Will the U.S. be prepared for the challenges of the year 2000 computer problem? Yes, according to a Senate committee investigating the matter. But the panel also warns of some problems. Following a background report, Elizabeth Farnsworth and guests discuss the panel's findings.

SPENCER MICHELS: From the crowded streets of midtown Manhattan to the Great Wall in China, people the world over have been watching millennium clocks count down to January 1, the year 2000. The clocks are ticking fast, with just a little more than 300 days to go. With that in mind, a Senate special committee on the year 2000 technology problem has drafted a status report on how well government and industry are faring in preparation for the much-anticipated and sometimes-feared day.

SEN. ROBERT BENNETT, (R) Utah: We want to be sure, in words that we've used before, that while we are Paul Revere, we are not Chicken Little. We have to get everybody aroused to the fact that the British really are coming. They have to get out of their warm beds and pick up their muskets and get ready for this one. But the sky is not falling.

SPENCER MICHELS: Computer programmers around the globe hope they can beat the deadline in time to correct what is known as the Y2K problem, or the millennium bug. Programmers use a special language, or code, to write the programs that tell the computer what to do. The problem was born back in the early days of the computer. To conserve computer memory, then very costly, the world's software writers would write dates with the fewest possible numbers. Within computer programs, December 31, 1999, was written 123199. Few in the computer industry expected this computer languages to last until now. But many did, leaving 700 billion lines of old computer instructions to be fixed. If they're not fixed, January 1, the year 2000, will register as 010100, which a computer could read as January 1, 1900. That's the big fear. For example, a bank's computer could suddenly read a mortgage statement as 99 years overdue. Electric companies' computers could suddenly think generators all over the country were a century past due for repair and shut them down, thereby crippling the power grid. SEN.

JOHN KERRY, (D) Massachusetts: John Healy was one of those small business owners who thought it was somebody else's problem. It couldn't happen to him. Luckily for John Healy and his business, he got a scare, and so he decided to test his computer system by creating a purchase order for motorcycle pistons with a receivable date of early January 2000. So what happened when he put in the order in into his system? He punched a key and he waited for his software to calculate how many days it would take to receive the order. He got back a series of question marks.

SPENCER MICHELS: There is a heated debate about just how dire the problem may be. No one knows for sure, and opinions range from Y2K survivalists who are preparing for the worst.

RONALD CASH: The population is going to drop dramatically. Starvation is going to be kicking in there. You're going to have water problems.

SPENCER MICHELS: To public utility industry officials, who predict few disruptions.

MICHAEL HYLAND, American Public Power Association: Right now we anticipate no power outages outside of the normal outages we see on any New Year's Eve date.

SPENCER MICHELS: But anticipating that some problems could occur, the Senate today unanimously approved an emergency loan program for small businesses wishing to make costly repairs now. It is also considering a bill to limit lawsuits resulting from Y2K failures. The Senate report, co-authored by Republican Senator Robert Bennett and Democrat Christopher Dodd, concluded, among other things, that, when it comes to preparing for Y2K, there is a lack of leadership at the highest levels of government and industry. The health care industry is one of the worst prepared, and "carries a significant potential for harm." International aviation and maritime industries are both at high risk for service and shipping disruption from the millennium bug. And key US trading partners like the oil-exporting nations of Venezuela and Saudi Arabia lag behind, raising concerns about the global economy when the year 2000 rolls around. The Clinton administration has imposed a deadline for all federal agencies and departments. They have been told to rid their essential and critical computers of the millennium bug by March 31.