Mr. Chairman, my name is Stephen Moore and I am an economist at the Cato Institute. In keeping with the new truth in testimony rules, let me first say that the Cato Institute does not receive a single penny of government funds.

Thank you for the opportunity to comment today on the idea of “improving the integrity of the Social Security card by making it as secure as the 100 dollar bill.” I am as opposed as I possibly could be to any measure that would move toward the establishment of a national i.d card in America. Make no mistake about it: H.R. 231 would do exactly that. I am aware that supporters of this idea argue vehemently that making the Social Security card fraud-proof is not the same as establishing a national i.d. card. In fact, there is a section in Mr. McCollum’s bill H.R. 231 entitled “NOT A NATIONAL IDENTIFICATION CARD.”

Mr. Chairman there is a popular saying these days in politics that applies directly to this bill:

If it looks like a duck.

If it quacks like a duck.

If it walks like a duck.

It’s a duck.

Supporters of a new tamper-proof Social Security card maintain that it is different from a national i.d. card in that no one would be required to carry the card around with them. Such assurances ring hollow given the recent history of immigration enforcement. With each passing law, privacy rights have been subjugated in the name of policing our borders. Twelve years ago when Congress enacted the employer sanctions laws, I and other critics, testified in this very room that the ill-conceived notion of making employers the de facto deputized agents of the INS, would lead to discrimination against foreign-looking and sounding U.S. citizens and authorized workers. We also argued that employer sanctions were the first step toward a national i.d. card system.

Members of this committee assured us that those predictions would never come to pass. They also pledged that if employer sanctions were proven to encourage discrimination against latinos or Asians then the law would be repealed. In 1990 the U.S. General Accounting Office documented a “serious pattern of discrimination” resulting from the employer sanctions law. Despite the evidence, the law has never been repealed.

Members of this Committee also denounced the suggestion that employer sanctions would ever lead to the establishment of a national i.d. card system or the implementation of any other technologies that would compromise the privacy rights of American citizens.

And yet here we are twelve years later debating this very issue. It is noteworthy that last year Congress adopted a “pilot project” for an insidious national computer registry system with the federal government centralizing work authorization data on every one of the 120 million Americans in the workforce. This system has become disparagingly known as: 1–800-BIG-BROTHER.

Surely, no one on this committee would deny that efforts to reduce illegal immigration have led to ever more draconian measures to keep out unauthorized workers. Consider the inglorious legacy of employer sanctions. They have failed in every way. Rep. McCollum conceded himself that “the employer sanctions law is not working.” It is worse than that; the law has done harm to many American citizens–particularly minorities. But rather than repeal a law that does not work, Congress continuously adopts more and more stringent steps to make it work.

Last year the computer registry system was adopted on a pilot project basis. It is almost a certainty that no matter how big a failure this new system proves to be, within ten years the registry will be applied to all workers and employers in the nation. I have worked in Washington for fifteen years mainly covering the federal budget, and I have never encountered a government program that didn’t work–no matter how overwhelming the evidence to the contrary.

The centralized computer registry system is dangerous enough. But to add to that a photo i.d. card issued to every citizen that matches up with the computer data base is to put in place the entire infrastructure of a national i.d. card system. All that is missing is the nomenclature. As someone once put it: this is as about as ill-fated as giving a teenager a bottle a booze and keys to a motorcycle, but getting him to promise that he won’t drink and drive. You’re just asking for trouble.

Nearly all congressional supporters of the new Social Security card system say they are against a national i.d. card. The best way to protect against the establishment of a de jure national i.d. document system is to abandon the idea of converting the Social Security card into a de facto i.d. card.

The Social Security card was never meant to be used for identification purposes. When the system was created in 1935, to assuage the concerns of American citizens, Congress insisted that the card would never and should never be used for purposes of identification. Its sole purpose was to ensure that workers were paying the required payroll tax. Individual workers were assigned numbers so that the proper governing authority could easily account for the contributions made to the Social Security fund. Nonetheless, the use of the number grew steadily over the years. Starting in 1961, the Civil Service Commission began using the number to identify all federal employees. In 1962, the IRS started requiring the number to appear on all completed tax returns.

We have seen on many occasions over the past sixty years abuses of the Social Security system that were never envisioned when the system was created–just as abuses of the proposed i.d. card that we cannot now envision would almost certainly occur when expediency takes precedence over safeguards of privacy rights and civil liberties. In fact, privacy rights have already been eroded. The SSA disclosed Social Security numbers to the private sector until public outrage halted the activity in 1989. The disclosures affected more than three million Americans.

Earlier this year the Social Security Administration launched a web site, which allowed computer hackers internet access to individuals’ payroll and benefit records. All a snoop needed access to was an individual’s name, Social Security number, date and place of birth, and mother’s maiden name. As Senator Grassley noted in a letter to SSA requiring the web site to be suspended, the system was ripe for abuse “by everyone from nosy neighbors, to legal foes, to ex-spouses seeking financial support.” The SSA’s track record in protecting privacy does not inspire confidence that privacy rights would be properly protected under the i.d. card system.

The Social Security number is by no means alone in this regard. Various programs which authorize the government to collect personal information about American citizens have gone so awry over the years that we ought to be reeling in the information that the government collects from us, not expanding its powers in this regard. Here are some historical and recent examples of abuse:

* The confidentiality of Census Bureau information was violated in World War II to help move Japanese-Americans to internment camps.

* The FBI criminal history records system, which was designed for law enforcement purposes, is now used predominantly by non-law enforcement agencies and private employers.

* The State of Ohio recently sold its drivers’ license and car registration lists to TRW, Inc. for $375,000. In a recent editorial, Business Week asked: “Who gave government agencies the right to cash in on information that people are forced to give them in the first place?”

* In early 1995 more than 500 Internal Revenue Service agents were caught illegally snooping into the tax records of thousands of Americans — often friends and celebrities. Only five of these employees were fired for this invasion of privacy.

* The IRS claimed that its new privacy protection measures would protect against this from happening again. But it did happen again in early 1997 with hundreds of IRS agents again illegally investigating the tax information of friends, foes, and celebrities.

Technology has played a vital role in advancing freedom around the world, especially in Eastern Europe and the former Soviet Union. But it has also laid new temptations at the doorstep of government, suddenly afforded ways to micromanage people’s lives. Once the technology and database is in place for a national worker registry, new and at times urgent alternative purposes for the registry will doubtless arise. Those who favor big government will find many uses for a centralized computer database every time a new “national crisis” emerges: to help fight the war on drugs, to control the spread of disease, to combat terrorism, and so forth. Here are a few examples of policy ideas that have already been promoted in Washington for which a national i.d. card and a computer registry system could be put to use:

• Nationalized health care. President Clinton’s health care plan included a “Health Security Card” for all Americans. If the idea comes back, the Social Security card could be used also as a Health Security card. The card could contain information about genetic testing, sexual orientation, drug use, sexually transmitted diseases, and more.

• Welfare payments. Vice President Gore has promoted a “reinventing government” initiative that would send entitlement monies to recipients via an ATM and Maryland has already experimented with the practice. Why not make the Social Security card capable of handling this function so that we can create one-stop shopping.

• Criminal records. Many people will think that the information on a card and in a worker registry could be combined with criminal records to make sure former felons do not get bonded in the banking industry or that convicted rapists do not become school teachers. The system could possibly perform background checks for gun purchases. The City of Pasadena already requires an identification to purchase ammunition.

In the age of the microchip, centralized computers have the capability of holding and processing huge amounts of information about all 265 million American citizens. An optically readable i.d. card recently patented by Drexler Technology Corporation in California can hold a picture i.d. and 1,600 pages of text. The government could mass produce these cards at a cost of less than $5.00 per person. Even more sophisticated identification systems might remove the need for carrying a card at all.

Hughes Aircraft Company has a new identification technology involving a syringe implantable transponder. This “ingenious, safe, and inexpensive” worker identification technology plants a tiny microchip under the skin. It contains a ten character alphanumeric identification code that can never be duplicated. The microchip is read by an electronic scanner–the type that reads the price on the food you buy at the grocery store.

The point here is that depending on how far Congress wants to go in suppressing the rights of the individual in order to deter illegal immigration, the technology exists for a fool-proof if Orwellian identification system. If Congress were willing to further denigrate Americans’ civil liberties, many new government controls to enforce our immigration laws could be erected.

Indeed, I would ask supporters of the new Social Security card: What exactly is your objection to a national i.d. card? If combating illegal immigration is such a national emergency, then why not require the card be carried around at all times? Why not require a biometric identifier that is much harder to forge? Why not place a micro-chip on the card? All of these steps would no doubt help with the enforcement of immigration laws. My fear is that some of the more zealous anti-immigrant groups might respond privately: one step at a time.

Members of this Committee may complain that I am engaging in scare tactics–that no one would suggest such measures. But in fact members of Congress have suggested these ideas in the past and continue to do so. Senator

Dianne Feinstein of California has suggested an identification card with “a magnetic strip on which the bearer’s unique voice, retina pattern, or fingerprint is digitally encoded.” These were her words, not mine.

Senator Simpson, who just retired, has consistently argued that for employer sanctions to work effectively, an I.D. card is necessary. In the 1990 Immigration Act Senator Simpson sought an experimental card with a biometric component, such as a fingerprint, and a social security number. In Congressional hearings two years ago Senator Simpson and other members of Congress spoke openly and longingly about the virtues of “an i.d. card system.”

Sen. Simpson’s original immigration bill last year included a provision that would have forced states to issue a standardized birth certificate that would have included an individual’s Social Security number and, by the age of 16, a biometric indicator. This would allegedly reduce the document fraud that currently plagues the enforcement of employer sanctions, but would also have the federal government regulating state records to an unprecedented degree. This builds upon a Jordan Commission recommendation, but, like the Commission, it offers no cost estimate of what it would take to regulate the 7,000 vital statistics offices across the country that currently issue birth certificates.

The main argument, then against this very dangerous idea is that it is an affront to out basic privacy rights and civil liberties as American citizens. But there are other problems with the idea as well:

1. Congress lacks the constitutional authority. At the Cato Institute we have been trying–in most cases in vain–to discipline Congress to always ask the question when voting on a new government program: where is the authority in the constitution to undertake this action. Nowhere in the Constitution is the federal government conferred authority to establish a computer registry, to compel citizens to obtain a national i.d. card, or to involve itself this intimately in the everyday business decisions of employers.

2. It will encourage further workplace discrimination. We don’t have to imagine, for example, that this new card, would exacerbate discrimination against the foreign-born and also American-born citizens with foreign surnames. We don’t have to imagine this because the laws already in place are causing such discrimination with Congress showing scant concern. For example, under employer sanctions, the documents of Hispanic job applicants have been found to be three times more likely to be challenged than those of whites. Hispanics and Asians are much more likely to be harassed by local law enforcement, employers, and the INS to produce their Social Security card.

3. It will not be forgery-proof. No government i.d. card is fraud-resistant for long–unless we move toward a 1984-style system with computer microchips, fingerprints, retina scans, and the like. Employer sanctions and I‑9 Forms have given rise to a cottage industry in fake identification. There’s no reason to believe that black market entrepreneurs will abandon a lucrative business just because the federal government thinks it’s getting clever. Phony worker documents are available for as little as $30 today in cities with high immigrant populations. The best a worker registry can hope to accomplish is to push up these costs temporarily as forgers update their techniques.

An i.d. card is not like a 100 dollar bill. Money is put into circulation. It flows through banks where specialists have the expertise and equipment to detect counterfeits. But millions of employers, who will be the guardians of this system, do not have such expertise, nor should they be required to.

4. It will not deter illegal immigration. As the experience with employer sanctions has shown, honest employers who simply want to play by the rules and run their businesses will face a hefty new burden imposed on them by Washington. Those who want to skirt the law will pay workers cash or accept forged documents. Says a director of the Amalgamated Clothing and Textile Workers Union in New York: “If a guy running a sewing loft or a laundry or a restaurant needs to cut labor costs, he knows he can hire a few illegal workers, pay them less than the minimum wage, and get away with it.” For those employers, sanctions have been an irrelevance. The first felony indictment under the employer sanctions law did not come down until August, 1994 — eight years after employer sanctions were first adopted. The job magnet that attracts illegal immigrants will maintain its strong pull. The “Zoe Baird problem” is one of demand, not supply.

5. The costs exceed the “benefits.” Despite the failure of employer sanctions, much of the hysteria over illegal immigration is not confirmed by the official statistics on the size of the illegal alien population. The U.S. Census Bureau estimates that there are now an estimated four to five million illegal aliens living in the United States today, and about 300,000 more settle permanently each year. Four to five million illegal immigrants is undeniably a large number of people, but it is far below the “invading army” of eight to ten million aliens regularly reported in the media or by anti-immigrant lobbyists. Illegal aliens constitute only about 1.5 percent of the 265 million people living in the United States. This level would not seem to require draconian enforcement measures involving every single American worker and employer — especially the majority of Americans who do not live in areas with a large number of illegal aliens.

Mr. Chairman, I wish to congratulate Rep. Melvin Watt for his courageous opposition to this bad idea. It saddens me to see Republicans, who took control of Congress in 1995 for the first time in forty years on an agenda of “less government, more freedom,” so enamored with an idea that so fundamentally contradicts that platform. Ironically, many of the same Republicans who belittled the Clinton administration for proposing a national health security card now want an even more insidious national i.d. card system with a centralized computer data base to control illegal immigration. Indeed, some advocates of the i.d. card idea have suggested that the card could and should be used for both purposes.

I wish to remind Republicans that this idea first surfaced in a Reagan cabinet meeting in 1981. Then Attorney General William French Smith argued that a perfectly harmless i.d. card system would be necessary to reduce illegal immigration. A second cabinet member asked why not tattoo a number on each American’s forearm. According to Martin Anderson, the White House domestic policy adviser at the time, Reagan blurted out: “My god, that’s the mark of the beast.” Anderson reports “that was the end of the national identification card” during the Reagan years. But bad ideas never die in Washington; they wait for another day.

It is also noteworthy that the leaders of virtually every libertarian, conservative, and civil liberties organization in America–from Bill Bennett at Empower America to Grover Norquist at Americans for Tax Reform to Milton Friedman the Nobel economist–have denounced the both a national i.d card and the computer registry as “misguided and dangerous.” (See appendix.)

Illegal immigration is the price we pay in America for being a free and prosperous nation. Indeed, these freedoms are why so many millions of people from all over the world come here–both legally and illegally. H.R. 231 asks Americans whether they are willing to give up some of those basic liberties in order to keep illegal immigrants out. The answer to that question should be: never. Congress should be concentrating all its efforts on reclaiming lost rights of citizens, not further snatching away, one by one, existing ones.