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FROM THE OFFICE OF PUBLIC AFFAIRS March 21, 2005 Deputy Assistant Secretary for Critical Infrastructure Protection Thank you, it's a pleasure and honor to be here today representing the Bush One of the hallmarks of the The President has led the effort to protect our country against those who wish to do us harm by strengthening our borders, reforming our intelligence programs, and creating the Department of Homeland Security. He strengthened and improved the quality of education. And the President is working to strengthen retirement. I want to spend just a moment on this because the President has made Social Security reform a priority in his second term agenda. The Social Security system is a pay-as-you-go system, which means that the payroll taxes paid by today's workers support benefits paid to today's seniors. In 1950, there were 16 workers to support every one beneficiary. Today, that number has dropped to 3.3 workers, and by the time today's young workers turn 65, there will only be 2 workers to support each beneficiary. In 2008, the baby boomer generation will begin to retire, and the number of retirees will continue to rise rapidly. Americans are also getting older - by 2035, 20 percent of all Americans will be over the age of 65. And people are living longer - life expectancy has hit a high of 78 years. These demographic shifts have created significant challenges for Social Security and threaten its solvency. According to the 2004 Social Security Trustees Report, the cost of doing nothing to fix the system has reached $10.4 trillion - that's twice the combined wages and salaries of every working American last year. In 2018, Social Security will begin to pay out more than it takes in. The shortfalls will grow larger with each passing year until the system is bankrupt in 2042. The President believes this is a problem that has to be addressed now so that our children, and future generations, will not have to face these same fiscal challenges down the road. The President has put forth some basic principles for Social Security reform.
With this framework guiding us, the Critical Infrastructure Protection In addition to the strength of our Social Security system, the President and Secretary Snow are concerned, as you are, with protecting the resilience and strength of our economy and financial system. At the Department of Treasury, we develop and implement policies that enhance the resilience of the economy, minimize economic damage, speed economic recovery from any adverse circumstance, and promote the protection of our critical financial infrastructure. Our process is to first identify the systemically critical infrastructures, assess vulnerabilities within those infrastructures, remediate the vulnerabilities, and measure the results. My office is responsible for protecting the critical infrastructure of the financial services sector. On the physical front, we face threats from terrorists whose objective is to create devastation, measured in the loss of lives and the destruction of property. Their techniques include the use of car bombs and homicide bombers. On the cyber front, we face threats from hackers and identity thieves who want to disrupt systems and steal from our customers and citizens. Recently, their have been several well publicized incidents that involve the theft personal information. It is important that financial institutions continue to safeguard their customer's assets and their personal information, such as their Social Security numbers. I believe that the financial sector does a good job in this area. But I encourage you to continue to work to increase your protections, because the thieves who want to steal this information are sophisticated, adaptive, and in many cases organized. Our challenge is to work together to address these threats and make our institutions stronger. With the old adage that a chain is only as strong as its weakest link, our goal is to protect all financial institutions. Our strategy to protect our infrastructure is built on two pillars. We have a public sector pillar, known as the Financial and Banking Information Infrastructure Committee (FBIIC), which is comprised of the federal and state financial regulators and chaired by Treasury. We also have created a private sector pillar, the Financial Services Sector Coordinating Council (FSSCC) that is comprised of the leading financial industry trade associations and financial institutions. Treasury appoints the chair of the FSSCC, and we work closely together to form policies that advance preparedness and protection. Information sharing between the government and private sector channels is the cornerstone of our strategy. Generating accurate and timely information about threats to our physical and cyber infrastructure and then sharing that information are essential outcomes of this communication. One mechanism for disseminating vital threat information is the Financial Services Information Sharing and Four principles guided our actions in the aftermath of September 11 and they continue to guide our actions today. These principles form the bedrock of our collaboration with the financial sector. While we have a strong regulatory regime in place that ensures the safety and soundness of financial institutions, I believe that protecting critical infrastructure is really a risk management problem, and that there is no "one size fits all solution" to be achieved through additional regulation. The first principle is the protection of people. We depend on people - tellers, technicians, loan officers - to operate the financial system and to see the system through during times of stress. Indeed, it was the commitment of these professionals to their institutions, customers, and colleagues that helped the financial system recover from the September 11 attacks. The second principle is maintaining confidence in the nation's financial system. We rely on financial services, such as those provided by thousands of community banks, to process our paychecks, buy groceries, purchase a house, finance our children's education, or save for retirement. We must ensure that consumers trust in the financial system. And this in turn produces confidence. The third principle is to ensure that the financial system remains accessible and helps keep Fourth, we encourage decentralized decision-making and swift, responsible action by the private sector. In general, financial institutions should engage in problem-solving and make appropriate decisions without waiting for guidance from As government and private industry share more and better information, financial institutions become better prepared to estimate the risks they bear and better equipped to effectively reduce the likelihood of a disruption through strategic investments. Furthermore, as more institutions enhance security and reliability, the incentive increases for competitors to invest in innovative solutions as well. In some firms, it may shift infrastructure protection from a corporate liability to an asset. Finally, an industry that responsibly protects itself reduces the need for the government to impose costly, inflexible, and potentially ineffective regulation. The four principles - protecting people, maintaining confidence, maintaining access to financial institutions, and promoting de-centralized decision-making and responsibility - shape our policies to enhance the resilience of the U.S. economy. I thank you for your time and attention today. -30- |
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