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E-News 4/27/12

The Week Just Past: Cyber Week

Increased Internet Dependence Leaves Us Increasingly Vulnerable

Committee Approves Rodney’s Bill – A Boost for Northern Jersey

Hmmmm: Interesting Timing on Medicare Advantage Pilot Program

The Shape of the New 11th Congressional District

The Week Just Past: Cyber Week

“With justification, the American people remain very concerned about their own economic security. After all, we are mired in the longest period of high unemployment since World War II and they long for an economy that allows them to ‘get ahead’ if they work hard, exercise personal responsibility and play by the rules.  

“However, there is an unseen threat to businesses of all sizes and our families’ economic security from foreign states, criminals and terrorists who certainly do not play by the rules nor exercise responsibility. Indeed, there exists a new threat - cyber crime - and U.S. businesses, government entities and everyday Americans are targets. 

“Cyber crime is no longer the lone teenager in the basement hacking into a high school database to change a grade. It has evolved dramatically. Today, a whole range of American citizens and organizations are targeted every hour of every day by scheming hackers, here and abroad, who are intent on robbing America’s intellectual property and sensitive government information through the Internet. 

“Economic predators are blatantly stealing business secrets and innovation from private companies. These, and other criminals and terrorists, are potentially affecting financial systems, citizens and our homeland by potentially disabling electrical grids and disrupting law enforcement communications, early warning systems, air traffic, train and mass transit.

“Cyber criminals are targeting online accounts, using ‘malware’ to steal log-in credentials and gain access or draining funds through fraudulent electronic-payment schemes.

“Clearly, cybersecurity is a major and growing area of concern for everyone. The last thing our economy needs is relentless cyber attacks against computer systems that support our financial institutions, employers, government entities and our soldiers doing the hard work of freedom.

“The House this week passed a series of bills designed to inform, educate and promote research into cyber threats and tools to defeat them. However, the keystone of ‘Cyber Week’ in the House was H.R. 3523, the Cyber Intelligence Sharing and Protection Act. This bill increases needed information sharing by allowing the federal government to provide classified intelligence information to private entities to use to protect their own networks. The bill also allows the private sector to voluntarily share cybersecurity threat information with other private entities and/or voluntarily share with the federal government. 

“Sharing information about cyber threats is a critical step to preventing them. This proposal is a good start toward helping the private sector safeguard its critical cyber networks, including those that power our electrical, water and banking systems. By permitting the private sector to expand its own cyber defense efforts and to use classified information to protect its systems and networks, this bill will help create a more robust cybersecurity marketplace with expanded service offerings and jobs.

Rodney Frelinghuysen

Increased Internet Dependence Leaves Us Increasingly Vulnerable

The internet becomes more vital to our economy, security and our private lives every day. However, that means protecting systems that use the internet and the internet itself has taken on critical importance. Here are just a few statistics to ponder:

Economy:

- Internet commerce accounted for $684 Billion or 4.7% of all U.S. economic activity in 2010 (CNN, March 2012)

- In 2011 Symantec placed the cost of Global Cyber Crime at $114 Billion annually ($388 Billion when you factor in downtime)

Email:

-107 trillion – The number of emails sent on the Internet in 2010

- 294 billion – Average number of email messages per day (Royal.pingdom.com)

Facebook:

- Over 845 million Facebook users worldwide, 50% logging in daily, averaging 130 friends, conversing in 70 languages (Facebook.com)

Twitter:

- Twitter has over 100 million active users worldwide, half of whom log in daily (blog.verticalresponse.com)

Mobile Devices:

- 461 million mobile phones and tablets sold in 2011 (www.indefenseofdata.com/)

These statistics underscore how important the internet is to our economy and our families. Every day, U.S. businesses are targeted by nation-state actors like China and Russia for cyber exploitation and theft, resulting in huge losses of valuable property and sensitive information. This rampant industrial espionage costs American jobs.

When these hackers steal intellectual property, they take new, high-paying jobs right along with it. Estimates of loss from economic espionage are hard to make, but range up to $400 billion a year. Just as important, many of the same vulnerabilities used to steal intellectual property can be used to attack the critical infrastructure we depend on every day.

Recommended Reading: Experts told Congress this week thatIran is recruiting a hacker army to target the U.S. power grid, water systems and other vital infrastructure for a cyberattack in a future confrontation with the United States.  Read Shaun Waterman’s piece in yesterday’s Washington Times here.

Committee Approves Rodney’s Bill – A Boost for Northern Jersey

The House Appropriations Committee this week passed Rodney’s fiscal year 2013 Energy and Water and Related Agencies Appropriations bill, which provides the annual funding for the various agencies and programs under the Department of Energy (DoE) and other agencies. The bill totals $32.1 billion – a cut of $965 million below the President’s budget request.

“This legislation prioritizes investments in our nuclear security enterprise, programs to address gasoline prices, and opportunities to advance American competitiveness and get people back to work here at home,” said Rodney, Chairman of the House Subcommittee on Energy and Water Development.

“All of our constituents are wrestling with how to pay for higher gasoline bills. This bill does not provide a quick-fix, since there is little these programs can do to immediately to change oil supply or demand. However, our bill provides investments to strengthen Department of Energy programs that address the causes of higher gasoline prices down the road,” he said.

The legislation also contained provisions related to Passaic River flooding and the Port of New York and New Jersey.  Specifically, the Energy and Water Development Appropriations bill for Fiscal Year 2013 included $1 million for the Passaic River “Mainstem” project and $64.6 million for the harbor deepening project at the Port of New York and New Jersey. 

“Because our area is all too familiar with damaging floods, relieving these conditions remains a top priority of mine,” said Rodney, the Chairman of the Energy and Water Subcommittee. “This funding is vitally important to our residents and businesses.”

The $1 million will be used to execute an agreement between the State of New Jersey and the Army Corps of Engineers to evaluate options to lessen the impact of storm events. In addition, the Army Corps of Engineers announced earlier this year that it had included an additional $250,000 in its work plan for the Passaic Mainstem for the current fiscal year.

The FY ’13 Energy and Water Development bill also included $64.6 million for the ongoing harbor deepening project at the Port of New York and New Jersey.

“OurPort is a major economic driver in our region, generating nearly 300,000 jobs,” Rodney said. “The funding in this bill keeps the vital harbor deepening program on track. After all, if large ships cannot navigate the shallow port channels, they will take their cargo - and their tens of thousands of private sector jobs - elsewhere on the East Coast.”

Hmmmmm: Interesting Timing on Medicare Advantage Pilot Program

A Government Accountability Office (GAO) report this week raised serious questions the Obama’s Administration’s treatment of the Medicare Advantage (MA) program and whether a new MA demonstration program run by the Department of Health and Human Services (HHS) was constructed for political purposes.

Here’s the back story: the President’s new health care law slashes $145 billion from Medicare Advantage – a highly successful private insurance program that covers over 169,000 seniors in New Jersey. The program allows seniors to basically take a voucher and have the choice of about 3,300 different plans by 175 different insurance companies in total, with a diversity of benefits, premiums and cost sharing.

The cuts in the Medicare Advantage program will end the program for about 50% of its current customers and the reductions will begin this year, in the months before the fall’s general election. 

So in November 2010, the Administration announced a nationwide MA “demonstration project” that would test if paying insurers bonus subsidies would improve quality over the next two years.

Interestingly, according to GAO, the $8.35 billion pilot program will reverse 71% of the Advantage cuts that would have hit seniors prior to November. And, interestingly, the pilot program disappears in 2013.

“It really appears that the Obama Administration launched this so-called ‘demonstration program’ to divert attention away from cuts to the popular Medicare Advantage program,” Rodney said. “And it appears to many people that the Administration is writing itself a blank check to spend more money for political purposes.”

Key findings of the GAO report:

The timing of this demonstration program raises serious questions about the Obama Administration’s use of taxpayer dollars for political purposes.According to the GAO report, “The largest annual offset will occur in 2012—71 percent—followed by 32 percent in 2013 and 16 percent in 2014.” Given that Medicare’s open enrollment season begins in October, this report raises serious questions about whether the purpose of this demonstration was to mask the health spending law’s cuts to seniors’ Medicare benefits for political purposes.

There are significant questions about the legality of the Obama Administration’s use of tax dollars for this demonstration program. HHS has the authority to test new approaches to paying Medicare providers under limited demonstration programs, but according to the GAO report, “The design of the demonstration precludes a credible evaluation of its effectiveness in achieving CMS’s stated research goal—to test whether a scaled bonus structure leads to larger and faster annual quality improvement compared with what would have occurred under PPACA.”

The Shape of the New 11th Congressional District

New towns in the 11th Congressional District added by the Congressional Redistricting Commission as a result of 2010 Census:

Bloomfield (part)

Cedar Grove

Montclair (part)

Nutley

Verona

West Orange (part)

Little Falls

North Haledon

Pompton Lakes

Totowa

Wanaque

Wayne

Woodland Park

Ogdensburg

You can find an interactive map of all of New Jersey’s new Congressional Districts here.