Lumps of Coal or Stockings Full of Gifts?

IT Execs Wonder What Congress Will Deliver

Rep. Neil Abercrombie

OMB Director Mitch Daniels said he is hopeful Congress will propose an economic stimulus bill the president can sign.

Information technology executives are hoping Congress will be more nice than naughty as it wraps up this session's legislative business, although they say it is still unclear which way lawmakers will lean on several issues of keen interest to the IT community.

Still before lawmakers are bills and amendments dealing with outsourcing, taxation and the economic stimulus package.

Booth Jameson, director of global government affairs for the federal unit of Electronic Data Systems Corp., Plano, Texas, said there is hope that a troubling amendment in the Defense Department authorization bill, S. 1438, will be stripped entirely in the conference committee.

The amendment, which was included in the House version of the bill, would have curtailed A-76 outsourcing studies and made it more difficult for industry to win public-private job competitions. Opponents of the amendment said it would cripple government IT implementation because government lacks the necessary in-house expertise.

The amendment, originally proposed by Rep. Neil Abercrombie, D-Hawaii, had been watered down in a House compromise, but IT executives said they were concerned Abercrombie had reconsidered the compromise. Now, Jameson is hopeful that the measure has been cast aside altogether.

Eliminating the amendment would be "a major victory for the IT world, although we expect many more fights about outsourcing in the future," Jameson said.

IT executives also are closely watching the congressional debate about legislation designed to stimulate the economy, H.R. 3090. They are lobbying for accelerated depreciation of IT assets, which they say would help alleviate increased costs of doing business and help businesses stay on top of the technology curve.

Industry claims the current depreciation schedule, which allows for most depreciation over five years, is two to three years too long and forces businesses to choose between forgoing either the replacement of outdated technology or complete cost recovery.

"Reasonable depreciation schedules are even more critical during a period of economic weakness, when companies must invest to make operations more efficient and to provide increased security for their property, their data and their people. Such a provision would stimulate corporate investment and keep people working," Harris Miller, president of the Information Technology Association of America, said in a letter to members of Congress.

The provision would immediately reduce the cost of technology investments, Jameson said.

"That's important as we try to react to [the attacks of] Sept. 11 and requests for help that the government is making to the IT sector. We have a strong stake in seeing that the economic stimulus package is passed," Jameson said.

Congress remains deeply divided over the right approach to stimulating the economy, with Republicans favoring tax cuts and Democrats favoring spending increases. Senate Democrats also wanted to add $15 billion in homeland defense spending to the economic stimulus measure, but backed away in order jump-start negotiations toward a compromise.

Meanwhile, President Bush has made clear he wants Congress to stick to its agreement this fall to hold discretionary spending to $686 billion.

At a speech to the National Press Club Nov. 28, Office of Management and Budget Director Mitch Daniels reiterated the president's position: The $40 billion in emergency spending already approved is enough, and an economic stimulus measure should focus on tax cuts to stimulate spending and long-term job prospects.

"We are still hopeful [Congress] will come up with a bill the president can sign," Daniels said.

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