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May 27, 2012

May 29, 2012



Popular House-passed line-item veto bill hits brick wall in Senate

The Hill

By Molly K. Hooper – 05/21/12 05:00 AM ET

The House-passed line-item veto bill, which has been endorsed by the White House, is on life support in the Democratic-controlled Senate.

More than four months after the House approved the measure, co-sponsored by Budget Committee Chairman Paul Ryan (R-Wis.) and ranking member Chris Van Hollen (D-Md.), the Senate hasn’t touched it.

Both House Minority Leader Nancy Pelosi (D-Calif.) and Majority Leader Eric Cantor (R-Va.) voted for the bill that passed the lower chamber, 254-173. The White House said it “strongly supports” that measure, claiming it would help “eliminate unnecessary spending and discouraging waste.”

Shortly following House-passage — with 57 Democrats voting in favor of the bill, 41 Republicans opposing it — Missouri Sen. Claire McCaskill (D) offered an identical bill in the upper chamber.

McCaskill’s bill has languished in the Budget Committee. Despite interest on the part of other senators such as Arizona Sen. John McCain (R) and Colorado Sen. Mark Udall (D), McCaskill’s bill has no co-sponsors.

“We need to be using every possible tool to bring down federal spending. A line-item veto is something I’ve advocated for since I arrived in the Senate, and now that the House has finally acted, it’s time for the Senate to take up and pass this bill right away,” McCaskill said as she unveiled her legislation.

A source close to McCaskill, who is facing a tough reelection, told The Hill that the senator is working to build support for this legislation as well as other measures to cut spending.

But Senate Majority Leader Harry Reid (D-Nev.), who sets the Senate floor schedule, has previously voted against line-item veto legislation. Senate Minority Leader Mitch McConnell (R-Ky.), meanwhile, supported the bill that Reid rejected in the 1990s. Reid’s office did not comment for this article.

Van Hollen believes there is “broad, bipartisan support” for the measure that would give the president the authority to proposed spending cuts in appropriations bills that Congress sends to his desk. Under an expedited process, the recommendations would be voted on by Congress, without amendments.

Proponents of cutting government spending succeeded in sending a line-item veto to then President Clinton in 1996. But critics of the law, including the late Sen. Robert Byrd (D-W.Va.), legally challenged it. The Supreme Court subsequently ruled it unconstitutional as an abdication of congressional authority over power of the purse.

The Ryan-Van Hollen bill seeks to comply with that ruling by requiring Congress to take an up-or-down vote on any cuts sought by the White House.

Van Hollen told The Hill that lawmakers pressed their Senate counterparts to move the bill, shortly after its House passage in early February.

“We’ll have to take another run at that,” Van Hollen said.

While Pelosi voted for the bill, her fellow Democratic leadership team did not – Minority Whip Steny Hoyer (D-Md.), Assistant Leader James Clyburn (S.C.), Caucus Chairman John Larson (Conn.) and Vice Chairman Xavier Becerra (Calif.) all voted against the bipartisan measure.

At the time, Hoyer, a former appropriator, said he supported expedited rescission authority, but added he opposes portions of the specific language approved by the House because it would allow the president to reduce funding altogether rather than simply object to money being spent on a specific project.

“I think that diminishes the authority of the Congress under Article I to establish spending levels and appropriate funds to priorities that it deems appropriate,” Hoyer told reporters.




Calif. Republican emerges as leader of GOP budget hawks

The Hill

By Erik Wasson – 05/20/12 05:00 PM ET

Rep. Tom McClintock (R-Calif.) has emerged as a leader of deficit hardliners in the House and become a thorn in the side of GOP leaders.

While McClintock does not criticize other Republicans by name, he is clearly dissatisfied with the amount of spending cuts House Republicans have achieved since winning the majority in 2010.

“This government doesn’t spend money unless the House authorizes it. We are more than a year into a period where we have controlled the House and we are a trillion dollars deeper in debt,” he told The Hill in an interview. “The buck starts here. We can’t blame the president.”

McClintock, who has been in the House since 2008, led the 93-member defection against reauthorizing the Export-Import Bank this month with an impassioned floor speech.

“Legitimate companies have plenty of access to private capital, they don’t need these subsidies. The illegitimate ones don’t need to be propped up with the hard-earned dollars of working taxpayers,” McClintock said on the floor.

The Ex-Im bill was negotiated by House Majority Leader Eric Cantor (R-Va.), who supports ending export credits but compromised with Democrats to extend the bank for three more years. In one concession won by Cantor, the bill for the first time orders the administration to begin international talks to end export financing.

That wasn’t enough to sway McClintock, however. He argued that, although the bank turns a profit, it could one day blow up in taxpayers’ faces like Fannie Mae.

McClintock was also one of 10 defectors on the Small Business Tax Cut act, H.R. 9, which passed the House in April by a 235-173 vote.

The bill gives a 20 percent tax break to any business with fewer than 500 employees, but following House GOP rules, the tax cut was not offset, meaning it would add to the deficit.

McClintock argued that tax cuts must be offset with spending cuts.

“Tax cuts without either spending reductions or real economic growth are an illusion,” he said at the time.

McClintock also organized 43 other members into sending a letter to GOP leaders this month demanding that the 12 appropriations bills be moved through the chamber individually.

On that front, McClintock is making progress. He told The Hill Friday that leaders responded favorably to the letter, and while they might still resort to packaging the bills together, they are allowing crucial amendments to come up on the floor.

One of the biggest fights over federal spending could come next year, when Congress will need to increase the debt ceiling. House Speaker John Boehner (R-Ohio) warned President Obama this week that he would not accept a debt-ceiling increase that isn’t paired with bigger spending cuts.

But McClintock said he remains skeptical that the House will be able to make deep enough cuts in the next showdown.

“[Boehner’s] speech was very good. The question is, does he mean the same kind of agreement that was adopted as the Budget Control Act? The problem is the cut in the English sense of the word doesn’t translate very well into Washington-ese,” he said.

McClintock said that allowing immediate debt increases to be offset by spending cuts down the road is wrong. The Budget Control Act raised the debt ceiling by $2.1 trillion, but imposed that amount of cuts over 10 years.

“What they actually did, the few cuts they made wouldn’t take place until 2017, while the debt increase all happened immediately,” McClintock said.

House leadership offices did not respond to request for comment on McClintock’s stands. Aides have said in the past that controlling “one half of one third of government” means that the GOP does face constraints in achieving all its policy goals before the election.

McClintock is demur when asked if he is emerging as a budget leader in the House. He gives more credit to Republican Study Committee chairman Jim Jordan (R-Ohio) for his efforts.

Before coming to Congress, McClintock was known as a maverick budget hawk in the California state Assembly who wasn’t afraid to take on the party establishment. He ran against Arnold Schwarzenegger to try to replace Gray Davis as governor in the 2003 recall election.

Americans for Tax Reform (ATR) President Grover Norquist compared McClintock to Rep. Jeff Flake (R-Ariz.), whose lonely anti-earmark crusade led to a temporary earmark ban and gave him a high profile ahead of his Senate race this year.

Norquist said ATR applauded McClintock’s stand on the Ex-Im Bank.

“This is exactly the sort of thing we can turn into a movement,” he said. “When someone like McClintock is doing it, you know it is serious.”

He said members like McClintock will be especially important if Mitt Romney wins the White House. In the past, Norquist said, GOP congressional leaders have looked the other way when Republican presidents strayed on spending.

Norquist disagrees with McClintock, however, about the small business tax cut and the Budget Control Act. He said that enforceable cuts over 10 years can work to shrink the government.

“Termites don’t eat your house all at once,” he said.

On the small business bill, Norquist said his group does not believe tax cuts need to be offset with spending cuts, although such a situation is preferable.

“That is ice cream with sprinkles!” he said. “If you don’t have sprinkles, though, you can still have ice cream.”


Boehner: New law to punish tax-dodgers for renouncing citizenship ‘unnecessary’

The Hill

By Alicia M. Cohn – 05/20/12 10:54 AM ET

House Speaker John Boehner (R-Ohio) said Sunday supported legislation to punish individuals who renounced their citizenship in order to avoid paying U.S. taxes, but said such measures were already law.

“There’s already a law in the books,” Boehner told ABC’s George Stephanopoulos in an interview on ABC’s “This Week.” “It’s already against the law.”

Democratic Sens. Charles Schumer (N.Y.) and Bob Casey Jr. (Pa.) announced legislation last week designed to punish people who renounce their citizenship in order to dodge taxes.

Their bill, the Ex-Patriot Act, is a direct response to Eduardo Saverin, the co-founder of Facebook, who renounced his U.S. citizenship last year, and the senators had harsh words for what they called Saverin’s “scheme” to avoid paying taxes on his interest in the company, which went public last week.

Saverin’s move saved him an estimated $67 million to $100 million in taxes. The wealthy technology investor however has said his change in citizenship was not an effort to avoid American taxes.

Boehner on Sunday said it is “absolutely outrageous” for anyone to renounce their citizenship in order to avoid taxes.

The Casey and Schumer legislation would punish any individual who renounces their citizenship and holds a net worth of $2 million or an average income tax liability of $148,000 over the last five years.

If the Internal Revenue Service determines that person gave up their passport for primarily tax reasons, the person’s U.S. assets would be taxed at 30 percent and they would be barred from ever re-entering the United States.

Sen. Orrin Hatch (R-Utah), the ranking member of the Senate Finance Committee, said his Democratic colleagues were overlooking the “root cause” of Saverin’s actions. A spokesperson from his office released a statement last week saying that wealthy expatriates seeking to renounce their American citizenship is a sign that the tax code needs to be fixed.



Who Is Michael Daniel?

New Cybersecurity Coordinator Will Reshape White House Post

Eric Chabrow    
May 21, 2012

Some of the most-connected people in Washington’s cybersecurity community never heard of Michael Daniel, who will succeed Howard Schmidt when he retires at month’s end as White House cybersecurity coordinator .

“Don’t know him,” a highly respected government IT security thought-leader says of Daniel, the White House Office of Management and Budget intelligence branch chief for the past 11 years.

“I never heard of him,” a long-time federal agency chief information security officer says.

That Daniel has remained under the radar for so long doesn’t surprise Karen Evans, the administrator for e-government and IT at OMB during the last 5½ years of the George W. Bush administration. Like Schmidt, Evans was in a political position and represented the public face of the administration. “Michael is an OMB careerist and we were very protective of them, so they could transition from administration to administration; that was their job,” says Evans, then known as the federal government’s de facto chief information officer.

Daniel’s job, as intelligence branch chief, is to understand thoroughly the policies that justify hundreds of millions of dollars in annual spending on U.S. defense and intelligence agencies’ cybersecurity initiatives.

“Michael was picked because of his intimate knowledge of national security accounts, where the true capabilities exist,” says Melissa Hathaway, a top cybersecurity adviser to Presidents Bush and Obama, who worked closely with Daniel in creating the federal government’s Comprehensive National Cybersecurity Initiative. “He knows what can be leveraged in the national security apparatus to help assure the defense of the country.”

Bank of America CISO Patrick Gorman sees Daniel as a great choice because of his experience in cybersecurity policy. “Michael is a strong manager who did a lot of heavy lifting under CNCI,” says Gorman, who as assistant and then acting associate national intelligence director, worked with Daniel from 2007 to 2009. “Few people in government know the whole range of cybersecurity programs and capabilities better. I think this was a great pick, especially so given the need to better integrate the numerous programs in government.”

Daniel’s deep knowledge of IT security programs and their costs could prove useful as government agencies confront potential across-the-board budget cuts of up to 10 percent starting next year, a process known as sequestration, as a result of a deficit-cutting budget deal enacted last year.

“Choosing Michael signals that you’re putting somebody in there who has intimate knowledge of where things go, in a very controversial budget year where trades and advocacy for key things are going to have to be made, especially as we go into potential sequester,” Hathaway says. “You want somebody who knows the truth about what’s going on in the different accounts and different agencies. And, he’s the guy. He’s maybe the only person besides his boss.”

The paths taken by Schmidt and Daniel to the cybersecurity coordinator post couldn’t have been more dissimilar.

Schmidt’s road to the White House was circuitous as the highways he rides on his Harley-Davidson. A Vietnam-era Air Force veteran, he worked in law enforcement for the Chandler, Ariz., police; Air Force, Army and FBI. Having earned his BA in business administration and MA in organizational management from the University of Phoenix, Schmidt taught at Georgia Tech, Idaho State and Carnegie Mellon. He worked as a venture capitalist and IT security consultant. Schmidt was chief security officer at Microsoft and eBay as well as headed a number of IT security associations. During the Bush administration, he served as vice chair of the President’s Critical Infrastructure Board.

Daniel at 41, a generation younger than the 62-year-old Schmidt, is a martial arts enthusiast who has a distinguished academic pedigree that mirrors the best and brightest in Washington: a bachelor degree in public policy from Princeton University, master of public policy from the Harvard Kennedy School of Government and a master in national resource planning from the National Defense University. After graduating from Princeton in 1992, Daniel took a job as a research assistant at the Southern Center for International Studies, a think tank in Atlanta. Upon receiving his master’s degree from Harvard, he joined OMB as a program examiner in the operations and personnel branch, covering the Navy, Marine Corps and contingency operations programs.

With different backgrounds and skills than Schmidt’s, Daniel will reshape the role of cybersecurity coordinator. Often, the first person to hold a position is perceived as an ideas person; the second one, an executor. A case in point: Mark Forman was OMB’s first e-administrator from 2001 to 2003, developing the nation’s cybersecurity strategy as the focus on IT security intensified following the Sept. 11 terrorist attacks. During Forman’s tenure, Congress enacted the Federal Information Security Management Act, the law the Bush administration helped draft that governs federal government IT security. But it turned to his successor Evans to execute on much of the strategy. Similarly, Schmidt helped shepherd the creation of new government IT security initiatives, but it will be Daniel who will be tasked to make sure they’ll be implemented.

“Mark changed the dialogue; Howard changed the dialogue. That’s a certain set of skills,” Evans says. “But you need the next set of skills where you have to execute.”


Army eyes Internet replica for crisis drills

By Dawn Lim

May 18, 2012

The U.S. Army is thinking about creating a replica of the Internet, replete with news sites, government websites and social media networks, to experiment with ways to manage the message during a crisis, government documents show.

The envisioned portal would allow the U.S. Northern Command — a unit that organizes exercises and planning efforts to sharpen agencies’ reflexes during emergencies — to test strategies for engaging journalists and the public through online networks. It reflects the growing importance government is placing on the Internet as a tool to influence the spread of ideas.

The password-protected platform, called the U.S. Army North Exercise Media Web Portal, will offer a microcosm of the online landscape, populated with “mass media and social media networking websites,” as well as interactive platforms similar to Twitter, YouTube and blogging sites. “The portal will serve as the primary distribution point for exercise media products and serve as a platform for scenario-based social media discourse,” the notice states.

The Army issued a request for information in April to suss out products available on the market to support the experiment. The RFI closed on April 23.

The platform is expected to host 1,000 concurrent users and allow uploads of video files as large as 200 megabytes, according to the RFI. The base period for the contract is slated to run from July 2012 to June 2013, with options for renewal through 2015.


Iraq buys U.S. drones to protect oil

By Jim Michaels, USA TODAY

BAGHDAD – The United States has agreed to sell unarmed surveillance drones to Iraq’s navy as part of an effort to help protect that nation’s oil exports amid growing tensions in the Persian Gulf and to strengthen U.S.-Iraqi ties.

“They understand the importance of the mission to protect its oil platforms,” said Army Lt. Gen. Robert Caslen, who heads the U.S. Office of Security Cooperation-Iraq.

The office, which operates out of the U.S. Embassy and manages U.S. military sales programs in Iraq, confirmed the sale of drones but declined to say the model or number of drones that are part of the contract.

The drones will allow Iraq’s military to keep a continuous watch over its oil terminals within Iraqi territorial waters of the Persian Gulf, where a significant portion of the world’s oil originates and which Iran has occasionally threatened to blockade.

The sales of drones and other U.S. military equipment are viewed by the United States as a way to maintain deep ties with Iraq after the departure of American troops in December. The sales “helps facilitate that strategic relationship,” Caslen said.

Iraq already said it is buying more than $15 billion worth of U.S. military hardware, including 36 F-16 fighter planes, M-1 tanks and armored personnel carriers, insisting the weapons are for defensive purposes.

“Iraq should have the ability to protect itself against outside aggression,” said Ali al-Moussawi, an adviser to Prime Minister Nouri al-Maliki.

Iraq is particularly concerned about the security of its oil facilities. The bulk of Iraq’s exports move through a handful of terminals on Iraq’s narrow Persian Gulf coast, making its exports vulnerable to attack from other countries or terrorists.

As a major oil producer, Iraq could balance Western worries about Iran’s threats to cut off oil shipments to some European countries that import Iranian oil. Iraq said it is not worried about whether Iran views Iraq’s progress as a threat.

“Whether Iran has concerns or not, we’re OK with that,” al-Moussawi said. “This is in our interest.”

Iraqi and U.S. officials say Iraq has made remarkable progress in developing its energy industry since the time of the 2003 U.S.-led invasion.

“This is one of the biggest energy stories in the world today,” said James Jeffrey, the U.S. ambassador to Iraq.

Iraq has boosted oil production to 3 million barrels per day, up from about 2.5 million before the invasion. In six years, Iraq expects to be producing 10 million barrels a day, according to Iraq’s deputy prime minister for energy, Hussain al-Shahristani.

“We’d like Iraq to be considered as a dependable long-term supplier of world energy needs,” al-Shahristani said.


Hawaii First State Where Plastic Bags Banned

by Jim Malewitz, Staff Writer

In an effort to cut down on a type of litter seen as a significant threat to the environment, Hawaiians are giving plastic bags the boot.

Peter Carlisle, mayor of the city and county of Honolulu, recently signed legislation banning retailers from offering plastic bags in the checkout aisle, joining the state’s other three counties that have recently passed similar laws. That makes Hawaii the first state with such regulations statewide.

“[The bill] will allow us to do reduction, recycling and reuse,” Carlisle told reporters on May 10 after signing the legislation. “This is really getting people to change their behaviors.”

Environmental groups for several years have been lobbying state and local governments to enact policies discouraging the use of plastic bags, which take hundreds of years to biodegrade and often end up clogging waterways, sitting in landfills or drifting across pavement as what some describe as “urban tumbleweed.”

No state legislature has passed a plastic bag law, but several in recent years have debated them. Ten states between 2009 and 2011 proposed taxes, fees or bans on plastic bags, according to the National Conference of State Legislatures. And this year, bills were proposed in Washington and Massachusetts.

For enemies of plastic bags, the greatest victories have come locally, where dozens of cities and counties have limited use of plastic, and in some cases, paper bags, too. For instance, San Francisco, which in 2007 became the first U.S. city to regulate plastic bags, now charges a 10-cent tax on paper bags.

“Great things are happening at the local level and we’re confident that California can translate that into statewide action,” says Sue Vang, a policy associate for the nonprofit Californians Against Waste.

Local bans in California will apply to 25 percent of the state’s population by the end of the year, the group estimates.

In 2009, Washington, DC, passed a 5-cent tax on disposable paper and plastic carryout bags following a study estimating that plastic bags made up 20 percent of litter in the Anacostia River and more than 40 percent of trash in nearby rivers and streams. Under the law, businesses keep 1 cent of the tax, and the remainder goes to fund river cleanup efforts.

The river’s plastic bag waste has since dropped by 75 percent, district authorities told The Washington Post earlier this month. And plastic and paper bag use had dropped from 22.5 million to 3.2 million to one year after the law went into effect.

Most opposition to bag bans and taxes comes from the plastics and chemicals industry, whose representatives have argued that the laws would burden consumers, manufacturers and recyclers.

“There’s no need to burden consumers with a punitive new tax in this difficult economy. Recycling is a solution that’s already working,” Shari Jackson, of the American Chemistry Council, said in a statement last year after Maryland’s Montgomery County passed a bag tax.

Some cities and grocery stores collect plastic bags for recycling, but few bags overall end up being recycled, partly because it’s costly to do so. Just 12 percent of bags, plastics and wraps was recycled in 2010, according to the U.S. Environmental Protection Agency.

Honolulu’s bag ban won’t go into effect until July 1, 2015, which Mayor Carlyle says will give stores ample time to use up their inventory and prepare customers for the shift.

Some environmental groups say the law doesn’t go far enough, since it grants exceptions for several uses, including newspaper bags for home delivery, bags used by dry cleaners and bags used in grocery stores to wrap small foods like produce or meat. But many anti-bag advocates are embracing Hawaii’s now statewide ban.

“What happened in Hawaii shows that locals can make a difference,” says Vang.



Congress pulls plug on Pell Grants; thousands of students affected


By Matt Krupnick © Copyright 2012, Bay Area News Group San Jose Mercury News


A mother of four who was laid off in 2008, Danielle Torno had planned on turning her life around next year with the help of a Cal State East Bay business degree.

Instead, the 36-year-old San Jose resident will be searching for another solution because of a little-noticed congressional decision to reduce or eliminate Pell Grants for hundreds of thousands of the poorest college students.

The changes take effect July 1, and students like Torno will bear the brunt of the reforms, which are expected to save $11 billion over 10 years.

Among those who will lose Pell Grants in the summer are at least 65,000 new college students without high school diplomas and 63,000 who, like Torno, have spent more than six years in college. Changes in income requirements will reduce or eliminate grants for nearly 300,000 others.

Torno has been in college off and on since 2000, full time since 2008. Her time in school amounts to the equivalent of six full-time years, which is the new limit on how long a student may receive Pell Grants. The scholarships previously were available for nine years.

“You should be able to get a bachelor’s degree in six years, honestly,” said Torno, who received a letter last month from the U.S. Department of Education alerting her that she would lose the $5,550-a-year scholarships. “But there should be hardship exceptions. People have families.”

Torno also has borrowed the maximum allowable $46,000 in federal loans, meaning her only remaining aid option could be private loans with higher interest rates. But even that is uncertain.

“My credit’s too bad from not having a job,” said Torno, who has been balancing child care and school by taking online courses. “I’m going to have to stop going to school.”

For many students who never finished high school, the loss of Pell Grants could put college out of reach. Those students, who also will lose access to subsidized federal loans, had qualified for aid through an exam known as the ability-to-benefit test or by completing at least six college units.

A 2008 federal study found students without diplomas who had completed at least six units were as successful as other students.

“There’s a lot of students who, for a lot of reasons, didn’t complete high school but who have come back to school at a different point in their lives,” said Emily Stone, dean of student-support services at Pleasant Hill’s Diablo Valley College. “They could very well be ready to be a college student but need the financial aid.”

Students without diplomas or a GED certificate, most of whom attend community or for-profit colleges, will remain eligible for Pell Grants if they have enrolled in college anytime before July 1. And they will still be able to receive state scholarships such as Cal Grants.

The impending changes were pushed by Republican members of Congress. Several of those members did not respond to repeated interview requests. In a written statement released by his office, Rep. John Kline, R-Minn., said Congress had to make “tough choices” to cut government funding for Pell Grants.

African-American and Latino students will be hit hardest, experts said. An estimated 31 percent of students who take the ability-to-benefit test are Latino, according to the American Association of Community Colleges, and 19 percent are black.

Combined, the two groups make up just 14 percent of undergraduates, the association said.

Minority students are essentially being blamed because their high schools failed them, said Manuel Alcala, a counselor at Laney College in Oakland.

“You’re shutting the door on a whole group of students,” Alcala said. “What kind of people are we creating?”

A coalition of groups is pushing Congress to reverse some of its Pell reforms. The most likely change would be to once again allow grants to students who have completed six college units, said Vickie Choitz, a senior policy analyst with the Washington, D.C.-based Center for Law and Social Policy.

“We’ve been hitting the Hill with a lot of meetings,” Choitz said. “We’re definitely getting interest from people who feel like this is a harsh change.”

Matt Krupnick covers higher education. Contact him at 510-208-6488. Follow him at 




NATO Signs $1.7B Global Hawk Contract


May. 21, 2012 – 06:27AM |


CHICAGO — At the end of the first day of the NATO Summit in Chicago, the transatlantic alliance signed a $1.7 billion contract with Northrop Grumman for five Global Hawk UAVs.

The Block 40 Global Hawks, which are unarmed reconnaissance UAVs, are part the Allied Ground Surveillance (AGS) system.

NATO first announced the purchase in February but officially closed the deal May 21. A NATO official predicted it would cost NATO another $2 billion to operate the aircraft during the next 20 years.

“These are five Global Hawk drones that provide the kind of surveillance capability that we saw in the Libya operation was so vital to the effective operation of our military,” U.S. Ambassador to NATO Ivo Daalder said at a press conference.

Although European air forces carried out the bulk of bombing missions in Libya last year, they relied heavily on drones provided by the United States to identify and hit targets during the campaign.

NATO Secretary General Anders Fogh Rasmussen told reporters that NATO had not discussed where the aircraft could be deployed.

Of the 28 NATO member countries, 13 are currently contributing to the acquisition of the aircraft. They are Bulgaria, the Czech Republic, Estonia, Germany, Italy, Latvia, Lithuania, Luxembourg, Norway, Romania, Slovakia, Slovenia and the United States.

Every NATO member is expected to participate in the long-term support of the program.

Northrop Grumman will be the prime contractor for NATO AGS and will build the Global Hawk air vehicle and its various payloads, including the ground surveillance radar. European industry will develop and deliver the system’s ground support stations.

Northrop Grumman officials, including CEO and President Wes Bush, joined NATO leaders and 28 defense ministers from NATO member countries for the signing in Chicago.

The main operating base for the AGS system will be at a NATO base in Sicily, where the U.S. Air Force bases Global Hawks and the U.S. Navy has the broad area maritime surveillance (BAMS) variant of the UAV


U.S. Said to Let China Buy Direct From Treasury



NEW YORK (Reuters) – China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

The relationship means the People’s Bank of China buys U.S. debt using a different method than any other central bank in the world.

The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn’t been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People’s Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.

The change was not announced publicly or in any message to primary dealers.

“Direct bidding is open to a wide range of investors, but as a matter of general policy we do not comment on individual bidders,” said Matt Anderson, a Treasury Department spokesman.

While there is been no prohibition on foreign government entities bidding directly, the Treasury’s accommodation of China is unique.

The Treasury’s sales of U.S. debt to China have become part of a politically charged public debate about China’s role as the largest exporter to the United States and also the country’s largest creditor.

The privilege may help China obtain U.S. debt for a better price by keeping Wall Street’s knowledge of its orders to a minimum.

Primary dealers are not allowed to charge customers money to bid on their behalf at Treasury auctions, so China isn’t saving money by cutting out commission fees.

Instead, China is preserving the value of specific information about its bidding habits. By bidding directly, China prevents Wall Street banks from trying to exploit its huge presence in a given auction by driving up the price.

It is one of several courtesies provided to a buyer in a class by itself in terms of purchasing power. Although the Japanese, for example, own about $1.1 trillion of Treasuries, their purchasing has been less centralized. Buying by Japan is scattered among institutions, including pension funds, large Japanese banks and the Bank of Japan, without a single entity dominating.

Granting China a direct bidding link is not the first time Treasury has gone to great lengths to keep its largest client happy.

In 2009, when Treasury officials found China was using special deals with primary dealers to conceal its U.S. debt purchases, the Treasury changed a rule to outlaw those deals, Reuters reported last June. But at the same time it relaxed a reporting requirement to make the Chinese more comfortable with the amended rule.

Another feature of the U.S.-China business relationship is discretion: The Treasury tried to keep its motivation for the 2009 rule change under wraps, Reuters reported.

Documents dealing with China’s new status as a direct bidder again demonstrate the Treasury’s desire for secrecy — in terms of Wall Street and its new direct bidding customer.

To safeguard against hackers, Treasury officials upgraded the system that allows China to access the bidding process.

Then they discussed ways to deflect questions from Wall Street traders that would arise once the auction results began revealing the undeniable presence of a foreign direct bidder.

“Most hold the view that foreign accounts only submit ‘indirect bids’ through primary dealers. This will likely cause significant chatter on the street and many questions will likely come our way,” wrote one government official in an email viewed by Reuters.

In the email, the official suggested providing basic, general answers to questions about who can bid in Treasury actions.

“For questions more extensive or probing in nature, I think it prudent to direct them to the or Treasury public relations area,” the official wrote.

The granting to China of direct bidder status may be controversial because some government officials are concerned that China has gained too much leverage over the United States through its large Treasury holdings.

For example, economist Brad Setser, who is a member of the National Economic Council and has also served on the National Security Council, has argued China’s large Treasury holdings pose a national security threat.

Writing for the Council on Foreign Relations in 2009, Setser posited that China’s massive U.S. debt holdings gave it power over U.S. policy via the threat of a swift, large sale of U.S. debt that could send the market into turmoil and drive up interest rates.

But Treasury officials have long maintained that U.S. debt sales to China are kept separate from politics in a business relationship that benefits both countries. The Chinese use Treasuries to house the dollars they receive from selling goods to the United States, while the U.S. government is happy to see such strong demand for its debt because it keeps interest rates low.

A spokesman for the Chinese embassy in Washington did not respond to calls and emails seeking comment.

The United States has, however, displayed increasing anxiety about China as a cybersecurity threat. The change Treasury officials made to their direct bidding system before allowing access to China was to limit access to the system to a specially designed private network connection controlled by the Treasury.

China is among the most sensitive topics for bankers and government officials who court the country as a financial client because of its size and importance, and none would agree to comment on the record for this story.

A former debt management official at the Treasury who did not want to be identified said that as China’s experience in the U.S. Treasury market has deepened over time, Chinese officials may have felt more comfortable taking the reins in the management of their holdings.

Their request to bid directly, in his view, came from a confidence that their money managers could buy U.S. debt more efficiently on their own than through Wall Street banks, which can often drive up the price of Treasuries at an auction if they know how much large clients are willing to pay. Such a practice that is not specifically illegal, though most traders would deem it unethical.

Evidence of China’s growing sophistication as a money manager in the U.S. markets is clear in its expansion of operations in New York. Its money management arm, the State Administration for Foreign Exchange (commonly called SAFE), has an office in Midtown Manhattan and a seasoned chief investment officer — former Pacific Investment Management Co derivatives head Changhong Zhu — in Beijing.

A woman who answered the phone at SAFE’s New York office said no one in the office was authorized to talk to the media.

(Editing by Martin Howell and Steve Orlofsky)


2014 budget guidance: Cut another 5%, 10% more for IT


By SEAN REILLY | Last Updated:May 21, 2012

Budget planning for 2014 is officially underway, and more cuts are in the works.

The White House budget office has directed agencies to plan discretionary spending cuts of 5 percent below the 2014 levels that the Obama administration has already outlined in its 2013 budget request.

Agencies’ responses will give President Obama options in making the “hard choices” needed to meet the limits imposed by last year’s Budget Control Act while addressing other priorities, acting Office of Management and Budget Director Jeff Zients wrote.

The new budget guidance, posted online Friday night, also directs agencies to cut information technology spending by 10 percent compared to average spending from 2010 to 2012.

Zients added that agencies may also offer ideas on how they would reinvest savings from those cuts in “innovative IT solutions that would produce a favorable return on investment within 18 months or demonstrably improve citizen services or administrative efficiencies.”

In his guidance, Zients made no provision for the potential impact of heavy across-the-board budget cuts known as sequestration. Those cuts, which would hit both the Defense Department and nondefense agencies, are scheduled to take effect starting in January unless Congress and the administration come up with another way to meet savings targets spelled out in the Budget Control Act.

Obama “continues to believe that the Congress can and must act” to avoid sequestration, Zients said. Even assuming that happens, he added, the 2014 budget “must continue to cut lower-priority spending” to help pay for funding for education and other areas critical to economic growth.

Zients also called on agencies to:

• Review mandatory spending “with the same rigor” as discretionary spending.

• Expand their use of evidence and evaluation in setting spending priorities.

• Make at least three “priority program reform proposals” where legislative, budget or administrative changes could bolster effectiveness or save money.



Cyber Intelligence: “Every Classified Database” Compromised?

By Kevin G. Coleman

Published: May 21, 2012

It is hard to go online without seeing yet another report about an inappropriate disclosure of classified information and last week was no different.

From an undisclosed location in Canada, Chris Doyon — also known under the hacker handle of Commander X, who is an active member of the group known as Anonymous (and pictured in an FBI photo above) — recently told the Postmedia in Canada: “Right now we have access to every classified databases in the U.S. government. It’s a matter of when we leak the contents of those databases, not if.”

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This is not another case of a hacker penetrating the security of the system. During his interview he disclosed that the access to the classified information was not accomplished by hacking but by what many to believe is the weakest link in cyber security — insiders!

All the cleared cyber security individuals I checked with said it would be impossible to breach the security and gain access to “every classified database.”

When I posed the question, “But what if they had access to 10% of the databases?” they all agreed it would be a catastrophic digital event the likes of which we have not seen and would take decades to recover from such a breach if we could recover at all.
However, even if only a few of the many classified databases have been inappropriately accessed or copied, the result of disclosing this sensitive data has many cybersecurity and espionage professionals on edge.

One thing is certain, if Doyon has even a small percentage of the classified information he claims to have and discloses it, three-letter agencies and other law enforcement organizations will be stepping up their efforts to apprehend him.

That’s not to mention, since those databases are sure to contain sensitive information about our allies, which might include their assets and operations, our allies are likely to join in the hunt for Mr. Doyon. At this point it is a wait and see game and its Doyon’s move.

Kevin G. Coleman is a long-time security technology executive and former Chief Strategist at Netscape. He is Senior Fellow with the Technolytics Institute where he provides consulting services on strategic technology and security issues. He writes a weekly blog for AOL Government on the topic of cyber intelligence.


Real federal deficit dwarfs official tally

By Dennis Cauchon, USA TODAY


May 24, 2012

The typical American household would have paid nearly all of its income in taxes last year to balance the budget if the government used standard accounting rules to compute the deficit, a USA TODAY analysis finds.

Under those accounting practices, the government ran red ink last year equal to $42,054 per household — nearly four times the official number reported under unique rules set by Congress.

A U.S. household’s median income is $49,445, the Census reports.

The big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules.

The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.

Contrasting deficits

The federal government calculates the deficit in a way that makes the number smaller than if standard accounting rules were followed (in trillions).

Deficits are a major issue in this year’s presidential campaign, but USA TODAY has calculated federal finances under accounting rules since 2004 and found no correlation between fluctuations in the deficit and which party ran Congress or the White House.

Key findings:

•Social Security had the biggest financial slide. The government would need $22.2 trillion today, set aside and earning interest, to cover benefits promised to current workers and retirees beyond what taxes will cover. That’s $9.5 trillion more than was needed in 2004.

•Deficits from 2004 to 2011 would be six times the official total of $5.6 trillion reported.

•Federal debt and retiree commitments equal $561,254 per household. By contrast, an average household owes a combined $116,057 for mortgages, car loans and other debts.

“By law, the federal government can’t tell the truth,” says accountant Sheila Weinberg of the Chicago-based Institute for Truth in Accounting.

Jim Horney, a former Senate budget staff expert now at the liberal Center on Budget and Policy Priorities, says retirement programs should not count as part of the deficit because, unlike a business, Congress can change what it owes by cutting benefits or lifting taxes.

“It’s not easy, but it can be done. Retirement programs are not legal obligations,” he says.


7 Lessons From Hack

By Mathew J. Schwartz, InformationWeek
May 23, 2012

Want to stop hackers from stealing sensitive data about your users? Then you must properly encrypt and salt stored passwords, subject any user-uploaded content to rigorous server-side security checks, and put mechanisms in place to detect when an attempted breach is underway.

Those are just some of the findings highlighted in a new study from Web application firewall vendor Imperva that analyzes the March 2012 attack by LulzSec Reborn on the website. Ultimately, the hacktivist group disclosed sensitive information on 170,000 members of the online dating site.

How can website operators prevent their site from being hacked like Start here:

1. Get breach detection. The last public statement from dates from March 28, 2012, when an administrator continued to deny that the site had been hacked, despite attackers releasing a decrypted user database–allegedly from the site–and then uploading an arbitrary image to the site. (The parent company of, ESingles, did not immediately respond to a new request for comment.) Numerous security experts believe the site was indeed exploited, but that administrators had failed to spot the breach. “A denial-of-service attack is visible; you can see that the site is unavailable,” said Tal Be’ery, the lead Web security researcher for the Imperva Application Defense Center. “But when all of the data is stolen–which is a much more grave and serious problem–the hacker can do it without leaving any trace, if you don’t have the right equipment.” Attackers with commercial or economic aims in particular, he said, rarely leave obvious traces

[ For more security lessons learned the hard way, see 9 Lessons From Utah Data Breach. ]

2. DDoS attacks remain a last resort. A recent Imperva study of an Anonymous attack against the Vatican website found that while hacktivists do launch distributed denial of service (DDoS) attacks, it’s often not their first attack-type choice. “Hacktivists prefer to hack websites with Web application vulnerabilities, because if there are vulnerabilities, it’s a lot easier than creating a denial-of-service attack,” said Be’ery. “You could say that a denial-of-service attack is the last resort of an attacker; he hasn’t found any easier way to hack into the server.”

3. Don’t trust Web 2.0 functionality. With, “attackers abused a file-upload mechanism that was only supposed to be used for pictures, and were able to upload an executable file, execute it, and take over the server,” he said. Accordingly, treat any such must-have website functionality that adds a security risk with extreme caution. “You can’t imagine a dating website that doesn’t include pictures, so you must include this functionality, but you also must do it safely,” said Be’ery. “Web 2.0 is all about sharing user content, but when you allow users to upload arbitrary data into your Web servers, this is a problem, because usually a file on your server is something that’s trusted.” And not least by the server’s operating system. In other words, watch for all weak points attackers can potentially abuse.

4. Segregate uploaded files. With a server tending to trust files stored on the server, do what Facebook and Google do: keep user-uploaded content away from critical servers in case it’s malicious. “You can see that pictures on Facebook aren’t served by, but by a different domain name, and there are different servers, permissions, and environments,” said Be’ery. “[Code] isn’t allowed to execute on those servers, and they also validate the content of that file. If it’s supposed to be a picture, then it’s validated–on the server side–that it’s a picture and not some executable code.”

5. Validate all user-provided content. When assessing files, don’t just trust client-side validation mechanisms. In the case of, for example, “the site was trying to validate the uploaded file with the picture in it, but it used client-side mechanisms,” explained Be’ery. Such checks–typically handled using JavaScript–are useful for error-checking and helping warn users if they’re uploading the wrong type of file, but an attacker can easily defeat such a mechanism, according to Be’ery. Similarly, make all security checks on the server side too.

6. Apply modern password hashing. After exploiting the site, attackers accessed a database containing users’ passwords, which were hashed using the MD5 algorithm. “They weren’t stored in plaintext, but MD5 is an outdated algorithm these days–known to be broken since 2004–and it’s very easy to brute-force the hashed password back to the root password,” said Be’ery. “So hashing is a good way to store the passwords, but you need to use updated algorithms … and SHA-256 is a good candidate.”

7. Salt passwords. The site also failed to salt its passwords, which would have made them even more difficult to crack. “Salt means using an arbitrary string that you concatenate to the password before hashing it, and it really creates a unique password,” said Be’ery. “If you don’t use any salt, it means that if a user uses any popular password, such as ‘123456’ … then all of the ‘123456’ passwords will end up with the same hash.” This makes them easy for an attacker to spot and crack. “But if you salt it, say with a unique number,” Be’ery explained, “then every password will have a different hash, making it more difficult to brute force and analyze the password behind the hash.”


White House Mobile Strategy Might be a Game Changer

BY: News Staff | May 23, 2012


The White House unveiled a new mobile initiative on Wednesday, May 23, that’s intended to reshape how government agencies utilize mobile platforms in serving the public.

To kick-start the initiative, federal CIO Steven VanRoekel and federal CTO Todd Park released a report on mobile strategy titled Digital Goverment: Building a 21st Century Platform to Better Serve the American People, a “12-month road map” to assist agencies meet goals for a more mobile government.

“We’re at a really interesting time,”VanRoekel said during a media conference call on Wednesday. “This consumerization of technology, even compared to three years ago, where now nearly everyone is carrying smart devices in their pocket that have incredible computing power, where it’s creating a dynamic both inside the walls of government and outside where citizens are really demanding more.”


In tandem with the report’s release, President Barack Obama released a memorandum saying that the strategies implemented through the new initiative will help agencies more efficiently deliver digital services to the public that more effectively utilize mobile and Web-based platforms, among other things.

VanRoekel highlighted some key objectives that federal agencies should follow, as prescribed by the new report:


Make Data More Open

The Office of Management and Budget will be formulating a governmentwide policy pertaining to Web API (application programming interfaces). Systems will have to be architected to support access to high-value open data and metadata tags, the report said.

“For decades, we’ve been locking government data up in paper files or nonsearchable PDF documents and things like that,” VanRoekel said.


Launch a Shared Platform

As a method for reducing duplication and cutting costs, VanRoekel is calling on government agencies to take a “governmentwide approach” to IT solutions. Applications or other solutions that have been deployed inside a government agency should be used across other agencies as well, giving multiple agencies access to features they may have otherwise not had access to before, and in addition, allowing the private sector access to those features when appropriate.


Digital Innovation Center

Plans to set up a Digital Services Innovation Center will soon be carried out by the U.S. General Services Administration through a centralized effort to help agencies build out shared solutions for a “citizen-centric approach to Web.”

According to Code for America founder and editorial director Jennifer Pahlka, the initiative is a good move for digital government.

“Happily there is also considerable attention given to the importance of a shared platform across agencies, particularly a content delivery platform (or several) that presumably every federal agency can use,” Pahlka wrote in a Wednesday blog post. “This promotes a vision I can get behind.”

This article was printed from:


DARPA settles in at new ultra-secure headquarters

By Charles S. Clark

May 23, 2012

The Defense Advanced Research Projects Agency on Tuesday marked the opening of its new headquarters complex, a couple of blocks from its previous location in Arlington, Va.

DARPA acting Director Kaigham (Ken) J. Gabriel held a ceremony at the secretive complex that was attended by Arlington County officials and Rep. Jim Moran, D-Va. As noted by the local blog ARLNow, the new 13-story facility that houses more than 1,200 employees is considered one of largest secure conference centers in Northern Virginia. It has earned several Leadership in Energy and Environmental Design, or LEED, distinctions for environmentally efficient building design, construction and operation since ground was broken for the complex in October 2009.

“Arlington has been and will remain home to DARPA,” Moran said in a statement. “From the development of the Internet to unmanned aerial vehicles, DARPA employs some of the best and brightest our nation has to offer. Today, these talented scientists are at the forefront of cybersecurity research, the future of information technology.”

DARPA would have been moved outside Northern Virginia under the recommendations of the 2005 Base Closure and Realignment Commission, but Moran worked with then-Republican Sen. John Warner, Democratic Sen. Mark Warner and Pentagon officials to keep it in Arlington.

County Board Chairwoman Mary Hynes said, “DARPA is the center of the wonderful knowledge economy that’s become part of our identity.”

DARPA’s current director is acting because Regina Dugan, who held the job for three years, left in March to work for Google.



Clouds don’t need real-time monitoring to win federal stamp of approval


By Aliya Sternstein

Cloud companies planning to apply in June for certification to sell Web services governmentwide will not be obligated to provide automated threat reports, the government’s purchasing agency told Nextgov.

Until now, the Obama administration had wanted agencies to outfit all information technology with “continuous monitoring” tools that feed risk indicators, such as unauthorized logins, to the Homeland Security Department.

The Federal Risk and Authorization Management Program, a cloud accreditation process, stipulated that Web-based IT providers supply agencies with these data feeds in a concept of operations released earlier this year.

But officials at the General Services Administration, which manages FedRAMP, are still figuring out how to compel real-time information sharing between private companies and agencies. With cloud computing, departments essentially outsource their IT to a commercial data center over which they have no control.

Despite the absence of guidance on automated surveillance, FedRAMP is anticipated to grant its first certifications by the end of December, GSA and the department’s hired auditors said this week. The program will start accepting applications on June 6. Certified cloud services will be announced on as authorizations are awarded, officials said. Accredited providers will receive directions on marketing their products with a FedRAMP logo and citing the distinction in press releases.

At the outset, companies will report on security controls periodically through manual reporting, GSA officials said. Homeland Security and GSA will provide a detailed roadmap for instituting data feeds, as both FedRAMP and continuous monitoring, in general, mature, they said.

GSA Associate Administrator Dave McClure and John Streufert, DHS national cybersecurity division director, are expected to discuss these plans more in depth at a June 13 breakfast co-sponsored by Nextgov’s parent organization Government Executive Media Group and the SANS Institute.

To cut costs and speed a federal shift to the cloud, agencies are supposed to use FedRAMP for verifying the security of cloud purchases. The Office of Management and Budget estimates the government in the past has spent $300 million annually on IT certification and accreditation activities, partly due to redundant assessments. FedRAMP is intended to bring Web services into compliance with a universal set of security standards so that any certified product will be safe for use at all agencies.

Once FedRAMP begins, one of nine GSA-approved, independent auditing bodies named earlier this month will examine whether a prospective service meets the uniform requirements — once. Then, any agency can reuse the certification to immediately deploy the cloud product without paying for another examination.

Cloud providers owning just a few servers could pass muster within 30 days, according to some of the chosen assessors. Computer racks at technology giants such as Amazon could take up to three months to inspect, unless the company has a dedicated enclave for federal customers, they added.

Competition for FedRAMP logos is expected to be high. “It’s been a week and we’ve gotten a lot of calls and emails from service providers,” said Paul Nguyen, vice president of cyber solutions for auditor Knowledge Consulting Group, estimating the number of inquiries to be about 15.

“This is one of the most public-facing programs for people who want to work with the government — they all want to be FedRAMP-certified.” Nguyen said his 250-person company should be able to handle the initial interest. More assessors will be added on a rolling basis, GSA officials said.

Cloud vendors are responsible for covering inspection expenses. Fees can range from $20,000 to more than $200,000, depending on the size and complexity of the firm’s computing facility, according to some auditors.

Several agencies, such as NASA and the Federal Aviation Administration, already are drafting contract solicitations that favor FedRAMP-approved firms, even though there aren’t any yet.

The pace of a review largely will depend on the candidate’s legwork in conforming with up to 300 blanket controls, inspectors predicted.

“It really becomes a question of how prepared the cloud service providers are,” said Todd Coen, vice president of auditor DRC’s homeland security solutions division. If a firm is ready to demonstrate compatibility with the safeguards, DRC could compile an assessment packet for the government within two and a half months, he said.

“By the end of summer, early fall, we should definitely start seeing those packages coming,” Coen said.

While cloud providers appear interested in participating, it’s less clear whether all agencies trust the process enough to use it.

“I still think there is a healthy skepticism in the market for cloud in general,” Coen said.

But he noted an interagency panel, the Joint Authorization Board, which signs off on final audited products, includes experts from agencies with high standards, including the Defense Department.

“I don’t think there is anything covert about the fact that they chose folks like DHS and DoD to be the main players on the JAB,” Coen said. “My sense is that if you can get these guys to agree on what would give them the sense that their data would be secure — that they would want to use these packages. If you can save money when times are very tight, this is a great way to do it.”



Senate panel moves $631B Defense bill

By Jeremy Herb – 05/24/12 04:09 PM ET

The Senate Armed Services Committee passed its version of the Defense Authorization bill Thursday, setting Pentagon spending in line with President Obama’s desired level and setting up a showdown with the Republican-led House.

The Senate panel passed the $631.4 billion bill unanimously out of committee, committee chairman Carl Levin (D-Mich.) said Thursday. It is about $4 billion below the funding-level set in the legislation that passed the House.

The differences between the two bills will have to be resolved in conference committee, although both bills are above the spending caps set by last year’s Budget Control Act.

The Senate bill reverses several cuts the Pentagon had requested in its plans to cut $487 billion over the next decade, pushing back on reductions in the Air National Guard and proposed increases to TRICARE fees.

Levin said that the committee made about 150 changes from the president’s request.


The panel also took aim at aid to Pakistan, as ranking member John McCain (R-Ariz.) expressed outrage at the sentencing of Pakistani doctor Shakil Afridi for his role helping the United States kill Osama bin Laden.

McCain said the bill fenced in funds to aid Pakistan’s military until Islamabad opens its supply routes, is not supporting extremist groups and is not detaining citizens — a reference to Afridi, who was sentenced to 33 years in prison for treason.

“That has frankly outraged all of us,” McCain said. “It is our goal to make sure this doctor is not sentenced to death — which is basically what he got — for helping us apprehend Osama bin Laden.”

Levin and McCain held a joint press conference to announce the details of the bill on Thursday, which was marked up behind closed doors in committee Wednesday and Thursday. The bill now moves to the floor, where Levin said it’s on a list of bills to be considered in June by Majority Leader Harry Reid (D-Nev.).

The bill did not directly tackle the $500 billion in automatic cuts through sequestration that the Defense Department potentially faces next year, which both Levin and McCain have said must be reversed. But the bill does instruct the Pentagon to explain the effects of sequestration — something it has yet to do — on the Defense Department to help “understand the huge impact” sequestration would have, Levin said.

During the markup, the committee did not tackle one of the most contentious issues in the Defense authorization bill, indefinite detention.

Sen. Mark Udall (D-Colo.) withdrew his amendment to change the language in last year’s authorization bill, saving it instead for debate before the full Senate on the floor.

Udall and opponents of indefinite detention want to change the law to stop military detention on U.S. soil, while supporters say it’s a necessary tool for the government to stop terrorism.


Sen. Kelly Ayotte (R-N.H.), one of the most vocal detention supporters, said she will also bring amendments to the floor on the issue.

Many of the major changes that the Armed Services panel made involved pushing back against the Pentagon’s proposed cuts.

Levin said that the committee froze most of the cuts to personnel and aircraft in the Air National Guard, because senators felt that the cuts hit the Guard disproportionally and Air Force officials were not the “least bit convincing” about why the cuts were necessary.

“We rejected the Air Force plan,” Levin said. “There was a broad feeling in the committee that the Air Force did not have a basis that was solid for where they were making these reductions.”

The committee also killed a proposed increase in fees to TRICARE and maintained funding for production of the M1 Abrams tanks that the Pentagon had opposed, changes that were similar to what the House made in its Defense bill that passed the House last week.

But one of the House’s major provisions — a new East Coast missile defense — was rejected by the Senate. Levin said there’s language in the bill for the Pentagon to assess the feasibility of a site, which is far short of the House’s plan to have it operational by 2016.

McCain told reporters Tuesday that he was “skeptical” of an East Coast site, which Pentagon officials have said they don’t think is necessary.

The Senate panel did follow the House on including more funds for Israel’s missile defense, as Levin said there was money for Israel’s Iron Dome system, which has broad backing in Congress.

McCain said the committee for the first time included provisions to reduce the civilian workforce in the Defense Department by 5 percent over the next five years, which he said was added because the military is shedding personnel to deal with budget cuts.


Microsoft’s upgrade avalanche a challenge for IT pros

Corporate technology managers must take time when deciding on Windows, Office upgrade path

Juan Carlos Perez

May 25, 2012 (IDG News Service)

Microsoft is in the midst of an unprecedented, massive upgrade cycle for its enterprise software products, a refresh wave that represents a major challenge for CIOs and IT managers responsible for charting their companies’ technology strategy.

Not only is Microsoft working on a major revamp of its flagship Windows operating system, but significant upgrades are coming to its Office products, the Explorer browser and a range of back-end enterprise products.

“There’s definitely something unique going on here,” said Ted Schadler, a Forrester Research analyst.

The current status and expected delivery dates of the various upgrades vary — and in some cases, Microsoft hasn’t yet provided specifics — but the overall effort started last year and may carry over into 2013.

Unsurprisingly, the company is trumpeting the initiative with an intense marketing assault, and CIOs and IT directors must be ready to analyze the individual upgrades to decide which ones make sense for their companies.

“Microsoft is the strategic supplier. It’s far and away the No. 1 most-used workforce technology. That makes it a critical supplier to the enterprise and every CIO needs to be extremely in touch with what Microsoft is doing,” Schadler said.

Coming soon from Microsoft

Chief among the upgrades are new versions of Windows OSes for PCs, tablets, servers and possibly even phones. Microsoft says that Windows 8, now in beta testing, is a major revamp of the Windows 7 OS for PCs. It includes a new touch-optimized user interface called Metro designed for tablet devices, which have become popular among enterprise users.

A new version of Internet Explorer (IE10), is also in progress, designed to take advantage of the new features and capabilities in Windows 8, particularly the Metro UI.

Microsoft is also revamping its Office family. The “Office 15” upgrade initiative, now in its early stages, will include new versions of productivity apps like Word, PowerPoint and Excel, and communications and collaboration products like Exchange/Outlook, Lync and SharePoint — both on premise and as part of the cloud-hosted Office 365 suite.

Back-end server and tools products are also getting makeovers. These include the company’s enterprise database, the new version of which is called SQL Server 2012; the IT management tool System Center; the application development platform Visual Studio; and the Dynamics enterprise software applications.

Microsoft, naturally, is doing its best to generate excitement around the new and improved features in these upgrades, making a case for their adoption through sometimes lengthy and frequent blog posts, advertising, appearances by officials at conferences and the like.

Microsoft is in the midst of a massive upgrade cycle for its enterprise software products.

However, CIOs and analysts caution against getting seduced by the Microsoft marketing siren call.

ROI important

“CIOs need to focus on total cost of ownership and return on investment. Once you know what you’re currently paying with the TCO analysis, then you can do an ROI assessment,” said industry analyst Michael Osterman from Osterman Research.

IT professionals should focus on what their internal organization’s road map looks like, said IDC analyst Al Gillen.

“They should identify what technologies they want to put in place and understand where the gaps are, what’s available in the market and what Microsoft’s portfolio has today and in forthcoming products,” Gillen said. “They need to determine what pieces fit where and what potential adoption curves will be for their organization.”

As Microsoft beats the drum to attract attention to its slate of enterprise software upgrades, Cam Crosbie, vice president of IT and CIO of Equitable Life of Canada, isn’t paying too much attention to it. “It’s on my radar but just at the periphery right now. It’s not something I’m trying to get my head around in terms of strategy,” he said.

Equitable Life of Canada is in the midst of a full desktop refresh cycle, standardizing its 550 users on Windows 7 and Office 2010, and the plan is to stay on that upgrade for the next several years.

“Ours is a ‘take your time approach’ to make sure there’s value in a potential solution before making the jump,” Crosbie said. “A lot of the marketing hype sounds quite good, but we want to make sure that whatever we’re looking at has a lot of compelling business value before making the leap.”

This is the right approach, especially regarding Windows 8, which is in beta testing and will most likely ship toward the end of the year, said Michael Silver, a Gartner analyst.

The next Windows

Companies need to upgrade from Windows XP, which Microsoft will stop supporting in April 2014, and delaying such a move to wait for Windows 8 would be a mistake, Silver said.

“It’s really important that organizations continue to get XP out,” he said. “For most people, Windows 8 will be too late and Windows 7 is the one to focus on right now.”

Gartner estimates that in developed countries, Windows 7, which began shipping in October 2009, has been fully implemented in about 10% of enterprises, while 55% are in the process of deploying it and 25% are just starting.

In addition to the new Metro UI, Microsoft officials have been promoting Windows 8 enterprise features like Windows To Go, which lets users boot and run Windows 8 from USB devices like flash drives; simpler ways for end users to manage their connections to Wi-Fi and mobile broadband networks; and virtual desktop infrastructure (VDI) improvements. Windows 8 also features security enhancements, such as a new secure boot process.

In addition to the version for x86 PCs that use chips from Intel and AMD, Windows 8 will also come in a version for devices that use ARM chips. This version, now called Windows RT, will be built on the Windows 8 code base and will probably run mainly on tablets built on chips from ARM licensees Nvidia, Qualcomm and Texas Instruments.

Like Windows 8 PCs for x86/64, Windows RT devices will be able to run Metro-style applications from the Windows Store created using WinRT APIs. WinRT stands for Windows Runtime and contains the API (application programming interface) library for building Metro-style applications.

However, Windows RT hardware will not run, emulate or port existing x86/64 desktop applications. Windows RT will include desktop versions of the upcoming Office 15 applications, like Word, Excel, PowerPoint and OneNote, that have been designed for touch-based interfaces and for minimal power consumption.

Despite the broad availability of the beta version since late February, it is still too early for enterprises to be even considering adopting Windows 8, IDC’s Gillen said.

“Windows 8 isn’t even in Release Candidate code yet, so it’s premature for most organizations to make any business decision about replacing Windows 7 with Windows 8. We need to see the finished product first,” Gillen said.

Gartner’s Silver believes that Windows 8 will largely be bypassed altogether, except in specific cases, such as in organizations that want to deploy Windows-based tablets to their users. It has become popular for users to come to work with their personal smartphones and tablets (mostly Android and Apple iOS devices), a trend known as “bring your own device,” or BYOD. Microsoft wants to enter that party, but Windows is currently a small player in tablets and smartphones.

At hotel titan Hyatt, the work to upgrade desktops from Windows XP to Windows 7 began in 2009 and continues today. The company expects to complete the upgrade of all 34,000 desktops in North America by the end of this year.

Hyatt’s CIO, Mike Blake, is very impressed with Windows 7, calling it “a great product.” While not closed to Windows 8, Blake said there are still many unanswered questions about the new OS.

“I’ve wavered from one end of the Microsoft spectrum to the other. I was a hater and now I’m more of a proponent, and a lot of it has to do with Windows 7,” he said.

Forrester also has found in its surveys that CIOs are moving their enterprises at a very quick and steady pace to Windows 7 and to Office 2010, according to Schadler. Almost 200 million copies of Office 2010 have been sold to date, according to Microsoft.

In fact, an argument can be made that Microsoft may be pushing out Windows 8 and Office 15 too close to their predecessors, and may find it is competing against itself, Osterman said.

“Unless there’s something really compelling in Windows 8, I don’t see the upgrade push,” Osterman said. “And with Office 15, Microsoft is going to be hard-pressed to make the case for it, only because Office 2010 is so good. Microsoft has a very nice set of products on the desktop right now.”

The next Office suite

Office 15 is in limited-access, early testing. A broader beta period is slated for the summer. Very little is known about technical details and improvements in the Office 15 applications at this point. What Microsoft is saying unequivocally is that Office 15 will be “the most ambitious undertaking yet for the Office Division.” The revamped applications, which will also include Project and Visio, will all get new “touch-friendly” UIs on tablets and similar devices.

For now, the Office product that Hyatt’s Blake is most focused on is the cloud-hosted email and collaboration suite Office 365 and its predecessor, BPOS (Business Productivity Online Suite). Hyatt is deploying BPOS and plans to later upgrade to Office 365, which was released in mid-2011 and includes online versions of Exchange, SharePoint, Office and Lync. Office 365 will be upgraded again once Office 15 is released in final form.

Coming from IBM Lotus Notes, Hyatt has experienced a significant improvement in email reliability and in employee collaboration from using BPOS.

Prior to rolling out BPOS, Hyatt’s email system was down 81 times over three years, with each of those outages being 10 minutes long or more. In the 13 months since it has been using Exchange Online, Hyatt has had only three hours of downtime, he said.

Meanwhile, SharePoint Online has taken employees’ ability to collaborate with each other and with customers and partners to another level, he said.

Blake, however, isn’t too happy with the licensing scheme for BPOS and Office 365, which he finds too complicated, especially considering that they are subscription-based suites.

He wishes the Microsoft suites would be licensed and billed in the “all inclusive” model of rival Google Apps. The Google suite costs $50 per user, per year, or, alternatively, $5 per user, per month. Hyatt almost picked Google Apps over BPOS, ultimately deciding against it in large part due to users’ historical familiarity with the Outlook email client. “It was almost a coin toss between the two,” Blake said.

Instead, Office 365 has multiple versions at different prices with different mixes of components, and as Hyatt looks ahead at transferring to it from BPOS, Blake finds the licensing scenario annoyingly complex, calling the many versions of Office 365 “crazy” and “foolish.”

“With Google Apps, it doesn’t matter how many trips to the buffet you make, you’re good to go. Microsoft on the other hand segments the salad bar, the starches, the meat, and you have to say, ‘did I remember the meat? The starch?’ And if you forgot the salad, then you need to pay another license fee for that,” Blake said.

Explorer and Windows Phone

In development along with Windows 8 is the next version of the browser, IE 10, which, according to Microsoft, is designed to be “edge-to-edge fast” with “less browser and more Web.” It will offer two different interface experiences — Metro-style and traditional Windows desktop. IE10 is being designed to take advantage of hardware acceleration features; supports HTML5, CSS3 and other Web standards broadly; and will be more secure than its predecessors, Microsoft has said.

Also relevant for enterprise IT executives is the next major version of the Windows Phone OS, which hasn’t been officially announced but is said to be code-named Apollo. Some speculate it will be called Windows Phone 8 and that it will provide more code and application consistency with the desktop and server OSes than has existed up to now.

Whatever enhancements are present in Windows Phone 8, Microsoft finds itself — much as in the tablet market — as an underdog. At the end of last year’s third quarter, Android held 52.5% of the worldwide mobile operating system market, while Microsoft ended in sixth place with 1.5%, according to Gartner. In the U.S., as of the end of February of this year, Android had 50.1% of the smartphone OS market, while Microsoft had almost 4%, according to comScore.

When Microsoft does talk in detail about the next major version of Windows Phone, there are two major areas CIOs should focus on, according to Avi Greengart, an analyst with Current Analysis.

The first area is the phone IT security and management controls that will be available to IT departments via Windows server products.

While Windows Phone 7 and 7.5 are in general more advanced than their predecessor, Windows Mobile 6.5, the latter gave IT staffers more administration controls over phones, Greengart said.

“If I was a CIO, I’d be asking for a more detailed road map on what is and isn’t supported before I’d commit to deploy Windows Phone,” Greengart said.

The other major issue is the level of application compatibility. “There will be some compatibility. The question is how much,” Greengart said.

Microsoft recently said in a blog post that “today’s Windows Phone applications and games will run on the next major version of Windows Phone.”

The company also said that “all” of Windows Phone developers’ programming skills “are transferable to building applications for Windows 8, and in many cases, much of your code will be transferable as well.”

Next: Microsoft server and tool upgrades demand CIOs’ attention

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.


British recession deepens as euro zone woes mount

By Fiona Shaikh and Olesya Dmitracova | Reuters – May 24, 2012

LONDON (Reuters) – A slump in construction output drove Britain even deeper into recession than initially thought in the first quarter of this year, raising the chance the Bank of England will inject more cash to prop up the faltering economy.

More is also expected to be needed to protect the economy from the worsening euro zone crisis.

Britain is in its second recession since the 2007-2008 financial crisis, and the prospects for a recovery are cloudy as leaders in the euro zone, Britain’s biggest trading partner, have made little progress in resolving their debt woes.

The BoE‘s Monetary Policy Committee (MPC) has indicated it is ready to pump more money into the economy, having paused its asset-buying quantitative easing programme at 325 billion pounds this month, amid growing worries about a break-up of the currency union.

“The economy is not recovering properly and with the uncertainty over Europe hanging over the outlook as well, our suspicion is the MPC will sanction further QE at some point later on this year,” said Philip Shaw, economist at Investec.

Britain’s economy contracted by 0.3 percent between January and March, according to the Office for National Statistics, confounding forecasts for an unchanged reading of -0.2 percent. On the year, GDP shrank by 0.1 percent, the first annual decline since Q4 2009.

The figures will make uncomfortable reading for British finance minister George Osborne, who has vowed to press ahead with harsh austerity measures to curb Britain’s debts, despite mounting criticism that spending cuts will stymie a recovery.

Britain’s economy has expanded by just 0.3 percent since the Conservative/Liberal Democrat government came to power in 2010, and Thursday’s figures showed government spending made the biggest positive contribution to the economy, but it is a prop that will soon fall away.

Faced with growing calls to find ways to boost growth, Britain’s finance ministry is looking for measures to channel cash into infrastructure projects and credit-starved companies, but the government warned on Thursday the recovery will be slow.


The International Monetary Fund this week warned about the risks facing Britain and urged policymakers to boost growth by whatever means necessary.

It suggested the BoE could cut rates further from their record-low 0.5 percent and start buying private-sector assets.

BoE policymaker David Miles rejected that call on Thursday, saying he felt buying gilts was still an effective way to boost the economy and did not feel the BoE had any skill at buying private-sector assets.

“I think it’s wrong to think that quantitative easing … somehow isn’t addressing these credit issues,” Miles said.

The IMF also recommended that the government should find money to invest in infrastructure and do more to boost the flow of credit to companies.

That would give a much needed boost to the flagging construction sector, which was the main driver behind the downward revision to first-quarter GDP, with a 4.8 percent drop in output – the steepest in three years.

But new data on expenditure was also bleak, and suggested Britain’s Q1 downturn would have been even deeper were it not for a 1.6 percent rise in government spending – the biggest rise in four years, and the main positive contributor to GDP.

Household spending, meanwhile, slowed sharply to just 0.1 percent on the quarter, denting hopes for a consumer-led recovery. Separate mortgage lending data on Thursday indicated the housing market remains weak, underscoring the fragile outlook for a consumer rebound.

Exports also suffered: the trade deficit rose to 4.4 billion pounds, and net trade shaved off 0.1 percentage point from GDP.

“The composition of expenditure looks worrying: household consumption was weak with government consumption the main driver of domestic demand. Government spending is unlikely to be a sustainable driver of growth,” said Simon Wells, economist at HSBC.

There was one bright spot in Thursday’s data: business investment posted its biggest quarterly rise in almost a year, and its largest annual increase in almost seven years.

Analysts cautioned that the outlook remained gloomy, with recent purchasing managers surveys indicating that business activity is tailing off, while an extra public holiday in June is also likely to depress growth in the second quarter.

“With the euro-zone crisis deepening and the knock-on effects already being felt in the UK, we continue to doubt that the recovery will get back on track in the near-term,” said Capital Economics analyst Vicky Redwood.


Dayton gets boost from committee for UAV testing

By Jessica Wehrman, Washington Bureau

Updated 11:48 PM Thursday, May 24, 2012

WASHINGTON — The Dayton region’s chances of becoming a center for research and testing of unmanned aircraft got a boost on Thursday after a key Senate committee passed a defense bill that also would prevent cuts at the Springfield Air National Guard Base.

The Senate Armed Services Committee passed a bill that included a measure aimed at increasing coordination between federal agencies for research in unmanned aerial vehicles.

The Dayton-Springfield area is positioning itself to offer air space for UAVs, and the provision is aimed ultimately at boosting the region’s chances of becoming a test site for unmanned aircraft. The measure was pushed by Sen. Rob Portman, R-Ohio, a member of the Armed Services Committee, but also supported by Sen. Sherrod Brown, D-Ohio.

The defense bill includes a measure that aims to provide greater security to the Air Force Institute of Technology at Wright-Patterson Air Force Base.

The provision would direct the Defense Department to perform a thorough review of its specialized degree-granting programs in engineering, science and management to ensure institutions are being used to their fullest potential.

Those two provisions were part of a massive defense policy bill that also aimed to stall an Obama administration plan to retire Air Guard aircraft.

The bill would restore funding for the estimated 47 intelligence jobs that would have been cut at Springfield Air National Guard Base under President Barack Obama’s budget.

The committee included in its bill a provision establishing a national commission to evaluate the best force structure for the Air Force and by establishing the commission, the Senate hopes to avoid or delay the retirement of aircraft including the C-27J, the KC-135 and the C-130.

President Obama earlier this year announced a plan that would result in the retirement of six KC-135 refueling aircraft at Rickenbacker Air Guard Base near Columbus, as well as effectively end the flying mission at the Mansfield Air Guard Base.

The defense bill also delayed a plan to temporarily shut down the Joint Systems Manufacturing Center in Lima. The plant, also called the Lima Tank Plant, would have shut down under an Obama budget proposal.

Portman said while he’s happy the bill will keep production going into 2014, he is “concerned about the incremental approach taken in this bill and the potential risk this approach could pose to the Lima facility.”

He said he’ll continue to work for funding beyond fiscal year 2014.

The Senate committee vote comes one week after the House of Representatives passed a defense bill that also worked to protect the Lima Tank plant and Ohio’s Air Guard aircraft. Both bills also included $150 million for a proposed uranium enrichment plant about 90 miles southeast of Dayton.

But that money would be spent during the next fiscal year and officials at USEC, the Maryland-based company running the plant, say they need $150 million in federal dollars for fiscal 2012 by June 1, or a key credit line will expire, leaving the plant in danger of being demobilized.

Supporters of the plant — including Portman — say they are hopeful that the Obama administration will approve the money for this year through administrative action in order to keep the plant operational.

The company is ultimately hoping for a $2 billion federal loan guarantee, applying for one more than three years ago. The federal government has yet to approve that loan guarantee but last year suggested $150 million for research and development at the plant to get the technology ready for commercialization.

The bill will next go to the full Senate for approval.

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Senate panel approves $631 billion defense bill

By DONNA CASSATA, The Associated Press

Updated 5:51 PM Thursday, May 24, 2012

WASHINGTON — A Senate panel on Thursday rejected the Pentagon’s proposed cuts in personnel and equipment for the Air National Guard as it completed a far-reaching, $631 billion defense budget for next year.

Republicans and Democrats on the Armed Services Committee unanimously backed the budget, which called for the same amount of money President Barack Obama had proposed for the military earlier this year. The total is $4 billion less than the House-passed bill, and House-Senate negotiators will have to work out the difference.

The committee followed Obama’s lead on overall spending, but broke with the administration and the Pentagon on several policies. The panel rejected a call for another round of domestic military base closings and rebuffed the Pentagon’s plan to raise enrollment fees for the military’s health care program.

The Pentagon envisions reductions in the size of the force as it emerges from wars in Iraq and Afghanistan. The cuts also reflect last year’s budget agreement that calls for a $487 billion reduction in projected defense spending over 10 years, a number that could double if Congress and the Obama administration fail to agree on a way to avert automatic spending cuts in January 2013.

In its budget proposal, the Pentagon called for a cut of 5,100 from the Air National Guard, 3,900 from active duty and 900 reservists as well as 134 aircraft. The proposal ran headlong into a political reality: The nation’s governors pushed back hard against the cuts, and so did members of Congress.

“Never underestimate the influence of the National Guard,” Sen. John McCain of Arizona, the top Republican on the Armed Services Committee, quipped at a Capitol Hill news conference.

The committee also voted to establish a national commission to make recommendations to Congress on the size of the Air Force. The commission would have to report to Congress by March 31, 2013.

“We want to prevent this kind of decision from being made in the future with little care as this one, frankly,” said Sen. Carl Levin, D-Mich., the chairman of the committee.

The Pentagon has announced reductions in the Army from a peak of 570,000 to 490,000, and a cut in the Marine Corps by 20,000, to 182,000.

Arguing against limiting the cuts to the armed forces, Levin said the bill would reduce funds for civilian personnel and service contracting by 5 percent over five years, a step that the panel estimated would save $5 billion.

The legislation also looks ahead to the likelihood of automatic spending cuts, asking the Pentagon for a detailed report on the impact of the reductions.

Overall, the bill authorizes money for weapons, ships, aircraft and a 1.7 percent pay raise for military personnel.

The committee extended, for one year, the divisive provisions on the handling of suspected terrorists that snagged the legislation last year. The defense bill that Obama signed into law Dec. 31, 2011, would deny terror suspects, including U.S. citizens seized within the nation’s borders, the right to trial and subject them to indefinite detention. It also would require military custody for foreign terrorist suspects linked to al-Qaida or its affiliates and involved in plotting against or attacking the United States.


Sinclair program earns national recognition

Recognition may bring grants, scholarships for students.

Dayton Daily News

By Meagan Pant, Staff Writer

Updated 10:38 PM Wednesday, May 23, 2012

Dayton — Sinclair Community College has earned national recognition for its information assurance program, which trains students to protect the confidentiality, integrity and availability of data.

Sinclair has been designated a National Center of Academic Excellence by the National Security Agency and the Department of Homeland Security. This could lead to new grants and scholarships for students.

“It confirms the quality of our programs,” said Bob Sherman, associate professor in Sinclair’s computer information systems department. “It makes Sinclair even more viable as a place for students to learn these skills.”

The national centers of excellence program aims to reduce vulnerability in the nation’s information infrastructure by promoting higher education and research and training more people, according to Sinclair.

More companies are investing in information assurance to protect sensitive data, including financial and medical information, Sherman said.

“There’s a greater and greater awareness of the need, which means companies are taking a more determined and committed approach to avoiding those incidents,” Sherman said.

The college’s designation is also a “sign that Sinclair is aligned to the needs of the Dayton region,” said Steve Johnson, the college’s president. “Meeting the needs of Wright-Patterson Air Force Base and the defense community surrounding it is a major undertaking. Those industries will require a strong and well-trained workforce, and this designation shows that Sinclair can help fill that need,” Johnson said. “We look forward to continuing to work with the regional economic development team and to collaborate to fill more training and education needs.”

Sinclair will be officially recognized in June.

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May 19, 2012 – 11:15 a.m.

America’s Tech Trade: Boxed In

By Joseph J. Schatz, CQ Staff

When Apple released its PowerMac G4 in 1999, the technology company touted the computer’s processor as so powerful the machine was “classified as a weapon by the U.S. government,” meaning it could not be exported.

“With the power to perform over a billion calculations per second, the Pentagon wants to ensure that the new PowerMacintosh G4 does not fall into the wrong hands,” the company said in an advertisement. “As for Pentium PCs, well, they are harmless.”


That may be the last time any U.S. company took any pride in having a product placed on the list of potential exports that the government strictly controls because of their possible military use. Just as Apple’s own advances overran the G4 within a few years, dramatic changes in technology, manufacturing, global trade and even military threats have made the country’s export control regime, devised during the Cold War, look antiquated. Defense contractors, coping with stingier military budgets and growing competition on world markets, say that the restrictions are entirely obsolete and that the export controls themselves pose a significant problem.

It’s a problem that goes well beyond computers and beyond the weaponry normally linked to export controls. It touches on airplanes, commercial satellites, high-flying drones, encryption software, complex machine tools, intellectual property — even airline toilets.

More broadly, it also raises questions about the ability of Congress to keep up with the enormous changes in technology and trade that are taking place at a dizzying pace. From the privacy questions surrounding Google and Facebook to concerns over cybersecurity, pressing new issues that defy national borders and conventional views of the world are challenging the ability of Congress to respond.

Those questions are hanging over American manufacturers of restricted goods as they try to keep pace with growing competition around the world, and even over universities as they seek to foster research and innovation while tapping into the global market for students and information exchanges.

The issue flared in Congress this month when satellite manufacturers won a victory with House approval of a measure that would loosen restrictions on their sales abroad. For that industry, big money is at stake: The Satellite Industry Association says it costs manufacturers about $60 million annually to meet licensing requirements and that it has lost up to half its share of the global market under rules it says do not work in the modern world.

“If the same situation were applied to computers, exports of 1950s-era computers with vacuum tubes would be treated the same as today’s cutting-edge microchips,” the satellite association’s president, Patricia Cooper, said in February testimony to the House Foreign Affairs Committee.


Like the PowerMac, much of what the government considers dangerous is not, in fact, a threat to national security. And many of those same products are being made and sold by companies in other countries.

The complexity of the global marketplace, where an “American export” may really be assembled in a foreign country out of foreign-made components, means that export controls are increasingly difficult to administer without putting U.S. companies at a disadvantage. Moreover, the military monopoly on technology development is long gone. Private companies are selling satellites. Drones are being used to monitor oil pipelines as well as to fight wars. Troops in battle communicate on the Internet.

And the global marketplace is outpacing the way the U.S. government regulates exports.

That, say some U.S. manufacturers, now counts as a threat to their businesses.


“Let me be clear: Export restrictions are hurting this industry in America without making us any safer,” Wes Bush, chief executive of defense giant Northrop Grumman, said in an April 27 speech on the unmanned aerial vehicles that are sometimes referred to as drones. “And they could cause the U.S. to relinquish its lead in these technologies to other nations based on their ability to meet global demand.”

The question is whether Congress will act to change it before the U.S. government loses a handle on the problem — and U.S. companies pay the price. Those companies say the rest of the world, which includes the competition, isn’t waiting, and that inaction by Congress means they’re being left behind.

The business community and the Obama administration want Congress to help remove many of the restrictions that prevent companies from selling products that are widely available elsewhere — such as commercial satellites. Some of the proposals require Congress to pass laws, and some do not. But generally, they would streamline the process, partly by combining outdated rosters of controlled products, making it easier and more efficient for companies to boost their exports and navigate the system without running afoul of the rules.

“There’s a trust factor involved in terms of how much discretion Congress is willing to give the executive branch,” says Christopher Wall, who was assistant Commerce secretary for export administration from 2008 to 2009 and now is senior international trade partner at Pillsbury Winthrop Shaw Pittman. “A lot of very good technical work has been done. But Congress has still got to be addressed.”


Past Is Prologue

The administration’s effort to restructure export control regulations since 2009 has run into many of the same political and institutional hurdles that have complicated past efforts to overhaul what has become an arcane, overlapping patchwork of executive orders, laws and treaty obligations.

Despite overwhelming backing from major business groups and a surprising measure of agreement among the Defense, State and Commerce departments, a White House initiative to build “higher walls around fewer items” has slowed to a crawl amid a maze of congressional committees and turf battles between Congress and the executive branch.

“It’s a hard thing to tackle, but it’s important,” said Howard P. “Buck” McKeon, the California Republican who is chairman of the House Armed Services Committee, as he walked to the House floor May 17 to begin debate on the authorization legislation for the Defense Department.

With defense contractors concerned about how a tight budget will affect their business, lawmakers may be taking a fresh look at the issue, at least when it comes to some products. McKeon, whose committee is at the heart of the balancing act, backed an amendment on the floor that same day to relax export restrictions on commercial satellites, a key goal of the aerospace industry and its congressional allies in states such as California, Washington and Colorado. The amendment was adopted. (Satellites, p. 1037)

“Treating commercial satellites and components as if they were lethal weapons, regardless of whether they’re going to friend or foe, has gravely harmed American space manufacturers,” said Rep. Howard L. Berman, a California Democrat who advocates overhauling the system.


But the world of satellites, where U.S. manufacturers face clear competition from other countries for specific, impending sales, may be about as simple as it gets these days when it comes to dual civilian-military use technology.

The subject of export controls can trigger strong feelings of protective national pride among lawmakers. And attempts to change the system involve different parts of the federal bureaucracy, says former Rep. Sam Gejdenson, a Connecticut Democrat.

As chairman of the Foreign Affairs panel’s International Economic Policy and Trade subcommittee from 1989 to 1995, Gejdenson spearheaded efforts to overhaul the system when encryption restrictions were the topic of the day, following debates over personal computers and then fast telephone switches in the 1980s and 1990s.

“Part of it is ideological. There are some people that believe we have exclusive technology, and that if we sell anything we’re spreading the ruin of the country, and that goes across the political spectrum,” Gejdenson says. “If you make one mistake in your life on some piece of technology that turns out to help our adversaries, your career is over. It’s like being an immigration officer in Yemen.”


An Outdated System

Striking a balance between keeping sensitive technology out of the hands of enemies and ensuring that U.S. companies can prosper and continue to make those products has become vastly more complicated in the post-Cold War era.

That’s why overhauling the export control system has eluded policy makers in both parties, as well as Presidents Bill Clinton and George W. Bush. The current effort has morphed into a painstaking review process, far from the House and Senate floors, in which lawmakers and their aides comment on thousands of products intended for export. The review is, for now, merely a piecemeal attempt to streamline a pair of control lists maintained by the government.

The Export Administration Act of 1979 expired more than a decade ago, but its powers have remained in force by executive fiat.

It also operates about as efficiently as a creaky, poorly maintained vehicle runs after three decades. That was the conclusion, in 2009, of the ad hoc committee created by the National Research Council, a wing of the National Academies, to study the state of the export control regime. Co-chaired by Stanford University President John L. Hennessey and former national security adviser Brent Scowcroft, the blue-ribbon panel’s final report, “Beyond ‘Fortress America,'” repeatedly cited the “marked inability of recent Congresses to address this issue.”

“The lack of existing legislation on dual-use export controls means that economic globalization, the 2001 terrorist attacks on the United States, the wars in Iraq and Afghanistan, the impact of globalized communications, the role of China in the American economy and the rise of Europe as an economic competitor are all not reflected in current export control legislation,” the authors wrote in the report.


The Commerce Department’s Bureau of Industry and Security, which has jurisdiction over products with both military and civilian uses, approved $24.6 billion worth of goods for export in 2011, not counting oil-related products.

There is no formal tally of the value of prospective exports that were barred, but business says the stakes are enormous. The system is “costing us billions and billions of dollars of sales abroad,” said the U.S. Chamber of Commerce’s president, Thomas J. Donohue, earlier this year.

The State, Defense, Treasury and Energy departments, as well as the Nuclear Regulatory Commission, all have a hand in export controls, and navigating the varying regulations has become particularly confusing for companies, eating up time and money while complicating research and development.

U.S. export control laws reach beyond commercial goods and services, extending even to technical discussions, such as seminars and meetings, about restricted technology.

That presents a major complication when the research done by a company or university involves scientists or engineers from different countries, or takes place in India, China or another country not considered a close U.S. ally.

It’s more complex when products or components that fall under export controls are being made overseas, particularly when it comes to China, widely viewed as the biggest potential rival to U.S. power. Yet China is also an indispensable economic partner, whose factories produce so much technology that is designed in the United States and could end up used by the Beijing. And some of those factories have links to state-owned enterprises and the Chinese military, potentially giving the government access to sensitive supply chains.

China remains unabashed about its desire to acquire U.S. technology as part of its effort to move its manufacturers up the value chain.

“If Motorola wants to build a facility in China to make phones,” says Bill Reinsch, the president of the National Foreign Trade Council, the question becomes, “will they send that factory any technology that is controlled?”

Companies lobbying Congress on export control issues, according to Senate records, are a who’s who of the defense contracting industry and the U.S. technology sector: Among them are Lockheed Martin, Northrop Grumman, Boeing, Raytheon and Intelsat. But they also include high-tech research institutions such as the University of Iowa and the University of Wisconsin, Madison; Ingersoll Machine Tools of Rockford, Ill.; and Edmund Optics, a Barrington, N.J.-based supplier of optical components.

The National Shooting Sports Foundation wants the administration’s efforts to succeed so its member companies can export more firearms.

For gunmakers and other companies, export controls amount to protectionism stood on its head, with the United States itself providing the barriers to potentially lucrative markets. Those markets are especially important to defense contractors as the specter looms of an additional $55 billion in automatic defense budget cuts next year, leaving companies looking for new ways to make money.


“Companies that see the Defense Department as a shrinking part of their customer base would like to be able to turn to the export market for some of these products,” says Lauren Airey, director of trade facilitation policy at the National Association of Manufacturers.

That is certainly true for Northrop. Drones have been ubiquitous in U.S. efforts against al Qaeda, but Congress recently cleared the way for greater use of them in U.S. airspace. Northrop CEO Bush noted that the U.S. military’s dominance over drone technology is rapidly giving way to an open worldwide market: “The U.S. is struggling to sell unmanned aircraft to our allies, while other nations prepare to jump into the marketplace with both feet.”

“We have certainly seen this before,” Bush said, “with satellites.”

Indeed, commercial satellites are the prime exhibits in the export control debate, in part because they’re the only item explicitly singled out by federal law for export restrictions. They also provide the clearest illustration of how changes in technology and business clash with the static world of foreign policy and national security.

That’s because export control policy, while designed to deal with lofty issues, often boils down to a discussion of lists — long, confusing and often vague government-administered litanies of categories, products and problematic countries, such as Iran and China.


Security Concerns

For American companies, the message from Capitol Hill is that the rules may be antiquated, but unraveling them is simply too risky. The argument is that the very complexity of the modern global economy, where the sources and destinations of goods may be buried behind highly complicated supply chains and complex trading relationships, means it is all but impossible to control where truly sensitive products actually end up.

Congress began the current regime of export controls in 1949, at the start of the Cold War when lawmakers were worried about a hostile Soviet Union and the potential loss of important commodities and technology. But true trade with the Soviet Union didn’t amount to much: U.S. exports to the country peaked at $5 billion, and much of that was in grain.

Since export laws underwent their last major rewrite in 1979, the Soviet Union has collapsed, world trade has become much more complex, and the U.S. economy has become intertwined with China’s rapidly expanding manufacturing and trading economy. Consensus over how to control technology has been difficult to find. Just as terrorism fears following the Sept. 11 terrorist attacks helped stop export control changes nearly a decade ago, concerns about Iran’s nuclear program and China’s military intentions now resonate in Congress.

It was a rare event when the Obama administration put forth a plan backed not only by the White House and Secretary of State Hillary Rodham Clinton but also by former Defense Secretary Robert M. Gates and current Pentagon chief Leon E. Panetta — a major change from previous times, when the defense and intelligence communities were wary of relaxing export controls.

Still, the issue of export controls has long exposed a fault line between the GOP’s traditional business advocates and national security hawks. Many of the party’s hawks, particularly those who control the House Armed Services and Foreign Affairs committees, take a far more suspicious view of the world than does the business community.


In a February hearing, House Foreign Affairs Chairwoman Ileana Ros-Lehtinen said administration plans to relax exports of technology to 36 “friendly” countries may raise the risk that those products would be diverted to third countries with questionable intentions, citing China and Iran in particular. “History has shown that without such safeguards, country exemptions for defense articles are vulnerable to exploitation by gray market brokers, by foreign intelligence entities, by front companies, and even terrorists,” said Ros-Lehtinen, a Florida Republican.

That goes for countries normally considered allies, as well. “All of us know that China represents the biggest threat of illicit acquisition of U.S. technology,” said one congressional aide. “But Iran is right up there. Several U.S. allies are right up there.”


Turf Wars

The bigger barrier to action may be the contrasting interests of Congress and the executive branch.

As with many issues that touch on both economics and national security — just look at trade policy or relations with China — Congress often takes a more hawkish approach, while the White House may be more inclined to look at how to mesh the desires of the business community, the global supply chain and foreign allies.

“The executive branch is under different pressures to try to show progress,” said one congressional aide. “We want to be able to do reasonable due diligence on items being removed.”

During the Clinton and early Bush years the major issues of contention were supercomputers, and then powerful encryption software. Now it’s jet engine technology, satellites and the always-problematic machine tools. At each stage, the executive branch has been able to take unilateral steps to relax controls on specific products. The PowerMac G4, for instance, didn’t stay on the list for long.

Now the administration wants to create a single export control list and a single enforcement agency. That move would require congressional approval. In addition to his satellite-specific bill, Berman has introduced legislation to allow the president to carry out such a broad overhaul, and when Democrats controlled both chambers of Congress during the first two years of Obama’s term, it appeared he might make progress.

But Ros-Lehtinen has introduced a competing export control bill and expressed skepticism about the administration’s wide-ranging effort, saying last year that a “compelling case has not been made for the wholesale restructuring of our current system, especially one that would include the creation of a costly and perhaps unaccountable new federal bureaucracy.”


‘Kind of Broken Down’

Amid resistance from Republicans, the administration now is scrubbing the control lists, moving items it deems low-risk from the State Department munitions list to the Commerce Department dual-use list, and making the munitions list more specific and easier to navigate.


The review process, which relies on input from a small group of aides and lawmakers on thousands of products, has grown from 30 days to months, thanks to an informal protocol in which the administration seeks congressional views before it actually notifies Congress of its intention to move a product or make an arms sale.

The result is a lengthy, often months-long process of review and consultation. That’s true on arms sales, but also on items such as a certain type of aircraft toilet from the munitions list, where it had been added because it was installed on military transports.

“Over 15 years the process has kind of broken down,” said the National Foreign Trade Council’s Reinsch.

Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, recently urged lawmakers to speed up the process. In a Dec. 9 letter to Republican Speaker John A. Boehner of Ohio and Senate leaders, Dempsey said, “The current notification system impedes our ability to protect, supply and otherwise support our war fighters, allies and partners.”

But members of both parties have pushed back. Indeed, the satellite amendment came with new strings attached, dampening the victory for some in the business community. House Republican staff members added language that would tighten notification requirements for moving most products, other than commercial satellites, from one list to another. The proposal raised alarms among business groups, which saw it as a rejection of many of the administration’s efforts to update the process.

It was a clear signal that export controls still hit a sensitive spot in Congress, and that is not likely to change.

Trying to get lawmakers to change to the system was “torture,” Gejdenson recalled. “It was torture over things that shouldn’t have been an issue, things that clearly were not undermining our national security.”

That’s true whether it’s satellites, drones, or technology that now seems quaint and once was on an export control list.

Gejdenson says a company in his Connecticut district, Gerber Scientific, once was prohibited from exporting a digital fabric-cutting device without a license because it contained an Intel 386 microprocessor chip that was on a restricted list.

At the time, he says, “they were selling 386 chips in Radio Shack in Beijing.”


Navy’s new network will cost half the previous estimates


By Bob Brewin

May 18, 2012

The Navy slashed cost estimates for its Next-Generation Enterprise Network contract to between $4.5 billion and a “maximum value” of $5.398 billion over five years compared to its October 2011 projections of $10 billion, an official told reporters Friday.

The service now expects the network, which will serve 800,000 Navy and Marine personnel, to cost between $900 million and $1.07 billion a year, according to Navy Capt. Shawn Hendricks, Naval Enterprise Networks program manager at the Space and Naval Warfare Systems Command, or SPAWAR.

The lower cost puts NGEN in range with the roughly $1 billion a year the Navy spent on its previous network contracts for the Navy Marine Corps Intranet run by HP Enterprise Services. A $3.4 billion NMCI continuity-of-services contract is set to expire in April 2014. HP and an industry team including Computer Sciences Corp., Cisco Systems Inc. and General Dynamics Information Technology have said they plan to bid on the NGEN contract, which the Navy plans to award in February 2013.

SPAWAR has broken up the NGEN contract into enterprise services — including myriad software systems — and transport services, such as base and local area networks and Wi-Fi systems. The command could award separate contracts for each piece, or combine them into a single contract.

Competition won’t end with the award of the NGEN contract, Hendricks said. The network will include 38 types of services, such as enterprise email, and the Navy will have the option to seek competition for those services outside NGEN to get a better deal, he said.

The Defense Information Systems Agency has pitched its ability to host email for all the services, with the Army as its initial customer. Hendricks said he would consider using DISA to provide email for Navy users if it proves a cost-effective approach.

Unlike NMCI, a single network that served the Navy and Marines, NGEN has separate domains for the two services and Brig. Gen. Kevin Nally, the Marine chief information officer, stands adamantly opposed to substituting DISA email for NGEN email.

Defense Systems reported Nally told a DISA conference earlier this month that senior Marine officers said they would “figuratively shoot him in the chest ‘if you make me go to’ ”

Hendricks portrayed NGEN as a flexible vehicle that can adapt to shifts in technology either through on-contract enhancements, or competition with the use of cloud computing services as a potential future option. This includes using commercial cloud services, if they meet Navy technical requirements.

Asked if the continuous competition on NGEN served as a disincentive to bidders, Hendricks said the contract has built-in incentives that allow the Navy to share cost savings from technical upgrades with NGEN contractors, a setup he viewed as additional profit for the contractor.

SPAWAR spent 18 months developing the NGEN request for proposals released earlier this month, and Hendricks said he personally read 3,500 comments that industry and Navy and Marine users submitted.

While many of those comments were administrative in nature, Hendricks said a vendor suggestion to increase the number of virtual desktops — thin client computers consisting of a display screen, keyboard and mouse with data stored on a server — had the potential to save money.

As a result of this suggestion, Hendricks said the Navy increased the number of NGEN virtual desktops on the unclassified network to 119,000 from the 7,500 planned initially and from zero to 15,000 on the classified network.

He emphasized price will drive selection of the NGEN contractor. The Navy is buying standard commercial hardware, software and services and has no intention of paying a premium, he said. The award will be made to the vendor with the “lowest priced, technically acceptable bid,” Hendricks noted.


NSA taps schools for cyber sleuths


By Dawn Lim

May 25, 2012

The National Security Agency has launched a program that will designate certain schools as National Centers of Academic Excellence in Cyber Operations to build out an identifiable pool of cybersecurity expertise it can tap into, the agency announced this week.

It has selected Dakota State University in South Dakota, the Naval Postgraduate School in California, Northeastern University in Massachusetts, and the University of Tulsa in Oklahoma as the first four centers of excellence. NSA will offer selected students opportunities to enhance their education at summer seminars offered by the agency.

The program will require the institutions to adopt an integrated approach to teaching security subjects, with a focus on technology and the techniques associated with specialized operations, such as collection and exploitation, the announcement said. Each center also will be required to include a course about the legal and ethical issues involved.

“The primary goal is to expose students to the scientific and intellectual foundation of cyber operations, giving them a glimpse of how such knowledge could be applied in innovative cyber careers with the government,” the NSA statement said.

The federal government faces a shortage of skilled security professionals to meet its cyber challenges.


Microsoft dumps ‘Aero’ UI in Windows 8, ‘Metro-izes’ desktop

Won’t reveal Windows 8’s final desktop user interface until launch later this year

Gregg Keizer

May 21, 2012 (Computerworld)

Microsoft said Friday that it is abandoning the “Aero” user interface with Windows 8, calling the UI that debuted in Vista and continued in Windows 7, “cheesy” and “dated.”

In a massive 11,300-word blog post, Jensen Harris, the director of program management for Windows 8’s user experience team, said that the new operating system’s look-and-feel, its graphics user interface, or GUI, would be “clean and crisp,” and would do away with the “glass and reflections” that marked Aero.

The move was Microsoft’s attempt to bring the traditional desktop — one of two GUIs in Windows 8 — closer to the new Metro-style interface, said Harris.

“In the end, we decided to bring the desktop closer to the Metro aesthetic, while preserving the compatibility afforded by not changing the size of window chrome, controls, or system UI,” said Harris. “We have moved beyond Aero Glass — flattening surfaces, removing reflections, and scaling back distracting gradients.”

Aero first appeared in Windows Vista, which reached enterprises in late 2006 and consumers in early 2007, but Microsoft had been working on the GUI for years. The company showed elements of Aero in 2005 betas it distributed to select testers, for example.

Windows 7 also relied on Aero, although Microsoft tweaked the GUI, adding features like “Snap,” which automatically sized a window to half the screen, and changing the translucency of maximized windows.

Users will not get to see Windows 8’s new GUI until the operating system appears in final form later this year. “While a few of these visual changes are hinted at in the upcoming Release Preview, most of them will not yet be publicly available,” Harris acknowledged.

Microsoft will offer Windows 8 Release Preview, its last public milestone before completing the OS, the first week of June.

It’s unusual for Microsoft to keep a Windows GUI under wraps until final release: Both Vista and Windows 7 showed the finished Aero UI, or at the least, major chunks of it, months, even years, before those editions went on sale.

Other than derogatory references to Aero as first implemented in Vista — when Harris said, “This style of simulating faux-realistic materials (such as glass or aluminum) on the screen looks dated and cheesy now.” — he did not give explicit reasons for dropping Aero from the desktop, other than Microsoft’s desire to shift it closer to the new Metro design philosophy.

In a long section of his post, however, Harris called out seven goals of the Windows 8 GUI redesign. Most applied primarily to Metro, and secondly, to touch-based devices like tablets, or in a broader sense, to mobile devices where battery power is tight and longevity a critical concern.

Microsoft won’t unveil the full Windows 8 desktop UI until this fall, but this screenshot of the Windows Explorer file manager is a sample of what the final will look like. (Image: Microsoft.)

Battery power, in fact, seemed to be the one goal that applied to the desktop GUI, something well-known Windows blogger Paul Thurrott noticed when he speculated that the effort to extend battery life was the reason for Aero’s demise.

“It’s all about battery life,” Thurrott argued on his SuperSite for Windows blog on Saturday. “Aero, with all its glassy, translucent goodness, is bad for battery life. Metro, meanwhile, which is flat, dull, not transparent, and only full screen, is very good for battery life.”

To lasso battery issues, Microsoft even considered limiting Windows 8 so that only one Metro app would run at a time. Ultimately, it decided against that restriction, and instead will allow two Metro apps to run simultaneously in a side-by-side view.

“Even with multitasking in the existing desktop still present, we did feel like only offering ‘one-at-a-time’ in the Metro style experience was a bit of a constraint, and not totally true to the Windows history of multitasking,” Harris said.

Also in his missive, Harris countered naysayers who have hammered Windows 8 for its touch-centric philosophy or for the lack of a traditional “Start” button on the desktop. He reminded them of early criticism when Windows took to the mouse, and the need to coach users of Windows 95 on how to use that edition’s Start button.

Harris also promised that GUI elements that have frustrated users — including difficulty in hitting the “hot” corner of the desktop that triggers the Start screen — had been addressed, and repeated earlier assertions that Microsoft would include tutorials with Windows 8 to show users how to manipulate both the desktop and Metro interfaces.

Essentially, his review of Windows GUIs, which stretched as far back as 1985’s original graphical shell atop DOS, and his comments around mice and usability, seemed to be a call for customers to give Windows 8 a chance.

“Yes, there are parts of the Windows 8 UI that have generated discussions and even debate, and aspects of the change that will take some people a little time to understand and digest,” Harris admitted. “Any change, particularly a change that doesn’t just follow in the footsteps of what everyone else is doing, can be hard to fully grasp at first…. The world changes and moves forward. Windows will continue to change too.”

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg’s RSS feed . His email address is

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Retired Gen. James Cartwright offers a fresh view on defense

Washington Post

By Walter Pincus, Published: May 21

Retired Marine Corps Gen. James Cartwright aired some fresh ideas about U.S. defense policies last week. About the same time, the House was preparing to pass next year’s Pentagon authorization bill and, in the process, illustrating Cartwright’s point that the nation isn’t downsizing correctly.

The former Joint Chiefs of Staff vice chairman questioned the emphasis on additional manned aircraft, tanks and land vehicles, saying unmanned systems will prove more effective.

He also spoke of the “fallacy of the two-war scenario” and argued against an emphasis on cyberdefense rather than cyberoffense. He made his off-the-cuff remarks during a presentation last Tuesday at the annual Joint Warfighting Conference, hosted by the U.S. Naval Institute and the industry group AFCEA International (Armed Forces Communications and Electronics Association).

Although the House is adding about $4 billion to next year’s spending, Cartwright said that “truth be told,” the Pentagon had been planning $480 billion in reductions over the next 10 years. “It was just a question of when and how,” he said.

What concerns him is that $480 billion “was about a 10 percent reduction, and historically we’ve run about 20 percent reductions after these [military] conflicts. We’re about halfway there.”

If there is an additional $200 billion cut in the next 10 years, there will be a problem, he said.

Although the United States has taken a volunteer force through a decade of war, Cartwright said, “we have not taken an all-volunteer force through a downturn when resources become stretched.”

Voicing concern about recruitment and retention, he said, “How we entice people to stay is something that we have really not done in the past. We have been a service in the mind-set of ‘We will RIF [reduce in force]. I don’t need you, I need that dollar that pays you, so I am going to get rid of you, and goodbye.’ ”

That approach can’t continue, Cartwright said.

He also spoke of the need to recognize that the United States has become an “occupying force.”

“When you go to battle by getting up in the morning in your compound, getting into your armored vehicles, go out and patrol, and return to your compound at night, that is an occupation force,” he argued.

As the country prepares to rebuild its fighting forces, he asked: “Are we going to build an occupation force for the last war or [build a force for] the next war we want to prepare for?”

He advocated new approaches in general and said the strategy of the Air Sea Battle, a new partnership between the Navy and Air Force, was not well conceived.

Additionally, he said, the new emphasis on U.S. forces in the Asia-Pacific region politically demonizes China, “which is not in anybody’s interest.” Not only that, he said, but it also gives the impression that the United States is turning its back on other areas.

The former fighter pilot talked about the future using airplanes as an example, but he said his views also applied to land and sea weapons. He described today’s aircraft as at “the human edge of performance,” meaning small and costly increments to a manned plane produce only small gains in fighting capability.

For instance, a U-2 surveillance craft can be in the air for 22 hours, but a pilot generally can do only nine, he said.

It would cost $100 billion and many years to engineer a 5 percent improvement in a manned bomber, but unmanned planes could be improved faster and at a lower cost, he said. “I love being in the cockpit, but this is the reality of the world we are in,” Cartwright said.

Cyberwarfare issues are another challenge, he said. The new and costly F-35 Joint Strike Fighter, which has stealth capability, has no protection against cyberattacks. Previous aircraft could turn off electronic transmission with one switch to avoid detection, he noted, but the F-35 has no such mechanism.

Cartwright said the United States also needs to protect its military systems from hackers, noting: “That’s the reality of the battlefield we are going to be in.”

But he insisted, “In military terms [of] offense and defense, we are thinking 90 percent defense, 10 percent offense. That is bass-ackwards for us. Our job is to kill things . . . change people’s mind-set.”

He closed by saying that cyberweapon development should be done at the tactical individual service level and not by some centralized Defense Department organization. Centralization, he said, would mean that the individual services would no longer be compelled to use their research money to develop weapons and train fighters for combatant commanders.

I hope the Senate Armed Services Committee, as it works on the fiscal 2013 defense bill this week, considers Cartwright’s viewpoint.


Facebook and physicians: Not good medicine

Doctors warned to stay off social media to avoid patient privacy conflict

Lucas Mearian

May 23, 2012 (Computerworld)

When Matt Goldstein entered medical school at Stanford, his instructors warned him about keeping Facebook or Twitter pages, saying that social media activity could lead to violations of HIPAA patient privacy rules.

As he prepares to begin his residency, Goldstein has once again received the now familiar warning. “I actually just got an email from my residency program, and they cautioned us strongly about social media and about using it judiciously.”

Medical students and physicians face the choice of either not using social media or using pseudonyms that only friends know in order to avoid violating privacy rules and to steer clear of inappropriate contact with patients.

“For me, something like Facebook, which started off as a really powerful social tool to interact with friends and colleagues, in some way became a concerning liability,” Goldstein said.

Goldstein said his classmates either use online pseudonyms on Facebook, Twitter or LinkedIn accounts, or they have shut down their accounts for fear of unwittingly violating privacy rules. Many have switched to private professional networking sites, which allow them to discuss medical cases in professional forums, seek out colleagues for remote consultations and read up on the latest treatments and outcomes.

In a 2009 survey of deans at 130 U.S. medical schools published in the Journal of the American Medical Association, 60% of the respondents reported incidents of students posting unprofessional online content. Violations of patient confidentiality were reported by 13% of those surveyed.

Unintentional privacy breaches

It may appear obvious that medical students and physicians shouldn’t post personal patient information on social networks, but it’s not always that simple.

For example, two years ago, Dr. Alexandra Thran, a 48-year-old emergency room physician, was fired from Westerly Hospital in Rhode Island and reprimanded for unprofessional conduct by the state medical board for posting information about a patient online.

According to a board filing, Thran didn’t post the patient’s name, but there was enough information that other people could identify the individual.

“Folks get into trouble when they think they’re not violating patient confidentiality because they don’t put the name or put the age down, but you can actually go back and find out information if you know where the doctor works, know the date it was posted,” said Dr. Bradley Crotty, chief medical resident at Beth Israel Deaconess Medical Center in Boston and an instructor at Harvard Medical School.

Physicians should approach posting on social networking sites in the same way they approach conversations in hospital elevators, Crotty said. It’s simply forbidden to discuss cases in a public setting, whether physical or virtual.

The potential for medical professionals to get involved in inappropriate activity on social networking sites goes beyond doctors sharing information with colleagues, Goldstein said. Often, such cases don’t involve a physician posting information; instead, it could be a situation where a patient is trying to make contact with a doctor.

“In some cases, that’s nice; it seems to foster a connection between a patient and a physician. But I’m sure you can imagine that it can also be somewhat uncomfortable,” Goldstein said.

Physician dual-citizenship online

Crotty has written about social networking, physician professionalism, and the need for physicians to develop “dual-citizenship” online to separate their public and private profiles. He said it’s not uncommon for patients to search on social networking sites for their doctors in order to communicate with them.

While he recommends that physicians set their privacy settings to “high” to avoid having patients contact them on public sites, he also said doctors should create separate professional and personal accounts. The professional profiles should contain only contact information and perhaps credentials, Crotty said.

For physicians, however, social networking can be more valuable than learning the latest recipe for chocolate cake in a cup or seeing a friend’s vacation photos.

Social networking sites can be places where physicians get advice from colleagues or share ideas on treatments. Crotty said a doctor seeking a second opinion on a social networking site is the equivalent of a “curbside consult,” an off-the-cuff act of one physician asking another for an opinion with no formal arrangement. It’s a longstanding practice among physicians, but it isn’t recommended.

Another ethics conundrum that has come into being with the rise of social networking is whether physicians should peruse their patients’ pages on social networking sites.

For example, a doctor who gave a patient a prescription for medicine that could have an adverse affect when mixed with alcohol might decide to check out the patient’s Facebook page to see if the individual is telling the truth about his drinking habits, Crotty said.

“Is that a breach of privacy? Or is it fair game because it’s public information?” he said. “There are so many questions that we don’t know the answer to.”

In a recent article in the Society for Academic Emergency Medicine titled “How Facebook Saved Our Day!”, a physician describes an incident where medical professionals had to weigh the need to respect a patient’s privacy against the need to give her the treatment she needed.

It started when a 34-year-old woman was brought into the emergency room displaying “bizarre behavior” and refusing to open her eyes for an examination. The only identification on the well-dressed woman was a business card. Using the information on the card, the physician looked up her Facebook page, and there he found the names of her husband and her primary care physician, both of whom were able to provide information about the patient’s medical history, which included bouts of depression.

“Not to say it’s wrong, but it’s something we really need to think about as a profession,” Crotty said. “HIPAA is a bill that carries criminal and civil penalties for breaches in confidentiality. So it’s something we need to be careful of when you think about how you live with the information you have as a doctor.”

Private physician social networks

Like many hospitals, Beth Israel Deaconess has set up its own messaging site for patients and physicians, called PatientSite. Patients can include up to two pharmacies in their profiles and add as many of their physicians as they like. The site requires users to log in, and thus enables patients and physicians to communicate securely.

Beyond hospital walls, a niche industry has emerged to address the desire by physicians to discuss patient cases with colleagues or request information on the latest treatments. Sermo and Doximity are two of the leading providers of online networking sites for physicians.

The sites verify physicians’ credentials before allowing them to open accounts and begin sharing information with other doctors, either through postings or secure email.

For example, one recent posting involved a physician who needed to learn how to remove a wire bristle that had become lodged in a patient’s throat. The bristle, from a gas grill cleaning brush, had broken off and become lodged in a hamburger the patient had eaten.

“He posted the case because he thought it was rare, but two other doctors had removed wire bristles from patients in the past two months. Now all three are going to write article about how to remove a wire bristle,” said Jeff Tangney, CEO of Doximity.

Launched a little more than a year ago, Doximity now has 9% of all U.S. physicians as members, according to Tangney. “We have three times as many physicians on our network as LinkedIn has,” he said.

Sites like Doximity allow specialists and hospitals to form social networking groups, and the information posted by members is only shared within a distinct universe of users.

The company generates revenues through physician referrals, including referrals to law firms that pay for expert testimony in court cases and referrals to Wall Street firms seeking physicians’ opinions on investments in companies involved in the healthcare industry. For example, a fund manager might be considering an investment in a company that just received FDA approval for a new medical device. A physician familiar with the product would be able to say whether or not the device is useful.

Just as with any curbside consultation, however, the quality of the information physicians receive from colleagues on such sites can be questionable, and there are tricky liability issues to consider as well, said Crotty.

“What if the treatment they suggested was wrong and you chose the wrong one?” he said. “The thing is, when you get a second opinion, the doctor you’re getting the opinion from has no clinical context or clinical relationship with that patient.

“I think these networks will be very good for general learning and general advice, but for real collaboration in clinical context, I wouldn’t recommend them,” Crotty said.

Goldstein has been using Doximity since the site launched nine months ago. He said it has a number of tools that are useful for connecting with other medical professionals. The site’s user interface is similar to that of LinkedIn; it has a basic user profile, but it’s tailored for physicians, he said.

Goldstein recently posted a question about a lab result that was confusing, and “in real time I got some interesting responses back,” he said.

The other physicians offered their own insights and provided references to online resources.

Describing how the site helped expand his professional network, Goldstein said, “That’s pretty cool to be able to sit in my physician work room here in Palo Alto and have responses coming in from people as far away as Boston and New York.”

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas’s RSS feed . His email address is

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Providing evidence for funding will challenge agency thinking – Evidence Base Budgeting

By Matthew Weigelt

May 21, 2012

 Now that the Office of Management and Budget wants to see more use of analysis and evaluation in agency budget request — evidence-based budgeting — agency officials have to be diligent about gathering the evidence they offer in support of their programs, according to a veteran of the federal budget process.

OMB’s evidentiary demands force officials to look far into the future to determine a program’s costs and benefits—a feat that takes a lot of internal and at least some external reviews, said Ray Bjorklund, vice president and chief knowledge officer at Deltek.

If officials don’t give OMB a full picture, they can open themselves up to criticism about poor planning and suspicious evidence, he said.

The evidence requires a degree of intellectual honesty about the cost and benefits of a program. It also requires holistic thinking, he said. Officials should consider getting outside opinions to gather as much various input to develop evidence with as few holes as possible. Bjorklund suggested seeking the opinion of the agency’s inspector general or even a public consultant.

OMB issued two memos on May 18 outlining a new emphasis on evidence in budgeting. Agencies are to reduce their costs and support their requests with data that shows why the programs to be funded deserve to be. The evidence can determine what funding an agency may potentially receive.

“Where evidence is strong, we should act on it. Where evidence is suggestive, we should consider it. Where evidence is weak, we should build the knowledge to support better decisions in the future,” Jeffrey Zients, acting OMB director, wrote in the memo.

The memo invites agencies to propose new evaluations, adding some specific suggestions. Officials can consider low-cost evaluations using administrative data or new technology or systemic measurement of costs and cost per outcome. The overall goal of the OMB guidance is to create smaller budgets that justify their expenditures.

“These are important and noble goals, but at the same time, challenging,” Bjorklund said.

Kevin Plexico, vice president of federal information solutions at Deltek, said the overall guidance builds on what OMB issued last year. OMB told agencies to cut their budgets by 5 percent and then identify programs where they needed increases. But the additional detailed guidance on evidence-based budgeting is a new wrinkle.

He said it’s interesting that OMB is asking for data that’s specifically relevant to a given challenge, and that demonstrates a connection between the data provided and the outcome.

“That said, it’s hard to see it having a meaningful impact on the outcome given the political landscape we are in today,” he said.

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Pentagon enlists scientists to build intel-decoding software


By Dawn Lim

May 23, 2012

The Pentagon is launching a four-and-a-half-year research funding effort to build computer software that can analyze intelligence data and “see through language” to tease out hidden meanings in texts, cutting the time for analysts to file intel reports.

The military’s venture capital arm, the Defense Advanced Research Projects Agency, issued a request for proposals May 22 enlisting scientists for developmental work. The goal is to create technology that picks up on nuances that aren’t easily inferred from the mounds of intelligence data that analysts are fed each day. The experimental program, called Deep Exploration and Filtering of Text, was first reported by Nextgov earlier in May.

“Automated, deep natural-language understanding technology may hold a solution for efficient processing of text information and for understanding connections in text that might not be readily apparent to humans,” the solicitation reads.

DARPA envisions creating “an end-to-end system that will assist the warfighter and intelligence analyst at every stage — from searching through data to identifying threats and then formulating analyses.” Because of the range of systems used in varied intel missions, DARPA wants an open-source platform that can be easily tailored for users, the broad agency announcement notes.

The funding program will be broken up into three 18-month phases. In the first, performers will build algorithms for the software. In the second, researchers will integrate the formulas into a computer program.

In the final phase, the scientists will have to demonstrate how the software works in deciphering and annotating unclassified and classified data. They also will have to show that their technology can be applied to at least one foreign language from a list that includes dialectal Arabic, Cebuano, Chinese, Pashto, Dari, Farsi, Ilocano, Spanish, Tagalog and Urdu.

Funding for individual awards has not been determined and will depend on the quality of the proposals received, the RFP notes.


Microsoft clarifies Ballmer’s claims of massive Windows 8 adoption

Analysts point out how Microsoft inflates the pool of Windows 8-capable PCs

Gregg Keizer

May 24, 2012 (Computerworld)

Reports earlier this week that Microsoft CEO Steve Ballmer predicted unprecedented sales of Windows 8 were wrong on multiple counts, Microsoft and independent analysts agreed.

But while Microsoft said Ballmer was misquoted or misunderstood, the analysts argued that even if the CEO’s number of 500 million had been accurate, it meant little about the upgrade’s success.

The kerfuffle started when the Agence France-Presse (AFP) wire service, reporting from a South Korean technology event, said Ballmer claimed up to 500 million users would “have” Windows 8 “next year.” A slew of blogs and news websites piled on, most of them questioning Ballmer’s number, or even his sanity.

It wasn’t hard to see why: Windows 7, which Microsoft has repeatedly said has been the fastest-selling operating system in its 37-year history, sold roughly 525 million licenses between its 2009 launch and the end of 2011. During the 12 months of last year, Microsoft claimed it sold some 225 million Windows 7 licenses.

Since most interpreted the AFP’s “next year” as meaning through the end of 2013 — and because that would give Microsoft just 14-15 months for Windows 8 to make the half-billion milestone — a lot of people were skeptical.

Very skeptical.

All for naught, as it turned out: Late Tuesday Microsoft said the AFP piece was the result of crossed wires.

“The numbers Steve Ballmer gave at the Seoul event are a restatement of what we said at the Windows 8 Store event in December, when we were talking about existing Windows users and analyst projections of PC sales for 2012 that could be upgraded to Windows 8 when the time comes,” said a Microsoft spokeswoman in a email reply Tuesday night to a request for comment and clarification.

In effect, said Microsoft, AFP miscast a Ballmer line as a Windows 8 sales projection when in reality it was nothing of the kind.

The December 2011 event the company spokeswoman referred to was where Microsoft promised to ship the Windows 8 beta in two months and beat the marketing drum for Windows Store, the e-market that will be the only distribution source for Metro-style apps.

In a blog published that same day, Ted Dworkin, director of the Windows Store development team, said, “We’ve just passed the 500 million licenses sold mark for Windows 7, which represents half a billion PCs that could be upgraded to Windows 8 on the day it ships. That represents the single biggest platform opportunity available to developers.”

Dworkin linked the number of in-play Windows 7 licenses — each of which could potentially migrate to Windows 8 — to the prospects that Metro app developers faced. The more Windows 7 machines that could become Windows 8 systems, the happier everyone should be.

According to Todd Bishop of GeekWire , who obtained an excerpt of Ballmer’s speech this week, his remarks echoed Dworkin’s in the boasting of development opportunities.

“With something like 400 million to 500 million users expected in the next year, the best economic activity for people building machines, and the best economic opportunity for people writing applications will be around Windows,” Baller said, by Bishop’s version.

Ballmer said nothing about Windows 8.

But the focus on numbers in the follow-up media reports — did Ballmer really think Microsoft could double the sales tempo of Windows 7? — missed the point entirely, said a pair of research analysts with Directions on Microsoft, a Kirkland, Wash.-based firm that tracks only Microsoft.

“What will matter is how fast actual adoption of Windows 8 is, not how fast it sells on new devices, or what the run rate for PCs is,” said Michael Cherry of Directions in an email reply to questions. “If a new laptop is sold with Windows 8 and then downgraded to Windows 7, it has no value to a Metro-style application developer.”

Most enterprises have top-to-bottom “downgrade” rights, which let them replace a newer version of Windows with an older edition without paying for two copies. Companies typically exercise those rights because as they buy new PCs — with, say, Windows 8 pre-installed — they would rather run Windows 7 to standardize their desktop inventory.

Businesses and some consumers also downgrade a new machine because they haven’t completed compatibility testing on the new OS, or are just not ready to switch from the known to the unknown.

Cherry’s point — that PCs bought with Windows 8 but subsequently downgraded to Windows 7 skew the “have” numbers in the former’s favor — was picked up by Rob Helm, also of Directions.

“What partners want to know is, how many computers will be running Windows 8 at the end of 2013?” Helm asked [emphasis in original]. “The answer is: Fewer than 500 million, not counting pirates. How many fewer is what’s going to matter to the partners.”

Cherry and Helm distinguished between a Windows 8 license and a copy of Windows 8 actually being used, intimating that the latter could be much smaller than the former.

Ballmer and Dworkin, on the other hand, crowed about the number of PCs sold that could — emphasis on “could” — turn into Windows 8 PCs after an upgrade. They did that in an attempt to woo developers to Metro, Cherry said.

“One reason I think that Microsoft is being aggressive in citing numbers is to encourage developers to write Metro-style applications,” said Cherry. “You will see references to large numbers of Windows users, implying that the large number is the market for developers of Metro-style apps and the market for apps in the Windows Store.”

But that’s not accurate. “Metro-style apps will only run on Windows 8 devices, so it seems to me that the number of XP, Vista and Windows 7 users is irrelevant.”

Helm also criticized the numbers game Microsoft plays.

If the company counts licenses to come up with its projections, then by Microsoft’s rules there’s a host of PCs that the company can slip into the “Windows 8” column. The desktops, laptops, tablets and ultrabooks equipped with Windows 8 or even Windows RT, are just part of Microsoft’s total, said Helm.

“All existing PCs that have Software Assurance coverage on Windows 7 Professional as of the Windows 8 launch … [are entitled] to run Windows 8,” Helm said. “[And] all PCs that ship with rights to Windows 8 under a technology guarantee program, something that Microsoft has done with earlier versions of Windows, they’re counted as Windows 8 licenses too.”

Microsoft hasn’t announced an upgrade deal — what Helm called a “technology guarantee” — but will reportedly kick off the program the first week of June, when it starts offering a $15 upgrade to Windows 8 Pro for buyers of Windows 7 PCs.

“So if a technology guarantee program starts June 1, over half of the Windows PCs that ship in 2012 will ‘have’ Windows 8,” said Helm, showing how Microsoft can easily inflate the number. “But all that is irrelevant for device makers and app developers.”

Like Cherry, Helm was certain that what those partners were interested in was the number of Windows 8 users — thus customers — not an amorphous pool of licenses, many of which may not be running Windows 8 now or even in the foreseeable future.

In other words, Microsoft’s attempt to put Windows 8 in the best light — at least to developers — by touting a huge number of PCs able to run the OS is a smokescreen.

“Initially the market for Windows 8 Metro-style applications will be small, [although] it will grow over time,” said Cherry. “But it does not start on Day One as the entire base of Windows users.”

How fast that installed base converts to running the new OS will be critical, Cherry continued, but he declined to predict how fast that may occur. “There is little history to predict that adoption,” Cherry said.

Microsoft has not yet disclosed a ship date for Windows 8, or the availability of Windows 8- and Windows RT-powered devices, but most experts expects an October launch, although some have staked out November instead.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg’s RSS feed . His email address is

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