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Issue Of The Week: Monday, January 30, 2006
Techies Optimistic Over Bush Agenda
by Randy Barrett

     There are strong signs that President Bush will discuss innovation, education and healthcare information technology in his upcoming State of the Union speech Tuesday night.
     Over the past year, innovation and education have become the focus of a unified lobby front by the technology industry and American universities. U.S. competitiveness is now a thoroughly bipartisan issue, but the White House has yet to fully embrace demands for increased science, math and engineering education funding or support big boosts in federal basic research investments.
     Advocates are hoping that might change with the president's speech. During a press conference last week, Sen. Pete Domenici, R-N.M., said he expected Bush will broach the topic for the first time during his annual talk. Domenici and 18 other senators have introduced legislation that would create new science and math education scholarships and boost federal research and development spending by 10 percent over the next seven years.
     The tech industry is eager to see the Bush administration support the initiative and has worked hard to drive home the links between competitiveness, U.S. jobs and America's high standard of living.
     Electronic Industries Alliance President Dave McCurdy, a former lawmaker, recently met with senior White House officials. He is optimistic Bush will talk about innovation during his speech.
     "It's clear just from their tone and familiarity with the issue that I'm confident the president will speak on this," McCurdy said.
     McCurdy wrote a letter to President Bush on Jan. 20 asking for a renewed commitment from the administration.

Techies Hold 'Competitiveness' Card
     "In a time when budgetary concerns, trade tensions and the ongoing war on terrorism consume the attention of the White House and Congress, we realize that making innovation and U.S. competitiveness policy topic number 1 is no easy task. But it must occur," wrote McCurdy.
     The bigger question is whether Bush will ask Congress for new funding to support the initiative. Domenici and others predict it will take about $9.5 billion per year to pay for the raft of new programs.
     "It will be interesting to see how this goes with no money left in this town," said one industry observer.
     But with elections around the corner, innovation advocates have made a successful gambit to link the competitiveness issue to job creation. There also appears to be a strong, bipartisan current in Congress to carve out new education and research funding during the 2007 budget process.
     The Democrats continue to push hard on the competitiveness issue. In a speech Jan. 26, Minority Leader Nancy Pelosi, D-Calif., hammered hard on the innovation theme in anticipation of Bush's Tuesday talk.
     "Nothing less is at stake than America's economic leadership," Pelosi said. "As our competitors copy our blueprint for preeminence -- with investments in education, long-term research and development and cutting-edge technologies -- we are departing from it."

Looking For A 'Healthy' Speech
     There is also a strong expectation that President Bush will discuss healthcare information technology, at least indirectly. He made references to the issue in his 2004 and 2005 talks. But, this year, industry executives said Bush likely will focus on health savings accounts.
     The controversial accounts were created in 2003 and allow workers to put aside money tax-free in conjunction with a low-cost, high-deductible health insurance policy. As the logic goes, if consumers have a more direct role in paying for medical services, they will help control rising costs.
     "Health savings accounts all aim at empowering people to make decisions for themselves, owning their own health care plan, and at the same time bringing some demand control into the cost of heath care," Bush said in a speech Friday reported in The Washington Post. "Our view is that if you're a consumer of health care and you're in the marketplace making health care decisions, it is more likely that there [would] be more cost control in health care than a system in which the consumer of health care has his or her health care bills paid by a third-party provider."
     Any unused portion of the account can be annually rolled over into a personal retirement investment fund. Critics of the plan contend the HSAs will lead to fewer visits to doctors and, consequently, more serious health problems down the road. As well, they warn that low-income HSA users could easily get cleaned out in the event of a catastrophic illness. Any mention of the accounts would be good news for IT, said Scott Wallace, president of the National Alliance for Health Information Technology. That is because HSA holders will be big users of medical record technologies as they become responsible for tracking their own healthcare needs.
     Right now, the effectiveness of these accounts is largely unknown, since only 1 percent of the working population currently uses them, Wallace said.

Techies Set Aside Broadband Hopes
     Industry officials agreed Bush is unlikely to talk about high-speed Internet availability, though the topic is near to their hearts. Tech associations have tried unsuccessfully for the past few years to coax Bush into expounding on his pledge to provide affordable broadband connections to all Americans by 2007.
     That goal likely will go unmet as U.S. high-speed internet penetration rates, quality and pricing continue to lag behind the rest of the developed world, said industry insiders. Additionally, the administration has shown a deep reluctance to insert itself in the debate over rewriting the 1996 Telecommunications Act or actively push a broadband agenda.
     "Broadband is a joke," said one industry lobbyist, referring to what he characterized as a weak effort on U.S. broadband penetration by the Bush administration.

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