WASHINGTON -- The Year 2000 computer problem likely will have a more serious impact overseas than it will in the United States, according to the Senate's leading Y2K expert.

That isn't to say the computer problem is not likely to have severe ramifications domestically, said Sen. Robert Bennett, R-Utah. Sen. Bennett is chairman of the Senate's Special Committee on the Year 2000 Technology Problem. He also drafted a controversial bill that would amend the Employee Retirement Income Security Act of 1974 to put on pension plan fiduciaries the burden of assuring that the issuers of any securities in which the plan invests are either Year 2000-compliant or are taking steps to minimize the risk of computer-glitch losses (BI, May 18).

"We have tried to be Paul Revere, but we're not yet Chicken Little," Sen. Bennett said during a speech to the National Press Club in Washington last week, after having been introduced as "the Paul Revere of the Information Age." He praised President Clinton for announcing a proposal on July 14 that would give businesses some degree of immunity from lawsuits if information they exchanged about fixing the bug inadvertently turned out to be inaccurate. Such safe harbors are "absolutely essential," he said.

Sen. Bennett said he does not believe Jan. 1, 2000, will bring the end of civilization as we know it, but only because 17 months still remain to deal with the Year 2000 problem. Even so, "the problem we face, of course, is time," he said, noting that Congress cannot legislate Jan. 1, 2000, out of existence or even delay its appearance.

Computers have "smoothed out the curves of the business cycle," said Sen. Bennett. But during the past 25 years, they have become "absolutely pervasive" throughout the economy, which means that even a failure of 2% to 5% of all microprocessors on Jan. 1, 2000 -- the percentage currently projected by the special Senate committee -- will send shock waves through the nation's economy. The failures will interrupt essential public and private services, he said.

"What I have described in the U.S. applies in spades abroad," he said. Only four other countries -- Australia, Canada, Singapore and the United Kingdom -- have taken the problem as seriously as has the United States, with a handful of other nations, such as the Netherlands, taking first steps toward addressing the issue, he said. Such U.S. allies as Japan, Germany and France lag far behind, he said.

When asked to predict how major industries would fare on Jan. 1, 2000, Sen. Bennett offered his own guesses, with the caveat that he reserved the right to change his mind within 24 hours.

He said he believes the U.S. power grid will work, with some brownouts and regional blackouts. The water system also will generally work, he said.

The domestic financial system should continue to function, though some banks and credit unions will be driven into bank-ruptcy because of the glitch, he predicted. "I believe you could trade stocks on the New York Stock Exchange. I wouldn't want to trade on the Nikkei," he said, referring to Japan's stock market.

He also predicted the telephone system will work, but he added, "I wouldn't guarantee you'll get a dial tone to Taiwan." Businesses dependent on imported components will need to have contingency plans, he said.

Sen. Bennett said he is "very concerned" about how the nation's health care delivery system will fare. He predicted that some providers will be driven out of business because they won't receive timely Medicare and Medicaid reimbursement. Some medical devices will fail because of the glitch, and some providers may find themselves unable to get necessary supplies, he said.

He also expressed some concern about the nation's air traffic system. Flights will continue, but probably not as many flights as needed, which could lead to the rationing of air travel, he said.

For businesses to survive, chief executive officers will have to deal with the problem, he said. CEOs cannot write off the issue as a mere "computer problem," turn it over to the "techies" and focus on other matters, or they will be doomed, he said.

"This is a management problem," he said. The CEO must set priorities, including engaging in corporate triage by deciding which operations or products will be allowed to fail to protect more critical operations. A top officer also will have to decide at what point a company has gone beyond the point where a fix is possible in time and must instead draft contingency plans, he said.

Sen. Bennett warned his listeners that all would not be well come Jan. 2, 2000, or even soon after. "The year 2000 problem will not end in the year 2000," he said. Cleaning up its effects will take years, he predicted.