let me kwoeth whquote what he s because i think it's important, since the president's budget will be submitted shortly and i i'm sure he'll have some proposals as well. you have to look at it in the context of the full recommendations and the question will be whether my republican colleagues want to support the full budget. here's the president's statement, just for the record. quote, and i will veto any bill that changes benefits for those who rely on medicare, but does not raise serious revenue by asking the wealthiest americans or biggest corporations to pay their fair share. we are not going to have a onesided deal that hurts the folks who are most vulnerable. so when the president made his proposals, he made them as part of a package approach. asking all the american people to be part of the solution and not singling out seniors or middle-income families to take a disproportionate brunt of the hit. thank you, mr. chairman.

>> and thank you, and to conclude on this issue, i would just say that the purpose of this is to protect taxpayers from overpayments. and these are payments that people are not entitled to, because their income has changed. some of it may be because they received a bonus or got an increase or something sb in the family got a job. but it also could be because of fraud. that they -- you know, proposed eligibility for a subsidy that they didn't ultimately provide. and i think what was important with the example that dr. price laid out, was that under this proposal, we're asking them just to pay back a small fraction of the overpayment or subsidy that they're not entitled to. again, an example he suggested, the family would keep an overpayment of $7,000 in being asked under this proposal, this

so-called pay-for, to only return $700 additionally. so it is a reasonable proposal, it's one that has received support. in other legislation. and i think is one that i think really deserves more merit than maybe it had received in the discussion between the parties. this would reduce the deficit by a significant amount. by over $13 billion. it's clearly an important part of making the legislation we're trying to move forward, not increase the deficit. and be paid for. so with that, i'll, before i close off the meeting and describe what might happen next, i'll turn it over to senator baucus. >> thank you, mr. chairman. we have been trading ui offers back and forth on the second level and i'm hopeful that we've

pretty much closed that out. on the larger ui issues, it's a number of weeks. drug testing, g.e.d., waivers and so forth. i think it might not be a bad idea if we in the senate were to send over to the house, very quickly an offer on that, on all of ui. and you could expect to see that very soon. >> well thank you very much. we'll look forward to that. that is obviously one of the core issues that we have to come to an agreement on fairly quickly, ui, payroll tax holiday and sgr being the three large ones. i do think that it appears from the conversation today, that the democrats rejected the offsets we in our legislation. but i think that we do want to get an offer, on those pay-fors as well. so i look forward to engaging

with my senate colleagues and other members of the conference on trying to find a way to go forward. if, if we are successful on that, we will have three choices. one, to go outside the scope of the conference to find other offsets. two, increase the deficit. which even the president said he doesn't want to do that with this legislation. or begin looking at scaling back some of these core policies that we've identified. which would mean less time, or less generous benefits. so at this time, at this point in our talks, i think those options will guide us going forward. i look forward to receiving the proposal on unemployment insurance and would look forward to hopefully receiving an offer on other pay-fors, if these are. >> mr. chairman, i might add, just to repeat, we do not have much time here. frankly for all intents and purposes, the practical

limitation is probably about the first part of next week. >> yes. >> recess coming up, we have to do this clearly before the recess. that will take a couple days before the recess begins. second, i urge ve flexible. it's you've raised mr. chairman, the scope of conference questions. i think that basic principle of not taking the scope of conference is a good principle. but there could be modifications, frankly. that i think could be within going to, we are going to pass this. and when we do pass it, that is the whole package, it's going to be one that's supported by both political parties. which is to say, that in the senate, in the senate scope of conference ot speak for the house, by definition, we

will agree to waivers if technically needed. because it will be a bipartisan solution. package. you mentioned a couple other alternatives if we don't reach a solution. i urge all of us that i don't want to butnts to find a solution. american people want us to work together. it's amazing to me know it's amazing to all of you, when you return here, after visiting with your constituents at home, how different this place is. in washington, d.c. i mean, there really is an echo constructive. and i just urge us, when we're trying to figure this all out, is to remember the people that we serve, what would they, what would their guidance be for us? what would they want us to compromise? would they want us to say, can't have it all, let's at least come

up with a solution. would they want us to reach an agreement that basically passes the smell test. and the answer clearly is yes. so i just urge us to remember our constituents. the american people who do want us to get our work done here. and maybe, maybe, maybe, the approval rating of this outfit might just go up a percentage point. that of course is not the reason why we want to reach an agreement. we want to reach an agreement because it's the right thing to do. and i just urge us to keep that bigger challenge in mind. >> yes. >> mr. chairman? >> yes, mr. levin. >> just a couple of things. there is an urgency here and there's really no alternative but to succeed. number two, i hope very much that when the republicans receive ideas from us on unemployment insurance, that

they'll be taken very seriously. and number three, i think if we're going to succeed, we need to find a way to have a lot of back and forth among all of us, on these issues. and i'm not exactly sure what the procedure is or what the structure will be, but we need to intensify our discussions. i go back to as i said earlier, the only conference i remember, there have been so few here. and this was many years ago, relating to welfare reform. which was a very controversial issue. but we essentially had subgroups that sat down and, and exchanged ideas back and forth. house, senate, democrats, republicans, and i think we need to do the same thing in one way or another on all of these outstanding issues. thank you. >> well, thank you.

and i, i very much appreciate the sentiment of the remarks both from mr. levin and especially from senator baucus. look, our time is short. we do need to find pay-fors that will pass both bodies. i would ask all the conferrees to remain flexible. because we don't have a lot ever time left and we need to begin to move very quickly. so in terms of scheduling, i can't give a prediction. but we do need to remain flexible, to be able to get together on a moment's notice, so with that, this meeting is now ajurned. we're going live to the rayburn house office building on capitol hill, where house energy and commerce subcommittee is beginning a hearing on cybersecurity threats to the u.s. and the role of federal government. the heads of several internet security firms are witnesses this morning. >> threats to communications networks have come a long way in a very short time and they're very, very real and serious.

before coming to congress, i spent about 22 years as radio broadcaster and as a small businessman, i had to worry about securing our communications network. back then, it was 20 years ago, relatively straightforward, you had to have a fence around the tower and you couldn't let people get near the transmitter and a few things like that and every once in a while somebody would come and shoot an insulator out or something and you had to repair that. and every once in a while some idiot would try to cut the guy wires and that usually sprung around and got them. that never happened at my station, all of that was security of that wireless age. not any more. while physical security remains important, cybersecurity has also become a pressing concern. now they confront an array of threats online from things like the zeus trojan horse to suxnet. these threats are serious. unless our cyber defenses hold, a bad actor could drain the bank

accounts of a business, or crash a website. or launch a barrage of attacks on a company's network. those are serious consequences for any business and especially the small businesses at the heart of creating jobs in the economy. in our small business, i don't know, ten years or so ago when we did create a computer network and put everything up on digital audio, our main server was hacked and staken over and all of a sudden it started running slower and slower. and eventually we determined it had been overtaken. every month we learn more about these cyberthreats. and what we have learned thus far is of great concern. i'm concerned that our communications networks are under siege. i am worried that the devices consumers use to access those networks are vulnerable. and i'm concerned that our process for looking at communications supply chain issues lacks coordination. i'm concerned that our cyber defenses are not keeping pace with our cyber threats. in this hearing we're lucky to have the voices of five

private-sector witnesses to guide us through the complex issues of cybersecurity. i'm hoping that you'll tell me that cyberspace is secure and we can all rest easy at night. unfortunately, i've read your testimony and it's not so. so i expect you'll tell us the threats of our communications networks are all too real, american businesses are losing dollars, jobs, intellectual property and much, much more because of cybercrime and cyber espionage and that our national security is frankly at risk. i also expect you'll explain what the private sector is doing to fortify our cybersecurity defenses. private sector owns most of the critical infrastructure. the wires, the servers, the towers, the base stations that make up our communications networks. and they are on the front lines of cyber security. so i want to know what cyber security services are being offered to consumers, what protections are being deployed in our communications networks. what affirmative steps the

private sector has taken to lock down the supply chain and to combat cyber crime and i also expect to hear what you think the appropriate, and i underscore appropriate federal role is. are federal laws and regulations helping or interfering with information sharing? are federal regulations of cyber security practices appropriate? and if so, how? should the federal government be providing incentives for internet service providers and other members of the private sector to invest and innovate in the cyber security arena? and how should our country's fiscal state shape our discussion of the federal role? these questions and others will form the basis for deciding what cyber security legislation, if any, is needed in the near-term and how we can best secure cyberspace in the long run. i want to thank our panelists for taking the time to be here to help inform this important subcommittee, the energy and commerce committee on what we should do and how we can be better informed in doing our job.

with that, i would recognize the gentlelady from california, the ranking member, for an opening statement. >> chaunk, mr. chairman, for convening this morning's important hearing and i want to welcome the witnesses and i'm especially pleased that june per n juniper networks and mcfee, two outstanding silicon valley companies are here to talk to us about tackling the challenges of cyber security this morning. we all recognize serious threat to our nation's communications networks. since 2006, the number of federal cyber security incidents reported to the department of homeland security has increased by 659%. that's a whopping number. and the economic impact of these incidences is equally significant.

a recent study by the pullman institute estimated that the median annualized cost of cyber crime to a victim organization is $5.9 million a year, an increase of 56% from 2010. the more we rely on the internet to conduct our business, the more vulnerabilities we create for hackers to exploit. having served as a member of the house intelligence committee for eight years, i'm very well aware of the threat. not just from criminal hackers, but also obviously from other countries. but talking about the problem is not enough. we need to act, and that requires the help of both the private sector and the federal government. the private sector really represents 95% of this. the federal government the other 5%. one of the first steps to tackling this growing threat is i think education and training. whether at home or in the workplace, every american should

understand what they can do to protect themselves against a cyber attack. improved information sharing is also a key aspect of our to cyberspurt. if we're going to ask industry to krort cyber security incidents to the government, we need to establish a clear process to do so. i'm pleased to support our colleague, mike rodgers' effort, the cyber intelligence sharing and protection act of 2011. that's one of three or four bills in the house, that are at least three or four in the senate as well. it's also important to recognize that timely alerts to consumers and businesses can be the difference between an isolated cyber security incident and one that impacts millions of users. a voluntary isp code of conduct currently being developed by the fcc is one of the propose the ways to alert consumers when a

botnet or other malware infection is discovered. today's hearing is a very important opportunity for us to better understand our subcommittee's role in cyber security. including what role the fcc and ntia should play in protecting our nation's communication networks and how the private sector and other federal agencies should interact with them. so thank you to all of the witnesses. those that come from silicon valley, to instruct us and what remaining time i have, i'd like to yield to mr. markey. >> i thank the gentle lady. last week, fbi director, robert mueller testified that cyber threats will soon surpass terrorism as the number one threat facing the united states. we know from the department of homeland security that there have already been threats to the utility sector. we also know that russia and china have probed our electricity grid to find vulnerabilities. our economy hinges on our reliable flow of power with losses that go into the billions

of dollars with every major blackout. our national security also depends upon it. since 99% of the electricity used to power our military facilities, including critical strategic command assets comes from the commercially-operated grid. last september, i asked all five commissioners on the federal energy regulatory commission under our jurisdiction to name the number one threat to electricity reliability. all five commissioners agreed, cyber threats are the number one threat to the grid. in 2009, the full energy and commerce committee unanimously passed the grid act, which i authored along with chairman upton. that bill gave ferc, the authority to quickly issue grid security orders or rules that vul vulnerabilities or threats have not been adequately addressed in the industry. it was killed in the senate. all five fe are everyone c commissioners agreed that giving ferc this authority would increase american's ability to secure our electric grid with

cyber threats growing by the day, threatening our security and our economy, it is imperative that this committee pass the grid act. so that we can move it forward and empower the ferc to move quickly to safeguard the electric grid from cyber threats that are not sufficiently addressed by industry. we should listen to fbi director mueller to the ferc and to the warnings coming from russia and china. we should pass that grid act. soon. i yield back. >> thank the gentleman for his comments. we'll now recognize the chairman emeritus of the committee, mr. barton. before i do that, i want to say how important it is to have members who have been so engaged on this and especially we're blessed to have anna here, who served on the intelligence committee and mike rodgers, who chairs it now. and lee terry and mr. lata and mr. murphy is not part of the subcommittee, but were on the cybersecurity task force the speaker appointed. so all of that is most helpful as we tackle both of these issues. so i now recognize the gentleman

from texas, mr. barton. >> thank you, chairman upton. i thought mr. markey was going to say the experts said the gen from texas. >> i thought he was going to say that the biggest threat to the grid was the epa, but he went a different way with that. back in 2006. chairman upton held a hearing on this issue and together we sent a letter to the gao to look at this issue and the response we received then is the response that we got today and that is that we could white possibquite attacked. cyber crime is a $388 billion

industry. research has showed that the annualized cost of cyber crime for companies is over $6 million a year with the range being between 1.5 million per year. that is a real statistic. as we use the internet more and more every day, it is important that we really take this seriously and as you have pointed out and anna pointed out, it good to have the chairman of the select committee on intelligence on this sub committee because he has access to information that could be usef useful if and when we decide to

legislate. thank you, mr. chairman. as you know, there's an epa committee down stairs and i'll be moving back and forth. >> will you yield a few minutes to mr. terry? >> i will yield my time. >> this is an important hearing that we have to elevate the level of discussion the potential solutions. there's only one silver bullet that exists to prevent cyber crimes, that is to completely disconnect your computer from the network and use it as a paper weight. if you are going to use your computer for commerce, you are at risk. using the -- or why these folks is here today is for us to

understand what tools may be available. in the cyber task force, one of the things that we concluded is that the vast majority of every day hackings can be, maybe not prevented but go a long way, which is basic security features that are offered today, but we have to have people to purchase those or use those tools. in fact there's an incident in omaha with our entity that controls our facilities that never thought it was important to have those type of securities and guess what? they were hacked and all their information of stolen. and then the next level is where it gets dicey. how do you protect people? how do they protect their data? we cannot engage in setting the standards because frankly we set the standards before the ink is

dry on the bill and the standard has changed. so you are here to help us understand what solutions may be available to minimize and secure our infrastructure. >> mr. rodgers? >> well, thank you very much, in the short tyime that we have, te top on i c 80% of the attacks can be prevented by the operator, it's the other 20% that are the devil in the detail. between criminal attacks, disruption or attacking as we call it on cyber security, we have a real and present danger when wit comes to cyber threats.

and and nobody is more integrated than the united states and therefore we are at bigger risk. it unprecedented in history that such a massive and sustained intelligence effort to steal data to use against the united states is under way. we do not talk about it a lot because companies are hesitating to talk about it. we think the number is between $1 billion and $1 trillion in lost property. countries like china are leading the charge, russia is not far behind and iran is getting better. and the concern is nonnation states that are developing technology to attack countries like the united states.

all are rifbsks. i look forward to hearing from the witnesses and i prsapprecia you being here so we can get to the next step so we can have a fighting chance against the threats. i yield back. >> we recognize the gentlelady who will take over chairman waxman's time. >> thank you. there's though doubt the cyber attacks are real and continue to pose significant threats to economy. communication networks is one of many areas that we must protect particularly as we consider to deploy broad band network. advanced ip technologies and public safety communications heighten the concern for cyber

community. this network will have the same concerns as any other network. this is something we have to take seriously and protect. one of the technologies that will continue to play a role in our economy both in the public and private sector is cloud computing. we are also seeing consumer cloud applications like the i-cloud, one of the key issues is the challenge of cyber security relating to the cloud. the challenge is to find the balance of continuing to foster american innovation and growth while combatting cyber attacks. for the most part, the private sector will need to be up to the challenge and manage itself and its networks from potential cyber attacks. that said, i do believe that some balance may be appropriate

where the government must work together in partnership with the private sector to enhance our cyber security preparedness. simply put, one cannot do it without the other. small businesses, many rely on the broad band economy are vulnerable to cyber attacks. in these instances small businesses do not have a plan or lack the resources to fight off an attack. such an attack would be costly to their businesses. during this economic recovery, the last thing small businesses owner in my district and across the country need to worry about is a cyber attack. i'm pleased that the fcc launched the small bis cyber planner. it a tool that will allow small businesses that can create customized cyber security plan. it's important to educate the

small businesses and public in general about the risk that that cyber security poses to the government, small businesses and the economy as a whole. i believe a strong publ public/private partnership is key. i look forward to exploring appropriate jurisdiction of this committee given the communication and technology relevance of cyberer security. i look forward to hearing from witnesses today and hope that we can have future hearings in this sub committee so we can hear more about the government's efforts to combat cyber attacks. i thank you for holding these hearing and i'll yield back the balance of my time. >> gentlelady yields back the balance of her time and thafrnk for your te