State of the Union

The State of the Union (which can be viewed live streaming below) begins  this evening at 9pm EST and pundits are expecting the President to focus on a mix of social and fiscal issues while continuing his Inauguration speech theme of the inaction in Congress stalling economic recovery and solutions to the nation’s large scale fiscal problems. With the sequester implementation deadline just three weeks away pundits expect a significant portion of the speech to focus on averting the immediate term cuts to federal spending and that he will again call for a far reaching deficit reduction deal on par with approximately $1 trillion plus in deficit reduction to be craft in 1H13. President Barack Obama’s State of the Union live streaming video is embedded below. The video will go live when the State of the Union begins at 9PM EST. However there is some pre-coverage of the event.

The market is perhaps getting optimistic ahead of the President’s State of the Union address tonight in which he will make proposals for spending on infrastructure, clean energy and education. He will also apparently argue that promoting economic growth is the best strategy to reduce the federal budget deficit that has exceeded $1 trillion in each of the last four years, so we will see how the market reacts to his talk and like any other major economic event, the higher it goes into the “report”, so to speak, the bar gets set a little higher as the market most of the time discounts any good news that might come out of what he has to say because of its gains ahead of the event itself.

President Obama is expected to issue an executive order on cybersecurity aimed at strengthening online protections for “critical infrastructure,” an action he could announce in his State of the Union address tonight. Cybersecurity is of growing importance due to increasing online attacks and espionage, with some potential for industry fallout.

The Obama administration says it’s focused on voluntary industry efforts and public-private collaboration to improve cybersecurity, however, some telecom companies are wary of possible regulation, particularly if it’s applied to communications networks and not tech/edge devices and software applications.

Analysts at Stifel Nicholas note that all sides are gearing up for another battle over cybersecurity legislation. The House last year passed a bill to promote information sharing between government and industry parties — a concept with much backing — but Republican-led opposition to critical-infrastructure provisions blocked a Senate bill. The telecom industry favored the House approach.

The Obama administration then started making noises about issuing a cybersecurity executive order under its existing authority. In November, it floated a draft order that eyed a partnership with critical infrastructure owners to foster “information sharing and the collaborative development and adoption of risk-based standards.”
The draft contained a host of provisions that, among other things, would seek to (A) encourage information sharing about cyber threats; (B) develop a framework to reduce cyber risk to critical infrastructure, incorporating “existing consensus-based standards and industry best practices to the fullest extent possible;” (C) create a voluntary critical-infrastructure cybersecurity program, with incentives for industry participation; (D) identify critical infrastructure at greatest risk for “catastrophic” effects; (E) direct sector-specific executive branch agencies to determine whether their regulations and statutory authority are sufficient in light of the risks; (F) and encourage independent agencies regulating critical infrastructure to consult with the Department of Homeland Security and consider steps to mitigate risks.

The looming executive order may be largely consistent with that draft, albeit with some tweaks, possibly to
make clearer the collaborative intent and to flesh out some interpretations.