The Politics of Year 2000 Computer Glitches

White House appoints crisis manager to speed up pace of $30 billion federal computer conversions.

Gathered at the long table in the Cabinet room of the West wing, the president's Cabinet recently listened to Vice President Al Gore - "the techno-nerd," as some at the gathering have described him - drone on about a technical glitch that will hit most computers in the year 2000.

As with other Gore crusades - sober warnings of future problems, like global warming - those in the room were not spellbound by the presentation.

Until he brought it home. Americans, he said, will hold the White House accountable. Looking around the table, Mr. Gore warned that "one of you" will likely get singled out as personally responsible for the administration's failure to get on top of this problem.

As the snafu known to programmers as Y2K nears, the White House is increasingly concerned about the political as well as economic fallout it says is inevitable, and it is intensifying its proactive efforts to minimize the problem.

Nevertheless those within the administration working the Year 2000 problem already know there will be lapses in the government's information infrastructure.

"There is a high-level focus on this as we reach the witching hour," says John Koskinen, who says he has spent most of his government career in crisis management and this week assumes the chairmanship of the President's Council on the Year 2000 Conversion.

Digital confusion

The Y2K problem is easy to understand.

Only the newest software and hardware in most computer systems are capable of realizing that the 20th century has become the 21st. The rest of the systems rely on only two-digit dates. So, anytime a computer makes a date-related calculation from '98 to '00, it doesn't see 00 as 2000 but as 1900. The inability to make the distinction creates unpredictability in a computer's ability to function.

Glitches could potentially show up in any computerized operation - from air-traffic control systems to the federal computers that send out monthly Social Security checks, officials concede.

The price tag to fix US government systems alone is pegged at close to $30 billion. Globally, the cost estimates range from $1 trillion to $3 trillion.

In the private sector, some companies specializing in the booming business of Y2K fixes have more business than programmers and are no longer taking on new clients.

At the top of the presidential council's fix list are systems that handle the money that comes in and goes out of government coffers. "We want to make sure Social Security payments are made in a timely way. We want to make sure tax payments come in in a timely way," Mr. Koskinen says.

But as the presidential commission works to coordinate federal Y2K efforts, ensuring each division of the government is combing through its computer systems to eliminate bad programming code, it is clear the government is behind in its work.

"We will not experience this change of date without some problem," says White House spokesman Mike McCurry, who recently announced that the president has requested an additional $250 million from Congress to fund the federal effort. The Federal Reserve Bank is also making billions of dollars available to US banks hampered by the Y2K problem.

Already, banks and credit card companies are experiencing Y2K hiccups. Some consumers have found their credit cards rejected at the check-out counter because the card has an expiration date in the year 2000. The computer, capable of reading only the last two digits of the year, believes the card expired 98 years ago. Similarly, since 1993 some computers have had trouble calculating interest on 7-year mortgages.

Economic repercussions

With political fortunes tied closely to the health of the economy, the White House is watching closely to determine just how much potential impact Y2K could have on the nation's fiscal well- being.

Federal Reserve Chairman Alan Greenspan warned last month of lost productivity as the work force spends time both correcting mishaps and rewriting defective code. "Before we reach the year 2000, there is economic loss," he said.

Some analysts predict that by next year, growth of the economy will be slowed by 0.3 percent, and 0.5 percent in the year 2000. If the economy is percolating well, that wouldn't be enough to cause major problems. But if the economy is already sluggish, the Y2K problem might be enough of an added drag, or create enough confusion in financial markets, to take the nation into a recession.

"We could see a sputtering recession result from problems in global financial markets," says James Canton, president of the Institute for Global Futures in San Francisco.

Ready - or not?

Based on polling of companies in the United States, Mr. Canton's conclusion is that roughly 20 to 30 percent of all American companies will have computer systems which won't be Year 2000 compliant.

And no one is sure how the noncompliant systems will interact with those that are Y2K ready. "We no longer live on an island in the brave new economic world of networked information," Canton says.

"This is not just a problem of will a computer recognize 1999 vs. 2000, it's a matter of will computers be able to talk to each other," he warns, saying the problem will persist well into the next administration. "The [Monica Lewinsky] scandal and the Iraq crisis will come and go," Canton says, but "Y2K will persist through the year 2003." It could take that long, he says, to reprogram all the world's computer systems.