February 4, 2002 6:55 PM PST

Bush budget proposes hefty IT increase

The Bush administration's proposed 2003 federal budget includes an 11 percent spending increase on information technology--a bright spot in an otherwise gloomy tech-spending environment.

The budget would give the U.S. federal government--already the world's biggest IT spender--a $50 billion IT budget next year if approved by Congress. Federal IT spending grew from $32.9 billion in 1999 to $45 billion in 2002, according to the Office of Management and Budget.

Increasing IT expenditures would support the nation's war on terrorism, its homeland security efforts and an ongoing attempt to streamline government operations, according to the proposal. It's also a helping hand to the beleaguered computer industry, which had seen a dramatic decline in business last year as companies tightened purse strings on corporate spending.

"It's extremely encouraging that this administration is putting this type of emphasis on information technology," said Bob Cohen, a senior vice president at the Information Technology Association of America, a high-tech trade group.

The proposal includes a 60 percent increase on computer security spending, according to the ITAA. After the Sept. 11 terrorist attacks, President Bush appointed Richard Clarke as a cyberspace security adviser. Clarke has proposed building a completely separate Internet for government use only to protect the government from hackers and viruses that plague the public Web. Experts say the project, called GovNet, could cost billions because it would run on a completely different network infrastructure.

The administration also seeks to reform the way the government manages its IT budget, shifting the imperative from projects that automate existing operations, to those that improve the quality of government services and eliminate redundant computer systems.

The budget proposal is subject to congressional review before it's made final and is likely to emerge with significant changes. Nevertheless, the public sector may be one of the few bright spots in the IT sector this year. U.S. businesses slashed IT budgets last year and, by all estimates, remain conservative in their spending this year.

"The federal marketplace looks like a much more attractive market in the sense that projects will actually be carried through and won't be terminated because of the economy," Cohen said.

 

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