White House threatens to veto bipartisan Y2K plan

WASHINGTON, May 19 (Reuters) - The White House Wednesday threatened to veto a bipartisan Senate plan to protect companies against lawsuits stemming from the year 2000 computer problem, despite changes added by Democrats to protect the rights of consumers.

The veto threat was yet another blow to legislation by Senate Commerce Committee Chairman John McCain of Arizona. The measure stalled this week in the Republican-led Senate, as lawmakers sparred over gun control and other legislative priorities.

Backed by influential business groups, McCain's bill would delay the filing of year 2000 computer bug lawsuits during a 90 day "cooling-off" period and make it harder for consumers to sue companies because of computer crashes next Jan. 1.

Under a compromise with Christopher Dodd of Connecticut, Dianne Feinstein of California and other senators, McCain agreed to amendments boosting consumer protection and eliminating most caps on punitive damages. McCain also agreed to drop a provision that would have protected individual corporate officers and directors.

But the White House, in a letter to Senate Republican Leader Trent Lott of Mississippi, said the compromise did not go far enough.

"If (the bill) were presented to the president in its current form or as amended by the Dodd amendment, the president's senior advisors would recommend that he veto the bill," Deputy White House counsel Bruce Lindsey and National Economic Council Director Gene Sperling told Lott.

The millennium bug, often referred to as Y2K, arises because many older computers record dates using only the last two digits of the year. If left uncorrected such systems could treat 2000 as 1900, generating errors or system crashes next Jan. 1.

McCain and other supporters said computer and software companies and other businesses needed protection to avert a flood of "frivolous" Y2K-related lawsuits. According to some estimates, litigation costs alone could add up to $1 trillion. But the White House and many Senate Democrats said McCain's bill might discourage companies from fixing computers by Jan. 1 and make it too hard for consumers to sue for damages.

Instead, Lindsey and Sperling said the White House supported a less intrusive bill by Sen. John Kerry, a Massachusetts Democrat, and Senate Democratic Leader Tom Daschle of South Dakota.

Like McCain's bill, Kerry's would give defendants up to 90 days to fix Y2K problems before a lawsuit could be filed. It would make it harder to file certain class action lawsuits and would bar damages for economic losses.

At the same time, Kerry and Daschle said their plan would safeguard consumer rights. For example, Democrats said they would not cap any punitive damage awards.

The Republican-led House approved its own measure to curb Y2K lawsuits earlier this month, brushing aside a similar veto threat from the White House.

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Everybodys gotta keep somebody happy. Lest we forget their livelihood depends on it!!

Ray

-- Ray (ray@totacc.com), May 19, 1999

Answers

Thanks, Ray. Is there a link, perchance??

-- Brooks (brooksbie@hotmail.com), May 19, 1999.

Here is the link:

Reuters MoneyNet

Hopefully it will not have scrolled off.

Ray

-- Ray (ray@totacc.com), May 19, 1999.

What is really interesting is that the Democrats intially refused to sign off on this until one limitation was dropped. The Republicans at first refused, but later caved in to the Democrats demand that this limitation be removed from the bill.

There was going to be a limit of $1,000 per hour for lawyer fees.

-- Ken Seger (kenseger@earthlink.net), May 19, 1999.

What riles me is that irresponsible companies like Intel and Microsoft are buying off a bunch of sleazy politicians to get out of their responsibility for causing this problem. They have known about this problem for years and have done too little too late. In the end, the consumer will be the one to pay, as always. I do not like or trust Clinton, but if he vetoes this travesty I am all for it.

-- Mr. Adequate (mr@adequate.com), May 19, 1999.