State of the Union Speech Short on High Tech Issues

(January 28, 2000) President Bill Clinton's speech to the Congress on January 27 on the "state of the union" addressed the e-rate and digital divide, and government spending on research, but little else pertaining the computer, software, Internet or communications industries.

Clinton spoke extensively about education. He stated that "we need a 21st Century revolution in education." However, the only high tech education or workforce issue which he addressed was the e-rate. Clinton continued:

"We know we must connect all our classrooms to the Internet. We’re getting there. In 1994, only three percent of our classrooms were connected. Today, with the help of the Vice President’s E-rate program, more than half of them are; and 90 percent of our schools have at least one connection to the Internet."

While Clinton credited Al Gore for the e-rate, it is a program established and controlled by the Federal Communications Commission, which is an independent federal agency. Nevertheless, Gore claims credit for the program; also, the program's critics often refer to it as the "Gore Tax," because consumers pay for the program through a charge on their monthly phone bills.

Clinton proposed expanding the e-rate program to cover computers. He stated that "Today, opportunity for all requires something new: having access to a computer and knowing how to use it. That means we must close the digital divide between those who have these tools and those who don’t. Connecting classrooms and libraries to the Internet is crucial, but it’s just a start."

Presently, the FCC's e-rate program subsidizes telephone service, Internet access, and computer networking for schools, libraries, and rural health care clinics. It does not subsidize computers.

Similarly, the National Telecommunications and Information Administration, of the Department of Commerce, which conducts an annual study of phone and Internet use, generally describes the "digital divide" as the gap in phone use and Internet access: rich versus poor, urban versus rural, and whites and asians versus blacks and hispanics.

There is at least one bill pending in the Congress that is designed to increase the number of computers which companies donate to schools and libraries, by allowing them a tax deduction for donating a two year old computer. Currently, a computer must be three years old to be eligible for a deduction. This is the New Millenium Classrooms Act, sponsored by Sen. Spencer Abraham (R-MI) and Sen. Ron Wyden (D-OR). However, Clinton did not comment on this bill, or its contents.

Clinton added that "I thank the high-tech companies that are already doing so much in this area -- and I hope the new tax incentives I have proposed will encourage others to join us."

Clinton's speech did not touch on the issue of filtering. Sen. John McCain (R-AZ) is one of the leading backers of a proposal to require that schools and libraries which receive e-rate funding use porn filtering software on computers used by children.

Clinton also referenced the Internet in his proposal for more funding for school repairs. He stated:

"But we can’t finish the job when a third of all schools are in serious disrepair, many with walls and wires too old for the Internet. Tonight, I propose to help 5,000 schools a year make immediate, urgent repairs. And again, to help build or modernize 6,000 schools, to get students out of trailers and into high-tech classrooms."

Clinton did not address the shortage of high tech workers. He said nothing about the many bills pending in Congress to increase the number of H1B visas given to high tech workers, or to create a new category of visas. Nor did he talk about funding for the study of math, computer science, electrical engineering, or other areas of expertise in short supply in high tech industries.

He did reference "high-tech jobs", but only in the context of stating that women earn less money than men. He stated:

"We can’t reward work and family unless men and women get equal pay for equal work. The female unemployment rate is the lowest in 46 years. Yet women still earn only about 75 cents for every dollar men earn. We must do better by providing the resources to enforce present equal pay laws, training more women for high-paying, high-tech jobs, and passing the Paycheck Fairness Act."

Clinton also briefly referenced threats to computer systems, but in the context of a broader section of the speech on national security threats. He said that another "challenge is to keep the inexorable march of technology from giving terrorists and potentially hostile nations the means to undermine our defenses."

In addition to dealing with nuclear, missile, and chemical and biological threats, the U.S. must protect its "vital computer systems from hackers and criminals".

Clinton also praised the contribution of information businesses to the economy, and implied that government spending is partly responsible. He called for more government spending.

"Science and engineering innovations are also propelling our remarkable prosperity. Information technology alone now accounts for a third of our economic growth, with jobs that pay almost 80 percent above the private sector average. Again, we should keep in mind: government-funded research brought supercomputers, the Internet, and communications satellites into being. Soon researchers will bring us devices that can translate foreign languages as fast as you can speak; materials 10 times stronger than steel at a fraction of the weight; and molecular computers the size of a teardrop with the power of today’s fastest supercomputers.

To accelerate the march of discovery across all disciplines of science and technology, my budget includes an unprecedented $3 billion increase in the 21st Century Research Fund, the largest increase in civilian research in a generation."

Finally, Clinton addressed privacy. "These new breakthroughs must be used in ways that reflect our most cherished values. First and foremost, we must safeguard our citizens’ privacy. Last year, we proposed rules to protect every citizen’s medical records. This year, we will finalize those rules. We have also taken the first steps to protect the privacy of bank and credit card statements and other financial records. Soon I will send legislation to the Congress to finish that job. We must also act to prevent any genetic discrimination by employers or insurers."

To date, the Clinton administration has rejected calls for government regulation of online privacy, except in the context of minors. The Clinton administration has instead promoted "industry self-regulation." There are several bills pending in Congress that would provide for some government regulation of online privacy.

Notably, while Clinton tried to claim credit for all sorts of things, there were a number of developments in high tech for which he could have claimed credit, but did not. He did not reference that the government's computer systems continued to function properly on January 1, 2000. This was due in part to the efforts of his assistant, John Koskinen. Also, while Clinton advocated more spending on government research, he did not reference that late last year the Congress passed, and he signed, a five year extension of the research and development tax credit, which will foster research in the private sector. Finally, he did not mention his administration's decision to liberalize encryption export restraints.

Also, Clinton had nothing to say about a number of other hot high tech issues. He did not address whether the government should regulate or mandate open access to broadband Internet access systems. Nor did he comment on any of the many pending legislative proposals to limit Internet alcohol sales, Internet gun sales, Internet cigarette sales, or Internet gambling.