Skip to content

November 23 2013

November 25, 2013

23 November 2013



Pentagon Chief Sounds Alarm Over US Budget Cuts

Nov. 17, 2013 – 03:55PM | By AGENCE FRANCE-PRESSE


SIMI VALLEY, U.S. — Defense Secretary Chuck Hagel sounded an alarm bell Saturday about budget cuts he said threaten America’s security and global military role, while “gambling” over the risk of an unexpected threat.

The cuts, which amount to nearly $1 trillion for the Department of Defense over a decade, were “too steep, too deep and too abrupt,” Hagel told a defense conference in California.

“This is an irresponsible way to govern, and it forces the department into a very bad set of choices.”

Automatic cuts of $52 billion set to take place in fiscal 2014 represent 10 percent of the Pentagon budget.

The Navy’s global presence is already down 10 percent since sequestration began in March, while the Army has canceled training rotations for 15 percent of its forces and the Air Force 25 percent of its training events.

“The effects will be felt for a long period of time to come. By continuing to cancel training for non-deploying personnel, we will create a backlog of training requirements that could take years to recover from,” Hagel said.

“These cuts are too steep, too deep, too abrupt.”

The defense chief was speaking at the Ronald Reagan Defense Forum, a one-day event hosted at the late US leader’s presidential library northwest of Los Angeles.

The Pentagon has made clear to Congress and the White House “the growing difficulties we face in training, equipping and preparing our forces under a cloud of budget restraints and uncertainty,” Hagel said.

“These challenges are often not visible, but they are very very real, and they will become more visible as they further jeopardize the security of our country as our readiness, capability and capacity continue to deteriorate.”

The budget crisis comes as the US military is drawing back after more than a decade of war in Iraq and Afghanistan following the Sept. 11, 2011 attacks.

But Hagel warned that if a deal is not reached to stave off the deepest cuts, US forces might not be ready if another major conflict erupts unexpectedly.

“If sequester-level cuts persist, we risk fielding a force that is unprepared,” he said.

“In effect, we would be gambling that we will not face a major contingency operation against a capable adversary in the near-term.”

The sequester was devised as a poison-pill austerity program in 2012, with mandatory cuts spread over 10 years aiming to force battling Republicans and Democrats to compromise on a long-term program to reduce the country’s deficit.


But a deal never came and the White House was forced to lop $85 billion from spending between March and the end of the fiscal year on September 30, with nearly half of that from defense programs.

Hagel’s predecessor Leon Panetta also made no bones about the crisis facing the US military, in a panel discussion shortly preceding the current Pentagon chief’s closing speech.

Panetta said the cuts would impact “almost in every area where we have been able to respond, whether it’s military crisis, whether it’s a need to go in and try to rescue people, whether it’s the need to do a bin Laden operation.”

“The reality is, the cuts that are taking place are going to inhibit our ability to respond in every area. We are sending the world a message that the United States is going to be weaker,” he said.

“That’s the wrong message to send to this kind of world where we face the troubles we face today.”



US Air Force CSAR Mission in Jeopardy

No Funding for Rescue Helo in Sequester Budget

Nov. 17, 2013 – 03:52PM | By AARON MEHTA and MARCUS WEISGERBER | Comments


WASHINGTON — If sequester remains in effect, the US Air Force’s combat search-and-rescue (CSAR) mission is in danger of disappearing, according to multiple defense sources.

Funds for new CSAR helicopters are not included in the service’s fiscal 2015 budget proposal that includes sequestration spending cuts, the defense sources said. Moreover, funds to extend the lives of about 90 battle-worn Sikorsky HH-60G Pave Hawk helicopters is not part of the sequester budget.

Each US military service is developing at least two budgets for 2015, one that includes sequestration spending cuts and another that builds on the Pentagon’s fiscal 2014 budget proposal, which is $52 billion above the federal spending cap.

Funding for the Combat Rescue Helicopter (CRH) program, which would purchase more than 100 helicopters for the CSAR mission, fell below the cutting line as the service struggles to find savings under a sequestered budget.

About two-thirds of the Pave Hawk fleet is flown and crewed by active-duty airmen, while the rest come from the Guard and reserve.

For months, the Air Force has been poised to award the contract to a Sikorsky and Lockheed Martin team — the only publicly announced bidders — but has held back the contract due to the budget uncertainty.

Without long-term sustainment funds, the HH-60G fleet will eventually need to be replaced. Without CRH being funded, that replacement will not exist. In other words, if the budget plan remains, the Air Force would have to drop the CSAR mission — or at least, shrink it significantly.


The CRH program is the Defense Department’s second attempt in the past decade to replace its heavily used Pave Hawks, some of which have been performing military and civil rescue operations since 1982. The Air Force wants to buy 112 new helicopters.

In 2006, the Air Force awarded Boeing a contract expected to be worth $15 billion under the Combat Search and Rescue Helicopter program (CSAR-X). But after the Government Accountability Office upheld a protest from competitors Sikorsky and Lockheed Martin, over how the contract was handled, the deal was canceled in 2009. It took nearly 3½ years to relaunch CRH following the CSAR-X cancellation.

Service officials planned to award the CRH contract this year, but the program has again seen delays. Despite public statements that the Air Force desired multiple bidders, only one team — United Technologies subsidiary Sikorsky, working with Lockheed Martin — actually submitted a bid. Three other competitors dropped out under the belief they would not be able to meet the program price cap of $6.8 billion.

The service delayed a contract award until the first quarter of fiscal 2014 “due to additional time required to complete the source selection and Milestone B processes, as well as impacts from the DoD furloughs,” according to an Air Force spokesman.

If the service decides not to award a contract before the end of the year, it would likely need to inform Sikorsky by early December.

“We have not gotten any indication,” said David Morgan, Sikorsky’s director of Air Force business development. “We are waiting with great anticipation. I would assume that we will hear something, probably in early December, whether it is progression towards contract award or an extension of source-selection process.

“I don’t think we’ll hear any bad news because I think the budget process is still playing out in Congress, we’re still under a [con­tinuing resolution], so I don’t think anything will be final until the president submits his budget in February,” Morgan added. “Either they will progress or there will be a delay. I don’t think we’ll hear any bad news until we hear all the bad effects of sequestration.”

The company will need to update its pricing for the competition if the source-selection process is extended, but Morgan said that should result in very little change, mostly based on updated inflation figures.

While it sorts out whether to move forward on the CRH contract, the Air Force is facing internal fights about whether the CRH program is even necessary.

Air Force Special Operations Command (AFSOC) spent several months this summer pushing to take over the CSAR mission, under the belief that its Bell-Boeing CV-22 Osprey tilt-rotor aircraft could perform the mission at a lower cost. That idea has met resistance, both on Capitol Hill and from Air Combat Command, which operates the mission.


Air Force Options

The notion that mission-specific platforms could be in peril from sequestration is not new. Service officials have been very clear that their top modernization programs — the F-35 Joint Strike Fighter, KC-46 tanker replacement and the new long-range strike bomber — will be protected in the budget. Anything else is potentially on the table.

“We’ve looked at every modernization program in the Air Force,” Air Force Chief of Staff Gen. Mark Welsh said last week. “If we go full sequestration, we will have to cut about 50 percent of them just to be able to afford some level of readiness and to modernize the force.


“The fact is, General Welsh is in a really tough spot,” said Mark Gunzinger, an analyst with the Center for Strategic and Budgetary Assessments who served in a number of Pentagon roles. “Various advocates make the argument that their platform of choice is a wonderful system, and it’s usually true. But given a $1.2 trillion cut in defense spending, what do you retire? You have to make tough calls and you have to base force structure cuts on a vision [for what prepares you for the future].

“If the Air Force makes the decision in their [sequester-level budget] to discontinue funding CRH, I assume it has an alternative plan for the combat rescue mission, be it upgrading current platforms or eventually procuring something else,” he said. “I just can’t see walking away from that mission.

“I think it’s too early to start criticizing such a move because nothing is final until the president’s budget is released, and I’m sure there are a lot of options that are in consideration. The fact is that under a sequester the Air Force — all of the services — are not going to be able to support every mission area as they have in the past.”

A major life-extension program for Pave Hawks may be cheaper than buying new platforms in the short term, but Gunzinger warns that such a “short-term strategy” could lead to larger costs.

Taking funds for the new rescue helicopter may be the service “circling the wagons around their top three programs,” said Richard Aboulafia, vice president of analysis with the Virginia-based Teal Group. “CRH/CSAR is conspicuously absent from that list.”

Like Gunzinger, Aboulafia is skeptical the service could cut the mission entirely. It is more likely the Air Force would try to downsize the force in order to extend the life cycle of the Pave Hawks, he said, which could get them through the lean years intact.

“They can probably buy themselves a few years with this strategy, but longer than that and they’ll need either a return to CRH or a major [service-life extension],” said Aboulafia, adding that using some CV-22 Ospreys for the mission could also prevent wear and tear on the Pave Hawks.

Proponents of the mission argue that it is important to get the CRH upgrade done as soon as possible.

“The people that fly this mission, they have been deployed so much, and they have worn this equipment out so bad that it is a big deal to be able to address this,” retired Gen. T. Michael “Buzz” Moseley, former Air Force chief of staff, said in an interview with Defense News.

Moseley was perhaps the most vocal, high-level advocate for the CSAR mission during his tenure as chief. Now a consultant for Lockheed and others, he said his passion for the mission stems well beyond his business allegiances.

“We need to somehow focus on modernization and recapitalization of that mission area so it is as survivable as we can make it and as capable as we can make it,” Moseley said. “So, this latest inclination of buying new H-60s, that’s fine. That’ll work like a champ.”

If that can’t get done, Moseley said, the next best option is to sustain the current fleet.

“Now we’re at a point where it looks like the most realistic program would be to buy some new Blackhawks and [modify] them with the latest gear, which will be OK,” he said. “It just won’t have the range that the bigger helicopters would have, but we’re where we are.”

As chief, Moseley accelerated CSAR-X by five years and made it the service’s No. 2 acquisition priority, behind purchasing a new tanker.

While at the Pentagon, Moseley proposed buying one helicopter that could meet the missions of CSAR, continuity of government, missile field security and Marine One. Three different types of helicopters perform those missions.

The former chief also dismissed the idea of moving the CSAR mission into AFSOC.

“This is not a special ops mission. I just reject that and find it curious that people keep bringing that up,” he said. “This has nothing to do with special operations. This has everything to do with having to go at high noon off of a scramble alert pad to go pick somebody up right now.”


GPS Backup Plans Still Incomplete


08:00 AM

Elena Malykhina

Agencies tasked with developing backup plans for federally run GPS systems are making insufficient progress.

The federal agencies responsible for developing backup capabilities for GPS — the government-run global positioning system that has become part of daily life — are not making sufficient progress in meeting a presidential directive issued nearly a decade ago, according to a new report by the Government Accountability Office, the nonpartisan investigative arm of Congress.

The threat of disruptions in the satellite network and support systems that provide precise positioning and timing data to the public (and to the nation’s 16 critical infrastructure sectors) has been a concern for many years. That’s why a National Security Policy Directive (NSPD-39) tasked the Department of Transportation and the Department of Homeland Security in December 2004 to jointly develop backup capabilities in response to potential natural and manmade GPS disruptions.

The directive instructed the DOT and DHS to create a plan for detecting and mitigating GPS interference. It also required them to coordinate efforts to “develop, acquire, operate, and maintain backup capabilities that can support critical civilian and commercial infrastructure during a GPS disruption,” the GAO report said.

The DHS is responsible for coordinating the government’s national effort to protect critical infrastructure. The DOT is the lead agency for all civilian bodies involved in the development, management, and operation of GPS products and services.

The agencies have launched a number of efforts to fulfill the directive. The DOT has been researching GPS alternatives for aviation, while the DHS has an initiative dedicated to GPS interference detection and mitigation. It is also exploring a potential nationwide backup to GPS timing — a feature widely used in critical infrastructure. However, GAO investigators found many of these tasks remain incomplete.

In 2012, the DHS published the GPS National Risk Estimate after conducting a scenario-based risk assessment for four critical infrastructure sectors: communications, energy, financial services, and transportation systems. However, the GAO found that the risk estimate lacks key characteristics of risk assessments outlined in the DHS risk management guidance. Consequently, it remains unfinished and unsuitable for mitigation planning, setting priorities, and resource allocation.

“A plan to collect and assess additional data and subsequent efforts to ensure that the risk assessment is consistent with DHS guidance would contribute to more effective GPS risk management,” the report said.

Another shortcoming is the lack of collaboration between the agencies; DOT and DHS leaders haven’t clearly defined their roles to meet the directive. The report recommended that they establish a formal, written agreement that explains how the agencies plan to share responsibility, and that they “set forth the agencies’ plans for examining relevant issues.”


The US government has invested more than $5 billion in GPS since 2009 but provides the service free of direct charge to users worldwide, according to the report. The service consists of three segments: the user segment, which depends on receivers to collect and process signals from orbiting satellites; the ground-control segment, a global network of ground facilities that track satellites and monitor their transmissions; and the space segment, which consists of at least 24 satellites. The ground and space segments are operated by the US Air Force.

The GAO said the inability to mitigate GPS disruptions could result in billions of dollars of economic loss. GPS experts associated with the risk estimate and others interviewed by the GAO expressed concern that current strategies may not be sufficient to mitigate GPS disruptions.

In a letter to GAO leaders regarding the report, the DHS did not agree with all the recommendations, and it remains to be seen what actions the department will take in response.


U.S. Military Eyes Cut to Pay, Benefits

Joint Chiefs Grapple With Less to Spend

The Wall Street Journal

By Julian E. Barnes 1 hour ago


SIMI VALLEY, Calif.—The U.S. military’s top commanders, groping for ways to cope with a shrinking Pentagon budget, have agreed to a plan that would curb the growth of pay and benefits for housing, education and health—prized features of military life that for years have been spared from cuts.

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, said in a weekend interview that without such changes, the cost of military personnel would soon rise to 60% from about half of the defense budget.

“What we have asked these young men and women to do over the last 10 years, we can’t pay them enough,” Gen. Dempsey said during a conference at the Ronald Reagan Presidential Library. “Having said that, we also have an institution to manage.”

Military officials haven’t revealed details of the plan, which still must be approved by the Defense Secretary Chuck Hagel and President Barack Obama before it is sent to Congress for approval.

Gen. Dempsey said the chiefs would unveil the changes when the proposed military budget is released in February. He said the new plan wouldn’t immediately cut the benefits received by service members or retirees.

Over the past nine months, the Joint Chiefs of Staff have been analyzing military compensation—from pay and health benefits to housing allowances to the discounted prices at base commissaries.

Previous efforts to curb benefits have met stiff opposition from veterans groups and lawmakers. Gen. Dempsey said the military’s previous efforts to change compensation were flawed because they were one-year fixes. The new approach would offer a multiyear plan to slow the growth of military compensation.

The Pentagon will make a persuasive argument to lawmakers that the changes are needed to balance the budget and fair to troops, Gen. Dempsey said.


“We have the analytic tools that potentially we didn’t have before,” he said. “We have a body of knowledge that has convinced us doing it once is the right answer.”

Lawmakers are far from certain about the plan.

“Last year Congress established a compensation review commission to look at this issue, and we have not yet received their feedback,” said Rep. Howard “Buck” McKeon (R., Calif.), chairman of the House Armed Services Committee. “I would like to see how much we can get out of institutional reform before we look at cutting benefits for the troops.”

Without curbs on compensation-spending growth, there will be too little money for building new weapons systems or training forces in 10 years, Gen. Dempsey said during the interview Saturday.

Off the table for now are changes in the retirement system. Because the military hopes to allow current service members to keep their existing retirement plans, it will be two decades until any savings from changes in military retirement are realized, making shifts in the program less urgent.

Gen. Dempsey made his comments on the sidelines of the Reagan National Defense Forum.

During the conference, current and former Defense officials, as well as members of Congress, spoke about the need to approve Pentagon budgets and lift the across-the-board government spending cuts known as the sequester.

“You can’t expect this country to maintain a strong military if we aren’t maintaining some kind of common-sense budgeting,” Leon Panetta, the former Defense secretary, said at the forum. “We are sending a message that the United States is going to be weak and that is the wrong message to send.”

If Congress doesn’t agree to lift the sequester, the Pentagon faces $52 billion in cuts in January. About $41 billion was cut this year from military spending.

Mr. Panetta’s successor, Mr. Hagel, said in a speech that the military’s ability to respond to crises was impaired by budget cuts.

“Inevitably, we are shrinking the size of the force that is ready and available to meet new contingencies or respond to crises across the globe,” Mr. Hagel said.

Gen. Dempsey said in the interview that if the sequester stayed in place, a large number of military units wouldn’t be ready for war or other duties. Under the sequester, the military in five years will be without the necessary depth to tap in the event of unforeseen crises, he said.

“You have just what you need,” Gen. Dempsey said. “But my view of the future is, just what you need is not enough.”


How Leap Motion tracks what it can’t see

We’re not at “Minority Report” quite yet, but the latest Leap Motion upgrade and its new Freeform software have brought us one step closer to the dream of next-gen computing.

by Nick Statt

 November 20, 2013 8:00 AM PST

The new software upgrade to Leap Motion, which will be pushed to all devices in the coming months, makes the device’s tracking even more precise to allow for unprecedented movement.

(Credit: Leap Motion)

Leap Motion, makers of the matchbox-sized motion tracker that launched back in July, has gone even further in its efforts to make interacting with computers in open space as accurate and powerful as possible. An upcoming software upgrade announced Wednesday will allow any Leap Motion device to perform far more precise tracking by viewing one’s hand as a whole object without needing to see its every move, allowing for new and more accurate forms of interaction.

The upgrade, which has been in the works for about a year and marks the first substantial overhaul to the device’s software, is going out to all 85,000 developers in Leap’s open-source community shortly and making its way to all Leap devices in the coming months, said CEO Michael Buckwald. “It takes the incredible tracking in our current generation of Leap and takes it the next level by being able to track things even when the device can’t see them,” he said.

“The way our tracking works now is what you see is what you get,” said CTO David Holz. The upgrade, Holz explained, will let Leap track the hand as a general object now, allowing for actions like pinching, crossing fingers, moving one hand over another, and hand-to-hand interactions like brushing and tapping fingers on one another.

While those more precise movements sound arbitrary on the surface, the added accuracy to the Leap Motion tracking opens up an entirely new level of depth to hand movement that developers can utilize for new inputs or increased functionality.

“This makes it easier for developers to build even better physical experiences. It’s about bringing everything closer to that original vision: how to bring the incredible power of hands and fingers to computers and make that interface disappear into the background,” Buckwald added. “It’s about making it as close to reality as possible.”

“A lot of these improvements are important, but you don’t necessarily notice them until you’re used to the first,” Holz said, noting how consumers are now conditioned to smartphone upgrades. “Otherwise they would never release a new phone. They would just wait until they had one that was infinitely fast.”

And much in the same vein, Buckwald said, of Elon Musk’s demo of spacecraft part building with Leap Motion in August, the company is also releasing for free a creation software tool called Freeform that allows users to experiment with geometric creation and manipulation. Like playing with clay on a pottery wheel, the app lets users distort any number of premade objects — as well as import their own — with a slew of tools and variables like object material to create digital sculptures and even 3D-printable objects.

“There are already apps for the very high end, like the SpaceX video using Siemens software with a Leap,” Buckwald said. Freeform is intended to be somewhere between those professional-grade applications and one’s that everyday consumers will find accessible.

The company’s new Freeform application.

(Credit: Leap Motion)

“The holy grail for this sort of this thing is that an 8-year-old could walk up, put their hands out, and then play with this. But someone who is older and has been using this for a while can really build something sophisticated with this,” Buckwald added. “I think we’ve struck that balance.”

Freeform is just one a growing number of applications Leap Motion has urged developers to create around motion tracking, from art and educational tools to musical instruments and video games. Since launching its Airspace app store, the company has seen its application count double and hopes to have 150 by the end of the year. It has also made in-roads in adoption, getting its device in thousands of retail stores in 12 countries, as well as embedding the Leap technology directly within HP’s Envy 17 laptop through a unique partnership, integration Buckwald and his team hope to expand to many other devices and form factors.

“What were about is not just making things simpler for professionals, but also making it so that people who don’t have has much ability with technology now can do more,” said Holz.

“It doesn’t matter if it’s possible or even if it’s reasonable. It has to be easy,” Holz added. “Basically, we’re going towards a point where you can have a indistinguishably real, but still in some way synthetic, digital reality that you can interact with, but is more powerful than the reality we normally have because we define all the rules. That’s really interesting, but it’s a long journey.”



We Haven’t Won Yet on Export Control Reforms

By BILL GREENWALT     on November 21, 2013 at 4:30 AM

The defense industry is hard-pressed for good news these days after budget cuts, sequestration and the government shutdown. But there is one bright spot. The industry received some good news last month when new export control reforms went into effect. The reforms involved transferring authority for key categories of arms exports, including military aircraft parts and engines, from the State Department to the Department of Commerce.

The move from State to Commerce means that companies wishing to sell these parts will face fewer burdensome regulations, helping to sustain exports and providing needed relief for America’s defense industrial base. But, as helpful as this change has been, the most important item on the export control reform agenda will be less about the ability of US defense firms to sell abroad than whether the US military has access to cutting edge technology from commercial firms who are not normally considered a part of the defense industrial base.

Export control reform will continue to be a critical national security issue because of changes in global research and development. In the past, the federal government dominated global R&D spending so strict export controls were created to protect this dominance.

Today, American R&D is predominately funded by the commercial market, one that is increasingly globalized. As commercial products and services become cheaper, more reliable and more advanced than their military equivalents, future military dominance will accrue from leveraging this commercial innovation for national security purposes. However, the commercial firms that control this knowledge will not necessarily support the U.S. government if export controls make it difficult or impossible to sell their products abroad.

Before the latest reforms, anything that fell under the State Department’s jurisdiction acquired an “ITAR taint” because they fell under the jurisdiction of the International Traffic in Arms Regulations (ITAR), the US government regulations that control the export and import of defense-related articles and services on the State Department’s US Munitions List.

US commercial companies watched as the “ITAR taint” decimated their role in emerging commercial markets, especially in space and night vision, as European competitors sprang up to grab market share. This lesson has not been lost on the private sector. It remains to be seen whether the new capability-based export control reforms will be enough to quell concerns by dynamic, innovative commercial firms about the risks of the process.

Before recent export control reforms, companies engaged several strategies to try and avoid US ITAR controls.

The first strategy is to never do business with the federal government. The second is to refrain from selling a product to the government until that product has wide distribution in the commercial marketplace. A third strategy is to shift these kinds of technologies and product developments overseas and allow overseas R&D funds to mature both the technology and the product to avoid the reach of U.S. export controls and security requirements. If the lines drawn by the US government between current and future commercial and military technologies continue do not accurately reflect technology and market trends companies will keep using these strategies.

This is easier to do because both the federal government and the United States as a whole account for a declining share of global R&D. As recently as 2002, the US accounted for one-third of global R&D. Today, this has slipped to about 28 percent, with no reason to expect anything other than a further decline. American commercial industry has recognized this trend and has opened R&D facilities around the globe. For their part, foreign companies are increasingly at the forefront of new potential “dual-use” technology development. The products derived from this rise in overseas R&D will be available to all countries, both friend and potential foe.

It is not clear whether the Pentagon has recognized the importance of globalization to its future development of weapon systems, notwithstanding much talk about the subject as far back as the Clinton Administration. With America’s share of global innovation funding shrinking, the Pentagon will be forced to turn to commercial US and international suppliers to buy the latest technology. At the same time, the threat of burdensome export control regulations will provide real disincentives for corporations to do business with the US if arms export control reforms do not continue.

This will mean that many commercial and foreign companies may think twice before bringing their innovative ideas to American shores and to Pentagon laboratories.

In an increasingly interconnected world, commercial and foreign innovation will be a vital component of preserving American military technological supremacy into the future because the U.S. military will be increasingly unable to afford to replicate commercial technology in military unique facilities and defense firms. Yet, this supremacy is at risk if Congress and the federal government believe the problem is now solved and they do not get serious about reforms that address how export controls impact technology cooperation and commercial R&D decisions in a globalized world.

In this context, the current reforms are an important—but incomplete—step. The Obama administration is to be commended for pushing ahead where previous administrations had failed, but much, much more work is yet to be done.


Bill Greenwalt, a former U.S. deputy undersecretary of defense for industrial policy, is a visiting fellow at the American Enterprise Institute’s Marilyn Ware Center for Security Studies.


Government Turns Bailout Profit Despite GM Loss

November 21, 2013, 5:16 PM


Five years after the U.S. government started injecting hundreds of billions of dollars into auto makers, financial institutions and the housing sector, American taxpayers can expect a small profit from an era of historic federal bailouts.

The U.S. Treasury, which pumped out $421.6 billion for its financial-crisis rescues, will have recouped more than $432 billion from bailout recipients once it unloads its remaining General Motors Co.GM +0.79% stock. The Treasury Department, which announced the final steps Thursday, expects to sell the government’s position in GM by the end of the year.

The GM bailout itself hasn’t been profitable and is currently on track to lose more than $10 billion.

The overall profit of more than $10 billion is far better than many lawmakers expected in the depths the crisis, which pushed insurance giant American International Group Inc.AIG +0.67% to the brink of collapse and led two of America’s three major domestic auto companies to file for bankruptcy. The bailouts, drawn from the $700 billion Troubled Asset Relief Program, were designed to halt a financial panic and prevent a deeper economic downturn.

The return of little more than 2% after five years fails to keep up with the rate of inflation. The return also doesn’t account for the intangible costs, such as the “moral hazard” effect that could lead some firms and their investors to expect government bailouts down the road.

The Treasury’s largest profit comes from its rescue of major financial institutions. Citigroup Inc.C +0.74%, Bank of AmericaBAC +0.55% and others fully repaid the government and handed over billions more in dividends.

The U.S. invested in a total of 707 financial institutions under TARP. Most were community banks. At the end of last month, Treasury still held stakes in 97 small banks that had failed to repay the government. The department also has sold some positions in other banks at a loss.

The government is on pace to lose more than $15 billion from the rescue of Chrysler Group, GM, and GM’s former finance arm, now known as Ally Financial Inc.


Even with that loss, Treasury officials say the investment paid off because the auto industry has added 340,000 jobs since 2009 and car sales have increased steadily.



OMB Sets Agency Deadlines To Strengthen Cybersecurity

Elena Malykhina

November 21, 2013


The Obama administration issues new guidelines for continuous monitoring programs to bolster information security.

The Office of Management and Budget (OMB) has directed the heads of all federal departments and agencies to implement measures to safeguard federal information systems and the information they process and store.

Among other measures, the OMB has made cybersecurity one of 14 cross-agency performance priority goals that agencies are responsible for achieving. And the memo to federal agencies provides guidelines for managing information security risks through continuous monitoring processes established by the National Institute of Standards and Technology.

OMB Director Sylvia Burwell said in the memo that all agencies must establish information security continuous monitoring (ISCM) programs that help them manage security risks and address how they authorize information systems (and the environments in which they operate) on an ongoing basis. “All strategies must address the agencies’ plans for transitioning to and maintaining consistency with federal information security policies, standards, and guidelines.”

To firm up the nation’s cybersecurity approach, Burwell also directed agencies to develop plans in coordination with the Department of Homeland Security (DHS).

Another critical component of the OMB’s initiative to fully implement ISCM across the government is a push for standardization. Burwell said ISCM must become an “agency-wide solution” for deploying products and services. Under the DHS Continuous Diagnostics and Mitigation (CDM) Program, federal, state, and local governments can deploy a basic set of capabilities for continuous monitoring as part of a blanket purchase agreement (BPA).

In August, the General Services Administration and the DHS awarded a BPA to 17 vendors that supply hardware and software for implementing continuous-monitoring-as-a-service. The contract provides a “consistent, government-wide set of information security continuous monitoring tools to enhance the federal government’s ability to identify and respond, in real-time or near real-time, to the risk of emerging cyber threats,” Burwell said.

The memo set deadlines of Feb. 28, 2014, for agencies to develop their ISCM strategy and April 30, 2014, for naming specific individuals who will manage ISCM programs. Agencies are also required to verify by May 30, 2014, that all information systems are authorized to operate according to federal requirements before deploying their continuous monitoring initiatives. Those initiatives are part of a broader effort to make continuous monitoring central to agency information security controls by fiscal year 2017.


The DHS is tasked with training agency managers on how to implement ISCM. It will also provide contract support to agencies that obtain ISCM services through the CDM Program, the memo said. The initial suite of products available under the BPA covers hardware asset management, software asset management (such as malware management), configuration setting management, and common vulnerability management. The suite will expand to cover additional capabilities.

“By strengthening the underlying information technology infrastructure through the application of state-of-the-art architectural and engineering solutions, agencies can improve the effectiveness of the safeguards and countermeasures protecting federal information,” Burwell said.



DoD seeks plan to shut all U.S. commissaries

Nov. 21, 2013 – 06:00AM |

By Karen Jowers

Defense officials have reportedly asked the Defense Commissary Agency to develop a plan to close all U.S. commissaries — about three-fourths of its stores, according to a resale community source familiar with details of a meeting with representatives of the Joint Staff and Pentagon comptroller’s office.

The source, who spoke on condition of anonymity, said the meeting was held within the last few weeks and was part of preparations for the fiscal 2015 DoD budget request that is due out on February.

That DeCA has been asked to prepare such a draft plan does not mean commissaries would close anytime soon. Even if such a plan was included in the defense budget request for fiscal 2015 — almost a year away — it would have to be approved by Congress, where many lawmakers would oppose it.

The Military Coalition, comprised of more than 30 military and veterans advocacy groups sharing a common agenda, also would fiercely oppose such a plan.

Still, the fact that defense officials want DeCA to draft a plan for how it potentially would carry out such a move is another sign of the heavy budget pressures weighing on the Pentagon as a result of sequestration.

DeCA has 178 commissaries in the U.S., including Alaska and Hawaii. Almost 70 stores operate overseas. Operating costs for the overseas stores account for 35 percent of DeCA’s budget and 16 percent of total worldwide sales.

Commissary officials negotiate lower prices for products based on volume. Closing all or most U.S. commissaries would lead to higher prices and a degraded benefit in remaining stores, Tom Gordy, Armed Forces Marketing Council president, said in written testimony to a panel of the House Armed Services Committee on Nov. 20.

The council represents over 330 manufacturers of products sold in commissaries, exchanges and other military venues.

The proposal to close U.S. stores was not discussed at the hearing, but in his written testimony Gordy said closing U.S. stores “would eliminate the benefit for millions of families, breaking a commitment that has been made to every service member.”

That such a proposal would come from within DoD is “very concerning,” said Steve Rossetti, director of government affairs for the American Logistics Association.


Commissaries are “one of the most valued benefits,” he said. “For what this costs the department, they get a huge return,” not only in terms of the benefit itself but in other factors such as jobs for military spouses. About 30 percent of DeCA employees are spouses.

DeCA receives nearly $1.4 billion in annual taxpayer subsidies. It has reduced its annual funding requirement by $700 million over the last 20 years, said DeCA Director Joseph Jeu.

Jeu said DeCA is constantly looking for ways to save money, but added that the agency has no more “low-hanging fruit” to cut.

But Rep. Joe Heck, R-Nev., an Army reservist, said other proposals under consideration include raising the commissary surcharge to 10 percent from the current 5 percent; raising prices by 2 percent to 3 percent to pay for shipping products to overseas stores; and creating an “enhanced” commissary that would sell other products at higher markups.

Any such changes would have a “great impact” on troops and families, Jeu told lawmakers.

Heck said that if such steps are necessary to maintain the benefit, DoD officials must consider them. “I encourage you to take that kind of perspective,” he told Jeu.



Bill would end pensions for new feds

Nov. 18, 2013 – 06:00AM | By SEAN REILLY | Comments

Newly hired federal employees would not be eligible for traditional pensions under a bill reintroduced last week by Sen. Richard Burr, R-N.C., and two colleagues.

The measure, which would also apply to new members of Congress, would end the defined benefit portion of the Federal Employees Retirement System (FERS) for employees who come on board starting six months after it is signed into law, according to a news release from Burr’s office.

New federal employees could still participate in the Thrift Savings Plan,the federal government’s equivalent of a 401(k)-type program under which agencies match employees’ contributions up to 5 percent of their salaries.

“Right now, federal government workers receive far more generous retirement benefits than private-sector employees,” Burr said in the release. For taxpayers, he added, the cost is “unsustainable.”

Current federal workers and retirees would not be affected.

Co-sponsoring the bill are Sens. Tom Coburn, R-Okla., and Saxby Chambliss, R-Ga. A similar measure introduced by Burr in 2011 never got out of a Senate committee.

But pressure on the status quo is coming from other quarters. U.S. Postal Service leaders, for example, would like to end FERS defined benefit pensions for new employees; a Senate bill introduced in August would give the mail carrier the green light to bargain over the issue with its unions.

On a separate track, the Obama administration has proposed phasing in a 1.2 percent increase in workers’ share of contributions to both FERS and the Civil Service Retirement System over three years.

For FERS participants, the proposed change would boost their share of contributions from 0.8 percent of salary to 2 percent, while CSRS employees would pay 8.2 percent, compared to 7 percent today.

The White House has broached the proposal in both its 2013 and 2014 budget requests; lawmakers have not acted on it.


Ohio invests $10M to spur UAS business growth

by Press • 20 November 2013


A $10 million investment by the state of Ohio could help improve investment in local defense industry-related resources, including unmanned aerial systems, during the next two years.

The funds — $5 million each in 2014 and 2015 — were released by the Ohio Controlling Board and goes to the Dayton Development Coalition. The money will go in part toward strategies to attract the UAS industry, as well as other aerospace production capabilities to leverage gains at Department of Defense facilities in Ohio.

The Ohio Department of Development requested the funding specifically mentioning economic development efforts in Dayton, both in attracting more resources as budget constrains force consolidations nationally, and attracting more activity at research sites around Ohio. The money was released to Development Projects Inc., which receives public funds for the DDC.

Dayton is lobbying to be one of six sites approved by Federal Aviation Administration to be a testing site for Unmanned Aerial Systems, a move which could spur development locally from the emerging industry. Word on whether the city is selected is expected around the end of the year.

“Ohio and the Dayton region have a great opportunity to capitalize on existing aerospace industry assets, and to be on the leading edge of new unmanned systems development,” said state Sen. Chris Widener, R-Springfield, in a statement.

The nonprofit Wright State Applied Research Consortium will match the Ohio funding with $1.25 million in funds per year, as Wright State University seeks to build research capabilities centered around human performance technologies.

Another $1.25 million is being matched by the Human Performance Consortium.

In addition to Wright-Patterson Air Force Base, the region’s largest employer, Dayton hosts a number of other UAS assets, including the 187th Fighter Wing of the Ohio Air National Guard, which operates UAS out of Springfield-Beckley Municipal Airport, and the Ohio/Indiana UAS Center.

By Sandra I. Erwin 

November 20, 2013


Defense industry leaders are growing uneasy over the number of unfilled senior civilian posts at the Pentagon. Many of the current vacancies have not been filled because the Obama administration has not yet named candidates. Others are positions for which nominees still await Senate confirmation.

At least 30 percent of top civilian Defense Department positions as of mid-November either remain vacant or are being filled by officials in acting capacity, according to estimates by Arnold L. Punaro, retired Marine Corps major general and chairman of the National Defense Industrial Association.

“I was surprised to see that so many positions at the Pentagon are vacant,” Punaro said. He worries about a leadership vacuum at a time when the Defense Department is grappling with massive budget problems and thorny policy issues. This is also problematic for contractors as they cope with fiscal uncertainty and look to the Defense Department for guidance, Punaro said.

If the Senate stalemate over nominees continues, the Pentagon could see more vacancies in its top ranks, he said. If the Senate doesn’t move to confirm nominees soon, by Jan. 1, “We’ll be at 40 percent.”
Senior Civilian Vacancies 
Submitted resignation, no replacement named:
• Deputy Secretary of Defense 
• Deputy Chief Management Officer 
• Undersecretary of Defense for Policy 
• Assistant Secretary of Defense for Global Strategic Affairs (Nominated for Deputy Director, NNSA) 
• Undersecretary of the Army (Nominated for U.S. Ambassador to Saudi Arabia) 
• Assistant Secretary of the Air Force for Manpower & Reserve Affairs 
Vacant (or acting), no replacement named:
• Principal Deputy Undersecretary of Defense for Policy 
• Assistant Secretary of Defense for Homeland Defense & America’s Security Affairs 
• Assistant Secretary of Defense for Asian & Pacific Affairs 
• Assistant Secretary of Defense for Reserve Affairs 
• Assistant Secretary of Defense for Research and Engineering 
• Assistant Secretary of Defense for Logistics and Materiel Readiness 
• Assistant Secretary of the Air Force for Financial Management & Comptroller 
• Assistant Secretary of the Army for Manpower & Reserve Affairs 
Vacant (or acting), awaiting Senate action:
• Undersecretary of Defense for Personnel and Readiness
• Director of Cost Assessment and Program Evaluation
• Secretary of the Air Force
• Under Secretary of the Navy
• Assistant Secretary of the Air Force for Acquisition

Source: The Punaro Group



FAA Roadmap Follow up

by Patrick Egan • 22 November 2013


An update to the previous story…


At the end of that story, I attached a copy of the letter that was sent to the Associate Administrator for Aviation Safety, Ms. Peggy Gilligan. The letter highlights some of the arguments for small business representation on the current UAS ARC. The small business stakeholder has no representation on the current ARC thus being disenfranchised from the process.

The roadmap and supporting documentation reference the charge of the new ARC, reviews of the NPRM and a continuation of work from the sUAS ARC that I was a part of and our readers have heard so much about over the years.

All one has to do is peruse that latest iteration of official documentation from the FAA to see that small business, and the end user is several years behind the rest of the group. Catching up with the moneyed herd is going to be difficult for sure. Add all of the damage and lock out barriers to mom and pop and you have a stillborn industry. That is what the disenfranchisement means to the layperson.

Well, there is some light at the end of the tunnel (and this time it’s not the 3:10 to Yuma.) I receive an email back from the Associate Administrator. “We will review your concern again and respond shortly.” This message was cc’d to the head of the UASIO and some other high level folks.


I wouldn’t say its time to don the smoking jacket and cork the bubbly just yet, but I think the message about the small business end-user stakeholder group is being better understood.


What They Told Us: Reviewing Last Week’s Key Polls

Rasmussen Reports

Bottom of Form

Saturday, November 23, 2013

Believe it or not, it’s already beginning to look a lot like Christmas – in the minds of many Americans, at least.

Thirty-seven percent (37%) have started their holiday shopping, and nine percent (9%) are finished already.

A lot more stores will be open on Thanksgiving Day next week in hopes of getting a bigger share of the Black Friday sales crowd, but 44% say they are less likely to shop at a store that opens on the holiday. However, 32% are at least somewhat likely to go shopping on Black Friday, the day after Thanksgiving, with 12% who are Very Likely to do so.

Here are some other things America thinks about shopping this holiday season.

Forty-five percent (45%) of Americans have decided to avoid some of the hassle, though, by making arrangements with friends or family not to exchange gifts this year.

Perhaps in part that’s because 36% say they owe less money than they did a year ago, the highest finding since November 2012, and they want to keep it that way.

Consumer confidence is up slightly at week’s end but is still down from the highs it hit in May and June.

Concerns about the potential impact of the new national health care law are on many Americans’ minds this holiday season, too. Fifty-eight percent (58%) of voters now view the health care law unfavorably, including 45% with a Very Unfavorable opinion of it.  Both are highs for the year.

Have the woes of Obamacare trumped the government shutdown? Republicans have rebounded from a seven-point deficit a month ago to take a one-point lead over Democrats – 40% to 39% – on the latest Generic Congressional Ballot.

Forty-three percent (43%) of voters now trust the GOP more to handle health care. Thirty-nine percent (39%) trust Democrats more. This is the lowest level of trust in Democrats on this issue since January 2011 and the biggest Republican lead since October of last year.

Fallout from the problems associated with the health care law have driven President Obama’s job approval ratings to the lowest levels of his presidency, and those ratings show little sign of improving. 

Twenty-four percent (24%) of voters believe those opposed to the president’s policies are motivated by racism. Sixty percent (60%) think the opposition is primarily because the policies are bad.

Speaking of those policies, the number of voters who believe the federal government bailouts of General Motors and Chrysler were good for the United States has reached an all-time low of 39%, and more than ever (58%) consider those bailouts a failure.

Americans are similarly critical of the government bailouts of the financial sector. Despite those bailouts, just over half (52%) are at least somewhat confident in the stability of the U.S. banking industry today, with 11% who are Very Confident.

Sixty-four percent (64%) of voters still agree with the president that a “world-class education is the single most important factor in determining whether our kids can compete for the best jobs and whether America can out-compete countries around the world.” But only 18% think that public schools in the United States provide a world-class education, down from 26% two years ago.

The U.S. Senate on Thursday ended rules that allowed a minority of senators to prevent a vote on a president’s political nominees, and most voters think the change is a good one. Fifty-five percent (55%) think that, regardless of any ideological or philosophical disagreements, every presidential nominee should be the subject of a simple yes-or-no vote in the Senate.

As the country awaits the likely confirmation of Janet Yellen as the new Federal Reserve Board chairman, just 42% of Americans are at least somewhat confident that the Fed can keep interest rates down and inflation under control.

Friday marked the 50th anniversary of the assassination of President John F. Kennedy. JFK is still viewed favorably by an overwhelming majority of Americans. The manned space program is considered the most important achievement of Kennedy’s presidency.

But Americans are evenly divided over whether the 35th president of the United States was killed by one man or was the victim of a larger conspiracy.

Voters continue to adamantly defend their constitutional freedoms, and most (55%) still consider the federal government a threat to those rights.

In other surveys last week:

— Just one-in-four Likely U.S. Voters (25%) think the country is heading in the right direction.

— Fifty-seven percent (57%) feel that finding new energy sources is more than important than reducing the amount of energy that Americans now consume.

— Three-out-of-four voters (78%) think America spies on other countries as much or more than they spy on us.

— Fifty-six percent (56%) of Americans believe it is bad for the economy that more grown children are living with their parents.

Only 15% believe that children today get enough exercise, and 89% think it’s up to their parents to do something about it.


From → Uncategorized

Comments are closed.

%d bloggers like this: