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Y2K Deal Survives Second Thoughts

By Stephen Barr
Washington Post Staff Writer
Thursday, July 1, 1999; Page A10

Despite a bout of second thoughts, the White House said yesterday that it supports legislation that would limit lawsuits against businesses in the event of Year 2000 computer failures.

The White House and Congress struck a deal on the legislation Tuesday after hectic negotiations, but by yesterday morning Democratic leaders were saying several provisions needed more work and some White House aides were grousing that Republicans had not completely followed the spirit of the compromise when writing the legislative language.

Republican aides said they had written up the compromise in good faith.

Alarmed by the complaints, bill supporters, especially in the computer industry, began to worry the legislation might be in jeopardy. But by the end of the day, the White House had reaffirmed its decision to back the compromise and Republicans had moved to put the bill on a fast track.

The House Rules Committee approved the bill and forwarded it to the full House for a vote today. The Senate may follow suit, approving and sending the measure to President Clinton today for his signature.

The Year 2000 problem, known as Y2K, stems from the use of two-digit date systems in computers, raising the possibility they will interpret "00" as 1900, not 2000, and malfunction or crash.

The legislation would give companies as long as 90 days to fix any problems before a lawsuit could be brought, place limits on punitive damages against small companies, create a formula for assessing blame and require that large class action suits be tried in federal rather than state courts.

"We wanted a bill that was narrowly tailored to the Y2K problem. We do not see this in any way, shape or form as a precedent for broader tort reform, and the president is prepared to sign it to deal with this critical problem," White House spokesman Jake Siewert said.

He acknowledged the compromise "does not perfectly reflect the understanding we had but meets our overall objectives of limiting the Y2K liability problem."

Bill supporters, including chief sponsor and presidential contender Sen. John McCain (R-Ariz.), argued that computer companies and other high-tech firms could face financial catastrophe without legal protections. Opponents contended that the proposed legal restrictions would make it difficult for consumers to recover economic losses.

Some Republicans used the bill to attack the trial lawyers lobby, a traditional Democratic campaign donor. Yesterday, House Minority Leader Richard A. Gephardt (D-Mo.) said it was "completely wrong" to portray lawyers as "the bad people in this economy." Gephardt said Republicans "are trying to use this [bill] as a fund-raising tool in the high-tech industries."

Vice President Gore, in an interview with the Associated Press, acknowledged he was in a political box trying to bridge the interests of the trial lawyers, who oppose liability limits, and the computer industry, which pushed hard for the bill.

But Gore said the political pressure was "no more than is frequently the case when you have differing legitimate points of view that have to be reconciled."

© 1999 The Washington Post Company

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