[Weekly Compilation of Presidential Documents Volume 34, Number 29 (Monday, July 20, 1998)]
[Pages 1376-1381]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on the Year 2000 Conversion Computer Problem

July 14, 1998

    Thank you very much, Mr. Vice President, Dr. Alberts, to all of our 
platform guests, Senator Bennett, Senator Dodd, Congressmen Horn, 
Kucinich, LaFalce, and Turner, and members of the administration who are

[[Page 1377]]

here and all the rest of you who are committed to dealing with this 
challenge.
    This is one of those days that I never thought would ever arrive, 
where Al Gore has to listen to me give a speech about computers. 
[Laughter] Being President has its moments. [Laughter]

International Monetary Fund Financing of Russia

    I have to ask your indulgence because this is my only opportunity to 
appear before the press today, and I need to make a brief comment about 
something that is also of importance to all of you, and that is the 
agreement that was reached yesterday between Russia and the 
International Monetary Fund to stabilize the Russian economy.
    I think all of us understand that a stable and democratic and 
prosperous Russia is critical to our long-term national interests. Ever 
since the fall of communism there, there has 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 with yesterday's 
agreement will substantially advance economic reform and stability 
there. Now it is critical that those commitments be implemented to 
strengthen confidence in their economy.
    It is clear, I think, to all of us now that our prosperity here at 
home in America is deeply affected by the economic conditions elsewhere 
in the world. About a third of our economic expansion that the Vice 
President referred to, which has given us 16 million new jobs and the 
lowest unemployment rate in 28 years with the lowest inflation rate in 
32 years, has come from our exports and our economic relations with the 
rest of the world. We, therefore, have a clear interest in playing a 
leading role to advance freedom and prosperity and stability.
    One of the most cost-effective ways of doing that is through the 
International Monetary Fund, the world's financial firefighter. For the 
first time in 20 years now, the IMF has had to draw on special emergency 
reserves to underwrite this Russian financial package, because its 
resources were stretched dangerously thin due to the financial 
difficulties throughout Asia, principally.
    To protect our economic strength, therefore, it is imperative that 
Congress act now to promote global economic stability by paying in 
America's share to the IMF. Earlier this year, the Senate, in an 
overwhelming bipartisan vote, endorsed legislation to strengthen the IMF 
and to pay our fair share into it. Since then, the legislation has 
languished in the House. If we fail to act responsibly at a time when 
there is so much financial uncertainty in the world, we will be putting 
our farmers, our workers, and our businesses at risk. This is a time to 
put progress ahead of partisanship, and I ask Congress to proceed to do 
so. [Applause] Thank you.
    Let me also say at the outset, I want to say a special word of 
thanks, as the Vice President did, to John Koskinen and his whole team 
for the work they are doing and to all the people that are working with 
them. We have, just on this platform, representative people from 
utilities, from transportation, from finance, from telecommunications, 
and from small business. And this really is a joint effort we are all 
making.
    But I thank you, John. You know, before I became President, John 
Koskinen was a personal friend of mine--I doubt if he still is now that 
I got him to do this. [Laughter] But what's a friendship to save the 
country's wires, so I thank him. [Laughter]
    I asked Bruce Alberts this--I remembered that Richard Berks' 
magnificent statue of Albert Einstein is right outside here, and I wish 
we could bring him to life for this moment. But I think I'll drive 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 new century, a 
new millennium. It will be, to be sure, an astonishing age of 
possibility, of remarkable advances in science and technology, a time 
when information clearly will widen the circle of opportunity to more 
people in the world than ever before and when technology will continue 
to shrink our small planet and require us to deal with challenges 
together, including that climate change challenge that Dr. Alberts 
referred to.
    It is fitting, if more than a little ironic, that this same stroke 
of midnight will pose a sharp and signal test of whether we have 
prepared

[[Page 1378]]

ourselves for the challenges of the information age. The Vice President 
discussed the design flaw in millions of the world's computers that will 
mean they will be unable to recognize the year 2000. And if they can't, 
then we will see a series of shutdowns, inaccurate data, faulty 
calculations.
    Because the difficulty is as far flung as the billions of microchips 
that run everything from farm equipment to VCR's, this is not a 
challenge that is susceptible to a single Government program or an easy 
fix. It is a complex test that requires us all to work together, every 
government agency, every university, every hospital, every business, 
large and small.
    I came here today because I wanted to stress the urgency of the 
challenge to people who are not in this room. So often one of the wry 
and amusing aspects of the nature of my work is that when I give a 
speech like this, I am typically preaching to the choir, as we say back 
home. But hopefully the sermon is heard beyond the four walls of this 
room because, clearly, we must set forth what the Government is doing, 
what business is doing, but also what all of us have yet to do to meet 
this challenge together. And there is still a pressing need for action.
    The consequences of the millennium bug, if not addressed, could 
simply be a rash of annoyances, like being unable to use a credit card 
at the supermarket, or the video store losing track of the tape you have 
already returned. Has that ever happened to you? [Laughter] It really is 
aggravating. It could affect electric power--I just wanted to remind you 
that I used to have a life, and I know about things like that. 
[Laughter] It could affect electric power, phone service, air travel, 
major governmental service.
    As the Vice President said, we're not just talking about computer 
networks but billions of embedded chips built into everyday products. 
And it's worth remembering that the typical family home today has more 
computer power in it than the entire MIT campus had 20 years ago. An oil 
drilling rig alone may include 10,000 separate chips.
    The solution, unfortunately, is massive, painstaking, and labor 
intensive. It will take a lot of time to rewrite lines of computer code 
in existing systems, to buy new ones, to put in place backup plans so 
that essential business and government services are not interrupted.
    With millions of hours needed to rewrite billions of lines of code 
and hundreds of thousands of interdependent organizations, this is 
clearly one of the most complex management challenges in history. 
Consider just one major bank, Chase Manhattan. It must work through 200 
million lines of code, check 70,000 desktop computers, check 1,000 
software packages from 600 separate software vendors.
    The Government's Health Care Financing Administration, known 
affectionately by the Governors and others as HCFA, which runs Medicare, 
processes almost one billion transactions a year. Its computer vendors 
must painstakingly renovate 42 million lines of computer code.
    All told, the worldwide cost will run into the tens, perhaps the 
hundreds of billions of dollars, and that's the cost of fixing the 
problem, not the cost if something actually goes wrong.
    Already extraordinary efforts are underway by the people on the 
platform, many of you out here, and others, but more must be done. We 
know first we have to put our own house in order to make certain the 
Government will be able to continue to guard our borders, guide air 
traffic, send out Social Security and Medicare checks, and fulfill our 
other duties. We've worked hard to be ready. I set a governmentwide goal 
of full compliance by March of 1999. John Koskinen is heading our 
council on the Y2K problem. I've met with the Cabinet and charged them 
personally to produce results and report quarterly to OMB on progress. 
We're working with State and local governments to do the same thing.
    We have made progress. As has already been said, the Social Security 
Administration has more than 90 percent of its critical systems ready. 
Other agencies, like EPA, FEMA, and the VA, are well on their way to 
meeting our goal. But not every agency is as far along as it should be. 
I have made it clear to every member of my Cabinet that the American 
people have a right to expect uninterrupted service from Government, and 
I expect them to deliver.

[[Page 1379]]

    I want to thank the thousands of individuals who are working to 
prepare our Government and to make sure we can stay open for business. I 
especially want to thank the Vice President and John Koskinen and the 
people who are working with them at OMB and elsewhere. And I very much 
appreciate these Members of Congress who are here and the extraordinary 
bipartisan interest and support meeting this challenge has engendered.
    In my proposed balanced budget for 1999, I asked Congress to fund 
this initiative on a one-time basis, because it is literally a once-in-
a-lifetime challenge. I urged the Congress to fully fund it and to 
provide contingency funding so that we can respond to unforeseen 
difficulties that are sure to arise as we near January of 2000. We have 
worked closely with Senators Bennett and Dodd and Congressman Horn and 
Congressman Kucinich and the other Members who are here, Congressmen 
LaFalce and Turner and others in the Congress. As I said, there has been 
a heartening amount of interest in this by people who actually know 
quite a lot about it in the Congress, and that's a very good thing.
    I think we all understand that this is a case where we cannot allow, 
even in this election season, any shred of partisanship to impinge on 
the national interest. We, after all, only have 17 months to go.
    I believe we also have a role to play in helping to meet this 
challenge around the world. Surely we can't be responsible for the 
preparedness of other countries, but I can make the same argument I just 
made about the IMF and Russia: If increasingly our prosperity is tied to 
the well-being of other nations, it would obviously have adverse 
consequences for us here at home if a number of our trading partners had 
major malfunctions.
    When I was meeting with the world's major industrial organizations 
in Birmingham, England, a few months ago, I brought this up, and I found 
that we had become far more invested in this and involved in this than 
some other major nations. When I was in Santiago, Chile, at the Summit 
of the Americas, I brought it up in our private meeting, and a number of 
countries had literally only begun just to think about the problem.
    So I think it is important that the United States recognize that the 
more we can do to help other countries meet this challenge in a timely 
fashion, the better off our own economy is going to be and the more 
smoothly our own businesses will be able to function as we pass over 
into the new millennium. The United States, to try to help, will provide 
$12 million to support the World Bank's Year 2000 Fund for developing 
countries.
    I also want to say what we all know and what you can see from the 
platform, which is this is not a Government problem alone. By far, the 
most significant potential risks fall in the private sector. Large firms 
already have spent hundreds of millions of dollars to make sure their 
systems are ready. Many have spearheaded remarkable efforts to make sure 
their firms and their whole industries are ready. We're encouraged that 
dozens of firms and thousands of people on Wall Street last night began 
a simulation to test whether they are ready. And the telecommunication, 
banking, electric power, and airline industries all deserve praise for 
the seriousness 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 o'clock in the morning 
to show up to manifest his understanding of the importance of this 
challenge to the airline industry, and he is still breathing the 
rarefied air of Kilimanjaro, so we thank him especially for doing that.
    But let me say, in spite of all this progress, in the business 
sector just as in the Government sector, there are still gaping holes. 
Far too many businesses, especially small- and medium-sized firms, will 
not be ready unless they begin to act. A recent Wells Fargo Bank survey 
shows that of the small businesses that even know about the problem, 
roughly half intend to do nothing about it. Now, this is not one of the 
summer movies where you can close your eyes during the scary parts. 
Every business, of every size, with eyes wide open, must face the future 
and act.
    So today I would issue three challenges to our business community. 
First, every business must take responsibility for making sure

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it is ready. Any business that approaches the new year armed only with a 
bottle of champagne and a noisemaker is likely to have a very big 
hangover on New Year's morning. [Laughter] Every business should assess 
its exposure, ask vendors and suppliers to be ready as well, and develop 
contingency plans, as we are, in case critical systems or systems of 
vendors fail as we move into the year 2000.
    I want to especially thank Aida Alvarez and the Small Business 
Administration and its supporters in Congress. And I thank you, Mr. 
LaFalce, in particular, for the work that has been done to spread the 
message in the small business community.
    And I'd like to salute one firm represented here, the Torrington 
Research Company, which makes fans for cars and computers. It has only 
55 employees, but they've taken the time to check their systems and by 
the end of this year they will be ready--by the end of this year. I want 
every small business in America to follow their lead.
    As the Vice President said, we need literally an army of programmers 
and information technology experts to finish the task. Many of the 
computers involved are decades old; some of them use programming 
language no longer used or even taught. There is a wealth of knowledge 
in America's tens of thousands of retirees who once worked in the 
computer industry or Government as programmers or information technology 
managers. I'm pleased to announce that the Department of Labor will 
expand its job bank and talent bank to help to meet this challenge. And 
I thank Secretary Herman and Deputy Secretary Higgins for that.
    The AARP has also agreed to help out. And we're reaching out to 
civilian and military retirees who did this work for Government before. 
I will ask these older Americans to set aside their well-earned rest and 
help our Nation to meet this challenge.
    Second, businesses should exchange and pool information among 
themselves. It makes no sense for every firm to have to reinvent the 
digital wheel. Businesses should be able to benefit from the experiences 
of other firms in the same situation that have found solutions or 
identified new obstacles.
    Today, too many businesses are understandably reluctant to share 
information, fearing legal complications. We have to take prudent steps 
to clear away any legal barriers to effective action. Earlier this 
month, the Justice Department stated that competitors who merely share 
information on how to solve this problem are not in violation of the 
Nation's antitrust laws. We need to get that message out there loud and 
clear: No one should be afraid to help another company to deal with this 
challenge.
    There is more we can do. This week I will propose good samaritan 
legislation to guarantee that businesses which share information about 
their readiness with the public or with each other, and do it honestly 
and carefully, cannot be held liable for the exchange of that 
information if it turns out to be inaccurate. And here, too, time is of 
the essence.
    Our third challenge to business is that you should take 
responsibility to accurately and fully tell your customers how you're 
doing and what you're doing. By letting customers know they are on top 
of the problem, businesses can help to maintain confidence and avoid 
overreaction. This is very important. It is important that we act and 
not be in denial; it is also very important that we avoid overreaction 
from people who hear, ``Oh my goodness, this problem is out there.'' And 
so we have to do both things.
    The proposed good samaritan law will give companies the confidence 
they need to ensure that they keep their customers informed. If ordinary 
citizens believe they're being told the full story, they'll be far less 
likely to act in ways that could themselves hurt our economy.
    We can do more to help businesses reach these goals. Later this 
month, our Council on the Year 2000 Conversion will launch a national 
campaign for year 2000 solutions, to promote partnerships between 
industry groups and Government agencies, with the goal of sharing 
information about what actually works and to prod organizations at every 
level to get ready, making certain Government services are not 
interrupted, minimizing disruption to commerce, encouraging businesses 
to share with each other and report honestly to customers, and above 
all, every business in America taking responsibility for being a part of 
the solution in the year 2000 conversion. These are the ways we,

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the American people, can be prepared to meet this challenge.
    Now, no one will ever find every embedded microchip, every line of 
code that needs to be rewritten. But if companies, agencies, and 
organizations are ready, if they understand the threat and have backup 
plans, then we will meet this challenge.
    The millennium bug is a vivid and powerful reminder of the ways that 
we are growing ever more independent as we rise to the challenges of 
this new era. When our Founding Fathers urged us to form a more perfect 
Union, I don't think they had this in mind, but they might be quite 
pleased. The powerful forces of change that have created unimagined 
abundance also bear within them, as is consistent with human nature, the 
possibilities of new and unexpected challenges.
    But if we act properly, we won't look back on this as a headache, 
sort of the last failed challenge of the 20th century. It will 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.

Note: The President spoke at 11:13 a.m. at the National Academy of 
Sciences. In his remarks, he referred to Bruce Alberts, president, 
National Academy of Sciences; and Stephen M. Wolf, chairman and chief 
executive officer, US Airways Group, Inc.