encourage STEM education and careers.

“Hands-on participation in real science and engineering projects would go a long way toward exciting these students enough to pursue STEM education and a career in a STEM-related field,” the general said.

General Shelton wrapped up his speech by emphasizing, “We’ll lean heavily on our partners in the cyber industry to continue to push the envelope in cyberspace innovation and help us overcome the challenges ahead as we work toward our goal of resilient, assured cyberspace operations”.

 

Federal retirements spike in 2011

Govexec.com

By Kellie Lunney

February 10, 2012

Federal retirements increased 24 percent in 2011 from the previous year, according to new statistics from the Office of Personnel Management.

OPM received 104,810 retirement applications in 2011 compared to 84,427 in 2010. The wave of buyouts and early retirement packages during the latter part of 2011 likely contributed to the uptick in departures. Applications surged in January, July and October 2011, in particular.

In January 2012, OPM received 21,479 retirement applications, 9 percent more than in January 2011.

The appeal of buyouts and early outs to agencies grew after the failure of the joint select committee on deficit reduction to agree on a plan to reduce spending by $1.2 trillion triggered across-the-board automatic spending cuts. Those cuts are slated to take effect in January 2013 unless Congress repeals sequestration. While there are no official figures available yet on how many employees accepted such incentives in 2011, tens of thousands were offered, and agencies en masse are likely to offer another round of buyouts heading into fiscal 2013.

The last time the government relied heavily on buyouts and early outs to reshape the federal workforce was during the 1990s as part of the Clinton administration’s reinventing government initiative. The difference between then and now, however, is that agencies’ use of the incentive in the 1990s was not budget-driven, but part of an overall initiative aimed at making government more efficient and streamlined.

While the increase in retirements could be good news for agencies struggling with budget cuts, the spike in applications also will have an effect on the troubled retirement claims process. There is a backlog of roughly 62,000 retirement claims and Congress is putting pressure on OPM to improve the system and get annuity checks to federal retirees more quickly. A trio of Washington-area lawmakers sent Office of Management and Budget acting Director Jeff Zients a Feb. 6 letter expressing frustration over the matter and asking OPM to work closely with OMB to resolve the delays. It takes an average of 156 days to complete a claim, but many retirees wait a year or more for their payments. Virginia and Maryland are home to more than 250,000 federal retirees.

 

How About Some Fog Computing? J

Nextgov

By Bob Brewin   02/09/12 03:07 pm ET

Last year Marine Brig. Gen. Kevin Nally had it with the term cloud computing, which had morphed into a buzz phrase about as informative as “transformation,” a word beloved by Pentagon bureaucracy.

So Nally decided the Marine Corps should move toward fog computing, somewhat analogous to cloud computing, as fog is really a cloud close to the ground.

Nally said he did not realize that what started out as a joke had taken on a meaning of its own until he showed up for a meeting at the Defense Information Systems Agency headquarters in Ft. Meade, Md., and more than one person asked to get on his calendar for a fog computing briefing.

“Sorry, it’s still a Marine secret,” Nally said he told the folks wanting to get into the fog.

 

Researchers turn to nature to fight cyberattacks

FCW.com

By Camille Tuutti

Feb 16, 2012

A team of computer science researchers is taking cues from nature to address one of the nation’s most urgent threats: cyberattacks.  

Research from 2011 shows that cyberattacks on government network systems increased almost 40 percent, and experts have declared digital intrusions as one of the top national security concerns.

The Wake Forest University faculty-student team’s effort to fight those threats is a recent contribution in a growing movement of bio-research. Computer science professor Errin Fulp and graduate student Michael Crouse are polishing a genetically inspired algorithm that could be used in any large computer infrastructure, including cluster computing.

The algorithm proactively seeks out more secure computer configurations by using the concept of “survival of the fittest.” Early simulations have shown the increased diversity of each device’s configuration boosts network safety, and Fulp said the goal is to create a moving-target defense that quickly detects threats.

The research initiative is funded by a one-year grant from Pacific Northwest National Laboratory. Over the next few months, the team will test its work but for now, “it looks very promising,” Fulp said.

“We have a prototype up and running and we’ve been testing performance and how to scale it,” he said, adding that additional funding is needed take the project to the next level.

This is not the first time the team has turned to nature for inspiration. In one of their ongoing cybersecurity projects with PNNL, the team is training digital “ants” to unleash into the nation’s power grid. When an ant discovers an intruder, other members of the colony spring to action to alert the IT administrator.

This sort of “swarming intelligence” is an efficient way to identify threats in a large computer infrastructure, Fulp said, but further development and work are needed before the ants can actually eliminate the intrusions.

 

Senate Armed Services Committee (Budget Request)

As Submitted by Secretary of Defense Leon E. Panetta, Capitol Hill, Washington D.C., Tuesday, February 14, 2012

 

Chairman Levin, Senator McCain, members of the committee.  I appreciate the opportunity to appear before you to discuss the President’s budget request for Fiscal Year 2013 (FY13). 

Let me begin by first thanking you for your support for our service members and our military families.  These brave men and women, along with the Department’s civilian professionals who support them, have done everything asked of them and more during more than a decade of war. 

Defense Strategy Review

The FY13 budget request for the Department of Defense was the product of an intensive strategy review conducted by the senior military and civilian leaders of the Department with the advice and guidance of President Obama.  The total request represents a $614 billion investment in national defense including a $525.4 billion request for the Department’s base budget, and $88.5 billion in spending to support our troops in combat. 

The reasons for this review are clear:  first, the United States is at a strategic turning point after a decade of war and substantial growth in defense budgets.  Second, with the nation confronting very large debt and deficits, Congress passed the Budget Control Act of 2011, imposing limits that led to a reduction in the defense budget of $487 billion over the next decade.

Deficit reduction is a critical national security priority in and of itself.  We at the Department decided that this crisis presented us with the opportunity to establish a new strategy for the force of the future, and that strategy has guided us in making the budget choices contained in the President’s budget.  We are at an important turning point that would have required us to make a strategic shift under any circumstances.  The U.S. military’s mission in Iraq has ended.  We still have a tough fight on our hands in Afghanistan, but over the past year we have begun a transition to Afghan-led responsibility for security and we are on track to complete that transition by the end of 2014, in accordance with our Lisbon commitments.  Last year, the NATO effort in Libya also concluded with the fall of Qadhafi.  And successful counterterrorism efforts have significantly weakened al-Qaeda and decimated its leadership. 

But despite what we have been able to achieve, unlike past drawdowns when threats have receded, the United States still faces a complex array of security challenges across the globe:  We are still a nation at war in Afghanistan; we still face threats from terrorism; there is dangerous proliferation of lethal weapons and materials; the behavior of Iran and North Korea threaten global stability; there is continuing turmoil and unrest in the Middle East; rising powers in Asia are testing international relationships; and there are growing concerns about cyber intrusions and attacks.  Our challenge is to meet these threats and at the same time, meet our responsibility to fiscal discipline.  This is not an easy task.         

To build the force we need for the future, we developed new strategic guidance that consists of these five key elements:

First, the military will be smaller and leaner, but it will be agile, flexible, ready and technologically advanced.

Second, we will rebalance our global posture and presence to emphasize Asia-Pacific and the Middle East.

Third, we will build innovative partnerships and strengthen key alliances and partnerships elsewhere in the world.

Fourth, we will ensure that we can quickly confront and defeat aggression from any adversary ? anytime, anywhere.

Fifth, we will protect and prioritize key investments in technology and new capabilities, as well as our capacity to grow, adapt and mobilize as needed.  

Strategy to FY13 Budget

We developed this new strategic guidance before any final budget decisions were made to ensure that the budget choices reflected the new defense strategy. 

While shaping this strategy, we did not want to repeat the mistakes of the past.  Our goals were:  to maintain the strongest military in the world, to not “hollow out” the force, to take a balanced approach to budget cuts, to put everything on the table, and to not break faith with troops and their families.  Throughout the review we made sure this was an inclusive process, and General Dempsey and I worked closely with the leadership of the Services and Combatant Commanders, and consulted regularly with members of Congress. 

As a result of these efforts, the Department is strongly united behind the recommendations we are presenting today.  Consistent with Title I of the Budget Control Act, this budget reflects $259 billion in savings over the next five years and $487 billion over the next ten years compared to the budget plan submitted to Congress last year.  Under the five year budget plan, the base budget will rise from $525 billion in FY13 to $567 billion in FY17.  When reduced war-related funding requirements are included, we expect total U.S. defense spending to drop by more than 20 percent over the next few years from its peak in 2010, after accounting for inflation. 

This is a balanced and complete package that follows the key elements of the strategy and adheres to the guidelines we established.  The savings come from three broad areas:

First, efficiencies – we redoubled efforts to make more disciplined use of taxpayer dollars, yielding about one quarter of the target savings;

Second, force structure and procurement adjustments – we made strategy-driven changes in force structure and procurement programs, achieving roughly half of the savings;

Finally, compensation – we made modest but important adjustments in personnel costs to achieve some necessary cost savings in this area, which represents one third of the budget but accounted for a little more than 10 percent of the total reduction.

Changes in economic assumptions and other shifts account for the remainder of the $259 billion in savings.  Let me walk through these three areas, beginning with our efforts to discipline our use of defense dollars.

More Disciplined Use of Defense Dollars

If we are to tighten up the force, I felt we have to begin by tightening up the operations of the Department.  This budget continues efforts to reduce excess overhead, eliminate waste, and improve business practices across the department.  The more savings realized in this area, the less spending reductions required for modernization programs, force structure, and military compensation. 

As you know, the FY12 budget proposed more than $150 billion in efficiencies between FY 2012 and FY 2016, and we continue to implement those changes.  This budget identifies about $60 billion in additional savings over five years.  Across the military services, new efficiency efforts over the next five years include:

The Army proposes to save $18.6 billion through measures such as streamlining support functions, consolidating IT enterprise services, and rephasing military construction projects;

The Navy proposes to save $5.7 billion by implementing strategic sourcing of commodities and services, consolidating inventory, and other measures;

The Air Force proposes to save $6.6 billion by reducing service support contractors and rephasing military construction projects;

Other proposed DoD-wide efficiency savings over the next five years total $30.1 billion, including reductions in expenses in the Office of the Secretary of Defense and the Defense Agencies.

Additionally, we are continuing the initiative to improve the Department’s buying power by seeking greater efficiency and productivity in the acquisition of goods and services.  We are strengthening acquisition support to the warfighter, executing acquisitions more efficiently, preserving the industrial base, and strengthening the acquisition workforce.  This budget assumes that these policies produce savings of $5.3 billion over the next five years.

In terms of military infrastructure, we will need to ensure that our current basing and infrastructure requirements do not divert resources from badly needed capabilities. 

As we reduce force structure, we have a responsibility to provide the most cost efficient support for the force.  For that reason, the President will request that Congress authorize the Base Realignment and Closure process for 2013 and 2015.  As someone who went through BRAC, I realize how controversial this process can be for members and constituencies.  And yet, it is the only effective way to achieve infrastructure savings. 

Achieving audit readiness is another key initiative that will help the Department achieve greater discipline in its use of defense dollars.  The Department needs auditable financial statements to comply with the law, to strengthen its own internal processes, and to reassure the public that it continues to be a good steward of federal funds.  In October 2011, I directed the Department to emphasize this initiative and accelerate efforts to achieve fully auditable financial statements.  Among other specific goals, I directed the Department achieve audit readiness of the Statement of Budgetary Resources for general funds by the end of calendar year 2014, and to meet the legal requirements to achieve full audit readiness for all Defense Department financial statements by 2017.  We are also implementing a course-based certification program for defense financial managers in order to improve training in audit readiness and other areas, with pilot programs beginning this year.  We now have a plan in place to meet these deadlines, including specific goals, financial resources, and a governance structure.

These are all critically important efforts to ensure the Department operates in the most efficient manner possible.  Together, these initiatives will help ensure the Department can preserve funding for the force structure and modernization needed to support the missions of our force.    

Strategy-driven Changes in Force Structure and Programs

It is obvious that we cannot achieve the overall savings targets through efficiencies alone.  Budget reductions of this magnitude require significant adjustments to force structure and investments, but the choices we made reflected five key elements of the defense strategic guidance and vision for the military.

1.  Build a force that is smaller and leaner, but agile, flexible, ready and technologically advanced

We knew that coming out of the wars, the military would be smaller.  Our approach to accommodating these reductions, however, has been to take this as an opportunity – as tough as it is – to fashion the agile and flexible military we need for the future.  That highly networked and capable joint force consists of:          

an adaptable and battle-tested Army that is our nation’s force for decisive action, capable of defeating any adversary on land;

a Navy that maintains forward presence and is able to penetrate enemy defenses;

a Marine Corps that is a “middleweight” expeditionary force with reinvigorated amphibious capabilities

an Air Force that dominates air and space and provides rapid mobility, global strike and persistent ISR, and;

National Guard and Reserve components that continue to be ready and prepared for operations when needed.

To ensure an agile force, we made a conscious choice not to maintain more force structure than we could afford to properly train and equip.  We are implementing force structure reductions consistent with the new strategic guidance for a total savings of about $50 billion over the next five years. 

These adjustments include:

Gradually resizing the active Army to 490,000, eliminating a minimum of eight BCTs and developing a plan to update the Army’s brigade structure;

Gradually resizing the active Marine Corps to about 182,100, eliminating six combat battalions and four Tactical Air squadrons; 

Reducing and streamlining the Air Force’s airlift fleet by retiring all 27 C-5As, 65 of the oldest C-130s and divesting all 38 C-27s.  After retirements, the Air Force will maintain a fleet of 275 strategic airlifters, and 318 C-130s – a number that we have determined is sufficient to meet the airlift requirements of the new strategy, including the Air Force’s commitment for direct support of the Army; 

Eliminating seven Air Force Tactical Air squadrons – including five A-10 squadrons, one F-16 squadron, and one F-15 training squadron.  The Air Force will retain 54 combat-coded fighter squadrons, maintaining the capabilities and capacity needed to meet the new strategic guidance;

Retiring seven lower priority Navy cruisers that have not been upgraded with ballistic missile defense capability or that would require significant repairs, as well as retiring two dock landing ships.

The strategy review recognized that a smaller, ready and agile force is preferable to a larger force that is poorly trained and ill-equipped.  Therefore, we put a premium on retaining those capabilities that provide the most flexibility across a range of missions.  We also emphasized readiness.  For fiscal 2013, the Department is requesting $209 billion in the base budget for Operation and Maintenance, the budget category that funds training and equipment maintenance among other aspects of operations.  That represents an increase of six percent compared to the enacted level in 2012, even though the overall base budget will decline by one percent.  Striking the right balance between force structure and readiness is critical to our efforts to avoid a hollow force, and we will continue to focus on this area to ensure that we make the right choices.

2.  Rebalance global posture and presence to emphasize Asia-Pacific and the Middle East 

The strategic guidance made clear that we must protect capabilities needed to project power in Asia-Pacific and the Middle East.  To this end, this budget:

Maintains the current bomber fleet;

Maintains the aircraft carrier fleet at a long-term level of 11 ships and 10 air wings;

Maintains the big-deck amphibious fleet;

Restores Army and Marine Corps force structure in the Pacific after the drawdown from Iraq and as we drawdown in Afghanistan, while maintaining persistent presence in the Middle East;

The budget also makes selected new investments to ensure we develop new capabilities needed to maintain our military’s continued freedom of action in face of new challenges that could restrict our ability to project power in key territories and domains.  Across the Services, this budget plan requests $1.8 billion for FY13, and a total of $3.9 billion over the next five years, for enhancements to radars, sensors, and electronic warfare capabilities needed to operate in these environments.

Other key power projection investments in FY13 include:

$300 million to fund the next generation Air Force bomber (and a total of $6.3 billion over the next five years);

$1.8 billion to develop the new Air Force tanker;

$18.2 billion for the procurement of 10 new warships and associated equipment, including two Virginia-class submarines, two Aegis-class destroyers, four Littoral Combat Ships, one Joint High Speed Vessel, and one CVN-21-class aircraft carrier.  We are also requesting $100 million to develop the capability to increase cruise missile capacity of future Virginia-class submarines;

$2.2 billion in FY13 for the procurement of an additional 26 F/A-18E/F Super Hornet aircraft;

$1.0 billion in FY13 for the procurement of 12 EA-18G Growler aircraft, the Navy’s new electronic warfare platform that replaces the EA-6B. 

$38 million for design efforts to construct an Afloat Forward Staging Base planned for procurement in FY14. This base can provide mission support in areas where ground-based access is not available, such as counter-mine operations, Special Operations, and ISR. 

3.  Build innovative partnerships and strengthen key alliances and partnerships

            The strategy makes clear that even though Asia-Pacific and the Middle East represent the areas of growing strategic priority, the United States will work to strengthen its key alliances, to build partnerships and to develop innovative ways to sustain U.S. presence elsewhere in the world.

            To that end, this budget makes key investments in NATO and other partnership programs, including:

$200 million in FY13 and nearly $900 million over the next five years in the NATO Alliance Ground Surveillance system.  This system will enable the Alliance to perform persistent surveillance over wide areas in any weather or light condition. 

$9.7 billion in FY13, and $47.4 billion over the next five years, to develop and deploy missile defense capabilities that protect the U.S. homeland and strengthen regional missile defenses.  The request includes the Phased Adaptive Approach that is being deployed first in Europe and is designed to protect NATO allies and forces from ballistic missile threats.

$800 million for the Combatant Commanders exercise and engagement program. Jointly with the State Department, we will also begin using the new Global Security Contingency fund that was established at our request in the FY12 legislation.

            The new strategy also envisions a series of organizational changes that will boost efforts to partner with other militaries.  These include:

Allocating a U.S.-based brigade to the NATO Response Force and rotating U.S.-based units to Europe for training and exercises;

Aligning an Army BCT with each regional Combatant Command to foster regional expertise;

Increasing opportunities for Special Operations Forces to advise and assist partners in other regions, using additional capacity available due to the gradual drawdown from the post-9/11 wars.

4.  Ensure that we can confront and defeat aggression from any adversary – anytime, anywhere

The strategic guidance reaffirmed that the United States must have the capability to fight more than one conflict at the same time.  Still, the strategic guidance recognizes that how we defeat the enemy may well vary across conflicts. 

This budget invests in space, cyberspace, long range precision-strike and the continued growth of special operations forces to ensure that we can still confront and defeat multiple adversaries even with the force structure reductions outlined earlier.  It also sustains the nuclear triad of bombers, missiles and submarines to ensure we continue to have a safe, reliable and effective nuclear deterrent.

Even with some adjustments to force structure, this budget sustains a military that is the strongest in the world, capable of quickly and decisively confronting aggression wherever and whenever necessary.  After planned reductions, the FY17 joint force will consist of:

An Army of more than one million active and reserve soldiers that remains flexible, agile, ready and lethal across the spectrum of conflict, with 18 Divisions, approximately 65 Brigade Combat Teams, 21 Combat Aviation Brigades and associated enablers.

A Naval battle force of 285 ships – the same size force that we have today -that will remain the most powerful and flexible naval force on earth, able to prevail in any combat situation, including the most stressing anti-access environments.  Our maritime forces will include 11 carriers, 9 large deck amphibious ships (although we should build to 10 such ships in FY18), 82 guided missile cruisers and destroyers, and 50 nuclear powered attack submarines.

A Marine Corps that remains the nation’s expeditionary force in readiness, forward deployed and engaged, with 31 infantry battalions, 10 artillery battalions and 20 tactical air squadrons.   

An Air Force that will continue to ensure air dominance with 54 combat coded fighter squadrons and the current bomber fleet, with the Joint Strike Fighter in production and the next generation bomber in development.  Our Air Force will also maintain a fleet of 275 strategic airlifters, 318 C-130s and a new aerial refueling tanker.

5.  Protect and prioritize key investments, and the capacity to grow, adapt and mobilize

The force we are building will retain a decisive technological edge, leverage the lessons of recent conflicts and stay ahead of the most lethal and disruptive threats of the future.        

            To that end, the FY13 budget:

Provides $11.9 billion for science and technology to preserve our ability to leap ahead, including $2.1 billion for basic research.

Provides $10.4 billion (base and OCO) to sustain the continued growth in Special Operations Forces;

Provides $3.8 billion for Unmanned Air Systems by funding trained personnel, infrastructure, and platforms to sustain 65 USAF MQ-1/9 combat air patrols with a surge capacity of 85 by FY16.  We slowed the buy of the Reaper aircraft to allow us time to develop the personnel and training infrastructure necessary to make full use of these important aircraft.  We also protected funding for the Army’s unmanned air system Gray Eagle;

Invests $3.4 billion in cyber activities, with several initiatives receiving increased funding relative to last year.  The scale of cyber threats is increasing and we need to be prepared to defeat these threats, mitigate the potential damage, and provide the President with options to respond, if necessary.  We are investing in full spectrum cyber operations capabilities to address the threats we see today and in the future.  The Department is also pleased to see progress being made in Congress regarding cyber legislation and is supportive of the bipartisan legislation being introduced by Senators Lieberman and Collins;

Provides $1.5 billion to fund the Department’s Chemical and Biological Defense program.

At the same time, the strategic guidance recognizes the need to prioritize and distinguish urgent modernization needs from those that can be delayed ? particularly in light of schedule and cost problems.  Therefore this budget identifies about $75 billion in savings over the FYDP resulting from canceled or restructured programs.  Key modifications and associated savings over the FYDP include:

$15.1 billion in savings from restructuring the Joint Strike Fighter by delaying aircraft purchases to allow more time for development and testing;

$1.3 billion in savings from delaying development of the Army’s Ground Combat Vehicle due to contracting difficulties;

$2.2 billion in savings from curtailing the Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System (JLENS) due to concerns about program cost and operational mobility;

$4.3 billion in savings from delaying the next generation of ballistic missile submarines by two years for affordability and management reasons;

$0.8 billion in savings from delaying selected Army aviation helicopter modernization for three to five years.

We will also terminate selected programs, including:

The Block 30 version of Global Hawk, which has grown in cost to the point where it is no longer cost effective, resulting in savings of $2.5 billion;

Upgrades to High Mobility Multipurpose Wheeled Vehicles (HMMWVs); we will focus our modernization resources on the Joint Light Tactical Vehicle, resulting in savings of $900 million; and

The weather satellite program, because we can depend on existing satellites, resulting in savings of $2.3 billion;  

We have also invested in a balanced portfolio of capabilities that will enable our force to remain agile, flexible and technologically advanced enough to meet any threat.  We will ensure that we can mobilize, surge, and adapt our force to meet the requirements of an uncertain future.  To that end, ground forces will retain the key enablers and know-how to conduct long-term stability operations, and the Army will retain more mid-grade officers and NCOs.  These steps will ensure we have the structure and experienced leaders necessary should we need to re-grow the force quickly. 

Another key element is to maintain a capable and ready National Guard and Reserve.  The Reserve Component has demonstrated its readiness and importance over the past ten years of war, and we must ensure that it remains available, trained, and equipped to serve in an operational capacity when necessary.  We will maintain key combat support capabilities and ensure that combat service support capabilities like civil affairs are maintained at a high readiness level.  We will also leverage the operational experience and institute a progressive readiness model in the National Guard and Reserves in order to sustain increased readiness prior to mobilization. 

In keeping with the emphasis on a highly capable reserve, this budget makes only relatively modest reductions in the ground-force reserve components.  Over the next five years, the Army Reserve will be sustained at 205,000 personnel, the Army National Guard will marginally decrease from 358,200 to 353,200 personnel, and the Marine Corps Reserve will sustain an end-strength level of 39,600 personnel.  The Navy Reserve will decrease from 66,200 to 57,100 personnel over the next five years.  Over the same span, the Air Force Reserve will decrease from 71,400 to 69,500 personnel, and the Air National Guard will decrease from 106,700 to 101,200 personnel.  

Another key part of preserving our ability to quickly adapt and mobilize is a strong and flexible industrial base.  This budget recognizes that industry is our partner in the defense acquisition enterprise.  A healthy industrial base means a profitable industrial base, but it also means a lean, efficient base that provides good value for the taxpayers’ defense investments and increases in productivity over time.

Ensuring Quality of the All-Volunteer Force

Now to the most fundamental element of our strategy and our decision-making process:  our people.  This budget recognizes that they, far more than any weapons system or technology, are the great strength of our United States military.  All told, the FY13 budget requests $135.1 billion for the pay and allowances of military personnel and $8.5 billion for family support programs vital to the well-being of service members and their families.   

One of the guiding principles in our decision making process was that we must keep faith with our troops and their families.  For that reason, we were determined to protect family assistance programs, and we were able to sustain these important investments in this budget and continue efforts to make programs more responsive to the needs of troops and their families.  Yet in order to build the force needed to defend the country under existing budget constraints, the growth in costs of military pay and benefits must be put on a sustainable course.  This is an area of the budget that has grown by nearly 90 percent since 2001, or about 30 percent above inflation ? while end strength has only grown by three percent. 

This budget contains a roadmap to address the costs of military pay, health care, and retirement in ways that are fair, transparent, and consistent with our fundamental commitments to our people. 

On military pay, there are no pay cuts.  We have created sufficient room to allow for full pay raises in 2013 and 2014 that keep pace with increases in the private sector.  That means for 2013, we propose a pay increase of 1.7 percent for service members.  However, we will provide more limited pay raises beginning in 2015 ? giving troops and their families fair notice and lead time before changes take effect.  Let me be clear:  nobody’s pay is cut in this budget nor will anyone’s pay be cut in the future years of this proposal. 

This budget devotes $48.7 billion to health care costs ? an amount that has more than doubled over the last decade.  In order to continue to control the growth of these costs, we are recommending increases in health care fees, co-pays and deductibles to be phased in over four to five years.  None of the fee proposals in the budget would apply to active duty service members, survivors of service members who died on active duty, or retirees who retired due to disability.  Most of the changes will not affect the families of active-duty service members ? there will be no increases in health care fees or deductibles for families of active duty service members.  Those most affected will be retirees ? with the greatest impact on working-age retirees under the age of 65 still likely to be employed in the civilian sector.  Even with these changes, the costs borne by retirees will remain below levels in most comparable private sector plans ? as they should be.

Proposed changes include: 

Further increasing enrollment fees for retirees under age 65 in the TRICARE Prime program, using a tiered approach based on retired pay that requires senior-grade retirees with higher retired pay to pay more and junior-grade retirees less;

Establishing a new enrollment fee for the TRICARE Standard/Extra programs and increasing deductibles;

Establishing a new enrollment fee for the TRICARE-for-Life program for retirees 65 and older, also using a tiered approach;

Implementing additional increases in pharmacy co-pays in a manner that increases incentives for use of mail order and generic medicine;

Indexing fees, deductibles, pharmacy co-pays, and catastrophic caps to reflect the growth in national health care costs.

We also feel that the fair way to address military retirement costs is to ask Congress to establish a commission with authority to conduct a comprehensive review of military retirement.  But the President and the Department believe that the retirement benefits of those who currently serve should be protected by grandfathering their benefits.  For those who serve today I will request there be no changes in retirement benefits.

Fully Supporting Deployed Warfighters

The costs of Overseas Contingency Operations (OCO) are funded separately from the base budget in a stand-alone FY13 request of $88.5 billion.  That funding level represents a decrease of $26.6 billion from the FY12 enacted level. 

This year’s OCO request, which ensures that deployed troops have all the financial resources they need to conduct their challenging missions, primarily supports operations in Afghanistan but also requests relatively small sums for the Office of Security Cooperation in Iraq (OSC-I) and the repair or replacement of equipment redeploying from Iraq.  

Our FY13 OCO request includes funding for added personnel pay and subsistence for deployed forces; communications; mobilizing Reserve Component units; transportation; supplies; deployment and redeployment of all combat and support forces; force sustainment; and sustainment and replenishment of war reserve stocks.

  For FY13 we request $5.7 billion in funding for the Afghan National Security forces (ANSF).  It is critically important that we maintain sufficient financial support to ANSF so that they can ultimately assume full security responsibility across Afghanistan. 

Much tough fighting lies ahead in Afghanistan, but the gradually improving situation permits the remainder of the U.S. surge force to redeploy by the end of September 2012, leaving 68,000 U.S. troops in Afghanistan at that time.  The FY13 OCO request assumes a continued level of about 68,000 troops in Afghanistan.  While future changes in troop levels may be implemented during FY13, those decisions will be based on advice from field commanders about conditions on the ground.

In Iraq, OCO funding supports continued security assistance and cooperation with Iraqi Security Forces through the OSC-I in the areas of common interest, including counterterrorism, counter-proliferation, maritime security, and air defense.  This funding is critical for the U.S. to strengthen its long-term partnership with Iraq.  Additionally, to ensure that U.S. forces redeployed from Iraq are ready and equipped for future operations, this funding replenishes equipment and stocks for these forces. 

A Balanced Package

Members of the committee:  putting together this balanced package has been a difficult undertaking and, at the same time, an important opportunity to shape the force we need for the future.  I believe we have developed a complete package, aligned to achieve our strategic aims.  We have achieved buy-in from the Service Secretaries, the Service Chiefs, Combatant Commanders, and the senior enlisted leaders of the Department. 

Our strategy review preceded and guided the budgeting process.  This strategy-first approach enabled the Department to balance strategic priorities, place individual budget decisions within a broader strategic context, and ultimately, to guide us in making some tough choices. 

As a result, the FY13 request is a carefully balanced package that keeps America safe and sustains U.S. leadership abroad.  As you take a look at the individual parts of this plan, I encourage you to do what the Department has done:  to bear in mind the strategic trade-offs inherent in any particular budget decision, and the need to balance competing strategic objectives in a resource-constrained environment. 

Each decision needs to be judged on the basis of the overall strategy that it supports, recognizing that unwinding any one piece puts our whole package in jeopardy.  The bottom line is that I believe there is little room for modification to preserve the force and capabilities we believe are needed to protect the country and fulfill assigned missions. 

Ultimately that means we will need your support and partnership to implement this vision of the future military.  I understand how tough these issues can be, and that this is the beginning and not the end of this process.  Make no mistake: the savings we are proposing will impact all 50 states.  But it was this Congress that mandated, on a bi-partisan basis, that we reduce the defense budget, and we need your partnership to do this in a manner that preserves the strongest military in the world.  This will be a test of whether reducing the deficit is about talk or action.

My hope is that now that we see the sacrifice involved in reducing the defense budget by almost half a trillion dollars, Congress will be convinced of its important responsibility to make sure that we avoid sequestration.  That would be a doubling of the cuts, another roughly $500 billion in additional cuts that would be required to take place through a meat-axe approach, and that we are convinced would hollow out the force and  inflict severe damage on our national defense.  

So the leadership of this department, both military and civilian, is united behind the strategy that we have presented, and this budget.  I look forward to working closely with you in the months ahead to do what the American people expect of their leaders: be fiscally responsible in developing the force for the future ? a force that can defend the country, a forced that supports our men and women in uniform, and a force that is, and always will be, the strongest military in the world.                                                          

 

NTIA finds LightSquared and GPS are incompatible, FCC blocks network

Nextgov

By Bob Brewin 02/14/2012

The network planned by start-up wireless broadband carrier LightSquared cannot safely co-exist with the Global Positioning System, Lawrence Strickling, administrator of the National Telecommunications and Information Administration, wrote in a letter to the Federal Communications Commission Tuesday.

LightSquared’s planned network of 40,000 cellular base stations operate in a frequency range close to GPS, and on Jan. 26, 2011, the FCC gave the company a conditional waiver to start operation. But the agency said the company first had to resolve interference issues with GPS receivers through tests conducted in conjunction with federal users.

LightSquared flunked two rounds of tests last year and Strickling said in his letter to FCC chairman Julius Genachowski that based on evaluation and analysis of those tests “we conclude that LightSquared’s proposed mobile broadband network will impact GPS service and that there is no practical way to mitigate the potential interference issue at this time.”

In a statement, the FCC said, “LightSquared’s proposal to provide ground-based mobile service offered the potential to unleash new spectrum for mobile broadband and enhance competition. The commission clearly stated from the outset that harmful interference to GPS would not be permitted. This is why the conditional waiver order issued by the commission’s International Bureau prohibited LightSquared from beginning commercial operations unless harmful interference issues were resolved.”

Given NTIA’s conclusion, the statement said, “the commission will not lift the prohibition on LightSquared.”

LightSquared said last October it had developed signal filters to resolve the interference issues. In his letter, Strickling tacitly acknowledged this, but added that while GPS manufacturers could use new technology to resolve interference in the future, “the time and money required for federal, commercial and private sector users to replace technology in the field and the marketplace, on aircraft and in integrated national security issues cannot support the scheduled deployment of terrestrial services planned by LightSquared.”

LightSquared has already invested $3 billion in its planned network and reacted sharply to Stickling’s letter. The company said Stickling’s recommendations to the FCC were based on “flawed conclusions” in a report last month by the multi-agency National Space-Based Positioning, Navigation and Timing Executive Committee, which determined the LightSquared network “significantly interferes” with GPS.

Jim Kirkland, vice president and general counsel of Trimble Navigation, said the NTIA recommendation marks a “pivotal moment” in the yearlong regulatory and political battle between LightSquared, the GPS industry, the federal government and GPS users.

“After a year of extensive testing, NTIA has now conclusively stated that LightSquared’s operations will interfere with GPS and that there is no viable mitigation path for the foreseeable future,” Kirkland said.

LightSquared, which last October threatened litigation if the FCC did not green-light its network, took a more conciliatory approach Tuesday. The company said in a press release that it “remains committed to finding a resolution with the federal government and the GPS industry to resolve all remaining concerns. LightSquared is confident that the parties will continue the on-going efforts to explore all engineering options and alternatives to find a solution to this difficult issue.”

 

Air Force aims to unify robot aircraft controls

Interoperability will mean fewer personnel, fewer unmanned aircraft able to do more, PEO says

GCN.com

By Henry Kenyon

Feb 16, 2012

The Air Force is continuing to develop new sensor and control systems for its unmanned aerial systems (UAS) despite a shrinking budget and the need to support its manned aircraft. The technologies under development will provide the service’s UAS with enhanced intelligence, surveillance and reconnaissance (ISR) capabilities, an Air Force official said.

Unmanned aircraft provide the military with an unprecedented capability for using ISR systems, Col. Eric Fick, program executive officer for Air Force ISR and special operations forces, said at the AUVSI Unmanned Systems Program Review 2012 conference in Washington on Feb. 8. However, using these platforms creates huge demands on the service in today’s constrained financial environment, he added.

The Air Force’s ISR and special operations mission extends beyond robot platforms to include manned systems, covering some 45 programs, Fick said.

Precision strike, ISR, and special operations capabilities traditionally develop in separate tracks, but these applications are now merging; it once took the Air Force weeks and days to locate and fix a target, but it now takes minutes, he said.

In the current tight fiscal environment, the Air Force’s priorities for UAS-based ISR are preparing for the next war and focusing on greater interoperability, which allows for fewer people and fewer drones to do more, he said. Major research and development thrusts include advanced sensors, flexible payloads, the UAS Command and Control Initiative (UCI), and high-capacity airborne communications.

For advanced sensors, the service is working on methods to support cross-cueing and control between UAS sensors and different users. A related area of research is also developing automated tools for sifting and identifying data to reduce operator workloads, Fick said.

The major thrust of the UCI is to promote system interoperability by developing a common ground station capable of controlling a variety of robot aircraft, eliminating development stovepipes and merging UAS fleets. The effort is also directing program developers to adopt common sensor platforms by eliminating redundant systems, Fick said. For mission software, he said the Air Force will probably develop an apps store-like function offering vetted and approved applications.

The Air Force is also part of a broader Defense Department program to develop sense-and-avoid technologies that will allow UAS operations in civilian airspace by providing drones with advanced sensors to detect other aircraft and the algorithms to avoid them if necessary. UAS flights in U.S. civilian airspace now require Federal Aviation Administration waivers and other documentation, Fick said. The goal is to develop an autonomous flight capability that will permit the service to file a flight plan just as it would do for a manned flight, he added.

 

DOD budget and industry: Prepare for change

FCW.com

By Amber Corrin

Feb 15, 2012

It’s been billed as a budget full of austerity measures, but there are a few parts of the Defense Department’s fiscal 2013 spending plan that are actually seeing a boost, including technology and cybersecurity.

As DOD prepares to implement the budget’s measures, industry needs to pay close attention to the department’s renewed focus on defending networks and data, according to officials and industry insiders.

“Cyber is now a ubiquitous requirement in all of our programs and not just in DOD. If you think about where our most treasured assets are, they’re not in the U.S. government. It’s our industrial base, which should be considered as part of the force structure,” said Brett Lambert, deputy assistant secretary of defense, manufacturing and industrial base policy. “So as a normal course of doing business and in operations, cyber is going to have to be in the forefront of our minds because the protection of that data is becoming increasingly essential by the hour, if not by the minute.”

Cybersecurity becomes high priority in budget request

 

Lambert spoke as part of a panel at the Center for Strategic and International Studies on Feb. 15 in Washington.

The demand for cybersecurity may not be anything new to the defense industry, but with the president and DOD officials augmenting cyber funding alongside measures to cut spending nearly everywhere else, it brings new concerns to the table shared by the public and private sectors.

For one, industry must adjust for a shifting priority on cybersecurity and other IT services, and that includes a requisite shift in the workforce – and that’s not so easy to come by, according to David Berteau, director of the CSIS International Security Program.

“There’s an aspect of this that is easily masked and it’s hard to tell the impact of this budget. That is the character of the workforce itself, and particularly the ongoing problem we’re having in sustaining both the supply of – and demand for – eligible, competent science, technical, engineering and mathematics people,” Berteau said. “There’s a long-term demand and supply equation that we have in place here. Clearly this is way bigger than defense, but this is a critical question to the defense industry, because of both demographics and changing technology.”

Another challenge for industry will center on how cyber comes to be defined – and then meeting that new requirement with tailored services, the panel noted.

“There’s a floating definition of what really constitutes cyber,” said Byron Callan, director of Capital Alpha Partners, LLC. “There was a $3.5 billion item in the budget for Cyber Command, but it’s a bigger market than that. Clearly it’s going to be a trend. The hard part, from the outside, is trying to get our arms around what that market actually is. How big is it and how fast is it growing? It’s going to come down to how you define it.”

 

DOD to launch department-wide cybersecurity review

FCW.com

By Amber Corrin

Feb 14, 2012

The Defense Department’s proposed budget for fiscal 2013 is quite a bit less than the amount requested for fiscal 2012 — $613 billion compared to $670 billion — but that’s not stopping officials from planning increased spending in some areas.

Indeed, DOD does plan to cut a number of defense IT programs, including some related to science and technology. But other areas, including cybersecurity, have seen an increase in attention – and funding, according to a budget overview released by DOD.

“We have heeded the lessons from 10 years of war and have protected and prioritized investments in areas such as cyber, special operations and intelligence, surveillance and reconnaissance assets,” Lt. Gen. Larry Spencer, director, force structure, resources and assessment, Joint Staff, said in a Feb. 13 Pentagon press briefing.

In a departure from the austerity trend, spending on cyber increased marginally for fiscal 2013, with the budget providing for at least $3.4 billion (up from $3.2 billion in the 2012 budget) for strengthening U.S. cyber defenses “including some new activities there aimed at what we know is an important area for us,” said Robert Hale, DOD comptroller.

According to the budget, the $3.4 billion will go through the Air Force to strengthen U.S. Cyber Command.

Cyber readiness has been prioritized in other areas of fiscal 2013 planning as well, with the overview outlining plans for a extensive, department-wide inspection of DOD cyber defenses.

“By September 30, 2013, the DOD will attain a passing score on a comprehensive cybersecurity inspection that assesses compliance with technical, operational, and physical security standards, on an overwhelming majority of inspected military cyberspace organizations resulting in improved hardening and cyber defense,” according to the document.

Despite DOD officials’ – including Defense Secretary Leon Panetta’s – repeated claims that science and technology would be an area of prioritized investment, funding in this area is down this year. The budget calls for $11.9 billion in fiscal 2013, dropping from $12.2 billion in 2012. Fiscal 2013 planning provides for $62 billion in science and technology spending through fiscal 2017.

“A strong S&T investment allows the department to focus and align content to meet new and emerging priorities,” the overview noted. “Investments were strengthened in DOD S&T priority areas such as cyber S&T, electronic warfare, autonomy (robotics), and advanced manufacturing.”

In the past, Panetta has reiterated the importance of investing in science and technology.

“With regards to the key investments in technology and new capabilities, we have to retain a decisive technological edge. We have to retain the kind of leverage the lessons of recent conflicts have given us. And we need to stay ahead of the most lethal and disruptive threats that we’re going to face in the future,” he said in a Jan. 26 briefing.

 

DoD Needs to be Open to Foreign-Made Systems: Carter

Feb. 16, 2012 – 05:40AM   |  

DefenseNews

By MARCUS WEISGERBER   

The U.S. Defense Department needs to be more open to purchasing foreign-made weapons and equipment, U.S. Deputy Defense Secretary Ashton Carter said.

During a Feb. 15 speech at the Atlantic Council in Washington, Carter noted he saw Army UH-72 Lakota helicopters this week while at the Pentagon helipad. The aircraft are built by European defense giant EADS in the United States.

“We have to be open to that,” he said. “It’s good for competition, good for technology.”

Carter, who previously served as the Pentagon’s top weapons buyer, said there are administrative factors that make this difficult.

“There are still barriers in our administrative system to tapping in effectively and efficiently to what really is a pretty capable, and certainly in some sectors more capable than ours, industrial base in Europe,” he said. “We know where they are. We would like to work with them. We do work with them.

“More of this goes on under the layer of the prime contractor than you might imagine,” he continued. “There is a very substantial transatlantic trade in subsystems, parts and that kind of thing, all to the benefit of everyone.”

 

Pentagon details downsizing of US forces in Europe

February 17, 012

By msnbc.com staff

The number of troops stationed in Europe will be reduced by more than 11,000 by 2017, defense officials said on Thursday.

Families affected by the moves were notified on Thursday, Stars & Stripes reported on its website.

About 80,000 U.S service members are currently deployed throughout Europe.

Two infantry brigades, the 170th Infantry Brigade and the 172nd Separate Infantry Brigade, each with 3,850 soldiers, will be moved off the European continent in the next two years, defense officials said in a news release.

The 170th, which is redeploying to Baumholder, Germany, from Afghanistan, will begin moving with troops’ families this summer. The 172nd, now in Afghanistan, first will redeploy this summer to Germany, then moving with troops’ families in the summer of 2013.

The Pentagon also announced the closure of Army garrisons in Schweinfurt, Bamberg and Heidelberg by fiscal year 2015.

Reductions in U.S. forces in Europe were announced earlier this month as part of Defense Secretary Leon Panetta’s plan to slash $487 billion from the Pentagon budget. Which units would move, however, had not been announced.

In a news conference Thursday with German Defense Minister Thomas de Maiziere, Panetta said a sizable force will remain in Europe.

“Despite these changes,” Panetta said, according to Stars & Stripes, “over 40,000 U.S. troops will still be based in Germany, training at state-of-the-art facilities.”

Maiziere said the move goes from “quantity to quality.”

“The withdrawal of U.S. troops from Germany is no complaint to me because a lot of troops will remain in Germany,” Maiziere said.

 

 

U.S. to Trim Commercial-Satellite Use

WSJ.com

FEBRUARY 17, 2012

By ANDY PASZTOR and NATHAN HODGE

The Pentagon’s latest spending plan marks a little-noticed but important shift for the space industry, scaling back a push to use commercial satellites to supplement the military’s communication and space efforts.

Defense Department budget cutters have long favored leasing satellite capacity in certain cases over developing, building and launching costly dedicated systems. But industry officials say the budget package unveiled Monday backs away from that decades-long privatization drive in two key areas: leasing private communication-satellite capacity to provide more bandwidth and buying commercial imagery to augment spy satellites.

Historically, government-owned and operated satellite systems have suffered from delays and cost overruns. Commercial satellite operators, which answer to investors, have often had a better track record of putting vehicles in orbit.

As an example, the Navy’s newest communications satellite, the Mobile User Objective System, or MUOS, is intended to provide more-reliable links for special-operations personnel and other military users than current Navy-operated satellites.

The $6 billion program is over budget and three years late, with the first satellite expected to operate at only about 3% of its full capability for at least a year. But Navy acquisition officials have rejected preliminary plans to use commercial alternatives to plug that gap.

Meanwhile, within the classified portion of the defense budget, the administration is proposing funding cuts to a program known as EnhancedView, a pioneering project to buy commercial images to complement the work of highly classified spy satellites. Conceived partly as a money-saving effort, the program’s data are less precise than military imagery but easier to share with allies or civilian agencies.

Taken together, industry officials say the recent decisions on the two programs reflect widespread institutional and political opposition to expanded national-security use of commercial satellites.

“There’s often a lot of reluctance to accept alternatives, including commercial solutions, because they are seen as threats to the big space programs,” says Mark Dankberg, chief executive of ViaSat Inc., a company that competes for both commercial and Pentagon contracts.

Administration officials describe the moves as a cost-cutting effort. Director of National Intelligence James Clapper recently told lawmakers: “We are looking at some pretty steep budget cuts across the board in the intelligence community.”

The proposed cuts are likely to have an impact on long-term contracts between the U.S. National Geospatial-Intelligence Agency and U.S.-based satellite-imagery providers DigitalGlobe Inc. and GeoEye Inc.

Karen Finn, an agency spokeswoman, says that while the EnhancedView accounts budget request is classified, the program will see “significant reductions” in fiscal 2013.

To guide those decisions, the administration is conducting a study of the usefulness of commercial imagery, due in mid-April. But industry officials contend that the anticipated cuts will yield short-term savings while likely raising prices paid by the government in the long run.

“Renegotiating a very attractive deal is not a recipe for saving money for the taxpayer,” says an aerospace-industry official familiar with the EnhancedView program.

Andrea James, a research analyst with the Minneapolis-based investment bank Dougherty & Co., estimates the cut could be as high as $300 million, a 40% reduction from anticipated spending levels.

The MUOS constellation is eventually expected to include four next-generation communication satellites and an in-orbit spare. MUOS prime contractor Lockheed Martin Corp. says the program will ultimately provide a huge transmission increase, allowing troops to use smaller, lighter radios without the telltale long antennas that can give them away on the battlefield.

But technical challenges, including delays in developing compatible mobile radios, means some of the promised improvements will take years.

More broadly, industry officials contend that Pentagon budgets sometimes disguise the finances of military satellites so that “even the most experienced military-budget analysts have trouble answering the basic question: What do they really cost?” says David McGlade, president of Intelsat SA, the largest commercial satellite operator

ViaSat, which competes for both commercial and Pentagon contracts, unsuccessfully proposed to retrofit existing radios to make MUOS more effective. Intelsat made investments with the expectation of leasing some transponders to augment MUOS, according to industry and government officials. An Intelsat spokesman declined to comment.

A Navy spokesman says individual armed services are responsible for buying compatible radios and terminals. He adds that officials have maintained quality communications by launching, reprogramming and repositioning military assets, and buying commercial capacity.

 

Senators Push Bill on Digital Security

WSJ.com

By SIOBHAN GORMAN

WASHINGTON—Senators moved Tuesday to jump-start efforts at bolstering U.S. computer security with a new bill that would require private companies operating critical infrastructure to meet certain security requirements.

The measure is the Senate’s latest attempt to meld competing proposals and stands the best chance of becoming law, cybersecurity specialists say, but even the bipartisan bill faces fairly long odds in an election year. It also comes up against significant opposition in private industry.

Roadblocks emerged quickly as seven senior Republicans asked for the bill not to be brought to the Senate floor, and to allow more time for debate and congressional hearings. Senate Majority Leader Harry Reid (D., Nev.) planned to bring the bill to the floor next month, a congressional official said.

The Senate measure would require companies that operate power plants, oil pipelines and other vital services to meet certain security standards. The requirements would be developed by federal officials in consultation with private industry.

The measure would also establish a mechanism for industry to more easily share information on cyberthreats with the government. That would come with liability protection for companies that provide data to the government.

Industry groups, however, oppose the central component of the bill, which they see as new regulation that will prove burdensome. The U.S. Chamber of Commerce said “rushing forward” with the bill would be “a major mistake.”

Lawmakers sought Tuesday to infuse urgency into the debate. “We are on the brink of what could be a calamity,” said Sen. Jay Rockefeller, a West Virginia Democrat who chairs the Senate Commerce Committee. “We should act now to prevent a cyber-disaster.”

“Our nation’s vulnerability has already been demonstrated by the daily attempts by nation-states, cyber criminals and hackers to penetrate our systems,” said Sen. Susan Collins (R., Maine). “Our bill is needed to achieve the goal of improving the security of critical cyber systems and protecting our national and economic security.”

The Senate measure is similar to a proposal the White House issued last year. The bill was introduced amid new revelations about a decade-long breach of computer systems at the now-bankrupt telecommunications giant Nortel Networks Ltd., which The Wall Street Journal reported Tuesday.

The White House and top Pentagon officials endorsed the new Senate bill Tuesday. “The American people expect us to ensure the nation’s critical infrastructure is protected, and quickly enacting comprehensive legislation would be an incredibly important step,” said White House spokeswoman Caitlin Hayden.

Cybersecurity experts said the Senate measure, which has been in the works for three years, was long overdue. “The lack of adequate authorities and oversight is making America a target for anybody with a grudge and some coding skills,” said James Lewis, a cybersecurity specialist at the Center for Strategic and International Studies who frequently advises the Obama administration. “This bill could change that if it isn’t watered down.”

Separately, a top military official told a Senate panel that if another country were to launch a cyberattack on U.S. infrastructure, it could be considered a “hostile act.” In that situation, said Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey, the U.S. would be justified to retaliate in kind.

 

V.A. Shiva Ayyadurai: Inventor of e-mail honored by Smithsonian

Washington Post

By Emi Kolawole, Published: February 17

The Smithsonian has acquired the tapes, documentation, copyrights, and over 50,000 lines of code that chronicle the invention of e-mail. The lines of code that produced the first “bcc,” “cc,” “to” and “from” fields were the brainchild of then-14-year old inventor V.A. Shiva Ayyadurai.

On Thursday, his name, his 1978 invention documentation, and the associated copyright, were entered in the Smithsonian permanent collection. The documentation will be archived in the National Museum of American History and put into an online exhibit. The documents will be scanned as soon as this week to be featured on a site under the Smithsonian.org domain. The date for the site launch has not yet been determined.

Ayyadurai’s path to the Smithsonian started with a series of articles he wrote about the U.S. Postal Service’s decline and his concern that the USPS was failing to innovate. His take: The Postal Service, carrying on the spirit of innovation which led to its creation, should have embraced e-mail years ago.

After a profile in Time magazine and a call from the Postal Service Inspector General asking for his ideas, Ayyadurai’s alma mater, the Massachusetts Institute of Technology, called to insist that it would be improper for the university to take the documentation of his work, and that it belonged in the Smithsonian. Conversations began, eventually leading to the Smithsonian’s latest addition and the celebration Thursday.

“My mom just passed away. So, it was unfortunate she wasn’t there,” said Ayyadurai during an interview at the Washington Post Thursday afternoon. “She represented for me a woman who came from very, very meager backgrounds — struggled to come here and then become a mathematician herself at a time when women weren’t supposed to get an education and work at a university as a systems analyst.”

“I think,without my mom,” he continued, “I would not have, as a young person, been introduced to that environment and had the opportunity to work there.”

Ayyadurai recounted how a family friend who had heard of MIT recommended that he apply. Reluctant, Ayyadurai filled out his application in pencil, with the family friend standing over his shoulder to make sure he finished.

“I didn’t even know about MIT until two weeks before I applied,” said Ayyadurai.

When he arrived he entered an environment still shadowed by racism. It was the beginning of the Reagan Administration, and the campus, like the rest of the nation, was still struggling to integrate. And there was another problem: “The people there didn’t seem very happy,” said Ayyadurai.

“I came in having developed this e-mail system, and when I went to my classes I was very bored. … I, essentially, got involved in a lot of radical politics,” he continued.

Coming from India, which, at the time, had a rigid caste system, he identified with the black and poor white students on campus.

“I was very intrigued by how do you change the system,” said Ayyadurai, who balanced his time between the studying technology and studying politics. Changing that system, he continued, was more complex than developing an e-mail system.

A recommendation for the young inventor

When it comes to today’s young people, particularly the 14-year-old eager to become an inventor, Ayyadurai recommends recommends embarking on independent studies, and taking a break from school before heading to college.

“I, in fact, believe people should work before they even go to school,”  said Ayyadurai, a faculty lecturer at MIT in the Biological Engineering Division. “Many people don’t even know why they’re going to college.”

But he’s not against going to college entirely, rather he is a fan of a combination of experiential learning and rote discipline. After all, Ayyadurai is at the front lines when it comes to preparing America’s youth for careers in science and technology.

He developed a class on traditional medicine and systems technology and another on systems visualization at MIT. The latter gives students who would otherwise not engage in the arts an opportunity to illustrate a complex concept. The course went from 6 to 32 and now 50 students, becoming one of the most popular classes on campus.

Based on his experience with the class, Ayyadurai recommends teaching the systems first and then bringing in the more complex, detailed math and science.

“The problems of today’s world are not just learning how to build a computer better or writing a software program. A lot of that stuff is being outsourced,” said Ayyadurai. “The big problems are large-scale systems.” Think education, transportation and even relationships, he said.

“If we can teach students that the world is very complex and to understand that complexity you need to have a systems approach,” he continued, “I think that systems approach is what students want to learn.”

The intellectual property debate

“I fundamentally do not believe in the patenting of software,” said Ayyadurai. “It would be like Shakespeare patenting the tragic love story.”

He admits that in his work as a venture capitalist he has had to go against his own belief. But, rather than patents, Ayyadurai prefers copyright, which allows others to innovate using the technology.

By pursuing a copyright on his e-mail work, Ayyadurai opened it up for use, but with credit. Had he pursued a patent, it could have significantly stunted the technology’s growth even as it had the potential to make him incredibly wealthy.

America, freedom and innovation

“We fail to recognize how much freedom we actually have here relative to these other countries,” said Ayyadurai when asked what the United States gets wrong when it comes to moving its innovation economy forward.

“That awareness,” he continued, “is what needs to be developed for people.”

India and China, two countries making significant strides in technology and innovation still lag behind the U.S., according to Ayyadurai, who says it’s due to a lack of fundamental freedoms in those nations.

“We should not really have any types of jobs issues here,” continued Ayyadurai, saying that the “basis of American democracy” is innovation.

“Innovation actually demands freedom, and freedom demands innovation,” said Ayyadurai. “I don’t think there’s more money we need to throw at it.”

Ayyadurai also has some recommendations for the presidential candidates when it comes to policy proposals that will accelerate rather than slow innovation growth.

“Small businesses, I believe, are the place where innovation really takes place,” said Ayyadurai.

With venture capital moving away from mid- and small-tier businesses, those companies are in need of government assistance. “There’s this whole strata of small businesses that needs tax credits, I think.”

Are we overcommunicating?

“I think people are overcommunicating in the sense they have missed out on what is communication,” said Ayyadurai. “A lot of time when people are texting, it’s not the content — you don’t need to text — but people are doing it just to connect with another human being, so a lot of the information is almost irrelevant.”

“I think we’re in this phase now in humanity where we have all these communication vehicles but we still are, as humans, trying to figure out how do we connect,” he continued, “because that ritual mode of communication is removed from us.”

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