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Your Social Security number - Abounding availability

By Stephen M. Lilienthal
web posted March 13, 2006

Your Social Security Number (SSN) is the key to extensive personal information. It makes sense to protect that usage. The Federal Government has enabled – indeed, encouraged - widespread SSN use by agencies other than the Social Security Administration, in part by failing to regulate private-sector usage.

The SSN thus has morphed into an all-purpose national identifier, prized by Federal, State and often local governmental agencies, data-marketing firms, lenders, insurers and so forth, not to mention identity thieves.

Representative E. Clay Shaw, Jr. (R-FL) in the 108th Congress, in an opening statement at a hearing, noted that SSN use has become "the key that unlocks the door to our personal and financial information. Criminals who get hold of this key can take advantage of weaknesses in our laws and procedures to carry out whatever bad acts their unscrupulous minds can conceive."

James B. Lockhart III, Deputy Commissioner, Social Security Administration, stated, "Initially, the only purpose of the SSN was to assure that [the Social Security Administration] kept accurate records of earnings under Social Security so that we could pay benefits based on those earnings." Within a few years of its creation SSN use expanded. The Privacy Act stipulated that Federal benefits could not be withheld because a person refused to produce his SSN unless a Federal requirement had been adopted before January 1975. Notwithstanding that provision of law, the 1980s and 1990s saw further expanded SSN use as, for example, verification of eligibility for employment and also for store operators participating in the Food Stamp program. The 1996 Welfare Reform Act required its use in all kinds of documents, including marriage licenses and divorce decrees, to improve the enforcement of child support.

Lockhart noted that no law prohibits Federal Government SSN use and that it has become an ubiquitous identifier as data-marketing houses have been able to obtain SSNs so easily. Lockhart said SSNs indeed are valued by many data-marketing companies because they are "more likely than any other identifier to maintain unique records for each specific individual."

Lockhart continued, "The cumulative effect [of expanded Federal Government SSN use as an identifier] is to make the SSN an important element in establishing and maintaining an individual's identity in various record systems, and the ability of individuals to function in our society."

There presently is momentum in Congress to slam the brakes on runaway SSN usage.

The 108th Congress almost did so when the House Ways and Means Committee unanimously favorably reported a version of the Social Security Number Privacy and Identity Theft Prevention Act of 2004, but without further legislative action.

Shaw's present Social Security Number Privacy and Identity Theft Prevention Act (H.R. 1745) essentially would limit SSN use to law enforcement, accuracy of credit and for tax purposes. SSNs could not be sold to most private entities. There could be penalties against those refusing to provide services to individuals who fail to disclose their SSNs when asked. Shaw's bill currently has 44 co-sponsors in the House, crossing the aisle.

H.R. 1745 has been referred to the Social Security Subcommittee of the Ways and Means Committee, to the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee and to the Commerce, Trade and Consumer Protection Subcommittee of the House Energy and Commerce Committee.

Introducing H.R. 1745, Shaw made clear that limiting access to SSNs is a matter of true concern:

"Barely a day goes by without hearing more examples of the truly devastating effects of identity theft. During a hearing of the Ways and Means Subcommittee on Social Security …, we learned about a widow whose husband died in the September 11th attacks on the World Trade Center – an illegal immigrant used her deceased husband's Social Security number to get a driver's license and to work. We also heard about individuals whose credit was ruined, who were arrested for crimes they did not commit, and who spent years and hundreds or even thousands of dollars out of their own pockets trying to clear their names because of identity theft often facilitated by obtaining the individual's Social Security number."

Shaw states that he is attempting to strike a reasonable balance between SSN usage and overuse. One's SSN would continue to be available to credit firms and also to health-care providers. "Our nation's credit system relies on the SSN as a common identifier to compile disparate information from many sources into one credit report. The necessary uses of SSNs must be and are preserved in this bill."

Private investigators would not be able to access SSNs in credit reports unless they have a "permissible" purpose, which would include a court order, employment purposes or collection of an account. States and local courts would not be required to alter or expunge documents. Only new documents would be forced to obscure the SSN. The Attorney General would be authorized to decide upon other SSN displays.

The numbers would not be allowed to be displayed on health cards, on the theory that bar code or magnetic strip usage to display SSNs is an inadequate guarantee of protection, given the availability of devices that can read the information. Transmission of SSNs by the private sector via the Internet would require encryption measures.

Were H.R. 1745 enacted there would be a period of five years in which it would be permissible to sell the last four SSN digits. Congress then would have the option to reauthorize the use of the truncated SSNs or to eliminate their use. (Privacy advocates might note this authority unintentionally could establish a whole new national identifier. It also might curb the ability of the States to use the SSN as an identifier in their records.)

Misuse could lead to criminal penalties of five years imprisonment and fines of $250,000; for repeat offenders up to ten years; for those involved in drug trafficking or violent crimes, up to 20 years, or terrorism, 25 years. Social Security Administration employees violating the law also would suffer severe consequences.

Representative Ron Paul (R-TX) has introduced H.R. 220, the Identity Theft Prevention Act of 2005, which would require the issuance of new SSNs within five years. These would be restricted solely to the purpose of obtaining Social Security and it would be difficult to have the Federal Government establish a widespread identification number in the current manner. H.R. 220 would provide that ". . . any two agencies or instrumentalities of the Federal Government may not implement the same identifying number with respect to any individual." In fact, there could be no mandate or establishment "of a uniform standard for identification of an individual that is required to be used by any other Federal agency, a State agency, or a private person for any purpose other than the purpose of conducting the authorized activities of the Federal agency."

The Paul Bill has been referred to the House Committees on Ways and Means and on Government Reform. It has six co-sponsors including the respected constitutionalist conservative, Representative Roscoe G. Bartlett (R-MD), and Representative Maurice D. Hinchey (D-NY).

Paul has spoken out consistently and clearly on the need to curb the widespread SSN use. He said in 1998:

When the Social Security System, and the SSN were introduced […], it was for use only in administering the system. Today, there are almost 40 congressionally-authorized uses of the SSN, and many states require that the SSN be used for a range of activities, including obtaining drivers' licenses and voter registration. Many private organizations have been using the SSN, as well, further opening the door to abuse as the ID drifts further and further from its original purpose.

Limiting SSN availability is an issue of concern. Anyone can be a victim of identity theft. The prevailing widespread SSN use far exceeds the original intent when Social Security was established in 1937.

The Shaw and Paul Bills appear to be valuable starting points to address the problem of SSN use and misuse.

Stephen M. Lilienthal is the Director of the Center for Privacy and Technology Policy at the Free Congress Foundation.






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