Y2K costs could sap Clinton's technology budget requests

Major information technology initiatives in President Clinton's fiscal 1999 budget proposal, which was released this month, may be trimmed back by Capitol Hill appropriators as Congress focuses dollars on a the Year 2000 problem.

The Clinton administration estimated it will spend about $3.9 billion to ensure that federal computers can accept dates after Dec. 31, 1999, and it has recommended in its budget setting aside large chunks of money to remedy the Year 2000 bug. Clinton has proposed spending $275 million at the Defense Department and $312 million at the Treasury Department to fix the Year 2000 problem. Millions more dollars that could be used for fixing the Year 2000 problem are embedded in IT-related line items in agencies' budget proposals.

But Congress, as it begins digging into the appropriations process this month, may steer more dollars away from specific line items for ongoing IT programs and toward Year 2000-specific programs, budget observers said.

"I do think that the IT budgets really are going to be in flux," said Olga Grkavac, senior vice president with the Information Technology Association of America's Systems Integration Division. "The numbers that came in really don't reflect the crisis they're facing on Year 2000."

A Senate staff member said, "I guess the big question in all of these...systems is whether any of these, to any extent, are going to be crowded out by the Year 2000 problem."

Vendors generally believe that funds will be redirected before the end of the fiscal year, but they are quick to note that little has been done so far. "There's a lot of difference between what agencies say their priorities are and what they actually do," said Jim Kerrigan, president of market research firm Colmar Corp. "With all of this talk about reprogramming funds for Year 2000, I want to see if anyone can point to a single budgeted program that has had its fund reprogrammed. I haven't seen anything happen yet."

Grkavac agreed, but she added that the situation is likely to change as time runs out. "There is a general feeling among our members that agencies are so far behind on Year 2000 that a serious reprogramming has to occur," she said. "So I don't see a lot of our members paying attention to the budget."

At risk of losing money to the Year 2000 problem are about 30 key programs for which the administration has earmarked more than $4.1 billion out of a total proposed federal budget of $1.7 trillion. These include $1.4 billion for modernizing systems at the Federal Aviation Administration, $257 million for a NASA system that supports spacecraft control and Earth observations, $220 million for managing direct loans through the Education Department and $199 million for systems to complete the 2000 census.

Some Democrats on Capitol Hill, however, plan to fight for those IT initiatives as well as smaller IT initiatives such as federal research and development projects. "I support all of it. I'm going to push for all of it," said Rep. Jim Moran (D-Va.), a member of the House Appropriations Committee.

Moran said he has not been able to gauge yet whether the Republican majority in Congress will be as set as he is on preserving the president's IT proposals. "We're not quite there; we're still digesting the budget," said one staff member on a House committee that oversees IT issues. "It's a lot to digest. There are a lot of new programs."

But what may make it easier to keep the IT proposals intact is new federal leadership for the Year 2000 problem. Moran said the recent appointment of John Koskinen, former deputy director at the Office of Management and Budget, to chair the new President's Year 2000 Conversion Council should help keep Year 2000 costs for fiscal 1999 in check by focusing the government like "a laser beam" on the problem.

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