tv Politics and Public Policy Today CSPAN September 21, 2016 1:00pm-3:01pm EDT
haystack every day is a brutal task. i wake up every day worried about things going on in the committee, i can't imagine what you go through. i thank you for what you do. members may have questions for witnesses we'll ask you to respond in writing. the hearing record will be held open for 10 days. without objection, the hearing stands adjourned. thank you, gentlemen.
$600 for a two-pack. west virginia attorney general is investigating whether ceo's mother pushed states to require schools to buy the product. the company ceo heather bresch goes before the house oversight committee this afternoon. she'll be answering questions about price increase. live coverage at 2:00 eastern on c-span3. the smithsonian national museum of african-american history and culture opens to the public here this weekend. live from the national mall saturday morning at 8:00 eastern on c-span3. earlier american history tv talked with african-american members of congress about what the museum means to them. here is a look at one of the interviews. >> congressman, in your view, what is the importance to the african-american museum to the country. >> the new african-american museum is essential to any i had
it no matter what color or background you have. you can argue the revolutionary war, not just civil war but revolution war before it had something to do with issues of race. 1777, british under lord mansfield said they were not going to allow slavery anymore on british land. the americans said you might not but we are. this is our economy. the south, many south carolina and southern counties basically decided to break along with their northern counter-parts because of this issue. you move up to the civil war. you know, some people argue today, was the civil war over slavery or not. the secessionists thought so. they wrote in their documents as they seceded from the united states even before president lincoln was inaugurated they were leaving because the issue of slavery was so prominent in the nation's history. by the way, the civil war wasn't the first time the nation almost
pulled it's self apart. we all know well before that the nation was seizing at the seams because of this issue of slavery. here even after we end slavery with the 13th amendment, it took 100 more years to end second class citizenship for black people. you cannot -- i believe you cannot understand america without understanding the history of african-americans. and everybody has a story in there. everybody has a place and a raleigh. so memorializing african-americans in the museum is an important thing. >> what role? >> congress played an important role as it should. congress, after all, passed laws that made second class citizenship and slavery the law of the land.
congress passed 13th amendment, guaranteed citizenship and equal protection. congress then passed laws that helped maintain racial sub ordination. of course congress ultimately passed 1965, 1964 civil rights acts which helped ended american apartheid. congress is deep ly indicated, should be part of the story of the museum. congress is part and partial of our racial legacy. >> the museum is located on the national mall. do you think that's the appropriate place? >> the national mall is absolutely where the african-american museum should be because the national mall there was actually slave trading on the national mall. d.c. was a slave trading town. d.c. was part of the story when we did desegregation. when america passed brown versus board of education there was a
companion case that had to do with washington segregated schools. the mall is where it should be. the mall is a place of national honor, a place of national prominence. also a place where so much african-american history took place, whether or not the building of the capital, which was done by slaves, or the white house, also contributed to by slaves or slave trading which happened on the national mall, it's where it should be. >> first african-american president is about to leave office. what's the significant of his opening of the museum. >> you know, my mom, who was bern in 1940 in rural louisiana could never conceive of a black president. growing up in louisiana's segregated schools and segregated south, to her the idea of a black president is unimaginable to her as a little black girl growing up in that time and in that space. and so for there to eastbound
for a black person to exist at all is something that so many untold generations of americans, black and white, it was beyond their imagining. yet america always exceeds expectations, right? to have this first african-american president, basically christen the museum, i think is appropriate and very fitting and very, very apt way for him to salute the nation as one of his final official acts. i think it's a tremendous achievement and i think that anyone who is present will be lucky to have observed history in the making. >> last question for you. what does the museum mean to you personally? >> you know, you can read as many book as you want and study as much history as you want, but to me the museum had a profound emotional connection. it's validation. it's acknowledgement.
the american slave, if anything, was the unacknowledged. we weren't acknowledged as human beings. we were cows and chickens and articles of merchandise and production. so now to have a museum dedicated in honor of the people who toiled for and over 246 years, this was a slave holding nation longer than it was not. and so to have a museum dedicated to the dignity and contribution and history of these people, i think is a tremendous commentary to the people themselves but also to america at large. how many societies in the history of humanity have seen people who were in servitude. because servitude is not unique to the americans. it was all over the world. but how many slave holding societies have been able internally to overcome that system and establish legal equality. we've got a long way to go to rid our selves of american
racism, but we have vanquished slavery and jim crow. that's an important achievement in the history of mankind. and so for me there's an emotional connection. it's about my mom. it's about my kids. it's about -- it has something to do with how police officers may treat me if they stop me. it has something to do with, you know, people struggling for equality right now and into the future. i think it's a tremendous achievement for our nation and it makes me proud to be an american. >> the smithsonian national museum of african-american history and culture opens its doors to the public for the first time saturday. american history tv will be leave from the national mall starting at 8:30 eastern leading up to the ceremony. speakers, president obama and lonny bunch.
also in attendance, first lady michelle obama, president president bush and laura bush. congressman john lewis, smithsonian secretary. live saturday at 8:00 a.m. eastern on american history tv on c-span3. president obama and china's president reached an agreement last year on a number of cyber issues. a panel of cyber security experts recently discussed the impact of that agreement. this atlantic council event lasted about an hour. good afternoon, everyone, and welcome to the new school year. i told my daughters early this
morning, walking them to the bus really early. i'm jon huntsman, chair of the atlantic council. we're delighted to have you here this afternoon. today's event, the art of cyber war co-hosted by the center asia security and cyber state craft initiatives are part of the council's cross-straight series, affairs and cross-strait relations. i'd like to also welcome all those watching online. i encourage you to join the conversation on twitter using a # #accyber. president obama and xi jing ping reached important agreement to curtail commercial cyber espionage. while many initially doubted the effectiveness of the deal, recent reports by the private sector and the department of justice indicate a sharp decline in chinese cyber attacks against
u.s. companies over the past year. china's neighbors in the asia-pacific region, however, face a very different set of realities. over the past year alone, the region's remarkable pace of economic growth, territorial disputes, and increasing military expenditures have all been factors in numerous cyber campaigns against governments and businesses allegedly originating from china. in hong kong and the lead up to last sunday's legislative elections, government agencies were targeted by cyber attacks originating from china. similarly, taiwan has been hit by chinese hackers on a nearly daily basis since the may inauguration of the president. its ruling party has become a frequent target of cbser attacks to obtain information about the party's policies toward mainland
china and its views on taiwanese independence. in southeast asia, countries with competing claims to the south china sea have faced a string of cyber attacks come in siding with times of heightened geopolitical tensions. furthermore, this july after a tribunal in the hague rejected the claims to the sea, flight information skreebs and sound systems in major airports in vietnam were hacked to spread messages of the tribunal's decision. around the same time many k websites in the philippines were knocked offline. geopolitical spilling over to the cyber realm are significant and likely to continue as tensions simmer in the region. therefore, a closer look at all of this is key in understanding
policy choices ahead. today we're honored to have a great group of experts discuss how the region's fluid geo politics drive cyber cam pabs and how the public and private sectors can better avoid falling easy prey to hackers. sam sacks will motte rate with bill glass and denise zheng. before i start i'd like to express sincere appreciate to cultural representative office for their continuous ebb gaugement and support of the council and our center. without further ado i'd like to thank our immediate partner as well pass code from the christian science monitor from joining us today. with that, samm, the floor is yours. >> thank you very much.
>> thank you very much ambassador huntsman. it's my honor to introduce a distinguished panel today. we have william glass, threat intelligence at fireeye previously worked with the u.s. government, a keen expert on advising u.s. industry on the cyber threat landscape. denise zheng, deputy director of cis strategic technologies program, previously advisers to darpa worked with u.s. industry, cyber security and cyber innovation. robert manning, senior fellow atlantic council coming from dni, state department's policy planning, an expert in asia regional issues. with that let's dive into the conversation. i'll welcome panelists to come up and we good begin the discussion.
>> so i thought we would begin today first by talking about very briefly the four main killers of chinese cyber strategy. i thought we would use this opportunity to dive into each of these pillars looking at economic and industrial motivations for chinese cyber operations as well as geopolitical foreign policy dimensions, military aspect and domestic information control. these are all overlapping but important pillars of the way the chinese leadership is thinking about its cyber strategy. so i wanted to first begin with a topic timely as ambassador huntsman mentioned, one year anniversary after the obama cyber agreement last year. my colleague has done lots of excellent work looking at the repercussions of this agreement and in particular how chinese cyber activity over the past year has been impacted following these agreements.
i wanted to first open up the discussion by asking will to share some insights on what we've seen in the past since that agreement. >> thanks for having us. i can't take credit myself for writing that report my company released in june. a whole slew of us working sometimes into the night. i'll summarize a couple of key points we found. we looked at the holdings of our data we have from various sources, company engagements from collection out there on the internet. we wanted to see what impact the agreement between president obama and president xi had had over the past six months since it was originally signed. and long story short, we saw a dramatic decline in activity that we've seen, recognized compromises of corporate networks we can trace back to or suspect we can trace back to chinese organizations, china sponsored groups. something on the order of more
than 80% going down. not to get there we looked at approximately 262 different compromises that we saw. we looked at 26 different countries. we looked at 72 different groups we suspect emanating from china overall. not to say chinese necessarily gone, they are still out there, active. they are certainly going after some particular industries, less voluminous but more targeted who they are going after. semiconductor companies, for example, are particularly hot topic these days, health care, navigational technology are just a few. so we wanted to say something about what we had seen. there are probably a number of factors that went into the decline we saw, and it's our contention that the agreement signed between president obama and president xi was one of the several events that contributed to the decline we've seen so
far. >> thank you. and at the moment right before the announcement of the cyber agreement last year, i remember here in washington everyone -- there was a lot of buzz because everyone thought the u.s. government was on the verge of coming out with sanctions against chinese companies for the first time that they were associated with cyber enabled espionage. at the last minute this delegation came and all of a sudden sanctions were off. since then there's been a lot of discussion about what are the policy tools that the u.s. government has in terms of influencing and deterring chinese behavior. i wanted to ask the panelists have you had any thoughts moving forward what are the tools you think the u.s. government should consider if we want to keep on this trajectory. >> i think really depends on what kinds of cyber activities you want to deter. so it's not useful to just talk about, i think, deterrence in
the cyber realm from nuclear perspective, because we're talking about a lot of different types of activity. cyber crime, run-of-the-mill cyber crime, really difficult to deter. it's easy to access the capabilities, easy to anonymize, obfuscate the source of the attack. it's cheap to acquire the infrastructure to do this kind of stuff. and law enforcement is not set up well to prosecute, to identify these people, investigate them and bring them to justice. so that's an area where, you know, the tools to deter that type of activity we need a lot more development, we need to improve. on the other side of the spectrum when you're looking at catastrophic cyber attacks, you can argue we effectively deterred those types of things because of our -- mostly because of our conventional military capabilities. so if you attack our power grid and bring our power grid down,
we have many other options on the table to retaliate. so when people talk about building a cyber nuclear bomb, i think a lot of folks that are new to the issue have sort of used that example. it's not particularly useful. we wouldn't necessarily respond to a catastrophic cyber attack using a cyber capability. so a lot of the tools that the u.s. government had would argue used in sfons espionage, cyber espionage, damaging cyber attacks, has actually been outside of the cyber realm. in part because we don't want to set a bad precedent. we don't want to condone this type of activity. it's a slippery slope. that's why we've used things like sanctions, indictments. we've used diplomatic actions to, you know, combination of all
of the above really to deter this type of activity. >> do you think sanctions are still on the table? is it possible u.s. government will still move forward and sanction another chinese form in the next year or two. >> if i were a negotiator, i would certainly keep it on the table. yeah, i think that's very possible. everyone is kind of waiting to see, you know, have the -- has the deal had an effect. we'll mention data, trends they have seen. a lot of folks are saying the chinese are getting better, more covert. switching from pla conducting lots of activities to parts of mss, frankly better at covering their tracks. there's also some discussion that it's possible the chinese are seeing a diminished return on cyber espionage because they want to climb the value train chain in terms of industrialization. they want to be providing goods
and services at the higher end of the value chain and stealing blueprints, ip doesn't necessarily enable you to develop that internal capability. so they have announced biotech, big data, ai, as key areas where they want to intro their industrial capacity, their industrial capability. it's not as easy to steal that type of information. you have to train algorithms, do machine, totally different technology process. >> one of the findings from a recent fireeye report you're involved with argues while we've seen a decline in traditional hacking activity, we've seen more of an emphasis on using partnerships with western firms to leverage technology transfer. can you comment a little more on that trend? >> sure. so that goes back to what denise was just talking about. there is a certain limit to which you can derive value from
stealing blueprints from something. you need people who actually know how to build it. part of the reduction you might be seeing is swaf an attempt from chinese eye to say, look, we're going to scale this back a little bit and try to build a more friendly environment for western companies to come to china and feel like they can invest a significant amount of money or make partnerships or provide expertise these companies want. if there's too much of a perception they are hard won property, research and development that cost these companies hundreds of millions over however many years, if they have a feeling suddenly erased or stolen from them, they are going to be less likely to make something of a partnership like that. this could also be recognition they are getting less bang for their buck in terms of stealing it, better to invite them to come to china and form research partnerships to get the value. >> any advice for person u.s., western industry on how to
engage in the market in china but also protect your self from this threat. >> spend some time with forensic analysis, the guys that go out to companies when they have a problem and forensic analysis to determine what happened, how do they do it. they always say they advise people to operate under the assumption that you are breached. there used to be a perimeter kind of model where you could set up a wall and moat and archers to use medieval, now not effective, you have to be able to say i have to operate under the assumption that there's some bad guy in my network. what do i have to do to make sure i can mitigate the damage they can cause once they are inside. there are various strategies you can do, really not that much interest to you guys.
there are certain options out there. there's a kind of growing up that needs to occur. i'll take an aside for companies operating in asia-pacific. some of our incident responders putting together a report earlier this month. what we found average well time or cyber espionage actor inside a corporate network in asia-pacific is around 520 days. in the united states, it's about 146. so europe and to a greater extent asia-pacific are a couple years behind in recognizing the threat, understanding that groups are coming for their technology. they are very skilled at getting in. a lot of times network security is pretty lacks by itself. the fact groups are able to stay inside a network for 520 days, bordering on two years, you might for the have technology, information, proprietary
information stolen during that amount of time is extremely high. >> private away from the industrial espionage angle and i want to talk about information it will policy in china. this is an area where we've seen a rapid buildout of laws and regulations during xi jinping. can you tell us about building cyber governance regime. >> it's part of a larger trend i find a little disturbing. that is their markets are closing and they are coming up with all sorts of devices, regulatory and otherwise, ngo law they passed to squeeze out american firms and build national champions of their own firms. particularly they have gone after i.t. firms, apple, qualcomm, others. and i think there is still some
back and forth about trying to get them to back off some of these legal devices they have come up with. but it's a troubling trend because i don't see how they get from there to the so-called market-driven reforms they claim they want to implement. i think it's a big -- larger problem for them and a larger problem in the overall u.s.-china relationship. i think on the sanctions, as i recall, one of the reasons they came around was they were really stunned at our attribution capabilities that we identified which office in the pla was doing it, who was doing it. we went under the facebook page of one of the guys doing it. so that must have kind of woken them up and wondered what else we can do.
and i think there's some basic tools in foreign policy, logic, drive, threat. those are the fundamentals. i prefer threats in many instances. but i think the stakes for them and the relationship, we have $600 billion a year trade relationship. and so there's really limits on how far they are going. >> if i can add to that as well, what we see in china, i think, in the ict policy space is sort of a conflating of industrial interests and security interests. and you know, i think china, just like any other country, has legitimate security concerns about the products they buy, the services they procure. but when you look at the design and implementation of the laws and regulations and policies they are pursuing in this space, i think, at least from my vantage point, the underlying
motivation is really to advance domestic industry, even though they have legitimate security concerns. this is very obvious when you look at their 13th plan, look at a lot of statements xi jinping, the former head of the cac, his speeches, longer term plan, this type of ideology is reinforcer across the board. i think there are probably three trends noting as well in the ict policy space in china. the first is that a sort of expansion as well as a centralization of cyber security authorities under xi jinping. you see that across the military. you see that across intelligence apparatus as well as the civilian government. they have sought a number of
laws, a number of new regulations specifically to do this as well as structural reforms internally to centralize a lot of different things taking place. there were at least 15 different entities across pla involved in cyber until the recent reforms. another area where you see in terms of trends that are doing to continue. now people are saying secure and trust worry. that along with data localization and content censorship will continue. i don't think there's really any hope within this administration of those activities diminishing. a great example of that is in the recent cyber security law, a broad expansion into other sectors, additional security reviews and requirements also that a lot of the definitions in terms of who is covered and what
types of reviews they will have to undergo has gotten more ambiguous. that leads me to the third trend, which is that chinese cyber security laws and policies are intentionally ambiguous. they do this for a reason. they do this because it provides great flexibility. it provides the government with the discretion to determine how to enforce things and whether to enforce things to their advantage. and it also, as some analysts has said, enables -- shields them from formal sort of wto complaints as well. if a lot of the laws are not finalized, or a lot of the regulations don't actually have promulgating guidance. it's harder to bring in dispute. so there's reason behind it all. >> i think it's also easier to look like they are making concessions to look back from
u.s. government, u.s. industry. last year there was a lot of resistance to the banking sector regulations which would put on burdensome requirements from i.t. banking sector. chinese said we suspended those laws. meanwhile for a year they had been implemented that created significant disadvantages to u.s. companies in those sectors. i think victory at this point is something that the obama administration needs to be careful about claiming particularly in ict regulations. i wanted to talk a little about military regulations and a point you raised. xi jinping sweeping reforms of command structure of pla. i think there are two schools of thought about what the implications have been in terms of chinese cyber activity. one is that it's caused some paralysis in the pla. that may be why they have seen a slowdown in activity. but the other is it's just made from more refined, more targeted
approach. so i wonder i think you've done a look at implications at these military reforms. can you comment a bit on that? >> sure. really interesting stuff they did at the end of last year when xi jinping said we have this new force, cyber, information warfare, technologically relevant skills that they have. but then that was kind of it. we didn't hear much about it afterward. so some details started to come out, xi jinping gave a speech the other week how it needs to be a driving force will be able to support other services military army and navy and air force and strategic rocket force owns acbms. and it will be, i think, really interestinged to where it goes, wide organizations in the pla that used to have cyber thing attached to them. we have a similar issue in the united states with the u.s. military. that's where the money is, everybody has cyber in front of
their names even if they are in janitorial services. they want to be cyber. to what sam just said, there is some slowdown, but i think there's going to be, once they figure it out, something interesting to watch. u.s. cyber command stood up in october 2009 and expected to have all their 133 teams on the cyber national mission force ready in 2018. that's a nine-year spread. if we can apply similar timeframe to chinese, expect strategic workforce to go by 2024. i don't think it will take them that long. that was one of the factors we looked at when want to figure out why see some of these declines, if a large, huge beaurocracy that's also politically tightly controlled is trying to reorient it's self and eliminating people's jobs, anti-corruption drive going on where pla used to derive some
commercial benefit, those things stamped out, a lot of commotion going on, that could be part of what we're seeing. >> i think this touches on another trend, as denise mentioned, centralization of these different actors. there's sort of a misconception about china's political system, which is that cyber strategy has always been quite centralized and passed down in terms of coordination. meanwhile you have all these different actors, pla, civilian industry, academia, mss that have been competing for influence. i wonder if the panel has any thoughts about the new cyberspace administration of china not new anymore, set up february 2014 under xi jinping to take the lead on these cyber security initiatives. any thoughts about what the creation of this will mean for cyber security and cyber policy in china? >> it's okay if not. these are tough topics.
>> samm, you actually authored a piece on this. so it's not quite fair for us to be -- she actually authored it. maybe you can answer that question for the audience. >> sure. thanks, denise. my assessment is that the cyberspace administration of china has become -- emerged as one of the most powerful entities in political beaurocracy in china. at the same time still some internal turf battles sorted out and not completely over. so you have the ministry of public security that played an increasingly important role in driving these ict policies, setting cyber security agenda. i think that turf war is playing out, we saw it play out in terms of the content of cyber security law. it highlights the tension in this government, which is on the one hand you have a government
that wants to clamp down on control of digital information and in terms of the hardware, software that's involved, but you also have a government that wants to create national champions in the technology space and really promote entrepreneurship and innovation. i think that tension is being hotly debated in the beaurocracy right now and cac, ministry of public security are in the mix of that debate. it's an open ended question who is going to emerge as the more influential player. >> i have a question, actually. so what do you think is the delineation of goals between cac and the new cyber security association of china and the new standards organization tc 260 -- 260 or 280. 260. >> yeah. so the cyber security association of china is an entity -- it's an industry group
that was established the spring under cyberspace administration of china. and it's essentially a party sponsored industry association. it includes not only prominent government entities, it includes research institutions as well as members of private -- chinese private industries, some of the most important chinese cyber security companies and tech firms. so far there are no foreign members that are involved in it and its mandate is essentially never to strengthen cyber security in china as aware of own vulnerabilities in areas as well as to groom national companies like ali baba to compete global. too early to find out what influence will be in the broader cyber government's regime. i think we're going to need to watch and see when the final draft of the cyber security law
comes out and these other regulations that are still pending. are they going to have a voice, represent chinese industry. i think they are sort of a myth that chinese firms are always aligned with the government's agenda on these regulations and that's not always true. cross-border data flows hurt companies like ali baba that want to compete and don't want restrictions on data flows. so that's something we have to keep an eye on. >> samm, if i could touch on something. cac, ways in charge, frequency, concept of cyber sovereignty, the idea that a country should be allowed to control the internet, the tubes and wires, whatever wasn't to call them, inside that country's borders and nobody else will be able to tell them how to run it. of great concern to chinese, they want to know what information flowing around, who knows how much money the family has, things like that.
the internet corporation for assigned names and numbers is a private organization that stood up in 1998 to govern internet's addressing system. i apologize if you already know this but if you type in google.com they go and figure out what ip address it is so your computer can take you there. there's been a lot of debate since 2013 since he who shall not be named decided to let everyone know what the united states intelligence committee is doinging, wait a minute, you have control over the addressing system. this sounds like a terrible idea. i don't like this. a lot of companies were jittery concerned. china and russia and a couple of countries with authoritarian bents were eager to take out from under control of u.s. government and put it toward u.n., international telecommunications union, which governs phone laws and most other international agreements when it comes to telecommunications. the issue with that for a lot of people including united states
government is that having u.n. body would allow for governments possibly to exert undue influence especially since china has a veto and so does russia on u.n. security council if cyber policy and address systems ever reach level of security issue we could be in really big trouble. so fortunately u.s. government announced last month it is supporting the complete privatization and it will come out from under department of commerce and be this super national organization run not by any government whatsoever and gets to determine who owns com, org, net. so kind of a victory for those of us who like to have free information flow on the internet. same as bringing up cross-border flows, some companies have to be connected to the economy in order to make money so there's probably a disconnect somewhere between the government wants more control over internet addressing system, ali baba, xi
jinping say we like this, have theability for information to go where we want and make more money. >> thanks for that. i think internet governance is a topic that gets us into a broader -- the other pillar of cyber, we haven't touched on yet, foreign policy china's role in the region global. cyber has a tool in that. bob, you've done a lot of work in this area. do you want to comment on cyber as a tool of these broader foreign policy objectives. >> i don't know how much i can add, but i think it's another arrow in their quiver, so to speak. i think mr. huntsman alluded to areas south china sea, philippines, taiwan, particularly since president xi has been elected, they have been fairly using it to be disrutive and getting their message across. but i also think the cyber
association you mentioned, they have make delegation here and we had a meeting with them. they seem to be sort of the smiling face of chinese cyber policy. they want to engage, they want to talk about cooperation, codes of conduct and that sort of thing. i don't know how i'm reserving judgment on it, but i think that all the things you've talked about are evidence of a work in progress. it's not clear where the ball is going to land. i think the more pressure we put on them probably the better, in terms of what the results will be. i think in terms of industrial espionage, i think they are probably getting -- probably being a lot more discreet and discerning rather than the kind of full-court press they have done in the past.
but i don't think it's over. i think the overriding goal is still modernizing the chinese economy. i think the concern is that they put forward an agenda of market -- where the market was supposed to be the determining factor, and that seems to have them falling by the wayside. the state is clearly the determining factor, instead of soe reform what we're hearing about is consolidation. so getting a corrupt state entity bigger will what a difference in its behavior. >> i want to focus on something you said. you talked about cooperation and collaborating on a code of conduct. we've been quite pessimistic i think so far on this panel. are there areas for collaboration for cooperation in the cyber realm with china? >> well, i think there's room
for more detail and codes of conduct. i think there's some basic -- ypt too far but there is an analogy to nuclear deterrents. both sides have agreed not to attack each other's critical infrastructure, for example. i don't know what else you could apply that type of logic to, but i also think the more china develops, the more vulnerable it gets and this mutual vulnerability cuts across the whole strategic relationship with china. ig the way i look at it, it took us about 20 years with the soviet union before we had strategic framework. i think we're in the early phases of trying to develop one. cyber is part of that. it's nuclear, it's missile defense a whole range of strategic issues, no understanding with china
whatsoever. even if you think about how bad our relationship with russia is, we still have a certain amount of predictability from arms control agreements we've made in the past and we don't have anything like that from china. it's all very uncertain. the u.s. government has tried for a loong time to push they will on strategic dialogue. as things get hotter, the traffic of chinese people coming through here, one very senior person came through here recently. i did a project a couple years ago on extended deterrence and trying to lay out to them rational of developing strategic framework and they looked at me like i was smoking something. this guy comes now and says we need a strategic framework. i think there's a learning curve. i think it's going to take a while and i think cyber is part of that larger strategic framework we've developed.
i don't have any illusions about anything happening overnight. >> let's make the one comment about the norm on agreeing not to attack each other's critical infrastructure. if you actually read fine print, during peace time, i think it's pretty safe to assume if you are attacking infrastructure, you are somewhat in war, we're talking about. not sure about the value of that particular norm, if you're going to call it a norm. a step in the right direction, obviously attenuated by that position. the chinese and u.s. have an ongoing dialogue as mentioned, where they are trying to establish a standard operating procedures in terms of when
there is a crisis, when they need technical assistance, who do you call, what are the hot lines and to exercise those means of communication. i think that's helpful. at the end of the day, the real sticking point between the u.s. and china, making a lot of progress on cyber norms is the issue of internet sovereignty. and the fundamental disagreement about whether or not states have sovereign right over the internet and the ability to control the type of data that flows over the internet, how it's secured, how it's regulated. and that, i think, is the biggest barrier to making progress. >> i wonder how sustainable chinese policy is. if their overall goal is to have a knowledge-based innovative economy, how do you do that and have complete control over everything?
it's the antithesis of innovation. i think there's going to be attention there. i don't know how that's going to come out. so far pretty disappointed. so and intimidation. if you are a chinese decision maker in the military or the state-owned enterprise or a r provincial government, you are afraid to do anything. there's a mood of fear. they will set their anti corruption campaign after you if they don't like what you are doing. >> i want to take a moment at this point to open the floor up to questions from the audience. we have touched on a lot of different topics. but any questions? >> waiting for a mike or am i just going to yell? thank you, panel. i would like to reverse the
bidding. assuming this on american cyber espionage. a couple of companies on whose board i sit and other companies i have an interest in, some abroad, some have got joint ventures with china, our biggest problem with hacking is not from china or russia. it's from competition in the united states, in europe and from disgruntled employees. when we report this to legal authorities, we get a shrug saying it's too big of a problem. how would you chair chinese hacking in terms of domestic hacking in terms of being a menace to u.s. corporations? >> i would say that one falls in my lane. i should back up. u.s. is the only one -- one -- i think it might be the only one that has a specific law on the books or a norm on the books that they will not conduct commercial espionage. every our country does it even with their intelligence services.
or is suspected of doing so. certainly, given the attribution challenges that some people have had, right, there is a possibility that competitors might say, i'm going to go hire this company over here and break into my competitor over here, steal some of his stuff, make it look like the chinese did it, boom. great. wonderful. despite that being highly illegal, computer fraud and abuse act has stiff penalties for doing so, but you have to prove that occurred. the burden of prove in cyberspace is -- burden of proof is high, but in cyberspace there's so many opportunities for running false flag operations to make it look like somebody else did it. coming to a level of evidence that could stand up in court is extremely difficult. you have to look at the agreement that was even signed between president obama and xi. we're not going to support cyber-enabled espionage for
commercial benefits. the if you can prove those things, you have a violation. i think it's challenging to do so. criminal actors have gotten extremely good. they have looked at what some of the nation state groups have done, the wait they organized themselves. they have normalized tasking systems. they have walls that they erect between people on the keyboard and people financing it over here. the rise of digital currency, bitcoin is the one everybody knows about has made this a wildly profitable enterprise to be undergoing. it's interesting that a lot of the bitcoin mining and storage actually goes on in china. so that's another issue for the government over there to figure out, we want to keep control of the currency but there's digital currency. china has the largest internet market by far. plenty of opportunity for stealing people's payments
accounts and buying whatever you want. i think you are right in saying that the nation state actors get more press. in terms of total volume of damage, criminals are probably doing more. >> other questions? >> hi. i have a question about the supply chain. there was an issue with the routers that had to do with china. i know that like you said, the hacker could have been a corporation for over 500 days before they are caught. now i will bet you there's a lot of routers that have still been compromised. has that been addressed? i don't even think china might know what ones are still compromised. how has that been resolved?
because there were so many of those routers. thank you. >> i will pick that one up, i guess. the national counselor intelligence and security center is the organization in the united states government that handles supply chain security. i don't know if anybody read "ghost fleet." basically, it has a lot do with pre-compromising digital technology that goes into fighter jets and advanced missile destroyers and somebody could turn it off whenever they wanted to. suddenly, your anti-missile system is a giant paper weight that flows. it is an issue. the amount of technological hardware that we import is massive. a long time ago, the decision was made it was more economical to produce computers and microchips overseas rather than here in the united states. now we're living with the consequences of that decision. we're going to have to recognize the problem, develop some sort of structure and framework to
deal with it, monitor where these things are coming from, make sure it's all written down somewhere. but it's no doubt a big challenge. >> since no one else is asking, this may not be relevant to this issue, but right now the big cyber issue seems to be russian intervention in the u.s. election. would anyone like to comment on that? >> i think this is pretty run of the mill sort of political espionage activity. and, you know, i'm sure -- this is a pretty well informed crowd. folks know that in terms of political campaigns, they are fair game in terms of espionage. right? it's the release of the data that was collected to wikileaks,
to sort of shape and influence the u.s. election that is obviously more concerning. putin was interviewed by bloomberg i think a few days ago where he said -- where he denied responsibility for the dnc hack. but he said, isn't this a public good? i mean, why are we even debating who, you know, actually conducted this attack. let's just focus on the fact that the hackers did something good for society. and so i think that that is a pretty good indication that, you know, they are probably involved. they are probably behind it. i mean, it seems like almost an admission to me in some ways. this type of stuff is really hard to deter. and figuring out how to respond to it is really difficult.
so i think, you know, the administration is still trying to figure out how to respond. they are looking at a lot of different options, trying to war game those options out. you know, one of the biggest challenges is attribution, not because they haven't determined that it is the russians, but because they don't know how to publically provide that attribution. so people always talk about attribution has gotten better. we have developed better tools. that's right, we have. but it's not necessarily reverse engineering code and looking at forensic data analysis of the information around an attack. it's using all different sources of intelligence. and we can't -- there's a sources and methods problem there. that's why we aren't able to fully attribute publically and to do any type of activity like indictments or sanctions, for example, we need to have public attribution, official attribution. we need to have all of the
evidence and sort of articulation of how we acquired that evidence. that's a problem. so i think there's multiple layers to this in terms of coming up with the right response. one, what is an appropriate response? right? i think the russians are very difficult to deter. much more difficult than the chinese. two, the attribution problem. not because we don't know but because of the question of how to publically attribute. >> i can give you a little bit of a more technical view of the way i see it. the russians are significantly skilled enough that if they didn't want us to know who did it, they very well could have done it. the fact that they used tools that we know are used by probably other members of the russian intelligence services in order to break into various organizations here in the d.c. area, means either they were careless and didn't care we would know or they wanted us to know. the fact that they came up with
moniker and it's the 2.0 version of the guy who supposedly claimed he found hillary clinton's private server, there are too many different things here that it almost seems forced to say, we're coming up with this persona out there on the internet. we're not expecting you to believe that it's this guy, but if you do, that's too bad for you. looking at this and saying they want us to know that we have all this information, we have all these capabilities, deterring physical russian forces, whether it's a bomber buzzing a plane or a tank division moving to a border, we know how to do that. we haven't figured out how to do deterrents in this other domain. where he supposed to be everybody doing everything they want. to feel like we're going to restrict that or counter attack in some way, it's not something that we're prepared to do yet.
>> good evening. i'm a senior at university of massachusetts. my main question is, i know over the past 30 years in the u.s. research and development funding has not stayed on par with other countries in europe, in the asia p pacific area. i was wondering if there's areas in the u.s. we can improve on to improve on cyber security and increase to get kind of ahead of the game? whether it's just focusing on funding. if it's focusing just on enforcing it. security. things like that. if you could touch upon that, that would be great. >> yeah. this seis an issue i've been looking at. when you look at innovation in cyber technology, you will find basically a handful of
technologies that -- and practices that have been in existence for well over a decade. the innovation that takes place in industry on that is how to basically deploy or implement those practices better, faster and cheaper. that's what all the companies compete on. when you look at what venture capital firms, investors are investing in in terms of new technology and startups, they're looking at companies that can do it better, faster, cheaper. that's great. but that also misses the underlying root causes of the problem. there's not enough private money going into funding the development of technologies that could have game changing affect on the security and resilience of the internet. that's the role of the government in some ways. it's harder to realize a return on your investment within a period of time that you can justify making that investment as a private entity. you have organizations like nsf
that are making investments. but there's something that we call in the rnd space the transition valley of death. that is after you have developed a prototype, you have developed an alpha of a product, using government money, it's almost impossible to transition that technology into commercial practice. it's already very difficult to transition that technology to government. even when the government has spent money building it. so we need to be focusing on efforts to bridge that technology valley of death into transition. and i would argue that government should take a page out of the playbook of a lot -- not in terms of the types of entities they are investing in but how they do it. they are sourcing startups. they are looking at which technologies are promising.
but they're not just doing that. they're actually looking at the teams of people. do you have a person on this team that knows sale ss? do you have a person on this team that can get you access into the marketplace? you are building a product team. not just getting the smart people to develop the technology. and not only are they doing that, but they're getting validaters from outside. they are getting big companies to validate the technologies of the startups so that they can commercialize the product. that's what we need to be doing with more government-sponsored r and d programs. put together smart people that not only develop the product but make sure that it's successfully transitioned to government and customers as well as the private sector. so you are right that r and d spending has gone down. i'm not -- i think an easy thing for people to say is we should increase funding. if you compare r & d funding that we spend now on national security or defense-related technology compared to the cold
war, it's a fraction. i don't -- i haven't calculated the numbers. it's significantly lower. a lot of our major technological breakthroughs happened during the cold war because of the amount of investment we put into this. we're not in that type of environment anymore. we have to think differently about solving this problem. so that's my -- that would be my advice. not necessarily increasing funds but bridging that technology transfer of death and making -- building smarter, more versatile teams. >> it's interesting because the chinese government is having this same debate and discussion right now around the 13 five-year plan where they have come up with a list of strategic industries that are targeted for more state support, more investment. the question is -- i had a conversation with a friend of mine in china about how is this 13 five-year plan really going to help lead to innovation in these sectors when there's a
heavy hand of the state capital allocation? indeed, in china right now, they are thinking about how can we actually take it to the next level and complmercialize the technologies? they are thinking through that same challenge. it will be interesting to see how both on the u.s. side and the chinese side we grapple with the same issue. >> a former software developer. my question is about open source technology and transparency. do they give an advantage to the attacker or the defender? or does it level the playing field, or does it have no impact on whether it's easier to defend or attack? >> i would say there's a rigorous debate about that. there's the one school of thought that would say that open source technology means everybody can see the back end code, everybody can kind of get
the wisdom of the crowd in finding bugs and vulnerabilities. that's where all software and computer problems stem from in the first place. the other side of that argument is that everybody knows the code. if there are bugs and people can't necessarily find them fast enough, it becomes easier for would-be attackers to find a particular vulnerability that they could build a tool to exploit. as software code is getting longer and longer, i saw a mercedes-benz ad that says this car has ten times as much -- ten times as many codes as the apollo lander. first of all, the fact that we have that much code in a car is a little scary to me. the fact that this is getting longer, the number of man hours that it takes to go through and find problems if it's an open source tool may actually give a benefit to the attackers who is going to sit in his basement or government facility and look through that code all the way through. if it were proprietary and hidden it would be harder to
find those problems. >> another problem is that -- the issue of responsibility. some open source code is reviewed by a lot of people. there's a lot of interest in that. but then there are many libraries that don't get reviewed for bugs, for vulnerabilities because nobody is being paid to do that. so there's actually a discussion about whether or not maybe through dhs there should be a fund that pays vulnerability researchers to go through open source libraries and to look for vulnerabilities and develop patches. the answer is not so binary i guess is the -- is what i would say. >> in the front in the red tie. >> thank you for coming today. i'm a freshman at the george washington university. thanks again for taking my question. one of the biggest pushes in the
technology industry is quantum computing. $600 million of investment. a huge push in the technology industry including google and many startup firms for quantum computing. is there any chance that this will raise the stakes of the current engagement between the chinese or u.s. government or just keep the stakes where they are right now except it's at a higher tier of netechnological advancement? >> it raised the stakes. there's a race to acquire quantum computing capabilities everywhere. and i would say that the most cutting edge developments are taking place in parts of this government and parts of this country that do not get reported on in the news. and where the budgets are not necessarily made transparent. so i think it would be very difficult for us here sitting on stage to articulate where
that -- that sort of pecking order, how that is and how we would compare. i think the u.s. is probably the leader. i hope it is. the chinese claim to have launched a quantum satellite, communication satellite a couple weeks ago. they did launch that satellite. it doesn't have the full suite of capabilities that you would need to really fully call it a quantum communication satellite. i think it's a nice first step. they will have to be a lot of additional research and development before they get any real use out of it. >> i think also there's still some debate in the technology community about what's possible and what the capabilities may be in the real world. >> in the front.
>> thank you for putting this together. it's been a very interesting discussion. i guess two things. first is, there is this issue of encryption. that encryption issue sort of pits silicon valley with both against washington and beijing in a certain way, given the product. curious to me, that has not come up. i would be curious for your thoughts about that. the second issue is, we are going to have an election. we're going to have a new administration. so what would be, from your perspective, what are the three or four issues you would advice a new administration to focus on? why would those areas you believe be the mosted av advants and successful to bring the relationship forward? >> i don't think we're going do anything on encryption unless there's a real incident where lines are lost and you can pin
it to -- directly tie it to the use of encrypted communications platforms. i just don't think that there's political will for it. i don't think that there is an appetite for it in the industry. i don't think that we have very good, sensible solutions right now either. the fbi and law enforcement community has been talking about the need to gain access to encrypted messaging platforms for a number of years now. in fact, something that people don't often realize is that in 2013, they had put together a proposal, a legislative proposal, that they were going to push on the hill. they decided not to push that agenda. it was the same talking points that are being used right now. they decided not to push that legislative proposal because something else happened in 2013.
because snowden disclosures happened. so they essentially took the proposal back and decided to wait. i don't think that we're going to do anything, because we don't, frankly, have really good solutions right now. i haven't seen anything. at csis we have a project to look at this. no one has articulated a framework that could actually work domestically and internationally. so until we have some real proposals that people can evaluate, technologists as well as lawmakers, lawyers, you negotiatiknow, companies, it's hard to make progress. there are wild cards here, china, india, where there's a huge market for mobile and where that's -- that's the future for the mobile industry in the united states, china and india. what they decide to do with their domestic encryption laws
will certainly have influence over how these companies determine their position on the matter. in terms of what the next administration should do, i think first and foremost -- this is the least sexy of the recommendations. first and foremost, they should do a better job of protecting their own networks. they need to adopt new technologies. i'm not even going to say the new technologies, just newer technologies. they need to learn in terms of how they manage security for the federal government networks. that should be their first goal. and then i think there are a number of other topics that deserve a lot of attention. including how to enable companies to protect themselves. we have been having this debate about hacking back for a while. i don't think that's a useful way to describe this problem. what we need to do is to figure out how to enable companies to
provide for a better defense. that's not necessarily going out and breaching other organizations' networks and stealing their data back. but it may be some other types of activities that are -- that do operate in this sort of legally murky area. a lot of companies have concerns about engaging in that activity because it's legally uncertain. i think rather than sort of articulating exactly what those active its should be on stage here, you know, that the government ought to consider putting together a pie llot program, much like we did for information sharing. when dod put together their information cyber threat information sharing pilot program, it was the first of its kind. now cyber threat information sharing is a mainstream topic. it's what every industry sector
is investing in. a lot of that dates back to the defense department's effort to sort of test out this activity. it wasn't a success right off the bat. but it did help them establish a lot of the legal vehicles that they needed. it helped them build a lot of the relationships within this trusted group. to get information sharing to where it is now. so i would say, you know, we ought to consider getting some critical companies together and establishing a pilot program possibly under the dod umbrella that looks at what types of activities those companies can engage in to provide for more effective self-defense. >> a quick follow-up question on the encryption side. the chinese are watching our debate about encryption closely as they are in the process of forming their own encryption laws and regulations. any thoughts on their perception in terms of chinese encryption policy? i know a lot of this is not obvious from the outside.
it's okay if the answer is no. >> well, they have their encryption law which i don't think has been implemented. not a big surprise for china. >> there's pressure on them to change it. >> yeah. there is certainly pressure on them to change it. chinese and china, there's a set of encryption laws that apply to commercial encryption products where encryption is the core function of that product and that's highly regulated. i'm going to set that aside. there's smartphone encryption or device encryption where the new national security law applies. but we haven't seen them fully sort of implement it yet. we don't know exactly how that will play out. for all smartphone companies operating in china, they have to adopt an encryption standard
called zuc. it's an internationally recognized encryption standard at this point. all of the documentation details have gone through public review. but there is concern that that has some sort of back door that folks have not necessarily been able to identify yet publically. obviously, the big question that people want answered is, what about apple? is apple -- will they be able to continue to sell their products in china and are they going to be able to offer products -- chat platforms? i don't know the answer to that. but i know that when you look at chinese smartphone and messaging application usage, you see that it's actually a tiny percentage of their user base. we chat and qq are the vast
majority of what people use to communicate when it comes to mobile chat platforms. they do not offer encryption. when you look at the types of users in china that own smartphones, it's a very more highly educated people. these with r peopare people who to buy an expensive device. it may be that companies like apple and platforms like what's app are flying under the radar. when they do, that might change. >> any other thoughts on the encryption issue with china? >> so i guess i would say, the debate here in the u.s. has been kind of -- either you give us all the keys to all the encryption or we get none of them.
there are a lot of really useful applications of encryption. every time you shop online, any time you want to send an e-mail you don't want anybody else to read, except for google. they read all your e-mail. these are things we take for granted but don't think about. to say encryption is fundamentally a problematic technology, it's like blaming the technology rather than somebody that uses it. i don't think that's a helpful debate to have. there are ways you can get around encryption. there's -- in a communications protocol there's the sender address and receiving address that have to be unencrypted. you can tell who is talking to who. or at some point on the phone, if we're talking about a chat application, it's in clear text when the human is reading. we can't read encrypted bits and bytes. if we can install some sort of image capture thing that will pick up the message as you type it, you can get around it.
fundamentally banning encryption i think is a dangerous road to go down. as far as the chinese are watching us and if they look at the u.s. and say the u.s. can get away with it, we certainly can. if the u.s. decides that an encryption ban is going to take place, u.s. companies can no longer complain to the chinese, you want keys to the kingdom for our devices, they won't have an argument anymore. for them to be able to piggyback off of what u.s. policy is to get what they want, i think it might be something they are hoping for and something they are watching. >> you think you raise a good point on the sort of -- the clear text being on the device and that that may be another avenue to access the data that you need to perform your law enforcement function. right now, the iteration of this debate in terms of government access to data for law enforcement access is about encryption. i think the next iteration of this debate is about law
enforcement hacking activities and what is lawful hacking in terms of government activities? that's the direction that we're moving. i think the administration could benefit from thinking a little more about how to govern that activity. >> we have time for two more questions. >> thank you. i was wondering if you could comment on sort of the hr practices for the cyber operators in china in terms of retention and salaries and training in general? if you travel down the silk road, their best cyber actors come from more of the black hat community. now they've been scripted into acting for the government. does china utilize the same. how do they deal with the pay differential between the two?
>> that's something i can comment on. >> sounds like you more about it than a lot of us. >> time for one more question. >> i'm a lawyer. president obama was just in china yesterday. i was just wondering what your thoughts were on how his trip went. >> if you look at the statement the chinese put on and one the white house put out, they're not identical. i think the chinese have kind of written president obama off to a certain extent. the focus on climate change is one that i think the chinese like, because it has no enforcement and no penalties. it's aspirational.
they have been dependent on coal between 67% and 70% of their energy for the last 20 years. it hasn't changed much despite their stated intention to do so. i'm not sure -- it's good to have a goal. but i'm not sure we have the wherewithal to reach it. there wasn't a lot of there -- there's a smattering of global issues, counter narcotics, counterterrorism, a number of other -- oceans policy, things that are somewhat limited but that the chinese are cooperating on. but i think the fundamental volatility of the u.s. china relationship was not reduced as far as i could see by this meeting.
i have to admit, i kind of find the chinese behavior a little confusing because i think they have to know that whoever wins the election, they're go ing to have a tougher china policy almost inevitable than with obama. you would have thought there might have been an interest in locking in some things with obama before he left. but i don't see any evidence of that. the cyber agreement i think is one exception. that seems to have made some progress. >> thank you all for coming today. i think we have touched on a lot of important issues. i think the agreement last year was an important milestone. but as we have seen from technology innovation, industrial policy, internet governance, there's a long way to go in this relationship. we will continue to watch for signs of future progress. thank you all. thank you to the panelists.
[ no audio ] we're live on capitol hill now in the rayburn house office building. we're here for the hearing on the cost of epipens. they have gone up more than 500% in price. it costs about $600 for a two pack. the company's ceo heather bresch will be before the house oversight committee this afternoon. she will be answering questions
about that price increase. it looks like it's going to be a few more minutes before this gets under way. committee members are over in the house chamber. they are casting votes. a series it looks like eight votes are under way in the house. halfway through them now. as soon as that ends, we expect this hearing to get under way. while we wait, earlier today we spoke with a member of congress who gave us a look at what's ahead in congress. >> our first guest, democrat of california, serves the 34th district and the democratic caucus chair, good morning. >> good morning. >> there's an effort to keep the government funded by september 30th. is that going to happen? what's the holdup? >> we have seen this movie before. we continue to watch as we approach the deadline when the government will shut down. we have done this for several years now. right? republicans are having an internal fight about where they should go. we had a deal, an agreement -- a budget agreement reached last
year -- december of last year through a process like this where we -- republicans came close to shutting down government. that agreement was to take us through this year's budget so we wouldn't have this kind of a showdown on a government budget. but here we are again. that's because within two months of the agreement that republicans and democrats and the president agreed to, republicans in the house said, no deal. we don't want this deal anymore. so that's why we're here today nine days from watching again as republicans come close to shutting down government. >> that no deal, what were the specifics late out because of that? >> the agreement that was reached last december was that we would reach an agreement on the numbers for the budget. and then we would fill in the numbers for each different department. republicans in the house said, we don't like the number that we agreed to two months ago anymore. we want to change it. there was mostly house republicans. senate republicans were saying, no, we got our agreement on the budget. let's not get in the way. let's do our budget and get done. republicans in the house said,
no. so that's where we are today. so now since very little has been done in this year's congressional session, we now have other things pressing. zika funding because some 1900 women -- american women now have zika and they are pregnant. so we understand that what we have to do are a number of things. first and foremost, keep our government from shutting down. secondly, take care of emergencies like zika. >> because of the -- you are on ways and means as well. there's an argument as far as funding as to whether we keep -- you pass a short-term deal through november after the elections or go longer into the next administration? from a financial standpoint, which works best? >> if you had a small business on main street, would you do budgets on a weekly basis or a two or three-month basis when you have to make payments and advanced considerations for what you are going to do long-term -- if you are a contractor doing major road construction projects, you have five years, seven-year deals with the state government, city government about what you will do with the
road or highway or bridge. here we are doing essentially a two or three-month budget. we can come back and try to finish off the remainder of the year's budget. you wouldn't run the smallest business on main street this way. why would we run the largest economy in the world this way? that's where we are. republicans have to decide what they want to do with regard to this budget. follow the agreement that was reached and signed by the president or battle it out and see if we come close to once again seeing republicans shut down the government. >> the numbers, 202-748-8000 for democrats, 8001 for republicans, 8002 for independence. what do you see for keeping the government open? what's coming from the senate? is that something you can agree to? >> the senate, there's a greater chance for a bipartisan agreement there. there are enough republicans willing to stick close to the previous agreement and also take care of providing emergency funding for zika. not what the cdc and nih -- the
healthcare experts are telling us they need. but it's something. it keeps us from watching more americans, especially pregnant women from contracting zika. it looks like the senate is moving closer. we have to see what it is. some republicans are trying to insert language that has nothing do with the budget or zika funding and has to do with their own political agenda. they are thinking because it's a must pass bill they can sneak their stuff in. right now, it looks like there are enough senators, republicans and democrats saying, let's have a clean bill that doesn't mess with all these political items that people want to insert. we need to keep our government funded and we have to stop zika from spreading to other people. >> that's on senate side. do you think republicans and democrats will come together on the house side with whatever the proposals come? >> how much money do you have to bet? i don't think it's clear yet where it goes. my sense is that the senate is getting ready to force the house to vote on something. that may be the only
alternative. you still have a group -- a faction on the republican side in the house who are saying no deal. >> you mentioned zika several types. i mentioned that because senator tom tillis put an op ed on there, talked about zika funding. he said, while president obama berates congress to pass funding, that his party is filibustering, now his administration is sitting on hundreds of millions of dollars that can be used to fight zika. the only rational that -- what do you think about the argument that he is putting out there? about the president having money. >> you have money in your pocket. part of it is to pay mortgage, part to pay gas and electricity, part to pay for your kid's school if they are in college. what he is saying is, you can take money you are using to pay your kid's tuition and pay the mortgage. we don't have to help you with the mortgage payment.
you could. but at some point you will have to tell your daughter or son you can't go to college anymore because i used your college funding to pay for the electricity bill or the mortgage. that's what he is saying. of course, government has money to do different things. we are supposed to walk and chew gu gum. we have money for he had caeduc homeland security. it has been assigned. it hasn't yet been sent. what we would do is get into this perpetual game of taking from one pot to pay another. then from third pot to pay the second because you still owe it because you took it for first pot. you go down the line. you need to fund your government the way you need to fund your family's operations. you shouldn't play these games. you shouldn't take money from the ebola account to stop the ebola virus from spreading to help pay for zika prevention. that's exactly what we're doing. they are proposing we take money from the ebola account that a few years ago we were afraid ebola was spreading throughout the country.
we have it under control. it's still there. they are saying, take money out of the ebola money to prevent it from spreading to take care of the zika virus. it's the worst way to do government. >> calls lined up for you. linda, pittsburgh, pennsylvania, independent line. you are up first. go ahead. >> caller: hi. can you hear me? >> we can hear you well. >> caller: i would like to ask for to you answer this question. number one, the president is the only person that can shut the government down. when you say the republicans can shut the -- one person can shut the government down, that's the president. can you answer that for me, please? >> sure. you have got it reversed. the president doesn't have control of the purse strings. our government shuts down only if it can't function. under law, the president cannot execute the orders of government without the resources to pay for those who are supposed to execute the orders. we're nine days from watching republicans in congress shut down the government because republicans have refused to finish up a budget.
without a budget on october 1, legally, by law, the president, the administration doesn't have money to pay all those government workers, to undertake their tasks. the government -- our government would only shut down if it doesn't have the resources to move forward. only congress under the constitution can provide resources. the president cannot order people to do something without resources, unless -- unless it's a national emergency and then it's recognized as something we need to do. simply because republicans decide to shut down the government as they did three years ago, it didn't mean our troops were no longer going to protect us. the president can order that the troops still continue to operate. we have to pay them back. every other aspect of government would have to shut down except the most essential portions of our government. >> for republicans, from milton, florida, hans is next. >> caller: hello. >> you are on. >> caller: thanks for taking my
call today. my first question is, you mentioned about family business and stuff like that and running it on a budget. we're $20 trillion in the hole. what kind of family business can continue to run in the red like that? another question is, on the zika, we have $1.7 billion they are seeking to control zika with an open border. how are you going to control an open border -- a disease coming in to communities here in america where they can walk it across? to spend money with an open border makes no sense. >> real quickly on first point, in terms of the budget deficit, you are right, the size of the national debt -- a deficit talks about an annual spending pattern. a debt is the acruel of all those years of spending and overspending. our national debt is as you said, it's rather high. it's beyond 18,000. $18 trillion. you are right. we can't continue this way. that's why this budget impasse
we see now playing out in congress is just terrible. not only does it affect the operations of our government, it keeps our economy from being able to move forward because businesses don't know if they're going to get paid by our government to fix that road or repair that bridge. it makes everything -- there's a ripple affect for the entire economy when we create this chaos within the funding of our government operations. i also want to make another point. when we talk about the $18 trillion plus national debt, we always forget to talk about our ass assets. you balance your debts against your assets. i don't think anyone would deny that our country is not only wealthy in terms of money, it's wealthy in terms of its vast resources and its talent. i don't want to dismiss the national debt, because you can't continue to spend that way and not have the operational money to pay for it.
but remember, i would take america over any country in the world. our debt is a sign that we're not being as fiscally responsible as we could be. we're going to start to reduce the surplus of our assets over our debt. that's what we have to be careful about. on the second wound, zika is being transmitted in this country not because of our southern border or our northern border. it's being transmitted because people are returning or coming to this country legally from countries where zika has already infected a lot of people. you are not finding that at the southern border, which i suspect you are referring to, a lot of people are transmitting zika. it's coming from folks who have been in places like puerto rico, where unfortunately a lot of american citizens have contracted zika. over 15,000, i believe, it is coming from puerto rico. i should check the number. what happens is it gets transmitted from those who had it before or those who are
returning from places where it -- zika is infecting individuals. that's what we have to deal with. we have to deal with it quickly because unlike other viruses or infections, zika is -- can be deadly and certainly devastating to a lot of people, including newborn children. >> congressman, earlier this august they predicted in a report that the deficit was going to rise to $549 billion. they said that's 3% of gdp. what does that number suggest to you? not only about the rise but also the government's ability and congress's ability to tailor back or pull back on the riesin figures? >> if we don't stop playing with the budget as we see right now, things will get worse. i will also tell you this. you can't believe that you are going to spend money and not incur deficit. last year in that budget deal that i mentioned to you, along
with it there was another bill that rode through congress and got signed by the president that essentially gave away in tax breaks about $600 billion over the next ten years. part of the reason that the deficit -- that projection you mentioned that the congressional budget office has come out with is because they factored in the unpaid for spending that occurred through that tax spending that occurred in that tax break bill that passed. you can't give away $600 billion in tax breaks and not have a t show up next year in the budget by showing a bigger deficit. part of that deficit growth was a result of a bill that congress passed without paying for the cost of tax breaks. when you give away $600 billion in tax breaks, some of them, which you and i probably would support, but still if they're good enough to want to support them, they had you be good fluff to pay for them. otherwise, you increase the siz
>> does it factor in obamacare and other things? >> actually, that's the interesting part. most of the spending we think of in terms of the direct spending by our departments and our agencies. the money the administration or our government spends on education, on our troops, that's essentially held pretty steady for several years now. but what we have seen is when you give tax breaks, those cost money. when you are spending money through the tax code and you don't pay for it, that increases the size of the deficit. that's what's going on is much of the deficit can be attributed to so many of these tax breaks that have been provided to special groups of people, not all americans, but special groups of people without paying for them. >> democrat line, maryland, al is up next. >> carol: good morning. thank you for having me on c-span this morning. i would like to speak to our nation's budget.
contrary to what i'm hearing this morning, the budget should be managed as we do manage the budgets within our own families. the difference is in our families we have discretionary and non-discretionary income. the second point is there are two limits on our budgets as we manage the funds for our household. number one is the soft limit which is our income. number two is the hard limit, which is our debt. i believe that we should have debt. debt is one of the disciplines in budgeting. debt itself is actually the storage of the difference between your income and your spending. however, going back to my first point, spending is discretionary and non-discretionary. we do move it around. if i i'allocate a certain amoun
of mp for vacation and i find out i have a non-discretionary expense such as a medical expense, i am going to move it. specifically speaking about the ebola versus zika, yes, it's a good idea to as a non-discretionary concept to support ebola. however, when we have another more highly prioritized non-discretionary expense such as zika, it makes common sense in my own family, i would do the same thing. >> thanks. we will let our guest respond. >> i agree with his point. if you compare your vacations to paying your mortgage or your vacation pot of money to versus your daughter's college education, yeah, if you are running short on your college -- paying your daughter's college education or your mortgage, yeah, you are going to shave away some of the money from your pot of money for your vacation. i get that. but i see ebola and zika as very
different from a vacation. i think there are few people looking forward to becoming infected with ebola. i know everybody would love to be able to say i'm going to take my vacation. it's easy to transfer from a vacation pot of money to pay for your mortgage or your daughter's college. i get that. it's very difficult to say you are going to take money to help continue to prevent ebola from spreading to help make sure zika doesn't spread. you know ebola is still out there. you know that americans could contract ebola, which is very dangerous and deadly. you are simply playing a game, a shell game. you know you are going to need money for ebola. you don't necessarily need to take that vacation. i agree with the gentleman's point. you can shuffle your money around. but there are some essential activities, as i mentioned before, when our government -- when republicans shut the government down a few years ago, our troops continued to operate. that's because you have essential services and
activities. i believe funding for -- to prevent ebola, funding to prevent zika is an essential activity, because the last thing you need to do is tell an american who contracts ebola and dies, sorry, we had a political fight in congress about funding. that's why you contracted ebola and you died. we need to make sure we're funding our essential services and those that are discretion y discretionary, you have to suffer the consequences of having some of your money take en from your pot. >> from texas, independent, tony, good morning. >> caller: good morning. i love c-span. i wish i could get it in hd. my question is to the representative. would he be willing to yield or at least listen to the idea like some of the young men like our friend in wyoming? when we talk about the budget, do some conservative things. yield to lawmakers and turn texas blue.
you got the presidency. now let's balance the budget. all these other things are just little details. it all starts with a balanced budget. which is why trump screwed the whole thing up. >> i think we would be -- there would be a number of people who would be willing to listen to different ideas. that was the idea behind the december agreement last year. we agreed in advance on what we would have put forward for the budget for this year. we would avoid this constant shutdown of government or threat of a shutdown of government. that's where people yielded and said, okay, we're not sure exactly how things will proceed over next nine to 12 months, but what we're willing to do is crecede the argument we have to fight on a budget. let's agree on the overall number. then we can bicker about the details about how we spread the
money. let's agree with the number so we don't have the potential for another government shutdown. i think there's a willingness to go there. as you saw the senate yesterday move forward on a bipartisan basis with the outlines of a deal. i believe that shows where they are trying to go where you suggested. there's no sense if they will agree with the senate republican counterparts. a tweet this morning from steve saying, you should allow the government to shut down. it might help democrats regain the house. >> you know, that's a rough way to play politics. by making others suffer the consequences of political acts in congress. i don't believe we should be using our government as a tool to run our politics. i think the american people understand, if you can't do your job, maybe you shouldn't have it.
so rather than shut our government down, i just hope the american public pays attention and recognizes this bickering, we're nine days away from having our government shut down not because we didn't have an agreement, it's because some people decided to break the agreement that had just been reached. so that's why we're having this fight. it's unfortunate that the internal civil war that republicans continue to have is playing itself out in our government and in our budget process. it could be very dangerous. >> let me show you a headline from the wall street journal saying you seeing potential of the house going back into democratic hands. 30 seats supposedly to win that. you still think that's a possibility? >> i do. it's a high climb. because 30 seats is a lot to win. my sense is the american public are interested in change. they also want us to get things done. it's not as if the american public wants us to have revolutionary change where turn
the whole place upside down. there are some people who do perhaps. i think what they are asking for is change so we don't constantly see this discussion of a government shutdown because people can't agree on what to do with our government budget. at the end of the day, november 8 is important. i hope everyone votes. i hope you vote however you feel you must. but vote. my sense is that most people will have had an opportunity to see what's going on, make a fair assessment and cast a vote based on their best judgment and gut. >> you see 30 vulnerable seats as it stands today? what are chief among them? >> there are 435 members of congress in the house who are up for election. every single member. some seats are easier to win re-election to than others. at least 50 to 60 of those are in the realm of -- they are close. so they could go in any direction. that's where the public, if it comes out to vote, could make a
difference. if they want change, if they want to have a congress that actually works for them and gets things done, that talks about making a stronger and secure america and not fighting with the the little political battles, i think there's a very good chance that november the 8th we have a different congress which hopefully will finally actually try to work with our president instead of constantly be an obstacle to the president's dee sighs to get things done. >> there a race you are particularly interested in in the house? >> we have several. i was just in minnesota a month or two ago, i was down in florida in orlando we have some great races going on, there is a young woman named stephanie murphy who is a dynamic person who really will bring change, i think i saw that you mentioned her at the very beginning. >> against john mica. >> very talented, could do well without ever having to run for office. thankfully she has decided to maybe give it a shot and do public service. in minnesota there is a young
woman named terry bonaff who has a food chance of becoming a new member of congress, angie craig in minnesota, two dynamic private sector leaders who have said i'd like to see my government work better. if they win they are replacing republican incumbents and they would have opportunities to help us change this place. >> the democratic caucus save javier basare joining us. >> the next thing that's going on if the government is shut down is that the liberal media is going to be all over it complaining about how the government employees don't get paid and it's such a tragic thing for them. most people don't realize all that back pay is made available to them as soon as the government is back in place. and if the democrats are so worried about the issue of money, maybe they should be
diverting the millions of dollars that are going to bring immigrants into the country, paying for their food, their clothing, their housing, their medical care. immigrants that i believe most people are opposed to, we don't need them, we don't want them and they cannot afford them. so maybe they should reevaluate where the money is being spent. >> all due respect. you should look a little closer what you just said because, one, if our government shuts down those federal employees do not go to work. if they don't go to work they don't get paid. when republicans shut our government down a few years ago those government employees that didn't come to work ultimately then when they did come back to work they did get paid and some of them did get back pay but that was because congress,
republicans and democrats, passed a bill authorizing that otherwise they wouldn't. so any government worker who is part of the shut down will not get that -- pay for those days when the government is shut down unless of course they are part of that indispensable group that must come in, our troops and so forth, and they do come in even though the government does not have the dollars to operate we do pay them because they did come in but we do have to pass a bill in congress that authorizes it. again, under the constitution our government cannot provide resources to people without having had the authority to do so. so check your facts on that because our federal government workers who always get beaten up and i will defend them because so many do such hard work, you should recognize that they only get paid for the work they do and the bad apples should not stain it for the rest of the hundreds of thousands of americans who work keeping our federal government open. i'm the son of immigrants and i
take offense to the way you portrayed that simply because my parents never asked our government to do anything for them, they worked very, very hard all their lives, yet, in fact, my father even when he was a u.s. citizen couldn't walk into restaurants or other places in america because of signs that said no dogs or mexicans allowed. my father was a u.s. citizen. so, cathy, maybe there are people who come to this country to take advantage of things. we know that there are some people who commit crimes. i will agree with you there. but for you to categorize all those individuals who have lifted up our country like my parents, i think it's unfortunate. because i think you know and i know that immigrants have made this country great and at some point your family can trace its immigrant roots as well and i suspect that you would say that your forefathers and fore mothers were here to try to make america better. immigrants that come to this country don't get benefits as you said, they don't fed and housed or free things.
folks who come in as refugees or people seeking asylum we do grant them certain benefits because they're coming in under circumstances if they qualify which demonstrate that they probably came with nothing but the shirt they had on their back. but most immigrants who come in and get the green card, for example, they don't get those benefits, in fact, if they get benefits they can be deportable for having gotten those benefits. again, cathy, i respect your opinions and your views but you should get your facts correct because i'm not going to sit here as a son of immigrants and let someone talk like that about people who made this country great. >> ken from lancaster, south carolina, independent line. >> yes. could you please give me a little time. first, there's too many republicans and democrats in this country, we have to have a lot of independent thinkers. can you hear me? >> go ahead. you're on. >> okay. and another thing, in the budget was the $10 billion payment to
israel in the budget? one thing the democrats and republicans get along with is that funding for israel. another thing, every time you on -- i know you are from hispanic dissent, you are talking about how great they are. this country came to fought all these illegals, we are $20 trillion in debt and they get all them programs that you say they don't get. i know for sure they get a lot of housing and everything else. i see it every day. my wife works at the social security office -- i mean and they will be out there getting social security cards. so you are talking about how great the immigrants are but -- >> okay. caller, thanks. >> as i said, i don't deny that there are people who end up doing bad things in this country whether they were born here or whether they came into this country and we thought they would do the right thing. so i would agree with that absolutely. there are people who are bad characters and if they came into
this country representing themselves a certain way we have the right and we should deport them and do it as quickly as we can. no argument from me on that. but i think what you see is that the majority of people who make a real effort to come to this country and essentially give up everything they have had back home try very hard. on the other issues of the budget, i know the gentleman mentioned israel and other aspects of the budget. you know, those are the debates that they have in wongs about where to put the money and theroux bust debates. it's unfortunate these days in congress we fight more about whether we should keep our government operating or not, but hopefully we get back to those kinds of debates because you and others are entitled to hear what your representatives choose to do with the dollars that you and others provide through your taxes. i appreciate your call. i'm not sure if we have the time to go into detail on some of those things. >> campaign politics from cbs news from a couple days ago showing battle ground states, i will read you the headline about
donald trump and hillary clinton showing a closeness. are you surprised the polling is showing so closely lately? >> no. this is a presidential election. i can't think of a presidential election in my lifetime that hasn't run close where one candidate is up, the next week or two later another candidate is up. it should be close. we want to have robust debates, i think money too much dictates how these debates take place and who wins, but it's good to see real competition. at the end of the day right now what we see is that secretary clinton is ahead of donald trump. will that continue forward? i believe that you will begin to see people make clear decisions, the undecided voters will start to decide where to go and i'm hoping that on november 8th the person that's most qualified and prepared to lead our country and is fit to be our commander in chief will be there and i'm supporting hillary clinton for that. >> how do you think she handled not only the basket of
deplorables statement but also the revelation of her pneumonia? >> i think -- i think well, especially when you consider donald trump. she said let me apologize for having used the word half. half of all those who support donald trump are deplorables. she said some. and i would echo what she said that there are clearly people who are deplorable or have said deplorable things who are definitely supporting donald trump. so she corrected herself and i appreciate that she did. in terms of her condition, her health condition, first i will say this, have you ever come to work knowing that you're kind of sick and maybe you should stay home? >> okay. sure. >> yeah, sure. me, too. you work through it. i believe that's what she was trying to do, especially since the day that she was trying to work through was 9/11, the anniversary of 9/11. and so if we typically work through things, secretary clinton who was senator clinton who helped make sure so many of the victims and their families and the first responders were --
got the support they needed after being there for so many families and victims, she was going to be there. so she tried to work through it. clearly she said she should have been a little smarter and taken it a little easier. >> no, she found out about it on a friday, though, kept that through the press and it was revealed from the press and that was part of the issue about the revelation of it. >> she did what you and i do on friday, she continued working and she didn't notice a thing. >> to be fair, we are not running for president. >> that's even more the point. she's running for president. friday she's told you are kind of sick you should take it easy she goes i think i can go through it. saturday she continues to work and go through it. we don't know anything about her having pneumonia. sunday when she is out there for an hour and a half standing in the hot humid sun for 9/11 we find out. okay. so she tried to work through it. for two days she worked through it and you and i didn't know, a lot of folks didn't know that you were sicker than you professed, that you should have been home. yeah, she s