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October 13 2012

October 15, 2012




Obama administration’s promised payouts to defense firms likely unneeded

The Hill

By Jeremy Herb – 10/07/12 02:35 PM ET

The Obama administration is unlikely to make payments to defense contractors to cover severance costs caused by across-the-board Pentagon cuts, according to defense analysts.

The prospect of the payouts has sparked a political firestorm, with congressional Republicans comparing them to bribes and saying they’ll do anything possible to stop the government from making the payments.

But the likelihood of the payments being made is actually quite remote, defense analysts say, because the companies won’t feel the effects of sequestration immediately.

The government also is not planning to cancel contracts the day the cuts take effect.

All the same, the Office of Management and Budget sweetened the pot in guidance to defense firms last week.

OMB said that federal agencies would cover companies’ costs if they have to lay off employees due to sequestration prior to a 60-day federal notification requirement.

“They’re promising something because they know they won’t have to do it,” said Todd Harrison, a defense budget analyst at the Center for Strategic and Budgetary Assessments.

Lockheed Martin, BAE Systems and EADS North America all responded to the OMB guidance by dropping plans to send out the layoff notices before sequestration takes effect — which could have come just four days before the election.

Republicans in Congress cried foul, accusing the Obama administration of hiding job losses before the election and ignoring the law.

Sens. Lindsey Graham (R-S.C.) and John McCain (R-Ariz.) vowed to block any payments from the administration.

They also sent a letter to 15 defense contractors Friday telling the contractors to follow the law and issue the 60-day notices under the Worker Adjustment and Retraining Notification (WARN) Act.

“Despite the Administration’s guidance not to issue WARN notices now, it is our fear that, should you rely on that guidance and fail to comply with the WARN Act requirements, you will be setting your company up for serious legal and financial repercussions,” the senators wrote.

“The Congress should not put the taxpayers on the hook if a private company fails to follow the law.”

Lockheed Martin responded to the letter in a statement to The Hill Friday, in which the company suggested it wouldn’t need the payouts offered by the Obama administration.

“Our decision to delay sending sequestration-related WARN notices to our employees was based on new information that clarified the timeline for implementing sequestration budget cuts,” Lockheed spokeswoman Jennifer Allen said.

“If sequestration occurs, we will adhere to the law and provide affected employees the full notice period required by the WARN Act at the appropriate time.”

Democrats have also pointed to guidance from the Defense Department — issued at the same time as the OMB’s — that said contracts would not be cancelled on the day sequestration takes effect.

Harrison published a study earlier this year on that point. He argued that defense companies would be harmed deeply by sequestration — but it would take time because the companies already have contracts they are working on that won’t go away on Jan. 2.

“Even if sequestration did go into effect and they cut the programs, it wouldn’t happen right away. They’d still have more than 90 days to do it,” said Larry Korb, a defense analyst at the liberal-leaning Center for American Progress.

The administration also has a second failsafe. If companies did in fact lay off workers immediately due to sequestration, there’s a chance that the WARN Act would not apply because the cutbacks are an “unforeseeable event.”

The administration made this argument in July guidance from the Labor Department telling contractors it was “inappropriate” to issue layoff notices due to sequester.

“The essential point the administration is making is that the prospect of sequestration is, at this juncture, mere conjecture. And conjecture does not trigger the 60-day obligation,” said William Gould, who was chairman of the National Labor Relations Board under President Clinton.

But Republicans disagree, arguing that sequestration has been the law for nearly a year now, and it’s very clear it would cut the Pentagon’s budget $55 billion in 2013. There have been industry-driven studies suggesting as many as 1 million jobs would be lost under sequestration, which would cut defense budgets $500 billion over the next decade.

“Make no mistake about it. The looming sequester is very real and the impacts will be felt in every corner of our economy,” McCain and Graham wrote to the defense firms.

“Despite efforts by the Administration to ignore the facts, sequestration and the WARN Act are the law of the land.”

Republicans have also questioned the legality of the administration’s promise. Graham called it “patently illegal” and Sen. Jim Inhofe (R-Okla.) said the administration was “bribing” defense firms.

The lawmakers have focused on a line in the OMB guidance that told contractors they would be protected from incurring WARN Act costs, but only if they did not send out notices before sequestration occurred.

“This guidance, like the Labor Department’s before it, is flimsy and lacking in its legal grounding,” said Mackenzie Eaglen, a defense analyst at the American Enterprise Institute.

“The law states that sequestration will take effect in January. Only another law will change that. Until those laws change, no guidance fully offers protection to industry on a matter adjudicated in federal courts.”

An administration official said that the OMB guidance simply applies longstanding rules about what costs are allowable in government contracts to a specific context, and it does not create new obligations for agencies or taxpayers.

Of course, the administration’s pledge is only an issue if sequestration actually does take effect, something that most Republicans and Democrats want to avoid.

Several defense analysts — particularly those who are growing tired of the political fighting surrounding sequestration — say the events this past week make it clear that both sides are playing a game of chicken with the WARN Act layoffs fight.

The Obama administration’s promise to cover contractors’ costs came as it was looking to stop the layoff notices coming out before the election. One industry insider noted that the guidance came three days before a state 90-day deadline. Republicans, meanwhile, are upset they can no longer use the defense firms to bolster their arguments that the Obama administration is threatening 10s of thousands of defense jobs.

The contractors, who tend to shy away from partisan politics, were caught in the middle after starting the fight, perhaps inadvertently, by threatening the layoff notices to try and spur action on sequestration.

“All this is really just a sideshow,” Harrison said. “I think it’s unfortunate because it’s distracting from the real serious impact of sequestration longer term.”


U.S. Report Undermines Huawei Expansion Plans


A U.S. Congressional report has labeled Chinese telecommunications company Huawei Technologies a national security threat. The WSJ’s Juro Osawa tells us what this could mean for the company’s overseas ambitions.

HONG KONG—A damning U.S. Congressional report represents one of the biggest threats to plans by China’s Huawei Technologies Co. and ZTE Corp. 0763.HK -5.97% to expand into developed markets, not only by tainting public perceptions of the companies but also potentially prompting further investigations into their businesses, analysts say.

The U.S. is one of few major markets where Huawei, the world’s second-largest telecommunications equipment supplier after Sweden’s L.M. Ericsson Telephone Co., hasn’t been able to expand. Whether Huawei can penetrate the critical U.S. market—a major market for Ericsson and Nokia Siemens Networks—will determine the rate of the Chinese technology giant’s overall growth.

The Report

In a report released Monday, the U.S. House intelligence committee said Huawei and Chinese telecom-equipment supplier ZTE pose security risks and that the U.S. government should avoid using the two companies’ equipment.

The report comes at a time when Huawei is struggling to establish its credentials in the U.S. Political rhetoric against Beijing is intensifying as the U.S. presidential election nears and as China gains clout in global affairs. China has become a key issue in the race between Democratic presidential incumbent Barack Obama and Republican candidate Mitt Romney, both of whom have spoken out against what they say are unfair trade practices and currency manipulation by Beijing.

In response Huawei said it “has not seen the committee report so has no familiarity with such allegations…The security and integrity of our products are world proven. Those are the facts, political agendas aside.”

“Huawei is a partner to the U.S. high-tech industry. Since launching our North America operations in 2001, Huawei has purchased more than $30 billion in technologies and services from 280 American suppliers,” the company said in a statement. “This active local procurement helps create jobs in the U.S. high tech industry and contribute to the development of local communities. Any interference and obstacles to free competition will eventually harm the entire industry chain.”

ZTE also defended its equipment. “ZTE’s equipment is evaluated by an independent U.S. threat-assessment laboratory with oversight by U.S. government agencies.”

ZTE shares fell 6% to close Monday at 12.6 Hong Kong dollars (US$1.63) on the Hong Kong exchange.

Also on Monday, ZTE said Cisco Systems Inc. CSCO +0.74% of the U.S. severed a strategic cooperation agreement because of U.S. allegations the Chinese company sold equipment to Iran. Cisco notified ZTE several days ago that it would end a strategic partnership agreement with the Shenzhen-based company that dated to about 2005 and included resale of equipment produced by the U.S. company, a ZTE spokesman said Monday.

The spokesman, David Dai Shu, said he wasn’t aware of specific reasons cited by Cisco but that “we know it’s related to Iran” and U.S. government scrutiny of Chinese business deals there.

Mr. Dai also supplied a ZTE corporate statement: “ZTE is highly concerned with the matter and is communicating with Cisco. At the same time, ZTE is actively cooperating with the U.S. government about the probe to Iran. We believe it will be properly addressed.”

Cisco couldn’t immediately be reached for comment. Cancellation of the strategic cooperation agreement was reported Monday by Reuters.

For Huawei, the result of the U.S. committee’s probe “limits [its] growth potential over the next few years,” said Jefferies analyst Cynthia Meng.

“It will be difficult for U.S. telecom operators and other U.S. companies to choose Huawei or ZTE” as their suppliers, she said.

The U.S. House intelligence committee had been investigating Huawei and ZTE over the past year over concerns among some Washington lawmakers that their equipment could be used for spying on Americans.

At a daily press briefing on Monday, Chinese Foreign Ministry spokesman Hong Lei said that China’s telecommunications companies “develop their international businesses according to market economy principles. The investments they make in the U.S. show the win-win aspect of China-U.S. trade relations.”

Mr. Hong added, “We hope that the U.S. Congress can reject bias, respect the facts and do more to promote China-U.S. economic relations, rather than the opposite.”

The worst-case scenario for Huawei and ZTE would be the U.S. committee’s report prompting similar investigations by European governments based on concerns about security risks, said Barclays analyst Jones Ku. “I wouldn’t rule out the possibility of an investigation in Europe,” said Mr. Ku, who covers Hong Kong-listed ZTE but not Huawei, which is a privately held company.

The U.S. market is also important for Huawei’s efforts to expand beyond the telecom sector. As the overall growth slows in the telecom-equipment market, the company is investing more in so-called enterprise-infrastructure businesses such as communication systems, data centers and other technology services for corporate clients, taking on powerful rivals such as Cisco.

Huawei entered the U.S. market in 2001, and it now has 13 offices across the country with about 1,800 employees. According to the company, its current U.S. clients include telecom operators such as MetroPCS Communications Inc. PCS -0.16% and Clearwire Corp. CLWR -1.85%

But its U.S. sales, which stood at $1.3 billion last year, accounted for just 4% of Huawei’s overall revenue of about $32 billion. By contrast, Europe accounted for 13% of the company’s revenue.

—James T. Areddy in Shanghai and Olivia Geng in Beijing contributed to this article.



Think tank: path to Iran nuke warhead 2-4 months

By GEORGE JAHN | Associated Press

October 8, 2012

VIENNA (AP) — Iran now could produce enough weapons-grade uranium to arm a nuclear bomb within two to four months but would still face serious “engineering challenges” — and much longer delays — before it would be able to use the material in an atomic warhead, a respected U.S. think tank said Monday.

While Iran denies any interest in possessing nuclear arms, the international community fears it may turn its peaceful uranium enrichment program toward weapons making — a concern that is growing as Tehran expands the number of machines it uses to enrich as well as its stockpile of enriched uranium. And as apprehension increases, so does anxiety that Israel will make good on threats to attack Iran’s nuclear facilities before that nation reaches the bomb-making threshold.

In a strident call for an internationally drawn “red line” on what he said was Iran’s move toward nuclear arms, Israeli Prime Minister Benjamin Netanyahu said Sept. 28 the world has until next summer at the latest to stop Tehran before it can build an atomic bomb. Flashing a diagram of a cartoon-like bomb before the U.N. General Assembly, he said Iran was ready to move to the “final stage” of making such a weapon by then.

For now, U.S. military and intelligence officials say they don’t believe Iran’s leadership has made the decision to build a bomb, while also warning that the country is moving closer to the ability to do so.

The Institute for Science and International Security did not make a judgment on whether Iran plans to turn its enrichment capabilities toward weapons making. But in its report made available to The Associated Press ahead of publication Monday, it drew a clear distinction between Tehran’s ability to make the fissile core of warhead by producing 25 kilograms (55 pounds) weapons-grade uranium from its lower enriched stockpiles and the warhead itself.

“Despite work it may have done in the past,” Iran would need “many additional months to manufacture a nuclear device suitable for underground testing and even longer to make a reliable warhead for a ballistic missile,” the report said.

Additionally, ISIS — which often advises Congress and other branches of U.S. government on Iran’s nuclear program — said any attempt to “break out” into weapons-grade uranium enrichment would be quickly detected by the United States and the International Atomic Energy, which monitors Tehran’s known enrichment sites. With Washington likely to “respond forcefully to any “break-out” attempt, Iran is unlikely to take such a risk “during the next year or so,” said the report.

Still, the report suggested a narrowing window as Iran positions itself to increase enrichment.

Iran now has more than 10,000 centrifuges enriching uranium at its main plant at Natanz, about 225 kilometers (140 miles) southeast of Tehran, making low-level material. Additionally it has about 800 machines turning out 20-percent enriched uranium at Fordo, a bunkered structure fortified against air attack near the holy city of Qom, as well as about 2,000 more installed but not yet running.

Uranium enriched to 20 percent can be turned into weapons-grade material much more quickly than low-enriched uranium. If the centrifuges at Fordo that now are idle also start operating and are used to make 20 percent material, Iran — using its total enrichment output of low and higher grade uranium — could produce enough weapons grade uranium for a warhead within three or four weeks, said the summary.

Olli Heinonen, who stepped down as the IAEA’s deputy director general in charge of the Iran file in 2010, said the ISIS report contained “good and technically sound estimates.”

He said Fordo will nearly double its production capacity of 20 percent enriched uranium to up to 30 kilograms (more than 60 pounds) a month, if an when all machines there are operating.


SpaceX Dragon capsule launched to space station

By MARCIA DUNN | Associated Press

October 8, 2012

CAPE CANAVERAL, Fla. (AP) — A commercial cargo ship rocketed into orbit Sunday in pursuit of the International Space Station, the first of a dozen supply runs under a mega-contract with NASA.

It was the second launch of a Dragon capsule to the orbiting lab by the California-based SpaceX company. The first was last spring.

This time was no test flight, however, and the spacecraft carried 1,000 pounds of key science experiments and other precious gear on this truly operational mission. There was also a personal touch: chocolate-vanilla swirl ice cream tucked in a freezer for the three station residents.

The company’s unmanned Falcon rocket roared into the night sky right on time, putting SpaceX on track to reach the space station Wednesday. The complex was soaring southwest of Tasmania when the Falcon took flight.

Officials declared the launch a success, despite a problem with one of the nine first-stage engines. The rocket put Dragon in its intended orbit, said the billionaire founder and chief executive officer of SpaceX, Elon Musk.

“It’s driving its way to station, so that’s just awesome,” noted SpaceX President Gwynne Shotwell.

In more good news, a piece of space junk was no longer threatening the station, and NASA could focus entirely on the delivery mission.

NASA is counting on private business to restock the space station, now that the shuttles have retired to museums. The space agency has a $1.6 billion contract with SpaceX for 12 resupply missions.

Especially exciting for NASA is the fact that the Dragon will return twice as much cargo as it took up, including a stockpile of astronauts’ blood and urine samples. The samples — nearly 500 of them — have been stashed in freezers since Atlantis made the last shuttle flight in July 2011.

The Dragon will spend close to three weeks at the space station before being released and parachuting into the Pacific at the end of October. By then, the space station should be back up to a full crew of six.

None of the Russian, European or Japanese cargo ships can bring anything back; they’re destroyed during re-entry. The Russian Soyuz crew capsules have limited room for anything besides people.

Space Exploration Technologies Corp., or SpaceX — owned by PayPal co-founder Musk — is working to convert its unmanned Dragon capsules into vessels that could carry astronauts to the space station in three years. Other U.S. companies also are vying to carry crews. Americans must ride Russian rockets to orbit in the meantime, for a steep price.

Musk, who monitored the launch from SpaceX Mission Control in Hawthorne, Calif., called the capsules Dragon after the magical Puff to get back at critics who, a decade ago, considered his effort a fantasy. The name Falcon comes from the Millennium Falcon starship of “Star Wars” fame.

An estimated 2,400 guests jammed the launching center to see the Falcon, with its Dragon, come to life for SpaceX’s first official, operational supply mission.

Across the country at SpaceX headquarters, about 1,000 employees watched via TV and webcast.

It was no apparition.

“Just over a year after the retirement of the space shuttle, we have returned space station cargo resupply missions to U.S. soil,” said NASA Administrator Charles Bolden Jr.

SpaceX is shooting for its next supply run in January.

Another company looking to haul space station cargo, Virginia’s Orbital Sciences Corp., hopes to launch a solo test flight in December and a demo mission to the station early next year.

Every time SpaceX or a competitor flies successfully, Bolden told reporters, “that gives the nonbelievers one more opportunity to get on board and root for us” and help enable commercial launches for space station astronauts. This will further free NASA up to aim for points beyond low-Earth orbit, like Mars.

“This was a big night,” Bolden concluded.


Retirement claims surge in September

By Kellie Lunney

October 5, 2012


The Office of Personnel Management processed more retirement claims in September than in August, after receiving thousands more applications last month.


OPM completed 12,563 retirement claims in September — the most claims processed in a single month so far this year and 1,063 more than it expected to complete last month. The agency received 11,952 new claims in September, 4,952 more than it anticipated, and 2,979 more than it received in August. The backlog now stands at 41,176 claims, down 33 percent since January.

A growing influx of new retirement claims this past summer, however, has slowed OPM’s progress in tackling the backlog. The current inventory is down just 1.4 percent since August, partly because OPM received more new retirement applications in September than it has since January when it was hit with 21,479 new claims. Still, the agency is slightly ahead of its backlog projections: OPM estimated an inventory of 42,978 as of September.

Despite the slow and steady progress OPM has made tackling the backlog, many federal retirees still wait several months for their applications to be fully processed. On average, it takes 156 days to process a claim, but many retirees wait much longer than that for their full annuity checks.

After the influx of claims in January, the number of applications filed this year started to increase steadily in May. Since the beginning of 2012, OPM has received 86,676 new retirement claims. In the last nine months, the agency has processed a total of 93,878 retirement claims. During fiscal 2011, the agency processed 82,837 applications.

OPM administers benefits for 2.5 million federal retirees and processes about 100,000 new claims annually.


If Cuts Happen, Troops, Major Weapons Are DoD Priorities



The Pentagon will move to protect major weapon programs, including those locked into fixed-price procurement deals, should mandatory U.S. government spending cuts go into effect under sequestration in January.

The Defense Department would also consider furloughing civilian workers as a last-ditch way to pay for combat operations in Afghanistan, should the Pentagon have to absorb a $50 billion sequestration cut to its 2013 budget, Pentagon Comptroller Robert Hale said.

“What we will do if we have to … is ask the services to review key contracts and try to avoid any renegotiations that are disruptive,” Hale said during an Oct. 3 interview at the Pentagon.

DoD might have a “limited ability” to reprogram funds across accounts, Hale noted, but Congress must approve funds shifted that way.

“I think for high-priority contracts, we might try to do that,” he said.

DoD leaders have consistently maintained that they are not making detailed plans for possible sequestration. Hale’s remarks, however, shed some light on how the Pentagon might proceed if further cuts are necessary.

Gordon Adams, an analyst who oversaw defense budgets during the Clinton administration, said the Pentagon would likely send a $15 billion to $20 billion reprogramming request to Congress, should sequestration go into effect.

But DoD could be playing with fire if it relies on lawmakers to shift funding, said Todd Harrison, an analyst with the Center for Strategic and Budgetary Assessments.

“There’s just a big asterisk there that they are crossing their fingers and hoping that Congress will go along with a reprogramming,” he said. “What if they don’t?”

The White House Office of Management and Budget (OMB) has yet to instruct DoD and other federal departments on how to implement the sequestration cuts, which are expected to be divvied evenly across budget coffers, with the exception of military personnel, whom the administration exempted.

The possibility of sequestration and uncertainty on how it will play out has left many program managers and defense industry leaders grappling with what to expect and how to respond.

Last month, Maj. Gen. John Thompson, who runs the Air Force’s $35 billion KC-46 tanker program, said he was afraid sequestration might force him to cancel the service’s fixed-price aircraft development contract with Boeing and renegotiate at a higher cost.

“I don’t want to break my contract, and I’m fearful sequestration may force me to do that,” he said during a Sept. 18 briefing at an Air Force Association-sponsored conference.

Hale said it is too early to signal specific programs that might fall into this category.

“I understand the worry,” he said. “It’s premature to conclude that we would have to modify a specific contract like KC-46 or even have to renegotiate future parts of it.”

If sequestration happens, DoD will implement it “in a way that minimizes the disruption and the devastation,” Hale said.

Contractors have been struggling whether to issue layoff notices in advance of the sequestration possibly going into effect. Job layoffs on the eve of a presidential election are a highly sensitive political issue, and on Sept. 28 the Obama administration advised contractors they were unnecessary, prompting Lockheed Martin and BAE Systems to cancel plans for sending out layoff notices.

Civilian Furloughs Possible

Should sequestration go into effect, DoD would look at furloughs in its more than 764,000 civilian workforce as a way to come up with money to pay for the war operations in Afghanistan.

“I think we will be forced to consider furloughs because we have to get money out of the operations and maintenance accounts quickly, and we’ll be a quarter of the way through the fiscal year when this goes into effect,” Hale said.

The Pentagon would ask the services to come up with a plan for these potential furloughs.

“I would, unfortunately, expect it to be fairly widespread because we’re going to need the money to comply with the law,” Hale said.

“I’d prefer to not get our people any more upset than we have to,” he said. “I don’t blame them for being uneasy. I’m uneasy, but we’re going to do our best to avoid the pain.”

DoD could take steps now to prepare for and minimize the impact of sequestration, according to Harrison.

“You could have a plan already put together on who you’re going to furlough on day one,” he said. “The sooner you can do that, the fewer people you have to furlough.”

Moving money around within operations and maintenance accounts — which includes civilian pay, base operations, war activities, fuel, exercises, training and education, and service contracting – has “huge fungibility” and does not necessarily require reprogramming, Adams said.

Of those, services contracting and civilian pay would most likely be hit under sequestration.

“The trend that’s already underway because we’re out of Iraq and leaving Afghanistan — which is service contracting is going down — will be accelerated a little bit,” he said.

The CR Impact

The government is operating under a continuing resolution (CR), with the Defense Department budget locked at the 2012 fiscal year appropriation of $530 billion. The Pentagon has proposed a spending plan of $525 billion in 2013, which started Oct. 1.

How sequestration could play out under the CR budget versus the 2013 request further complicates efforts to develop spending plans.

“I’m not sure of the details,” Hale said, but “in some fashion, the cuts would have to be against the CR … because that’s the appropriation that’s out there.”

The exact level of detail of those cuts is yet to be determined, he said, and decisions would be made by OMB. “We may not know that until we get close to a sequestration order,” Hale said.

Adams’ view is that the percentage of the cuts would still be applied equally across all spending accounts. So, if the top line is higher than planned, the total value of the cuts across the single year would be higher because the government must achieve a certain level of spending.

The Budget Control Act calls for about $500 billion to come out of planned Pentagon spending over 10 years through sequestration. The annual cut is about $50 billion.

DoD has received budget authority in the CR to move money around in the overseas contingency operations or war fighting accounts, Hale said.

Preparing for ’14

Despite all of the uncertainty surrounding the 2013 budget, Pentagon budget officials are preparing a 2014 spending plan, a plan that anticipates sequestration will be avoided.

Budget officials are going through the program review process, which includes making broad decisions about which weapons to purchase. More detailed budget development will occur next month.

“I am concerned about workload here, too,” Hale said. “As we do have to plan for sequestration, in many cases it’s the same people who are putting together the ’14 budget. It’s going to be a real challenge.”

Although they are not considering sequestration in the budget planning process, officials are considering consistent recommendations that have been made across all four defense oversight committees in Congress, Hale said.

Although Congress has not passed defense authorization or appropriations bills, the House and Senate Armed Services committees and Appropriations defense subcommittees have reviewed the Pentagon’s 2013 request. Those committees did not approve many Air Force aircraft retirements, re-basing requests or personnel cuts. “You have to try to make sensible assumptions,” Hale said.

Much could change between now and the official release of the 2014 budget, continuing to stress an already taxed Pentagon planning workforce.

“There’s a lot of stress,” Hale said. “It’s not just the financial management workforce. A lot of press on DoD in general.”

Over the past two years, DoD has had to actively prepare for four possible government shutdowns, which has taken away from “more productive activities,” such as looking for ways to lower the cost of acquiring weapons and making the Pentagon’s financial books auditable, Hale said.

“The same problem will occur if we get close to sequestration,” he said. “We will have to be ready, and we will be. But it will drain time from things that’d be more productive. It’s unfortunate, but it’s where we are.”



North Korea says U.S. is within its missile range

Hyung-Jin Kim, Associated Press

5:52AM EST October 9. 2012 –

SEOUL, South Korea (AP) — North Korea on Tuesday warned that the U.S. mainland is within range of its missiles, and said Washington’s recent agreement to let Seoul possess missiles capable of hitting all of the North shows the allies are plotting to invade the country.

Seoul announced Sunday it reached a deal with Washington that would allow it to nearly triple the range of its missiles to better cope with North Korean missile and nuclear threats.

On Tuesday, North Korea called the deal a “product of another conspiracy of the master and the stooge” to “ignite a war” against the North.

In a statement carried by the official Korean Central News Agency, an unidentified spokesman at the powerful National Defense Commission said the North will bolster its military preparedness.

“We do not hide … the strategic rocket forces are keeping within the scope of strike not only the bases of the puppet forces and the U.S. imperialist aggression forces’ bases in the inviolable land of Korea but also Japan, Guam and the U.S. mainland,” the spokesman said.

South Korea’s Defense Ministry said Tuesday it had no official comment on the North’s statement, but Seoul and Washington have repeatedly said they have no intention of attacking North Korea.

North Korean long-range rockets are believed to have a range of up to about 4,160 miles, putting parts of Alaska within reach, according to South Korea’s Defense Ministry.

But the North’s spotty record in test launches raises doubts about whether it is truly capable of an attack.

Pyongyang shocked Japan in 1998 when it sent a rocket over Japan’s main island and into the Pacific.

That also alarmed Washington because about 50,000 U.S. troops are deployed in Japan and their bases could be within the North’s range. Tokyo and Washington have since intensified their ballistic missile defenses.

But the North’s most recent rocket launch, in April, ended in humiliating failure shortly after liftoff.

North Korea said it was trying to launch a satellite with that launch, but the U.S. and other countries said it was actually a test of long-range missile technology.

The failure suggests that Pyongyang has yet to master the technology it needs to control multistage rockets — a key capability if it is to threaten the United States with intercontinental ballistic missiles.

And although North Korea is believed to have a small nuclear arsenal, experts do not believe it has mastered the miniaturization technology required to mount a nuclear weapon on a long-range rocket.

It’s unusual for the North to say its missiles are capable of striking the U.S., but Pyongyang has often threatened to attack South Korea and the U.S. in times of tension.

It often does not follow through, but its deadly 2010 artillery strikes on a South Korean island came after it issued a threat to retaliate against South Korean military drills.

Koh Yu-hwan, a North Korean studies professor based in Seoul, said that in the latest case, the North had no choice but to respond to South Korea’s extended missile range but is unlikely to launch a provocation, as it is waiting for the results of U.S. and South Korean presidential elections.

Under the new deal with the U.S., South Korea will be able to possess ballistic missiles with a range of up to 500 miles.

South Korea will continue to limit the payload to 500 kilograms for ballistic missiles with an 800-kilometer range, but it will be able to use heavier payloads for missiles with shorter ranges.

A previous 2001 accord with Washington had barred South Korea from deploying ballistic missiles with a range of more than 186 miles and a payload of more than 1,100 pounds because of concerns about a regional arms race.

The Korean Peninsula remains officially at war because the 1950-53 Korean War ended with an armistice, not a peace treaty.

The U.S. stations about 28,500 troops in South Korea as deterrence against possible aggression from North Korea.



6 Foreign-Policy Flashpoints That Could Matter in November

National Journal

by Sophie Quinton

October 10, 2012 | 6:00 a.m.

The attack on the U.S. diplomatic facility in Benghazi, Libya, that claimed four American lives last month thrust foreign policy into the forefront of the presidential race. Unrest in Libya is just one of the simmering conflicts worldwide that could erupt into a crisis between now and Nov. 6, and one of several foreign-policy issues the candidates will spar over in the coming debates.

Experts say the probability of any existing conflict dramatically escalating in the next few weeks is low. A game-changing event would more likely catch America unawares, such as another terrorist attack or an unexpected new threat—something like the discovery, ahead of the 1962 midterms, that the Soviet Union was discreetly arming Cuba. With that caveat, here are six scenarios that could impact U.S. policy abroad and the presidential race at home.

1) U.S. Strikes Libya, or Libya Investigations Reveal Damning Evidence

New information on mistakes that left the U.S. facility in Libya vulnerable may be Romney’s best opportunity to fault President Obama’s leadership overseas. But Romney needs to tread a fine line, and criticize the president without “making a mountain out of a molehill” for partisan gain, said Michael O’Hanlon of the Brookings Institution. Investigations into the incident are more likely to reflect public servants struggling to make sense of conflicting information with limited resources at their disposal than outright incompetence, experts say.

Another possibility is that the administration obtains actionable information on the perpetrators of the attack in Libya and takes action. A Seal Team Six-style takedown of the men who killed Ambassador Chris Stevens would elevate the president in voters’ eyes. But taking action without gaining the support of Libya’s fledgling government would damage America’s reputation in one of the few Islamic nations in the region that actually supports the United States.

NATO Takes Military Action Against Syria

Ever since a Syrian mortar attack killed Turkish civilians last week, Turkey—a NATO ally—and Syria have been exchanging fire over their shared border. Turkey’s response has heightened the risk of a wider regional conflict, and the direct involvement of a NATO member puts pressure on the alliance to make a collective military response. Both Romney and Obama have said that Syrian strongman Bashar al-Assad must go, although neither has called for going to war to get rid of him. A pledge by Obama to provide aid or weapons to Turkey wouldn’t conflict with the more hawkish tone Romney has taken on the Syrian conflict, giving Romney little space for criticizing the president.

Israel Strikes Iranian Nuclear Facilities

Israeli Prime Minister Benjamin Netanyahu told the United Nations in September that Iran’s uranium-enrichment activities will reach a dangerous stage by the spring of 2013. A unilateral strike by Israel ahead of the U.S. election is unlikely, but both Obama and Romney face continuing questions on what circumstances would compel them to take military action against Tehran and whether they’ll let Netanyahu—literally—call the shots. A serious escalation of the standoff with Iran would probably help Obama, O’Hanlon said. “It would elevate his role as commander in chief” and make voters nervous about switching to an untested candidate in the midst of a crisis, O’Hanlon said.

4) Sanctions Force Iran to Negotiate

Thanks to Tehran’s poor handling of its economy and the strict sanctions the United States and other countries have imposed on the regime, Iran faces hyperinflation and domestic unrest. A precipitous 40 percent drop in the Iranian rial’s value against the dollar in late September sparked public protests. It’s hard to say whether economic woes will bring Iran to the negotiating table with a sincere proposal, but signs that the Obama administration-led sanctions are bearing fruit could help the president make the case for his approach.

Deepening Crisis in the Eurozone

Italy, Greece, and Spain remain in deep economic trouble, and the potential for calamity in the eurozone remains perhaps the greatest overseas threat to the U.S. economy. But Europe’s next crisis point is likely to fall after the U.S. election. Greek Prime Minister Antonis Samaras told a German business daily last week that Greece will need another bailout by the end of November. Samaras stressed that the Greek government has already imposed budget cuts that push the limit of what citizens will tolerate. During the debates, Obama and Romney may face questions about the crisis in Europe, and how they would respond to, say, a Greek departure from the common currency.

Either Obama or Romney Seriously Misspeaks

A major flub during a presidential debate is more likely than any of the above scenarios, said Anthony Cordesman of the Center for Strategic and International Studies. Cordesman pointed to a 1976 debate, in which President Ford erroneously claimed, “There is no Soviet domination in Eastern Europe,” despite abundant evidence that the USSR was expanding its influence into the region. Ford’s insistence that Poland, Romania, and Yugoslavia were totally autonomous helped sink his reelection hopes. “That was the October surprise in foreign policy in that campaign,” Cordesman said. “This is one area where Romney has a track record of misstatements. He has to be more careful than the president.”


U.S. Military Is Sent to Jordan to Help With Crisis in Syria



October 9, 2012


WASHINGTON — The United States military has secretly sent a task force of more than 150 planners and other specialists to Jordan to help the armed forces there handle a flood of Syrian refugees, prepare for the possibility that Syria will lose control of its chemical weapons and be positioned should the turmoil in Syria expand into a wider conflict.

The task force, which has been led by a senior American officer, is based at a Jordanian military training center built into an old rock quarry north of Amman. It is now largely focused on helping Jordanians handle the estimated 180,000 Syrian refugees who have crossed the border and are severely straining the country’s resources.

American officials familiar with the operation said the mission also includes drawing up plans to try to insulate Jordan, an important American ally in the region, from the upheaval in Syria and to avoid the kind of clashes now occurring along the border of Syria and Turkey.

The officials said the idea of establishing a buffer zone between Syria and Jordan — which would be enforced by Jordanian forces on the Syrian side of the border and supported politically and perhaps logistically by the United States — had been discussed. But at this point the buffer is only a contingency.


The Obama administration has declined to intervene in the Syrian conflict beyond providing communications equipment and other nonlethal assistance to the rebels opposing the government of President Bashar al-Assad. But the outpost near Amman could play a broader role should American policy change. It is less than 35 miles from the Syrian border and is the closest American military presence to the conflict.

Officials from the Pentagon and Central Command, which oversees American military operations in the Middle East, declined to comment on the task force or its mission. A spokesman for the Jordanian Embassy in Washington would also not comment on Tuesday.

As the crisis in Syria has deepened, there has been mounting concern in Washington that the violence could spread through the region. Over the past week, Syria and Turkey have exchanged artillery and mortar fire across Syria’s northern border, which has been a crossing point for rebel fighters. In western Syria, intense fighting recently broke out in villages near the border crossing that leads to the Bekaa Valley in Lebanon. To the east, the Syrian government has lost control of some border crossings, including the one near Al Qaim in Iraq.

Jordan has also been touched by the fighting. Recent skirmishes have broken out between the Syrian military and Jordanians guarding the country’s northern border, where many families have ties to Syria. In August, a 4-year-old girl in a Jordanian border town was injured when a Syrian shell struck her house, and there are concerns in Jordan that a sharp upsurge in the fighting in Syria might lead to an even greater influx of refugees.

Jordan, which was one of the first Arab countries to call for Mr. Assad’s resignation, has become increasingly concerned that Islamic militants coming to join the fight in Syria could cross the porous border between the two countries.

The American mission in Jordan quietly began this summer. In May, the United States organized a major training exercise, which was dubbed Eager Lion. About 12,000 troops from 19 countries, including Special Forces troops, participated in the exercise.

After it ended, the small American contingent stayed on and the task force was established at a Jordanian training center north of Amman. It includes communications specialists, logistics experts, planners, trainers and headquarters staff members, American officials said. An official from the State Department’s Bureau of Population, Refugee Affairs and Migration is also assigned to the task force.

“We have been working closely with our Jordanian partners on a variety of issues related to Syria for some time now,” said George Little, the Pentagon press secretary, who added that a specific concern was the security of Syria’s stockpiles of chemical and biological weapons. “As we’ve said before, we have been planning for various contingencies, both unilaterally and with our regional partners.”

Defense Secretary Leon E. Panetta met in Amman in August with King Abdullah II of Jordan and at that time pledged continuing American help with the flow of Syrian refugees. Mr. Panetta was followed in September by Gen. James N. Mattis, the head of Central Command, who met with senior Jordanian officials in Amman.

Members of the American task force are spending the bulk of their time working with the Jordanian military on logistics — figuring out how to deploy tons of food, water and latrines to the border, for example, and training the Jordanian military to handle the refugees. A month ago, as many as 3,000 a day were coming over the border. But as the Syrian army has consolidated its position in southern Syria, the number of refugees has declined to several hundred a day.

According to the United Nations, Jordan is currently hosting around 100,000 Syrians who have either registered or are awaiting registration. American officials say the total number may be almost twice that.


The American military is also sending medical kits to the border and has provided gravel to help keep down the dust at the Zaatari refugee camp, which the task force helped set up and is now home to 35,000 Syrians. It has also provided four large prefabricated buildings to be used at Zaatari as schools. One official estimated the cost so far at less than $1 million.



Defense Department pushes spectrum sharing as solution to wireless crunch


The Defense Department and wireless industry agree freeing up government owned spectrum is a good idea, but they disagree how about how to do it.

by Marguerite Reardon

October 10, 2012 5:07 PM PDT


SAN DIEGO – The Department of Defense says it’s onboard with freeing up more wireless spectrum for commercial wireless broadband use. But proposals that rely heavily on the government sharing wireless spectrum with private sector wireless carriers doesn’t jive with what the industry wants.

At the CTIA’s Mobilecon tradeshow here Wednesday, Major General Robert Wheeler, a deputy CIO for the Department of Defense, gave a keynote speech in which he outlined how the government agency plans to free up additional spectrum that will help the country reach President Obama’s goal of releasing 500 MHz of additional wireless spectrum to the market.

While he promised that the Defense Department, which is the largest license holder of government owned spectrum, would clear or move off some spectrum to make room for commercial use, he also emphasized the prospect of sharing spectrum with commercial providers.

This is an idea that has been pushed recently by the National Telecommunications and Information Administration, the government agency in charge of overseeing wireless spectrum allocated to government agencies, and the President’s Council of Advisors on Science and Technology (PCAST). These agencies have been reviewing ways in which government spectrum can be used to help alleviate the “spectrum crunch” facing commercial wireless providers.

In a report issued earlier this year, NTIA said it could cost $18 billion to completely clear the 1755MHz to 1855MHz spectrum band, which is the sliver of spectrum that is most attractive to commercial wireless broadband providers.

Wheeler reiterated the NTIA’s findings, stating that it could be too expensive for the Defense Department to relocate its applications and services to other frequencies in order to give the wireless industry a completely cleared band of spectrum. And he noted that the government and the wireless industry would have to work together to come up with creative solutions to this problem.


“There isn’t one solution to clearing this spectrum,” he said. “There will be some vacating, but that can be expensive.

As an example, he described the difficulties that in relocating spectrum that is used for a satellite application that the Defense Department uses to train fighter pilots. He called the application “Top Gun on steroids” and said it was one of the most important training programs the government has in place. But he explained there was a problem. As he put it, the spectrum used for this satellite application is “smack dab in the middle” of the spectrum the agency is looking to clear for commercial wireless use.

And he explained that early assessments indicate it would be too expensive and take too long for the agency to move to a different frequency to make this spectrum available to commercial wireless providers.

“It’s difficult if you have a satellite that’s been up for 10 or 15 years,” he said. “You can’t change the transmit and receivers in space. So unless you want to pay to change out the equipment on the satellite you need to come up with something different.”

The something different, he explained is to share some slivers of spectrum with commercial wireless operators.

There are three main types of sharing his agency is proposing. There’s geographic sharing in which the Defense Department would continue to use its applications in certain locations in a discrete area and would allow commercial providers to use the spectrum in areas where it is not using the spectrum. There’s also time-shifted sharing, which will allow commercial providers to use spectrum during certain periods of time when the government is not using a particular sliver of spectrum.

And the final type of sharing is what he called “true sharing” or cognitive sharing. In this scenario, special technology is used to sniff the airwaves to ensure that applications designed to use the same frequencies of spectrum are not using them at the same time and intefereing with each other.

This technique is used with unlicensed wireless spectrum, such as Wi-Fi. And it will be used when unlicensed “white space” spectrum is put into use. But “cognitive” spectrum sharing has not been used with licensed spectrum. And there are plenty of people in the wireless industry who believe this is not an ideal solution.

In his own speech at Mobilecon later on Wednesday, Federal Communications Commissioner Ajit Pai explained how relying on spectrum sharing, particularly cognitive sharing, would cause a whole host of issues. And he explained how it could even harm competition in the wireless market.

Look, I’m not opposed to spectrum sharing,” he said. “For example, geographic sharing by creating exclusion zones around certain areas can be a useful tool. And spectrum sharing may be a workable alternative when auctions can’t be used to raise funds for relocation, such as in higher bands like the 5 GHz band. But if our goal is to incentivize investment in wireless networks, nothing beats clearing.”

Pai said that auctioning free and clear spectrum gives wireless providers the most flexibility to put wireless spectrum to the best use. He explained that wireless companies may be unwilling to invest in building networks with this spectrum because there would be too much uncertainty in how and when they could use the spectrum.

He also said that spectrum sharing may encourage more political infighting between the wireless industry and government, since interference issues are likely to come up in a scenario where entities are sharing spectrum.

And he pointed out that sharing wireless spectrum could also hurt competition by making it more difficult for smaller players to use this spectrum.


“Spectrum sharing is a complicated and largely untested endeavor that requires a lot of coordination among potentially hundreds of federal users and licensees,” he said. “The largest wireless providers in America may be up for that challenge. But I doubt that smaller ones who lack the time or resources are.”

The wireless industry has accused the Department of Defense and the NTIA of dragging their feet when it comes to freeing up additional spectrum for commercial use.

But Wheeler said in an interview after his speech that this accusation was untrue.

“I disagree with that assessment that we’ve been dragging our feet,” he said. “We are the ones who have been pushing for this, because we know how important it is for the country to get more spectrum into the hands of commercial carriers. But we have certain requirements that we need to deal with.”

He explained that many of the government’s systems that use this spectrum were put into place well before the wireless phone market even existed.

“Spectrum wasn’t a problem 20 or 30 years ago when many of this technology was being deployed,” he said. “So that wasn’t even a consideration then.”

John Marinho, vice president of technology and cybersecurity for CTIA, acknowledged that some spectrum sharing may be necessary to get additional capacity into the network right away. But he said there needs to be a plan in place to eventually clear that spectrum.

“We can’t share spectrum into perpetuity,” he said. “That doesn’t benefit anyone. Clearing spectrum is the most ideal scenario, and we need to do that as quickly as possible.”



Iran’s spy agency finds voice in cyberspace


By Ali Akbar Dareini and Brian Murphy – The Associated Press
Posted : Wednesday Oct 10, 2012 19:18:45 EDT

Top of Form


Bottom of Form

TEHRAN, Iran — A glimpse into the shadow world of Iran’s main spy agency is now a click away.

In an unexpected display of outreach, the Intelligence Ministry now hosts a website with addresses of provincial offices, appeals for tips and anti-American essays that mock rising obesity rates, large prison populations and school shootings.

There’s no mission statement on the site, but it appears part of stepped-up attempts by Iran’s leadership to promote national unity and project its authority amid Western sanctions and international isolation. After protests in Tehran last week over Iran’s slumping currency, the nationally broadcast Friday prayers tapped heavily into the theme of shared sacrifice in times of trouble. And on Wednesday, Iran’s Supreme Leader Ayatollah Ali Khamenei described the sanctions as a “war against a nation.”

The new website also fits into Iran’s narrative of fighting a “soft war” in cyberspace against Western cultural and political influences. For more than a year, Iran’s leaders have touted plans for a “clean” Internet that could presumably try to block Western content, but Web experts have raised questions about its technical feasibility.

“The ministry is going online to make its presence known to the Iranian public, especially the young who use the Internet,” said Meir Javedanfar, an Iranian-born political analyst based in Israel. “This is basically a show of force.”

What the new Farsi-language site,, lacks in innovation (mostly a simple list of stories and links), it makes up for in pure anti-American bluntness.

Click on “America from a Different Perspective.” The list of shame includes the huge U.S. prison population, rising obesity, school shooting statistics, why supporters of euthanasia seek to “kill grandparents” and how giant chain stores such as Walmart are smothering small businesses.

Another essay claims the chief goal of U.S. economic sanctions is not to force concessions over Tehran’s nuclear program, but to incite civil unrest. It specifically cites U.S. diplomat Jillian Burns, who set up Washington’s first Iranian monitoring office in Dubai in 2006 and is currently the consul in Herat in western Afghanistan, where Iran has strong cultural and economic ties. There was no immediate comment from the State Department.

Tehran-based political commentator Hamid Reza Shokouhi sees the website — the web name is the Farsi acronym for the Intelligence Ministry — as part of a new image-building campaign by Iran’s ruling system in the Internet era, which has left authorities in a constant struggle to block opposition sites and Western influences.

“Economic and military threats against Iran have increased. Under such circumstances, it is necessary to reduce the gap between the people and the ruling system,” said Shokouhi. “The website is a move in this direction. This is a big deal.”

It’s far from the first time that Iran’s leadership has planted its flag in cyberspace.

Websites have operated for years for Khamenei and others including President Mahmoud Ahmadinejad — in Farsi, English and Arabic. More than a dozen state-run and semiofficial news services also flood the Web around the clock.

“The leadership, particularly within the hardline elements of the Intelligence Ministry, has an obsession with the notion that Washington is coordinating a soft revolution to unseat the Islamic Republic,” said Suzanne Maloney, an Iranian affairs expert at the Brookings Institution in Washington.

Part of Iran’s counterstrategy appears to be a kind of information overload in response to U.S. initiatives, such as the State Department’s launch last year of a “virtual embassy” in English and Farsi that seeks to reach out to ordinary Iranians. The site was quickly blocked by Iranian authorities, but firewall bypasses such as proxy servers are widely used by Iran’s young and tech-skilled population.

“There is probably an element of mimicry here as well,” said Maloney. “The Iranians enjoy turning the table on Washington and imitating American tactics.”

Last week, a U.S. broadcast oversight board accused Iran of jamming regional radio and television programming that includes the Persian services for the Voice of America and the BBC. And on Monday — two days after the website was launched — Iran’s Intelligence Minister Heidar Moslehi claimed that Iran’s secret services have the upper hand in the Web war with the West.

“The intelligence apparatus confronts enemy measures in the cyber front,” the official IRNA news agency quoted Moslehi as saying.

The intelligence minister was at the center of one of Iran’s most public political feuds. Khamenei last year demanded Moslehi keep the post despite objections from Ahmadinejad, who was so angered that he boycotted government meetings for more than a week. In response, the ruling clerics arrested dozens of Ahmadinejad’s allies and left him politically weakened entering his final year in office.

A journalist at Tehran’s moderate Shargh newspaper, Soroush Farhadian, interprets the new website as an effort by intelligence agency to gain its own voice.

“One of the objectives is to demonstrate its independent position rather than speaking through the semiofficial news agencies,” he said.

There is also a potential for touches of candor amid the high-voltage propaganda. One article appears to buck the official line that sanctions on Iran’s oil exports are meaningless. It notes Iran has “paid heavy costs” in its showdown with the West.

“On the one hand, Iran has faced problems with a cut in its main source of revenue. On the other hand, the West has taken all measures to force Iran to give up its nuclear program,” the post said. “Despite all the costs suffered by the West to stop Iran’s nuclear program, the Islamic Republic has continued its path and the West has failed.”

Murphy reported from Dubai, United Arab Emirates.



Mailing a letter to cost a penny more next year

It’ll cost another penny to mail a letter next year.

Seattle Times

Originally published Thursday, October 11, 2012 at 2:29 PM


Associated Press



It’ll cost another penny to mail a letter next year.

The cash-strapped U.S. Postal Service said Thursday that it will raise postage rates on Jan. 27, including a 1-cent increase in the cost of first-class mail to 46 cents.

It also will introduce a new global “forever” stamp, allowing customers to mail first-class letters anywhere in the world for one set price of $1.10. Currently, the prices vary depending on the international destination, with letters to Canada and Mexico costing 85 cents.

Under the law, the post office cannot raise stamp prices more than the rate of inflation, or 2.6 percent, unless it gets special permission. The post office, which expects to lose a record $15 billion this year, has asked Congress to give it new authority to raise prices by 5 cents, but lawmakers have failed to act.

The mail agency also will increase rates on its shipping services, such as priority mail, by an average of 4 percent.

The post office, which is struggling with debt and low cash flow, said the rate hikes were partly aimed at bringing in new revenue while maintaining its pricing advantage in the shipping business. Private companies such as UPS and FedEx, which offer similar shipping services, regularly adjust their prices.

The post office lost $5.1 billion in fiscal 2011, mostly due to a 5.8 percent decline in revenue for first-class mail. Financial results are expected to be even worse when final figures for fiscal 2012 are released next month. Earlier this year, it was forced to default on two payments due to the Treasury totaling $11.1 billion for future retiree health benefits because it lacked sufficient cash reserves.

While the Postal Service has said it will continue seeking ways to cut costs, Postmaster General Patrick Donahoe has made clear that the agency has little left it can do to bring in significant new revenue. After months of congressional delay, he said it’s now up to lawmakers to pass a postal fix when they return to Washington after the November elections.

The latest rate increase, for instance, will make only a small dent in the Postal Service’s losses, caused by the economic downturn, movement of mail to the Internet and a congressional requirement that the mail agency fund future retiree medical benefits years in advance. Earlier this year, the mail agency floated a proposal to Congress aimed at increasing stamp prices to 50 cents as a way to generate $1 billion in new revenue.

The Postal Service has also asked Congress to allow it reduce mail delivery from six to five days a week and reduce its annual $5 billion payment for the future retiree health benefits.

The current 45-cent rate for first-class mail in the U.S. has been in effect since January. Since 2006, the Postal Service has now increased the price of the stamp five times, from 39 cents to 46 cents.

Because stamps are now being issued as forever stamps, they will remain good for first-class postage. But buying new forever stamps will cost more when the prices go up.

While the price for the first ounce of a first-class letter will rise to 46 cents, the cost for each additional ounce will remain at the current 20 cents.

Other price increases:

-Postcards will go up one penny to 33 cents.

-Priority mail, small box, $5.80; medium box, $12.35; large box, $16.85.

-Priority mail, regular envelope, $5.60; legal envelope, $5.75; padded envelope, $5.95.

-Delivery confirmation will be free on packages, including priority mail and parcel post, rather than being an extra charge.

The Postal Service, an independent agency of government, does not receive tax money for its day-to-day operation but is subject to congressional control.



White House Wants Ideas For Next Moonshot

Think big: The Office of Science and Technology Policy and Defense Advanced Research Projects Agency are looking for the next ‘grand challenge.’

By J. Nicholas Hoover, InformationWeek

October 11, 2012


The White House Office of Science and Technology Policy and the Defense Advanced Research Projects Agency (DARPA) are looking for groundbreaking achievements. Not just any new ideas, but “grand challenges for the 21st Century,” in line with the lunar landing and sequencing of the human genome. And they want your help.

The White House and DOD on Tuesday released a request for information seeking suggestions on grand challenges that will require significant advances in science and technology, and seeking those suggestions “from a wide variety of diverse perspectives–young and old, scientist and layperson, domestic and international.”

In particular, the request for information asks submitters to send presentations of their ideas to DARPA by January 1, 2013. Submissions will need to discuss what the idea is, how it will “capture the public’s imagination,” success metrics, what trends and technology support the idea that the goal is feasible, what breakthroughs will be needed to achieve it, and what organizations or people could come together to participate in the effort to achieve the goals.

While the White House and DOD say they are seeking widespread participation, they chose to announce their request on the relatively lightly trafficked government procurement website rather than highlighting it on a more heavily used platform such as the White House’s own website.

This isn’t the first time that the Obama White House has sought ideas for “grand challenges.” The administration first called for the pursuit of such efforts in its 2009 Strategy for American Innovation, and in February 2010, the White House Office of Science and Technology Policy and the National Economic Council released a request for information similar to the one released this week by the Office of Science and Technology Policy and DARPA.

The 2010 request sought help with the grand challenges that the Obama Administration identified in its Strategy for American Innovation, information on other grand challenges the administration should consider, partners interested in working to achieve these goals, and models for allowing many people to participate in the challenges.

More recently, the Office of Science and Technology Policy announced that it planned to hold a conference on grand challenges and made the effort to spark more grand challenges a core piece of its open government strategy. Then, in its fiscal 2014 science and tech policy budget guidance sent to agencies in June, the White House instructed agencies to “identify and pursues ‘grand challenges'” as part of their research efforts.



Panetta Lays Out New Cyber Policy

Defense News

By Zachary Fryer-Biggs

NEW YORK — Delivering what Defense Department officials termed a major policy speech outlining an aggressive new agenda to prevent cyber attacks, Defense Secretary Leon Panetta described the U.S. as in a “pre-9/11 moment” in need of immediate action as he spoke to an audience of veterans and business executives here at the Intrepid Sea, Air and Space Museum.

The U.S. was sending a clear message to cyber attackers that it would not only find them, but respond with action as needed, Panetta said, outlining advances in cyber forensics and capabilities at an awards dinner hosted by Business Executives for National Security.

“Our cyber adversaries will be far less likely to hit us if they know that we will be able to link them to the attack,” he said.

Panetta described several recent attacks against energy companies in Qatar and Saudi Arabia, Ras Gas and Saudi Aramco, respectively. Both attacks were based on a variant of the “Shamoon” virus, and the attack on Saudi Aramco disabled 30,000 computers. Although the attacks have been reported in the media, the DoD had not formally acknowledged them. Senior defense officials said the agency has determined the source of the attacks but would not disclose the details.

“These attacks mark a significant escalation of the cyber threat, and they have renewed concerns about still more destructive scenarios that could unfold,” Panetta said. “For example, we know that foreign cyber actors are probing America’s critical infrastructure networks. They are targeting the computer control systems that operate chemical, electricity and water plants, and those that guide transportation throughout this country.”

Panetta said DoD efforts in cyberspace do not include excessive snooping into U.S. citizen email and data, a concern that has been frequently raised in Congress. Instead, he said the DoD must focus on protecting the country and deterring potential enemies.

“Our mission is to defend the nation,” he said. “We defend. We deter. And if called upon, we take decisive action to defend our citizens. In the past, we have done so through operations on land and at sea, in the skies and in space. In this century, the United States military must help defend the nation in cyberspace as well.”

The notion of deterrence was a critical theme of the speech, as Panetta mentioned the concept repeatedly. He emphasized that two critical lapses had previously limited the U.S.’s ability to deter attackers: an inability to target attackers by attributing attacks, and the need to possess tools to respond aggressively.

Panetta said that DoD has largely addressed both problems.

“The department has made significant advances in solving a problem that makes deterring cyber adversaries more complex: the difficulty of identifying the origins of that attack,” he said. “Over the last two years, DoD has made significant investments in forensics to address this problem of attribution, and we’re seeing the returns on that investment. Potential aggressors should be aware that the United States has the capacity to locate them and to hold them accountable for their actions that may try to harm America.”

Once targets are identified, the U.S. must be able to respond, and will, he said. Panetta referenced both offensive capabilities as well as a willingness to act not only against attacks, but also against threats of attacks.

“We won’t succeed in preventing a cyber attack through improved defenses alone,” he said. “If we detect an imminent threat of attack that will cause significant physical destruction in the United States or kill American citizens, we need to have the option to take action against those who would attack us, to defend this nation when directed by the president. For these kinds of scenarios, the department has developed the capability to conduct effective operations to counter threats to our national interests in cyberspace.”

Panetta’s speech emphasized the need for cooperation and urged Congress to take up the work started in a bill requiring new levels of cyber protection in the private sector that was co-sponsored by Sens. Joseph Liberman, I-Conn., and Susan Collins, R-Maine. The bill, deemed by opponents as too costly for business interests, failed a key legislative hurdle in the Senate earlier this summer. The bill would have provided protection against lawsuits stemming from disclosure of information about cyber attacks in exchange for sharing details about the attacks.

Obama administration officials have said the administration would act through an executive order to do as much as possible to improve security efforts, a move that Panetta has supported and that has been fought by Republican opponents who have described it as an abuse of executive power.

Panetta also said that new standing rules of engagement, in the works for years and promised as “imminent” by administration officials several times during that span, are being finalized. The new rules, paired with policy adjustments and the investment of roughly $3 billion per year in cybersecurity, have resulted in real operational capability, he said.

“These new rules make the department more agile and provide us with the ability to confront major threats quickly,” he said.


Full Transcript of the Panetta address:

Remarks by Secretary Panetta on Cybersecurity to the Business Executives for National Security, New York City, October 11, 2012



SECRETARY OF DEFENSE LEON E. PANETTA: Thank you. Thank you very much.

Thank you so much for this wonderful evening and the chance to enjoy such terrific company and be able to express my deepest gratitude to this organization for all of the great things that it does on behalf of those that serve in our military.

Bruce, my greatest thanks to you for your kind remarks and for your leadership here.

And I — I accept this award, not so much for myself but I accept it on behalf of the men and women in uniform who are putting their lives on the line every night, every day in order to protect this country.


I want to congratulate the troops from the 82nd, they’re — they’re the very best.

I also want to congratulate Frank for receiving this reward, the great service that he does in helping to — to find jobs for those that are returning so that they can be part of — of their community after serving this country, to protect their community is outstanding. And besides that, and perhaps most importantly, he’s Italian. It’s nice to have another Italian honored this evening.


I — I also want to thank Fran Townsend. She’s a great friend and, obviously, a tremendous Master of Ceremonies this evening. And the reason I — the reason I asked Fran to serve on the board is because she is bright. She is capable. She’s dedicated. She — she’s a straight talker, she knows what she’s talking about. She’s dedicated to this country and in a room of a lot of ugly old guys, she’s not bad to look at.


General Meigs, thank you for your leadership as well and for your distinguished service to this country.

I am truly honored to be with you this evening. We gather in the midst of a very important national contest. It’s one that will continue to play out over the coming weeks in unpredictable ways before a final decision is reached. And in fact, some of the key players are dueling tonight.

So I want to be very clear about where my loyalties lie in this contest, I have always been and always will be for the New York Yankees.


And I think the score is 1-to-1. Right?

In all seriousness, I really do appreciate the opportunity to come back to this great city. This is — New York is a special place for me and I’ll tell you why. I am — I’m the son of Italian immigrants and both of my parents came through New York, came through Ellis Island like so many millions of others. That made this a special place for me.

I also had the opportunity to be here and work as an Executive Assistant to the Mayor of New York City, a guy named John Lindsey at the time.

I also had the opportunity to work very closely with the delegation in Congress. As a matter of fact, in Washington.

I lived with Chuck Schumer and a group of other members of Congress in what was well known as Animal House in Washington. And you can’t live with Schumer and not develop an appreciation for New York City.

I also served on the Board of the New York Stock Exchange for six years. And I was on the board when 9/11 took place and I want you to know how much at that time I appreciated the great courage of the people of New York in the face of that attack. And I remembered that courage when I had a chance to lead the operation that went after Bin Laden.

We sent a very clear message to the world. We sent a very clear message to terrorists that in fact, don’t ever attack this country because you will not get away with it.


I’ve long appreciated, from my own experience, New York’s role as the center of gravity for our nation’s economy. This is where it’s at. And for that reason, it’s an honor to be able to speak before this kind of distinguished audience of business leaders and innovators because you understand what a strong national defense is all about and you understand that a strong national defense and a strong economy go hand in hand.

With that in mind, tonight I’d like to discuss with you an issue that I think is at the very nexus of business and national security: the threats facing the United States in cyberspace and the role that the Defense Department must play in defending this country from those kinds of threats.

We’re on an aircraft carrier, a famous and great aircraft carrier and it’s a fitting and appropriate venue to have this discussion. This ship and the technology that’s on display at this museum, attests to one of the central achievements of the United States in the 20th century, our ability to project power and strength across the land, across the high seas, across the skies and across outer space.

We secured those domains. Securing them helped ensure that they were used to advance peace and prosperity and were not used to promote war and aggression.

It is with that same goal in mind, today we have to address a new domain that we must secure to have peace and prosperity in the world of tomorrow.


Cyberspace has fundamentally transformed the global economy. It’s transformed our way of life, providing two billion people across the world with instant access to information to communication, to economic opportunities.

Cyberspace is the new frontier, full of possibilities to advance security and prosperity in the 21st century. And yet, with these possibilities, also come new perils and new dangers.

The Internet is open. It’s highly accessible, as it should be. But that also presents a new terrain for warfare. It is a battlefield of the future where adversaries can seek to do harm to our country, to our economy, and to our citizens.

I know that when people think of cybersecurity today, they worry about hackers and criminals who prowl the Internet, steal people’s identities, steal sensitive business information, steal even national security secrets. Those threats are real and they exist today.

But the even greater danger — the greater danger facing us in cyberspace goes beyond crime and it goes beyond harassment. A cyber attack perpetrated by nation states are violent extremists groups could be as destructive as the terrorist attack on 9/11. Such a destructive cyber-terrorist attack could virtually paralyze the nation.

Let me give you some examples of the kinds of attacks that we have already experienced.

In recent weeks, as many of you know, some large U.S. financial institutions were hit by so-called Distributed Denial of Service attacks. These attacks delayed or disrupted services on customer websites. While this kind of tactic isn’t new, the scale and speed with which it happened was unprecedented.

But even more alarming is an attack that happened two months ago when a very sophisticated virus called Shamoon infected computers in the Saudi Arabian State Oil Company Aramco. Shamoon included a routine called a ‘wiper’, coded to self-execute. This routine replaced crucial systems files with an image of a burning U.S. flag. But it also put additional garbage data that overwrote all the real data on the machine. More than 30,000 computers that it infected were rendered useless and had to be replaced. It virtually destroyed 30,000 computers.

Then just days after this incident, there was a similar attack on RasGas of Qatar, a major energy company in the region. All told, the Shamoon virus was probably the most destructive attack that the private sector has seen to date.

Imagine the impact an attack like that would have on your company or your business.

These attacks mark a significant escalation of the cyber threat and they have renewed concerns about still more destructive scenarios that could unfold.

For example, we know that foreign cyber actors are probing America’s critical infrastructure networks. They are targeting the computer control systems that operate chemical, electricity and water plants and those that guide transportation throughout this country.

We know of specific instances where intruders have successfully gained access to these control systems.

We also know that they are seeking to create advanced tools to attack these systems and cause panic and destruction and even the loss of life.

Let me explain how this could unfold. An aggressor nation or extremist group could use these kinds of cyber tools to gain control of critical switches. They could, for example, derail passenger trains or even more dangerous, derail trains loaded with lethal chemicals.

They could contaminate the water supply in major cities or shutdown the power grid across large parts of the country.

The most destructive scenarios involve cyber actors launching several attacks on our critical infrastructure at one time, in combination with a physical attack on our country. Attackers could also seek to disable or degrade critical military systems and communication networks.

The collective result of these kinds of attacks could be a cyber Pearl Harbor; an attack that would cause physical destruction and the loss of life. In fact, it would paralyze and shock the nation and create a new, profound sense of vulnerability.

As director of the CIA and now Secretary of Defense, I have understood that cyber attacks are every bit as real as the more well-known threats like terrorism, nuclear weapons proliferation and the turmoil that we see in the Middle East.

And the cyber threats facing this country are growing. With dramatic advances, this is an area of dramatic developments in cyber technology. With that happening, potential aggressors are exploiting vulnerabilities in our security. But the good news is this, we are aware of this potential. Our eyes are wide open to these kinds of threats and we are a nation that, thank God, is on the cutting edge of this new technology. We are the best and we have to stay there.

The Department of Defense, in large part through the capabilities of the National Security Agency, NSA, has develop the world’s most sophisticated system to detect cyber intruders and attackers.

We are acting aggressively to get ahead of this problem, putting in place measures to stop cyber attacks dead in their tracks. We are doing this as part of a broad whole of government effort to confront cyber threats.

The Department of Homeland Security has the lead for domestic cybersecurity, the FBI also has a key part to play and investigating and preventing cyber-attacks. And our intelligence agencies, of course, are focused on this potential threat as well.

The State Department is trying to forge international consensus on the roles and responsibilities of nations to help secure cyberspace.

The Department of Defense also has a role. It is a supporting role but it is an essential role. And tonight I want to explain what that means. But first let me make clear what it does not mean.

It does not mean that the Department of Defense will monitor citizens’ personal computers. We’re not interested in personal communication or in e-mails or in providing the day to day security of private and commercial networks. That is not our goal. That is not our job. That is not our mission.

Our mission is to defend the nation. We defend. We deter, and if called upon, we take decisive action to protect our citizens. In the past, we have done so thorough operations on land and at sea, in the skies and in space. In this century, the United States military must help defend the nation in cyberspace as well.

If a foreign adversary attacked U.S. soil, the American people have every right to expect their national defense forces to respond.

If a crippling cyber attack were launched against our nation, the American people must be protected. And if the Commander in Chief orders a response, the Defense Department must be ready to obey that order and to act.

To ensure that we fulfill our role to defend the nation in cyberspace, the department is focusing on three main tracks.

One, developing new capabilities.

Two, putting in place the policies and organizations we need to execute our mission.

And three, building much more effective cooperation with industry and with our international partners.

Let me briefly talk about each of these.

First, developing new capabilities. DoD is investing more than $3 billion annually in cybersecurity because we have to retain that cutting edge capability in the field.

Following our new defense strategy, the department is continuing to increase key investments in cybersecurity even in an era of fiscal restraint.

Our most important investment is in skilled cyber warriors needed to conduct operations in cyberspace.

Just as DoD developed the world’s finest counterterrorism force over the past decade, we need to build and maintain the finest cyber force and operations. We’re recruiting, we’re training, we’re retaining the best and the brightest in order to stay ahead of other nations.

It’s no secret that Russia and China have advanced cyber capabilities. Iran has also undertaken a concerted effort to use cyberspace to its advantage.


Moreover, DoD is already in an intense daily struggle against thousands of cyber actors who probe the Defense Department’s networks, millions of time a day. Throughout the innovative efforts of our cyber operators, we’ve been trying to enhance the department’s cyber-defense programs.

These systems rely on sensors; they rely on software to hunt down the malicious code before it harms our systems. We actively share our own experience defending our systems with those running the nation’s critical private sector networks.

In addition to defending the department’s networks, we also help deter attacks. Our cyber adversaries will be far less likely to hit us if they know that we will be able to link to the attack or that their effort will fail against our strong defenses.

The department has made significant advances in solving a problem that makes deterring cyber adversaries more complex: the difficulty of identifying the origins of that attack.

Over the last two years, DoD has made significant investments in forensics to address this problem of attribution and we’re seeing the returns on that investment.

Potential aggressors should be aware that the United States has the capacity to locate them and to hold them accountable for their actions that may try to harm America.

But we won’t succeed in preventing a cyber attack through improved defenses alone. If we detect an imminent threat of attack that will cause significant, physical destruction in the United States or kill American citizens, we need to have the option to take action against those who would attack us to defend this nation when directed by the president.

For these kinds of scenarios, the department has developed that capability to conduct effective operations to counter threats to our national interests in cyberspace.

Let me clear that we will only do so to defend our nation, to defend our interests, to defend our allies and we will only do so in a manner that is consistent with the policy principles and legal frameworks that the department follows for other domains including the law of armed conflict.

Which brings me to the second area of focus, policies and organization. Responding to the cyber threat requires the right policies and organizations across the federal government.

For the past year, the Department of Defense has been working very closely with other agencies to understand where are the lines of responsibility when it comes to cyber defense. Where do we draw those lines? And how do those responsibilities get executed?

As part of that effort, the department is now finalizing the most comprehensive change to our rules of engagement in cyberspace in seven years. The new rules will make clear that the department has a responsibility, not only to defend DoD’s networks, but also to be prepared to defend the nation and our national interests against an attack in or through cyberspace.

These new rules make the department more agile and provide us with the ability to confront major threats quickly.

To execute these responsibilities, we must have strong organization structures in place.

Three years ago, the department took a major step forward by establishing the United States Cyber Command. Under the leadership of General Keith Alexander, a four-star officer who also serves as the director of the National Security Agency.

Cyber Command has matured into what I believe is a world-class organization.

It has the capacity to conduct a full range of missions inside cyberspace. And it’s also working to develop a common, real-time understanding of the threats in cyberspace. The threat picture could be quickly shared with DoD’s geographic and functional combatant commanders, with DHS, with FBI and with other agencies in government. After all, we need to see an attack coming in order to defend against that attack.

And we’re looking at ways to strengthen Cyber Command as well. We must ensure that hit has the resources, that it has the authorities, that it has the capabilities required to perform this growing mission. And it must also be able to react quickly to events unfolding in cyberspace and help fully integrate cyber into all of the department’s plans and activities.

And finally, the third area is to build stronger partnerships.

As I’ve made clear, securing cyberspace is not the sole responsibility of the United States military or even the sole responsibility of the United States government. The private sector, government, military, our allies – all share the same global infrastructure and we all share the responsibility to protect it.

Therefore, we are deepening cooperation with our closest allies with the goal of sharing threat information, maximizing shared capabilities and determining malicious activities. The president, the vice president, Secretary of State and I have made cyber a major topic of discussion in nearly all of our bilateral meetings with foreign counterparts.

I recently met with our Chinese military counterparts just a few weeks ago. As I mentioned earlier, China is rapidly growing its cyber capabilities.

In my visit to Beijing, I underscored the need to increase communication and transparency with each other so that we could avoid a misunderstanding or a miscalculation in cyberspace. This is in the interest of the United States, but it’s also in the interest of China.

Ultimately, no one has a greater interest in cybersecurity than the businesses that depend on a safe, secure and resilient global, digital infrastructure.

Particularly those who operate the critical networks that we must help defend. To defend those networks more effectively, we must share information between the government and the private sector about threats in cyberspace.

We’ve made real progress in sharing information with the private sector. But very frankly, we need Congress to act to ensure that this sharing is timely and comprehensive.

Companies should be able to share specific threat information with the government, without the prospect of lawsuits hanging over their head. And a key principle must be to protect the fundamental liberties and privacy in cyberspace that we are all duty bound to uphold.

Information sharing alone is not sufficient. We’ve got to work with the business community to develop baseline standards for our most critical private-sector infrastructure, our power plants, our water treatment facilities, our gas pipelines. This would help ensure that companies take proactive measures to secure themselves against sophisticated threats, but also take common sense steps against basic threats. Although awareness is growing, the reality is that too few companies have invested in even basic cybersecurity.

The fact is that to fully provide the necessary protection in our democracy, cybersecurity legislation must be passed by the Congress. Without it, we are and we will be vulnerable.

Congress must act and it must act now on a comprehensive bill such as the bipartisan Cybersecurity Act of 2012 co-sponsored by Senators Lieberman, Collins, Rockefeller and Feinstein.


This legislation has bipartisan support, but is victim to legislative and political gridlock like so much else in Washington. That frankly is unacceptable and it should be unacceptable not just to me, but to you and to anyone concerned with safeguarding our national security.

While we wait for Congress to act, the administration is looking to enhance cybersecurity measures under existing authorities, by working with the private sector to promote best practices, increase information sharing.

They are considering issuing an Executive Order as one option to try to deal with the situation, but very frankly there is no substitute for comprehensive legislation and we need to move as far as we can in the meantime. We have no choice because the threat that we face, as I’ve said, is already here.

Congress has a responsibility to act and the President of the United States has constitutional responsibility to defend our country.

I want to urge each of you to add your voice to those who support stronger cyber defenses for our country.

In closing, let me say something that I know the people of New York, along with all Americans, will appreciate.

Before September 11, 2001, the warning signs were there. We weren’t organized. We weren’t ready and we suffered terribly for that lack of attention.

We cannot let that happen again. This is a pre-9/11 moment.



The attackers are plotting. Our systems will never be impenetrable just like our physical defenses are not perfect, but more can be done to improve them. We need Congress and we need all of you to help in that effort.

I want you to know the Department of Defense is doing our part.

And tonight, I’m asking you to do yours as citizens and as business leaders. Help us innovate. Help us increase the nation’s cybersecurity by securing your own networks. Help us remain ahead of the threats that we confront. By doing so, you will help ensure that cyberspace continues to bring prosperity to your companies and to people across the world.

BENS has played an important part in this debate by identifying cybersecurity as a key national security challenge where business and government must partner together.

And so I’d like thank BENS for your leadership in this area and thank you again for your recognition of the efforts that we have made.

But more broadly, let me thank you for your commitment to the dream that guides all of us in this nation.

I talked about my parents as immigrants. And I used to ask my father why did he travel all of that distance to come to a strange land, leaving the comfort of family, it was a poor area in Italy, but why would you leave your comfort of family and travel all that distance to a strange land? And my father said the reason he did it is because he and my mother believed that they could give their children a better life. That is the American dream.

That’s what we want for our children. We have achieved that dream because we always have been able to defend our interests and our values. That must remain our most important mission on land, at sea, in the air, in space and yes, in cyberspace. This is not just a responsibility, it is a duty that we owe to our children and their children in the in the future.

Thank you very much.



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