Mike McConnell:

Against this backdrop, I will focus my statement on the following issues:

* The continuing global terrorist threat, but also the setbacks the violent extremist networks are experiencing;
* The significant gains in Iraqi security since this time last year and the developing political and economic improvements;
* The continuing challenges facing us in Afghanistan and in Pakistan, where many of our most important interests intersect;
* The persistent threat of WMD-related proliferation:

o Despite halting progress towards denuclearization, North Korea continues to maintain nuclear weapons;
o Despite the halt through at least mid-2007 to Iran’s nuclear weapons design and covert uranium conversion and enrichment-related work, Iran continues to pursue fissile material and nuclear-capable missile delivery systems.

* The vulnerabilities of the US information infrastructure to increasing cyber attacks by foreign governments, nonstate actors and criminal elements;
* The growing foreign interest in counterspace programs that could threaten critical US military and intelligence capabilities;
* Issues of political stability and of national and regional conflict in Europe, the Horn of Africa, the Middle East, and Eurasia;
* Growing humanitarian concerns stemming from the rise in food and energy prices for poorer states;
* Concerns about the financial capabilities of Russia, China, and OPEC countries and the potential use of their market access to exert financial leverage to achieve political ends.

We assess that nations, including Russia and China, have the technical capabilities to target and disrupt elements of the US information infrastructure and for intelligence collection. Nation states and criminals target our government and private sector information networks to gain competitive advantage in the commercial sector. Terrorist groups—including al-Qa’ida, HAMAS, and Hizballah—have expressed the desire to use cyber means to target the United States. Criminal elements continue to show growing sophistication in technical capability and targeting, and today operate a pervasive, mature on-line service economy in illicit cyber capabilities and services available to anyone willing to pay.

Each of these actors has different levels of skill and different intentions; therefore, we must develop flexible capabilities to counter each. It is no longer sufficient for the US Government to discover cyber intrusions in its networks, clean up the damage, and take legal or political steps to deter further intrusions. We must take proactive measures to detect and prevent intrusions from whatever source, as they happen, and before they can do significant damage.

At the President’s direction, an interagency group reviewed the cyber threat to the US and identified options regarding how best to integrate US Government defensive cyber capabilities; how best to optimize, coordinate and de-conflict cyber activities; and how to better employ cyber resources to maximize performance. This tasking was fulfilled with the January 2008 issuance of NSPD-54/HSPD-23, which directs a comprehensive national cybersecurity initiative. These actions will help to deter hostile action in cyber space by making it harder to penetrate our networks.