substance abuse, there's an epidemic of opiate drug abuse, super passes homicide and traffic crashes in the number of injury deaths in america. heroin use remains relatively low in the united states as compared to other drugs but there has been a troubling increase in the number of people using heroin. evidence suggests some users, will substitute heroin for prescription opioids since it is often cheaper than prescription drugs. a recent report from the mental health services administration found that while only 3.6% of people who had started using prescription drugs nonmedically ever initiated heroin use in the following five-year period, four-fifths of recent initiatives previously used prescription pain relievers nonmedically. these findings demonstrate that we need to take a comprehensive approach to addressing opioid

drugs, including more widespread use and emergency oepiate reversal medication and as well as expanded access to medication assisted treatment. multiple studies show young people's attitudes towards marijuana use and nonmedical use of prescription drugs are soften. each day an estimated 4400 young people under the age of 18 initiate drug use for the first time. this can have a profound effect in the future. since research shows us in earlier a person begins to use drugs, the more likely they are to develop a substance abuse disorder. to enable ondcp to accomplish administrations goals to at a dress these and other numerous challenges from substance use disorders, the perfect is suggesting 311 million for nfy 2015, this represents a decrease of 55 million from ondcp's enacted budget.

however it has been developed to ensure we have the resources to meet the goals while reducing spending. ondcp's budget request includes funding for two grant programs that support efforts throughout the nation to reduce drug use and its consequences. the drug free community through dfc support program provides grants to local drug free community coalitions to prevent and reduce youth substances. the dfc program provides grants to local drug free community coalitions, enabling them to increase collaboration among partners and prevent youth substance abuse. during fy 2013, a total of 643 grants were awarded. the president's request for the grant program is 85.6 million, a decrease from the fy 2014

enacted budget. the program helps improve the efficiency and effectiveness of drug control efforts by facilitating cooperation between federal and state and tribal law enforcement as well as other drug control organizations. the president's request of 193.4 million for the program is a decrease of 45 million from the ny 2014 enacted budget. however, this request maintains the program focus and mission of reducing drug trafficking and production. core functions will be maintained. in addition to ondcp's administering the grants program, they are responsible for overseeing and evaluating the agencies throughout the federal government as well as overseeing the consolidated national drug control budget to ensure that drug control funding proposed by this agency is adequate to carry out the strategy. the president's fy2015 national

drug control budget request is 25.4 billion governmentwide. this represents an increase of 151 million over the fy 2014 enacted level. reflecth need to address public health and safety, the portion of the budget requested for drug treatment and prevention efforts, 43% has grown to its highest level in over 12 years. i'd like to thank you for the opportunity to testify and happy to answer any questions you may have. >> thank you very much. let me start by asking -- you mentioned it was going to be reduced by $45 million and i mentioned in my opening remarks that kind of a strange sense of priorities when you asked for a billion dollars for the irs and half a billion dollars to the general service administration and the last couple of years the funding has been reduced in the

proposed budgets but congress each year has restored that funding. again in today's world when states are legalizing marijuana and production is up in afghanistan, cocaine and heroin use all of that is up, what do you think the impact would be if you were to reduce it by $45 million? >> clearly, chairman, the program is really essential both at the federal and state and local level in terms of being able to enhance efficiency and information sharing among law enforcement entities. we consider that incredibly powerful program. our challenge was within restrained resources. making sure that we will maintain core functions and core services with our program. so to that extent, this will not result in any -- any elimination of our programs and maintain the

core mission and core functions. the biggest impact will be on the ability to addressee merging drug threats that we see in the community. it will preserve the core functions and preserve our core inf infrastructu infrastructure. >> in your opinion, it's still effective, the things you're doing, it's just a matter of not as much money to go around but as you note the last couple of years congress has restored the funding. so you wouldn't be upset if it happened again? >> we see our program is incredibly valuable programs. one of the things over the past year that i've seen with the programs is their ability to be flexible and nim bl at the state and local level in terms of really responding to local threats and local emergencies. >> the other question is briefly that you have this drug free community program and i think there are 600 coalitions across the united states.

they work on mobilizing communities and increased collaboration, things like that. how do you measure the progress that's been made by those community groups, those are grants they receive in funds. how do you go about deciding who's effective and how effective and things like that? >> sure, one of the things i think we know, local drug use patterns are different among localities and what it requires to really reduce substance abuse at the local level is looking at the community factors but also convening all of the local state agencies and schools to really look at implementing evidence based prevention program at the local level. as you indicated, for ny14, we're estimating we're going to have 672 of those local coalitions. they have been nationally evaluated and it's shown that those communities that have community programs are able to

substantially reduce drug use in their communities so these are programs that are implementing evidence based prevention programs and also nationally evaluated and have been shown to reduce substance use among youth at the local level. >> those funds are being reduced or proposed to be reduced. how would that impact your ability? would you give less grants or would the grants be smaller? how would you handle that reduction? >> sure, so at this point it doesn't mean that we would take back any existing grants. those grants would continue through the grant cycle. what it would mean, we would probably be able to award 50 less grants in fy 15 than 2014. >> how much do you think it would take to continue to fund the number of grants you've funded in the past? >> in terms of looking at level funding in terms of fy 14 enacted, that's approximately

$92 million for the program and with other it's $92 million. >> got you. thank you. >> mr. serrano. >> mr. chairman, that was going to be my first question also that you asked. let me just -- i don't know if you got the number the right the same way as i see it, it was -- not you about mr. botticelli. you said 672. that's what it is now. it will reduced to 614, is that correct? >> that's correct. >> you spoke of spreading the money around more. that's a program at a seems to be working. i'm wondering why the administration would propose a cut. i think you're hearing something, unless i heard it wrong, something that usually don't hear from all members of a committee and that is asking the question, how can you continue to function at a level that does credit to a program that

obviously works and has the support of many members of this committee. >> you know, clearly our drug free communities program is one of the back bones of our prevention infrastructure in the united states. obviously we had to look at how did we have restraints spending in fy 2015. again, i think the proposal if enacted would be we didn't eliminate any of the existing grantees but have about 50 less new grants in fy 2015. >> so you don't think it will be a result of reducing 672 to 614. we went by those numbers. there would be a reduction to 614 or not? >> it would be an overall reduction but it does mean we would eliminate any existing grantees. that money would continue. it just means we would have less money about -- we would be able to award 50 less grants, new

grants in fy 2015. >> okay. let me ask you about the caribbean border counter narcotics strategy. that was as you mentioned language that was put in the bill at the request of many of us, include gs the resident commissioner from puerto rico. and you know, this issue speaks to two situations. a lot of florida members can speak to it. that is that first the territories get less attention than the states. most importantly in this case, that we're -- shooting ourselves in the foot by allowing one border, if you will, to be totally open, not only to enter the territory but then make it to the mainland as we say. it's both setting this one up and i want to hear your thoughts on how quickly that can be set up and setting this one up not only helps those two territories

from having the drugs come into their area, but then it helps the states especially florida, with the drugs coming into the states. >> right. you know, clearly our ability to -- drugs in the caribbean is core to the strategy. as you indicated, the more drugs we can intercept the more we have less coming to our local communities. clearly having a caribbean strategy i think that supports the work we're trying to do domestically is particularly important. we have made progress in terms of the development of that caribbean strategy so we've already convened meetings across our interagency looking at how each of these relevant federal interagency partners can support the priority action items of the kr caribbean strategy. we continue to work with them and that strategy is in progress and we hope to have it to you shortly.

>> i hope so. i know we have other members, i want to make a statement for the record and that is something that i've said over and over again in my 24 years in congress, that any time drugs enter one of our territories, it has in fact entered the united states and a lot of people see it as it didn't enter into the united states until it gets to florida or texas or new mexico. not true, if it enters any territory, under the american flag, it enters the united states and should be fought in the same way it's fought when it enters one of the states. i thank you for your reply. >> thank you. i was handed a note, we actually have staff who will meet with your staff on friday to be updating you on our progress to the strategy. >> thank you. >> thank you, mr. chairman. thank you, mr. botticelli for your testimony here today. i want to confine my remarks initially and questions on weed. because there's certainly been a

lot of discussion about it from the miracle from the medical side of the equation to the outright legalization for recreational use and i have my own pretty hard core philosophical objections to what's going on around our country. but my question is, as far as you and ondcp is concerned, help me understand what involvement your office has had with states like colorado that have gone in this direction and helping educate people on what the true effects of this increased use happens to be here? >> i think you know that office of national drug control policy and the administration has remained opposed to drug legalization. and i think we come at this from a public health standpoint

particularly as it relates to what we think the impact will be on our youth. you've raised some pretty important concerns. we now have more 12th grader using marijuana than smoking cigarettes and the perception of risk is at the lowest level. we know generally when youth perceive something as less risky, they are more likely to try a substance. clearly we have been concerned in terms of what the impact will be in colorado. but not only that, what is the message that that sends our youth nationally in terms of what it means to use marijuana. we have been engaged following on the department of justice criteria with both colorado and washington as well as with our federal partners to monitor both the public safety and public health impact that legalization will have in colorado and washington in terms of the transportation of marijuana from one state to another. are we going to see increased

pref lance in use among our youth. we've been engaged with governors oofss and health department to see how they are going to implement regular tri schemes to ensure that they are doing everything possible to mitigate the safety and public health aspects. >> you've weighed in and your office has helped try to educate the country on this particular subject. and do you anticipate that there might be a more -- i bigger or higher response, a larger response, waiting response to what's we see going on around the country? >> again, i think what we generally try to do with our existing resources wf both within the drug free communities and other resources to try to.

-- that we need to really counteract some of the messages that youth are getting in terms of what the perceived safety, if you will of marijuana. >> there's no way we can put a crystal ball in front of you to kind of look into the future. do you -- if there was a crystal ball in front of you, do you anticipate having to reach back to say, colorado as an example as i've already mentioned them and have one of these i told you so moments? >> what the department of justice has laid out in terms of their federal law enforcement priorities was a clear indication that they resolve the right to take subsequent action if colorado and washington haven't demonstrated their ability to meet those criteria as it relates to public health and safety. as public health persons we have

every reason to think that we're going to see problems in colorado and washington. and again, usually the data and science suggests that as youth see something as less harmful, there will be a correlational increase in terms of their youth. that's what we're seeing nationally. i do think we have some concerns in terms of colorado and nationally in terms of looking at the data we have now, but also what that means going forward. >> finally, mr. chairman, if i may, you know, i've -- a subject that's near and dear to my heart we talked about it in previous hearings on this particular subject matter. i experienced this with my own family, so i think i'm not a subject matter expert by any means but i'm a parent and now a grandparent. it scares me, the message we are sending to future generations out here i'm saying the message

the country is sending. if we know with i am per cal data are putting our kids on a bad path, that we're now saying, it's really okay, look at what's going on in colorado and washington. legalization, that we are basically promoting almost by -- in some remarks, in some categories, we're almost promoting the fact that this is something you can do without any known consequences down the road. i'm deeply worried about that as a parent now and grandparent and certainly as a member of congress who's job it is to look out for welfare of this country. doesn't require a response. i wanted to say that and let you know it has my attention. i yield back my time. >> thank you very much, mr.

chairman. thanks for being here, sir. you were very clear about your statement about your concerns of use and expanding the use of marijuana and going to the statement you just mentioned, that message has not only heard in the country but also heard from our allies. you have -- i will get it all the time. when i travel abroad to latin america, those allies, we're putting resources and blood to try to stop drug production. counselor asking me, why are we doing this in the united states there's a mixed message? your message today was very clear. let me ask you a simple question, isn't marijuana outlawed by federal law? i think it is. >> correct. >> here's the question, have you asked the attorney general or the president to just enforce federal law? in other words, i understand you

have serious concerns and your job is to protect people from drugs, including marijuana if you have serious concerns about it. have you asked the administration to ep force federal law? if it is so problematic, which, you have said it is, we all have our opinions, but clearly you're an expert and speak for the administration. have you asked the president to enforce federal law and asked the attorney general to not just sit back and wait to see what happens in colorado, but to inforce current federal law. >> i think what the department of justice has stated is that given limited federal law enforcement priorities, they are going to preserve their federal actions at the most significant crimes associated with marijuana and not go after people using it for personal use. but again, i think they've reserved the right to go back -- >> have you asked -- have you asked of the attorney general or

the president and said this is a big issue and important issue as you can see as a health hazard and sigh it as a problem? you mentioned the namtz -- clearly we're spending a lot of money to make sure kids don't smoke tobacco. and yet, have you asked has that been one of your priorities? have you said to the attorney general and president, i think this is a bad idea and harmful and i think we should enforce federal law? >> during the kourgs of the development process we had the opportunity to talk to the department of justice in terms of those issues. what we've agreed to going forward, given what the department of justice issued an engagement to monitor the data at the federal, local and state levels to see what the impact is. give that information to the department of justice with their opportunity to look at taking subsequent action should we see enhanced public safety and public health effects as relates to colorado and washington.

>> kind of a penned around question. i'm not going to further press you because i don't want to put you add odds with the administration. it seems part of the mixed message is coming not from you, sir, but the administration, because we have you saying this is a bad deal, bad for public poll and and health and then ears saying it's not that dangerous, it's not that healthy but it's not that bad. i'm para phrasing, it's not a direct or accurate quote. those are the mixed messages that we are give mixed messages to our allies and mixed messages i think to the american people. i would like for once to have -- what is our policy? is marijuana illegal? is it harmful? if it is, what serious country

steps and to the point where we should continue to press our allies around the world to do what they are doing in this very painful battle against it. if not, what should the policy be? i think that mixed message is something that you all kind of take back and realize it's there not only for the american people but allies. the second point if i have time, mr. dharm, going back to mr. se serrano's question, recently for example, i mentioned how our allies are confused at best as to mixed message from the administration and from the states and from the country. then you have others who do not have mixed messages and vuf the head of the ecuador yan government and they kicked out the dea out of the country. inbolivia, clearly their country is better off without the dea.

general kelly, commander of the southcom, located in my congressional district that i represent, he was in and testified in front of the senate arms services committee that he was very blunt, that he believes we're currently only stopping -- i know this is not going to shock him, only catching 20 prosecution of the drugs being trafficked into the united states. and it's an issue there of resources. how much coordination do you have coordination with southcom and as far as on the budget tri aspect, how much coordination is there? are you consulted at all? what's that role here. >> as part of our statutory report in terms of looking at the totality of the budget, clearly we work with d.o. did and coast guard and others in terms of our part of ongoing supply reduction strat by. i have the opportunity to go down and talk to general kelly

and see the work that he's been doing and hear some of his concerns. this is obviously, intradid is part of our course. we consider it very important. it has been significant amount of discussion both with general kelly as well as the intradiction committee to look at available resources and operational efficiencies we can achieve in terms of meeting our goals of interdikting as many drugs as possible. we have been taking a leading role with the military and with all of our interagency partners to look at in light of the fiscal issues that we have here. how do we continue to meet our goals around supply reduction and interdiction. >> you get a big bang for the buck? >> i would agree. when you see large scale removal of drugs that don't come into our country. we know from a prevepgs

perspective, the more drugs available in the community, the more likely we have people who are likely to use them. clearly these are complimentary strategies in terms of our supply reduction and demand reduction stralt strategy. >> very briefly, i would also -- if i could again, that mixed message is really intense and real deep. i'm not -- i don't want to bust your chops but i think weefd heard it here today. you've been clear about the effects and what your concerns are. the other sade, the other side of the same administration there's the lack of willingness to enforce current law. if federal law is wrong and if marijuana is not a big deal, we should have that discussion and the president should be up front, let's debate that. right now we're getting mixed messages and allies here that. and our kids are hearing that.

that's probably the most dangerous part. >> to be fair, i think both the president and the department of justice have indicated their significance around the public health impact. i think we would have to clarify law enforcement issues versus public health and safety. thank you for your comments. >> thank you. >> thank you, mr. chairman. mr. director thanks for being here and thank you for what you do. i couldn't imagine the burdener you carry each day on your shoulders and it's a noble, noble cause. i know we have our questions and concerns and such. i don't really intend to speak on topic that to general -- but i was shocked at the statistic you shared momentarily and in your statement, you said it here as well, more 12th gratders today now smoke marijuana than cigarettes and we were all shocked to hear that. i heard about mixed messages and you suggesting that it's because

they sense that marijuana has less consequences, fewer consequences than cigarettes. and it was just list than 60 days ago the president i think sent some confusing messages to the youth across the country. and his quote was well documented and he even says as it's been well documented. i spoked pot as a kid and view it as a bad habit in a vice. not different from cigarettes i've smoked as a young person. this was in the new yorker. you thought it would stop there. then he said, i don't think it is more dangerous than alcohol. and i mean that probably bothered you would imagine. you tape your job very seriously. does that make your job easier for more difficult? did you just -- was some sort of internal frustration going to the president's office and say, what are you doing here? you're making my job extremely more difficult and challenges. what was your response to that? could you share that with the

committee? >> i think if you look at the totality of the president's comments and subsequent comments, what he was referring to is the inaccuracy and inconsistencies in reporting, particularly of people of color, for him and the attorney general's office as well. i think the president has repeated -- >> do you inspect that's how youth is interpreting his comments? maybe you're right in totality that's what he was thinking and suggest,ing bulgt the youth of our country, i don't think marijuana is more dangerous than alcohol. almost -- almost just a an odd statement and such. >> again, i go lack to looking at comments he made subsequent to those in terms of really understanding the significant health consequences. both for alcohol and mare marijuana not necessarily endorsing what was happened in colorado and washington and

saying we need to be vigilant in terms of keeping this as a public health priority. >> i don't mean too interrupt, i took it as flip pant, off the cuff and maybe he was caught offguard and isn't prepared. he is the president of the united states and i know he gets difficult questions all the time. this one couldn't have been all that difficult. ha has he since then come forward and with remorse, said i made a mistake. i shouldn't have done that as a youth. all of us have done things we regret. has he ever expressed regret or allow the comments to hang and dangle and everyone hope it was about sentencing. >> >> he made subsequent comments after understanding this is a public safety health issue. the president is not unlike many parents who use substances in their youth to great regret. and i think the best thing we can do is be honest and candid and say we don't support if a

for our kids as we talked about in not supporting it for his daughter. i think if you look at again, successful prevention strategies, we need to have those conversations and need to be candid as parents and need to say to our kids, i may have done this and may have done okay. but it's -- i don't -- advise it for my kids. >> i appreciate his candidness and such. i hope he has taken the statement and not encouraged others to do and not a statement at look at me and what i've been able to accomplish. but if i can change gears real quick, i met with sheriff's last week while i was in the district and we were talking about methamphetamines and it's been a difficult problem in northwest georgia. they were suggesting that with all of the steps we've all taken to try to prevent it that things have changed and ingredients are changing and others are finding easier ways to do it. there's still that lingering

problem with drugs coming across the southern border. do you seps that you're border security is adequate when it comes to not only from the immigration perspective, not asking you to speak on that but from a legal drug perspective crossing our borders, what can be done? is it adequate and what more can be done? >> you raise two criticali is issues, both one in terms of drugs coming in from mexico and domestic production as well as domestic use. and i think we've had significantly enhanced the resources at the border. part of the concern has been both good and bad in the sense they have been able to actually seize a tremendous amount of more drugs at the border. unfortunately we have seen a 45% amount of increase in methamphetamines at the border xgt you're right as mexico has

changed in terms of looking at controls on precursor chemicals, as the combat meth act states enacted. we see different patterns in internationally as well as domestically. previously where we saw large laps in the united states, some of the laws have made it harder to get large amounts of chemicals. we are seeing an increase in terms of these very maul pot labs here in the district. so it's been clear that this is a -- a public safety and public health issue that we have to look at. you know, one of the areas that we're examining is we have made pretty good progress over the past years in terms of reduction in methamphetamine use in the united states, largely through the prevention and local law enfwoks. issues. we have a number of programs through our office that help support reducing the distribution in trafficking and

largely through a height of the programs and drug free community. that is an issue that we have to continue look at both internationally swi internationally as well as what we see from the borders and domestic production and domestic trafficking, as well as reducing demand for methamphetamine care in the united states. >> i know it's outside of your scope, the drug trafficking across the border, are you suggesting it's adequate protections are more in place now? is there any more that can be done? unmatly it i am packs your role. >> i think we've done a significant job in terms of looking at increasing our technology and information sharing as well as increasing our prevention efforts on both sides of the border. i think we have done a really good job in terms of looking at that. there's always more work to be done. my former boss is now the commissioner of customs of

border protection. i ensure we'll have a good relationship particular little as it relates to our south west corridor. >> thank you. i share your concern as well as i think everybody on this subcommittee is probably concerned about marijuana and to hear the things that you mentioned xgt, the good news is we can refer everybody to jerry brown in california who said it succinctly, it's hard to have a great nation when you have too many people getting stoned, which surprised me to hear him say that. but that's the other side of the coin that probably people need to talk about, shouldn't have too many pot heads. so he's trying to spread the message i guess from the other side of the coin. let me ask you, we have time for a couple more questions and i want to ask you on international

scale and then more domestic, people have talked about latin america and caribbean and fact that 75% of everything comes through. on the other side of the world in a place called afghanistan where they grow poppies and i remember the first time i went to afghanistan, it was all of the conversation about how are we going to get people to quit growing poppies and grow something else? that kind of died down and a lot of discussion about that. i was there about six weeks ago and the military was talking about all of the great things that have happened in afghanistan in terms of education and terms of universities decree ited in terms of women's rights. didn't talk about the poppy situation. as we prepared for this hearing, it was called to my attention that poppy production is used ever increasing. now it's 5% of the kbgdp. you see the impact with the drugs whether they are latin america from afghanistan where they hit the ground here, the

terrible impact to have. do you work with them and are those things that are still being talked about in terms of maybe how you slow down that production there? do you koocoordinate with the department of defense at all? >> clearly the situation in terms of poppy cultivation has been a significant concern. you're right we've seen year after year increase in terms of poppy cultivation. and have some significant concern in terms of what that might mean. we're not seeing kind of widespread heroin trafficking to the united states from afghanistan but clearly as it relates to instability within the country and money it generates in terms of insurgency, that is a particular problem. we work with the department of defense as well as the department of state in terms of looking at how do we continue to aid cover in our narcotics efforts in afghanistan.

clearly the next few months in terms of the election there as well kind of what are going to be resources after troop pullout has particularly concern in terms of looking at those issues of poppy eradication and alternative development to take place of those poppies. that said, it doesn't diminish in terms of what we're anticipating for our counternarcotics efforts, we're looking to continue priorities that provide training and technical assist haeance to the counter narcotics police of afghanistan and as well as vetted units within the afghan drug law enforcement. as well as investing institutional sustainability within naturrcotic. through the department state and international law enforcement division. clearly this is an issue that is of significant concern for us.

now and going forward. >> thank you. let me now ask you about a more domestic problem and that's methamphetami methamphetamines. as i understand it, you know, it's very addictive and cheap and kind of becoming the drug of choice. and maybe you could tell us what you see the trends are in terms of use and abuse of that, talk about what you all are doing to try to counter production in the use of that. do you need anything more in terms of tools you can use because as i understand it, that's really one of the most serious things we're facing today. >> great. i thank you and i appreciate the offer. as we indicated, we've seen significant increase in seizures of methamphetamine at our southern border as well as increase in production. some of the programs we have from law enforcement that we talked about previously through our high intensity drug trafficking areas, we also have

a national program under our program a national program under that, the national methamphetamine and pharmaceutical initiative. and that provides regional support to look at how do we diminish drug traffics and production issues, particularly for methamphetamine. again, on the prevention side, we see a variety of resources. our drug free communities to look at doing that. i'd be happy to have subsequent conversation with you in terms of what additional things might we have in place beyond just that combatting meth addict that might hold promise in terms of reducing the availability of some of the precursor chemicals that go into methamphetamine production. as congressman graves pointed out, as we've made changes at both the federal and state level, there's been, i think, an evolution in both chemicals and production that warrant, i think, additional consideration in terms of how do we continue to do everything that we can

from both a supply reduction and a demand reduction standpoint to reduce those issues. i also think, too, when we look at methamphetamine, that we have some significant parts of the country that are more affected than others. >> i was going to ask you about that. what are some of the -- these meth labs you read about that come and go. where are they going? where are they kons traconcentr today? >> the biggest impact we see -- it's not to say we don't see it in rural pockets in other areas. the regional impact, i think that is particularly in the south -- particularly in the south and the west is where we see significant impact for methamphetamine. i came from the northeast where we had a big heroin problem and very little meth problem. so we have different parts of the country that, i think, are differentially impacted by methamphetamine. both in terms of production and use. >> is it hard to set up a meth lab?

like, you go to colombia and see it's pretty -- go out in the jungle and make cocaine. i mean, how do you -- is it something somebody can set up? make meth? and if somebody comes, they go somewhere else? how complicated is it? >> in the spirit of full disclosure, i don't think i'm really fluent other than watching "breaking bad." i don't think, you know, i don't think i really know the keck technical capabilities. my understanding is it not prempr tremendously complicated. that's why we're seeing the one pot labs in terms of chemicals available as well as process. people doing production are not necessarily tremendously skilled at it. think we see some devastating environmental impact. drug endangered children. as it erelates to it. i don't think that it's technically tremendously difficult to do. again, i think as we have put certain controls on certain of the chemicals, precursors that

we've seen evolution in terms of -- >> is it -- would you say is it the fastest growing -- i mean it used to be crack cocaine. how does meth rank in terms of abuse and potential for abuse? because i always understood it was just so cheap and so available that it was one of the fastest growing problems you're facing. >> i think, you know, one of the things -- again, i think we have to continue to monitor the impact of the production. because what we've seen quite honestly over the past several years has been a reduction in meth use. again, that is probably differential in different parts of the country. but we have seen some decline in methamphetamine use. i think we would be well advised in terms of looking at both the production and the interdiction around our meth use as well as indications we're seeing more emergency department mentions, uptick in emergency department mentions for methamphetamine. so i think we have to play close attention on both a regional and a national level in terms of

those issues. one of the issues that we talked about before, i think, in terms of magnitude of order has been the prescription drug abuse and the opiate epidemic that we're seeing nationally. so those -- you know, that is clearly an issue that is a high priority for us as well as continuing to monitor what's happening with other drug use trends. >> got you. mr. serrano. >> not doing well today. either you're asking my questions or he's answering my questions before i ask them. >> i hope it's the latter, congressman. >> it's both. it's both. so i wanted to talk to you about the prescription drug abuse. what are you specifically proposing to do to reduce this use of the drug, of the prescription drugs. and also, how have past efforts -- what have they shown and how do we integrate them into what we want to do now? lastly, i know there are 49 states that have laws authorizing prescription drug monitoring programs.

or pdmps. are they all functioning? or just some of them? >> sure. in 2011 ondcp coordinated an interagency effort among our federal partners and released a plan to reduce prescription drug abuse. that has four main pillars. one is education. educating prescribers. what we've seen is as the number of prescriptions for prescription painkillers has increased, so has the consequence of doing that. it entails proper monitoring, as you alluded to, making sure that we have good prescription drug monitoring programs. it requires and focuses on safe disposal. one of the things that we see is particularly for occasional users, about 70% of people who use those medications occasionally are getting them free from friends and family. so how do we get those drugs out of the supply chain, so we're working on safe disposal. then the third -- the last one

is around good laws to make sure that we are eliminating pill mills and doctor shopping. as you talked about, one of the central components of what we've been proposing is making sure that we have good prescription drug monitoring programs. you know, we have 49 states that now have prescription drug monitoring programs. and have been working to make sure that all of them are implementing best practices in terms of those. i think, you know, there's probably no better example than what happened in florida that had -- a congressman and i were talking about this in terms of implementing strong prescription drug monitoring programs and enacting strong legislation. what we've seen in florida is a significant decrease in the number of prescription painllers. i think probably most importantly, a significant reduction in drug overdose deaths associated with those. so clearly having vibrant programs are important to us. as well as having programs that share information across state borders to make sure that as

florida implements good and sound policies, that people are not just moving to georgia to focus on it. so it's clearly been one of the top priorities of our office in terms of this whole of government effort, across our federal partners, to minimize the impact of prescription drug abuse. >> yeah. i should tell you that on social media this afternoon, after announcing that i would be attending this hearing, the number one question asked by about six or seven people, which is usually an indication of many others who want to ask the same question, was about the overdose issue. so with that in mind, i'd like to get you on the record just for clarification. when we talk about prescription drug abuse, are we talking about all prescription drugs or are we basically saying that the problem is painkillers? >> we're chiefly talking about prescription pain medication. that's really the issue. >> because, i mean, people who are on, for instance,

cholesterol medication or high blood pressure, they're on for the rest of their lives. >> i think we want them to probably stay on those medications. >> exactly. >> i think the concern is, particularly that physicians get very, very little training around the risks associated with these very powerful pain medications. as well as little training on how to identify substance abuse disorders in their population. so that's why prescribing, particularly mandatory prescribes for physicians, is really important to the work that we do. as you indicated, you know, the magnitude of the drug overdose deaths is really astay tunoundi our office. in 2010 we had over 16,600 prescription pain related overdose deaths in the united states. that's 100 people a day who are dying from prescription pain medication overdoses. and our office has been working with federal, state and local folks to implement naloxzone

description programs. naloxone is a safe, effective, nontoxic substance that emergency responders have been using for decades to reduce overdose. we've been very hardened in terms of the number of states that enacted noloxone distribution programs throughout the country. it's really remarkable. it's a really miraculous drug in terms of its ability to save lives. >> let me ask you one more question. then, mr. chairman, if we don't have another round, i'll submit a couple questions for the record. we don't -- we know we don't have diplomatic relations with the island of cuba. but in the past, we've done immigration work with them. in fact, we do immigration work ongoing. we've done transportation issues in terms of airplanes flying over and our flying certain parts of the caribbean. we've done hurricane issues, preventing tsunamis or warning of tsunamis and so on. do we have any kind of

relationship when it comes to drug issues with the cuban government? >> to my knowledge, sir, i don't think that we have any ongoing discussions or work with cuba. i would be happy to discuss with you and your staff kind of what you might be thinking. >> okay. because i know a couple years ago, to my shock, they were willing to accept dea agents on their turf, if you will. and political pressure from this country stopped that from happening. i said i was shocked because, you know, basically saying send me agents from your country of any kind of agents, you know, to cuba was quite a statement. i know it's not in their best interest to have drugs coming into cuba. and it's not in our best interest to have drugs coming here. so i'd like to know if you know, later on if you can find out, if there's been any talk about that in the near future. it's probably one of the areas where i think both parties could agree would be of benefit to this country.

>> happy to look into it, sir. >> thank you. thank you, mr. chairman. >> thank you. >> thank you, mr. chairman. >> mr. botticelli, your predecessor i think was confirmed at cbp earlier this month? is that right? >> correct. >> you've been in your current capacity now as acting director? >> two weeks now. >> for two weeks. okay. is it fair to say you didn't have a lot of input with the president face to face on this particular budget? >> you know, clearly we work with the administration. >> but you personally. you personally were not face to face with the president on this budget? >> correct. >> okay. have you been invited into the white house, into the oval office to talk about the growing problems with substance abuse and the effects, the cascading effects across society? have you had an opportunity, have you been invited, have you had the opportunity, can you kind of take me inside the white house and tell me how that conversation is going?

>> as part of the executive office of the president, we obviously work with the president and the president's advisers in terms of what our policy has been. >> i'm talking about specifically the presidt. >> i have not, sir. >> have not. have you been invited? >> i have not, sir. >> okay. 311 million is the budget -- the president's budget for your office? >> for our office. >> down from 370, 360? was it $55 million? was that the difference? >> correct. >> okay. that's about a little less than 20% cut. i'm going to guess about 17.5%, 18% cut in your budget. do you think that's an adequate reflection of the importance of your office, given the fact that you're taking the better part of the 20% cut in the president's proposed budget, do you think that's a reflection of the

priorities? >> i think -- i think not just looking at our budget, but if you look at the totality of the national drug control budget, right? so not just ondcp. >> which is 20-some billion. it's a lot of money. >> if you look at kind of the totality of the resources that the federal government has in terms of looking at this issue, we've seen that money increase. and i think what is particularly important in terms of the overall national drug control budget is that we've seen a significant increase in terms of our drug prevention and drug treatment services. and, again, you know, that if you think about priorities that we're looking at, how do we deal with this as a public health related issue? and so those dollars have continued to increase in terms of our overall federal budget for a priority. so i think, congressman, when you look at the entire national drug control budget, you see that it is a priority within the administration. >> well, i was reading in your statement that -- and these

numbers just kind of shocked me to my conscience on the fact that drug overdose deaths now number greater than motor vehicle crashes. and greater than gunshot wounds. and so we are tani pertaining t, i've sat in a lot of meetings including the state of the union address where the president talks about pulling out his phone or his pen to do things that congress is unwilling to do. and he did spend some time talking about school shootings and large scale casualty operations resulting from guns. and this immediate desire to want to do something about gun violence. and yet we're going to cut this particular budget, even though it's the office's budget, by almost 20%. and the number of deaths related

to drug overdoses in this country is greater than the gunshot wounds. so i want to ask again. is this a reflection of the -- of where this fits in the national priority as it concerns the administration? and what are you doing and what do you plan to do, because i'm going to give you a break here. you've been there two weeks. you've been there since '12. but in your capacity for two weeks. what are you going to say to the president when you have that face to face meeting on the policies of this administration as it concerns something that now outnumbers -- drug overdoses now outnumbers gunshot victims? >> i think, again, when you look at some of the new additions and the proposed 2015 budget items, that there are some additional items included in that budget that are specifically focusing on the opioid abuse and overdose epidemic. our substance abuse and mental health services administration has an additional $15 million to get out to states and local

communities to particularly focus on prescription drug abuse issues and opioid and overdose issues. contained is money for the centers for disease control again to support state level actions as it relates to overdose prevention. you know, it's clearly been a priority for our office in terms of -- of promoting overdose education. we worked with a number of federal partners and nongovernmental partners in terms of continuing to raise awareness around the magnitude of the opioid overdose issue. again, i think one of the areas that we see that leads to overdose is untreated addiction. and one of the biggest causes of why people don't get treatment is lack of insurance. and one of the areas i think that the affordable care act contains is a provision to make sure insurers have to include a benefit for substance use disorder treatment.

and that's reflected in the president's budget. so i think if you look at, again, the commitment to not only expanding access to treatment, but specific vehicles to enhance state-level efforts to reduce the magnitude of the burden, i think that we see some promising proposals. >> i thank the gentleman. >> thank you. mr. dias-ballard. >> i was listening to you before and you were talking about florida. we would be remiss without thanking chairman rogers. remember how he was so aggressive about the pill mills. and florida had, frankly, a huge issue there. and so that was -- we've seen some good results of that. let me just throw out another issue which i know very little about. which is this issue of synthetic marijuana. what's -- i saw some things in newscasts recently. i guess there have been some deaths. and i know that our attorney general in the state of florida has been very aggressive. and as the formulas change,

she's constantly looking at just trying to update that legislation which is obviously much quicker eer on the state l than it is here on the federal level. tell me your thoughts about that. how big of an issue is it, and, you know, what's your thoughts on that? and then the second question -- let me just go with that one first. then we'll -- >> sure. so the issue of synthetics has also been a significant concern for us in terms of a number of different areas. so one is often people don't know what they're taking or what they're getting when they take these chemical substances. there's certainly not a consistency in terms of products, in terms of how they're using it. we've seen some significant issues around those areas. and so it's really been an issue that we've been trying to kind of focus on. and, you know, clearly we've been working with our partners in the dea in terms of how do we -- trying to stay on top of scheduling some of these substances.

but congressman, quite honestly, that's been really difficult because as we continue to schedule more and more of these substances, the chemists always seem to be one step ahead of us in terms of making small tweaks to some of these chemicals to elude some of the processes. we've been working with the dea and with the senate drug caucus in terms of are there things that we can continue to do to stay ahead of some of these scheduling issues as it relates to some of these synthetic drugs. we've also seen and have been having conversations, you know, as states and as federal government has implemented strategies to reduce the sale of these, we see the internet playing a larger and larger role in terms of where people are getting the substances from. so we've been actually engaged with payment processors. some large credit card companies as well as paypal to see to what extent can they share information with us as it relates to some of these internet sites. and they've been to this point, i think, concerned about the

issue. and willing to work with us in terms of some of those sites. so it's been an issue, again, that we continue to look at in terms of those priorities. and look at how we can continue to stay on top of some of the emerging issues. >> i'm assuming -- because the states do have, i guess, an advantage as far as at least quickness, right, of dealing with this. >> yeah. >> so i'm assuming you are -- how good is your cooperation with states? i'm sure that's a general question. some are better than others, i would assume? >> part of one of our components in ondcp is our office of state, local and tribal affairs. and they work pretty closely with our state counterparts both in terms of law enforcement and public health to look at things like model legislation and model work and sharing best practices among states. we actually have, i think, a very good relationship with many of our state counterparts on both the law enforcement and public health side. >> if i may, mr. chairman, you've been very patient with me.

i'll be quick on this one. going back to the issue of how the attorney general and the administration began monitoring what's going on in colorado and elsewhere, as far as we know is there a -- is that an informal monitoring? is there a metrics? in other words, is there a system set up so that they can look at, you know, compare data, et cetera? or is it more informal monitoring. if it is a system set up, metrics, it'd be good -- i'd be interested to see it and how long it's going to be, et cetera. what can you tell me about that? >> sure. our office actually took the lead in convening some of our federal partners. and we looked at each of the eight department of justice criteria as they lay it out. and looked at what are our data sources. most of these are publicly available data sources that speak to things like diversion to youth and treatment admissions. things like drugged driving and arrests. so we will continue to monitor

with our federal partners those data to look at the picture of what happens with colorado and washington. >> thank you, mr. chairman. >> thank you. well, i have some estions that i will submit for the record. i know mr. serrano does as well. so let me just say in closing to thank you and your staff for what you do. we talk about this fight against drug. we refer to it often as a war against drugs. and some people say we're winning. some people say we're not winning. but we're certainly fighting the war. and drugs as we all know have such a terrible impact on our country. whether it's destroying lives, breaking up communities and families. so we want to work with you and your staff to try to win this war. to keep america safe. to keep it healthy. and thank you again for being here today. you. forwa towo >> thank you [inaudible conversations]

>> thank you, sir. >> [inaudible conversations] >> [inaudible conversations]

>> president obama said that if russia stays on its current course it will stand alone in the world and will suffer economic consequences. mr. obama was indeed in talks with leaders of european union. you can see the entire event at c-span.org. here's some of what he said. >> russia's action in ukraine are not just about one country. they are about the kind of europe and the kind of world that we live in your the european project was born from the ashes of two world wars, and

the united states has long supported european integration as a force for peace and prosperity. and europe's progress rests on basic principles, including respect for international law, as well as the sovereignty and territorial integrity of nation's. that's what russia violated with its military action against ukraine. the united states and your stand united on this issue. we united in our support for ukraine and for the need to provide economic assistance to help stabilize its economy. we are united in our commitment to europe's security. we are united in our determination to isolate russia and of those costs for russia's actions. every step of the way i've coordinated closely with our allies and partners in europe. and i want to thank president van rompuy and barroso for the leadership vigilant during this difficult time but i want to

commend the eu for the portal steps taken over to make sure russia feels the cost of its behavior in ukraine by implementing these abeyance and freezing assets and designating individuals for sanctions, as was canceling a number of engagements with russia. and making it clear that if russia stays on its current course, the consequences for the russian economy will continue to grow. of course all this comes atop the measures and sanctions that the united states and others around the world are imposing on russia. and taken together, these are the most significant sanctions russia has faced since the end of the cold war. moreover, russia stands alone. russia stood alone when trying to defend its actions at u.n. security council. the 20 members of the european union are united. the 20 members of nato are united. every member of the g7 has imposed sanctions on russia, as we announced on monday, and the g7 will meet here in brussels in

june without russia. so if anyone in the russian leadership thought the world wouldn't care about their actions in ukraine, or that they could drive a wedge between the european union and the united states, they clearly miscalculated. as i've said repeatedly and was mentioned by both presidents van rompuy and barroso, there is still a way for russia to work with ukraine and the international community to de-escalate the situation through diplomacy. that's the only way that the issue will be resolved. if russia continues on its current course, however, the isolation will deepen. sanctions will increase and it will be growing consequences for the russian economy. and this reflects the enduring commitment to the goal that is brought europe and the united states together for decades, a europe that is whole and free and at peace. in closing, i just want to say to president van rompuy and

barroso, as you prepared to conclude for 10 years later this year, thank you for all the outstanding work that you been able to do together. we have gone through some very rocky waters. we've preserved through some very difficult economic times. but throughout this process we been able to deepen the ties between the european union and the united states. we've been able to advance the cause of security and human dignity around the world. i'm personally grateful to both of you for your leadership as well as your friendship, and most importantly, for the purposes of our countries that we represent here today, your dedication to the transatlantic relationship or so thank you very much. >> kathleen hunter covers the senate for the bloomberg news. they are set to set up education for eight to ukraine and sanctions against russia. for the senate, what did leader reid finally agreed to take a?

>> the big development, what happened yesterday is that maybe basically capitulated to republican demands that he drop a plan to boost money for the imf, change the i'm a system of funding. this is something democrats have wanted to see done for a while, something the treasury department and the obama administration has been pushing for. democrats included in the original legislation. republicans balk and it was a bit of a showdown. house speaker john boehner said basically there's no way busy getting to the president's desk with that provision. mitch mcconnell in the senate said the same thing and the biggie though that was hairy reid said okay fine will take it out. >> you tweeted about the earlier saying majority leader reid cited secretary kerry as the reason he's okay and dropping the imf language. what did he refer to? >> yesterday after he came out of the party lunch with his caucus, leader reid told reporters he was in reporters he was in the drop in the language and he basically said he i guess he had spoken to john kerry

about it and john terry said they want the imf language but they won't be eight more. >> in addition to the imf language, what about senate republicans, they wanted some amendments deal with energy to ukraine and other issues. dedicate that? >> they wanted those and it looks like that's not going to happen for the. it seems that's what the deal obstruct the democrats drop the imf language, let's go ahead and move this thing forward and that will happen tomorrow. >> what about the house? before they went on the recess a week ago didn't they pass legislation that would provide loan guarantees to ukraine? what else do they have to work on? >> they did. the house to pass the loan guarantees measure as a stand-alone bill before the last weeks recess. the senate has kind of put both sanctions and aid decrease in the same bill and that's the bill the senate will vote on tomorrow. the house is considering their own sanctions measure basically doing aid before the break. not coming back and doing sanctions and they're arguing

the better approach because the sanctions they will consider in legislation coming up this week they say is basic more up-to-date come it takes into account what president obama has already done through the executive on his own and goes although further. what this it will do is take that language from the house and in aid and pass a baltimore. >> so it's still simply put two pieces of legislation by the end of the week. will something finally get worked out by this weekend or early into next week that the president was on? >> it could go army into next week in terms of getting something to obama's desk that looks like really the train is leaving the station and the legislation is pretty much great from here on out. it will get done one way or another. just a matter of the house and senate approving the same legislation. but there's support in both houses for the elements of what's going to get that at this point. >> you can read more of kate hundred 40 at bloomberg.com. thanks for joining us for the

update. >> thank you. >> the head of department of protection agency, gina mccarthy will be on capitol hill this morning to testify about her agency's budget request for nasa -- next fiscal year. you can see live coverage on a companion network c-span3 at 9:30 a.m. eastern. >> i do recognize that is enough will be exists. if it expires irrational fear of islam and, therefore, negative attitude towards the committee i am as a against it. if it's part of xenophobia, xenophobic is nothing than xenophobia versus one group, judeophobia, christian phobia or any other form fully. it's part of it. but what happened is that the islamist lobby, the brotherhood lobby and iranian lobby have hijacked that notion and the into a weapon to anybody was put aside a policy issue has nothing to do with religion, with the

five pillars. there has been accused of islamophobia and i think this is very close to what the national socialist in germany would have a come anybody was criticizing their policy of being against the german race. even at the national level it has become very dangerous. >> walid phares on u.s. policy iin the middle east side tonight at 10 eastern and sunday night at nine on booktv's "after words." and on april 6, more discussion on the middle is what military strategist and former assistant defense secretary bing west with your calls and comments live "in depth" starting at noon eastern. booktv every weekend on c-span2. >> dear congress, my name is shelley ortiz, hannah, and we attend art school in phoenix, arizona. we have encountered a handful --

[inaudible] and throughout those years with same the lack of support for treatment can result in devastating events as our emotional distress for those individuals and our families. >> when i look back on the incident that took place in tucson, the tragedy where i was shot and congresswoman giffords was shot and 17 other people were wounded and six people died, the young men who did those shootings, who shot as, had been displayed symptoms of mental illness for at least two years before that time. >> would've announced the winners of this years c-span studentcam video competition on what'which the most important ie congress should address this year. watch the top 21 winning videos starting tuesday, end of the week day throughout the month at 6:50 a.m. eastern on c-span, and see all the winning document is online at studentcam.org. >> the senate commerce committee

on wednesday heard from representatives of target, the university of maryland and the federal trade commission about recent consumer data security breaches. this is a little more than two hours. >> this hearing will come to order. this hearing is in order. it doesn't have to come to order. it is. we now live in the era of big data. you knew that, senator mccaskill? that's not news to you, okay? companies are bravely collecting reams of information about us as we go about our daily lives. i serve on the intelligence committee and i have since before nine 9/11, and it just drives me absolutely while sometimes to read in the new york times and the "washington post" the guilty parties for the most part, that they talk about everybody's privacy is just

about -- but if it could happen then it has happened, so as why you keep people scared and the people are reacting to it. we've always got to get rid of that thing. we are not necessarily an intelligent congress would comes our national security. so in any event, we ar are tracg -- their attractiveness as we visit our website, as we visit stores, as we purchase products. while some of the information may be mundane, some of it can might have to do with health, whatever. i think we'd all agree it are going if the company is going to collect detailed information about its customers, they need to do everything possible to protect them from identity thieves. because what's in fact whatever he was doing about the nsa which should never come to be true has come to be true about the

american private sector. that's the irony of the whole thing. this city is wrought with, you know, terrible things that could happen with the nsa, except nothing terrible has happened. it's now will no target fell far short from doing this because, protecting their customers. last november and december, cyberthieves are able to affect the credit card payment terminals with a malicious software, looted their computer service, access a steady amount of consumer information which they could pick and choose from, and then sell them for something called a profit. there has been a lot of anxiety recently about the kind of information the federal government -- making a pointer again. i like making this point. they have been collecting about american citizens as part of their effort to protect the country from the ongoing terrorist threat.

private comes like target hold vastly larger amounts of sensitive information about us than the government could ever think of doing. and they spend much less time and much less money protecting their sensitive data than the government does. you cannot penetrate the firewalls, all of the firewalls around the nsa. senator thune, welcome. so we learned yesterday that federal agents notified more than three son companies last year that their computer systems had been hacked. i'm certain there many more breaches that we never hear about. in my zeal a number of years ago, i asked the sec if they would sort of make it a requirement that every time somebody was hacked into, that had to be reported to the sec,

put on the website for the vengeance of the shareholders, because that's the kind of information they need to know if they're going to buy or sell or whatever. that's haphazard at best. so target is going to tell us today that they take data security very strictly and that they follow their industries data security standards. but the fact remains it wasn't enough. the credit card numbers of 40 million people and e-mail addresses of nearly 70 million people were potentially stolen under their watch. my staff has carefully analyze what we know at this point about the target breach. in a new report that identified many precise opportunities target had to prevent this from happening. it's a very interesting chart of where they could have come and i'll hold it up and ask unanimous consent that this be made a part of the record of this hearing, and anybody who wants one of these is welcome to have it. i hope people of the press table

have it. it's increasingly frustrating to me that organizations are resisting the need to invest in security systems. target must be a clarion call to businesses, both large and small, that it's time to invest in some changes. while and just when many countries have failed to take responsibility for the data security weaknesses, i am just as disappointed by congress and our failure to create federal standards to protecting consumer information. if you can imagine having stores in 45, 35 states in every state has different rules and regulations. i mean, it's just impossible, the mess. recently i've put forth legislation that builds on the long, well-established history of the federal trade commission, and states attorney general in protecting consumers from data breaches. the bill sets forth a strong

federal consumer data security and breach notification standards body, one, directing the ftc to circulate rules requiring companies to adopt reasonable but strong security protocols. requiring companies to notify affected consumers in the wake of the breach. enemy, that just should be automatic. authorizing both the ftc and the states attorney general to seek civil penalties for violations of that law. for nearly a decade we've had a major data breaches at companies large and small. millions of consumers have suffered the consequences. while congress deserves its share of the blame for inaction. i'm increasingly frustrated i industries disingenuous attempts at negotiations. so this is my message to the industry today. it's time to come to the table, be willing to compromise. while i'm willing to hear the concerns about the legislation, my legislation, or any of the

legislation, i'm not willing to forfeit the basic protections that american consumers have a right to count on, and i will not. finally, i would be remiss if i did not publicly note that representatives from the company snapchat declined the invitation to testify today. when people refuse to testify in front of this committee, my instincts, which may be skewered, are nevertheless that they are hiding something. and on this subject i think it warrants closer scrutiny. i call on my most distinguished -- i won't go through the usual drill. >> okay. thank you, chairman rockefeller, for holding this afternoon in hearing a data breaches, protecting consumer information, protecting consumers from fraud and harm physical that all of us share. i'm glad represents an target and university maryland accepted our invitation to be here today to those of the recent and well-publicized breaches. while the forensics

investigation into these incidents are still ongoing it's clear millions have been affected. i look for to hearing what lessons target and the university of maryland have learned from these bridges and what additional steps they're taking to prevent them in the future and to better safeguard individuals personal information. yet data breaches club are not in it to target and university maryland but the data breach found that more than 600 from data breaches disclosures among private government entities in at least 44 million optimize records in 2012 of them. while we're here today permitted to discuss data breaches in the private sector, we can't forget the u.s. government holds vast amounts of information. its estimate that the federal government spent more than $1,426,000,000,000 in it security in this clear 2012, but it is not immune to cyberattacks and data breaches. in 2012 federal agencies reported more than 22000 data breach incidents, a number that is more than doubled what was reported in 2009.

in addition a recent report by the government accounting office, the government watchdog might invite some incidents where a decent to notify individuals able in the breach was determined to have a high risk. ranging from a convinced that i credit card replaced to the home of identity theft were a criminal run up large debts or commits crimes in the victims names. when there's a risk of real harm stemming from a bridge we need to make sure consumers have the information they need to protect themselves. that's why i support a uniform federal breach notification standard to replace the patchwork of laws in 46 states and the district of columbia. a single federal standard would ensure that all consumers are treated same way with regard to notification of data breaches that might cause them or. such a standard would provide consistency answer to regarding time in notification practices which benefits both consumers and businesses. i want to ensure that businesses appropriate with secure

information and are not burdened by ill suited security requirements or rather provide with the flexibility to develop effective and innovative tools to secure the information that they are entrusted to protect. for these reasons i cosponsored senate bill 1193, but it is a 93, the data security of breach notification act of 2013 with senator toomey, a number of my colleaguecolleague s on this committee. the bill would require companies processing personal data to notify consumers and accounting and if the information has been unlawfully taken. i know you've introduce legislation on this topic and a coach working with you and our colleagues as we consider how best to promote the security of personal consumer information and assure appropriate breach notification. of course, we should acknowledge this issue is not a new one. the committee reported data breach legislation in 2005 and again in 2007, but finding broad agreement on the path forward has proven difficult. wished proven difficult. we should heed of the testament of mr. wagner and not about the perfect become the enemy of the

good. a recent expense advancing legislation on the role of the national statistics and technology and the identification of voluntary best practices and standards for cybersecurity gives me reason for optimism. i was pleased to see that several of the what is today highlighthighlight ed the good work done by nist in that regard. as noted in the past, legislation is needed to enhance information sharing of cyber threats with liability protections. while not all data breach occurs because of a cyber attack, timely information, sharing of cyber threats is key to preventing and responds to cyberattacks whether the breach of consumer data, that of intellectual property or an attack on critical infrastructure. i look forward to learning more about the new partnership between the merchant and financial associations i will focus on sharing more information on cyber threats and improving technology to protect consumers. i hope that these and target can elaborate on the work they're doing to identifying and prevent payment card fraud resulting from the recent breach so that the payment system is more

secure and consumers are better protected. i look for doing from chairwoman ramirez of the federal trade commission about the work the agency is doing on enforcement and education to protect consumers from identity theft and fraud. i also know that the secret service and the federal bureau of investigation in partnership with industry and government partners are working hard to detect, prosecute cyber criminals and fraudsters. so i hope our witnesses can share their experiences, good or bad, working with federal federl agencies honor shared goal of safeguarding consumers personal information, and i want to thank you again for holding this hearing and i look forward to and from our witnesses. thank you, mr. chairman. >> thank you very much, senator thing. we are a very good combination. if you don't know that now you will learn. >> that's true than it is true. we both come from big states. [laughter] spent with tall people. >> that's right. and we love sports. first, let's start with the honorable edith ramirez who is

chairman of the federal trade commission. and once again i issue the following words of comfort to you. never fear that the national gallery of art would take you over. you're going to be there a thousand years from now. whether they will be or not, i don't know but you will be. [laughter] >> thank you. chairman rockefeller, ranking member thune, and members of the committee, i appreciate the opportunity to present the federal trade commission's testimony on data security. under your leadership, chairman rockefeller, this committee has led to critical efforts in congress to protect consumers privacy and data security. from the recent examination of the data broker industry and its impact on consumers to proposing data security requirements for industry, you and the members of this committee has sought to advance the same goals as the ftc. i want to thank you for your

leadership. as this committee is well aware, consumers of data is at risk. recent data breaches remind us that hackers seek to exploit vulnerabilities in order to access and miss you consumers data in ways that can cause serious harm to consumers and businesses. these threats affect more than just payment card data. for example, breaches in recent years have also compromises social security numbers, account passwords, health data and information about children. this occurs against the backdrop of identity theft, which has been the ftc's top consumer complaint for the last 14 years. today i am here to reiterate the commission's bipartisan call or the enactment of a strong federal data security and breach notification law. never has the need for legislation in greater. with reports of data breaches on the rise, congress must act. the ftc supports federal

legislation that would strengthen existing data secure the standards and require companies in appropriate circumstances to provide notification to consumers when there is a security breach. reasonable security practices are critical to preventing data breaches and protecting consumers from id theft and other harm. and when breaches do occur, notify consumers helps them protect themselves and any harm that is likely to because by the misuse of their data. legislation should give the ftc authority to seek civil penalties where warranted, to help ensure that ftc action have an appropriate deterrent effect. in addition enabling the ftc to bring cases against nonprofits, such as universities and health systems which have reported a substantial number of breaches would help ensure that whenever personal information is collected from consumers, and duties to maintain such data adequate protective. finally, apa rulemaking authority, like that used in the

spam act would allow the commission to ensure that its technology changes, and the risks from use of certain types of information involved, companies would be required to give adequate protection to such data. for example, were as a decade ago it would've been difficult and expensive for companies to track an individual precise location, smart phones have made this information readily available. and as a growing problem of child identity theft has brought to light in recent years, social steady numbers alone can be combined with another person's information to steal an identity. using its existing authority, the ftc has devoted substantial resources to encourage companies to make data security a priority. the ftc has settled at 50 cases against companies that we alleged the consumer data put -- at risk. and all these cases the touchstone of the commission's approach has been

reasonableness. a company vegas sector you measure must be reasonable in light of the sensitivity and volume of consumer information it holds, the size and complexity of its data operations, and the cost of available tools to improve security and reduce vulnerabilities. the commission has made clear it does not require perfect security and that the facts that the breach occurred does not mean that a company has violated the law. as the commission's case against the retailer illnesses, the commission did security cases have alleged failures and the basic, fundamental safeguards. in 2007, tjx announced what was then one of the largest known data breaches. according to the ftc subsequent complaint against tjx, a hacker obtained information from tens of millions of credit card and debit payment card information, as most of the personal information of approximate 455,000 consumers. the ftc alleged that tjx engage

in number of practices that, taken together, were unreasonable, such as lung network administrators to use weak passwords, failing to limit wireless access to instore networks, not using firewalls to isolate computers processing cardholder data from the internet, and the vetting procedures to detect and prevent unauthorized access to its networks, such as procedures to update antivirus software. in addition to our enforcement efforts, the commission also undertakes policy initiatives to promote privacy and data security. such as workshops on mobile security issues and child and senior id theft. and for those consumers who may have been affected by recent breaches, the edges is posting information online about steps they should take to protect themselves. the ftc also provides guidance to businesses that recent security practices. thank you for the opportunity to provide the commission's views on data security. the ftc remains committed to

promoting race will security for consumer data, and we look forward to continue to work with the committee and congress on this critical issue. thank you. >> thank you very much. were honored to the presence of numerous of maryland are, dr. wallace loh. thank you for taking the time. i'm sure testifying before congressional committee must be something to look forward to. [laughter] [inaudible] >> thank you, chairman rockefeller, and ranking member thune and members of the commerce committee. i spent most of my time testifying before the maryland legislature, so i hope that's good preparation for today. on february 18, after a major snowstorm paralyzed this region, that we can, that was presidents' day weekend, we had a very sophisticated cyber

attack. somebody basically uploaded a trojan horse into the website of one of our colleges. this website is about 10 years old. uploading photographs, but instead they uploaded this malware. wants they got into that website, they were able to pierce into central systems where they -- and they were actually coding in order to do that, and they were able to get to the directory of the management and find their passwords and then change the passwords in order to issue orders. so they downloaded 310,000 names, social security numbers, university ids. they intentionally left out photographs, so i support from

that kind of thing because that would'vwould have slowed the exn of the data. and they did it using core from which means they're able to hide the point of origin of the attack. it turns out, because we never been hacked before, we were just flying by the seat of our pants. and it just so happens that we did exactly what you're bill proposes to do, with regard to notification. we simply said, we announced it within 24 hours. within 24 hours were also contacted credit rating agencies, set up call centers and notified the entire university community, all 38,000 student, all faculty and staff. and with four or five days, we e-mailed, called, send letters to everybody else, a total of 310,000. because some of them are alumni

going back for 20 years. the reason, of course, is that what they got with the university ids to a remember, until about the year 2000 every university in this country was using salsa secure the numbers as identification. and we have thousands of databases. and they just took that one database where we have both the university id and the social security. so in terms of notification, not only did we notify, we offered to pay five years of protection, credit card protection, to all of the affected parties, $20 per person multiplied by 310,000 over five years. to date, approximately 30,000 have signed up for this free five year protection. so we also did in terms of data security is a much along the lines of what you're bill has

proposed, but what we did emitted was to purge all of the unnecessary data. we have purged approximately 225,000 names from our records. within purged -- we didn't approach often because you need sosa to numbers for student financial aid, or payroll purposes. and those that remain we are trying to reinforce the to what we're trying to do with the help of the fbi, the secret service, private sector to companies is two things. one is to strengthen perimeter defenses and -- on a regular basis penetration testing. and then also, and assume they're still able to shrink always be one step ahead of those were in defense. it is to tighten security around the sensitive databases. so what we have done just in one

month is we have migrated almost all of our websites to the cloud. we have purged, as i said, lots of information. we have engaged firms to to penetration testing. we have isolated information that sensitive from information, and so on. and the cost is very, very high. let me just conclude by saying that three weeks later we had another major intrusion. within 36 hours the fbi was able to identify and very successfully mitigate that intrusion. no data was released except for the data of one individual was posted on the web for everyone to see just because they want everybody to know they are successful. so that's where we are at. and thank you very much for all of your work in terms of

required data notification and data security. this is a very important issue, and i would just conclude by saying this. security in the university is very different and security in the private sector. because the university is an open organization. there are many points of access because it is all about freedom of information but by definition that's the internet. in a private sector you can centralize cybersecurity. you cannot do that at university so we had to find the proper balance between security and access. and that is the challenge for all universities because as you know in the past four months, 50 universities have had major data breaches do not all of them even bother to report it. >> excellent testimony, and i thank you very much. mr. john mulligan as executive vice president and chief financial officer of the target corporation, we welcome you. >> that afternoon, chairman rockefeller, ranking member thune, and members of the committee.

nine in the john mulligan and an executive vice president and chief financial officer of targeted it's a pleasure to be here with you today. target expense a data breach resulted from a criminal attack on our systems. let me begin by once again reiterating how deeply sorry we are for the impact this incident has had on our guests, your constituents. our top priority is always taken care of our guests. they should feel confident about shopping at target. we work hard to protect information about them but the reality is we experienced a data breach. our guests expect more and we're working hard to do better. we know this has shaken their confidence, and we intend to earn it back. my written statement provides pe additional details about the breach and targets response. like you, we are asking hard questions about whether we could have taken different actions before the breach was discovered that would've resulted in different outcomes. in particular we are focused on what information we had the could have alerted us to the breach earlier.

whether we have the right personnel in the right positions, and ensuring that decision whether to operational security matters were sound. we are working quickly to answer these questions. i would like to provide an update since i last testified, including the actions we're taking to further strengthen our security and potential policy solutions we support. from the outset our response has been focused on supporting our guests and taking action to protect them against possible evolving cyber threats. we are taking a hard look executed across a network. while we don't know everything yet we have initiated the following steps to for the protect our perimeter and better secure our data. we are enhancing our security systems. we are increasing segmentation of key portions of our network. we have accelerate the installation of additional anti-malware tools and we're hardening our network perimeter by expanding backdrop dedication to earlier target became the first retailer to join the financial services information

sharing and analysis center. the center sure to critical information at the celtics detection, prevention and response to cyber attacks and fraught activity. we are accelerating our $100 million investment in the adoption of chip technology because we believe it is critical to enhancing consumer protection. we've already installed approximate 10,000 chip enabled devices in target stores and expect to complete this installation in all target stores by september, six months ahead of schedule. we expect to issue and accept chip enabled cars by early 2015. we've offered one you a free credit monitoring and identity theft protection to anyone was ever shopped better use target stores and we informed our guests that have zero liability for any fraudulent charges on the cards arising from this incident. we believe that responsible policy measures can help further enhance security for our guests and all consumers. mr. chairman, i know you and

other members of the committee of introduced legislation designed to enhance data security. although i'm not a policy expert, i discussed the principles of you go with our team. we agree a uniform standard would help provide clarity and predictability to consumer notification. while the standard will be uniform, we would support continued state attorneys general enforcement. we also data security standards a properly structured by the federal trade commission could provide additional protection for consumers if we have learned that if a robust security can't complete a shield a company from a criminal breach. however, the more the data seated in be approved across the economy, the better protected consumers will be. for many years target has invested significant capital and reserves and personal a process he. prior to the data breach we had with multiple layers of protection and continue to make enhancements to meet evolving threats. in september 2013, our system for certified compliant with

payment card industry data security standard, meaning we met across the 300 independent requirements of the assessment. yet the reality is that criminals breached our system. to prevent breaches like some happening again, none of us can go it alone. all businesses and their customers are facing frequent and increasingly sophisticated attacks i cybercriminals. protecting american consumers is a shared responsibility, and target remains committed to being part of that solution. senators, want to once again say to you and to our guests how sorry we are this happen. we are committed to getting things right. thank you. >> thank you, sir. now ms. ellen richey whose chief enterprise risk officer visa. spent thank you, chairman rockefeller, ranking member thune, and members of the committee. i appreciate the invitation to testify today.

everyone in our payment system, merchants, financial institutions from networks and cardholders is affected when did it optimize occur because they jeopardize the trust that we work to build for more than 50 years. we continue to work to maintain that trust every day by placing secured at the forefront of everything we do. the payments industry has adopted a layered approach to data security. first we protect consumers from financial harm from zero liability policies that ensure they aren't held responsible for fraudulent charges on their accounts. and then we worked behind the scenes to protect their personal information and prevent fraud before it can happen. as a result of fraud rates in the visa system have declined by more than two-thirds in the last two decades to just 6 cents for every $100 transacted. as recent compromises show, however, our work is never done. our critical first step in data security is to limit the amount of data that needs to be

protected. for example, years ago we campaigned successfully to eliminate the storage of sensitive cars -- card data it is minimal difficult for criminals to steal large audience updated. but as with all the more sophisticated for most are stealing data in? >> guest: . therefore strongest security remains fundamental to our program to protect the payment system. the payment card industry data security standards establish a baseline which, when fully and consistently implemented, has proven effective in protecting our stakeholders from cyber attack. visa understand it's difficult for any organization to maintain complete security all of the time. with that in mind were working with others in the industry towards a paradigm shift that would indicate to reduce or even eliminate vulnerable payment data from the merchant environment. if it did it fail in the environment could no longer be reduced to commit fraud, criminals would have no reason to attack. we call this devaluing the data.

that's over join with others and industry to create a roadmap for the future of payment security with a focus on three data evaluation technologies, the chip, and point-to-point because you. emv chip is a microprocessor that can be embedded in payment cards. chip cards are nearly impossible to counterfeit and as such a eliminate one of the most important incentives for criminals to steal payment data today. the profit opportunity from counterfeit card. but emv as not a silver bullet. in countries where it's widely used, protestant we moved to the online channel. so to address that threat we have proposed a new standard for digital payments known as tokenization which replaces the account holders 16 digit account number with a digital token during a transaction process. tokenization removes the sensitive data from the online merchant and firemen because it's the token and not the card number that goes to the merchant

to the third element in the roadmap is point-to-point encryption, a technology which is available today and protects account data from the moment it enters a point-of-sale terminal to the completion of the transaction process. securing data today and the valuing it tomorrow are the most critical component of our security strategy, but the layered approach assumes that no single strategy will ever be 100% effective. therefore, we also invest in fraud prevention, analytical tools, some of most advanced in the world that identify and prevent billions of dollars of fraud each year. and we also invest in breach response, continuously improving our ability to identify breaches, respond to them quickly and protect consumers when they occur. as a result, the vast majority of accounts exposed in large data breaches do not experience fraud. in fact, just two to 5% of the accounts exposed in per fraud resulting from the breach. as the committee considers its

policy response, visa believes there are three areas where government help could be most effective. first the government can help create a safe environment to share cyberthreat information. second, the government can continue to work with the international community to improve coordination among law enforcement agencies and to eliminate the havens from which cybercriminals launch the attack on our financial system. third, the government can establish a uniform breach notification standard to replace the native state laws currently in place. and, finally, in closing let me note that we no cybercriminals will always be with us. they will continue to target any environment that contains valuable information. the payments industry has fought back in investing in sophisticated solutions that protect the system and the consumers who rely on it. but as the girls improve their technologies, we have to improve ours as well. they key is to work together, to defeat our common enemy, and

visa is fully committed to working with all of the participants in the payments industry towards this objective. thank you again for the opportunity to testify today. >> thank you very much. very much indeed. now mr. peter sharpe, marsh mclennan companies. >> chairman rockefeller, ranking member thune, members of the committee, as a former david rockefeller fellow convicted in particular pleasure, mr. chairman, to be before this committee. i like to focus my remarks -- >> for freaks because i'm so? >> my uncle did this for free speak with something like that. >> very unusual. [laughter] >> i'd like to focus my remarks this morning, this afternoon on a single and narrow topic of cyber insurance. what is it? who's buying it? and what role might they play as part of a comprehensive risk

mitigation framework as the world's leading insurance broker, our company has a unique perspective on the cyber insurance marketplace. marsh assist clients in preparing risk mitigation strategies including its cyber insurance, and it is issued its first cyber policy as far back as 1999, called net secure. so there are three basic sites of cyber insurance in the first and most fundamental is coverage that protects out of pocket expenses that the university of maryland or not institutions might suffer, expenses like credit monitoring or setting up call centers or notifying affected individuals. the second type of insurance is something analogous to business interruption insurance. so that if your system is really disabled for a period of days or longer, you're able to recover the actual harm that you suffered in the form of lost

profits. and the third type of insurance is for damage that might be suffered by part outside of your company. so customers or consumers or clients, and that's called third party insurance. to give the committee some insight into the dynamics of the cyber insurance market, which is conducted a survey of our cyber clients to give you a sense of who is buying it, what the take-up rates are and what the price of this insurance actually is. so the a couple of charts that were in my written test what i think of some of them in front of you -- >> they are in each of our packets. >> thank you, mr. chairman. so that i couple of important headlines. the first is that interest in cybersecurity is increasing rapidly. indeed, the number of marsh clients who purchase standalone cyber insurance increased by more than 20% just in the past year. the highest tak take-up rates an

industries like financial services, health care, particularly because of the hipaa statute and importance of protecting health care data and also interesting in the education space. would have been marketed increases. -- market increases but that's a breakdown that interest. in terms of size of companies, larger companies perceive a greater risk to cyberthreat than smaller companies do. so we analyzed the take-up rates, and if you're a company with revenues of more than $1 billion, your take-up rates are almost double what they are if you're a smaller company. and lastly, mr. chairman, on pricing, i hear the news is actually quite positive, that throughout the past year, even if the perception of the risk and potential severity associate with cyberattacks, pricing engine in relatively stable throughout the year. this is partly a product of a number of new entrants can do under that is coming into the marketplace.

so that's the actual insurance. the process of simply applying it in church, is itself constructive. because similar to the nist framework, the process of blind forces you to go through a gap analysis to try to benchmark itself against industry standards and what are considered the best practices and see what you can do to position yourself as a better risk for the underwriting community. so just in closing, mr. chairman, as this committee is all too aware, this is a race without a finish line. our adversaries will continue to adopt new methods of attack and different strategies. and its extranet important that in combating this threat, government, the private sector, and also the nonprofit world partner together to try to respond effectively. thank you. >> thank you very much. eloquent and helpful. mr. david wagner, president of

entrust and corporate spent good afternoon. entrust -- good afternoon, and trust is pleased to be your to help facilitate and continue the dialogue for better understanding of cybersecurity issues. just over two years ago, entrust testified on a similar topic of cybersecurity, and since that time the situation has worsened. nationstates and colonels are continuing to use cyber to advance their interest. in december, point-of-sale bridges are another example of this escalation. although entrust has no direct relationship with any of the victims of the point-of-sale attacks we can provide general insight to the attacks. as we've heard earlier in these testimonies, criminals are using old-fashioned con tricks and cyber to get past mode style defenses. social engineering and malware

are the silent equivalent of crowbars penetrating into corporate networks. and once past the perimeter defenses, the criminal uses a stolen identity and virtually becomes someone on the network, making them difficult to distinguish from normal network behavior. in the case of the retail breaches, once the criminal assumed the right identity, they were able to push malicious code to the point-of-sale terminals. they were able to collect customer credit card data from the magnetic stripes. and then extort and exfiltrated that data overseas. you can see from these passengers that their sophisticated to their sophisticated but not rocket science. they used stolen identities to access the victim company's network, and then used the victim companies it tools to complete their crime. a determined cyber attacker can overcome even strong defenses. we need strategies to strengthen the defenses inside the

perimeter. good information security governance is a vital, and industry regulations like pci and frameworks like sands 20 and iso are able to help build effective security architectures. so you might be asking with all of this knowledge, guidance and standard how did the breaches occur? why weren't accounts using identification techniques stronger than using a password? why wasn't the network segment to protect sensitive data? why worked a launch respond to an network monitoring equipment capturing the unauthorized traffic patterns? nothing in the breaches was new. we know that good comes to government requires investment in process of time but if we create a culture where executives and board members are unaware and understand information security risk, how do we create a regulation that evolve and change with technology. ..