President's Remarks on the Year 2000 Computer Problem

Office of the Press Secretary

For Immediate Release July 14, 1998


National Academy of Sciences

11:13 A.M. EDT

THE PRESIDENT: Thank you very much, Mr. Vice President,Dr. Alberts, to all of our platform guests, Senator Bennett, SenatorDodd, Congressmen Horn, Kucinich, LaFalce, and Turner, and members ofthe administration who are here, and all the rest of you who arecommitted to dealing with this challenge.

This is one of those days that I never thought wouldever arrive, where Al Gore has to listen to me give a speech aboutcomputers. (Laughter.) Being President has its moments.(Laughter.)

I have to ask your indulgence because this is my onlyopportunity to appear before the press today, and I need to make abrief comment about something that is also of importance to all ofyou, and that is the agreement that was reached yesterday betweenRussia and the International Monetary Fund to stabilize the Russianeconomy.

I think all of us understand that a stable anddemocratic and prosperous Russia is critical to our long-termnational interests. Ever since the fall of communism there, therehas been a strong bipartisan consensus in our national government,and I believe in our country, to working toward that end.

The commitments that Russia made in connection withyesterday's agreement will substantially advance economic reform andstability there. Now it is critical that those commitments beimplemented to strengthen confidence in their economy.

It is clear, I think, to all of us now that ourprosperity here at home in America is deeply affected by the economicconditions elsewhere in the world. About a third of our economicexpansion that the Vice President referred to, which has given us 16million new jobs and the lowest unemployment rate in 28 years withthe lowest inflation rate in 32 years, has come from our exports andour economic relations with the rest of the world. We, therefore,have a clear interest in playing a leading role to advance freedomand prosperity and stability.

One of the most cost effective ways of doing that isthrough the International Monetary Fund, the world's financialfirefighter. For the first time in 20 years now, the IMF has had todraw on special emergency reserve to underwrite this Russianfinancial package, because its resources were stretched dangerouslythin due to the financial difficulties throughout Asia, principally.

To protect our economic strength, therefore, it isimperative that Congress act now to promote global economic stabilityby paying in America's share to the IMF. Earlier this year theSenate, in an overwhelming bipartisan vote, endorsed legislation tostrengthen the IMF and to pay our fair share into it. Since then,the legislation has languished in the House. If we fail to actresponsibly at a time when there is so much financial uncertainty inthe world, we will be putting our farmers, our workers, and our

businesses at risk. This is a time to put progress ahead ofpartisanship, and I ask Congress to proceed to do so. (Applause.)Thank you.

Let me also say at the outset, I want to say a specialword of thanks, as the Vice President did, to John Koskinen and hiswhole team for the work they are doing and to all the people that areworking with them. We have just on this platform representativepeople from utilities, from transportation, from finance, fromtelecommunications, and from small business. And this really is ajoint effort we are all making.

But I thank you, John. You know, before I becamePresident, John Koskinen was a personal friend of mine -- I doubt ifhe still is now that I got him to do this. (Laughter.) But what's afriendship to save the country's wires, so I thank him. (Laughter.)

I asked Bruce Alberts this -- I remembered that RichardBerks' magnificent statue of Albert Einstein is right outside here,and I wish we could bring him to life for this moment. But I'lldrive by it on the way out for inspiration.

It seems unbelievable that it's only 535 days from now,at the stroke of midnight, when we will usher in a New Year, a newcentury, a new millennium. It will be, to be sure, an astonishingage of possibility, of remarkable advances in science and technology,a time when information clearly will widen the circle of opportunityto more people in the world than ever before, and when technologywill continue to shrink our small planet and require us to deal withchallenges together, including that climate change challenge that Dr.Alberts referred to.

It is fitting, if more than a little ironic, that thissame stroke of midnight will pose a sharp and signal test of whetherwe have prepared ourselves for the challenges of the Information Age.The Vice President discussed the design flaw in millions of theworld's computers that will mean they will be unable to recognize theyear 2000. And if they can't, then we will see a series ofshutdowns, inaccurate data, faulty calculations.

Because the difficulty is as far flung as the billionsof microchips that run everything from farm equipment to VCRs, thisis not a challenge that is susceptible to a single government programor an easy fix. It is a complex test that requires us all to worktogether -- every government agency, every university, everyhospital, every business, large and small.

I came here today because I wanted to stress the urgencyof the challenge to people who are not in this room. So often one ofthe wry and amusing aspects of the nature of my work is that when Igive a speech like this I am typically preaching to the choir, as wesay back home. But hopefully the sermon is heard beyond the fourwalls of this room because, clearly, we must set forth what thegovernment is doing, what business is doing, but also what all of ushave yet to do to meet this challenge together. And there is still apressing need for action.

The consequences of the millennium bug, if notaddressed, could simply be a rash of annoyances, like being unable touse a credit card at the supermarket, or the video store losing trackof the tape you have already returned -- has that ever happened toyou? It really is aggravating. (Laughter.) It could affectelectric power -- I just want to remind you that I used to have alife and I know about things like that. (Laughter.) It could affectelectric power, phone service, air travel, major governmentalservice.

As the Vice President said, we're not just talking aboutcomputer networks, but billions of embedded chips built into everydayproducts. And it's worth remembering that the typical family hometoday has more computer power in it than the entire MIT campus had 20years ago. An oil drilling rig alone may include 10,000 separatechips.

The solution, unfortunately, is massive, painstaking,and labor intensive. It will take a lot of time to rewrite lines ofcomputer code in existing systems, to buy new ones or put in placebackup plans so that essential business and government services arenot interrupted.

With millions of hours needed to rewrite billions oflines of code and hundreds of thousands of interdependentorganization, this is clearly one of the most complex managementchallenges in history. Consider just one major bank, ChaseManhattan. It must work through 200 million lines of code, check70,000 desktop computers, check 1,000 software packages from 600separate software vendors.

The government's Health Care Financing Administration,known affectionately by the governors and others as HCFA, which runsMedicare, processes almost 1 billion transactions a year. It' scomputer vendors must painstakingly renovate 42 million lines ofcomputer code.

All told, the worldwide cost will run into the tens,perhaps the hundreds of billions of dollars, and that's the cost offixing the problem, not the cost if something actually goes wrong.

Already extraordinary efforts are underway by the peopleon the platform -- many of you out here and others -- but more mustbe done. We know first we have to put our own house in order, tomake certain that government will be able to continue to guard ourborders, guide air traffic, send out Social Security and Medicarechecks, and fulfill our other duties. We've worked hard to be ready.I set a government-wide goal of full compliance by March of 1999.John Koskinen is heading our council on the Y2K problem. I've metwith the Cabinet and charged them personally to produce results andreport quarterly to OMB on progress. We're working with state andlocal governments to do the same thing.

We have made progress. As has already been said, theSocial Security Administration has more than 90 percent of itscritical systems ready. Other agencies, like EPA, FEMA, and the VA,are well on their way to meeting our goal. But not every agency isas far along as it should be. I have made it clear to every memberof my Cabinet that the American people have a right to expectuninterrupted service from government and I expect them to deliver.

I want to thank the thousands of individuals who areworking to prepare our government and to make sure we can stay openfor business. I especially want to thank the Vice President and JohnKoskinen and the people who are working with them at OMB andelsewhere. And I very much appreciate these members of Congress whoare here and the extraordinary bipartisan interest and supportmeeting this challenge has engendered.

In my proposed balanced budget for 1999, I askedCongress to fund this initiative on a one-time basis, because it isliterally a once-in-a-lifetime challenge. I urge the Congress tofully fund it and to provide contingency funding so that we canrespond the unforseen difficulties that are sure to arise as we nearJanuary of 2000. We have worked closely with Senators Bennett andDodd and Congressman Horn and Congressman Kucinich and the othermembers who are here -- Congressmen LaFalce and Turner and others inthe Congress. As I said, there has been a heartening amount ofinterest in this by people who actually know quite a lot about it inthe Congress, and that's a very good thing.

I think we all understand that this is a case where wecannot allow, even in this election season, any shred of partisanshipto impinge on the national interest. We, after all, only have 17months to go.

I believe we also have a role to play in helping to meetthis challenge around the world. Surely we can't be responsible forthe preparedness of other countries, but I can make the same argumentI just made about the IMF and Russia -- if increasingly ourprosperity is tied to the well-being of other nations, it wouldobviously have adverse consequences for us here at home if a numberof our trading partners had major malfunctions.

When I was meeting with the world's major industrialorganizations in Birmingham, England, a few months ago, I broughtthis up and I found that we had become far more invested in this andinvolved in this than some other major nations. When I was inSantiago, Chile, at the Summit of the Americas, I brought it up inour private meeting and a number of countries had literally onlybegun just to think about the problem.

So I think it is important that the United Statesrecognize that the more we can do to help other countries meet thischallenge in a timely fashion, the better off our own economy isgoing to be and the more smoothly our own businesses will be able tofunction as we pass over into the new millennium. The United States,to try to help, will provide $12 million to support the World BankYear 2000 fund for developing countries.

I also want to say what we all know and what you can seefrom the platform, which is this is not a government problem alone.By far the most significant potential risks fall in the privatesector. Large firms already have spent hundreds of millions ofdollars to make sure their systems are ready. Many have spearheadedremarkable efforts to make sure their firms and their wholeindustries are ready. We're encouraged that dozens of firms andthousands of people on Wall Street last night began a simulation totest whether they are ready. And the telecommunication, banking,electric power, and airline industries all deserve praise for theseriousness with which they are taking the challenge.

I want to compliment one person back here in particular.Steve Wolf came all the way back from Africa, got here at 3:00 the morning to show up to manifest his understanding of theimportance of this challenge to the airline industry, and he is stillbreathing the rarefied era of Kilimanjaro, so we thank him especiallyfor doing that. (Applause.)

But let me say, in spite of all this progress, in thebusiness sector just as in the government sector, there are stillgaping holes. Far too many businesses, especially small- andmedium-sized firms, will not be ready unless they begin to act. Arecent Walls Fargo bank survey shows that of the small businessesthat even know about the problem, roughly half intend to do nothingabout it. Now, this is not one of the summer movies where you canclose your eyes during the scary parts. (Laughter.) Every business,of every size, with eyes wide open, must face the future and act.

So today I would issue three challenges to our businesscommunity. First, every business must take responsibility for makingsure it is ready. Any business that approaches the New Year armedonly with a bottle of champagne and a noisemaker is likely to have avery big hangover on New Year's morning. (Laughter.) Every businessshould assess its exposure, asks vendors and suppliers to be ready aswell, and develop contingency plans, as we are, in case criticalsystems or systems of vendors fail as we move into the year 2000.

I want to especially thank Aida Alvarez and the SmallBusiness Administration and its supporters in Congress. And I thankyou, Mr. LaFalce, in particular, for the work that has been done tospread the message in the small business community.

And I'd like to salute one firm represented here, theTorrington Research Company, which makes fans for cars and computers.It has only 55 employees, but they've taken the time to check theirsystem and by the end of this year they will be ready --by the end ofthis year. I want every small business in America to follow theirlead. (Applause.)

As the Vice President said, we need literally an army ofprogrammers and information technology experts to finish the task.Many of the computers involved are decades old; some of them useprogramming language no longer used or even taught. There is awealth of knowledge in America's tens of thousands of retirees whoonce worked in the computer industry or government as programmers orinformation technology managers. I'm pleased to announce that theDepartment of Labor will expand its jobs bank and talent bank to helpto meet this challenge. And I thank Secretary Herman and DeputySecretary Higgins for that.

The AARP has also agreed to help out. And we'rereaching out to civilian and military retirees who did this work forgovernment before. I will ask these older Americans to set asidetheir well-earned rest and help our nation to meet this challenge.

Second, businesses should exchange and pool informationamong themselves. It makes no sense for every firm to have toreinvent the digital wheel. Businesses should be able to benefitfrom the experiences of other firms in the same situation that havefound solutions or identified new obstacles.

Today, too many businesses are understandably reluctantto share information, fearing legal complication. We have to takeprudent steps to clear away any legal barriers to effective action.Earlier this month the Justice Department stated that competitors whomerely share information on how to solve this problem are not inviolation of the nation's anti-trust laws. We need to get thatmessage out there loud and clear: no one should be afraid to helpanother company to deal with this challenge.

There is more we can do. This week I will propose goodSamaritan legislation to guarantee that businesses which shareinformation about their readiness with the public or with each other,and do it honestly and carefully, cannot be held liable for theexchange of that information if it turns out to be inaccurate. Andhere, too, time is of the essence.

Our third challenge to business is that you should takeresponsibility to accurately and fully tell your customers how you'redoing and what you're doing. By letting customers know they are ontop of the problem, businesses can help to maintain confidence andoverride overreaction. This is very important. It is important thatwe act and not be in denial; it is also very important that we avoidoverreaction from people who hear, oh my goodness, this problem isout there. And so we have to do both things.

The proposed Good Samaritan law will give companies theconfidence they need to ensure that they keep their customersinformed. If ordinary citizens believe they're being told the fullstory, they'll be far less likely to act in ways that couldthemselves hurt our economy.

We can do more to help businesses reach these goals.Later this month our Council on the Year 2000 Conversion will launcha national campaign for year 2000 solutions, to promote partnershipsbetween industry groups and government agencies, with the goal ofsharing information about what actually works and to prodorganizations at every level to get ready, making certain governmentservices are not interrupted, minimizing disruption to commerce,encouraging businesses to share with each other and report honestlyto customers, and above all, every business in America takingresponsibility for being a part of the solution in the year 2000conversion. These are the ways we, the American people, can beprepared to meet this challenge.

Now, no one will ever find every imbedded microchip,every line of code that needs to be rewritten. But if companies,agencies, and organizations are ready, if they understand the threatand have backup plans, then we will meet this challenge.

The millennium bug is a vivid and powerful reminder ofthe ways that we are growing ever more interdependent as we rise to thechallenges of this new era. When our founding fathers urged us toform a more perfect union, I don't think they had this in mind, butthey might be quite pleased. The powerful forces of change that havecreated unimagined abundance also bear within them, as is consistentwith human nature, the possibilities of new and unexpectedchallenges.

But if we act properly, we won't look back on this as aheadache, sort of the last failed challenge of the 20th century. Itwill be the first challenge of the 21st century successfully met.That is the American way, and together we can do it.

Thank you very much. (Applause.)

What's New - July 1998

IRS Reform Act

Year 2000 Computer Problem

Agricultural Issues

Health Care Issues

Patients' Bill of Rights Roundtable

Kassebaum Kennedy Law

The Boys Nation Class of 1998

Pass A Patients' Bill of Rights

New Handgun Safety Protections

Social Security Reform

Girls Nation Event

PBS Dialogue on Race

Honor Officer Chestnut and Detective Gibson

Discipline and Safety in Schools

Youth Anti-Drug Media Campaign

Education Issues

Quality of Nursing Home

200th Birthday of U.S. Marine Corps Band

New Grants To Fight Crime

Medal of Honor to Robert R. Ingram

Fourth of July, 1998

New GDP Numbers

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