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Continuing Federal Cyber Breaches Warn Against Cybersecurity Regulation

October 29, 2014 Comments off

Continuing Federal Cyber Breaches Warn Against Cybersecurity Regulation
Source: Heritage Foundation

Recent high-profile private-sector hacks have once again put a spotlight on the issue of cybersecurity. This is a serious problem that requires legislation to improve the United States’ cybersecurity posture, but the U.S. should not reflexively adopt government regulation of cyberspace as a solution. There are concerns that such a response would not be cost-effective and would have an adverse effect on innovation. It could also potentially create a mindset of compliance rather than of security. Additionally, the government’s own cybersecurity track record raises questions about the effectiveness of government cyber regulations.

The following is a list of federal government cybersecurity breaches and failures, most of which occurred during 2013 and 2014. This list is part of a continuing series published by Heritage that serves as a long-term compilation of open-source data about federal cybersecurity breaches dating back to 2004.

This list is in no way complete: Some hacks might not be reported or are classified, and others have yet to be realized. In September 2014, Robert Anderson, executive assistant director of the Criminal, Cyber, Response, and Services Branch of the FBI told the Senate Homeland Security Committee that if a federal department believes it hasn’t been hacked, it is likely that they are simply unaware of the hack. When Senator Coburn asked for a list of all the government hacks the panelists were aware of, he acknowledged that they may have to be discussed in a closed Senate hearing. Furthermore, the list below does not include the large number of private-sector failures. Nevertheless, the seriousness and number of known U.S. government cybersecurity failures undercut the argument for a government-led regulatory approach to cybersecurity.

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Cyber Attacks on U.S. Companies in 2014

October 29, 2014 Comments off

Cyber Attacks on U.S. Companies in 2014
Source: Heritage Foundation

The spate of recent data breaches at big-name companies such as JPMorgan Chase, Home Depot, and Target raises questions about the effectiveness of the private sector’s information security. According to FBI Director James Comey, “There are two kinds of big companies in the United States. There are those who’ve been hacked…and those who don’t know they’ve been hacked.”

A recent survey by the Ponemon Institute showed the average cost of cyber crime for U.S. retail stores more than doubled from 2013 to an annual average of $8.6 million per company in 2014. The annual average cost per company of successful cyber attacks increased to $20.8 million in financial services, $14.5 million in the technology sector, and $12.7 million in communications industries.

This paper lists known cyber attacks on private U.S. companies since the beginning of 2014. (A companion paper discussed cyber breaches in the federal government.) By its very nature, a list of this sort is incomplete. The scope of many attacks is not fully known. For example, in July, the U.S. Computer Emergency Readiness Team issued an advisory that more than 1,000 U.S. businesses have been affected by the Backoff malware, which targets point-of-sale (POS) systems used by most retail industries. These attacks targeted administrative and customer data and, in some cases, financial data.

This list includes only cyber attacks that have been made known to the public. Most companies encounter multiple cyber attacks every day, many unknown to the public and many unknown to the companies themselves.

The data breaches below are listed chronologically by month of public notice.

Amnesty Cost to Taxpayers: $6.3 Trillion

May 22, 2014 Comments off

Amnesty Cost to Taxpayers: $6.3 Trillion
Source: Heritage Foundation

Granting amnesty to an estimated 11 million unlawful immigrants will cost taxpayers at least $6.3 trillion, according to a new report by Heritage Foundation scholar Robert Rector. The highly anticipated report, released today, becomes available as a Senate committee is set to mark up a “comprehensive immigration reform” bill May 9.

10 Guiding Principles for Agriculture Policy: A Free-Market Vision

May 14, 2014 Comments off

10 Guiding Principles for Agriculture Policy: A Free-Market Vision
Source: Heritage Foundation

Agriculture has changed dramatically over the past 80 years, yet farm and commodity programs are Depression-era relics that are grounded in central-planning philosophies. Even some policymakers who claim to be strong proponents of free markets and limited government tend to forget these core beliefs when it comes to these programs.

Agriculture policy is not just limited to these traditional farm and commodity programs that limit choice, stifle innovation, drive up consumer prices, and cost taxpayers billions of dollars a year. It also includes food safety, international trade, environmental policy and property rights, research and innovation, and general issues applicable to all sectors of the economy, such as labor policy.

There are alternatives to agriculture beyond the status quo of central planning and subsidies. The same free-market solutions that have allowed this nation to flourish are just as applicable to agriculture as they are to other sectors of the economy. The following are 10 guiding principles for agriculture policy.

Boosting Economic Mobility Through Prize-Linked Savings

July 23, 2013 Comments off

Boosting Economic Mobility Through Prize-Linked Savings
Source: Heritage Foundation

The savings rate in America has been in decline for three decades, with roughly one-third of households having no savings at all. Analyses of economic mobility explore why some people are successful in moving up the economic ladder during their lifetime while others are not. While there is much debate about the degree of opportunity in America, there is general agreement that there seem to be significant obstacles facing Americans who start out in households at the bottom end of the income spectrum. But even for those starting at the bottom, lifetime trajectories vary widely. The habit of saving is a critically important complement to education and social “capital” needed for upward mobility. But we need to recognize that there are many Americans who are not inclined to take part in traditional programs designed to build a savings habit. For these Americans, financial incentives and tools with approaches that have a more emotional appeal are a more effective way of creating a culture of savings by channeling the instinct to gamble into systematic savings. This approach, known as “prize-linked savings” employs the techniques of behavioral economics to turn a behavior pattern into a savings habit that enhances the economic mobility of a household.

The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer

May 14, 2013 Comments off

The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer

Source: Heritage Foundation

Unlawful immigration and amnesty for current unlawful immigrants can pose large fiscal costs for U.S. taxpayers. Government provides four types of benefits and services that are relevant to this issue:

  • Direct benefits. These include Social Security, Medicare, unemployment insurance, and workers’ compensation.
  • Means-tested welfare benefits. There are over 80 of these programs which, at a cost of nearly $900 billion per year, provide cash, food, housing, medical, and other services to roughly 100 million low-income Americans. Major programs include Medicaid, food stamps, the refundable Earned Income Tax Credit, public housing, Supplemental Security Income, and Temporary Assistance for Needy Families.
  • Public education. At a cost of $12,300 per pupil per year, these services are largely free or heavily subsidized for low-income parents.
  • Population-based services. Police, fire, highways, parks, and similar services, as the National Academy of Sciences determined in its study of the fiscal costs of immigration, generally have to expand as new immigrants enter a community; someone has to bear the cost of that expansion.

The cost of these governmental services is far larger than many people imagine. For example, in 2010, the average U.S. household received $31,584 in government benefits and services in these four categories.

The governmental system is highly redistributive. Well-educated households tend to be net tax contributors: The taxes they pay exceed the direct and means-tested benefits, education, and population-based services they receive. For example, in 2010, in the whole U.S. population, households with college-educated heads, on average, received $24,839 in government benefits while paying $54,089 in taxes. The average college-educated household thus generated a fiscal surplus of $29,250 that government used to finance benefits for other households.

Other households are net tax consumers: The benefits they receive exceed the taxes they pay. These households generate a “fiscal deficit” that must be financed by taxes from other households or by government borrowing. For example, in 2010, in the U.S. population as a whole, households headed by persons without a high school degree, on average, received $46,582 in government benefits while paying only $11,469 in taxes. This generated an average fiscal deficit (benefits received minus taxes paid) of $35,113.

The high deficits of poorly educated households are important in the amnesty debate because the typical unlawful immigrant has only a 10th-grade education. Half of unlawful immigrant households are headed by an individual with less than a high school degree, and another 25 percent of household heads have only a high school degree.

Some argue that the deficit figures for poorly educated households in the general population are not relevant for immigrants. Many believe, for example, that lawful immigrants use little welfare. In reality, lawful immigrant households receive significantly more welfare, on average, than U.S.-born households. Overall, the fiscal deficits or surpluses for lawful immigrant households are the same as or higher than those for U.S.-born households with the same education level. Poorly educated households, whether immigrant or U.S.-born, receive far more in government benefits than they pay in taxes.

Marriage: What It Is, Why It Matters, and the Consequences of Redefining It

March 21, 2013 Comments off

Marriage: What It Is, Why It Matters, and the Consequences of Redefining It

Source: Heritage Foundation

Marriage is based on the truth that men and women are complementary, the biological fact that reproduction depends on a man and a woman, and the reality that children need a mother and a father. Redefining marriage does not simply expand the existing understanding of marriage; it rejects these truths. Marriage is society’s least restrictive means of ensuring the well-being of children. By encouraging the norms of marriage—monogamy, sexual exclusivity, and permanence—the state strengthens civil society and reduces its own role. The future of this country depends on the future of marriage. The future of marriage depends on citizens understanding what it is and why it matters and demanding that government policies support, not undermine, true marriage.

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