Last September, for a mere $5,000 per couple, Silicon Valley executives got hominy grits, black-eyed peas, and a question-and-answer session with Bill Clinton. By far the most persistent question-asker was candidate Clinton himself. "The thing that impressed me most," remembers host Sanford R. Robertson, a San Francisco investment banker, "was his ability to really listen."

He must have listened well. When President Clinton returned to Northern California on Feb. 21 to sit down to a salmon-and-risotto dinner with many of the same high-tech executives, he unveiled a $17 billion-plus technology spending program that was just what they had ordered. "We helped write it," crows John Sculley, chairman and chief executive of Apple Computer Inc., who had been granted a seat beside First Lady Hillary Rodham Clinton to witness the Feb. 17 economic address. "How could we find anything wrong with it?" he asks, comparing the initiative to President John F. Kennedy's program to put a man on the moon.

DEJA VU. The Clintech program will hardly be so dramatic. Yet, it does represent the biggest change in federal technology policy since World War II. Under the post-cold-war plan, billions will be shifted away from defense and "big science" research and pumped into environmental and commercial technologies. Projects such as the "information superhighway" promise to hasten the day when rivers of data will flow at light speed between homes, schools, offices, and laboratories.

Inevitably, plenty of people are finding things wrong with the Clinton package. Unreconstructed laissez-faire capitalists, who never liked Clinton anyway, see the plan as further evidence that the Democrats are aiming the country toward economic ruin. Even high-tech executives who unabashedly back him are finding nits to pick.

Nonetheless, the emerging consensus in Silicon Valley and elsewhere is that Clinton's technology proposals are a reasonable approach to gearing the U. S. for the information economy of the 21st century. "The government is going to put money in, but it's up to industry to execute it," says Roger W. Johnson, CEO of Western Digital Corp. in Irvine, Calif. "It doesn't create a huge bureaucracy that's counter to our heritage and could stifle individual initiative."

Instead, the Clinton plan aims to reinvent existing programs and agencies to make them more responsive to industry and the economy. Ideas such as making permanent the research and development tax credit, shifting government R&D from defense to commercial applications, and building a "technology infrastructure"--all keys to the Clinton plan (table)--are proposals long advocated by industry groups such as the Computer Systems Policy Project and the privately funded Council on Competitiveness. "We've been talking about these things for 12 years. The difference is, they're supported this time," says Andrew Procassini, president of the Semiconductor Industry Assn.

HARDWARE CREDIT. Although the outlines in the Clinton program are clear, the details remain fuzzy. The multibillion-dollar program includes a complex mix of redirected and new R&D spending and incentives over the next five years. Alongside high-speed data networks and big boosts in basic research at the National Science Foundation, for example, is $2.6 billion to upgrade the Social Security and Internal Revenue Service computer systems. The biggest chunk is $6.4 billion in R&D tax credits. The controversial $8.4 billion supercollider project in Texas will be slowed, while NASA's $30 billion space station will be completely redesigned to be far cheaper.

Of course, to evaluate Clinton's technology plan, executives must factor in his broader economic program, particularly new taxes and tax breaks. Companies such as Apple and Hewlett-Packard Co. will benefit from a proposed two-year investment tax credit. But the credit offers software companies--where highly skilled labor, not machinery, makes up the vast bulk of expenses--no new goodies.

Meanwhile, capital-gains tax breaks would apply to companies capitalized at $25 million or less. And long-term investment tax credits also favor small companies. Some in the Valley feel that to the President, small means microscopic. "Clinton's got a model of the world that comes from Arkansas," says Kieth E. Sorenson, chief executive of RasterOps Corp., a $100 million computer graphics-hardware company. "He thinks $25 million is big. Tax credits need to go up to $100 million." Others see startups as losers. "A lot of guys aren't even making enough money to pay taxes. So a tax credit is of questionable value," says Louis A. Greenbaum, chief executive at KOR Electronics.

'HIGH-TECH PORK.' Then there are the Silicon Valley executives who believe the Clinton tech plan is a nightmare come true. Thomas W. Weisel, chairman and chief executive officer at the stock-trading firm Montgomery Securities, notes that the flow of capital into small companies and technology companies quadrupled during the 1980s and has doubled during the past three years. By overtaxing, overspending, and getting the government's nose in what should be the private sector's business, Weisel feels, Clinton "is really going to kill the economy." And T. J. Rodgers, chief executive at Cypress Semiconductor Corp., says the Clinton technology plan, and Silicon Valley's support, is merely a variation on an old Democratic Party theme: "We're now going in for high-tech pork instead of low-tech pork."

Even the most ardent Clinton supporters worry that Congress lacks the discipline to make the cuts necessary to pay for his "investments" in technology. If total spending is not cut, if the deficit is not significantly reduced, they say, no technology initiative will make the U. S. more competitive in the world economy.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE