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July 21 2012

July 23, 2012


Federal Computer Week


CBO predicts defense cost overruns

By Amber Corrin

Jul 13, 2012


The Defense Department will spend 5 percent more than planned over the next five years, according to a Congressional Budget Office analysis. However, a Pentagon official dismissed the CBO’s projections.

In a report dated July 11, the CBO said DOD would likely spend $123 billion more than estimated in its Future Years Defense Plan (FYDP), which outlines spending plans through 2017. CBO also said the department will exceed budgetary limitations mandated in last year’s Budget Control Act.

Using estimated cost factors and growth rates based on those in recent years, the CBO singled out the increasing costs of operations and maintenance – especially military health care and employee compensation – as well as the high price of replacing and modernizing weapons systems as key culprits likely to inflate DOD’s budgetary requirements.

But George Little, DOD spokesman, dismissed the findings and called on Congress to give the department the power to make the difficult cuts necessary to ultimately save money.

“The CBO report underscores the point the secretary has been making: To responsibly square fiscal discipline with national security, you have to make tough decisions informed by a strategy, as we’ve done,” Little said in a July 12 Pentagon briefing. “If Congress does not allow us to proceed with these changes, we will be forced to look elsewhere for savings in order to meet the requirements of the Budget Control Act. That means cuts to training, weapons modernization and other programs that are essential to avoiding a hollow force.”

DOD’s requested budget for 2013 totals $526 billion, not including the overseas contingency operations budget reserved for war spending, which is roughly $5 billion less than last year’s. If sequestration is enacted in January, that will further shrink DOD’s budget to $469 billion, a scenario that top DOD officials have repeatedly decried as a disaster scenario.

Still, even with the drastic cuts that would come from sequestration, DOD spending in 2013 would be still tally above 2006 levels, according to the CBO report.

“For most categories of DOD’s budget, costs under the CBO projection are higher than the costs estimated by DOD in the FYDP and the assumed costs for the extension of the FYDP,” the CBO report noted. “In particular, DOD’s costs of providing health care, paying military and civilian personnel, and developing and buying weapons have historically been higher than the department’s planning estimates.”

But Little argued that CBO failed to account for DOD’s aggressive cost-cutting plans that are already under way, assuming that the department would fail to meet its targets and that future acquisition program costs would “perform as they have too often in the past.”

“If you can’t control costs, then it’s hard to live with tough budget caps. CBO’s report makes it clear why we need to continue to press ahead on all fronts with our efforts to achieve cost savings, and we need the close partnership of Congress to do so,” Little said.


Microsoft, NBC dissolve joint venture

By MICHAEL LIEDTKE | Associated Press

July 16, 2012


SAN FRANCISCO (AP) — Microsoft is pulling out of the joint venture that owned, freeing the world’s largest software maker to build its own online news service.

The breakup announced late Sunday dissolves the final shreds of a 16-year marriage between Microsoft Corp. and NBC News, which is now owned by Comcast Corp. The relationship began to unwind in 2005 when Microsoft sold its stake in MSNBC’s cable TV channel to NBC.

NBC is buying Microsoft’s 50 percent interest in the MSNBC website for an undisclosed amount. will be rebranded as, and readers who logged into late Sunday were automatically redirected to

The website will move its headquarters from Microsoft’s corporate campus in Redmond, Wash., to NBC News’ longtime home in New York.

The online divorce stemmed from the two partners’ desire to gain greater control over their digital destinies as the Internet becomes an increasingly important part of their businesses.

The inherent constraints of being locked into a joint venture sometimes handcuffed Microsoft and NBC.

Microsoft, in particular, had grown frustrated by contract terms requiring it to exclusively feature content on its own websites. That exasperation was exacerbated by the MSNBC cable channel’s strategy to counter Fox News Channel’s appeal to conservative viewers by tailoring its programming for an audience with a liberal viewpoint.

The strategy fed a perception that material from MSNBC’s website was politically slanted, too.

“Being limited to content was problematic to us because we couldn’t have the multiple news sources and the multiple perspectives that our users were telling us that they wanted,” said Bob Visse, general manager of

Now that it has shed those shackles, Microsoft is preparing to launch its own news service this fall. Although he declined to provide many details about the operation, Visse said the news staff will be about the same size as the roughly 100 people who created original content for the

By hiring its own news staff to feed material to its websites, Microsoft is embracing the same strategy as the owners of two other major Internet companies, Yahoo Inc. and AOL Inc.

Microsoft has leaned on its lucrative franchise selling personal computer software to pay for massive Internet investments that have rarely paid off, much to the frustration of its shareholders. The software maker initially invested $220 million in the MSNBC joint venture. It’s unclear if Microsoft ended up making any money on the alliance. As a whole, the company’s online operations, which include the Bing search engine and MSN portal, have lost more than $10 billion in the past seven years.

Even as it sets out to compete against NBC News, Microsoft will continue to highlight the top stories from its former partner for the next two years under terms of the split.

NBC News, in turn, believes it will be able to attract more traffic to its stable of websites by forging other partnerships that were off limits when it was tied to Microsoft.


“There is no question that we are going to have more flexibility to make our own decisions,” said Vivian Schiller, NBC News’ chief digital officer. “This is really an amicable breakup. We think competition will make us better.” and its affiliated sites ranked as the Internet’s fourth most popular site for general news in the U.S., with nearly 50 million visitors in June, up 5 percent from last year, according to the research firm comScore Inc.

Yahoo’s recently formed alliance with ABC News topped the charts with 81 million visitors, followed by AOL/Huffington Post, and CNN.

As part of its online restructuring, NBC News plans to create a new online destination for the MSNBC cable channel’s personalities next year.

Although it will be based in New York, will retain a significant staff in the Seattle area, according to Schiller. About 170 of’s 300 employees worked in the Seattle area.

Microsoft is letting remain in its Redmond office while it looks for a new location in the area.



July 13, 2012 – 9:38 p.m.

Unease Grows Over Sequester’s Effect

By Kerry Young, CQ Staff

Lawmakers in both parties are increasing the pressure on the Obama administration to spell out how federal agencies would implement automatic, across-the-board spending cuts at the start of next year. But the deeply partisan divide on economic issues suggests there’s little chance that Congress will act to head off the sequester.

The push for more information comes amid a growing outcry from Congress and from groups that would be affected by the impact of the $109 billion in spending cuts. The alarms have spread from the defense world to advocates of domestic programs, who warn that public safety, law enforcement, education and other areas would be affected by the blunt and sudden cutbacks scheduled to hit on Jan. 2.

The Obama administration has so far instructed agencies to prepare budget requests for fiscal 2013 as if the sequester would be averted, and lawmakers for months made do largely with general observations of its potential impact.

But the House on July 18 will vote on a bill that demands from the White House a detailed description of the plans for implementing the spending cuts at federal agencies, in both domestic and defense programs. That follows the adoption of a measure in the Senate calling for even more detailed reports from agencies, reports that would include assessments of the impact of the cuts in areas such as food inspections and social welfare programs.

“Congress does not yet have an accurate understanding of the implications of sequester beyond an assertion that the cuts would be devastating, which is the word used by the Secretary of Defense, Leon Panetta, and nearly every other defense official we have queried,” John McCain of Arizona, the ranking Republican on the Senate Armed Services Committee, said July 12. “We must have this information as we begin the work of developing a balanced approach to deficit reduction.”


House defense authorizers have scheduled an Aug. 1 hearing with two senior Obama administration officials to discuss the estimated $54 billion in cuts the Pentagon faces under sequester.

Rep. Edward J. Markey, D-Mass., last week released an assessment from the Department of Health and Human Services showing how education and medical research would be curtailed under the sequester. Health and Human Services Assistant Secretary for Financial Resources Ellen G. Murray, citing a Congressional Budget Office estimate, said non-defense discretionary programs faced a 7.8 percent reduction that, she said in a letter to Markey, would have “profound consequences” on medical research and treatment for patients with AIDS and with substance-abuse problems.


GOP Seeks ‘Common-Sense Savings’

Republican congressional leaders wrote to President Obama on July 13, calling on him to seek “common-sense savings” to replace the sequester. The reductions under the sequester would be replaced by those savings on spending and would not include “tax increase proposals that face bipartisan congressional opposition,” said the letter from Senate Minority Leader Mitch McConnell of Kentucky, Senate Minority Whip Jon Kyl of Arizona, House Speaker John A. Boehner of Ohio and House Majority Leader Eric Cantor of Virginia.

There’s virtually universal agreement in Congress that lawmakers must revise the sequester, but there’s no agreement between Republicans and Democrats on how to do that. That’s why there’s broad agreement that Congress will not act to head off the sequester, a kind of budget doomsday device built into the 2011 debt-limit law (PL 112-25), until after the November elections.

“Both sides agree that sequestration is a terrible way to cut spending, on both the defense and non-defense sides,” said Patty Murray of Washington, the No. 4 Senate Democrat, who will speak Monday at the Brookings Institution about the budget cuts.

There has been bipartisan cooperation on attempts to compel the Office of Management and Budget to release detailed information on how the cuts under the sequester would be distributed across agencies and programs, but it’s unclear whether Congress will soon clear a law carrying such a demand.

McCain worked with Murray to add a requirement for a sequester report to the Senate’s farm bill (S 3240), and the chamber in June adopted by voice vote their amendment seeking a sequester report. But Boehner last week said he had not yet decided when the House’s version of the farm bill (HR 6083) would come to the floor, raising the possibility that it may not come to the floor at all.

And although the House on Wednesday is likely to pass a bill demanding a sequester report, it’s unclear whether Senate Majority Leader Harry Reid, D-Nev., will bring that separate measure to a vote. “We’ll just have to see if we can run it through all of the different traps that are laid for me and for us,” he said at a July 10 news conference.

Introduced by Jeb Hensarling, R-Texas, and amended by Paul D. Ryan, R-Wis., the House version makes narrower demands than does the Murray-McCain amendment, calling for information on implementation of cuts at “the program, project and activity level.” The House Budget Committee approved the Ryan-Hensarling bill by a 30-0 vote on June 30. Minority Whip Steny H. Hoyer of Maryland last week said that it “is not a bad idea” and that he expects the House to pass the measure.

The procedural hurdles and the calendar mean that there is little likelihood that Congress would demand and then get a detailed report on the implementation plans for the sequester before the start of the next fiscal year, Oct. 1. The House and Senate measures ask for reports within 30 days.


‘Waiting for a “Better” Proposal’?

But the political hurdles to heading off the cuts appear to be even higher.

Reid and Republicans on the House Armed Services Committee scrapped publicly over the sequester in recent days, and both sides appeared entrenched in positions.

“News reports indicate that you are waiting for a ‘better’ proposal,” the GOP authorizers wrote in a June 4 letter to Reid. “If you have a solution in mind, it is incumbent upon you to bring it to the floor of your own chamber, pass it, and allow us to move to conference.”

In his reply, released to reporters, Reid said he is “convinced” that in time there will be a bipartisan compromise to head off the sequester but said it must include new tax revenue. “Given your concern about sequestration, I would encourage you to focus your energy on convincing Republicans that forging a balanced compromise that protects the middle class is more important than adhering to the tea party’s rigid, extreme ideology,” Reid wrote.

Even with this stalemate, the White House has not yet directed agencies to begin to factor into their fiscal 2013 budgets the chance of deep budget cuts. Instead, the Obama administration has tried to prod Congress into coming up with a legislative fix.

Jeff Zients, acting director of OMB, and Deputy Secretary of Defense Ashton B. Carter, who earlier was the Pentagon’s chief for acquisition, technology and logistics, will appear before the House Armed Services Committee on Aug. 1 to discuss the potential impact of the sequester.

Carter’s “going to be very straightforward about what the potential effects of sequestration might be,” said DOD spokesman Gregory Little at a news conference last week. “The deputy will be prepared to have a very robust dialogue



Plan to close Ohio 444 moves forward


July 13, 2012

By Daryl Mayer 88th Air Base Wing Public Affairs


WRIGHT-PATTERSON AIR FORCE BASE, Ohio – The Air Force has signed the Record of Decision which allows the base to reconfigure several gates that, when complete, will dramatically change the traffi c fl ow on base.

The first of these changes will be closing the section of Ohio 444 that currently bisects Area A.

The Ohio Department of Transportation has scheduled a meeting to share information about its plans, in relationship to the relocation of Ohio 444, at the Fairborn Government Center on July 19 from 6-8 p.m. In the near future, signs will be posted along the current Ohio 444 detailing when it will be rerouted. This project will bring the base perimeter fence across Ohio 444 behind the Exxon Station at the Ohio 444 and Dayton-Yellow Springs Road intersection. Access to this business will not be affected. On the other end, a new gate will be built on Ohio 444 adjacent to the commissary. This gate will become the new Gate 1A.

“This project will join Area A and Kittyhawk and provide for needed security enhancements,” said Mark Mays, 88 Civil Engineer Directorate. “The closure of a portion of Ohio 444 will enable the construction of a new Gate 1A with prescribed security features.”

Ultimately, this decision will also allow the Air Force to reconfi gure Gates 15A, 16A and 26A. It will likely be several years before work begins on any of these projects.


Air Force Space Command Defines its Priorities


Air Force Space Command Defines its Priorities: Air Force Space Command on July 16 issued its list of space and cyberspace priorities. The command’s 15 prioritized space capabilities are: nuclear, survivable communications; launch detection/missile tracking; position, navigation, and timing; space situational awareness and battlespace awareness; defensive space control; assured space access/spacelift; space command and control; satellite operations; protected, tactical communications; offensive space control; unprotected communications; space-to-surface intelligence, surveillance, and reconnaissance; terrestrial environmental monitoring; nuclear detonation detection; and responsive spacelift. The command’s nine prioritized cyberspace capabilities are: proactive defense; defensive counter-cyberspace (recon/counter-recon); cyberspace ISR and situational awareness; persistent network operations; data confidentiality and integrity systems; cyberspace operations center; offensive counter-cyberspace for global reach and access; net extension and resiliency; and influence operations. The AFSPC commander is the Air Force’s core function lead integrator for space and cyberspace superiority core functions. In this role, he is responsible for defining service-wide investments supporting these functions.



Enough! Study finds voters overwhelmingly want big Defense cuts


by Kevin Baron

July 16, 2012

Americans of all stripes have had enough of massive Pentagon budgets and want significant cuts in defense spending, according to new survey data released on Monday.

In Republican and Democratic districts across the country, 74 percent and 80 percent of respective voters said they want less defense spending, the study found.

On average, voters indicated that they wanted a budget for fiscal 2013 that would be nearly 20 percent less than current defense spending.

With $645 billion enacted for total defense spending this year, the average voter’s preferred budget for next year, an 18 percent cut, would translate into a $116 billion savings — money lawmakers trying to balance the budget could sorely use.

The study’s results will disappoint defense hawks and industry officials fighting against spending cuts, especially those claiming to protect defense jobs in their districts.

Voters participated in an April survey that first presented and explained competing arguments for higher or lower defense spending. Some results of that survey have previously been released. But the authors dived into a deeper examination of party differences and found no statistically significant separation of attitudes on defense spending cuts between Republicans and Democrats. Moreover, voters in districts with or without defense industry jobs overwhelmingly said they want the federal government to spend less.

“The idea that Americans’ would want to keep total defense spending up so as to preserve local jobs is not supported by the data,” said Steven Kull, director of the Program for Public Consultation, which conducted the survey with the Stimson Center and the Center for Public Integrity, a nonprofit investigative journalism group.

Pork spending in districts has little effect on voter support for defense spending, the group claimed its findings showed. “Overall there was no statistical correlation between the level of defense spending in a district and the level of support for defense cuts.”

Some results were unsurprising. “Blue” district voters wanted larger overall cuts of 22 percent, compared with 15 percent preferred by voters in “red” districts. Blue-district voters wanted bigger cuts to missile defense, long perceived as a Republican-favored program, but “respondents in red districts were a bit more ready to cut health care benefits for military families and retirees,” which require government spending.


Five reasons why cybersecurity is a tough nut to crack


By Josh Smith

July 16, 2012

With the Senate hoping to end its deadlock on wide-ranging cybersecurity legislation as early as next week, calls are growing for Congress to do something — anything — to secure America’s computer networks.

The security firm Symantec estimates that businesses around the world lose at least $114 billion annually to cybercrime, and rarely a day goes by without a government official warning of a “digital Pearl Harbor.”

Besides the gridlock that has plagued Congress, there are several reasons why lawmakers have struggled to find ways to combat cyberthreats. Here are five of the most important ones:

Private ownership. Most computer networks in the country are owned and run by private businesses — by some estimates 80 to 90 percent. Civil-liberties advocates fear a wider government role could undermine privacy and free speech. Businesses say government regulation would only add to their burdens.

Federal officials say they need tools to ensure that critical networks like electric grids and water-treatment plants meet basic security standards.

But the White House-backed Cybersecurity Act of 2012 has been delayed in the Senate by concerns among some Republicans and by business objections to a provision that would grant the Homeland Security Department authority to help set minimum security standards for certain critical networks. Businesses, those critics argue, know their networks better than any government regulator might.

Privacy. Lawmakers of both parties and businesses say new rules are needed to allow firms to tell government agencies about more of the attacks they face, and to give government agencies a green light to share more classified intelligence they collect on cyberthreats.

But civil-liberties groups say that many information-sharing measures are based on undermining consumer-privacy laws and could give government officials broad new powers to monitor Americans’ communications.

Americans, meanwhile, also don’t appear to be sold on the idea of more information sharing, a recent United Technologies/National Journal Congressional Connection Poll found.

Sixty-three percent of respondents said that government and businesses should not be allowed to share information because it would hurt privacy and civil liberties.

Competing agencies. Many current and former officials envision a collaborative effort with the Homeland Security Department focusing on protecting critical domestic infrastructure like electric grids and water-treatment plants and the Defense Department taking the lead in
heading off foreign cyberthreats.

But that’s a hard line to draw in cyberspace, where attacks routinely cross borders and target government as well as private organizations and individuals.

The debate centers on fears that DHS and law-enforcement agencies don’t have the capability to confront major cyberattacks. Concerns over civil liberties, meanwhile, have dogged efforts to have the Defense Department and National Security Agency, with its cyber capabilities, take a larger role in domestic cybersecurity.

Now the interagency turf war has spilled over into Congress, where more than a dozen committees have a piece of the cybersecurity pie.

Changing technology. A constant refrain from industry lobbyists is that technology changes too quickly for government regulations to keep up. It’s an argument that
has been used effectively against legislation on issues like privacy and online competition.

“Cyberthreats change so quickly that any legislation must also protect the ability of the private sector to be fast and agile in the detection, prevention, mitigation, and response to cyberevents that can have national or global impact,” a coalition of business groups wrote in a letter to Congress in April.

Scope. The bottom line is that “cybersecurity” encompasses a universe of security problems that arise in cyberspace.

The term can describe anything from theoretical cyberattacks by terrorists or enemy states that send aircraft plunging out of the sky to malware installed by a hacker to steal e-mail passwords. Trying to solve all potential cybersecurity problems can be like trying to stop pickpockets and nuclear war at the same time.

And then there’s debate over how big the threat really is.

Among lawmakers and officials who fear being held responsible if the worst should happen, there is broad agreement that a “cyber 9/11” could be just around the corner. Others, however, are less convinced. A report last year by the Organization for Economic Cooperation and Development, for example, found that the risk of an all-out cyber war was very low.


Microsoft Office 2013 to include social, cloud features

By Dina Bass, Published: May 21 | Updated: Tuesday, July 17, 2:25 PM

July 16 (Bloomberg) — Microsoft Corp., the world’s biggest software maker, unveiled the next version of its Office software with social and cloud features that will work with touch-screen devices powered by its Windows 8 operating system.

“We are taking bold steps at Microsoft,” Chief Executive Officer Steve Ballmer said at an event today in San Francisco. “The new, modern Office will deliver unparalleled productivity and flexibility for both consumers and business customers. It is a cloud service and will fully light-up when paired with Windows 8.”

Revenue in Microsoft’s business division, the company’s largest, increased 6.4 percent to $17.7 billion in the nine months ended March 31, the company said. Microsoft is trying to sell customers Web-based versions of its Word, Excel and e-mail programs and add social features to its marquee software suite to stave off competition from Google Inc. and Jive Software Inc.

The updated Office will save documents to Microsoft’s Internet-based cloud storage service SkyDrive, enabling access to files via tablets, computers and phones. Customers will also be able to buy the software as a subscription, which will let them use the cloud to stream applications to any Windows-based PC. Subscribers also get future upgrades automatically.

‘Huge Bet’

“We are seeing Microsoft update almost its entire product line this year with laser alignment around touch interfaces built into Windows 8,” said Al Hilwa, an analyst at IDC, in an e-mail. “This is clearly a process that is several years in the making and should be seen as a huge bet the company is making to usurp the disruptive innovation brought about by touch screens and cloud services.”

Besides touch controls, the program will also allow users control programs and take notes with a stylus.

Social features will include tools Microsoft is gaining from its $1.2 billion purchase of corporate social-network operator Yammer Inc. last month. Yammer offers a Facebook-like experience that enables employees to collaborate in the workplace.

Another tool, called People Card, lets users see their contacts anywhere in Office, including photos, status updates and information on whether they are online. The Office suite also comes with Skype Internet-calling, which Microsoft gained in its $8.5 billion purchase of Skype Technologies SA last year.

“This is the most ambitious release of Microsoft Office we’ve ever done,” Ballmer said.


Microsoft, based in Redmond, Washington, has said it will provide the touch-enabled versions of Word, Excel, OneNote and PowerPoint available on its upcoming Windows RT operating system, which will be released in late October and is designed for tablet computers to rival Apple Inc.’s iPad.

A test version of the Office 15 programs was shared with select partners and customers starting in January.

The company updated its online corporate-software offerings a year ago to include a full Web-based version of Office 2010.

Microsoft’s Business Division, which is largely made up of Office revenue, contributed 32 percent of total sales during the nine months through March 31.



Windows XP and Vista: No Office 2013 for you

Microsoft bars 55% of all current Windows PCs from running the newest suite

Gregg Keizer

July 17, 2012 (Computerworld)


Microsoft confirmed yesterday that the new Office 2013 will not run on older PCs powered by Windows XP or Vista.

“The new Office will work with Windows 7 and Windows 8,” a Microsoft spokesperson said Monday in an email reply to questions about Office 2013 and Office 365. “Vista or XP will not support the new Office.”

Users running those operating systems will not be able to advance beyond Office 2010, the suite that launched about seven months after Windows 7.

The omission of the two operating systems means that more than half of all Windows computers — 54.6%, to be exact — now in place will be locked out of the upgrade, according to statistics compiled by Web metrics company Net Applications.

Windows 7 does not yet have a majority of all Windows PCs: In June, it powered 45.1% of all PCs that went online, said Net Applications. Windows 8, which has not been released except in preview formats, accounted for just 0.2% of all copies of Windows.

But those shares are moving targets, and will be different come the release date of Office 2013 and the various Office 365 subscription programs. It’s difficult to project how much more share Windows 7 and Windows 8 will have then, since uptake on Windows 8 would be a blind guess, and no one knows whether Windows 8’s gains will come from former XP or Vista users, or from people moving up one edition from Windows 7.

One projection is possible, however: Absent any Windows 8 impact — unlikely, of course — Windows 7 will edge upward to 54.9% of all Windows PCs by February 2013, one of the several release dates that has been bandied about.

“It makes sense for them to do this, what with the end of life for XP approaching,” said Alan Krans, an analyst with Technology Business Research.

As Krans noted, it’s no surprise that Microsoft excluded Windows XP from the supported OS list. Windows XP is due for retirement in April 2014, when Microsoft stops serving the 11-year-old operating system with security updates.

“Those people are due for an upgrade [to a new operating system] anyway, but it is a nudge to push people to Windows 8,” acknowledged Krans. “Microsoft is imposing that line in the sand where users running software a couple of generations old need to upgrade.”

Microsoft has said that XP users will be able to upgrade to Windows 8, assuming that their hardware passes the eligibility test.

Krans pointed that out as well. “A lot of upgrades will go straight from XP to Windows 8,” he said, referring to the possibility of those users buying into Office 2013 once they’ve upgraded to the new OS.

Microsoft has eased the pain of upgrading to Windows 8 by cutting the price to just $39.99, a deal good through the end of January 2013.

Less expected was Microsoft’s decision to bar Vista users from acquiring Office 2013. Although the five-year-old edition was never popular — it peaked at a 19.1% share in October 2009 by Net Applications’ tracking — it still represents about 7% of all currently in-use copies of Windows and will account for around 5% come February 2013.


Krans had an explanation for Vista’s absence from the Office 2013 list as well, saying that it was a sign that Microsoft recognized what users have known for years: The 2007 edition was a washout.

For those reasons — XP users needing to upgrade or buy new PCs soon, and Vista’s irrelevance — Krans downplayed the potential financial hit to Microsoft of its decision to block XP and Vista from running the new Office.

What’s also notable about Windows XP’s inability to run Office 2013 is that it ends the operating system’s long run of supported suites. The aged operating system was able to handle four different editions: Office XP, which shipped in March 2001, Office 2003 (October 2003), Office 2007 (January 2007) and even Office 2010 (June 2010).

By comparison, the perception-plagued Vista only supported two editions — Office 2007 and Office 2010 — another demonstration of its short shelf life.

And it’s not as if Microsoft hasn’t put the kibosh on XP and Vista before.

March 2011’s Internet Explorer 9 (IE9) was refused to XP users, a decision Microsoft made the year before and stuck to even in the face of critics who howled that they’d been left behind.

Vista, meanwhile, will not run the upcoming IE10 that Microsoft plans to ship with Windows 8 and also release for Windows 7, later this year.

The ban on an Office 2013-Windows XP combination can also be read as another way for Microsoft to condemn the OS to the ash bin of history. For over a year now, Microsoft has said it was “time to move on” from Windows XP as it’s dubbed it the “lowest common denominator” and kicked off a retirement countdown for the software.

Users running Windows 7 or the Windows 8 Release Preview can try Office 2013 through one of the Office 365 Customer Previews, available from Microsoft’s website.

Windows XP and Vista users, of course, need not apply.


Building a Cyber Vision

AF Magazine

July 18, 2012

Building a Cyber Vision: The Air Force chief scientist’s office will release “Cyber Vision 2025” later this month, said Mark Maybury, chief scientist, on July 17. The roughly 80-page document—a follow-on to the recently released Energy Horizons vision paper—details the way ahead for cyberspace science and technology, acquisitions, and accessions, stated Maybury during an AFA-sponsored Air Force breakfast program address in Arlington, Va. Cyber Vision 2025 draws heavily on input from combatant commanders and major commands as well as industry and academia, said Maybury. In the document, the Air Force breaks down cyber-related goals in the near term (Fiscal 2012 to Fiscal 2015), mid term (2016-2020), and far term (2021-2025) and identifies whether the service will become a technology leader, follower, or watcher, he said. For example, finding a common operating platform across Air Force and joint systems, or measuring cyber operator stress levels are areas where the Air Force will lead and likely invest in, said Maybury. There is no reason for the Air Force to reinvent programs already in the works in national labs or industry. Those would more likely be areas where the service will follow or watch, he said.


Sens consider one-year delay on automatic cuts to military budget

By Carlo Munoz – 07/17/12 01:10 PM ET

Several senators on Tuesday said delaying automatic defense cuts for a year is the best option for a Congress looking to avoid steep spending reductions at the Pentagon.

“I do see that as a way forward,” Sen. Kelly Ayotte (R-N.H.) said of a possible one-year stopgap measure during an Aerospace Industries Association-sponsored event on Tuesday.

Speaking at the same event, Sen. Jeanne Shaheen (D-N.H.) agreed with her GOP counterpart, saying lawmakers “may need to do a short-term effort” on defense cuts under sequestration before tackling the entire 10-year plan.

Despite that stopgap, the New Hampshire Democrat emphasized the need for both parties to find an overarching, bipartisan alternative to sequestration.

Hopes have about-faced on striking a larger, bipartisan deal before the November presidential elections as time has shortened and campaign rhetoric has grown heated.

Triggered by the failure of the so-called supercommittee to trim $1.2 billion from the federal deficit, the sequestration plan includes an across-the-board $500 billion cut to Pentagon coffers, spread across the next decade. The cuts would begin in January.

On Tuesday, AIA released a report claiming the cuts would result in the loss of 600,000 federal jobs. Another 1 million jobs across the defense sector would be scrapped if the automatic cuts go into effect in January.

Top defense industry officials are already preparing to issue termination notices to their workforces, in anticipation of the defense cuts going into effect.

Delaying those cuts would block notices from going out, and create some semblance of stability within the defense industry, according to Ayotte.

Ayotte, along with Sens. John McCain (R-Ariz.) and Jon Kyl (R-Ariz.) have already drafted a plan to delay sequester by a year.

A group of House Republicans, led by House Armed Services Committee Chairman Buck McKeon (R-Calif.), have assembled a similar one-year stopgap plan.

Both plans would offset the scheduled cuts to defense programs for one year with drawdowns of the federal workforce, combined with spending reductions across all government coffers.

They argue the one-year reprieve would give Congress more time to come up with an alternative to sequestration.

Ayotte said she was “very optimistic” that a bipartisan House-Senate working group could be formed to come up with that alternative. Senators “are in discussions right now” over forming a working group, she said.

“A few [lawmakers] getting together … can make a difference” Ayotte added.

However, the current impasse between Republicans and Democrats over including tax increases in any deal remains a difficult hurdle.

“You can’t get there without revenue [increases] on the table,” Shaheen said Tuesday.


Lawmakers on both sides of the aisle need to “put aside these sacred cows” and get a deal done, Shaheen added.

“We need to send a signal [that] we are serious about addressing this issue,” she said. “It is doable [but] we need to get it done.”




Sequestration portends ominous future for some feds

By Camille Tuutti

Jul 17, 2012


The automatic budget cuts slated to kick in Jan. 2, 2013 could have a devastating impact on the job market in shedding more than 2 million jobs, many of which belong to key federal employees, new analysis shows.

“The results are bleak but clear-cut,” said Stephen Fuller, professor and director for regional analysis at George Mason University, who conducted the research with Chmura Economics and Analytics on behalf of the Aerospace Industries Association.

The findings conclude 2.14 million U.S. jobs could be eliminated if the Budget Control Act’s sequestration directive takes place and budget cuts of $1.2 trillion occur throughout the federal government. Fuller said the unemployment rate will rise above 9 percent and decrease projected economic growth in 2013 by two-thirds.

“An already weak economy will be undercut as the paychecks of thousands of workers across the economy will be affected from teachers, nurses, construction workers to key federal employees such as border patrol and FBI agents, food inspectors and others,” he said.

The spending cuts affecting defense and non-defense discretionary spending in the first year of implementation will trim down the nation’s gross domestic product by $215 billion. Personal earnings of the workforce will decrease by nearly $110 billion, according to the analysis. California, Virginia and Texas are expected to see the largest potential job losses.

In responding to the bleak numbers in the report, Sen. Kelly Ayotte (R-N.H.), said the analysis emphasizes sequestration “will also crush our economy, devastate our defense industrial base, and put tens of thousands of Americans out of work.”

“Republicans and Democrats must work together now to find alternate spending reductions that will not add a national security crisis to our fiscal crisis,” she said.


Civilian workforce faces brutal consequences under sequestration


7/18/2012, 3:02am ET

Jared Serbu

A report released Tuesday suggests that several hundred thousand federal jobs at civilian agencies would be on the chopping block within the next year if Congress lets the automatic budget cutting process known as sequestration go into effect.

The study, authored by George Mason University professor Stephen Fuller, adds a new dimension to a budget debate that’s so far been centered on sequestration’s effects on the military. At least that’s the hope of the Aerospace Industries Association, which commissioned the research.

AIA, which represents defense companies and other manufacturers, has frequently used Fuller’s earlier research to rail against sequestration because of the effects the budget cuts would have on the defense industry. The defense industry could shed more than a million jobs, the earlier report said.

The trade association emphasized Tuesday that sequestration was not just about defense.

“We now know that the nondefense portion of these cuts will destroy an additional 1 million jobs,” said Marion Blakey, AIA’s president, of the follow-on study.

The full tally of 2.1 million job losses in the Fuller study includes “indirect” and “induced” employment reductions that he projected would result from economic ripple effects. But the direct cuts to the federal workforce would also be substantial, the study found.


Hundreds of thousands jobs on the line

It projects next year’s share of the 10-year across-the-board cuts would mean the direct loss of 229,000 federal jobs in civilian agencies. In DoD, the federal civilian job losses would total just 48,000. The disproportionately high workforce reductions in civilian agencies are a result of the fact that their budgets are much less dominated by expensive procurement programs than are the Pentagon’s, Fuller said.

“They’re predominantly payroll,” he said in an interview with Federal News Radio. “As they look for opportunities to reduce spending, they can’t put it all on procurement, because what they buy are office supplies and training for their employees. Their biggest line item is payroll, so the payroll effect is enormous.”

In all, federal payrolls would be cut by $40 billion. On top of that, Fuller projects the direct job losses in the private sector in the first year of sequestration would add up to 191,000 jobs in civilian agencies and another 278,000 in DoD. The professional and business services sectors of the contracting industry would be the hardest hit.


Analysis has its doubters

Fuller’s analysis makes several assumptions about the way sequestration would work, partly because the Office of Management and Budget has not yet released guidance about how the automatic cuts would be implemented. Among his assumptions are that President Obama would exercise a legal option to exempt military personnel funding from sequestration.

The rest of the presumed 2.1 million job losses would be caused by secondary economic effects of the decline in federal spending, Fuller said.


But the “indirect” and “induced” job losses are anything but certain, according to Gordon Adams, a professor of international relations at American University and former Office of Management and Budget official.

“In the Fuller analysis, nothing else happens in the economy when defense dollars go away, just that sector of federal spending gets cut,” Adams wrote in response to the AIA announcement. “In reality, defense spending changes take place in a dynamic context of overall federal spending, revenues, and especially non-governmental economic activity. In other words, something else happens to the foregone resources, the $1 trillion that would go away from the current DOD forecast over the next 10 years.”

“It’s good for AIA’s political purposes. It’s not very good analysis of the labor market.” Adams said.

But Fuller said he based his dire forecast on the fact that the most precipitous cuts would happen in 2013, before the private economy had time to adjust. The analysis, he said, is based on a Congressional Research Service report finding that next year’s discretionary budget would have to be automatically cut by 12 percent compared with this year’s spending, followed by eight years of year-over-year spending growth of less than a percentage point.

“If we go by the book, this all happens in three quarters. Not in 12 months but in nine months,” he said. “This is very immediate, not something that’s going to happen over the course of many years. It’s going to happen over the course of months.”


One-year delay is possible

In addition, Fuller said his study doesn’t even account for other negative economic effects of sequestration.

“Another collateral impact would be the loss of competitiveness,” he said. “Innovation stops. And then there’s just the broad disruption in the economy. Federal facilities won’t be open. Federal employees won’t be there to process approvals. The economy will slow down just because of the friction of less government and probably very un-careful decisions about where the cuts come from. They have to happen very quickly. Closed facilities and lost services in the federal system will have a consequence, and we haven’t measured those.”

Congress set up sequestration in last summer’s Budget Control Act, intentionally designing it to be so horrific that it would force lawmakers to come up with a reasoned way to cut the deficit by the January 2013 deadline. The supercommittee of lawmakers assigned to find those answers ended in gridlock.

Sen. Jeanne Shaheen (D-N.H.) voted for the Budget Control Act, but she said Tuesday sequestration can’t be allowed to happen.

“Look, we need to solve this problem. I don’t know how many ways we can say it,” she said. “It’s not a Democratic issue, it’s not a Republican issue. Whoever gets elected president is going to want to solve this problem, because it’s having a huge impact on our economy.”

Sen. Kelly Ayotte (R-N.H.) opposed the Budget Control Act. She said she thought it was a bad idea for Congress to kick the can down the road on a major deficit cutting deal, but that with the Jan. 2 deadline now so close, Congress may have to do so again. In a presidential election year, she said a one-year delay to sequestration is the most likely solution.

“We do need to do a large agreement that deals with our debt, but I don’t see that happening before the election,” she said. “It would take a lot of planning to handle it the right way when you think about something like tax reform and entitlement reform, which is where we need to get to. But what I do think is responsible is to come up with a proposal to give us some room to get to that big deal after the election’s over.”


But even when it comes to a one-year delay, Ayotte said the furthest lawmakers have gotten is to discuss the prospect of conducting talks. She said she and fellow senators are currently discussing how to form a bipartisan working group to undo sequestration.


Hearings on sequestration to begin

The report comes amid a cacophony of election-year demands and partisan backbiting over how to avert the impending cuts that will only grow louder in the coming weeks.

Former Vice President and onetime Defense Secretary Dick Cheney met with Senate and House Republicans Tuesday to discuss the cuts. The House is scheduled to vote this week on legislation forcing the Obama administration to explain how it will impose the automatic cuts. Top officials from major defense contractors such as Lockheed Martin, EADS, Pratt and Whitney and Williams-Pyro are slated to testify before the House Armed Services Committee on Wednesday as they clamor for Congress to avoid the cuts.

Then, on Aug. 1, Jeffrey Zients, acting head of the Office of Management and Budget, and Deputy Defense Secretary Ashton Carter will testify before the same panel on how the administration plans to make $55 billion in defense cuts next year.

Unless Obama and congressional Republicans and Democrats can agree on a plan to stave off the cuts, the military will face a reduction of $492 billion over a decade, with a $55 billion cut beginning in January, three months into the fiscal year. Domestic programs also would be reduced by $492 billion over 10 years.


Why The World Is Coming For America’s Oil


July 18, 2012

Norway’s national oil company is betting $20 billion that the future of the energy business lies under the U.S. They’re not alone.

Out the helicopter window, as the muddy waters dumping out of the Mississippi River give way to the deeper and deeper blue of the Gulf of Mexico, the oil and gas gear gets bigger and bigger. Shallow jack-up rigs evolve into spars and tension-leg platforms. Finally, 150 miles out, we descend on the 330-foot-tall, 60,000-ton semisubmersible drill ship Maersk Developer, leased and operated by my host, the Norwegian oil giant Statoil.

The Developer is sitting in 3,100 feet of water, its roaring diesel engines turning a drill bit 16,000 feet below the seafloor. The target is a prospect called Kilchurn, 25,000 feet down. In June Statoil completed the Kilchurn well at a cost of some $120 million but was keeping mum on the results.

The Developer rig is similar to Transocean’s ill-fated Deepwater Horizon. As a semisubmersible it is basically a superstructure sitting on top of two cigar-shaped submarine hulls that are equipped with four dynamically positioned thrusters to keep the rig nearly stationary, even in stormy seas.


But this ship is newer and more modern than the Deepwater Horizon, and as everyone on board will tell you—repeatedly—it’s equipped with more safety precautions and redundant systems. The Developer was the


first rig to meet all the new standards required by the Bureau of Ocean Energy Management—because Statoil already had those practices in place. “We haven’t had to change the way we do business,” says Jason Nye, head of Statoil’s Gulf of Mexico operations.

Tested by four decades exploring the unforgiving waters of the Norwegian continental shelf, Statoil has more experience working in waters deeper than 300 feet than any other company in the world. They’ve built some of the biggest structures on earth, like the Troll platform, which measures nearly 1,600 feet from its foundation on the seafloor up to the tip of its flare boom. Statoil’s standards were already good enough that the company received two of the first ten drilling permits issued after BP’s spill.

The message Statoil wants to get across by taking me on this tour is clear: Trust us. That’s understandable, considering that Statoil (which is publicly traded, though 67% of its shares are owned by the government of Norway) is the fifth-largest acreage holder in the Gulf and plans to drill three deepwater wells here this year. But there’s an even bigger reason for the p.r. push: Statoil has more than $20 billion worth of oil and gas assets in the U.S. and has bet still more that drilling into America is the company’s best bet for growth.

Statoil CEO Helge Lund has big plans to increase its output from a current 2.1 million barrels per day to more than 2.5 million by 2020. The U.S. will be the biggest driver of that growth, with production here more than tripling from 150,000 barrels per day today to 500,000. That Lund has chosen to invest this much in the U.S. speaks volumes both about America’s oil and gas future and the state of the industry in the rest of the world.

“There can be no doubt that America is in the midst of an energy renaissance,” says global energy guru Joseph Stanislaw, who now works with Deloitte. Soaring oil output from the Bakken Shale fields, coupled with increased deepwater output primarily from the Gulf of Mexico, has pushed up U.S. domestic oil production by 12% since 2008. This is the first increase in a quarter-century and has confounded predictions that domestic output was set on an inexorable downtrend.

America’s potential oil and gas growth is so great, predicts professor Amy Myers Jaffe of Rice University’s Baker Institute, that by the 2020s the capital of energy will likely have shifted back to the Western Hemisphere, where it was prior to the ascendancy of Middle Eastern mega-suppliers such as Saudi Arabia and Kuwait in the 1960s. Statoil isn’t the only national oil company horning in. After failing to land Unocal in 2005 amid political contretemps, China’s Cnooc has put up $2 billion for joint ventures with Chesapeake Energy and another $2.1 billion to dig into Canada’s oil sands. Sinopec has done a $2.5 billion shale JV with Devon Energy and bought Canada’s Daylight Energy for $2.1 billion. Malaysia’s Petronas is closing on a $5.35 billion takeover of Canada’s Progress Energy. And Korea’s KNOC invested more than $9 billion in U.S. finds.

The draw is more than just the oil and gas, says Lund. America has a relatively transparent and stable regulatory environment, royalties and taxes far lower than Norway’s and an unmatched system of private ownership of mineral rights, giving room for competitive returns for the good and competent companies, he says.

“Early on we developed the strategic belief that these resources can mean a fundamental change to the supply-demand balance,” says Lund. “It has been proved that the resource potential is vast and gives room for long-term commitments.”



Big steps: CEO Helge Lund has led Statoil to international acquisitions, with a focus on the U.S. Shown here in Houston. Credit: Johannes Worsøe Berg

CEO since 2004, Lund, 49, is young enough not to be trapped in the previous generation’s conviction that the U.S. could be all but written off as a locus of oil and gas growth. (Lund was previously a McKinsey consultant, Norwegian political advisor and CEO of engineering firm Aker Kværner.)

In 2008 Statoil invested $3.3 billion in a joint venture with Chesapeake Energy in the Marcellus Shale of Pennsylvania. In 2010 it did a $1.3 billion JV with Talisman in the Eagle Ford Shale. Last year it paid $4.7 billion to acquire Brigham Exploration, which had built a big position in the Bakken formation of North Dakota. The company has also spent $7 billion acquiring Gulf of Mexico assets. Onshore, it now has roughly 1 million acres. That’s on par with the likes of Marathon Oil.

STATOIL COULD have just stuck to its home waters, where the company still gets more than 50% of the 2.1 million barrels a day it produces worldwide. Last year Statoil shocked Norway with the discovery of the Johan Sverdrup and Skrugard fields. With some 3 billion barrels of oil, Sverdrup is Norway’s largest find in decades and sits just 90 miles offshore. “Sverdrup is in the middle of where we have other assets, so it will be a phenomenally profitable project,” says Lund.

But despite the find, Norway, the world’s seventh-largest oil exporter, is picked over, and decline rates are high: Each year that passes the average Norwegian field gives up 20% less hydrocarbons than it did the previous one. Costs have been rising as drillers try to squeeze more barrels out of old fields. Meanwhile, Norway levies taxes of more than 75% on the value of oil and gas recovered from its waters, among the highest rates in the world. What’s more, a strike this summer by oil workers forced Statoil to shut down four platforms, tem- porarily knocking some 300,000 barrels a day off-line. Statoil has long set out to replace those Norwegian barrels with international ones.

The results have been mixed. The biggest success has been in Angola, which Statoil entered back in the 1990s and now produces more than 170,000 bpd from offshore fields like Dalia. In eastern Africa Statoil has recently made big offshore gas discoveries in Tanzania.

Brazil is promising, but the country’s oil patch is beset with red tape, cronyism and a mandate that Brazilian companies must be contracted to supply the bulk of deepwater drilling gear. (Never mind that Brazil’s young shipyards haven’t yet built such things.) It’s even more complicated in Russia; Kremlin-controlled Gazprom is set to kick Statoil out of the consortium to develop the giant Shtokman field in the frigid Barents Sea.

As Statoil has dabbled in even more rogue countries, its results have been worse. In Cuba Statoil came up dry in an expensive exploration well, which was hindered by the U.S. embargo, preventing the use of top-notch machinery. In Iran, a decade ago, Statoil relied on corrupt payments to a middleman to gain development contracts there (investigated by the SEC, Statoil admitted to bribes and paid $21 million in fines in 2006). It eventually pulled out after sinking $750 million into the giant South Pars gas field. Lund also pulled out of a joint venture in Iraq earlier this year—Baghdad paid a fee of only $1.15 for every barrel they extracted. “On every project we have to assess risk/reward,” says Lund. “And that balance has been better on other projects.”

Little wonder Lund is so high on America. But the U.S. has its perils, too. Analyst Oswald Clint with Sanford C. Bernstein says that natural gas prices below $3.50 per thousand cubic feet mean drillers won’t be earning even their cost of capital in places like the Marcellus Shale. Embattled Chesapeake Energy is looking to shed some $7 billion in oil- and gas fields just to meet its financing gap this year. Would Statoil be interested in helping Aubrey McClendon out? “Chesapeake is a competent operator,” says Lund. “We are aligned on the strategy for operations in the Marcellus. As I say, we will always look for good business opportunities.”

THE ECONOMICS are better for Statoil’s projects in the oily and liquids-rich plays like the Bakken and Eagle Ford, which are profitable at oil prices as low as $70 per barrel. As natural gas prices plunged this year, Lund shifted capital there. Through the Brigham acquisition, Statoil’s biggest since merging with Norsk Hydro in 2006, the companyacquired 375,000 acres in the Bakken, which is now producing 30,000 barrels of oil a day. Statoil thinks it can take that to 100,000 a day by 2020.

But there’s a catch here, too. Statoil is a big company, with revenues of $110 billion and net income of $13 billion last year. It records $125 billion in total assets. Given declining production in the North Sea, its U.S. ventures will not fix Statoil’s production challenges, says Bernstein’s Clint. With shares going for just six times earnings and yielding 4.5%, Statoil hardly trades like a high-growth company.

Lund’s answer: Learn how to exploit shale gas and tight oil in the U.S. and use the technology elsewhere. China and Russia both are thought to have far more shale potential than the U.S.—and Statoil, with its international connections, wants to be the one to help develop it.

Earlier this year, in a signing cere- mony presided over by Vladimir Putin, Lund entered a broad venture with Kremlin-controlled Rosneft to explore and develop new areas in Russia both on- and offshore. Statoil will be required to drill a handful of exploratory wells in icy Arctic seas, and it will also get the chance to explore shale oil for- mations near the southwestern city of Stavropol and an undeveloped field in western Siberia. Both areas are thought to be underlain with massive formations of oil-bearing rock.

Playing ball with the Kremlin carries a lot more political risk than drilling in North Dakota, but in time this could provide just the goose to growth that Statoil needs. “By engaging in U.S. plays with competent, pioneering North American partners, we wanted to develop knowledge and operational competence that can be deployed globally,” says Lund. “The shale opportunity in the Rosneft JV is one example of just that.” Norwegians battling Chinese and Koreans to invest in America, learning U.S. know-how and sharing it with the Russians. Welcome to the future of energy.



Published on Security Management (

Lawmakers Consider the Security and Civil Liberty Implications of Domestic Drones

By Matthew Harwood

Created 07/19/2012 – 12:43





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By Line:

By Matthew Harwood


Lawmakers Thursday debated the costs and benefits of integrating unmanned aerial vehicles, otherwise known as drones, into the national airspace, particularly whether terrorist groups or other adversaries could use the pilotless aircraft to carry out attacks and whether UAVs threaten American civil liberties.

Lawmakers Thursday debated the costs and benefits of integrating unmanned aerial vehicles (UAVs), otherwise known as drones, into the national airspace, particularly whether terrorist groups or other adversaries could use the pilotless aircraft to carry out attacks and whether UAVs threaten American civil liberties.

Rep. Michael McCaul (R-TX), chairman of the Subcommittee on Oversight, Investigations, and Management [1], called drones a “game changer” from the battlefields of Afghanistan and Iraq to the borders of the United States. McCaul noted that Customs and Border Protection (CBP), which owns 10 drones, have conducted drone missions in support of the Border Patrol, Texas Rangers, US Forest Service, FBI, and others.

Currently, the Federal Aviation Administration (FAA) has granted 200 active certificates of authorization to fly drones domestically, primarily to law enforcement agencies and academic institutions. In February, President Obama signed a law which required the FAA to rapidly expand the ability of federal, state, and local public agencies to use drones to fulfill their mission [2].

Lawmakers worry that drones could be used to harm homeland security rather than bolster it. Last week Rezwan Ferdaus pled guilty
[3] in a 2011 plot to hit the Pentagon and the Capitol with explosive-laden remote control planes. Late last month, a research team from the University of Texas at Austin showed the Department of Homeland Security that it could hack and hijack an $80,000 UAV [4]commonly used by law enforcement agencies.

During the hearing, Professor Todd Humphreys [5] of the University of Texas at Austin’s Radionavigation Laboratory [6], who led that team, explained to lawmakers how he and his students hacked into a UAV by spoofing the civil GPS system the drone uses to navigate.

Humphreys told lawmakers that he was not terribly worried about hackers taking control of drones in the near term because it takes tremendous expertise to build a GPS spoofer like the one he and his students built, even though the hardware costs were only between $1,000 and $2,000. Nevertheless, his concerns rise the more and more drones enter the airspace over the next few years and technology evolves.

Humphreys recommended that the U.S. government make all civilian UAVs 18 lbs or larger GPS-spoof-resistant proof. UAVs become “quite deadly” when they exceed 18 lbs and something goes awry, he explained.

Another witness, Chief Deputy William R. McDaniel [7] of Texas’ Montgomery County Sheriff’s Office, however, concentrated more on drone’s upsides and the barriers he sees in place preventing them from fulfilling their potential in law enforcement and public safety missions.

According to McDaniel, whose department owns a drone purchased with homeland security grant funding but has never been used yet, drones can be used for SWAT operations, high-risk warrants, man hunts, lost persons, and accident scene investigation. He worries, however, that the FAA doesn’t understand how revolutionary this technology will be for law enforcement and other public safety agencies.

“If UAV operations remain under the oversight and control of the FAA, as is currently the case, domestic UAV operations will continue to be severely hampered or limited to the point of being useless,” said McDaniel.

Rather McDaniel believes federal oversight should be located within the Office of State and Local Law Enforcement within the Department of Homeland Security (DHS). However, DHS doesn’t feel the same way.

“Unfortunately, DHS seems either disinterested or unprepared to step up to the plate to address the proliferation of Unmanned Aerial Systems in US air space, the potential threats they pose to our national security, and the concerns of our citizens of how drones flying over our cities will be used,” according to McCaul. DHS declined to appear before the committee.

Civil libertarians, however, fear that drones present a threat to privacy.

“Today, drones greatly increase the capacity for domestic surveillance,” said Amie Stepanovich [8], association litigation counsel at the Electronic Privacy Information Center.

Rep. Jeff Duncan (R-SC) also worried about the privacy implications of drones and wondered whether there would be judicial oversight of drone operations to ensure civil liberties were respected.

In a statement for the record, ranking member of the House Homeland Security Committee Bennie G. Thompson also called on DHS to provide oversight of drones, particularly the privacy and civil liberties’ implications of UAVs.

“Despite the Department of Homeland Security’s role as the leading federal agency operating UAVs, its Chief Privacy Officer has never performed a Privacy Impact Assessment on UAVs or developed safeguards and guidelines for ensuring that privacy protections are in place,” Thompson wrote [9].

McDaniel disagreed that drones presented a threat civil liberties, stating he believes the same case law that governs how public safety agencies now use manned aircraft would similarly apply to UAVs.

But UAVs give government surveillance powers that manned aircraft can’t match, according to Stepanovich.

“Drones are cheaper to buy, maintain, and operate than helicopters, or other forms of aerial surveillance,” she said. “Drone manufacturers have recently announced new designs that would allow drones to operate for more than 48 consecutive hours, and other technology could extend the flight time of future drones out into weeks and months [10].”

Despite privacy, terrorism, and civil aviation safety concerns over drones voiced during the hearing, lawmakers repeatedly described how fascinated they were with drones, with little, if any, outright opposition to UAVs.

“The UAV revolution is coming and we better be on the cutting edge of it,” said Humphreys.


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July 19, 2012 – 6:03 p.m.

Lieberman and Allies Offer New Compromise Cybersecurity Proposal

By Tim Starks, CQ Staff

Sponsors of the chief Senate cybersecurity bill have written a new version of the legislation that scales back the measure’s regulatory authority, hoping to clear a path for long-awaited floor action.


The revised bill (S 3414) would make compliance with new security standards voluntary, rather than mandatory, for businesses that own the most vital computer networks. It offers those companies legal immunity in the event of an attack and other incentives in exchange for establishing that they are meeting a certain standard of protection, according to a summary provided by the bill’s sponsors on Thursday.

Senators and aides have said cybersecurity legislation could be on the floor as soon as next week, and the revised bill would form the basis of floor debate. In rewriting the bill, the sponsors are trying to bridge a gap between their own ambitions to compel industry to improve cyber defenses and the view held by business groups and many Republicans that mandatory security regulations are unwise.

An earlier version of the bill (S 2105) had backing from the White House, but Republicans opposed it for including mandatory security standards for some businesses. As such, the bill didn’t have enough support to get through the Senate, even with Majority Leader Harry Reid, D-Nev., declaring cybersecurity legislation one of his top priorities this year.

It is unclear whether the revised bill could win floor passage as is, but it stands to win over at least some GOP senators.

The bill is sponsored by Homeland Security and Governmental Affairs Chairman Joseph I. Lieberman, I-Conn.; the panel’s top Republican, Susan Collins of Maine; Commerce, Science and Transportation Chairman John D. Rockefeller IV, D-W. Va.; Intelligence Chairwoman Dianne Feinstein, D-Calif.; and Thomas R. Carper, D-Del.

The revised bill reflects an attempt at drafting a compromise by Sens. Sheldon Whitehouse, D-R.I., Jon Kyl, R-Ariz., and a variety of other lawmakers from both sides of the aisle between the Lieberman bill and another measure (S 2151) sponsored by Arizona’s John McCain and other GOP senators that included no new security requirements whatsoever.

“I had previously sponsored a bill with a stronger regulatory approach to resolve this problem, but it’s become clear that some members of the Senate would not support that approach,” Rockefeller said in a news release.

Said Lieberman: “We are going to try carrots instead of sticks as we begin to improve our cyber defenses. This compromise bill will depend on incentives rather than mandatory regulations to strengthen America’s cybersecurity. If that doesn’t work, a future Congress will undoubtedly come back and adopt a more coercive system.”

For companies providing evidence that they are employing the industry-recommended, federal-government-approved security standards, incentives would include liability protection, expedited security clearances and “priority assistance” from the government on cyber issues, according to the bill summary.

As with both the original Lieberman and McCain bills, the revised measure would include provisions designed to strengthen the sharing of threat information between the federal government and the private sector, as well as provisions aimed at shoring up the federal government’s defenses of its own computer networks.

Feinstein said the revised bill also improves upon its privacy protections for information shared between the government and businesses, a point of contention for a number of Senate Democrats.

Civil liberties groups campaigned hard against a House-passed information-sharing bill (HR 35223) that they maintained did not adequately safeguard data on U.S. citizens.




July 14, 2012 – 12:45 p.m.

Running Low on Power

By Geof Koss and Pam Radtke Russell, CQ Staff

June brought bad news for the beleaguered U.S. coal industry. In the span of one week, the Senate upheld new federal limits on toxic emissions from coal-fired utilities, a federal appeals court rejected an industry challenge to the EPA’s authority to regulate greenhouse gases, and a major U.S. coal producer announced it was eliminating 750 jobs in Kentucky and West Virginia. The news got worse in July, as Patriot Coal, one of the largest Appalachian producers, filed for bankruptcy protection.

Congressional defeats, lost lawsuits and mine shutdowns have become a familiar pattern for U.S. producers of coal and the electric power plants that burn it. A suite of new environmental regulations and unexpected competition from a seemingly endless domestic supply of cheaper — and cleaner-burning — natural gas has King Coal, long the dominant American power source, backed against the wall. The industry’s congressional allies point to the flurry of new regulations as proof of what they see as an Obama administration “war on coal.”

Coal producers remain a formidable political force on Capitol Hill. Despite a 2010 accident that killed 29 miners, the industry has blocked mine safety legislation in both chambers from even advancing to markups in the 112th Congress. The House has passed multiple bills to ease restrictions on mountaintop mining and other regulations that are problematic for coal. And the industry led the successful fight in the last Congress to block cap-and-trade climate change legislation. The American Coalition for Clean Coal Electricity, an industry group that spends millions of dollars on television ads touting the benefits of “clean” coal, reported $380,000 in lobbying expenditures in the first quarter of 2012 alone.

But even some of coal’s friends in Congress say the industry is becoming a victim of its uncompromising fight against regulatory efforts to reduce power plant pollution.

“This foolish action wastes time and money that could have been invested in the future of coal,” said West Virginia Democrat John D. Rockefeller IV during Senate debate last month on an industry-backed resolution aimed at blocking new EPA limits on power plant mercury emissions. “Instead, with each bad vote they give away more of their leverage and they lock in their failure.”

In unusually harsh tones for a lawmaker from a coal-dependent state, Rockefeller denounced the coal industry’s “all or nothing” strategy of fighting EPA rules one by one rather than negotiating for concessions that would bolster the economic and environmental reasons for the fuel’s continued use.

Rep. Henry A. Waxman, a California Democrat who has battled coal for decades, says greater collaboration would have yielded increased federal investment in technology to burn coal more cleanly. (Clean coal, p. 1447) “Instead, they’ve put their head in the sand, and natural gas is picking up the utilities because it’s a better competitor,” Waxman says.

As a result, utilities are turning off their coal-fired plants and turning to natural-gas-powered plants at an unfettered rate. Coal’s declining share of the nation’s electricity generation left it tied with natural gas at 32 percent in April, according to the most recent statistics from the Energy Information Administration. For much of the past decade, coal accounted for closer to 50 percent of the generation mix.

The industry’s response to its setbacks has been to double down on its political bet, hoping that Republican gains in November — including the election of Mitt Romney as president — will hold back the regulatory tide long enough to permit a rewrite of the Clean Air Act that would free coal from some of its restraints and stem its downward slide.

History suggests that’s a risky proposition. Efforts to rewrite the law under President George W. Bush were unsuccessful even when Republicans controlled both the House and Senate. Democrats fared no better during the 111th Congress when they controlled both ends of Pennsylvania Avenue.


Coal backers are also betting that energy economics will eventually swing back to their favor. “I’m glad natural gas prices are down,” says Kentucky Republican Edward Whitfield, chairman of the House Energy and Commerce subcommittee with jurisdiction over power production. Still, Whitfield says, “everybody understands” that natural gas prices “are going to start going up again.” He says there’s simply no way to meet growing electricity demands at home and abroad without America’s estimated 239-year supply of coal reserves.

“Coal has to be part of the mix,” agrees Nick Akins, president and chief executive of American Electric Power Co. (AEP), the nation’s third-largest power generator with a capacity of almost 38,000 megawatts of electricity, 66 percent of it from burning coal.

Such optimism doesn’t comfort those who fear most for coal’s future, such as Oklahoma Republican James M. Inhofe, sponsor of the unsuccessful Senate resolution to roll back the EPA’s restrictions on mercury emissions. Allowing the air toxics rule to take effect, Inhofe said on the floor, would mean “coal is dead.”


Economic Challenges

Trends in coal markets lend strong support to Inhofe’s apprehensions. The Energy Information Administration projects that coal deliveries to U.S. power plants — which consume 93 percent of domestic coal — will fall to 798 million tons in 2012 from 929 million tons last year. Increased exports also aren’t likely to pick up the slack. Although the appetite for coal in Asia is growing, the infrastructure to move U.S. coal from the West Coast isn’t yet built.

The downward trend in domestic coal consumption is hurting the ability of domestic producers to raise capital. Share prices for U.S. coal-mining companies have fallen as much as 70 percent in the past year, says Lucas Pipes, vice president and senior equity analyst for Brean Murray, Carret and Co.

Instead of pinning blame on new EPA rules designed to control emissions of mercury, sulfur dioxide, nitrogen oxides and greenhouse gases, Pipes and other analysts say coal’s current decline results from the combination of inexpensive natural gas (which fell to a record low of $1.90 per million British thermal units in April), a mild winter, low overall demand for electricity and a weak world economy. Pipes says coal deliveries were already projected to drop 115 million tons a year because of the EPA regulations. But even without those regulations in effect, cheap natural gas and falling demand drove coal consumption in the first quarter of 2012 to the lowest level since the second quarter of 1988.

“I would say now that there is not much further downside because of the regulations,” Pipes says. Few, if any, further declines in consumption are expected, he says.

Demand for coal is expected to rebound somewhat as electricity use rises with the recovering economy and as the price of natural gas strengthens. The Energy Information Administration forecasts that coal will remain the dominant domestic source of electric generation for decades, although at a reduced level of 38 percent of generation in 2035, down from 45 percent in 2010.

Still, while the price of natural gas has bounced back somewhat, it remains historically low — and currently costs about half what it did for most of the past decade. As a result, utilities are reconsidering whether they can justify investing $750 million to retrofit coal-fired plants as large as 300 megawatts to meet new emissions requirements, if instead they can purchase natural-gas-produced power on the market or build new gas-fired plants for less, says Mark Gabriel, vice president and executive director of strategy for the consulting arm of the engineering and construction company Black and Veatch.


The new EPA rules were initially expected to primarily affect smaller, older, inefficient power plants. Gabriel says the EPA expected that plants producing between 15,000 megawatts and 20,000 megawatts from coal would close because they could not comply with the regulations. With the additional economic pressure from inexpensive natural gas, Gabriel says his engineering company forecasts up to 65,000 megawatts of coal plant closures.

Not all utilities, though, can simply shut down their coal plants. Some are needed at specific spots on the electric grid for reliability reasons, says Akins. And a natural gas plant sometimes can’t simply replace a coal-fired plant because there’s no pipeline built to bring in fuel. Akins contends there isn’t enough time to engineer and build replacement gas plants before the rules would require coal plants to shut down.

To meet regulations and keep its coal generation plants operating, AEP has spent $7.2 billion over the past two decades, and is planning to spend $6 billion to $8 billion more to meet the new rules. The company also expects to retire about 20 percent of its coal plants, equal to 5,200 megawatts.

AEP and other utilities, however, are pushing for additional time to meet the regulations. Under the current schedule, Akins says the utility would be forced to shut some coal plants prematurely.

“At this point, we will take what we can get,” Akins says. “We continue to support a rational, coherent and consistent view to deal with emissions and provide timing to deal with it in a very responsible way.” If the regulations are implemented too quickly, he says, AEP customers may see electric bill increases of 10 percent to 35 percent.

However, the EPA and its supporters say the compliance schedules are achievable, noting that more than half of coal-fired power plants already meet the new limits for mercury, having installed pollution reduction equipment to comply with state air requirements.

Daniel J. Weiss, a senior fellow at the liberal Center for American Progress, says utilities that held out making upgrades are paying the price for making bad business decisions. “These companies should have seen the handwriting on the wall,” he says, noting that regulations to control many of the pollutants have been in the works for years. “But instead, Big Coal and Dirty Utilities’ strategy has been delay, delay, delay.”

Some utilities have hesitated to pay for pollution controls until the rules are final or because the technology isn’t available, Gabriel says. The starting price to add a post-consumption carbon dioxide capturing system is about $750 million, and no utility wants to install a system only to find out later that it won’t meet the regulations, he says.

Last year, AEP shelved plans for a large-scale project to demonstrate carbon capture and sequestration technology at its Mountaineer generating plant in West Virginia, citing the weak economy and uncertainty about national climate policy.

“No one is saying ‘we don’t want to do this,'” Gabriel says, referring to investments in new technology. “But at the end of the day, it’s about engineering and physics and economics — it’s not about philosophy or policy.”

Yet while the regulatory and economic challenges facing existing coal plants are difficult, the future for coal beyond existing generating plants is — currently — difficult to imagine.

The lack of commercial-scale carbon capture technology means that the most widely used type of natural gas plant has essentially become the default power source for new fossil fuel plants. In fact, the EPA’s proposed greenhouse gas standards require new power plants to meet the carbon dioxide emissions of existing natural gas technology.

“The industry does not have a lot of growth prospects,” says Pipes.


Familiar Stalemate

Coal and its backers are eying a two-pronged, post-election strategy for obtaining relief from their regulatory challenges.

In the short term, if President Obama isn’t re-elected, a Romney administration is widely expected to use its administrative authority to slow implementation of major air quality regulations issued by Obama’s EPA. That would provide breathing room for coal producers and power generators while lawmakers push a more ambitious, longer-term solution — overhauling the 1970 Clean Air Act.

Weiss says utilities followed a similar strategy shortly after George W. Bush was sworn into office in 2001. They lobbied the administration to ease a Clinton-era crackdown on power plant pollution, and within months, the new administration announced it would propose legislation to relax the Clean Air Act’s application to utility emissions.

Should Romney be elected, Weiss predicts the coal industry “will make a quick path to his doorway seeking the same kind of relief.”

Among the options for delaying rules already in effect would be extending compliance deadlines through executive order or using consent decrees to settle industry litigation against specific rules. Environmentalists would almost certainly challenge such actions — as well as expected Romney administration attempts to scuttle pending EPA greenhouse gas rules — in federal court.

As judges sort out the legal tangles, Congress might try to move on the elusive goal of rewriting the underlying statute. Although even most of its critics agree the 42-year-old law has succeeded in clearing up air pollution, attempts to weed out the multiple layers of regulation it dictates is a longstanding industry goal.

It’s also a goal that has taken on increased urgency since the Supreme Court ruled in 2007 that the law applies to greenhouse gases. That decision ultimately triggered a new layer of regulations on power plants and other industrial facilities. Those regulations are under development by Obama’s EPA.

House Republicans have pushed to passage multiple bills that would block or weaken clean-air regulations on emissions of greenhouse gases and other pollutants, but the legislative reprieve that industry says it so desperately needs remains out of reach as long as Democrats control the Senate.

Kentucky Republican Whitfield sees coal’s political fortunes rising after November: “If Obama’s defeated and if we can maintain the House and just make a few gains in the Senate, we’ll make some changes related to coal.”

Later this month Whitfield will lay the groundwork for a rewrite of the Clean Air Act by convening the first of a series of forums on the law’s effectiveness. Among the issues he wants to address are what he calls the oversized role of environmental litigation in driving clean-air policy and the law’s consideration of economic and health factors in setting air quality standards, which critics say are biased in favor of additional regulation.

Although Whitfield concedes benefits from reducing air pollution, he says Congress needs to take a look at the “inequitable things” borne by coal in the air law. “There isn’t any act up here that is sacrosanct in my view,” he says.

Making changes to the Clean Air Act has proven to be one of the more challenging undertakings on Capitol Hill. Michigan Democrat John D. Dingell, the longest-serving House member in history, has said the 1990 clean-air overhaul that he helped shepherd into law was among the most difficult legislative endeavors of his career.


The 1990 amendments — the last time major changes were made — are also noteworthy in that they resulted from cooperation between Republican President George Bush and a Democratic Congress.

Bush’s son had no success, however, when he tried to amend the law to allow for emissions trading to cut mercury, sulfur dioxide and nitrogen oxides pumped from the smokestacks of coal-fired power plants. With Republicans in charge of Congress, the prospects for Bush’s “Clear Skies” proposal seemed favorable. But strenuous opposition from environmentalists led to a deadlock in the Senate Environment and Public Works Committee in 2005, killing the measure.

Committee Democrats wanted to include carbon dioxide emissions as part of the legislation, which Oklahoma’s Inhofe, who was chairman at the time, vigorously opposed.

Obama fared no better during the Democratic 111th Congress, when he sought to amend the Clean Air Act to create a national cap-and-trade program to reduce emissions of carbon dioxide and other greenhouse gases. The House in 2009 just barely passed a sweeping climate change bill sponsored by Waxman and Massachusetts Democrat Edward J. Markey. But efforts to push a companion measure through the Senate collapsed.

Both the Bush and Obama efforts further poisoned the already-toxic politics of the Clean Air Act, says Tennessee Republican Sen. Lamar Alexander, who worked with moderates from both parties on legislation to address multiple pollutants in a coordinated fashion after Bush’s Clear Skies plan fell short.

There’s plenty of blame to go around, says Alexander. “The utilities and the environmentalists take extreme positions, Congress has been in a stalemate, and EPA’s left as the only game in town,” he says. “And that’s not good government for me.”


Willingness to Change

Glenn English, a former 10-term Democratic representative from Oklahoma who heads the National Rural Electric Cooperative Association, says one effect of the congressional impasse on coal is clear: “We don’t believe any new coal-fired plants can be built in this country, period.”

And for all the intensity surrounding clean-air policy, there is broad desire on both sides of the aisle to revisit the law — albeit for very different purposes.

Jeff Holmstead, who served as the top EPA air official from 2001 to 2005, says lawmakers need to review the multiple layers of regulation that facilities face. “There’s a lot of overlap, but no acknowledgment of that in the statute,” says Holmstead, now in private law practice with Bracewell & Giuliani.

The Bush administration’s Clear Skies proposal marked the first attempt to “harmonize” regulation of coal plants through various programs under the law by capping emissions of multiple pollutants, while also exempting or delaying compliance with other requirements. Environmentalists said the proposal would have weakened the overall targets for reduced emissions of mercury, sulfur dioxide and nitrogen oxides under the existing statute.

Holmstead says that adamant opposition to changes from environmentalists stems from the fact they “have a lot more leverage if they can pull the various strings, so I think they are not very interested in that kind of overall reform at this point.”

Nonetheless, he says, changes in the clean-air law might yield the same environmental benefits at lower cost. “I think everyone would agree that there are more efficient and effective ways of accomplishing our goals, but I think the politics of getting there are going to be a challenge,” says Holmstead.

Federal efforts to clamp down on the same toxic pollutants that were at issue in the Clear Skies effort continue to bedevil regulators and regulated industries. After the collapse of Clear Skies, the Bush administration tried to implement some of its provisions through regulations — only to be rebuffed by federal courts.

The Obama EPA’s later attempts to deal with the same pollutants by separate regulations are now the subject of legal challenges from industry. Pressure on affected interests and lawmakers to return to the table to discuss a legislative solution would increase if the courts invalidate any of the pending rules, observers say.

“The Obama administration has made it quite clear they don’t want to reopen the Clean Air Act, but if there is a Romney administration, I think there’s quite likely to be an attempt to fix some of these things,” says Holmstead, a Romney supporter who says he has played an informal role in advising the campaign. But it isn’t clear how far negotiators might get, since climate change remains the 800-pound gorilla in any discussion involving the clean-air law these days.

Romney and other Republicans have made clear they want to amend the Clean Air Act to exclude regulation of greenhouse gases. For many Democrats, reducing emissions of carbon and other gases that they say contribute to global warming is the only topic they want to discuss.

While it would be an uphill fight, making statutory changes might be the only avenue available to those who want to bar the EPA from regulating carbon dioxide. That point was driven home last month when a federal appeals court in Washington dismissed industry challenges to EPA climate rules. In doing so, the judges found that the EPA’s interpretation of its regulatory authority to be “unambiguously correct.”

The ruling was a major setback for EPA critics, although some lawmakers and lobbyists say they are confident that there are major legal flaws in upcoming EPA greenhouse gas regulations that industry will be able to exploit to gain some relief.

Still, Sen. Lisa Murkowski, the Alaska Republican who led an unsuccessful attempt in 2010 to block climate regulations, says the more recent ruling highlights the need for congressional action. “We’re not doing as well in the courts as I think many of us would like,” she says.

Broader legislative changes, Murkowski concedes, will hinge on GOP electoral gains and how many sympathetic Democrats can be counted on to provide the 60 votes needed to break a Senate filibuster.

Alexander similarly agrees that Congress needs to address greenhouse gases, but he is less optimistic that the debate can move past the earlier stalemate. “The EPA has no business regulating carbon,” he says. “We should be deciding that question, but apparently we can’t agree enough to decide any question when clean air is the issue, so we leave it to bureaucracies.”

No matter who wins in November, English says, industry and environmentalists need to confront a future where coal is still burned to produce electricity, and where the regulatory environment is stringent.

“Somewhere, the reality needs to take hold. Otherwise, we aren’t going to meet the nation’s power needs,” English said. “I am not sure that either side is going to achieve the position that they would like.”


Budget cuts, veto risk complicate defense appropriations bill

By Amber Corrin, Camille Tuutti, Matthew Weigelt

Jul 19, 2012


The House is expected to pass its version of the 2013 defense appropriations bill, a $608 billion budget poised to take a significant hit if sequestration becomes a reality. The vote is expected July 20.




The 2013 defense bill includes $518.2 billion in the base budget and $88.5 billion in funding for overseas contingency operations. It does not include any direct references to sequestration, which will deduct roughly $55 billion from the budget if Congress’ current overtures to undo the process fail. The bill also faces the threat of a veto because it breaks a deal on spending levels made last August, according to an AP report.

The 2013 plan is an increase of more than $1 billion over last year’s Defense Department budget, and is $3 billion more than President Barack Obama’s defense budget request. It includes measures to revive programs Pentagon leadership had planned to retire next year, including a version of the Global Hawk unmanned vehicles. The House budget also boosts research and development funding by $576 million.

Some areas of focus in the House bill – though not always in the form of more money – include cyber defense; acquisition workforce issues; technology innovation; and personnel management and troop levels as the war in Afghanistan winds down.

In the bill, lawmakers call for DOD leadership to provide more information on cyber-related budget requirements, including separate budget justification and details on progress, goals, initiatives and operations.

“Further, the Committee suggests that the department continue to refine what activities, budget lines and programs should be considered cyber in order to better coordinate and track these budgets,” the House Appropriation Committee noted in a report on the bill.

Innovation in technology and small business also receive attention in the bill, with $250 million designated toward the Defense Rapid Innovation Program, which will target research, development, testing and evaluation.

“The Committee understands that DOD has received over 3,500 proposals primarily from small businesses, and will award funding on a competitive basis to stimulate innovative technology, reduce the lifecycle costs of weapons systems and address various technical risks confronting” DOD, according to the report.

Legislators took aim at other programs, including one targeting acquisition workforce training.

The appropriations committee has proposed a major cut to the Defense Acquisition Workforce Development Fund, a pool of money for training the acquisition workforce.

The spending bill would cut the fund nearly in half compared to fiscal 2012’s appropriation. The committee recommended $50 million for the fund in fiscal 2013, according to the bill. In fiscal 2012, Congress gave the fund $106 million, and the president requested $274.2 million for 2013.

The fund is a key tool for the DOD to alleviate some of the long-standing challenges associated with training the acquisition workforce. It also provides additional funds for the recruitment, training, and retention of acquisition personnel.

DOD expects to use the fund’s money to hire approximately 10,000 new acquisition personnel through fiscal 2015. Approximately $1.8 billion was allocated to the fund through February 2012, according to a recent Government Accountability Office report.


The Obama administration dislikes the reduction, noting that defense officials would have to pull from other funds to meet shortfall between the appropriation and the statutory minimum for the development fund.

“The reduction in the appropriation would put unnecessary stress on the operation and maintenance budget at a time when funding levels are already constrained,” administration officials wrote June 28 in a statement of administration policy regarding the spending bill.

In a report on the spending bill, the appropriations committee said defense officials need to find ways to quickly conduct proper background investigations on potential employees. Constant and long-lasting delays can wreak havoc in the office.

“Workplace efficiency and morale decline when an employee is unable to work due to a delay in security clearance processing,” the committee wrote.

Committee members are concerned that DOD is not investing enough in automated tools necessary to speed up the investigation and reinvestigation process for security clearances. They urged the defense secretary to invest in those tools capable of conducting queries across government and commercial databases to streamline the time-consuming process for top level security clearances.

The House bill increases funding for military personnel, including, in some cases, more than the services themselves have requested.

The appropriations committee included more than $128 billion toward military personnel in new budget authority. These appropriations finance basic, incentive and special pays for active, reserve and National Guard personnel and Academy cadets. They also include funding for retired pay accrual, housing, subsistence and other allowances; recruitment and retention initiatives; permanent change of station costs; and other military personnel costs such as survivor, unemployment, and education benefits.

The military personnel funding is an increase of nearly $33 million above the budget request, but more than $2 billion below the fiscal year 2012-enacted level.

The bill would also bump up basic pay for all military personnel by 1.7 percent, starting Jan. 1, 2013, although an increase of .5 percent for civilian personnel was rejected. Also recommended is full funding to support the authorized end strength levels for active duty and Selected Reserve personnel.

In the committee report, lawmakers said they support programs that boost the morale and quality of life of military personnel and their families. There’s also continued support for constructive evaluations of recruitment and retention programs, bonus and special pay incentives, and personnel benefit programs for military personnel for fiscal year 2013.



DOD News Briefing with George Little from the Pentagon

07/17/2012 04:37 PM CDT

Presenter: Pentagon Press Secretary George Little

July 17, 2012





            GEORGE LITTLE:  Good afternoon.  I only have one brief announcement, and that is that tomorrow the United Kingdom’s Secretary of State for Defence, Philip Hammond, will be in Washington and will meet with Secretary Panetta here at the Pentagon.  They’re expected to discuss a wide range of issues during a breakfast meeting that begins early tomorrow morning. 

            Following that meeting, the two secretaries will conduct a short press briefing here in the briefing room at 8:30 a.m.  Yes, that’s 8:30.  Some of you will have to set back your alarm clocks, knowing some of your sleeping biorhythms.  But I expect to see many of you here. 

            All right.  With that, let’s go ahead and take your questions

Q:  The AIA put out a new statement, a new study today on jobs losses.  I want you to be clear on sequestration.  What impact will sequestration have on contracts obligated — funded with obligated 2012 dollars, in layman’s language, contracts that were signed up until September 30th of this year, funded with dollars approved by Congress for this fiscal year?  Will they be terminated, whacked, reduced, affected in any way? 

            MR. LITTLE:  I’m not sure if whacked is a technical budget term, but let me try to put this into English that’s perhaps a little less plain than that.  Sequestration cuts would not affect current contracts funded with FY (Fiscal Year) 12 dollars that is obligated funds.  Anything put on contract between now and September 30th, the end of the fiscal year, would also not be affected or be subject to sequestration.  All FY 13 dollars would, however, be subject to sequestration.  And FY 13, as you know, begins August 1st — excuse me, October 1st.  

            Q:  Even if those FY 13 dollars were obligated, put on contract, in layman’s language, between October 1st and January 1st, when sequestration, you know, could take affect, those dollars would be affected and those contracts would be affected? 

            MR. LITTLE:  FY 13 dollars would be affected by sequestration, period.  That’s right. 

            Q:  Obligated and unobligated? 

            MR. LITTLE:  All funds. 

            Q:  Thank you. 

            Q:  A follow-up to that?  Is there any — not planning, but any assessments being made that the department would hold off on contracts in that October to January period?  Is there — do you have any — has there been a look at that, in terms of how to handle that?  If the threat of sequestration hangs over it, but yet it’s not in place yet, are you going to do anything differently? 

            MR. LITTLE:  It’s a very fair question.  We are, obviously, assessing the potential impacts of sequestration.  We are not planning for sequestration to try to get ahead of a question that may be posed here today by others.  But, clearly, we do need to take a look at contracts and take that into account, should sequestration go into effect.


Sequestration will cost 2.14 million jobs, study says


By Charles S. Clark

July 17, 2012

Severe, across-the-board budget cuts slated to kick in January 2013 would cause a sharp uptick in both federal and private sector unemployment, according to an academic report commissioned by the Aerospace Industries Association and released Tuesday.

According to the study of the economic impact of the 2011 Budget Control Act on the Defense Department and other federal agencies, the budget-cutting tool known as sequestration would reduce the nation’s gross domestic product by $215 billion, decrease personal earnings of the workforce by $109.4 billion and cost the economy 2.14 million jobs—with the most severe impact coming in 2013 in what is shaping up to be a continually weak economy. Sequestration will trigger automatic cuts on Jan. 2, unless Congress can agree on an alternative savings plan.

The projections, compiled by George Mason University economist Stephen Fuller, were unveiled at a Capitol Hill news conference attended by two senators and two big-city mayors, with the lawmakers’ expressing opposing views on the key question of whether new tax revenues are needed in crafting a long-term and bipartisan deficit reduction plan.

Spending cuts of $56.7 billion for defense “would result in the loss of 325,693 direct jobs, including 48,147 civilian DoD employees,” the report said. A loss of $59 billion for non-Defense agencies could cost 420,529 jobs with an estimated 229,116 jobs or 54.5 percent of these direct job losses consisting of federal workers.

“Non-DoD cutbacks would have a much greater direct impact on federal employment than DoD budget reductions,” it said, because the bulk of the Pentagon’s budget goes to procurement while the lion’s share of spending at other agencies goes toward payroll.

“As a consequence of sequestration, GDP growth in 2013 will be reduced by two-thirds and unemployment will increase by as much as 1.5 percentage points, raising the current national rate above 9 percent,” the report warned.

The hardest hit would be California, Virginia and Texas, with most states taking five-digit job losses.

These job loss projections show a “dependence of state economies on federal spending,” Fuller said. “It certainly undercuts the strength of the economy and translates into a whole lot of losses for businesses that drive the economy.”

Sen. Kelly Ayotte, R-N.H., ranking member of the Armed Services Readiness Subcommittee, said she hoped the prospects of such job losses would be a “clarifying event” and an “eye-opener,” especially if legally required layoff notices are sent out this fall to contractor employees just before the national elections. “But we can come up with alternative ways to reduce spending, and it can be bipartisan,” she said.

Though Republicans already have agreed to “some revenues, raising taxes on the high-income taxpayers would harm the economy,” Ayotte added. “It’s important that we not play chicken with national security or our economy.”

Her state counterpart, Sen. Jeanne Shaheen, D-N.H., took a different tack. “No one thinks sequestration is the way we should reduce the deficit, but it should press us to take action,” she said, praising the study for focusing not only on defense but also on the entire economy. “Backing off from tough choices is not the way.”

Instead of pitting defense against domestic spending, Shaheen argued for keeping reforms to mandatory spending, as well as new tax revenues on the table. “The answer is a long-term solution—otherwise, we will be back in a year and again after that,” she said. “It’s not that we don’t know what to do, it’s that we need the political will.”

Shaheen described the rejected Simpson-Bowles deficit reduction plan as a “roadmap in front of us,” and she cited comments by former New Hampshire Republican Sen. Judd Gregg suggesting that revenues could be tapped by reforming tax expenditures.

The impact of the projected budget cuts on states and localities was stressed at the press conference by Phoenix Mayor Greg Stanton and San Diego Mayor Jerry Sanders.

Stanton said sequestration “would likely put Arizona in a recession,” and implored Congress “not to wait for a lame duck session, which is not relevant to the American people.”

Sanders, noting that San Diego boasts the country’s largest military population with one of four jobs defense-related, said rather than pursuing “arbitrary, politically motivated cuts to national defense,” Congress should “target spending cuts where they have the least impact on the public.”

Marion C. Blakey, president and chief executive officer of the Aerospace Industries Association, which has coordinated a campaign against sequestration called Second to None, said, “unless our leaders in Washington take action, massive cuts have the potential to impact everyone from the defense worker to teachers, health care professionals, government employees and beyond.”


Congress to White House: What’s the sequestration plan?

By Amanda Palleschi

July 18, 2012

The House passed a bill Wednesday requiring the White House to disclose details on how federal agencies will implement mandatory, across-the-board budget cuts if sequestration isn’t averted before January.

The bill, approved in a 414-2 vote, would require President Obama to submit a report to Congress within 30 days with details of agencies’ sequester plans. The Senate passed similar legislation in June as part of its farm bill.

House Budget Committee chairman Rep. Paul Ryan, R-Wis., insisted during debate that the bill was about transparency and not a discussion of the merits of Republican or Democrat ideas about how to avoid sequester.

Still, House Speaker Rep. John Boehner, R-Ohio., took the bill’s passage as a political victory, saying the information the Obama administration produces “will provide a clear picture of what Democrats’ inaction will mean for our men and women in uniform and for all Americans who depend on the freedom and security their countless sacrifices provide.”

The House also is slated to vote this week on a $608 billion Defense appropriations bill that the White House has threatened to veto. Under the 2011 Budget Control Act, Defense must find $487 billion in savings in its budget over the next 10 years. If sequestration kicks in, then it will face $600 billion in additional cuts in the next 10 years.

A recent study of the economic impact of sequestration provides possible answers to the questions lawmakers have posed to the White House. According to the study’s projections, sequestration would decrease workforce earnings by $109.4 billion and cost the economy 2.14 million jobs.

Additionally, Defense spending cuts would result in the loss of 325,693 direct jobs, including 48,147 civilian federal employees, and a loss of $59 billion for non-Defense agencies could cost 420,529 jobs, the report says.

Rep. Chris Van Hollen, D-Md., recommended a substitute to the Sequestration Transparency Act prior to its passage in the House Budget Committee. The alternate plan would have directly headed off sequestration for one year through cutting some farm support payments and eliminating tax breaks for major oil companies. He called out Republicans during the bill’s debate Wednesday for not considering revenue measures to fend off sequestration.

“The reason we are here is because Republican colleagues chose to put Defense on the chopping block . . . above the choice to deal with revenue as part of a sequester,” Van Hollen said.


US House passes huge defense spending bill

July 19, 2012

By Michael Mathes | AFP


US lawmakers passed a sweeping $606 billion defense bill that exceeds a budget cap and faces a veto threat from the White House for failing to sufficiently rein in spending.

The bill would provide $518 billion for the Pentagon and an additional $88.5 billion for overseas contingency operations, specifically the war in Afghanistan and counterterrorism efforts, for the fiscal year that begins October 1.

The 2013 Defense Department spending bill had originally come in at $519 billion, an increase of $1 billion over 2012 spending, but in a surprise move just before the final vote lawmakers approved an amendment bringing the spending into line with current figures.

It’s still roughly $2 billion more than President Barack Obama requested, and about $8 billion above the cap set by last year’s Budget Control Act.

The Republican-controlled House of Representatives passed Thursday’s bill by a vote of 326-90.

Democrats and Republicans are promising a major budget tussle this election year as the two sides square off over whether to raise taxes for wealthy Americans as well as slash federal spending in a bid to pare down the skyrocketing debt.

US lawmakers failed to reach a deal last year over how to reduce the long-term deficit by $1.2 trillion, and default spending cuts are scheduled to kick in next January that could see the defense budget slashed by an additional $50 billion in 2013.

House Appropriations Committee chairman Hal Rogers praised the bill, saying it “supports and takes care of our troops at the highest level possible, keeps America at the forefront of defense technologies, and boosts key training and readiness programs to prepare our troops for combat and peacetime missions.”

“But in this environment of fiscal austerity, we must also recognize that even the Pentagon should not have carte blanche when it comes to discretionary spending,” the Republican Rogers said, insisting that the bill makes “common-sense decisions” on spending cuts.

Some Democrats were keen on making even deeper cuts, but three of their proposals to slash some $23 billion from the bill were rejected.

“The bloated Pentagon budget must be addressed if we are serious about solving our nation’s deficit,” said congresswoman Barbara Lee, who authored several cost-saving amendments which were turned down.

But while Republicans have stood firm in their desire to see defense spending levels maintained, Lee had a partner in Republican Mick Mulvaney, who authored the measure which successfully cut the bill by $1 billion.

“Austerity to me means spending less,” the Tea Party conservative said. “Total government spending will be up this year. We’re still facing a $1 trillion deficit. We need to do better to get our spending under control.”

The bill saw lawmakers express their disgust with Russia’s stance on Syria, as they voted overwhelmingly for an amendment that ends the Pentagon’s arms contract with a major Russian defense firm which provides weapons to the regime in Damascus.

House Democrat Jim Moran, who introduced the measure, lambasted the Pentagon for its contract with Rosoboronexport, which he said sells mortars, sniper rifles and attack helicopters to Syria.

The Pentagon has procured some 33 Mi-17 attack helicopters from the Russian firm and which are to be used by the Afghan military after US operations wind down in Afghanistan.

“I should think it’s troubling to all of us that we are purchasing helicopters from a Russian firm that is directly complicit in the deaths of thousands of innocent Syrian men, women and children,” Moran said.

The Senate will now craft its version of the defense bill, but its fate is unknown. The House has passed several spending measures but the Senate largely balks at them because they overshoot the spending agreement reached last year.


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