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Statement to Congressional Committee by John Koskinen
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�STATEMENT OF JOHN KOSKINEN
CHAIRMAN
PRESIDENT'S COUNCIL ON YEAR 2000 CONVERSION
BEFORE THE
SPECIAL COMMITTEE ON THE YEAR 2000 TECHNOLOGY PROBLEM
UNITED STATES SENATE
June 12,1998
Good morning, Mr. Chairman. I am pleased to appear before the committee to discuss the
activities of the President's Council on Year 2000 Conversion and the year 2000 problem's
implications for the energy industry.
Let me begin, however, by expressing my support for the work of this committee. I am
confident the committee will play a key role in helping to address the year 2000 problem, and I
appreciate your commitment to focus not only on year 2000 activities within the Federal
Government, but in the private sector as well, where it is clear we face a real challenge in raising
awareness among small and medium-sized organizations. I would also like to express my
appreciation to you, Mr. Chairman, and to Senator Dodd, for the work that you both have done
to increase awareness of the problem in thefinancialservices industry. The Council has formed a
financial institutions group to work with industry leaders in this important area, and we look
forward to working with you as well.
As you know, like the financial sector, energy is a key part of our Nation's infrastructure.
While people in other sectors are focused on ensuring that their systems and date-sensitive
embedded chips are ready for the new millennium, that work will be irrelevant if we have power
failures on January 1, 2000. To prevent such an outcome, we need to work together in an
ongoing dialogue with the industry to raise awareness of the problem and to facilitate information
exchanges. Today's hearing is a valuable contribution to that dialogue.
Council Structure -- Economic Sectors
As you know, I returned to Federal Government in March to chair the President's Council
on Year 2000 Conversion. The Council's mission is two-fold: To assist Federal agencies as they
work to prepare their systems for the new millennium and to coordinate agency efforts to increase
awareness of the problem among private sector entities, State and local governments, and
international organizations.
intepiat
The Council is made up of senior executives from more than 30 major Federal executive
branch, regulatory, and independent agencies who were personally chosen by their agency heads
and h^ye the authority to commit their agencies to action on the spot. The fiill Council meets at
l^sfmonthly to discuss not only agency efforts to increase awareness of the problem outside of
the Federal Government, but agency progress in ensuring that Federal mission-critical systems will
�be year 2000 compliant.
While several of the agencies confront significant management challenges, I am confident
that the vast majority of Federal mission-critical systems will be ready for the year 2000. In the
ongoing discussion about the Federal response to this problem, we often overlook the fact that —
many agencies are making excellent progress. According to the most recent OMB quarterly
report, 71 percent of mission-critical systems in the nine agencies assigned OMB's highest ranking
are year 2000 compliant - nine months ahead of the government-wide goal.
An important fact in our favor is that senior managers in the Federal Government are very
much aware of the year 2000 problem. I've met individually with the heads of more than 40
agencies, and their agencies are working hard to ensure that critical Federal systems are
compliant. I wish I could be as certain that is the case in every organization outside of the Federal
Government. Unfortunately, many organizations are not paying appropriate attention to the
problem. That is why our outreach efforts are so important.
One of the things I emphasized in my meetings with the agency heads was that, while it is
very important for agencies to focus on fixing their own systems, they also have a responsibility to
reach out to organizations within their policy areas to increase awareness of the problem and to
offer support. The agencies have accepted that challenge, but that does not mean the Federal
Government has the authority or the responsibility to fix others' systems. The Government has no
such authority in many areas of our economy, and getting people to take personal responsibility
for ensuring that their systems work is key to the success of the Nation's year 2000 preparations.
So how can we most effectively reach out to organizations outside the Federal realm?
This was one of the first questions the Council addressed. We decided that, to be most effective,
we needed to build on existing organizational relationships between agencies and outside groups,
which are in many cases their normal constituencies. We asked the agencies to also consider
reaching out to important sectors we don't regularly contact and to coordinate outreach efforts to
ensure there are no gaps in coverage. Fortunately, our normal working relationships reach into
many important areas of the economy. The Federal Reserve, for example, has an ongoing
relationship with the Nation's banks. The Federal Aviation Administration has an ongoing
dialogue with the airline industry. And there were obvious industries we could initiate contact
with, such as having the Environmental Protection Agency discuss the year 2000 problem with the
operators of local wastewater treatment plants.
The Council has organized itself to take advantage of these relationships. We have
identified roughly 30 economic sectors and enlisted agencies who have policy interests in, or
connections to, these areas to serve as "coordinators," to increase awareness of the problem and
to offer support. In this role, agencies are also getting feedback on organizations' progress in
addressing the problem, which will help us identify areas of concern. In particular, agencies are
working with industry trade associations, who have unique capabilities for communicating with
their members about the problem, individual companies, State and local governments, and
�intemational institutions.
For example, the Transportation Department will soon be holding an Intelligent
Transportation Systems summit in Washington that will bring together industry leaders. State and
local transportation officials, and transportation technology suppliers to discuss solutions for
possible year 2000-related disruptions in the operation of traffic control systems. The Federal
Communications Commission last week held a roundtable of industry leaders to discuss the year
2000 problem's implications for public safety systems. The Small Business Administration will
run a series of public service announcements on the problem aimed at small business owners. The
Department of Health and Human Services and the Veterans Administration are working with
hospital trade associations and the American Medical Association to increase awareness of the
problem among the Nation's hospitals. And the Food and Drug Administration is again surveying
medical device manufacturers about the year 2000 compliance of their equipment.
We are also using other "leverage points" in our outreach efforts. These are organizations
who, by virtue of their actions or opinions, can be a powerful influence to encourage others to
ensure that their systems are ready for the new millennium. This is particularly important for
small and medium-sized organizations that seem to be the least aware of the problem's
significance to their operations. Therefore, I have met with several rating agencies and the year
2000 task force of the American Institute of Certified Public Accountants to encourage them to
reiterate to their clients the importance of addressing the year 2000 problem.
Council Structure -- Working Groups
The Council has formed agency working groups to coordinate agency outreach activities
in several key parts of the Nation's infrastructure that require an intensified focus. We have
working groups that cover telecommunications,financialinstitutions, workforce issues,
emergency preparedness, and energy. I will address the energy working group's activities in
greater detail momentarily.
The telecommunications group, which the FCC chairs, is working with industry groups
and the Nation's largest telecommunications service providers to minimize potential disruptions to
the communications network we have all come to rely upon. One of the real challenges in this
area is intemational telecommunications. In countries that have thus far done very little to
address the problem, there is a significant chance for telecommunications failures on January 1,
2000.
For financial institutions, I did not initially plan to form a working group because of the
good progress being made, thanks t6 hard work of agencies like the Fed, the Office of Thrift
Supervision and other members of the Federal Financial Institutions Examination Council, and the
Securities and Exchange Commission. Recognizing this is an area of unparalleled importance to
the Nation's economy, however, the Council decided we should form a working group. This
�Fed-chaired group is now working to address the problem not only with U.S. banks, but with the
securities industry, mortgage companies, and government sponsored entities.
The Labor Department chairs the workforce issues group, which is focused not only
monitoring the Federal Government's supply of workers for its year 2000 remediation activities,
but on ways to help mitigate some of the potential year 2000 workforce shortages in the economy
as a whole. Labor has electronic job and talent banks that will be modified to contain a special
section devoted to the year 2000 problem. This will enable job-seekers to connect with
organizations that are in need of assistance. The group is also working to form relationships with
outside parties such as the American Association of Retired Persons that have unique capabilities
for reaching those retirees with special skills for addressing the problem.
The emergency services working group, chaired by the Federal Emergency Management
Agency, is concentrating on ensuring that State and local emergency response officials are
addressing the year 2000 problem. Emergency response agencies need to assess their own systems
to make sure they are year 2000 compliant. But they also need to prepare for potential problems
caused by failing computer systems and embedded chips in their communities just as they would a
major storm or earthquake, since the year 2000 problem has the potential for causing disruptions
in key infrastructure segments.
Energy
Because it is such a critical part of the Nation's infrastructure, we are very concerned
about year 2000 progress in the energy industry. The wide range of companies active in the
production and transportation of power, which include investor-owned utilities, publicly owned
utilities. Federal power marketing associations, and oil and gas producers, makes the challenge of
outreach all the more difficult.
As a result, the Council has taken the step of appointing two chairs ~ the Energy
Department for electric power, and the Federal Energy Regulatory Commission for oil and gas.
The entire group is working to engage industry in an ongoing dialogue about the level of
awareness, assessment, and remediation that is underway, and is offering Energy and FERC to
coordinate the activities of Federal agencies in this area. Again, while the Government does not
have direct control over most of these organizations, we can play an important role in facilitating
an information exchange on year 2000 best practices and shared experiences among those in the
industry.
We are also very concerned about the implications of date-sensitive embedded chips for
the energy industry. Some of these chips help to carry out critical functions in power plants and
oil production facilities, and we are encouraged that the industry recognizes the importance of this
issue.
�Thus far, we have been delighted with the response we have received from various energy
trade associations. The working group has met with the North American Electric Reliability
Council, which has agreed to be our contact with the electric power industry. In a meeting last
week, the American Petroleum Institute and the Natural Gas Council agreed to use their
capabilities as umbrella organizations to raise awareness of the problem within their industries and
to survey the progress of their members. While it is difficult to make estimates at this stage in the
process, the consensus is that the largest companies in the energy industry are actively working to
ensure their ability to function as we move into the new millennium.
Moving Forward
There is no doubt the year 2000 problem poses a significant challenge to the global
economy. I am confident that Federal agencies will live up to their end of the bargain, both in
fixing their critical systems and in increasing awareness beyond the Federal Government. We will
continue to reach out to public and private organizations ~ particularly in key infrastructure areas
such as energy - to encourage people to take personal responsibility for solving their year 2000
problems. As I have often said, there is no guarantee that every critical system will be fixed. But
if we work hard, and if we work together, I think we will be well-positioned to achieve our
ultimate goal of ensuring that any inconveniences caused by the year 2000 problem will be
relatively minor.
I thank the committee for its interest in the year 2000 problem. You are making a
valuable contribution to the public dialogue about this matter. I look forward to working with
you, and I would be happy to answer any questions that you may have.
�STATEMENT OF JOHN KOSKINEN
CHAIRMAN
PRESIDENT'S COUNCIL ON YEAR 2000 CONVERSION
BEFORE THE
COMMITTEE ON GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
April 1,1998
Good morning, Mr. Chairman. I am pleased to appear before the committee to discuss the
year 2000 problem and my new role as Chair of the President's Council on Year 2000
Conversion.
As the President said recently, the year 2000 problem is "one of the great challenges of the
Information Age in which we live." Like you, the President wants to ensure that individuals in the
public and private sectors are doing all they can to meet that challenge. Therefore, last month, he
issued Executive Order 13073 creating the President's Council on Year 2000 Conversion. He has
also made it clear recently at a meeting of his Cabinet that agency heads bear the full responsibility
for the successful preparation of their agencies' mission-critical systems for the transition to the
year 2000.
As the recent OMB report on year 2000 progress in Federal agencies stated: agencies are
making progress, but the rate of that progress needs to increase. No problem facing us is more
pressing, especially since, unlike other Washington problems, neither the President nor Congress
can push the deadline back. We have 639 days left until January 1, 2000, and the question is how
can we work together to ensure that the Federal Government, State and local governments, those
in the private sector, and leaders in other countries are doing all that they can to minimize
disruption to systems on January 1, 2000.
The Council's Role
There is no question that the challenges are great, and I am confident that our newly
established Council will play an important role in meeting those challenges. However, we need to
carefully structure the Council's activities to maximize its effectiveness.
It is important for the Council not to interfere with or duplicate the good work that is
currently underway in the agencies and is being done by the CIO Council and other interagency
management councils. The Council should also build on, rather than try to replace, OMB's
important oversight role in monitoring and reporting information gathered from the agencies.
The Council needs to remain aware of the progress resulting from these efforts, which
have been appropriately focused primarily on systems managed by or for the Federal Government.
However, we have an obligation to the public to view this as more than just a Federal systems
�problem. We need to adopt a global perspective, and I think the Council's real contribution will
be in encouraging the agencies to expand their year 2000 outreach efforts to include those outside
the Federal government ~ whether they be Tribal, State and local governments, private sector
organizations, or intemational institutions - and in coordinating those efforts at a governmentwide level.
Rather than independently creating and directly managing new national forums for specific
sectors of the economy such asfinancialinstitutions and the health care industry, the Council
should be a catalyst, using existing structures and resources, to create an ongoing dialogue on the
year 2000 implications for these activities.
For example, I think the Council can maximize its effectiveness by enlisting and supporting
someone like the Treasury Department or the Federal Reserve as the coordinator on outreach to
financial institutions, and HHS as the coordinator on outreach to the health care industry —
empowering them to determine the appropriate measures Government should take to assure
progress in these areas. And agencies may work through existing private sector groups as part of
their outreach efforts. The senior executive in each agency overseeing the outreach work will be
the agency's representative on the Council, which will then be able to monitor, support and
coordinate these agency activities and help ensure that there are not gaps in the coverage.
Our immediate goal has to be to ensure that, to the extent possible, leaders of
organizations throughout the United States and the world are asking the right questions — Do we
have a problem? What is the nature of that problem? What should we be doing tofixit? And are
the organizations that we work with or depend upon prepared to deal with the transition to the
year 2000? My experience as a crisis manager in both the public and private sectors is that once
leaders ask the right questions, the work gets done. I beheve that most senior executives in the
Federal agencies are asking these questions, and the Council's job is to ensure that leaders outside
the Government are asking them as well.
Let me now turn to describing more specifically what the Council will be doing.
Working with the Agencies
The Council will monitor the progress of those responsible for fixing the problem in
Federal agencies. I have already begun to embark on what I fondly refer to as my "Agencyof-the-Day Tours," where I am meeting with agency heads, their deputies, their CIOs, and those
leading their year 2000 efforts to discuss their situations.
In these meetings, I am emphasizing that the Council's existence does not relieve the
agencies and others of their individual responsibilities to actually do the work necessary tofixthe
year 2000 problem. The work offixingthe problem can only be done by those who are on the
front lines. Senior executives responsible for public and private sector organizations are
�responsible for ensuring that their mission-critical systems are ready.
In each meeting, I have been asking agencies three key questions about the status of the
work on their own systems: What are your major risks? What are the most significant obstacles
to removing those risks? What contingency plans are appropriate in light of that analysis?
Some of the most difficult challenges are those facing agencies with ongoing
modernization programs that will transcend the year 2000. They must decide what upgrades will
be completed in time and which legacy systems they must repair. A similar problem faces agency
leaders who have discovered that their planned new systems will not be operational by January 1,
2000 and have thus had to begin upgrading their existing systems, even though they are likely to
be replaced soon after the year 2000, so that their mission-critical operations will not be affected
by the date change.
Although these "insurance policies," as I like to call them, have caused some agencies to
incur additional costs, both in short-term investments on existing systems and in delays to
modernization programs, I think they are doing the right thing. Agencies need to err on the side
of caution to ensure that their mission-critical operations will continue without interruption.
Congress has been very supportive of the agencies' need for year 2000 funds, and I hope that it
will continue to do so.
With regard to contingency plans, one of the Council's functions will be to keep members
advised of the latest risk assessments. The focus should be on contingency plans to protect the
provision of an agency's basic services. And agencies need to be prepared for the possibility of
failures of other systems as well as their own. For example, contingency plans should consider
the implications of localized difficulties with outside services such as power or transportation.
I am also talking to agencies about the external systems with which they interface,
particularly their data exchanges with State and local governments. Even if all of the Federal
Government's mission-critical systems function effectively on January 1, 2000, the public will still
suffer substantial adverse consequences if our systems cannot communicate with the external
systems with which they need to exchange data to operate key Federal programs.
Finally, I am reviewing with agency heads the operations ~ within areas of an agency's
policy concerns — of entities that the Federal Government does not directly fund or regulate.
Outreach: Beyond the Federal Government
The Council will work with agencies to reach out to those outside the Federal
Government to increase awareness to the year 2000 problem and to offer appropriate assistance
and support.
�The Federal Government has a responsibility to exercise leadership in this area. Everyone
has an interest in a smooth transition to the year 2000 by organizations operating independently of
the Federal Government. The inability of a stock market in another country to open on Monday,
January 3, 2000, the slowing of a local mass transportation system to a crawl, or the failure of a
medium-sized business could affect us all.
I've already mentioned the importance of Federal interfaces with State and local
governments, but there are other solely State and local services that people depend on — from
public safety to payment of State pension benefits - that could be affected by the year 2000
problem. Last October, we made a good start in our dialogue with State and local officials when
Sally Katzen, Vice Chair of the Council, met with representativesfromState and local
governments at a conference in Pittsburgh. A Federal-State working group has been established
and I look forward to continuing that dialogue, and to seeing how the Federal Government can be
of assistance to State and local governments as they work tofixtheir systems. In fact, I recently
met with James Lee Witt, director of the Federal Emergency Management Agency, who agreed
that his agency will begin to work closely with State and local disaster authorities to determine the
status of their year 2000 efforts and offer whatever support they can.
Some have described economic doomsday scenarios that could take place when we reach
the year 2000. To ensure that does not happen, the Council will work to raise awareness and
offer support to private sectorfirms.Small and medium-sized businesses are of special concern,
because many of them do not have adequate institutional resources to devote tofixingthe
problem. We are also reaching out to them. For example, through its Web page, the Small
Business Administration is sharing with small business owners information on best practices for
dealing with the transition to the year 2000.
At this time, we are specifically looking at outreach opportunities in major sectors of
economic operations, such as energy, transportation and telecommunications. In most cases, a
specific agency has agreed to assume responsibility for a related sector. HHS, for example, will
increase its outreach efforts in the entire health area. The Transportation Department will review
the status of the Nation's transportation systems with State and local authorities as well as private
sector groups. In some areas, such as telecommunications, the Council itself, with the support of
several agencies, may help to organize sector reviews.
Finally, the Council will have a world-wide focus. We live in a global economy that is
increasingly dependent upon the electronic exchange offinancialand other data. Unfortunately, it
is not clear that all other nations are devoting the appropriate level of attention to the year 2000.
While this is the one area in which the Council may have the greatest difficulty in
exercising influence, we need to do everything that we can to raise awareness in other countries.
Therefore, the Council will work with Federal agencies to leverage the influence of intemational
organizations like the United Nations, the World Bank, and the Intemational Monetary Fund to
increase awareness and facilitate the exchange of information among nations.
�Working Through Interagency Management Councils
In addition to working through Council members from each Federal agency, the Council
will work closely with existing interagency management councils to increase the coordination of
agency year 2000 efforts and better facilitate the exchange of year 2000 information and ideas
among agencies. As I said, I don't believe the Council should be duplicating these efforts, but I
do think we can play an important role in coordinating the good work of these groups and in
increasing their visibility to ensure that agencies can benefit from each other's experiences.
To further this goal, I will be meeting on a regular basis with the President's Management
Council, the Chief Information Officers Council, the Chief Financial Officers Council, the
President's Council on Integrity and Efficiency, the Executive Council on Integrity and Efficiency,
and the Interagency Council on Administrative Management to encourage information
sharing on best practices and system challenges to ensure there is effective coordination across the
Government. I will also be joining the Vice President and the staff of the National Partnership for
Reinventing Government as they continue to work to improve customer service at the 32
Federal agencies identified as having a "high impact" on our citizens. Nothing is more central to
improved customer service than a smooth transition to the year 2000.
The Balancing Act
There is no doubt that the year 2000 problem poses significant challenges to our
Government, our Nation, and the world. Those of us who are committed to solving this problem
will have to perform a delicate balancing act over the next 21 months. While it is important to
increase world-wide attention to the urgent necessity of solving this problem, we need to avoid
creating panic and precipitous, counterproductive activity. We, and, with our help, the public
need to understand that ~ despite our best efforts ~ not every system will function effectively.
Our goal should be that any disruptions to services will be minor inconveniences to the American
people. The best way for us to spend the next 21 months will be to address the challenges that lie
before us, in a very aggressive but measured way, by marshaling the resources at our disposal in
the most effective way possible to achieve that goal.
I thank the committee for its interest in the year 2000 problem. You can make a valuable
contribution to the public dialogue about this matter. I look forward to working with you, and I
would be happy to answer any questions that you may have.
�STATEMENT OF JOHN KOSKINEN
CHAIRMAN
PRESIDENT'S COUNCIL ON THE YEAR 2000 CONVERSION
BEFORE THE
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND
TECHNOLOGY
OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
AND THE
SUBCOMMITTEE ON TECHNOLOGY
OF THE COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
March 18, 1998
Good morning. I am pleased to be back before the subcommittees to discuss the year
2000 problem and my new role as Chair of the President's Council on the Year 2000 Conversion.
I welcome this opportunity, not only because of my prior experience in working with you
on a range of issues as Deputy Director for Management at OMB, but because of the ongoing
interest you have shown in raising public awareness about the year 2000 problem to help ensure
that computer systems are ready for January 1, 2000.
As you know, the President shares your concern. Last month, he issued Executive Order
13073 creating the Council, and has recently made it clear at a meeting of his Cabinet that agency
heads bear the full responsibility for the successful preparation of their agencies' mission-critical
systems for the transition to the year 2000.
Chairman Horn, I have read your most recent report on year 2000 progress in Federal
agencies. As you know, last week OMB submitted to Congress its latest quarterly report. Both
reports share a common finding: agencies are making progress, but the rate of that progress needs
to increase. I think we all agree that no problem facing us is more pressing, especially since,
unlike other Washington problems, neither the President nor Congress can push the deadline back.
We have 653 days left until January 1, 2000, and the question is how can we work together to
ensure that the Federal Government, State and local governments, those in the private sector, and
leaders in other countries are doing all that they can to to minimize disruption to systems on
January 1, 2000.
The Council's Role
In the days and weeks following my appointment as Chair of the President's Year 2000
Council, many people have told me that I must be in need of counseling, having resumed my
�career in public service by taking on a job that some think is impossible. Senator Moynihan, who
has also been concerned about the Federal Government's response to the year 2000 problem for
some time, has said that the overall challenge facing me is analogous to the "13th labor of
Hercules."
There is no question that the challenges are great, and I am confident that the Council can
play an important role in meeting those challenges. However, we need to carefully structure the
Council's activities to maximize its effectiveness. GAO, which has done very valuable work in the
year 2000 area generally, has recently circulated a draft report recommending actions for the
Council. We will be sharing our detailed comments on the draft with GAO, but we generally
agree with much of what they have to say.
From my perspective, I think it is important for the Council not to interfere with or
duplicate the good work that is currently underway in the agencies and is being done by the CIO
Council and other interagency management councils. The Council should also build on, rather
than try to replace, the important oversight role that OMB is playing in monitoring and reporting
information gatheredfromthe agencies.
The Council needs keep informed of the progress resultingfromthese efforts, which have
been appropriately focused primarily on systems managed by or for the Federal Government.
However, we have an obligation to the public to view this as more than just a Federal systems
problem. We need to adopt a global perspective, and I think the Council's real contribution will
be made by coordinating work by the agencies with those outside the Federal government,
whether they be tribal, state and local governments, private sector organizations or institutions
operating around the world.
To accomplish this, I do not believe the Council should create and directly manage new
national forums for specific sectors of the economy such asfinancialinstitutions and the health
care industry. The Council should be a catalyst, using existing structures and resources to create
an ongoing dialogue on the year 2000 implications for these activities. Individual Federal
agencies have a major role to play in this regard. For example, I think that the Council can be
more effective by enlisting and supporting someone like the Treasury Department or the Federal
Reserve as the coordinator on outreach tofinancialinstitutions, and HHS as the coordinator on
outreach to the health care industry ~ empowering them to determine the appropriate measures
Government should take to assure progress in these areas. For example, the agencies may work
through existing private sector groups, such as those identified in GAO's testimony, as part of
their outreach effort. The senior executives in each agency responsible for the work in such
sectors or partnerships will be the agencies' representatives on the Council, which will then be
able to monitor and coordinate these agency activities and help ensure that there are not gaps in
the coverage.
While the Council will have a global perspective, I would like to emphasize that it will
not be a centralized body that will relieve the agencies and others of their individual
�responsibilities to actually do the work necessary tofixthe year 2000 problem. Not only would
this require an extremely large staff, it would be a misguided effort. The work of fixing the year
2000 problem can only be done by those who are on the front lines. Senior executives responsible
for public and private sector organizations are responsible for ensuring that their mission-critical
systems are ready.
I am adopting this approach in part because it is my experience as a crisis manager in both
the public and private sectors that once you get the senior people in an organization asking the
right questions ~ Do we have a problem? What is the nature of that problem? What should we
be doing to fix it? — the work gets done. I believe that most senior executives in the Federal
agencies are asking these questions, and the Council's job is to ensure that leaders outside the
government are asking them as well.
In short, the President's Council on the Year 2000 conversion needs to be a catalyst, to
ensure that individuals in the public and private sectors are aware of the problem and doing all
they can to fix it. The Council also should be a facilitator, to promote the fruitful exchange of
ideas and information on best practices and the resolution of common problems. Finally, the
Council should be a coordinator, to ensure that resources are being used effectively across
organizational boundaries.
Let me now turn to describing more specifically what the Council will be doing.
Working with the Agencies
First, the Council will monitor the progress of those responsible for fixing the problem in
Federal agencies. I have already begun to embark on what I fondly refer to as my "Agency of the
Day Tours," where I am meeting with agency heads, their deputies, their CIOs, and those leading
their year 2000 efforts to discuss their situations. In each meeting, I have been asking three key
questions: What are your major risks? What are the most significant obstacles to removing those
risks? What contingency plans are appropriate in light of that analysis?
I am also talking to agencies about the external systems with which they interface,
particularly their data exchanges with State and local governments. Even if all of the Federal
Government's mission-critical systems function effectively on January 1, 2000, the public will still
suffer substantial adverse consequences if our systems cannot communicate with the external
systems with which we need to exchange data to operate key Federal programs.
In January, OMB instructed agencies to inventory all of their data exchanges with outside
parties by February 1, 1998, and to coordinate with those parties by March 1, 1998 to determine a
transition plan. The agencies are making good progress in this area. Of the 24 agencies that
report regularly to OMB, 19 have completed their inventories of data exchanges and indicated
that communication with outside parties either was complete or would be complete by March 1,
�1998. OMB is following-up with the remaining five agencies to assure that they complete the
discussions soon.
Working Through Interagency Management Councils
Second, we will be working closely with existing interagency management councils to
increase the coordination of agency year 2000 efforts and better facilitate the exchange of year
2000 information and ideas among agencies. As I said, I don't believe the Council should be
duplicating these efforts, but I do think we can play an important role in energizing and
coordinating the good work of these groups and in increasing their visibility to ensure that
agencies can benefit from each other's experiences.
To further this goal, I will be meeting on a regular basis with the President's Management
Council, the Chief Information Officers Council, the Chief Financial Officers Council, the
President's Council on Integrity and Efficiency, the Executive Council on Integrity and
Efficiency, and the Interagency Council on Administrative Management to encourage information
sharing on best practices and system challenges to ensure there is effective coordination across the
Government. I will also be joining the Vice President and the staff of the National Partnership for
Reinventing Government as they continue to work with the 32 Federal agencies identified as
having a "high impact" on our citizens to improve their customer service. Nothing is more central
to improved customer service than a smooth transition to the year 2000.
Outreach: Beyond the Federal Government
Third, and perhaps most important, the Council will be reaching out to those outside the
Federal Government to increase awareness of the year 2000 problem and to offer appropriate
assistance and support.
The Federal Government has a responsibility to exercise leadership in this area. Everyone
has an interest in a smooth transition to the year 2000 by organizations operating independently of
the Federal government. The inability of a stock market in another country to open on Monday,
January 3, 2000, the slowing of a local mass transportation system to a crawl, or the failure of a
medium-sized business could affect us all. A year ago, if you had asked me to name our greatest
challenge, I would have said that it was making those within the Federal Government aware of the
problem. I think we have now achieved that awareness at the Federal level, and a critical
challenge over the next six months will be to reach out to State and local governments, to the
private sector, and to foreign entities to increase their awareness and determine not only how they
are dealing with the problem, but whether there is anything that the Federal Government can do to
help them in their efforts.
�I've already mentioned the importance of Federal interfaces with State and local
governments, but there are other solely State and local services that people depend on — from
public safety to payment of State pension benefits ~ that could be affected by the year 2000
problem. Last October, we made a good start in our dialogue with State and local officials when
Sally Katzen, Vice Chair of the Council, met with representatives from State and local
governments at a conference in Pittsburgh. A Federal-State working group has been established
and I look forward to continuing that dialogue, and to seeing how the Federal Government can be
of assistance to State and local governments as they work tofixtheir systems. In fact, just last
week I met with James Lee Witt, director of the Federal Emergency Management Agency, who
agreed that his agency will begin to work closely with State and local disaster authorities to
determine the status of their year 2000 efforts and offer whatever support they can.
Some have described economic doomsday scenarios that could take place when we reach
the year 2000. To ensure that doesn't happen, the Council will work to raise awareness and offer
support to private sector firms. Small and medium-sized businesses are of special concern,
because many of them do not have adequate institutional resources to devote to fixing the
problem. We are also reaching out to them. For example, through its Web page, the Small
Business Administration is sharing with small business owners information on best practices for
dealing with the transition to the year 2000. And as I mentioned earlier, I think the Council can
be effective in using existing structures and resources to create a dialogue between the Federal
Government and the private sector in many key areas of the economy.
Finally, the Council will have a world-wide focus. We live in a global economy that is
increasingly dependent upon the electronic exchange offinancialand other data. Unfortunately, it
is not clear that all other nations are devoting the appropriate level of attention to the year 2000.
Having traveled extensively in Southeast Asia prior to my starting this job, I can tell you from
personal experience that many countries are focused on more immediate economic problems.
While this is the one area in which the Council may have the greatest difficulty in
exercising influence, we need to do everything that we can to raise awareness in other countries.
Again, once senior leadership begins to ask the right questions, the work will get done. So the
Council will work with Federal agencies to leverage the influence of intemational organizations
like the United Nations, the World Bank, and the Intemational Monetary Fund to increase
awareness and facilitate the exchange of information among nations.
The Balancing Act
There is no doubt that the year 2000 problem poses significant challenges to our
Government, our Nation, and the world. Those of us who are committed to solving this problem
will have to perform a delicate balancing act over the next 21 months. While it is important to
increase world-wide attention to the urgent necessity of solving this problem, we need to avoid
creating panic and precipitous, counterproductive activity. The best way for us to spend the next
�21 months will be to address the challenges that lie before us, in a very aggressive but measured
way, by marshaling the resources at our disposal in the most effective way possible.
I thank the subcommittees for their continued interest in the year 2000 problem. Your
efforts have made, and continue to make, a valuable contribution to the public dialogue about this
matter. I look forward to working with you, and I would be happy to answer any questions that
you may have.
�STATEMENT OF JOHN KOSKINEN
CHAIRMAN
PRESIDENT'S COUNCIL ON THE YEAR 2000 CONVERSION
BEFORE THE
COMMITTEE ON BANKING
U.S. HOUSE OF REPRESENTATIVES
March 24,1998
Good afternoon. I am pleased to be before the committee to discuss the year 2000
problem and my new role as Chair of the President's Council on the Year 2000 Conversion.
Mr. Chairman, I would like to start by thanking you and the other members of the
committee for your ongoing interest in raising public awareness about the year 2000 problem to
help ensure that computer systems are ready for January 1, 2000.
In particular, I would like to applaud the committee for its work on H.R. 3116, the
"Examination Parity and Year 2000 Readiness for Financial Institutions Act," which the President
was pleased to sign last Friday. The legislation will encourage Federal agencies to reach out to
private sector financial institutions to increase awareness of the implications of the year 2000
problem. The legislation will also increase the authority of Federal regulators at the Office of
Thrift Supervision and the National Credit Union Administration to work with thrifts and credit
unions and their service providers to ensure that they will be able to continue to provide services to
their customers without disruption.
In signing H.R. 3116, the President called the year 2000 problem "one of the great
challenges of the Information Age in which we live." Like each of you, the President wants to
ensure that individuals in the public and private sectors are doing all they can to meet that
challenge. Therefore, last month, he issued Executive Order 13073 creating the President's
Council on the Year 2000 Conversion. He has also made it clear recently at a meeting of his
Cabinet that agency heads bear the full responsibility for the successful preparation of their
agencies' mission-critical systems for the transition to the year 2000.
The recent reportsfromCongressman Horn and OMB on year 2000 progress in Federal
agencies share a commonfinding:agencies are making progress, but the rate of that progress
needs to increase. No problem facing us is more pressing, especially since, unlike other
Washington problems, neither the President nor Congress can push the deadline back. We have
647 days left until January 1, 2000, and the question is how can we work together to ensure that
the Federal Government, State and local governments, those in the private sector, and leaders in
other countries are doing all that they can to minimize disruption to systems on January 1, 2000.
�The Council's Role
There is no question that the challenges are great, and I am confident that the Council can
play an important role in meeting those challenges. However, we need to carefully structure the
Council's activities to maximize its effectiveness. GAO, which has done very valuable work in the
year 2000 area generally, has recently circulated a draft report recommending actions for the
Council. I have shared some detailed comments on the draft with GAO, which I will submit for
the record, but we generally agree with much of what they have to say.
From my perspective, I think it is important for the Council not to interfere with or
duplicate the good work that is currently underway in the agencies and is being done by the CIO
Council and other interagency management councils. The Council should also build on, rather than
try to replace, the important oversight role that OMB is playing in monitoring and reporting
information gathered from the agencies.
The Council needs to remain aware of the progress resulting from these efforts, which have
been appropriately focused primarily on systems managed by or for the Federal Government.
However, we have an obligation to the public to view this as more than just a Federal systems
problem. We need to adopt a global perspective, and I think the Council's real contribution will be
made by coordinating work by the agencies with those outside the Federal government, whether
they be Tribal, State and local governments, private sector organizations, or institutions operating
around the world.
To accomplish this, I do not believe the Council should create and directly manage new
national forums for specific sectors of the economy such asfinancialinstitutions and the health care
industry. The Council should be a catalyst, using existing structures and resources to create an
ongoing dialogue on the year 2000 implications for these activities.
Individual Federal agencies have a major role to play in this regard. For example, I think
that the Council can be more effective by enlisting and supporting someone like the Treasury
Department or the Federal Reserve as the coordinator on outreach tofinancialinstitutions, and
HHS as the coordinator on outreach to the health care industry — empowering them to determine
the appropriate measures Government should take to assure progress in these areas. And agencies
may work through existing private sector groups, such as those GAO identified in its testimony
last week, as part of their outreach effort. The senior executives in each agency responsible for the
work in such sectors or partnerships will be the agencies' representatives on the Council, which
will then be able to monitor and coordinate these agency activities and help ensure that there are
not gaps in the coverage.
While the Council will have a global perspective, I would like to emphasize that it will not
be a centralized body that will relieve the agencies and others of their individual responsibilities to
actually do the work necessary to fix the year 2000 problem. Not only would this require an
extremely large staff, it would be a misguided effort. The work of fixing the year 2000 problem
�can only be done by those who are on the front lines. Senior executives responsible for public and
private sector organizations are responsible for ensuring that their mission-critical systems are
ready.
I am adopting this approach in part because it is my experience as a crisis manager in both
the public and private sectors that once you get the senior people in an organization asking the
right questions - Do we have a problem? What is the nature of that problem? What should we be
doing to fix it? ~ the work gets done. I believe that most senior executives in the Federal
agencies are asking these questions, and the Council's job is to ensure that leaders outside the
Government are asking them as well.
In short, the President's Council on the Year 2000 Conversion needs to be a catalyst, to
ensure that individuals in the public and private sectors are aware of the problem and doing all they
can to fix it. The Council also should be a facilitator, to promote the fruitful exchange of ideas and
information on best practices and the resolution of common problems. Finally, the Council should
be a coordinator, to ensure that resources are being used effectively across organizational
boundaries.
Let me now turn to describing more specifically what the Council will be doing.
Working with the Agencies
The Council will monitor the progress of those responsible for fixing the problem in
Federal agencies. I have already begun to embark on what I fondly refer to as my "Agency
of the Day Tours," where I am meeting with agency heads, their deputies, their CIOs, and those
leading their year 2000 efforts to discuss their situations. In each meeting, I have been asking
three key questions about the status of the work on their own systems: What are your major risks?
What are the most significant obstacles to removing those risks? What contingency plans are
appropriate in light of that analysis?
With regard to contingency plans, agencies need to be prepared for the possibility of
failures of other systems as well as their own. For example, contingency plans should consider the
implications of localized difficulties with outside services such as power or transportation.
I am also talking to agencies about the external systems with which they interface,
particularly their data exchanges with State and local governments. Even if all of the Federal
Government's mission-critical systems function effectively on January 1, 2000, the public will still
suffer substantial adverse consequences if our systems cannot communicate with the external
systems with which they need to exchange data to operate key Federal programs.
Finally, as I will soon discuss in more detail, I am reviewing with agency heads the
operations -- within areas of an agency's policy concerns -- of entities that the Federal Government
�does not directly fund or regulate. Before considering this broader issue, however, let me discuss
specific meetings I have had with two agencies of concern to you — the Treasury Department and
the Department of Housing and Urban Development.
I have met with Secretary Rubin and his senior management team and am pleased to report
that Treasury is clearly focused on this problem at the highest levels. The Secretary, Treasury's
Chief Operating Officer, and Treasury's Chief Information Officer gave me a detailed update on
the progress they are making in dealing with the year 2000 problem department-wide. Systems of
particular concern are those at the Internal Revenue Service and the Financial Management
Service. The IRS has the challenge of dealing with the year 2000 problem at the same time it
continues work on a modernization program that will transcend the year 2000. However, the new
IRS Commissioner is very experienced in these areas, and I think there is sound basis for the
confidence being placed in him. FMS has also been the source of some concern in light of its
interactions with virtually every Federal department. Here too, a new management team has
directed its attention awayfromrelying only on a complete replacement of critical systems, which
will be completed over time, and is now focused on ensuring that the existing operation will
function effectively as we move into the year 2000.
We also discussed the implications of the year 2000 problem for the banking industry,
particularly on an intemational level, and the roles Treasury and intemational financial
organizations such as the Intemational Monetary Fund and the World Bank can play in increasing
awareness and facilitating information exchanges among nations. Secretary Rubin has been a
leader in government in raising awareness of this problem in meetings around the world, and he
will continue to do so at upcoming intemational meetings, both in the United States and abroad.
While I was not able to meet with Secretary Cuonlo prior to my testimony today, I did
meet with members of HUD's senior management team, including Deputy Secretary Saul Ramirez,
their Chief Financial Officer, and their year 2000 project manager. HUD is focused on the problem
at the highest levels as well, and my meeting with the senior management team was also very
productive. HUD is on schedule to meet the OMB government-wide goals for ensuring that
systems are year 2000 compliant, and the Secretary receives regular reports on the department's
progress. HUD has also begun to reach out to its business partners, which include mortgage
companies, State and local public housing authorities, and the Nation's cities, to increase
awareness and offer assistance. In the event that these business partners experience their own
system failures, HUD has developed contingency plans to ensure that the department will still be
able to receive and process important data.
Outreach: Beyond the Federal Government
My discussions with Treasury and HUD are examples of how the Council will be reaching
out to those outside the Federal Government to increase awareness of the year 2000 problem and
to offer appropriate assistance and support.
�The Federal Government has a responsibility to exercise leadership in this area. Everyone
has an interest in a smooth transition to the year 2000 by organizations operating independently of
the Federal government. The inability of a stock market in another country to open on Monday,
January 3, 2000, the slowing of a local mass transportation system to a crawl, or the failure of a
medium-sized business could affect us all.
I've already mentioned the importance of Federal interfaces with State and local
governments, but there are other solely State and local services that people depend on — from
public safety to payment of State pension benefits — that could be affected by the year 2000
problem. Last October, we made a good start in our dialogue with State and local officials when
Sally Katzen, Vice Chair of the Council, met with representativesfromState and local
governments at a conference in Pittsburgh. A Federal-State working group has been established
and I look forward to continuing that dialogue, and to seeing how the Federal Government can be
of assistance to State and local governments as they work tofixtheir systems. In fact, I recently
met with James Lee Witt, director of the Federal Emergency Management Agency, who agreed
that his agency will begin to work closely with State and local disaster authorities to determine the
status of their year 2000 efforts and offer whatever support they can.
Some have described economic doomsday scenarios that could take place when we reach
the year 2000. To ensure that does not happen, the Council will work to raise awareness and offer
support to private sectorfirms.Small and medium-sized businesses are of special concern, because
many of them do not have adequate institutional resources to devote tofixingthe
problem. We are also reaching out to them. For example, through its Web page, the Small
Business Administration is sharing with small business owners information on best practices for
dealing with the transition to the year 2000. And as I mentioned earlier, I think the Council can be
effective in using existing structures and resources to create a dialogue between the Federal
Government and the private sector in many key areas of the economy.
Finally, the Council will have a world-wide focus. We live in a global economy that is
increasingly dependent upon the electronic exchange offinancialand other data. Unfortunately, it
is not clear that all other nations are devoting the appropriate level of attention to the year 2000.
Having traveled extensively in Southeast Asia prior to my starting this job, I can tell you from
personal experience that many countries are focused on more immediate economic problems.
While this is the one area in which the Council may have the greatest difficulty in exercising
influence, we need to do everything that we can to raise awareness in other countries. Again, once
senior leadership begins to ask therightquestions, the work will get done. So the Council will
work with Federal agencies to leverage the influence of intemational organizations like the United
Nations, the World Bank, and the Intemational Monetary Fund to increase awareness and facilitate
the exchange of information among nations.
�Working Through Interagency Management Councils
Beyond working through Council membersfromeach Federal agency, the Council needs to
work closely with existing interagency management councils to increase the coordination of agency
year 2000 efforts and better facilitate the exchange of year 2000 information and ideas among
agencies. As I said, I don't believe the Council should be duplicating these efibrts, but I do think
we can play an important role in energizing and coordinating the good work of these groups and in
increasing their visibility to ensure that agencies can benefitfromeach other's experiences.
To further this goal, I will be meeting on a regular basis with the President's Management
Council, the Chief Information Officers Council, the Chief Financial Officers Council, the
President's Council on Integrity and Efficiency, the Executive Council on Integrity and Efficiency,
and the Interagency Council on Administrative Management to encourage information
sharing on best practices and system challenges to ensure there is effective coordination across the
Government. I will also be joining the Vice President and the staff of the National Partnership for
Reinventing Government as they continue to work to improve customer service at the 32
Federal agencies identified as having a "high impact" on our citizens. Nothing is more central to
improved customer service than a smooth transition to the year 2000.
The Balancing Act
There is no doubt that the year 2000 problem poses significant challenges to our
Government, our Nation, and the world. Those of us who are committed to solving this problem
will have to perform a delicate balancing act over the next 21 months. While it is important to
increase world-wide attention to the urgent necessity of solving this problem, we need to avoid
creating panic and precipitous, counterproductive activity. The best way for us to spend the next
21 months will be to address the challenges that lie before us, in a very aggressive but measured
way, by marshaling the resources at our disposal in the most effective way possible.
I thank the committee for its continued interest in the year 2000 problem. Your efforts
have made, and continue to make, a valuable contribution to the public dialogue about this matter.
I look forward to working with you, and I would be happy to answer any questions that you may
have.
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Michael Waldman
Description
An account of the resource
<p>Michael Waldman was Assistant to the President and Director of Speechwriting from 1995-1999. His responsibilities were writing and editing nearly 2,000 speeches, which included four State of the Union speeches and two Inaugural Addresses. From 1993 -1995 he served as Special Assistant to the President for Policy Coordination.</p>
<p>The collection generally consists of copies of speeches and speech drafts, talking points, memoranda, background material, correspondence, reports, handwritten notes, articles, clippings, and presidential schedules. A large volume of this collection was for the State of the Union speeches. Many of the speech drafts are heavily annotated with additions or deletions. There are a lot of articles and clippings in this collection.</p>
<p>Due to the size of this collection it has been divided into two segments. Use links below for access to the individual segments:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+1">Segment One</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+2">Segment Two</a></p>
Creator
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Michael Waldman
Office of Speechwriting
Date
A point or period of time associated with an event in the lifecycle of the resource
1993-1999
Identifier
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2006-0469-F
Extent
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Segment One contains 1071 folders in 72 boxes.
Segment Two contains 868 folders in 66 boxes.
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Still Image
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Original Format
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paper
Dublin Core
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Title
A name given to the resource
Statements to Congressional Committee by John Koskinen
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
Michael Waldman
Is Part Of
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Box 59
<a href="http://clinton.presidentiallibraries.us/items/show/36403"> Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763296">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2006-0469-F Segment 1
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
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Preservation-Reproduction-Reference
Date Created
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6/3/2015
Source
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7763296
42-t-7763296-20060469F-Seg1-059-008-2015