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Corrected: Press Briefing by Chief of Staff John Podesta and OMB Director Jack Lew (1/16/01)

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                              THE WHITE HOUSE

                       Office of the Press Secretary
For Immediate Release                       January 16, 2001

                             PRESS BRIEFING BY
                        CHIEF OF STAFF JOHN PODESTA
                         AND OMB DIRECTOR JACK LEW

                       The James S. Brady Press Briefing Room

1:15 P.M. EST

          MS. GEGENHEIMER:  Good afternoon.  Today we are releasing the
third and final report of the Clinton-Gore administration's e-commerce
working group, which is entitled, "Leadership For The New Millennium:
Delivering on Digital Progress and Prosperity."  White House Chief of Staff
John Podesta and Director of the Office of Management and Budget Jack Lew
are here to discuss the report and the administration's leadership on this
issue.  And Jake Siewert will follow.

          MR. PODESTA:  Thank you.  I'm going to make a brief statement,
and then Jack is going to make a brief statement, and then we're going to
take questions.

          When President Clinton and Vice President Gore took office eight
years ago, they were convinced that technology would be and could be the
engine of economic growth.  That's why, in the campaign in 1992 and then in
the way they governed, starting in 1993, they made promoting technology,
along with fiscal discipline and opening markets and investing in people, a
key component of their economic strategy.

          It was a profound decision for America's future.  Over the past
five years, the information technology sector, which accounts for 8.3
percent of U.S. GDP, accounted for almost one-third of U.S. economic

          More companies are using information technology to increase their
productivity, develop customized products and deliver online training to
their employees.  In 1993, when President Clinton entered office, there
were 50 web sites on the Worldwide Web; today there are 25 million.  People
are using the Internet to get lower prices for home mortgage, make better
informed decisions about their health care needs, and check on the voting
records of their elected representatives.  And we're, of course, all using
it to get low discounted airfares on January 20th.  (Laughter.)

          Today we're releasing the third and final report of the
administration's e-commerce working group, which is entitled, "Leadership
For The New Millennium:  Delivering on Digital Progress and Prosperity."
This report outlines the work that we have done to promote electronic
commerce, reinvent government for the information age, bridge the digital
divide and ensure that all of our children have access to education

          None of this would have been possible without, of course, the
creativity and determination of entrepreneurs and community-based
organizations.  But the administration played an important role in creating
the right policy environment that allowed these efforts to flourish.  The
sum of the principles and policies that the administration has set have
really helped create the rules of the road for the information age.  And
they have largely been accepted around the world.

          First, the administration established a policy framework that
emphasized private sector leadership, and the avoidance of unnecessary
government regulation, and got other countries to adopt those principles.
For example, we were able to create an agreement in the WTO to make
cyberspace a duty-free zone.

          Second, the President signed legislation that allowed the
Internet and e-commerce to flourish.  Legislation that gave online
contracts the same force of law as paper contracts, protected intellectual
property in cyberspace, established a temporary moratorium on new
indiscriminatory taxes on Internet access and electronic commerce.

          I think, as the paper we handed out notes, some of the estimates
range this past year that business to consumer e-commerce will now total
$61 billion, and business to business e-commerce could total $184 billion.
That's from really a trickle of electronic commerce that occurred when the
President came into office.

          Third, the President and Vice President worked to protect
privacy, especially in sensitive areas, such as medical and financial
records, and children's privacy.  They wanted to make sure that all
Americans had the opportunity to enjoy the benefits of the information age.
That's why they've worked so hard to connect schools and libraries to the
Internet, and to train teachers to be as comfortable with a computer as
they were with a chalk board.

          Thanks to the e-rate, and grass-root efforts like NetDay, the
percentage of schools that are connected to the Internet is now 95 percent.
The percentage of classrooms connected to the Internet increased from 3
percent in 1994 to 63 percent in 1999.  We're spending about $2.25 billion
a year now through the e-rate to help schools and libraries provide the
services that we're talking about.

          They also supported a national network of community technology
centers in low-income urban and rural neighborhoods, and worked to ensure
that the information technology is accessible to the 54 million Americans
with disabilities.  The administration also boosted R&D through an
unprecedented five-year extension of the R&D tax credit, and increases in
government support for R&D.

          It's worth remembering that today's Internet is an outgrowth of
the ARPANET which the government began funding in 1969.  President Clinton
and Vice President Gore supported research initiatives like the Next
Generation Internet, which is connecting 180 universities at speeds that
are up to a thousand times faster than today's Internet; and
nano-technology     , which could eventually allow us to store the Library
of Congress' collection in a devise the size of a sugar cube.  These
initiatives will help ensure that America maintains its technological
leadership well into the 21st century.

          The administration fought for telecommunications reform so that
consumers would enjoy greater choice, faster deployment of broad-band
networks, and lower prices.  There are now providers of high-speed Internet
access in 70 percent of the nation's zip codes.

          The administration also made more spectrum available to the
private sector for new digital wireless services.  The number of wireless
subscribers increased from 11 million in 1992 to 108 million today.

          I want to turn the platform over to Jack to talk about what we've
done on electronic government, but as I'm doing so I also would like to
introduce a few people who really drove the creation of this report:  David
Beier, who chairs the working group on electronic commerce and is the
Policy Director for the Vice President's Office; Sally Katzen from the
Office of Management and Budget who is our leader on electronic government;
Tom Kalil, the Deputy Director of the National Economic Council, who has
been with the President since the start of his journey on this and has
probably taught him how to use a computer somewhere along the way, who
right from the beginning in the 1992 campaign, Tom has spearheaded that.
And if you wait one moment, Elizabeth Echols, who is the Executive Director
of the committee.

          Let me turn it over to Jack.

          MR. LEW:  Thanks, John.

          John has focused on the many things we've done in e-commerce and
in terms of making access to the Internet available broadly to people
throughout the country at all economic levels.  I wanted to focus for a few
minutes on what we've done over the last eight years to develop
e-government and to really bring government into a whole new generation of

          E-government provides access to government information 24 hours a
day, 7 days a week.  It's focused on the needs of our citizens and
businesses, and with access to the Internet, anyone can get access to
government information, services and transactions, easily, quickly,
efficiently and responsively.

          The President and Vice President have taken the lead and we've
made remarkable progress in a short time.  Let me give you just a few
examples.  One-stop government information:  First Gov provides a simple,
straightforward mechanism for the public to locate information and
services.  Users can access 27 million federal agency web pages at one
time.  They can search half-a-million documents in less than a quarter of a
second, and handle millions of searches a day.

          The private sector has played a key role in creating First Gov,
and now helping us to broaden it.  Dr. Eric Brewer from the University of
California-Berkeley, and co-founder and chief scientist of Inktomi, is one
of the people who has really contributed a lot to the development of First
Gov, and it is something that has been a partnership with the private
sector, academia, state and local governments, and nonprofit organizations.

          Over 40 federal agencies have been working together on web
portals designed specifically for people with special needs, people with
disabilities, seniors, businesses, students    and workers.  Recently,
First Gov introduced a new feature called Facts For You, through which a
citizen can learn about housing prices, weather patterns, school
performance, diet, airline safety, on-time performance, and health quality.

          First Gov currently links to state and local web sites, but very
soon it's going to be interactive with state and local web sites, so that
there will be one site that you can go to to access information not just
from the federal government, but state and local government as well.

          In the area of government services, we have already made enormous
progress that puts us on a path towards making all government services
online by October 2003.  You can now make a reservation in a national park,
follow the progress of the space shuttle, check the National Weather
Service.  And if you look at the programs that most people rely on the
federal government for, you can actually apply for benefits in many cases
-- Social Security benefits; the public can apply for benefits, track their
benefits.  The Veterans Administration -- veterans can apply for and send
completed applications electronically to their local VA offices.

          Forty-two million people are filing their tax forms
electronically.  Student assistance -- you can get your applications
online, file them online, student aid can be applied for online.  And in
the last six months, 10.5 million loan applications have been process
online in a timely manner.

          Government procurement -- GSA Advantage allows federal employees
to access quality products online at lower prices.  The number of items has
grown 57 percent; sales has grown 50 percent in 2000, with over a $1
million a day in sales in late September.

          Fed Bus Ops allows agencies to post contracting opportunities to
the web and vendors, and to download these notices directly from the
Internet.  Beginning as a five-agency pilot, now 19 agencies participate,
and 60,000 vendors are involved.

          The Smart Pay program provides purchase, travel and fee charge
cards to government agencies.  Use of purchase cards streamline
procurement, invoicing and payment processes, and it saved the federal
government $1.1 billion in fiscal year '99 on total sales of $14.8 billion.
That's a tremendous savings and a large percentage reduction in cost.

          A new service, Pay.gov will be operational in 2002 to be a
one-stop shop for making electronic payments online.

          We've also developed the public key infrastructure which is
necessary to establish security in this electronic government world.  It
involved the issuance of digital signatures, establishment of cross-agency
infrastructure for the use of digital signatures, and acceptance of common
digital signatures by multiple agencies.

          John mentioned the privacy issues.  There very much of a concern
in e-gov, as well as in general on the Internet.  With respect to privacy,
last spring we at OMB issued government-wide policy directing federal
agencies to post their privacy policies on key web pages.  And virtually
every agency has responded and posted those guidelines.  It tells you why
data is being collected and how it's being used.

          More recently, we've put out guidance to track user -- that
prohibits the tracking of user behavior across government sites and over
time.  In addition, we directed each agency to describe its privacy
practices and the steps to comply with administration privacy policies in
its budget submissions, to make sure that this isn't just something that's
off on its own, but it's very much a part of how we look at agencies and
whether or not they're doing their basic jobs.

          In terms of accessible federal web sites, making information
technology available is critical in keeping our economy going and reaching
all people, people with disabilities, people who have special needs.  In
July, all large agencies succeeded in making their principal web sites, as
well as their top 20 web sites, by volume, accessible to persons with

          We've documented, in this report, 1,300 separate electronic
government initiatives, originating from 36 agencies.  All 1,300 have been
entered into a database which is sortable by type of transaction, type of
government program, type of technology.

          Technology is the promise of changing the world.  It offers a
possibility of not only making government better and more efficient, but
fundamentally to rethink how government should work.  We made enormous
progress and we have set a foundation which really brings the business of
government into a new century, with a whole new technology.  As John noted,
here the people who have done the leg work for many years on this, David
Beier who chaired the committee, the working group, Sally Katzen, the
Vice-Chair, Tom Kalil and Elizabeth, and I think we should now invite them
up, so that if we get questions, they can participate in responding to
them.  Thank you.

          Q    Can you tell me what's going to happen to the President's
personal papers and official communications?  Maybe it isn't related
exactly to what you're saying, but is there some sort of rule of thumb here
that you operate under in terms of what will be preserved?

          MR. PODESTA:  Let me take the paper side and then I'll take the
electronic side, and somebody will correct me if I get this wrong.  The
official papers of the President and essentially the White House staff
operate under the Presidential Records Act, which I think was passed in
1979.  And we are right now in the process of archiving all that material.
It will be sent to, under the custody of the National Archives, where it
will be stored at the Clinton Library.  And that is true for electronic
records, as well as paper records.

          We were kidding around as we came in, one of the computers in the
Lower Press here has the death notice on the computer which says that the
files of that computer have been officially archived and it is no longer in

          So the material that is on the hard drives, the material that --
we were the first administration to try to, as you well know and have well
documented, to try to enter the thorny field of archiving our electronic
mail records.  We, I think, have done that.  We've obviously experienced a
couple of problems in doing that, but I think no organization, probably
private sector or public sector, has tried harder to produce a system that
would really archive the history and the decision-making, both paper and
electronic, of this administration.

          And that work is ongoing.  By the time noon rolls around on
January 20th, everything will be boxed up, the hard drives will be
downloaded, the electronic mail will be stored.  It will all, again, be, at
that point, under the custody of the National Archives, and it will be
available pursuant to the Presidential Records Act, which staggers the
release of that information, depending on what kind of information is in

          Q    You stamp it "classified," or to be opened in 50 years?

          MR. PODESTA:  Well, for example, if it is classified, then you've
got to go through the process of declassifying the information before it's
publicly available.  It could be accessed, for example, by Congress or
other sources who have access to classified information.  There's some
personal information that pursuant to the Presidential Records Act, as I
said, there's a schedule in the act itself which makes that available
through the Freedom of Information Act, once it's fully available to the
National Archives.

          Q    Do the hard drives go to the Archives?

          MR. PODESTA:  I believe that the actual -- I'm not certain about
that, but I believe the hard drives actually do go to the Archives.  I'll
check that.

          Q    John, what happens actually on Saturday at noon to the White
House web site?  Does that change and all of a sudden it becomes the Bush
White House?  And what happens to -- there is on your web site a virtual
library that goes back eight years of all the --

          MR. PODESTA:  We're working with the Archives to essentially
transfer the information from our web site to an Archives web site which
would be available, in essence, immediately.  I don't know whether we'll be
able to turn the switch, but that's our goal, so that at 12:01 p.m. you can
look at the Clinton administration's library on a National Archives web

          With regard to the incoming administration, I don't know exactly
what their plan is, but at that moment, they would have control of the
White House web site, and I assume that they will try to stand up their web
site virtually instantly with coming into office.  I don't know if that
will be the first order of business and whether it will be up and available
on Saturday, but I would think by Monday they'll probably have that up and

          Q    So White House.gov as of Saturday or Monday won't have the
Clinton records on it anymore -- is that your understanding?

          MR. PODESTA:  We'd probably be happy to have a link to the
Archives web site if people wanted to come here to find a link to the
Archives web site, but we'll have a new URL, and people will be able to
find Clinton information, Clinton administration information through that
Archives web site.  And that should be up and running and part,
essentially, of the process that is envisioned in the way the library will
be conducted.

          I think one of the things the President very much wanted to do
was to make sure that in working with the Archives, which again has custody
-- it will be their information -- as well as building the library,
displaying the information, et cetera, that these new tools are available
so that people around the country can really have greater access than any
previous administration has done.  It's an important tool, and it's an
important opportunity I think for the American people to be able to go
online and be able to retrieve information, retrieve documents, et cetera.

          The full range of documents, obviously, as I mentioned -- paper
documents, which ultimately will -- many of which have already been scanned
and could be available electronically; others will be scanned and available
electronically.  But that takes place, again, over some period of time, and
pursuant to the Presidential Records Act.

          Q    John, this technology is obviously evolving.  Could you, and
maybe some of the others up there identify what you think on the e-commerce
side are the one or two biggest issues that loom in the immediate future?
And then, Jack, the same thing for streamlining further government use of
the Internet?

          MR. BEIER:  On the e-commerce side of the equation, the two
biggest public policy issues that are going to confront the next
administration and governments across the world are going to be taxation
questions.  That is, whether a particular economic activity can be taxed at
all, and if so, by whom, and using what rules.  This administration,
through the Treasury Department, has taken a leadership role on an
international basis to try to create neutral, transparent rules that
neither discriminate against or in favor of electronic commerce.  We've
made a lot of progress, but a lot of those key decisions haven't been fully

          And the second is going to be, in my judgment, whether the rules
that we have in place with respect to financial records, medical records
and privacy of children need to be supplemented at all by additional safe
harbor kind of rules for privacy on the Internet.  We've tended to take the
view that the private sector should take a leadership role, and they've
done a very good job of improving privacy compliance.  But I'm sure that
that's going to be a topic hotly debated in the Congress this next year.

          Q    When you say children, what do you mean?

          MR. BEIER:  During this administration, the Children's Online
Privacy Act passed, and it's been fully implemented by the Federal Trade
Commission, with a set of regulations.  So children 13 and under already
have statutory protection, a set of rules that apply to them in terms of
data collection and use.  What's not done are data collection relating to
items that are not financial and that are not medical.  And that's, as I
say, going to be for the next administration and for this Congress.

          MS. KATZEN:  With respect to e-government, I think the two
greatest challenges and developments that you'll see is moving from
information to services and transactions.  Right now you can get a lot of
information.  You can also get a lot of forms, which you download, fill in,
and mail back.

          What the agencies are starting to do is to be able to take the
information online, process the information, and send you electronically
your license.  DOT has done this, VA is doing this.  It's becoming -- it's
a transforming thing.  It's not just automating the processes.  It's
transforming the way you do business.  And this is going to happen
throughout the government, in terms of ability for citizens to deal with
their government.

          I think the second is in the area of security.  One of the
problems has always been how do you authenticate that the person who says
he or she is who she says he or she is -- well, in any event, you get the
picture.  It's difficult, because a dog on the Internet can be just as much
a person.  The idea is to have a digital signature that would be as real,
in effect, as a pen and ink signature.  That you can authenticate who it is
who's sending it and that the message to which it's attached has not been
tampered with in transmission.

          The private sector is working hard on this.  We've been working
hard on this in partnership with them.  And the trick will be to enable a
common signature to be used with multiple agencies.  We have something
called PKI, Public Key Infrastructure.  It's an infrastructure that enables
us to use it.  And what we want is, if you have a digital signature that
you're using with Department of Transportation for licenses for your
trucks, that you can also use it with VA or with IRS to pay your taxes.
And we're working on those kinds of bridges, as they're called.  And I
think with that breakthrough, there will be an enormous simplification and
streamlining of government for citizens.

          Q    CBO is going to come out in a couple of weeks with its
revised projections of the budget outlook, and the economists expect, given
the economy has slowed, to have some dramatic impact on the outlook for the
surplus.  What are your own internal numbers and projections showing --

          MR. LEW:  Well, just today we've put out a report that has our
baseline projections and our economic projections in terms of the
consequences on the budget for the next 10 years.  And what is in our
report shows that there is still a very substantial surplus.  Not counting
Social Security or Medicare, it shows that with the baseline there is no
change in policy -- there's a surplus of $1.9 billion over the next 10

          We've also included an analysis which goes a step further and
says, what's likely to happen -- things like the research and development
tax credit that always get extended.  If you go the next step and ask how
much is there really that's available for new policy, you quickly go down
from $1.9 billion to $1.6 billion.

          I think one of the things that gets lost in any of the
discussions is that if there is a decision to spend the surplus, be it on
the tax cut or on spending programs, the cost of paying interest goes up
very rapidly.  It can be hundreds of billions of dollars, depending on the
timing and the out-year impact of the policies.

          I think that any decisions that are made with regard to the use
of the surplus have to be prudent ones, and that means you have to look at
the moment you're making the decision for all the competing demands.  It's
very possible that the first round of decisions will be the last if the
surplus isn't there when you're done with it.  And I think that the report
that we've put out today establishes a baseline against which actions can
be measured, against which program trends can be measured, whether or not
more kids have access to education, or less; whether or not more people
have access to health care, or less.  I think it's a very important
beginning point in the budget process for the coming Congress and

          Q    John, going back to the Internet, are you predicting that in
the next 10 years paperwork will disappear?

          MR. PODESTA:  I think that if -- anybody who has worked in a kind
of paperless environment would be crazy I think to predict that paperwork
will disappear.          I think that it will be transformed.  I think that
the gains that this technology is showing in productivity, not just in the
information technology sectors, per se, but as they essentially trickle
through, or flood through, the economy, will mean that many transactions
that used to take place that were slower, that were more cumbersome, that
were more paper-intensive, will be able to be done electronically.

          But I think that the fact that some things will continue to
happen in hard copy -- I'll probably, I'll be the last guy to continue to
read a newspaper, I suppose, because I think there are some features of
holding on to something that at least are comforting.  But I think that
you'll see this technology taking over more and more functionality,
productivity increasing across the board, not just in the .com economy or
in the information technology-intensive economies, but across the board,
throughout the economy.  That's the wave of the future and I suspect that
that will accelerate rather than just keep moving in a linear direction.

          Q    How will the U.S. deal with the underdeveloped and many
third world countries who cannot afford computers or Internet and who do
not have today --

          MR. PODESTA:  Well, I was thinking as Sally was talking about the
services that might become available through U.S. government agencies, the
President likes to talk about the fact that when he was in India he got a
driver's license online.  Now, he didn't have to take the driving test,
which may have -- if he was in the United States that may have prevented
him from getting a driver's license, I don't know.  He hasn't driven in a

          But I think that we've placed a major emphasis on this in terms
of the President gave an important speech I think in the UK here when he
went on the trip to Ireland and to UK last December, I guess, about that.
I think that it's clear that we can't just be concerned about the digital
divide in the U.S., although that has been a central concern of ours.
We've got to worry about it around the world.

          But these kinds of technologies can be rapidly deployed and
empowering, and I think India is a very good example of that.  When we were
in Rajasthan, we saw the power of having one community computer that was
available in a town that enabled a woman's co-op to be able to get into the
production of milk.  We saw how health information could be delivered
online.  And so the most advanced, rapid information could reach the places
in the world that are perhaps, in a different respect, some of the furthest
behind what you see in the United States.  So I think there's great
promise, as well as -- just to finish up.

          Q    How will the U.S. in their relations with India in the
future under the new administration?

          MR. PODESTA:  Give me that one more time.

          Q    The relations between U.S. and India as far as IT or
computers are concerned --

          MR. PODESTA:  I'm not sure I'm in a position to judge that.  I
look forward to being able to utter the words -- as I probably am going to
do right now -- you won't have me to kick around anymore.  (Laughter.)  But
I'll leave that question to my successor.

          Q    What are your farewell remarks?  (Laughter.)

          Q    Stories have oftentimes gone through internal White House
communication to tell very vivid stories many years later about how White
Houses came to certain decisions.  But you've learned in this
administration that e-mail can become not only a -- of doing that, but also
a source of controversy.  What advise do you have to this and any
succeeding administration about how White House staffs should handle their
e-mail communications?

          Q    Don't write.

          MR. PODESTA:  Yes.  Well, I don't think I would say that.  I
think people are learning this in the private sector, quite frankly, as
well as in places like the White House, that there is more formality than
people I think expect out of an e-mail transaction.  There is a record left
behind.  There are footprints that don't take place in a telephone
conversation.  And I think that that will probably cause some people I
suppose to think a little more as they compose it at the keyboard or maybe,
in a year or two, as they compose by talking to their computer.  But
because I think a record is left behind, people have to be able to come to
grips with that.

          But it's also an extremely -- I think from our perspective, we
have been an active administration and I think the ability to communicate
relatively instantly with a wide variety of people to be able to kind of
network, to be able to use electronic mail and electronic conferencing
technology, to be able to share information has been critical to our
ability to stay on top -- like I think any modern organization -- to stay
on top of what's going on, and to be able to have a dialogue.

          So I think it will -- you've got to be able to use it, but you've
got to be smart about it and you can't be a smart-aleck.  So that means
that I won't be able to serve in any future government.  Thank you.

                             END        1:46 P.M. EST

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