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Fed: Y2K to gobble $5 billion

Though the federal government has earmarked roughly $5 billion in the 1999 budget to handle the bug, officials say more will be needed.

Though the federal government has earmarked roughly $5 billion in the 1999 budget to handle the Year 2000 bug, administration officials say more will be needed before the new century begins.

The funding includes part or all of a $3.2 billion pool of money set aside for unanticipated contingency costs to cover anything from military expenditures or the Year 2000 bug, said Jack Gribon, a spokesperson for the President's Council on Year 2000 Conversion.

It also includes a $2.25 billion emergency reserve fund created by the Senate Appropriations Committee that agencies can tap for fixing computer systems plagued by the millennium bug.

In approving the $2.25 billion, Appropriations Committee chairman Ted Stevens (R-Alaska) said in a statement that one year from now will be too late to respond to the government's Year 2000 needs. "We must make these resources available now, subject to appropriate review, to ensure all necessary government functions are not impacted by the Year 2000 problem."

But Gribon admits more cash may be needed if the anticipated cost for fixing all government computer systems rises, as it has already.

The latest Office of Management and Budget report said the cost to rid the Y2K bug from federal systems will be $800 million more than expected, skyrocketing from an original estimate of $3.9 billion to $4.7 billion.

The OMB added the Labor Department to its list of agencies making poor progress in quashing the millennium bug, according to the agency's latest quarterly report tracking the progress of Year 2000 fixes.

The report lumped Labor with the Energy, Education, Health, and Human Services, and Transportation departments, as well as the International Development Agency, in the critical, or "Tier One," list. These are the agencies OMB says are not making "significant progress" in converting systems. The next report is due next month.

"We've said all along that we expect the cost estimates will go up," said Gribon, hinting that even more funds may needed in the future. "On the other hand I don't think these figures will double."

The bug was created by 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 balances to elevator maintenance to building security procedures.

The budget still needs to be approved by Congress, and Gribon wouldn't say how much more money will be needed to handle the Year 2000 technology problem.

"We're in the midst of the 1999 budget process," he said. "Beyond [the $5 billion], if there's a need for more emergency funding, we'll cross that bridge when we get there."