The $900 billion economic stimulus package moving through Congress includes as much as $100 billion in IT initiatives and infrastructure investments – more than the federal government spent on all of its IT needs last year.
The $900 billion economic stimulus package moving briskly through Congress includes as much as $100 billion in information technology initiatives and infrastructure investments — more than the federal government spent on all of its IT needs last year.
That funding has generated excitement among federal contractors and agency officials, all of whom see rare opportunities for fast-moving technology projects in health care, energy, broadband access and even the government’s shadowy cybersecurity initiative.
However, some lawmakers are questioning whether the money earmarked for IT will create the jobs the stimulus package is supposedly designed to create. Late last week, senators proposed about $100 billion in cuts, including some from cybersecurity, green IT and energy. Congressional leaders have promised to send a bill to the president's desk by Feb. 13.
Sen. John McCain (R-Ariz.) said the proposed $6 billion for broadband Internet access would take years to implement. “If we need to stimulate the economy in a short period of time, let's enact those provisions” that will do so, he said.
The IT-related spending, while substantial, is dwarfed by the nearly $1 trillion size of the total package — most of which would pay for highway work, more conventional energy initiatives, federal building and school construction, and other bricks-and-mortar projects.
Even so, the rush of dollars to IT and related research and development is unprecedented — about $75 billion in the House bill and $94 billion in the Senate version, according to a Federal Computer Week analysis. The federal government spent a total of $70 billion on IT in fiscal 2008.
This is one of the first times Congress has debated the immediate economic benefits of a major investment in digital infrastructure. Given President Barack Obama’s reputation as an avid promoter of new technology, the IT community is feeling doubly favored by the economic recovery package he has set in motion.
“There is a lot of excitement about this infusion of funding for government IT,” said Deniece Peterson, principal analyst at Input, a market research firm. “It creates a special opportunity.”
The House easily passed its version of the bill, but Senate Republicans are opposing many provisions, and some lawmakers, such as Sen. Susan Collins (R-Maine), have pledged to shrink the total package. Critics say it might not provide enough short-term stimulus and could create unacceptably large deficits, while supporters say the current economic crisis demands that the government take action.
The IT community is working hard to counter perceptions that the technology initiatives would not spur economic growth. The Information Technology and Innovation Foundation recently evaluated a hypothetical $10 billion investment in each of three technologies — broadband access, health IT and smart electrical grids — and predicted that they would create or retain about 949,000 jobs in one year. That is more jobs than the same investment in roads and bridges would create, said Robert Atkinson, one of the study’s authors.
“Anyone who says this is a waste — that is nonsense,” Atkinson said. “It is completely logical to include digital infrastructure investments in the stimulus proposal. They will have a greater stimulative effect than other spending.”
The chief impacts on the IT industry and government contractors would be in health care, energy efficiency, broadband and cybersecurity. Lobbyists are already making their pitches for how to target the IT spending. Privacy advocates and health insurers are debating changes in privacy provisions, public safety organizations are pressing for inclusion in the broadband investment, and large corporations are fighting “buy American” provisions in the Senate bill.
Health IT is the technology receiving the most support, with approximately $20 billion in the House bill and $23 billion in the Senate bill dedicated to expanding the use of electronic health records and building a national health information exchange. The Office of the National Coordinator for Health IT would get $2 billion in the House bill and $5 billion in the Senate bill to help build that exchange. The rest of the money would go to help physicians and hospitals adopt electronic information systems for patient records.
However, privacy remains a key challenge, as the Bush administration discovered during its efforts to expand the use of electronic health records. But privacy groups have so far approved of the provisions in the House and Senate stimulus bills.
Patient Privacy Rights, a watchdog group, “supports the practical, commonsense measures in the [House] bill that begin to restore the consumer privacy protections that have been eliminated over the last eight years,” said Ashley Katz, the organization’s executive director.
The Senate bill includes $9 billion for the National Telecommunications and Information Administration’s program to improve access to broadband, while the House bill has $6 billion for broadband networks. Lawmakers in both chambers are focusing the spending on rural and underserved areas of the country.
One of the key policy debates is whether to ensure that the broadband networks are built to allow access to devices from multiple vendors. Consumer groups, including Public Knowledge, have praised the House for including provisions to that effect, but some industry executives say it might discourage companies from building the networks because of the potential benefits to competitors.
Public safety organizations and advocates for 911 emergency call centers are asking Congress to include provisions that would accommodate their need for additional broadband capacity, but Congress thus far has not specified any funding for that purpose.
Atkinson and others warn that Congress should avoid imposing too many restrictions on broadband network developers. “Everyone wants their piece of it,” Atkinson said. “But tying the broadband networks to public safety is not in the cards, nor should it be.”
Both the House and Senate versions of the economic stimulus bill would target billions for green Energy Department programs that incorporate IT. While improving the environment and conserving resources, efforts aimed at energy efficiency and research into renewable energy would also stimulate the creation of what Obama has termed green-collar jobs.
The energy provisions would boost IT investments in that field and support jobs with IT contractors, said Joshua Lamel, senior vice president of federal government affairs at the Technology Association of America.
“What Obama, the House and Senate are trying to do here is to move into a 21st-century energy-delivery system for the federal government, homes and businesses,” Lamel said. “That involves upgrading some of the IT systems around that.”
For example, it is possible to incorporate IPv6-enabled sensors into buildings so the sensors could interact with a smart electrical grid and adjust the supply of electricity to the buildings based on temperature changes. “You’ll have communications between the electric grid and everything related to energy usage in an office,” Lamel said.
The House and Senate bills also allocate money for technology-related projects at the State Department, including $120 million to build a backup information management facility and about $98.5 million for State’s portion of the government’s Comprehensive National Cybersecurity Initiative.
James Lewis, director of the technology and public policy program at the Center for Strategic and International Studies and a former Foreign Service officer, said the IT upgrades to State are necessary and appropriate. But he questioned whether they belong in the economic stimulus package.
“It’s nice to have, but it’s not a stimulus,” he said.
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