Earlier this month, Sen. Tina Smith (D-MN) questioned Biden officials on national security as it relates to fiscal security during a Senate Banking Committee hearing.
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NewsTranscript
00:00Brown, thanks to all of you for being here.
00:02I really appreciate it.
00:03I'd like to direct my first question
00:05to Assistant Secretary Taylor Cawley, if I may.
00:09The recent disastrous CrowdStrike incident, I think,
00:14exposed the alarming vulnerabilities
00:16that can result when too many critical systems
00:19and capabilities are dependent on a single source component.
00:22And that faulty software update crashed.
00:26It apparently crashed over 8 million Windows devices.
00:29I mean, airlines were crippled, banking systems, hospitals.
00:31It was a mess.
00:33A lot of people paid the price for that.
00:35My question is, the DOD's industrial-based strategy
00:40includes efforts to reduce the risks associated
00:43with overdependence on a single or potentially adversarial
00:47source for national critical capabilities.
00:51I'm wondering, how is the DOD thinking
00:53about the national security risks
00:54that can stem from instances like the crowdsource outage,
00:57where there's vulnerability from a single-sourced product
01:01that can crash critical systems?
01:04Ma'am, thank you for that question.
01:07Single sources in our supply chains,
01:11in particular our defense-critical supply chains,
01:15remains a huge, incredible risk for our industrial base
01:24and for the Department of Defense,
01:26in general for us being able to provide our warfighters
01:30with the capabilities that they need at speed and at scale.
01:34An issue like the one that you raised with CrowdStrike
01:37is one that, obviously, we all experience.
01:41I experienced it myself personally on Monday,
01:43trying to leave Michigan.
01:46But in general, we address our supply chain issues
01:52looking at broadly, looking across the board.
01:55We also, through our chief information officer,
02:00look at cyber threats in particular.
02:02And I want to emphasize the importance of cyber
02:07as part of the sources of risk to our industrial base,
02:12particularly to manufacturers as well.
02:16As part of the umbrella of the National Defense Industrial
02:19Strategy, CIO also issued the DOD
02:24Defense Industrial-Based Cyber Strategy as well.
02:27So we continue to look very closely at these
02:29and look at ways in which they affect, particularly,
02:32the defense industrial base and how we can intervene.
02:36I appreciate your response.
02:38I think it was just sort of impossible for most Americans
02:41to believe that everything could just
02:42be so screwed up because of one software update gone awry.
02:48And I think when you think about what
02:50that might mean for other highly important systems
02:55that we rely on for so many other things,
02:57it's really concerning.
03:00I want to ask you another question.
03:02This one has to do with drug onshoring.
03:06So the FDA tells us that nearly 70% of the ingredients
03:12in medications that Americans take
03:14are sourced overseas, mostly India and China.
03:17And the Finnish drug supply is also
03:19heavily reliant on overseas supply chains,
03:22again, mostly from India and China.
03:24So could you talk about what the risks are
03:27that are posed by this reliance on foreign manufactured drugs,
03:31especially medications like antibiotics?
03:34What impact that has on military readiness and civilian health?
03:37And what tools does the Department of Defense
03:39have to promote domestic manufacturing
03:41of these critical medical products?
03:44Ma'am, I want to underline the concerns that you raise,
03:49particularly with pharmaceuticals
03:51and the effect that they have on our supply chains
03:53and ultimately to our warfighters.
03:57I don't, in my purview, handle these issues
04:01within the Department of Defense,
04:02but I also want to note that Mr. Harris also does
04:05within the Commerce Department.
04:06He may have something.
04:07Oh, thank you.
04:08Mr. Harris.
04:09Thank you, Senator.
04:11We absolutely share your concern
04:13that we need to be focused on where there are dependencies,
04:16where there are single sources of supply,
04:19and we have an urgent need to be more proactive
04:22and strategic in our approach to supply chains.
04:24We all collectively learned lessons in the pandemic,
04:27but it's not just about where the market might not function
04:30or where the supply might be too brittle of a supply chain.
04:33There are also national and economic security risks
04:36in these supply chains.
04:37You noted a perfect example.
04:40Americans expect every day that they would have
04:42what they need in the medicine cabinet
04:43or on the kitchen table,
04:45and the supply chains are what gets those products to point.
04:49On my team in the Commerce Department
04:51and in the new supply chain center that we've created,
04:53we've been working with
04:55the Health and Human Services Agency and others
04:57to try to assess the data and identify
04:59what is of greatest concern
05:01and who do we need to work with
05:03to try to improve resiliency in that supply chain.
05:06Thank you very much.
05:07Mr. Chair, I just note that I have two bipartisan bills
05:10to address this issue, one with Senator Cassidy,
05:13which would provide fundings to antibiotics manufacturers
05:16to bring those factories back to the United States,
05:20and the second with Senator Cotton
05:22would provide incentives to drug manufacturers
05:24to produce finished drugs here in the United States
05:28by providing higher reimbursement for those products.
05:30I look forward to working on those proposals
05:33with any of my colleagues who are interested.
05:35Thanks, Sarah.