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December 8 2012

December 10, 2012




North Korea Plans “Satellite” Launch

Air Force Magazine

Dec 3 2012


North Korea intends “to launch another working satellite” aboard an Unha-3 rocket in the period between Dec. 10 and Dec. 22, announced the country’s state-run central news agency. The Dec. 1 announcement came less than one week after commercial satellite imagery of North Korea’s Sohae launch site indicated that the North Koreans appeared to be preparing for a launch of a multi-stage, long-range rocket. While the North Koreans claim that they are launching for “peaceful scientific” purposes—placing a polar-orbiting earth observation satellite into orbit—nations like the United States and Japan contend that the North Koreans seek to advance their long-range ballistic missile know-how. “A North Korean ‘satellite’ launch would be a highly provocative act that threatens peace and security in the region,” said State Department spokeswoman Victoria Nuland in a Dec. 1 release. She added: “Devoting scarce resources to the development of nuclear weapons and long-range missiles will only further isolate and impoverish North Korea.” The communist nation failed in its previous attempt to launch a multi-stage missile in April.



U.S. Navy Deploys Ships Before North Korean Launch

Defense News

Dec. 6, 2012 – 11:47AM |



WASHINGTON — The United States has deployed naval ships equipped with ballistic missile defenses and is monitoring North Korea “very closely” ahead of an anticipated rocket launch, the head of U.S. Pacific Command said Dec. 6.

It was “logical” that U.S. naval ships in the region would be employed to track North Korea’s launch and “to the degree that those ships are capable of participating in ballistic missile defense, then we’ll position them to be able to do that,” Adm. Samuel Locklear told reporters at a Pentagon news conference.

The U.S. Navy took a similar approach “the last time they had (a launch),” Locklear said.

Two guided missile destroyers, the Benfold and the Fitzgerald, had been sent to the area ahead of the launch, CNN reported.

American naval ships had been sent to the region “so we understand if they do violate the U.N. Security Council (resolution) and launch a missile, what kind is it? What is it about? Where does it go? Who’s threatened?” he said.


The admiral added that U.S. forces would also be tracking any stray parts that might fall from the rocket.

Pyongyang has announced it will conduct between Dec. 10 and 22 its second long-range rocket launch this year, after a much-hyped but failed attempt in April.

The North says it will be a purely “peaceful, scientific” mission aimed at placing an Earth observation satellite into orbit.

The United States and its allies insist the launches are disguised tests for an inter-continental ballistic missile capable of carrying a nuclear warhead.

Locklear said North Korea has steadily improved its missile technology, but it was unclear if the test this month would be successful.

“I think they have progressively gained better technology over time through a number of methods, a number of years and decades.

“To the degree that they would be more successful than they were last time in such a short period of time and what they’ve done to correct it, I can’t tell you.”


Defense Cuts No Longer Untouchable?

More U.S. Lawmakers Seem Willing To Trim DoD

Defense News

December 1, 2012



Higher tax rates. Medicare cuts. Those are issues Republicans and Democrats have made clear are non-starters in efforts to craft a massive deficit-reduction package.

But one formerly untouchable issue now occasionally crosses congressional leaders’ lips: additional defense cuts. In fact, if one listens to the public debate long enough, it appears that protecting the Pentagon budget from more cuts is suddenly an afterthought.

For nearly two years, Republican leaders and rank-and-file members, joined by hawkish Democrats, stood firm against slashing the Pentagon’s annual budget to help reduce the federal deficit, which has topped $1 trillion for four consecutive years.

Take House Speaker John Boehner, R-Ohio, who in October 2011 said this about additional Pentagon spending cuts: “I would argue that they’ve taken more than their fair share of the hits.”

But just a few months and a completed election cycle later, Boehner rarely marks the Pentagon budget — which has grown to about $530 billion plus nearly $100 billion a year in war spending — as off limits for Republicans.

In brief comments to reporters on Nov. 28, Boehner said, “It’s time for the president and Democrats to get serious about the spending problem that we have.”

He did not warn President Barack Obama and congressional Democrats against proposing new Pentagon cuts as the two sides haggle over the contents of a bill to avoid the “fiscal cliff.”

The speaker’s rhetorical shift is key because all deficit-reduction talks involve only Obama, Boehner, Senate Majority Leader Harry Reid, D-Nev., Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader Nancy Pelosi, D-Calif. But, increasingly, most see two members of that group as key.

“Forget the Gang of Six, and the Gang of Eight,” said Sen. Bob Corker, R-Tenn. “Right now, this comes down to the Gang of Two: Speaker Boehner and the president.”

In a series of interviews last week on Capitol Hill, other Republicans appeared to be backing away from their collective anti-defense cuts stance.

Asked by Defense News whether he would support additional defense cuts at a level below the automatic $500 billion reduction set to kick in Jan. 2, Senate Armed Services Committee member Lindsey Graham, R-S.C., sidestepped the question. “I’d need to hear what the Department of Defense thinks about that,” Graham said.

Sen. Richard Shelby, R-Ala., a Senate Appropriations defense subcommittee member, said, “I think that we have to put everything on the table — we have to take a look at everything.”

Economists say the U.S. economy would tumble off a steep cliff if a slew of tax cuts expire and deep cuts to planned federal spending, including for the military, are allowed to kick in. Lawmakers and Obama can avoid twin $500 billion cuts to defense and domestic spending by agreeing to reductions of at least $1.2 trillion in the federal deficit by Dec. 31. If they fail to pass that kind of bill, or one that delays the defense cuts, the cuts would be triggered.

When House Democratic and Republican leaders addressed reporters Nov. 28 following separate closed-door meetings about avoiding the fiscal cliff, there was nary a mention about protecting defense spending.

House Democratic Caucus Chairman John Larson of Connecticut urged Republicans to support Obama’s proposal to extend middle-class tax cuts in coming weeks, and leave the question of whether to raise new federal revenue in the lower chamber.

“We have clear agreement among Democrats and Republicans that we have near unanimous support on making sure the middle class is not impacted by the Dec. 31 deadline,” said Rep. Xavier Becerra of California, vice chairman of the Democratic Caucus.

“Where we disagree, let us push that off,” Larson said, “and where we agree, let us embrace.” The Democratic leaders signaled they remain skeptical about major changes to Medicare and Medicaid.

The absence of talk about the defense cuts is a sign that further Pentagon budget reductions, at some level below $500 billion, are on the table.

“Of course, it’s going to have to come down some,” said Gordon Adams, an American University professor who was a senior defense budget official in the Clinton administration. “There is zero possibility that defense is not on the table here. Revenues and entitlements and overall deficits are driving things, not the defense budget.”

House Republicans have raised hopes in recent weeks for a “grand bargain” that avoids across-the-board Pentagon spending cuts by stating they would support raising new federal revenues. For nearly two years, congressional Republicans and presidential candidates had held firm against new revenues.

Several Capitol Hill Republicans told Defense News they now want Democrats to reciprocate by proposing cuts to domestic entitlement programs. GOP leaders are pressing Obama, and congressional Democrats also are looking for federal spending cuts.

Rep. Eric Cantor, the No. 2 House Republican, said, “We have not seen any good faith effort to talk about the real problem we’re trying to fix.”

Cantor said Erskine Bowles, the Clinton-era White House chief of staff who was the co-chair of Obama’s 2010 fiscal commission, told Republicans, “There has been no serious discussion by the White House on Medicare and Medicaid.”

The Republican leaders made clear they oppose raising taxes on the wealthiest Americans and want entitlement program changes. With those costly programs likely off the table, getting to the $1.2 trillion deficit-reduction target mandated by a 2011 law becomes harder. And that likely puts the defense budget in play for additional cuts to planned spending, but smaller than the pending $500 billion reduction.

For some hawkish House Republicans, the threat of more Pentagon cuts has them ready to support the previously unthinkable: new federal revenues.

“As far as any pledges [about refusing to raise federal taxes], just my personal opinion, is my pledge is to the folks in my district and doing what we need to do to get past this,” said Rep. Adam Kinzinger, R-Ill.

Kinzinger, who signed the anti-tax pledge promoted by Americans for Tax Reform head Grover Norquist and is an Air Force veteran, said additional defense cuts are so alarming that he is willing to do whatever it takes to get a broader fiscal deal done.

“I actually am OK with putting revenue on the table, talking about various ways to get to whatever target we need to,” Kinzinger said. “This isn’t me saying that I believe increasing revenue is going to help the economy — I don’t. But [it’s] understanding that we have to work with a Democrat president, we have to work with a Senate that will be more Democrat than it was this year.”


Federal facilities get off the power grid

December 2, 2012



For many federal managers, October’s megastorm Sandy was simply the latest reminder of how vulnerable their operations are to power outages. The storm left more than 7 million people and countless businesses and government offices without power.

“Every year we have big outages, and not all are weather-related,” said Julieta Giraldez, an electrical engineer at the Energy Department’s National Renewable Energy Laboratory in Golden, Colo. “The grid is aging; it’s a big, interconnected grid that can create big outages.”

Besides big storms — such as Sandy, Hurricane Katrina in 2005 and 2010’s “Snowmaggedon” — other things threaten to disconnect power to critical government operations: terrorism, cyber attacks, heat waves and an aging, overloaded power grid.

The result is agencies are investing hundreds of millions of dollars building and maintaining their own backup “microgrids” — miniature replicas of larger commercial power grids that generate and transmit energy from multiple sources.

Tom Glennon, engineering director at Honeywell Building Solutions, said the Defense Department, health-related agencies and the Federal Aviation Administration are among those investing aggressively in indigenous power generation at their most critical facilities.

“They are clearly trying to get to the point where they are getting power reliability and power independence,” Glennon said.

He said microgrids are not for every federal facility but will be important for larger installations and campuses that need to perform critical functions without interruption.

The agencies working on grid independence include:

• The Defense Department, which is installing microgrids at 10 installations.


That includes the Army at Fort Bliss, Texas, which is constructing a 20-megawatt solar field, which will be combined with a microgrid already in place and allow the installation to run independent of the local commercial grid.


• The Department of Homeland Security’s planned headquarters complex in southeast Washington will include a 25-megawatt utility plant and microgrid. Funding for the project, however, has been cut drastically in recent years and its fate is unclear.


• The Veteran Affairs Department’s new Las Vegas Medical Center has the ability to run without outside power, water or sewers for four days. It also is in the process of awarding a contract for a 3.2-megawatt solar panel system that will allow it to run for longer periods independent of the local commercial grid.


VA hospitals are already required to have backup diesel generators, but new facilities will be able to generate their own power to run longer independent of the commercial grid, according to VA spokeswoman Josephine Schuda.


• The Food and Drug Administration is embarked on a $213 million expansion of its power generation facilities at its White Oak campus in Maryland. The new utility plant will include two 7.5-megawatt turbine generators, a 4.5-megawatt natural gas generator, two 2.3-megawatt diesel standby generators and a 5-megawatt steam generator — all together capable of powering more than 23,000 homes and allowing the FDA to generate all the energy it needs for critical functions. The new power sources will join an existing utility plant, thousands of solar panels and a pair of turbine generators in providing energy to the facility.


Glennon, whose company, Honeywell, is building the power generation plant at White Oak, said its microgrid technology allows the campus to separate immediately from the larger commercial power network when it detects a problem.

Giraldez said the frequency of power outages will only continue to increase, and she has seen increased interest in microgrids at all levels. She predicted agencies will increasingly develop business cases for microgrids by factoring in the economic losses suffered during power outages.

At DoD, the case for grid independence often includes a strong national security dimension — many U.S.-based DoD installations directly support military operations thousands of miles away.

“We have to be able to complete the mission without the grid,” said Philip Barton, the microgrid program director at energy contractor Schneider Electric.

Barton said the majority of solicitations the company has received from agencies include energy security as one of the main requirements. He said every agency has critical systems — such as data centers — that need to be functioning in a power outage or natural disaster.

Microgrids run in tandem with local commercial grids, but when a commercial grid shuts down, the microgrid disconnects and runs its facilities on its own, Glennon said.

Twentynine Palms, a Marine Corps base in California, is home to 27,000 military and civilian personnel and holds large-scale training exercises. It uses its own power plant and solar panel field to provide its own power and has installed a microgrid that can disconnect from the civilian grid — which DoD refers to as “island mode.”


If the microgrids at Twentynine Palms and the other installations work as expected, the Defense Department will expand the program to hundreds of other installations nationwide.

Ed Bursk head of the microgrid federal business division at contractor Siemens Government Technologies, said cybersecurity threats and natural disasters are pushing agencies to evaluate their dependence on the civilian grid.

“We are really starting to see an increased interest across the DoD space,” Bursk said. He said civilian agencies were slower to catch on, but they also are exploring grid independence.

DoD has earmarked $9 billion in planned investments to improve energy use in military operations between fiscal 2013 and 2017. This includes $1.6 billion in fiscal 2013, according to DoD.

“Over the coming years, you will see this really expand out into other arenas where you need to have a continuous and secure operation,” Bursk said.



December 1, 2012

Are U.S. Defense Experts Getting China Wrong?

Defense News


TAIPEI — Are Western experts on China’s military modernization efforts misreading and downplaying the level of ambition, sophistication and just plain guts the Chinese are showing in the country’s quest to be a top arms player?

Time and time again, Western analysts have described China’s fighter development as years behind the U.S. They say China’s new aircraft carrier couldn’t last a minute against a U.S. naval task force. And they say landing a fighter on the aircraft carrier is years away.

Yet over the past two years, two new stealth fighter aircraft have emerged from behind the veil. When photographs appeared, naysayers called them Photoshopped. Then when videos appeared showing them flying, analysts dismissed them as prototypes that will never go into production.

China’s military aviation industry has its weaknesses, especially in engine development, but its learning curve is impressive. Events in November provided numerous examples of how China appears years ahead of schedule, instead of years behind, as so many Western analysts claim.

First, China showed off many of its best military aircraft at the ninth Zhuhai Airshow Nov. 13-18. The only Western analyst willing to push aside his laptop and jump into the fray was Andrew Erickson, a professor at the China Maritime Studies Institute, U.S. Naval War College.

What Erickson saw, and his colleagues did not, was a wide range of new weapons: the air-to-ground LD-10A anti-radiation missile; the SD-10A surface-to-air missile; a model of the new Harrier III UAV; the Blue Fox target drone, based on the L-15 fighter jet trainer; the Minshan Engine, set to replace the Ukrainian engine in the L-15; and an upgrade to the Guizhou FTC-2000 (JL-9) fighter, now with more hard points.

The second thing that upset the apple cart for Western analysts was news that China might buy 24 Russian-built Su-35 fighters. Too many analysts predicted Russia had been badly burned by the Su-27/J-11B scandal and would never try another deal with China.

Yet rumors of the deal emerging at the Zhuhai Airshow appear correct. Russia has caved to demands by China to begin with an initial buy of 24 Su-35s, rather than the 48 originally demanded by Moscow.

The problem is the Russians are still terrified the Chinese will simply reverse-engineer the fighter and produce clones, as they did with the Russian Su-27 when they began manufacturing the Shenyang J-11B.

There are also suspicions that the Chinese do not actually want the Su-35, but instead will use the engines for the Chengdu J-20 stealth fighter. The Saturn AL-117S engine is outfitted in both the Su-35 fighter and the T-50 stealth fighter prototype. If the Chinese procure one spare for every four engines installed on the 24 Su-35s, alarm bells should begin going off in Moscow, said a U.S. defense industry analyst.

The third thing that caught many Washington analysts off guard was the release of videos showing a Shenyang J-15 Flying Shark fighter landing and taking off from the new Liaoning aircraft carrier. Previous photographs appearing on the Internet showed black skid marks on the carrier’s flight deck, hinting that the Chinese were preparing the carrier for landings. Naysayers in Washington said the marks were most likely touch-and-go marks by fighters and that landings or take-offs were not possible this early.

They were wrong again.

“If you are talking about ‘is China achieving carrier capabilities like a U.S.-like naval power,’ then the answer is, ‘no, it’s not,'” said Gary Li, an analyst at U.K.-based Exclusive Analysis. “If U.S. analysts are looking at it with their own [past] knowledge of how naval powers develop and the U.S. Navy experience, then no.” But the “Chinese are not playing that game,” Li said.

“The recent air operations by the Chinese aircraft carrier demonstrate that the PLAN [People’s Liberation Army Navy] is developing an operational aircraft carrier capability much faster than many Western observers anticipated,” said Sam Bateman, senior research fellow in the Maritime Security Program at the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore.

Bateman is not surprised.

“I have always believed that given Beijing’s perceptions of a more threatening strategic environment and China’s technological achievements in other areas, the aircraft carrier capability could be developed quite quickly if it were given high priority,” he said.

Li, who grew up in Beijing, said the fact the chief engineer responsible “for the J-15 literally worked himself to death should say something to Western commentators as to the dedication of these people.” For China to achieve so much in the “middle of every arms embargo under the sun and with such a little research and development base to start with is impressive.”

York Chen, a former member of Taiwan’s National Security Council in the Chen Shui-bian administration, said Taiwan’s intelligence assessments in 2006 indicated that China’s aircraft carrier program, along with its efforts to develop the J-15, were impressive. For that reason, “we decided to speed up our supersonic anti-carrier missile program in 2006.” The result was the unveiling of the Hsiung Feng 3 anti-ship cruise missile in 2011.

So what is it about the tendency of Washington analysts to get China’s military modernization effort wrong so many times?

“China is one of these things that can look like different things from different angles. The West loves calling it a dragon while China sees itself as a panda,” Li said. “I would say the key issue is that the West continues to view China and Chinese development from a Western-centric/Westphalian international relations tradition that places China into the ‘realist/revisionist’ camp,” he said. “However, as far as the Chinese are concerned, they are just getting on with national regeneration, with little outside help.”

However, there also is a concern that Beijing is misunderstanding Washington.

“The military dimensions of the U.S. pivot toward Asia, for example, has the undesirable consequence of fueling Chinese perceptions of a deteriorating and more threatening regional strategic environment,” Bateman said.

Bateman’s biggest fear is that a regional arms race will develop as a result of this current process of action and reaction — the classic security dilemma, and an urgent and more focused strategic dialogue is required to prevent this from occurring.



Air Force role just 1 piece of DoD’s cyber puzzle

Monday – 12/3/2012, 5:16am EST

By Jared Serbu

DoD reporter, Federal News Radio


The Air Force has several new to-do items on its cyber list after a summit of senior civilian and uniformed leaders in November.

But the answer to one of its most intriguing questions — Does anyone have a common understanding of what’s encompassed by the word “cyber” in the first place? — remains elusive.

“There are different lines of operation in cyberspace. When some people think of it, they think of the smaller parts of it like what you’re doing in your offensive and defensive capabilities, versus what you’re doing to build the network and extend the network. That’s a different element that we [previously] threw in the same bucket,” said Lt. Gen. Michael Basla, the Air Force’s chief information officer. “I think we’ll draw a clearer line and distinction between what’s required to build, operate and maintain the network and what’s required to operate on the network. I think operating on the network will be where we coalesce around our definition of cyberspace operations.”

The Air Force, Basla said, also needs to gain a better understanding of what the military as a whole will require in terms of cyber capabilities. That question, he told reporters in a media roundtable at the Pentagon on Friday, is dependent on the outcome of ongoing discussions among the Joint Chiefs of Staff. He said he expects the chiefs and Defense Secretary Leon Panetta to arrive at decisions later this week that will elucidate the manpower and technology requirements of the military’s U.S. Cyber Command going forward.

“We will then understand what those demands are, what our capabilities are and we’ll address those gaps,” Basla said.

Right people, right training

The recent summit tried to answer these and several other questions, including whether the service is poised to provide the nation with the cyber talent and equipment the military will need in future years and whether Air Force commanders understand the possibilities cyber capabilities can bring to the battlefield.

Ensuring the service has the right talent is key to its future. Basla said the Air Force needs to study whether or not its cyber forces are organized properly to support Cyber Command. Currently, he said, performing cyber missions requires contributions from personnel in various functional areas across the Air Force: engineers, intelligence analysts, acquisition experts, network maintainers and many others.

“That’s really not how we’ve done business in the past,” he said. “Before, if I was a pilot, I was a pilot. In cyber, it takes a team. Are we properly organized in the Air Force to facilitate that teaming? I think that’s the question. Right now we pull from various organizations across the Air Force to put that team together.”

That team includes members who are explicitly cyber warriors, however, such as those the Air Force trains in offense and defensive cyber operations at Hurlburt Field in its 39th Information Operations Squadron.

Basla said while the quality of the training the Air Force gives incoming airmen is top-notch, it’s far from clear that the Air Force is training enough of them. He said increasing the graduate rate of the service’s cyber schoolhouses is probably necessary, but the magnitude of the increase will depend on the “demand signals” the Pentagon sends when it tells the military services more about the future of Cyber Command.

“Right now, we project we’ll meet today’s demands in the fourth quarter of 2014,” he said. “But I expect the demand signal to continue to go up. We’re going to have to go expand the throughput rate, and we’ve got some ideas on how do to do that. We might have to have 24 hour operations, we might need more bed spaces, we might need more instructors and, if that’s what it takes, that’s what we’ll do.”

Immersion, discussion for senior leaders

Another objective of the Nov. 15 summit, Basla said, was to raise the awareness of the military’s cyber capabilities among the service’s senior uniformed leaders. The summit followed an earlier full-day immersion session for commanders at Cyber Command and the National Security Agency at Fort Meade. Md.

“We took graduate-level material and put it in a form that was understandable and could generate a high-level discussion,” he said. “We took a whole day in which there was 30 percent presentation on our part and 70 percent discussion among principals at the table. I think we made a huge step from the senior leader perspective.”

At more junior levels of the service, Basla said planners and operators already understand that cyber is an important arrow in the military’s quiver.

“We have a cyber-operations weapons instructor course at Nellis Air Force Base, just like we have for the fighter force, just like the space force, just like the nuclear force. Now we see a synergy occurring out there between the planners and the operators in our exercises,” he said. “It’s really amazing and pretty awesome. The planners now recognize that there are options out there for targets. And the targets don’t all have to be kinetic.”



Congress passes resolution opposing U.N. Internet takeover

The adopted resolution again calls on the U.S. government to keep the Internet free from government control

By Loek Essers

December 6, 2012 06:03 AM ET


IDG News Service – The U.S. House of Representatives unanimously passed a resolution urging the U.S. government not to give the United Nations’ International Telecommunication Union (ITU) control over the Internet.

The resolution was adopted by the House on Wednesday with a 397 – 0 vote, according to the House’s website. The bill, passed by the U.S. Senate in September, emphasizes the importance of the Internet to the global economy, saying that “it is essential that the Internet remain stable, secure, and free from government control.”

By adopting the resolution the House intends to send a clear message to the ITU not to increase government control over the Internet during the World Conference on International Telecommunications (WCIT)A in Dubai. Proposals by the U.N. body to increase control over the Internet “would undermine” the way the Internet is organized right now “that has enabled the Internet to flourish,” the adopted bill reads.

It is the second time the House has urged President Barack Obama’s administration to keep promoting a global Internet free from government control. In June, the House Energy and Commerce Committee passed another resolution telling the ITU to keep its hands of the Internet.

The U.S. government is not the only government worried about the ITU plans. The European Commission said last Friday it was opposed to increasing the ITU’s powers over the Internet during the conference, following a vote by the E.U. Parliament A loudly calling for negotiators to block such attempts.

While companies, organizations and governments are worried the ITU will increase its powers at conference, the ITU said the worried parties don’t understand what the WCIT meeting can decide on. The conference cannot grant the ITU regulatory powers over the Internet, the organization emphasized on Friday, adding that “it seems the message is simply not getting through.”

The ITU’s protests were supported by Harvard Law Professor Jack Goldsmith, who tried to debunk what he called pre-WCIT “hysteria” in a detailed blog post.

The WCIT conference started on Monday and will end on Dec. 14.


U.S. spy agencies to detail cyber-attacks from abroad

A National Intelligence Estimate will report on cyber-attacks from abroad, including financial losses blamed on hackers in China.,0,1598259.story

By Ken Dilanian, Washington Bureau

December 6, 2012, 4:32 p.m.


WASHINGTON — The U.S. intelligence community is nearing completion of its first detailed review of cyber-spying against American targets from abroad, including an attempt to calculate U.S. financial losses from hacker attacks based in China, officials said.

The National Intelligence Estimate, the first involving cyber-espionage, also will seek to determine how large a role the Chinese government plays in directing or coordinating digital attacks aimed at stealing U.S. intellectual property, according to officials who spoke on the condition of anonymity to discuss a classified undertaking.


The Pentagon requested the estimate more than a year ago, and it sparked a broad review of evidence and analysis from the 17 U.S. intelligence agencies. The document has been submitted to the National Intelligence Council, which coordinates such efforts, but it was unclear whether the council had reached or approved final conclusions. The study is expected to be given to policymakers early next year.

U.S. intelligence agencies monitor daily digital assaults from hackers based in China who seek to steal intellectual property from American and other Western companies, current and former intelligence officials said. Intelligence analysts disagree over the extent to which the intrusions are organized by Chinese authorities, but the CIA and National Security Agency have traced cyber-attacks and thefts to Chinese military and intelligence agencies.

“We know much more about who is doing this than we did even two years ago,” one official involved in the effort said. “We have traced attacks back to a desk in a [People’s Liberation Army] office building.”

Some analysts believe the Chinese government has a broad policy of encouraging theft of intellectual property through cyber-attacks, but that it leaves the details to intelligence services, state-owned companies and freelancers. As a result, at least some of the attacks appear poorly orchestrated.

U.S. officials have raised concerns about cyber-espionage with Chinese officials. Beijing has denied any involvement.

Obama administration officials have publicly warned in recent months about threats to national security from cyber-attacks, but they have tiptoed around the issue of who is to blame. “It’s no secret that Russia and China have advanced cyber capabilities,” Defense Secretary Leon E. Panetta said in a speech on Oct. 11 in New York.

Russia engages in cyber-espionage against government targets, as does China, the United States, Israel, France and other nations. But Russia does not systematically steal corporate secrets from U.S. companies to aid its own national companies, U.S. intelligence officials say.


Last week, the congressionally sponsored U.S.-China Economic and Security Review Commission alleged that China has “an elaborate strategy for obtaining America’s advanced technology by subterfuge, either stealing it outright or by requiring U.S. companies to turn over technology to Chinese business partners as a condition for investment and market access in China.”

Part of that strategy relies on computer attacks, the commission said.

“In 2012, Chinese state-sponsored actors continued to exploit U.S. government, military, industrial and nongovernmental computer systems,” the report said. “The volume of exploitation attempts yielded enough successful breaches to make China the most threatening actor in cyberspace.”

Losses from the theft of U.S. intellectual property through cyber-attacks and theft are difficult to quantify but are believed to be in the billions of dollars a year.

In one recent case, Brian Milburn, who runs Solid Oak Software Inc. in Santa Barbara, sued the Chinese government and nine companies for $2.2 billion in January 2010 in federal court in Santa Ana, alleging that his Cybersitter child-monitoring software had been pirated and illegally sold to 57 million users in China. The lawsuit was settled for an undisclosed amount in April, though the Chinese government did not participate in the settlement.

As the lawsuit unfolded, Milburn was targeted for harassment by Chinese hackers thought to have been tracked by U.S. intelligence, according to his Los Angeles lawyer, Gregory Fayer. He said the hackers blocked orders on the Cybersitter website, costing Milburn tens of thousands of dollars in lost sales.


“The guys they put on us were the virtual Chinese A-Team of hackers,” Milburn said in a phone interview Thursday. “They were the most patient people I’ve ever seen. They basically used the same techniques against me that they would use for cyber-espionage.”

Copyright © 2012, Los Angeles Times


Swiss Spooks Warn Of Counter-Terrorism Intelligence Breach

Swiss government suspects insider may have stolen counter-terrorism information that had been shared with Switzerland by foreign governments, including Britain and the United States.

By Mathew J. Schwartz InformationWeek

December 06, 2012 11:17 AM


Authorities in Switzerland have warned U.S. intelligence officials that a senior IT technician working for a Swiss intelligence service may have compromised U.S. and British counter-terrorism operations.

In September, Swiss attorney general Michael Lauber and a senior prosecutor, Carolo Bulletti, held a press conference to disclose the alleged data theft, and said that they had a suspect in custody. “The intention was to sell the data to other countries,” said Bulletti, but authorities didn’t know whether that had happened.

Earlier this week, Reuters reported that unnamed European intelligence sources with knowledge of the investigation said that Swiss authorities still haven’t ascertained whether the suspect sold the data. That led Swiss authorities to warn all intelligence agencies that share counter-terrorism information with Switzerland — including the CIA and Britain’s Secret Intelligence Service, or MI6 — that the information may have been sold to foreign intelligence agencies or commercial buyers.

The suspect worked for the NDB, Switzerland’s federal intelligence service, which is part of its defense ministry, for eight years. He reportedly had administrator-level rights to most of the spy agency’s networks, including ones storing highly secret information, and became disgruntled after feeling that higher-level managers were ignoring his recommendations.

Reportedly, the quantity of breached data involves terabytes of secret information and was stolen when the suspect copied it onto a portable hard drive and walked out of government premises with the drive stored in a backpack. Swiss authorities arrested the suspect — who under Swiss laws can’t be named — in May, and said they recovered numerous portable devices containing the surreptitiously copied intelligence data. Authorities were tipped off by Swiss bank UBS, which had traced an attempt to open a new, numbered bank account to the IT technician. The suspect has been released on bail while the related investigation continues.

According to the European intelligence sources, the employee began displaying some of the classic warning signs that precede insider attacks, such as manifesting a disgruntled attitude and regularly failing to show up for work. The signs, however, were apparently ignored.

The Swiss case is far from the first time that a disgruntled IT-savvy employee with access to sensitive information has been accused of stealing it. In 2009, for example, MI6 caught Daniel Houghton, one of its computer programmers, trying to sell cutting-edge email interception technology, as well as staff lists containing cell phone numbers and home addresses for MI6 and Britain’s MI5 domestic intelligence service. Houghton had downloaded at least 7,000 files onto a secure digital memory card and offered it for sale to the Dutch intelligence service, or AIVD. Dutch officials tipped off MI6, who busted Houghton in a sting operation.

Arguably, that data breach could have been prevented if proper controls been in place to monitor for unusual network behavior, such as copying 7,000 files to a removable memory card. The same, of course, could be said for the NDB in Switzerland, or for that matter, the Department of Defense, which saw 251,000 sensitive diplomatic cables get leaked to WikiLeaks. The alleged perpetrator, Private First Class Bradley Manning, an intelligence analyst, allegedly copied the data onto rewritable CDs, which he stored in a Lady Gaga CD case. According to psychologists, Manning’s superiors ignored obvious insider-attack warning signs indicated in his emotional and mental state.

Benchmarking normal activity and then monitoring for users who stray from that norm is an essential strategy for getting ahead of potential data and system breaches. But choosing the right tools is only part of the effort. Without sufficient training, efficient deployment and a good response plan, attackers could gain the upper hand


Which Highly Ranked Universities Operate Most Efficiently?

US News

By Robert Morse, Diane Tolis

December 6, 2012 RSS Feed Print


In these times of tight or reduced state budgets, it’s important for some colleges to efficiently spend their limited resources in order to produce the highest possible educational quality. U.S. News has developed an exclusive new list showing which schools are able to produce the highest educational quality, as determined by their place in our Best Colleges rankings, but spend relatively less money to achieve that quality.

U.S. News
measures financial resources by taking into account how much a school spends per student on instruction, research, student services, and related educational expenditures. Financial resources has a 10 percent weight in the Best Colleges ranking methodology.

The new list is based on operating efficiency, defined as a school’s 2011 fiscal year financial resources per student divided by its overall score (the basis U.S. News uses to determine its overall numerical rank) in the 2013 Best Colleges rankings. This calculation reveals how much each school is spending to achieve one point in the overall score and its position in the rankings.

The less a school is spending relative to its ranking, the more efficient it is in producing a quality education among its peers.

How should these results be interpreted? Schools that are featured on this list are doing a good job in managing their financial resources relative to other schools that may have larger state funding, higher tuition, or larger endowments. Many of these schools are likely to be more affordable in terms of tuition relative to others in their ranking category, since almost all of them are public universities.

Only schools that were numerically ranked in the top half of their ranking category in the Best Colleges 2013 rankings were included in this analysis. Additionally, only the categories that had a significant proportion of both public and private universities were considered.

The tables below show the universities that score highest on the operating efficiency measure. These are the schools that are providing a high quality education while spending relatively less than their peers to achieve it. Note: A school’s overall rank is partly based on a two-year average of expenditures per student; the financial resources figures displayed below reflect only the most recent year.

National Universities

School name (state) 

U.S. News National Universities rank

Financial resources per student (FY 2011) 

Florida State University



Brigham Young University–Provo (UT)



Miami University–Oxford (OH)



University of Alabama



College of William and Mary (VA)



Colorado School of Mines



University of Missouri



Binghamton University–SUNY (NY)



Indiana University–Bloomington



Ohio University



Rutgers, the State University of New Jersey–Newark



University of Georgia



Clemson University (SC)



University of South Carolina



Virginia Tech



Clark University (MA)



Duquesne University (PA)



University of Oregon



Texas Christian University



Missouri University of Science & Technology



Regional Universities (North)

School name (state) 

U.S. News Regional Universities (North) rank

Financial resources per student (FY 2011)

SUNY–Geneseo (NY)



Salisbury University (MD)



Towson University (MD)



College of New Jersey



University of Scranton (PA)



Regional Universities (South)

School name (state) 

U.S. News Regional Universities (South) rank

Financial resources per student (FY 2011) 

James Madison University (VA)



Appalachian State University (NC)



University of Mary Washington (VA)



College of Charleston (SC)



Belmont University (TN)



Regional Universities (West)

School name (state) 

U.S. News Regional Universities (West) rank

Financial resources per student (FY 2011) 

California Polytechnic State University–San Luis Obispo



California State University–Long Beach



Western Washington University



California State University–Fullerton



Gonzaga University (WA)



Regional Universities (Midwest)

School name (state) 

U.S. News Regional Universities (Midwest) rank

Financial resources per student (FY 2011) 

Truman State University (MO)



University of Wisconsin–La Crosse



University of Wisconsin–Eau Claire



University of Wisconsin–Whitewater



Drake University (IA)



The financial resources per student data above are correct as of Dec. 6, 2012.






Could the ‘platinum coin option’ solve the U.S. debt crisis?

Washington Post

By Brad Plumer,

Published: December 6


Associated Press – This is a U.S. Mint handout of the one-ounce $100 platinum coin. Under current law, the Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.

If President Obama wants to avoid an economic calamity next year, he could always show up at a news conference bearing two shiny platinum coins, each worth . . . $1 trillion.

Okay, that sounds utterly insane. But some economists and legal scholars have suggested that the “platinum coin option” is one way to defuse a crisis if Congress cannot or will not lift the debt ceiling soon. At least in theory.

Some economists suggest that platinum coins worth $1 trillion may curtail economic misery — in theory.

The U.S. government is, after all, facing a real problem. The Treasury Department will hit its $16.4 trillion borrowing limit by February at the latest. Unless Congress reaches an agreement to lift the debt ceiling, the government will no longer be able to borrow enough money to pay all its bills.

Last year, Republicans in Congress resisted raising the debt ceiling until the last minute — and then only in exchange for spending cuts. Panic ensued. So what happens if there is another showdown this year?

Enter the platinum coins. Under current law, the Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.

Under this scenario, the U.S. Mint would make a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.

“I like it,” said Joseph Gagnon of the Peterson Institute for International Economics. “There’s nothing that’s obviously economically problematic about it.”

In theory, this is much like having the central bank print money. But, Gagnon said, the U.S. government would simply be using the money to keep spending at existing levels, so it would not create any extra inflation. And if it did cause problems, the Fed could always counteract the effects by winding down some of its other programs to inject money into the economy.

Is the platinum coin option really legal? Apparently so.

It was raised during the 2011 debt-ceiling crisis by Jack Balkin, a law professor at Yale Law School. Under law, he noted, there’s a limit to how much paper money the United States can circulate at any one time, and there are rules that limit how many gold, silver and copper coins the Treasury can mint.


But there’s no such limit when it comes to platinum coins. It’s right there in the U.S. legal code: “The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”

Problem solved, right?

Well, maybe not. This strategy would not be risk-free. Congress could argue that the original law was intended to govern commemorative coins, not to finance the operations of the government. And, of course, the political blowback would probably be fierce.
Indeed, even Balkin now says said that he thinks the platinum-coin option is too risky. If Congress cannot or will not lift the debt ceiling, then most likely the Obama administration would have to start shutting down parts of the government so that it does not default on its debt. That, in theory, would prod Congress to act.

“All those other ideas [such as the platinum coin option] are very uncertain, and they could lead to complicated litigation,” Balkin said. “A government shutdown is much more straightforward.”

The platinum coin is only one of many out-of-the-box ideas that have been proposed to avoid a debt ceiling crisis. Some legal scholars have suggested that Obama could declare the debt ceiling unconstitutional under the 14th Amendment. Last year, Gagnon suggested that the Treasury Department could start selling off its gold reserves to pay its bills until Congress acted.

But the consensus seems to be that all of these options are wildly unlikely. A recent report by Chris Krueger, a policy analyst at Guggenheim Partners, suggested that such ideas as a 14th Amendment challenge or the platinum coins “are VERY low probability options.”

But not impossible. And if, for whatever reason, Congress does not raise the debt ceiling as part of the “fiscal cliff” negotiations, then some of these wacky ideas may get more attention



Dayton ranks third in high-tech job growth

But report says Ohio lags other states in ‘new economy’

Dayton Daily News

Posted: 6:25 p.m. Thursday, Dec. 6, 2012

By Dave Larsen

Two studies issued Thursday show that the Dayton area is among the top metros in the nation for high-technology job growth, but Ohio lags other states in its ability to thrive in the so-called “new economy.”

The Dayton area saw a 24.2 percent increase in the number of high-tech jobs created from 2010 to 2011, the nation’s third-largest increase behind Greensboro, N.C. and Columbia, S.C., according to Technology Works: Patterns of High-Technology Employment and Wages in the U.S.

Dayton added nearly 3,500 high-tech jobs during this period, the report said.

Ohio’s average growth in technology jobs from 2010 to 2011 was 4.6 percent, nearly twice the national average of 2.6 percent, the study said.

But Ohio ranks 32nd for having the necessary economic structure to adapt to a global economy that is increasingly dependent on knowledge and innovation for growth, according to the 2012 State New Economy Index.

Scott Koorndyk, the Dayton Development Coalition’s executive vice president of economic development and operations, agreed with the second study’s findings. He said the Dayton region “has to develop an innovation ecosystem” to meet the challenges of globalization and the digital economy.

However, Dayton is better positioned to succeed than other parts of the state because of its many research and technology assets, Koorndyk said.

“We’ve got the building blocks to resolve some of these challenges much quicker and in a much more effective way than others … statewide or across the nation,” he said.

Dayton has an above-average concentration of 18,000 high-tech workers, according to the Technology Works study by the Bay Area Council Economic Council, a public-private partnership based in San Francisco that produces analyses on economic policy issues.

The average salary last year for a Dayton-area high-tech worker was $77,638, the report said.

High-tech industries are defined as having a high proportion of scientists, engineers and technicians; a high proportion of research and development employment; production of high-tech products; and the use of high-tech production methods, according to the report.

Koorndyk said Dayton is home to 7 percent of Ohio’s overall workforce, but 12 percent of the state’s high-tech workers.

“We’ve got this massive research and development engine, Wright-Patterson Air Force Base. Five of the 10 Air Force Research Laboratory directorates are run out of Dayton,” Koorndyk said.

AFRL spends $2.2 billion annually on research and development, according to Koorndyk. “That infuses the culture of Dayton,” he said.

Other local technology assets include the University of Dayton and Wright State University research institutes, as well as large information technology firms such as LexisNexis, Teradata and Sogeti USA.

The Dayton Development Coalition projects a local technology industry growth rate of about 9 percent over the next few years, compared to 7 percent growth nationally.

“We believe we will grow at a faster pace. We believe we are developing and attracting that knowledge work force that we need,” Koorndyk said.

Ohio’s “knowledge jobs” ranking has dropped significantly over the last two years, according to the State New Economy Index. That report ranked Ohio 28th in the nation, down from 16th in 2010.

The index, which benchmarked the innovative capacity of all 50 states, was published by the Information Technology and Innovation Foundation, a non-partisan research and education institute headquartered in Washington, D.C. The nonprofit group’s mission is to formulate and promote public policies to advance technological innovation and productivity. It has published six such reports since 1999.

The ITIF study measures the economic structure of states, not their economic performance or policies. The report uses 26 indicators, divided into five categories that best capture what is new about the “new economy:” Knowledge jobs; Globalization; Economic dynamism; Digital economy; and Innovation capacity.

“Ohio fell in every indicator, but some to a greater extent than others,” said Luke Stewart, an ITIF economic analyst. The two biggest declines were in the immigration of knowledge workers from other countries or states, and manufacturing value added, which is the sum of unit profit, depreciation cost and labor cost, he said.

State officials were skeptical about the ITIF report’s findings.

“Traditionally these types of reports do not reflect the total picture of Ohio’s industries,” said Katie Sabatino, a spokeswoman for the Ohio Development Services Agency. “While Development appreciates the work that goes into them, recognize the evaluation lens used by its authors may be different from those who work more closely with Ohio’s economy,” she said.

The Development Services Agency, formerly known as the Ohio Department of Development, houses the Ohio Third Frontier, a $2.3 billion initiative designed to boost the state’s economy through investments in targeted innovation and technology.

Koorndyk said the ITIF report identified “things that we know are challenges for this region.” To meet those challenges, the Dayton area needs to align its research and development with local industry, increase its global fluency and transform its skilled workforce, he said.

Top 5 metro areas for high-tech job growth, 2010-11

  • Greensboro-High Point, N.C., up 36.3 percent
  • Columbia, S.C., up 28.2 percent
  • Dayton, Ohio, up 24.2 percent
  • San Francisco, up 20.1 percent
  • Ogden-Clearfield, Utah, up 19.3 percent

Source: Bay Area Council Economic Institute

Ohio’s “New Economy” rankings

  • Knowledge jobs: 28th (Down from 16th in 2010)
  • Globalization: 25th (Down from 24th in 2010)
  • Economic dynamism: 42nd (Down from 38th in 2010)
  • Digital economy: 35th (Down from 31st in 2010)
  • Innovation capacity: 26th (Down from 25th in 2010)

Source: Information Technology and Innovation Foundation




Neuron Completes Maiden Flight over Southern France

Defense Update

December 1, 2012 at 11:03


Dassault aviation carried out the first flight of the nEUROn, Europe’s unmanned combat air vehicle (UCAV) stealth technology demonstrator. The unmanned aircraft successfully completed its maiden flight from the Dassault Aviation flight test base in Istres, in collaboration with the flight test personnel of the French defense procurement agency (DGA).

nEURON taxi on the runway at Isters after landing. Photo: video via Dassault Aviation

Following this maiden flight nEUROn will continue to undergo testing in France until 2014, at which time it will be sent to Vidsel in Sweden for a series of operational trials. It will then go to the Perdadesfogu range (Italy) for further tests, in particular firing and stealth measurements.

At a length of 10 meters, and wingspan of 12.5 meters, nEUROn has an empty weight of only 5 tons. It is powered by a Rolls-Royce Turbomeca “Adour” engine.

The nEUROn technology UCAV demonstration program was launched in 2005 by the customer, DGA, and involves France, Italy, Sweden, Spain, Greece and Switzerland. It defines a future for the aeronautic excellence of Europe. With Dassault Aviation as prime contractor, the program was designed to pool the skills and know-how of Alenia Aermacchi (Italy), Saab (Sweden), EADS-CASA (Spain), HAI (Greece), RUAG (Switzerland) and Thales (France).


DOD begins planning for fiscal cliff

By Amber Corrin

Dec 06, 2012


The Defense Department warns that sequestration will harm troops returning from war and the programs they depend on. (Stock image by David Freund)

The Defense Department earlier this week received guidance from the Office for Management and Budget to officially begin planning for the spending cuts expected from sequestration, according to DOD.

“We are consulting with the Office of Management and Budget and have been instructed to pursue internal planning on sequestration,” George Little, DOD spokesman, said in a Dec. 5 press conference. “We are at the very start. We don’t have all of the details firmed up. Naturally, we hope very much that sequestration will be avoided. We don’t want to go off the fiscal cliff.”

Until now, DOD leadership, at least publicly, had continued its financial planning using the fiscal 2013 budget, which did not include the roughly 10 percent cuts sequestration is set to institute. Over the course of 10 years, the process would shave about $500 billion from DOD spending, in addition to $487 billion in spending reductions already planned.


Little said it is unlikely that the effects of sequestration, which was mandated in last year’s Budget Control Act as the consequence of the failure of a so-called “supercommittee” of lawmakers to agree on what could have been a more targeted set of budget cuts, will be felt immediately upon its Jan. 2 implementation. Instead, it is more probable there will be a period at the beginning of 2013 to sort out the specifics and implement new policies.

“We are going to have to do some detailed planning at some point on the numbers and the specific consequences of sequestration, which we’ve anticipated and already talked about,” Little said. “We expect in our planning efforts to identify not just numbers, but how we communicate to our 3 million-plus workforce, to prepare them for what may come down the pike.”

In a joint appearance with Secretary of Veteran’s Affairs Eric Shinseki in Washington on Dec. 6, Defense Secretary Leon Panetta, who has been vocal in his opposition to the measure, vowed that if leaders in Washington cannot come to an agreement halting sequestration it will have major impact on troops returning from war and the programs supporting them.

At a Dec. 3 appearance at National Defense University, Deputy Defense Secretary Ashton Carter described sequestration as “chaotic, wasteful, and damaging to every function of government and should not take place.”

Little echoed those comments at the Dec. 5 press conference, but did express some hope that a worst-case scenario may be avoided.

“If this is triggered, even in light of this absurd mechanism that was created to avoid absurdities, our intent is to not implement sequestration in an absurd way … inside the Department of Defense,” Little said. “Hopefully, Congress will come to resolution on sequestration, but we have looked at those impacts and will plan against them.”


Agencies set up plans to manage cuts if Congress, Obama fail to reach deficit deal

Washington Post

By Lisa Rein, Updated: Friday, December 7, 10:46 AM


Federal agencies are sharpening their plans for forced spending cuts starting Jan. 2 if the Obama administration and Congress cannot agree on a deficit reduction strategy in the coming days.

Some agencies envision furloughs for federal workers, while others are mapping out how to slow hiring and outside contracting and put programs on hold if the across-the-board reductions known as a sequester kick in, affecting millions of Americans.

With 25 days before $1 trillion in cuts over 10 years are set to start, the White House sent word this week to civilian and defense agencies to prepare for the worst to happen.

But the White House may be leading from behind. For months, some managers have been quietly preparing worst-case plans, having grown painfully familiar with budget uncertainty after a near-government shutdown last year and numerous stopgap budgets.

From the federal courts to the National Park Service, agencies have been sweating the logistics on how to shrink their day-to-day operations.


The court system, which faces a $555 million loss next year under an 8.2 percent cut mandated for civilian agencies, is preparing to close some district courts one day a week, impose employee furloughs of up to four weeks and reduce the hours of security officers who guard courthouses.

“We’ve all developed this master plan that nobody hopes we’ll have to enact,” said David Sellers, spokesman for the administrative office of the federal courts. A committee of court officials from across the country has met for a year to decide where the system would absorb the cuts, balancing furloughs with delayed trials.

“They’ve taken it very seriously and methodically,” Sellers said.

The Nuclear Regulatory Commission assured employees in November that no furloughs or layoffs are planned. Instead, to save money, outside contracts would be stretched out or stopped. The National Park Service has slowed some hiring for the tourist season, a strategy that advocates and former park officials said would have to continue in January.

The Defense Department is likely to impose an immediate hiring freeze on its civilian workforce, said a spokeswoman, Army Lt. Col. Elizabeth Robbins. Furloughs, rather than layoffs, would begin within a few weeks, she said.

And unions that represent federal workers are dusting off their manuals on when to call for bargaining with management over unpaid furloughs, which would probably be forced on thousands of employees.

“Nobody knows what’s going to happen with the fiscal cliff,” said Danette Woo, special park uses coordinator at the Mojave National Preserve in San Bernardino County, Calif. “What happens is totally out of our control, but it affects our ability to get our job done.”

Park managers have prepared a “budget constraint” plan that calls for layoffs of seasonal employees and program cuts, Woo said. Like other agencies, the Park Service in recent months has slowed hiring, travel and training.

At the NRC, “the agency has certainly worked under the assumption that sequestration is a very real possibility,” spokesman Scott Burnell said. “We’ve put the work into understanding how we would go about continuing to operate.”

The Office of Management and Budget asked agencies in an internal memo this week for more detailed analysis of their financial operations than was in a 394-page report the White House provided to Congress in September.

That report listed more than 1,200 agencies and federal programs that would lose anywhere from 8.2 percent (domestic) to 9.4 percent (military) of their budgets. About $2.5 billion would be excised from the National Institutes of Health and $555 million from nutrition-aid programs for low-income women, infants and children, for example.

Administration officials called this week’s notice “technical” planning given that agencies are living under a temporary budget based on funding at last year’s spending levels. They reiterated the White House’s optimism that Democrats and Republicans will reach a deal.

“This action should not be read . . . as a change in the administration’s commitment to reach an agreement and avoid sequestration,” said Jay Carney, the White House press secretary. The budget office “is simply ensuring that the administration is prepared” to order the spending cuts.

Under a law Congress passed last year to force its own hand in reducing the deficit, the federal budget would shrink indiscriminately by $108 billion starting in January and continue on that scale for eight years — divided between civilian and defense agencies.

Economists warn that the cuts could push the country back into recession.


Managers say they have learned from the spending and tax fights that have left them lurching from one stop-gap budget to the next in the past two years — and a near shutdown of the government in 2011. Meanwhile, anxious employees say uncertainty over the latest showdown is doing its own damage.

Until this week, agencies had no formal word from the budget office beyond a two-page memo in July. That missive instructed them to “continue normal spending and operations since more than five months remain for Congress to act.”

Lt. Gen. Jeffrey W. Talley, chief of the Army Reserve, reflected the this-isn’t-really-going-to-happen strategy when he told reporters in November, “I’m not . . . worrying about sequestration . . . because [Defense] Secretary [Leon E.] Panetta has told the departments, ‘Do not plan for it.’ ”

But nervous employees say they are in the dark about what might happen, and some are downright cynical.

“They cry wolf every time,” said Mike Granger, a computer programmer for the Navy at the Patuxent River Naval Air Station. “It always ends up being resolved. So I just ignore it.”

The sequester dates to the Gramm-Rudman-Hollings law, a deficit-reduction strategy Congress passed during the Reagan administration to force a balanced budget as the federal debt ballooned.

Five of these automatic cuts were triggered from 1986 to 1990, when Congress and the White House failed to reach spending targets. Four were automatically rescinded or substantially reduced by a budget agreement or later law. Only the first, in 1986, resulted in $11.7 billion in cuts.

Today, federal employees and contractors find themselves confronting the many what-ifs and gaming out the possibilities.

One line of thinking is optimistic: Congress will agree to tax increases and targeted spending cuts before its Christmas recess, and there will be no sequester. Or there will be, but with only some cuts. Or, if there is no deal by then, there will be soon thereafter. Another act of Congress would be required to undo the trigger.

“There’s just a lot of waiting and monitoring,” said Gary Somerset, spokesman for the Government Printing Office, where a task force has produced a list of cuts.

Administration officials point out that a sequester would not look like a government shutdown, which resulted from failed budget talks in 1995 and 1996, and came close to happening again last year.

Federal employees would still go to work — at least in the beginning, they say. The government would not cease to function. Furloughs would be weeks if not months down the road, because the cuts could be delayed until later in the fiscal year. The Budget Control Act of 2011 requires the reductions to take effect across the board, but it does not say they must start in the first month or two.

Still, federal budget experts note that January is three months into the fiscal year. That means the cuts must be compressed into nine months, which equates to reductions of 10 or 11 percent.

As the deadline nears, logistical issues loom. Managers face wrenching decisions about which employees they would furlough. A furlough of more than 30 calendar days, or more than 22 discontinuous work days, is considered a reduction in force. That would require the government to pay severance and allow employees to cash out their unused sick leave and vacation. It also becomes a mandatory subject of bargaining to determine who goes first.

“We have persistently asked the agency, ‘What are the plans? Can you tell us the plans?’ ” said Carolyn Federoff, a Boston-based attorney for the Department of Housing and Urban Development and official with the American Federation of Government Employees.


“They say, ‘Don’t worry about this, this is not going to be a problem,’ ” Federoff said. Truthfully, we have to be concerned.”

Steve Vogel and Alice Crites contributed to this report.


Cyber early warning deal collapses after Russia balks


By Aliya Sternstein

December 7, 2012


An accord involving the United States, Russia and other countries requiring that each nation provide advance warning of government cyber operations that might otherwise spark unintentional conflict collapsed on Friday after Russia dissented, U.S. officials said.

The 57-nation Organization for Security and Cooperation in Europe failed to reach the unanimous consensus needed to adopt the resolution. It was aimed at building trust and open communication to avoid cyberwar.

The politically-binding agreement by the United Nations-recognized organization would have operated similarly to the way that Russia and America decades ago drew red lines to avoid nuclear war.

“Russia today killed in the OSCE the first-ever set of multilateral cyber confidence building measures,” a U.S. official close to the discussions said in a statement. “These proposed transparency measures, agreed affirmatively by 54 of the 56 representatives, would have established the foundation for long-term international cyber risk reduction in the political-military field.”


The official called the move a “profound reversal” of two years of constructive cooperation on cyber issues across multiple international forums, including the UN. Last year, Alexander Kozlovsky, the leader of the Russian delegation to the OSCE, endorsed foundational provisions in a 2011 OSCE annual statement intended to guide future policy decisions.

The U.S. official speculated that Russia’s earlier willingness to sacrifice its traditional embrace of information control perhaps evaporated after the Arab Spring events. “Their prime concern appears not the resiliency of their networks, but the resiliency of their regime,” the official said.

On Tuesday, The Wall Street Journal reported a new website blacklist that Russia ostensibly implemented to protect children from offensive material is in effect a policy to suppress political dissent.

The foreign government has blocked 640 sites so far. “The law’s backers had insisted it was designed only to target child pornography and other offensive sites, but critics say it is a thinly veiled mechanism that would allow the government to shut down sites offering opposing views,” the Journal wrote.

Delegates on Thursday were anticipated to negotiate the accord at a meeting of the OSCE Ministerial Council in Dublin, which State Department Secretary Hillary Clinton attended. No such agreement was included in the organization’s road map to address security challenges that was finalized on Friday.


A draft resolution Nextgov reviewed on Wednesday would have compelled “confidence-building, stability and risk reduction measures” to address the implications of a nation state’s use of cyberspace, “including exchanges of national views on the use of [information technology] in conflict.”

The Russian Embassy in Washington and Permanent Mission of the Russian Federation to the OSCE did not respond to multiple requests for comment. State Department officials declined to comment.

OSCE spokesman Frane Maroevic on Friday said he could not comment on the views of individual nations, but “what I am sure is that we will continue working in this field.”


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