Sue Hartigan <[EMAIL PROTECTED]> writes: Fed Says 2000 Glitch Will Cost $50B > WASHINGTON (AP) -- Reprogramming, updating and fixing > computers to process data at the beginning of the new > millennium without crashing will cost U.S. businesses > roughly $50 billion, Federal Reserve officials > predicted Tuesday. > > Fortune 500 companies alone have told the Securities > and Exchange Commission they anticipate spending $11 > billion dealing with the so-called Year 2000 problem, > Fed Gov. Edward Kelly told the Senate Commerce > Committee. > > While the problem has ``contributed to the spectacular > growth recently in this country's computer hardware and > software industries'' as companies scramble to replace > their aging computers, the long-term net effect of the > problem will be slightly negative, Kelly said. > > The problem involves computers that use two digits to > identify years, such as 98 for 1998. Without a fix, > their inability to distinguish 2000 from 1900 could > produce erroneous data, cause programs to fail and > create widespread disruptions in commercial, financial > and government transactions. > > ``I suspect the majority of Year 2000 expenditures > should be viewed as increased outlays for maintenance > of existing systems, which are additional costs to > business,'' Kelly said. ``Other than the very valuable > ability to maintain its operations into the year 2000, > few quantifiable benefits accrue to the firm and > overall productivity gains are reduced by extra hours > devoted to reprogramming and testing.'' > > He said predictions that the glitch will induce a deep > recession are ``probably a stretch,'' but added, ``I do > not think that we shall escape unaffected.'' > > Kelly likened the expected disruptions when the clock > rolls over at midnight on New Year's Eve 20 months from > now to those that occurred from the winter blizzard in > early 1996 and last summer's United Parcel Service > strike. > > Although commerce ground to halt for up to a week in > areas hit by the blizzard, and some businesses were > hurt by the UPS strike, in both instances they bounced > back within weeks and the over-all effect on the > economy was minimal, he said. > > ``Hopefully, any Year 2000 shock to our information > infrastructure would also be transitory and would share > the characteristics of the shocks to our physical > infrastructure,'' he said. > > Meanwhile, Senate Majority Leader Trent Lott announced > the formation of a new Senate committee to examine both > private and government efforts to make the needed > technological fixes and deal in other ways with the > problem. > > Sen. Bob Bennett, R-Utah, will chair the Senate Special > Committee on the Year 2000 Technology Problem, and Sen. > Christopher Dodd, D-Conn. will serve as vice chairman. > > The seven-member panel will study the potential effects > of the computer glitch on the executive and judicial > branches of the federal government, as well on state > and local governments and private businesses operating > in the United States and overseas, Bennett said. > > The Senate Rules Committee will monitor Senate > progress. > > The panel's other members are: Sens. John Kyl, R-Ariz., > Susan Collins, R-Maine, Gordon Smith, R-Ore., Daniel > Patrick Moynihan, D-N.Y., and Jeff Bingaman, D-N.M. > > The House has held numerous hearings on the issue, but > has not created a special committee. -- Two rules in life: 1. Don't tell people everything you know. 2. Subscribe/Unsubscribe, email: [EMAIL PROTECTED] In the body of the message enter: subscribe/unsubscribe law-issues
