$3.4 billion devoted to Y2K bug

Nearly a week after lawmakers and the White House announced a budget agreement, President Bill Clinton signed the $520 billion spending package that includes $3.4 billion for covering costs associated with Year 2000 problems.

The money will go a long way toward fixing federal computer systems so that they are Y2K ready. But the government will most likely still need additional funds to fix all of its systems, say government officials and most industry experts.

As reported earlier, repairing the federal Year 2000 problem is expected to cost more than $5 billion, according to the latest Office of Management and Budget estimates.

The Y2K funding approved today includes part or all of $3.2 billion money set aside for unanticipated contingency costs to cover anything from military expenditures to the Year 2000 bug, as well as other money found in other parts of the budget, White House sources said.

However, an additional $2.25 billion in an emergency reserve fund created by the Senate Appropriations Committee was voted down by Republicans on the House Rules Committee in June.

During a press teleconference today, House Republican Policy Committee chairman Christopher Cox (R-California) said that, of the $3.4 billion approved to cover government Y2K costs, $1.1 billion will go to the Pentagon and other national security agencies to upgrade mission-critical systems necessary for the defense of the country, while the rest of the funds will be spread amongst the other government agencies.

"This funding is in addition to money already budgeted by the individual agencies to address the problem," Rep. Connie Morella (R-Maryland) said. "These numbers are underestimated. I think the costs will be higher, but I think this indicates that we are trying."

The Y2K bug results from antiquated hardware and software formats that denote years in two-digit formats, such as "98" for 1998 and "99" for 1999. The glitch will occur in 2000, when computers are either fooled into thinking the year is 1900 or interpret the 2000 as a meaningless "00." The glitch could throw out of whack everything from bank systems to building security procedures, critics warn.

Cox criticized the White House for not submitting a separate budget request specifically for Y2K. "We haven't seen one, so Congress had to put this into the budget."

In related news, Morella is cosponsor of a bill approved by the House last week that urges the president to authorize John Koskinen, chairman of the president's Council on the Year 2000 Conversion, to take control of the computer systems of critical agencies if they're not likely to meet the January 1, 2000 deadline.

Senate sources told CNET News.com that the bill was not approved by the Senate today, as originally expected, and will be held for the next session of Congress.

In approving the bill last week, the House sent a strong message to the Clinton administration to step up to the plate and take an active role in helping to solve the Year 2000 computer problem, House majority leader Dick Armey (R-Texas) said in a statement published on his Web site.