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Defcon 3 2/20/2013

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    Why is China hacking us and what can we do about it? Plus: Will there be defense cuts?

  • Duration 25:12
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This was all designed.

To say we can't do these bad cuts let's do something -- -- the whole point.

Of the so called sequestration.

Unfortunately congress didn't compromise they haven't come together.

And done their jobs and so as a consequence we've got these automatic.

Brutal spending cuts that are poised to happen next Friday.

-- congress allows this meat cleaver approach to take place.

It will jeopardize our military readiness.

Welcome to Defcon three while the president has just said he doesn't want to cut the defense budget with the meat cleaver the Republicans in congress have said.

Cutting the defense -- will be a catastrophe.

The chairman of the Joint Chiefs of Staff has said we will endanger American national security and the secretary of defense the outgoing secretary of defense is that -- the same thing.

-- -- -- have the defense budget.

So I've got one of the best as far as people -- done this before.

He's been through several rounds of this in Washington DC we have doctor Lawrence or Larry Korb a colleague of mine from the Reagan administration.

And he's president for the -- For American security.

I ask you Larry how bad is this -- -- defense that we're gonna see probably in the next week.

Well the first depends on how long it lasts I mean that's the key thing to -- thing -- they're talking about.

You have to make 45 billion dollars in cuts between now and the end -- that the fiscal year the second is how much flexibility do you have enough.

In making -- reductions you have to cut everything equally York and you decide you know where to caught them and the other.

Real thing is how much planning have you done.

For what I understand the Pentagon just assume that wouldn't happen so.

You know we're almost halfway through the fiscal year they've been spending as if it weren't gonna happen now of course on this this is going to be more difficult if it does.

Are there started to try and catch up but like any bureaucracy and they're not the only ones are trying.

To scare people enough so that they won't do you know that they'll stop sequence sequestration by talking about.

Sort of worst case all the things that could happen if you -- if you did this regardless of whether in fact -- really well.

Okay when you just saying you've written about this and you think defense candy -- a lot of us agree the defense budget is.

Big and as bloated and there are areas where it could be cut.

If the president were to turn you in congress were to -- to -- their -- doctor -- You've studied this for thirty years where can the Defense Department budget be cut where the safe places to cut.

And -- are -- areas where we should increase spending.

What do you -- well.

In the first thing I would take a look at is nuclear weapons.

Under the new start agreement that the president outside dealt with Russia in its first term.

We're -- to reduce the number -- deployed warheads to 15150.

By 2070.

We're also gonna keep another 3000.

In -- -- you gonna have close to 5000.

-- nuclear weapons.

General cartwright who was the vice chairman of the Joint Chiefs of Staff under President Bush the -- Donald Rumsfeld appointed to be head of the Strategic Command.

You know he's left office they said you don't need more than 800 of them 400 operational.

400 reserve so if you move in that direction.

Not only will you save the maintenance of these you know keeping these weapons maintained and the people and everything like that.

But you won't have to -- prospect you won't have to modernize all three legs of the Triad right now.

We're at a point where we need a new generation of ballistic missile submarines new bombers.

And if you take a look at that -- -- general Clark writes numbers basically you know you can you can save.

You know at this savings will mount up over the years which you can save easily.

You know fifteen or twenty billion dollars a year -- right -- -- Without you know jeopardizing security.

The next thing I would take a look at is right now the ground forces the army the Marines have -- to go back to where they -- 2005.

I think it could take -- back to where they weren't 2000 of one.

Because if we should be as Bob gates said foolish enough to send large land armies into.

Another country we know the guard and reserve of good you know and and you -- you could use them.

Next thing I take a look at -- -- we're building the joint strike fighter for both the the air force the navy and the Marine Corps the navy really doesn't want it that navy would prefer to keep buying the -- generation of the FA eighteen.

He -- -- I would let them do that.

-- -- -- let the air force by it and see if we can work out there that the problems you know for the -- you know fought for the for the Marine Corps.

And in -- final thing is nobody wants to deal with -- But the -- need to take a look at the health care benefits for working age retirees.

Not people who or -- wounded and covered by the veterans administration.

We're talking about people who serve at least twenty years and you know before they turn 65.

We essentially haven't raised the previous embattled boss that you what I went there and -- -- -- to go up.

On each year -- what happens is not always a government have to pay more and more for the health care will call cost which have a lot of men and women.

Won't take their health care coverage where they're working because this is so much cheaper so that's also the type of things -- think you can do.

Right off the back you can get about a hundred billion dollars in you know -- -- the upcoming budget without really jeopardizing security.

Where should you spend more money on things like special forces.

-- drones cells so that that's the future of the way of which work -- -- deal with these you know these terrorist groups with a global reach.

I'm -- bass sounds very very recent -- -- something like this never gonna happen.

Well I think it well the problem you have right now is the parties are trying to you know basically -- who blinks first.

Because that a president.

In addition to making these spending cuts and I think he would accept this hundred billion dollars -- in cots and then.

You know cuts and no Medicare -- are you know the so called change CPI for Social Security he wants some revenues.

The Republicans say no -- they -- -- tax cuts they want it all from spending and not too much from defense and so both parties are you know sort of you know playing you know -- who blinks first and that's rather unfortunate.

Because you know the -- -- thing is.

You know you -- I could sit down and a lot so the people who you don't really want the interest of our country at heart and we could really help deal with this you know for example.

One of those things you can -- we pay Social Security taxes on the first it's like a 113 thousand what I like Medicare pay you know whatever -- bank.

And you know -- the -- CPI rather than you know the full CPI.

Means test Medicare that would really help us deal with entitlements.

Bring defense you know as I mentioned you get the money you know it and in defense.

Which would still mean we were spending more than just the about the rest of the world you know -- -- So you we could do those things but the political climate is such right now.

That that's the real -- the real.

Problem.

Well thank you so much doctor Lawrence -- Larry Korb former colleague of mine at the Pentagon.

He's our president for the Center for American Progress and he has just outlined.

In about three minutes exactly how you could cut the defense budget exactly how you could fix -- defense budget.

And has indicated by -- -- probably not happen as reasonably as you said thank you so much for joining us Larry JT I don't measure yet they say yeah -- thanks for doing this.

We've done this -- gotten our little chat rooms all buzzing around we've got some very interesting -- -- often on the show we get people.

-- in -- say you know the United States but Everett does it can't cut defense -- we have two very thoughtful things.

One from Chico says I've seen so much waste in the Defense Department I just retired.

After twice six years of service is against people still believe it's the gravy train.

-- areas threatened we have to cut something we're going broke cut cap and balance we must get sanity into our budgets.

This so called sequestration plan was a plan that the White House that and the administration Democrats in congress and edit so -- it criticized that.

And -- -- come back and after the break we're gonna talk about the fact that the Chinese are probably packing every computer in America.

Prior to report that you know I've.

Giving you.

An assessment of our view of the problem and the fact that we when it comes to China.

Regularly raise this issue with Chinese officials including officials in the military.

Elect a pentagon spokesman.

Says podiums I have even been to that podium.

And -- I have no idea what -- -- it's a sad other than the fact that I guess we in the Chinese are talking.

About the fact that they've -- have been caught red handed hacking into.

The companies like apple.

The Defense Department.

The United States government I mean even waterworks plants in the midwest.

So one guy is gonna come and explain to us exactly what this cyber threat is this -- seder -- he's formally of that the Joint Chiefs of Staff.

Where he was one of the senior research and intelligence officers thank you so much for joining us again colonel.

More quickly indicate to you may effectively picket the paper today and it turns out that the Chinese have been hacking.

May -- a number of not only military industries in the United States but civilian infrastructure and they seem to be doing it through the people's.

Liberation army as an active plan I guess -- United States defense industry as well what is it.

Well basically what it is is just that it is an active -- it's a concerted strategy by the Chinese to go after the things that they deem important.

In essence what they're looking at -- is going through all of the strategic industries that are part of their five year plan.

So if you look at the Communist party of China's five year plan and you go down the list of industries that they have.

You can see that they are basically targeting each one of those industries and they include the critical infrastructure elements that you mention such as utilities.

Electric power stations and the attendant go governing bodies that that to work those.

Also of course you're looking at today defense contractors -- looking at consultants.

You're looking at health care you've been all kinds of things that they're interested in in their interest did not only from a espionage perspective.

But also from me -- -- perspective they're getting ready.

Just in case as we say in the military the balloon goes up in other words that there's conflict between us and the Chinese they're getting ready to understand what our networks look quite so they can do maximum damage against those networks.

What is -- ranking -- can do to protect ourselves.

Yes there are lots of things that we can do and number one -- I would see is pass comprehensive cyber security legislation.

That's been stalled in the congress for quite some time now last year the house passed what is known as the cyber intelligence sharing and protection act or so spot.

That was championed by chairman Mike Rogers of the house permanent select committee on intelligence.

And of course by the the vice chairman from don't troopers burger on the democratic side.

That bill has a lot of good elements in it.

Particularly the information sharing peace between the intelligence community and the private sector a lot of what to the -- men didn't report -- being the company that.

-- release this report to talks about has actually been known by the intelligence community for some time maybe not.

Exactly the same things but similar pieces of information.

Okay and Al-Jazeera per second if I mean if we all recognize there's a problem and they're all it wears a solution.

Why have what -- how could anybody be against this legislation.

Well what you're looking -- is concerns from two sides on the one side you have.

Do you privacy advocates -- from the American Civil Liberties Union and -- and similar groups.

And then on the other side you have the US chamber of commerce that is worried about onerous regulations.

On businesses and they both have valid points.

But the problem is that this that this is a clear and present threat.

To you all were infrastructure to our well being not just strictly in the IT sense of that word.

But also in the interaction that we have in our daily lives with that infrastructure structure such through electricity through hospitals.

All of those things could potentially adverse would be affected.

Are we doing the same thing.

Are we spying on everybody else other countries their critical infrastructure -- electric -- what -- thanks colonel.

What we have we have been a big program that is designed to really do -- intelligence from all elements of the answer in short is yes we are looking at these things but we don't plant.

Nefarious code or malware in their systems.

Unless it it's directed by a very very high authority namely the president of the United States.

And those are things that we do very very carefully.

And we do you have certain capabilities we do you have certain.

Cyber quivers.

You know in our.

Did you know in our arsenal that we can actually use and -- you -- you make it into it weapons of war should we so choose to do.

To do that but it it becomes a very important element of the national power and in essence what we're looking at KT is making sure that everybody understands.

That cyber is a domain of warfare just like here space and -- Our domains of warfare as well.

I'm -- -- -- one of the things that other we've had other people on the show on I mean I've been sort of running around like a person with my hair on fire for the last three years.

Talking about the cyber threat in the fact that we're not paying any attention to it.

One of the things as I understand that that John John-Michael Hayden for example has told -- that.

With any kind of cyber attack that might happen is very difficult to find out what the return addresses who's doing -- this is the first time.

That we've actually had a report that says it's the Chinese we know what's the Chinese here's the building that it's happening -- What happens now.

Not just on -- and that defense part but what happens diplomatically what's our next step.

Well I think it's going to be a multi pronged approach to the White House is beginning to announce certain measures.

In terms of trade sanctions that they can take against China there are rumors that they're going to be.

Talking about those specific elements and a specific responses that's one side of it the other part of it is too.

Make sure that -- -- cyber strategy we have one that was unveiled.

Back in 2011.

But it is very defensive in nature we need to make sure did our cyber strategy has an offensive component to it that is actually written into the strategy we've had people like general cartwright.

Talking about the offensive component when he was the vice chairman.

But it's actually not written into our strategy and people read that strategy people like the Chinese read that -- and they think that they can get away.

We've put it spying on us and by implanting malware in our systems with impunity and if they continue to believe that -- will continue to do that if -- -- we precautions.

I -- one quick question do we know that it is this just -- snooping exercise.

Or do we think that the Chinese have actually planted things in computers bots are spyware or something that would be used at some point in the future.

My personal belief is that they have used this opportunity to do reconnaissance in force of the networks.

And what they're doing is they're targeting about 115.

Different companies it is a targeted approach.

And what they're doing is they're going in and they're making sure that they understand the network.

So that they can actually put things like back doors botnets of its forms of malware on our systems and they're -- arm pieces of malware on our systems right now both private and public.

That could be activated in a so called zero day exploit should the Chinese decide to do that.

So where are already in the air out cyber war.

Although it seems early days thank you definitely OK thank you so much colonel Cedric Leighton.

And joining us from Washington thanks a lot more.

Now we're gonna come right back -- -- to the head of the UN national council of US China's relations about what does this mean for US Chinese relations.

Major trading partner.

Major potential military adversary for -- what's next stay -- c'mon back.

Yeah yeah.

To make speculation thing groundless accusations on various purposes is unprofessional and irresponsible and does not help.

To solve the problem.

OK well irresponsible doesn't solve the problem yet there is a problem.

We just found out through one company that works -- -- -- -- government that the China's been caught red handed affected even got a building.

In Shanghai that is was that his own by the -- People's Liberation Army that is it.

One job which is to hack into US civilian infrastructure and military computers so what's the bigger picture in -- China's plan right major trading partner.

But visit our enemy is -- -- to -- -- Gossip Girl.

Tag line so we've got a guy who's gonna explain to Alter -- Steve morons who is the president of the national council of US China relations.

Just back from China it yourself.

-- to make up.

Office.

Well certainly that the hacking allegations have been around for a long time -- -- there's that significantly more specificity here.

And the administration because of the public pressure because of the belief that it's really compromising.

A lot of business and our infrastructure is going to have some announcement in the next day.

About retaliatory measures I think we have to be careful how we look at.

The PLA operates in its own kind of -- wanna call a vacuum but it's on silent at a -- is the people's liberation -- -- operates in its own silo so when we see a completion of the PLA with the Chinese Government I think we better be careful not to do that.

That this can this is a division of the division so -- to leadership even knows about it condones it approves.

Individual actions is something we don't know.

I have experience where we aired the PLA we'll take an action all be with the ministry of foreign affairs and they'll go really.

And it's.

And as I mean -- -- -- right out of there aren't aware of the late sat test for instance the anti Saudi Arabia test in 2006.

But I think you were in government -- I believe -- He was not coordinated with the civilian part of the government.

But the silo was -- not only was not coordinated with the civilian part of the government I think it was not coordinate with other branches of the military that it was are indeed portion.

Of the PLA.

Which did this test without really coordinating and I think we saw -- on the roll out of the when Secretary Gates stealthy fighter this stealth fighter where.

Literally you had to go down to -- A one star general to really find somebody who knew what had happened when gates was meeting with.

You know hi this is -- -- delegates -- yes secretary of defense is in Beijing.

Long delayed meetings finally gets there.

Meeting with the Chinese military leadership at the same time loops.

They show and demonstrate and test a brand new stealth fighter which looks like it would not it was modeled -- -- the Lockheed Martin to sign that we.

About two weeks to be careful not to overreact to the other hand obviously I think -- publicity is positive.

What happens is you get a story like this right the major media in the United States it gets translated into Chinese and gets circulated to the civilian leadership.

And so they sit there and they go okay.

We see that this is going on Centre where us and us prior causing us foreign relations problems so they begin to respond -- this actually can often be a positive.

Because it's at a time when we have a new leader in China.

The transition will is a little bit about that consistent really significant point that most people are missing about their leadership and -- -- we've had.

You know that we have a new yeah we have teaching -- Who was becoming the -- who is in the process of becoming the new leader of China that he is already the general secretary of the Chinese Communist Party.

Which happened in November and then next month around march 15 he will become the president of China.

So you right here in this transition period as you know during transition periods it's difficult to get a handle -- -- bureaucracy.

It's difficult he is also chairman of the Chinese China's military commission.

Which is roughly the equivalent of of the commander in chief but not exactly that he sits atop that.

PLA bureaucracy but is the only civilian.

In that bureaucracy so you have to go all the way up there.

All the way up the military commission to that general secretary of the Chinese Communist Party who's also the chairman.

Of the military commission until you reached the civilian part of this but can -- -- often operate without much coordination with civilian as a.

Is it in -- fat cat excuse of you we didn't realize that we don't -- I mean that's -- let them off the -- -- One of the things that my -- Boston manager Henry Kissinger is always worried about.

Is that the United States and China -- going in their own direction -- development.

Could somehow find themselves sort of unintentionally.

Drifting towards a confrontation or at least an adversarial situation which nobody won.

This -- -- once famously said to Richard Nixon.

If you want a war will give you -- war but it -- a thousand years.

And so no one wants to do to go in that direction but how we sort of pull back when I honestly can't let them continue to.

To steal and snoop and everything in the US critical infrastructure.

But how -- well I think one you checks to everybody does espionage -- -- extent that it is espionage but it's not really an attack.

We're gonna have to live with I mean it's it's we need -- I think this is a great wake up call to both the US military in the US corporate sector.

Protect yourself that going -- and have systems which don't allow this to happen but your point about this kind of strategic drift.

Into a confrontational.

Position is one which has to be avoided at all cost that we don't -- now -- lots of discussion in the policy community about China being.

The Germany of pre World War II.

That it is going to drift into this conflict with the United States being in the position of Great Britain.

And that we will have this conflict and what we need to do is have a very strong sound basic relationship with China.

And convince them that this hacking is counterproductive.

Convince them that aggressive behavior in the South China Sea -- the East China Sea is actually counterproductive.

And its implications.

For the broader relationship.

Are so bad that they shouldn't follow these policies.

Switch gears over to North Korea -- today that are -- -- release director of music video showing President Obama burning out last week they had a music video.

-- nuclear weapon detonating a lower Manhattan.

It's kind of funny and it's amateurish except for the fact that last week they also.

Tested a nuclear device.

We've always said that -- up North Korea is something China has to deal with China as their major supporter they give and 75% of their food 9% of their fuel oil.

Heating fuel so we cannot outsource North Korean behavior to China.

Why can't China South Park Korea -- does China want to stuff.

I think they have conflicting goals with respect to North Korea as that as you just mentioned I was in China week before -- with a congressional duplication.

We had meetings with the ministry of national defense the PL -- and a lot of the senior leadership.

And what I detected in those meetings meetings were -- increasing frustration.

With the North Korean behavior that really increasing frustration with the new.

Very very young inexperienced leader is the way the Chinese put it and they are public statements.

Are consistent with what they said privately and what we're seeing in -- in the UN is a willingness from China.

To criticize north Korean War and potentially even to impose additional sanctions.

What we they could do.

And what reaches their great fear is cut off food and fuel yeah.

That would be the way to say you cannot do this anymore but what -- greatest fear is the North Korean.

Government collapses right -- they have millions of refugees they have.

This problem with what happens the nukes then whose hands they fall into.

Could they be turned against the Chinese so they have these conflicting policy goals which make it extremely difficult.

For them to take the toughest position on North Korea.

A lot of -- comfortable.

But interest advice like interesting great opportunities as well.

What this is not been talking to stabilize his the president I mean national council on your -- -- thank you so much insurance he's just back from.

Thank you for giants you.

-- nuclear weapons you cyber hacking to our defense budget -- -- -- giant boxes are -- live Aruba tomorrow.

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