“Coincidentally today we handed in our homework assignment, if you will, to [the White House Office of Management and Budget], and it calls for cuts in the double-digit range with a ‘B’ over 10 years,” he said.

As the federal government attempts to find over $1 trillion in savings to meet budget-cutting goals, even intelligence spending is not immune to cuts.  But the intelligence community does not normally divulge details of its budget, citing the need to keep its spending secret from foreign adversaries who might glean valuable information about the scope of activities.

Steven Aftergood, who writes the Secrecy News blog for the Federation of American Scientists, said that most statements so far about possible cuts to the intelligence budget have only been general in nature. “Double-digit cuts would be huge, and astonishing,” he said.

In recent congressional testimony, Clapper and David Petraeus, the head of the CIA, both talked about the potential for upcoming cuts to the intelligence budget. “We have . . . had 10 years of steady increases,” Petraeus a joint congressional panel on intelligence. “Now we’re going to have to tighten our belts.”

Speaking today (10-17-11), Clapper expanded on previous comments, saying the spending reductions will be absorbed in a number of areas, including cuts to the information technology budget, slashing the contractor workforce, and possibly closing some overseas facilities.

IT, however, may be the primary focus.  Clapper said that some 20 to 25 percent of the intelligence community’s budget is labeled as IT, making it ripe for cuts. “If there’s an area where we can bring about efficiency and savings, that’s it,” he said.

Overseas infrastructure may also have to shrink. “I think another thing we’ll have to look at, and this will take time, is overseas facilities,” he said. “Do we really need all of them or not?”

Clapper said the expected cuts should come as no surprise, given the increased funding the community has benefited from in recent years. “We have been luxuriously funded the past 10 years,” he said.

None of her story, it was later revealed, was true.

But the ability of Hanna’s narrative to evoke emotion and sympathy and its rapid spread to an international audience proved an enduring truth: stories, ranging from urban myths to epic works of literature, exert a powerful influence over people and their beliefs.

And in the era of social media, stories can spread with unprecedented speed to anywhere in the world, potentially influencing elections, protest movements or even revolutions.

Now, the Pentagon wants to use those stories to help it control violence and influence people’s behavior. The Defense Advanced Research Projects Agency this week announced a new program called “narrative networks,” and one of its goals is to “enable prevention of negative behavioral outcomes, such as use of indiscriminant violence, and generation of positive behavioral outcomes, such as building trust.”

This research effort is yet another foray into the Pentagon’s interest in understanding—and controlling—social networks, which may determine, for example, who will join a terrorist network. In this case, however, DARPA is looking at how narratives spread through social network, via social media, traditional media, and even word-of-mouth.

For those not used to looking at storytelling as a science, the announcement describing the program includes some amusing military-inspired neologisms, such as the desire to create “narrative influence sensors,” that will allow the military to double “the “status quo capacity to forecast narrative influence.”

At its heart, however, this is about doing something governments and social movements have tried to for years: creating stories and narratives that influence people to do, or not do, specific things.

What the Pentagon is now doing is elevating it to a science that can be used in warfare.

The project will include using fMRI scans to study the effects of stories on the brain, looking at emotional responses to stories, such as empathy and disgust. The agency would even use invisible “standoff” sensors, like those that can detect eye pupil dilation, so that they can measure people’s reaction as they listen to a story.

As for how this science will eventually be used to construct military-relevant narratives is unclear. DARPA, as the agency likes to emphasize, is only involved in developing the research and technology. Where it goes from there is up to the Pentagon.

The Pentagon’s premiere research agency announced last week that it is seeking to build a better science of social network analysis, a relatively new field of research that many believe could be used to deliver a fatal blow to terrorist and insurgent groups. The Defense Advanced Research Projects Agency is seeking proposals for a new program called GRAPHS, short for Graph-theoretic Research in Algorithms and the Phenomenology of Social networks program. The goal is to get researchers to come up with “revolutionary” ways to model—and predict—social networks.

The relatively esoteric field of social network analysis, which looks at the relationships between people and groups (and popularized in Malcolm Gladwell’s book, The Tipping Point) has become an area of increasing Pentagon interest, and is even being credited with helping key military operations in Afghanistan and Iraq. “Recent successes in apprehending high-value individuals demonstrate that elementary methods of analysis can have a large operational impact when applied in this setting,” says DARPA.

The idea behind this research program is not entirely new; DARPA in fact is already operating a hush-hush program, called Nexus 7, which employs social network analysis in Afghanistan to help track insurgent networks. While it’s not clear whether this new research program is directly connected to Nexus 7, it does appear to affirm the Pentagon’s commitment to expanding this research into a formal program.

DARPA isn’t specifying exactly what it wants out of social network analysis, other than saying new research should propose ways to make it useful to the military. The agency does suggest, however, that such research could be used to forecast “major critical events, emergence of unusual trends, critical vulnerabilities in terrorist and adversary networks.”

It should, since indeed the Pentagon is working on a variety of technologies designed to do just that.

A recent Washington Post article recounted a recent military-sponsored experiment that could lay the “groundwork for scientific advances that would allow drones to search for a human target and then make an identification based on facial-recognition or other software.” Similarly, Wired’s DANGER ROOM blog reported on some half a dozen contracts recently given by the Army to develop software that can instantly recognize specific people based on unique identifiers, such as their face.

Such automatic facial recognition technology, the articles say, could lead to a future where targeted killings are carried out with incredible speed. “This successful exercise in autonomous robotics could presage the future of the American way of war: a day when drones hunt, identify and kill the enemy based on calculations made by software, not decisions made by humans,” the Washington Post reported.

Fears of real-world Terminators are converging with another trend: commercial applications of facial recognition software being used in social media. When Facebook added a facial recognition technology that would allow users to “tag” friends, there was public outrage at the potential privacy invasion, as well as an acknowledgement that such advances may well be inevitable.

Picking up on these concerns, Carnegie Mellon scientists ran a series of experiments to see if they could extract information about people by matching their photos with online data. The results demonstrated, for example, that photos from anonymous dating site profiles could be matched to profiles from sites, such as Facebook, that use people’s full name.

Another experiment showed that photos taken of students on campus could also be matched to their Facebook profiles using automatic facial recognition software.

These experiments, they concluded, “raise questions about the future of privacy in an ‘augmented’ reality world in which online and offline data will seamlessly blend.”

The immediate question, however, is how close such facial recognition technology is to being useful, at least for national security.  It turns out, not very.

Facial recognition software still works very poorly, even under the best of circumstances in non-military applications.  The Carnegie Mellon researchers acknowledged in their research that matches from their experiments were as poor as1 in 10 (though up to 1 in 3 for identify online daters). Their point, however, was simply to demonstrate how the convergence of online and offline data will be affected once this technology evolves, as it most certainly will.

But for the military, the idea of the face-spotting Terminator drone is still many years, if not decades away. At this year’s Special Operation industry conference in Florida, Craig Archer, a civilian at U.S. Special Operations Command, briefed the audience on advances in bio metric identification. His message was that standard bio metrics—such as fingerprints and retinal scans—have become very useful in matching so-called “high value targets,” like Osama bin Laden, and insurgents.

Thousands of identifications have been made by U.S. military forces in places such as Iraq and Afghanistan using fingerprints. But facial recognition, he says, “works, but it doesn’t. Yes, we do have positive identifications. But, out of the 60,000 or 70,000 facial recognition photos we’ve sent, we maybe have 20 matches,” he said.

Do 20 positive matches out of some tens of thousands of facial photos mean that the technology works? No, but it also doesn’t mean it will never work.

What it does mean, Archer pointed out, is that it needs a dose of realism. “If you think we can get everybody’s face just because we have a picture, you watch too much SyFy” he said.

The project is the brainchild of the Intelligence Advanced Research Projects Activity, or IARPA, a relatively new part of the spy community that is supposed to help investigate breakthrough technologies.   While other projects exist for predicting political events, the Open Source Indicators program would be perhaps the first that mines data from social media websites.

The idea is to use automated analysis to sift through the deluge of publicly available data to help predict significant societal events, like a popular revolution. The nascent Open Source Indicators project is just the latest move by the national security community to come to grips with the flood of information now available on social media.

The science underlying the project is that the notion that there may be early indicators of major social upheavals. “Some of these changes may be indirectly observable from publicly available data, such as web search queries, blogs, micro-blogs, internet traffic, financial markets, traffic webcams, Wikipedia edits, and many others,” the announcement, published August 25, says. “Published research has found that some of these data sources are individually useful in the early detection of events such as disease outbreaks, political crises, and macroeconomic trends.”

Indeed, social media sites, such as Twitter and Facebook, have garnered major attention during recent events, such as the Arab Spring, and have been credited with helping to organize protesters and even foment revolution.  Authoritarian governments trying to hold on to power also noted this trend, and attempted at times to shut down access to those sites in the hopes of stymieing efforts to organize protests.

The idea of the U.S. intelligence community culling data from social media is still a new one, and is likely to raise a number of questions. For example, what constitutes public data?

IARPA, for its part, defines public data as “lawfully obtained data available to any member of the general public, to include by purchase, subscription or registration.” That raises a host of questions, for example, whether the intelligence community could register a fake profile on Facebook, in order to “friend” people and obtain more information.

For those who fear the all-seeing surveillance state, IARPA says there are some things the program won’t do: it won’t be used to predict events in the United States, nor will it be used to track specific individuals.