Forbes Urges Congress to Fill ‘Leadership Vacuum’ on Year 2000 ‘Bug’; Y2K ‘Czar’ Tries to Shift Blame for Coming Crisis

(Washington, D.C.): On Friday, Steve Forbes sent a forceful two-page
memorandum to
Members of Congress and conservative leaders warning of the dangers of the Year 2000 (Y2K)
computer crisis. Mr. Forbes’ memo — issued by his public policy group, Americans for Hope,
Growth and Opportunity — is noteworthy not only for its being the first expression of dire
concern about this issue from a national political figure. No less striking was the harsh response it
received yesterday from the Clinton Administration’s Y2K point man, John
Koskinen.

Forbes’ Call to Arms

Mr. Forbes memo comes just eleven days after he delivered a major address on American
foreign
and defense policy as the keynote of a Symposium held in New York by the William J. Casey
Institute of the Center for Security Policy.⁽¹⁾ Highlights of
the latest, signal contribution by this
once-and-perhaps-future presidential candidate to the policy debate about U.S. economic and
national security included the following (emphasis added throughout):

• “The Year 2000 (Y2K) computer crisis is now upon us and the federal government
  is
  even more woefully unprepared than the rest of society. The implications are ominous.
  Medicare, the IRS, the Federal Aviation Administration and other basic agencies are operating
  on utterly out-of-date technology. It doesn’t take much imagination to see how dreadfully
  wrong things could go.”
• “Some Y2K problems have surfaced already; more will surface soon. Most states
  begin their
  fiscal 2000 years on July 1, 1999; the federal government, on October 1, 1999.“
• “‘There is very little realization that there will be a disruption,’ Sherry Burns, director of the
  Central Intelligence Agency’s office studying the Year 2000 problem, told Reuters. ‘As
  you
  start getting out into the population, I think most people are again assuming that things
  are going to operate the way they always have. That is not going to be the
  case.'”
• “‘There is no way we’re going to fix 100% of all the computer systems around the
  world
  in time,’ warned Edward Yardeni, chief economist with Deutsche Morgan Grenfell, in
  an
  April interview with the technology magazine, FORBES ASAP. ‘My analogy is the
  1973-74
  recession. Just the way a disruption in the supply of oil caused a global recession, a
  disruption in the flow of information, especially if it is critically important information,
  might similarly disrupt global economic activity and produce a recession.'”
• “The federal government’s Y2K compliance efforts recently received a ‘D-minus’ grade by
  the
  House Subcommittee on Government Management, Information and Technology, chaired by
  Representative Steve Horn of California.”
• “What has the Administration’s technology point man, Vice President Al Gore,
  been
  doing for the past five years? … At its core, this is not a technology crisis; it is a
  leadership crisis.”
• “We have the technology to fix or replace every computer and software program affected by
  Y2K, though it will be expensive. Technical corrections are estimated to cost between $300
  billion and $600 billion globally. Litigation, lost business and bankruptcies could drive the
  costs over $1 trillion.”
• “Distracted by scandals and side-tracked by questionable crises like global
  warming, the
  Clinton-Gore Administration is failing to insure that vital government computers will be
  fixed in time. Nor are they impressing the American public and foreign governments
  with the urgency of this crisis. Why such silence? Are they trying to limit public concern
  until after the mid-term elections? The stakes are too high for such partisan political
  games.“
• “With the Clinton-Gore Administration AWOL, Congress must urgently fill this
  leadership
  vacuum. Increase defense funding to speed up compliance. Create Y2K compliance
  penalties
  and incentives for key federal agencies. Require the Federal Emergency Management Agency
  (which itself received a ‘D-minus’ grade for Y2K compliance) to develop contingency plans
  for major disruptions in vital services. Move fast. Time is short.“

Koskinen’s Response

As it happened, Friday was also the occasion for a luncheon address by Mr. Koskinen — a
former
OMB official appointed last February to become chairman of the President’s Council on Year
2000 Conversion (the so-called Y2K “Czar”)⁽²⁾ — sponsored
by the Washington Chapter of the
Armed Forces Communications and Electronics Association (AFCEA). Czar
Koskinen’s
remarks largely validated Mr. Forbes’ critique: They were long on upbeat assessments of all that
is being done to deal with the “problem” and very short on evidence that there will, as a result of
the Millennium Bug, shortly be serious disruptions in both critical federal government functions or
private sector activities upon which public health, safety and economic viability depend.

This performance, with its “whistling past the graveyard” tenor, stands in stark contrast to the
specific indicators of looming disaster cited in the Forbes memo. These include:

• “Only 63% of the 7,850 federal computer systems deemed ‘mission critical’ — that is, vital to
  protecting U.S. national security, health, safety, education, transportation, and financial and
  emergency management — will be ready on 1 January 2000.”
• “Five Cabinet-level departments (Defense, Education, Transportation,
  Labor and State)
  received ‘F’ grades. Only 24% of Defense’s mission-critical systems have been
  fixed to date.
  Only 36% are expected to by fixed by 1 January 2000. At this rate, Defense’s mission-critical
  systems won’t be completely fixed until 2009.”
• “‘The impact of [Year 2000 computer] failures could be widespread, costly, and
  potentially disruptive to military operations worldwide,‘ concluded a chilling April 1998
  General Accounting Office report. ‘In an August 1997 operational exercise, the Global
  Command and Control System failed testing when the date was rolled over to the Year 2000.
  GCCS is deployed at 700 sites worldwide and is used to generate a common operating
  picture
  of the battlefield for planning, executing, and managing military operations. The U.S., and
  its allieswould be unable to orchestrate a Desert Storm-type engagement in the Year 2000 if
  the problem is not corrected.'”
• “Serious problems face the private sector, too. According to March surveys by the
  Information Technology Association of America and The Y2K
  Group:
• 94% of information technology managers see the Y2K computer issue as a ‘crisis’;
  
• 44% of American companies have already experienced Y2K computer
  problems;
• 83% of U.S. Y2K transition project managers expect the Dow Jones Industrial
  Average to fall by at least 20% as the crisis begins to unfold.“

Awfully Late in the Game for ‘Outreach’

Remarking that there were only 595 days left before 1 January 2000, href=”#N_3_”>⁽³⁾ the “Czar” employed the
euphemism “outreach” to describe his principal focus at the moment. By this
term, he evidently
means an effort to educate the public and private sectors about the implications of the Y2K
syndrome and the need to take corrective action — without unduly alarming his
audiences. He
emphasized that he saw such outreach as best being accomplished by working with the federal
agencies and through them, with their suppliers, contacts and relevant interest groups.

This “outreach” (or “prosletyzing”) phase would be, in Mr. Koskinen’s
words, followed by
three others: “monitoring,” “reviewing contingencies” and “crisis
management.” Aspects of
this first phase to which the “Czar” called particular attention were his efforts to: induce some 35
federal agencies and regulatory organizations to communicate about the
Millennium Bug with
their constituencies, and to identify gaps in the outreach effort; address
corporate concerns about
anti-trust and liability issues that are interfering with
information-sharing and coordinated,
industry-wide initiatives; task U.S. ambassadors to become U.S. government
points-of-contact
on Y2K matters for their host governments; discussing it at multinational summit
meetings
(e.g., the recent Hemispheric Summit in Chile and this week-end’s so-called “G-8” meeting in the
United Kingdom); and encouraging the United Nations to address the state of preparedness in
member countries.

Interestingly, of the “outreach” measures Koskinen mentioned, the one that conveyed the
greatest
sense of urgency about the Y2K problem was a visit he recently made to bond-rating
agencies in
New York. He remarked that, “If I can’t get bond issuers’ attention [concerning the
Millennium Bug] through other means, I probably can do so by threatening to lower their
ratings.”

As evidence of the seriousness with which the Clinton Administration takes his portfolio, Mr.
Koskinen recalled a remark made by Vice President Gore at a Cabinet meeting in January 1998 at
which the President and Mr. Gore impressed upon those present that they must regard Y2K as
“their problem.” He quoted the Veep as saying: “One of you will be the
poster child for failed
federal systems. Which one will it be?”

Shifting the Blame from Clinton-Gore

After Koskinen completed his remarks, he took a question from the Center for Security
Policy’s
director, Frank J. Gaffney, Jr. Noting the emphasis placed on outreach by the “Czar,” Mr.
Gaffney asked why it was that no use had been made to date of the most obvious
and far-and-away most effective mechanism available to the Administration for
raising public
consciousness about the Y2K crisis — namely, the two people absolutely certain to be the
“poster children” for the coming debacle, Bill Clinton and Al Gore? Mr. Gaffney
called Mr.
Koskinen’s attention to the Forbes memo and its speculation that perhaps the reason for such
top-level silence on the issue (outside of closed-door Cabinet meetings and presidential councils)
may
be a deliberate decision to wait until after the 1998 mid-term elections. Should that be the case,
the Center’s director observed that six irrecoverable months could be wasted before the “bully
pulpit” was used as it should be to raise an urgent alarm with the American people.

Mr. Koskinen’s response was most illuminating. He said that he had seen the Forbes memo
and
decried its author as “the first person to try to make a partisan issue out of the Y2K problem.”
The “Czar” actually went so far as to decry Mr. Forbes’ memorandum as “explicitly partisan” — a
rather remarkable misrepresentation since, as noted above, the memo actually expressly states that
“The stakes are too high for such partisan political games” as “trying to limit public
concern until after the mid-term elections.”

Perhaps inadvertently, however, Mr. Koskinen answer may have disclosed the
Clinton-Gore
game-plan for limiting the political damage likely to be inflicted by the Y2K debacle: Try
to fob off onto the Congress at least some of the responsibility for the coming
crisis — and
obscure the Administration’s “leadership vacuum” that has, over the past five-and-a-half years of
this presidency, resulted in the adoption of few of the steps needed to avert this
most-accurately-forecast disaster. As the “Czar” put it: In contrast to Mr. Forbes, “the
congressional leadership
understands that we are all in this thing together.” He asserted that “the American people will not
make a distinction between the executive and legislative branches” in assigning responsibility for
failures to deal with the coming crisis.

The Bottom Line

One thing is sure: All other things being equal, John Koskinen will be proven right.
If the
Congress fails to heed Steve Forbes’ call for it to fill the “leadership vacuum” on the Y2K
crisis, it will appear equally culpable for the inaction that will bring great grief starting in
early 1999. Since — in the absence of executive branch action — the legislature can only
do so
much to arouse the Nation and prepare for deadly contingencies, it behooves the Republican-led
Congress to do what it can. At the same time, it must demand that the Clinton Administration do
its part now to limit the Y2K-related damage, while holding it (and particularly, its
self-designated point-man on computer issues, Al Gore) fully responsible for the failure to
do so
before now.

– 30 –

1. See the Casey Institute Press Release entitled
Casey Symposium Shows Need for
Security-Minded Approach to Asian Financial Crisis and Other Global Challenges
(No. 98-R
77, 5 May 1998).

2. See the Casey Institute Perspective entitled
Bridge to Nowhere: Inattention to the
‘Millennium Bug’ Threatens the Nation’s Security, Economy in the 21st Century
(No. 98-C 24, 6 February 1998).

3. N.B. Mr. Koskinen did not address the problem noted by Mr.
Forbes that there will be
substantially less time until financial data begins to be affected by the Y2K “bug.”