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Clinton Establishes Council To Fix 'Year 2000' Glitch

By Juliana Gruenwald, CQ Staff Writer

Amid growing concerns that the federal government and parts of the private sector may not fix the problem in time, federal officials are taking steps to ensure that critical computer systems will not malfunction as a result of a computer glitch that may kick in at 12:01 a.m. on Jan. 1, 2000.

The latest move came Feb. 4 when President Clinton issued an executive order creating a White House council to coordinate the federal government's efforts to fix the "Year 2000 problem." The next day, a House panel approved legislation (HR3116) to ensure that financial institutions, such as banks and credit unions, are taking the necessary steps to prevent computer chaos.

The problem stems from a practice begun in the late 1960s to conserve computer memory and save money by using two digits in the date field to represent the year, using " '98," for example, for the year 1998.

When the date changes to 2000, many computer systems that perform time- or date-sensitive tasks may malfunction or shut down unless they are reprogrammed or replaced because they will not be able to distinguish between "00" in "2000" and "1900." For the federal government, the problem could affect everything from the computers running the nation's air-traffic control system to those operating sophisticated weapons systems.

Even if a new computer system is Year 2000 compliant, it may be contaminated if it runs old software or interacts with other computers that have not been fixed.

"Minimizing the [Year 2000 problem] will require a major technological and managerial effort, and it is critical that the United State government do its part in addressing this challenge," Clinton said in his executive order creating the new Council on the Year 2000 Conversion. It will be headed by John Koskinen, a former Office of Management and Budget (OMB) deputy director.

The OMB had been in charge of overseeing the progress of federal agencies in fixing the problem. But some lawmakers had urged Clinton to establish a White House office to coordinate the government's Year 2000 efforts, saying the problem needed to be handled by a high-profile office that could devote full-time attention to the issue.

"We are glad the White House finally recognized the importance of the Year 2000 issue," said Rep. Steve Horn, R-Calif., chairman of a House Government Reform and Oversight subcommittee with jurisdiction over the issue.

The problem could have a debilitating impact, not only on the federal government, but on almost every aspect of the private sector that relies on computers or computerized devices. "We are looking down the barrel of a potential disaster," said Rep. Gil Gutknecht, R-Minn., during a Feb. 4 hearing on the Federal Aviation Administration's Year 2000 efforts.

During that hearing, officials from the Department of Transportation and the General Accounting Office (GAO) expressed concern about the FAA's slow progress in ensuring its computer systems, which include those that run the air-traffic control system, are Year 2000 compliant. If the agency continues at its current pace, it will not fix its systems in time, according to a GAO report.

While acknowledging the agency has not tackled the problem as aggressively as necessary, FAA administrator Jane F. Garvey insisted, "Aviation safety will not be compromised. Ensuring that we meet this challenge is one of my top priorities."

Banking Panel Acts

Meanwhile, the House Banking and Financial Services Committee approved legislation by voice vote Feb. 5 aimed at shoring up the financial community's efforts to fix the Year 2000 problem.

Among the numerous problems banks could encounter if they fail to fix their Year 2000 problems are errors in checking account transactions and interest calculations. Among the problems consumers could encounter are malfunctions with automated teller machines, which may assume all bank cash cards have expired.

The legislation (HR3116) requires federal banking agencies and the National Credit Union Administration, which regulates all federally chartered credit unions, to conduct seminars for financial institutions on the implications of the Year 2000 problem and provide suggestions for solving problems associated with it.

HR3116 also gives the Office of Thrift Supervision and the credit union administration the authority to examine the operations of service providers who contract with financial institutions to perform such tasks as data processing and information system management. This extension of authority would give the two agencies the same statutory authority enjoyed by the Federal Reserve, the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

The bill's supporters say this extension of authority is necessary to ensure that service providers that contract with thrifts and credit unions are taking the steps to be Year 2000 compliant.

Under current law, the two agencies have to gain the permission of the service providers to examine their operations but not all have been willing to cooperate, officials said.

Some committee members and industry officials expressed concern about broadening the credit union administration's regulatory authority. They said unlike the thrift office, the credit union administration has not made a case for permanently extending its authority.

The committee adopted by voice vote an amendment offered by Reps. Richard H. Baker, R-La., and Spencer Bachus, R-Ala., to sunset the credit union administration's authority over service providers on Dec. 31, 2001.

© 1998 Congressional Quarterly Inc. All rights reserved.
In CQ News This Week

Saturday February 7, 1998

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Clinton Establishes Council To Fix 'Year 2000' Glitch

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