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Measures Against ID Thievery

Opinion Editorial
January 29, 2003

By Mike Krause

Representative Ron Paul (R, TX) wants to do something about the crime of identity theft. Of course, so do other lawmakers, whose solutions invariably involve new laws on top of old ones and a general expansion of federal intrusion into personal privacy.

This month, Paul introduced to Congress the Identity Theft Protection Act of 2003, based on the radical notion that getting the government out of the privacy invasion business is the best way to keep identity thieves at bay. Or as Paul himself puts it, “It is simply common sense that repealing those federal laws which promote identity theft is more effective in protecting the public than expanding the power of the federal police force”.

Consider that in December, thieves stole computer equipment from a Defense Department health care contractor containing a host of personal information, including addresses, dates of birth and of course, the social security numbers (SSNs) of about half a million active duty and retired military personnel and their dependents.

So just what exactly do SSNs have to do with a data-base of medical histories, or any data-base other than the Social Security Administrations? The short answer is nothing, except that the federal government has legislated the SSN into a national ID number and the key ingredient to successful identity theft, while at the same time making it widely available to would-be identity thieves.

The ID Theft Act would, among other things, require the Social Security Administration to issue all Americans new SSNs within five years and forbid the release of the new number for any purpose not directly related to the administration of Social Security benefits. In effect this would be a return to the original intent of the number. As a bonus, the new numbers will be the sole legal property of the recipient.

According to Paul, “By putting an end to government mandated uniform IDs (the SSN), the act will prevent millions of Americans from having their liberty, privacy and property violated by private-and-public sector criminals”.

Social Security numbers were introduced as part of the Social Security Act of 1935. At the time, President Roosevelt assured the nation that the numbers would only be used by the Social Security Program. In 1943, the same President Roosevelt signed executive order 9397, which required federal agencies to use the number when creating new record-keeping systems. By 1961, the IRS began using it as a taxpayer identification number and the floodgates were opened.

Today, your SSN is required to get a job, open a bank or brokerage account, get a loan or credit card or obtain a passport, drivers license or state ID card. It is also now required to get a state hunting or fishing license, or access any and all government services from veterans benefits to food stamps.

Yet, despite an array of laws and rules governing the use of the SSN, the government just isnt any good at protecting us all from identity thieves.

A recent General Accounting Office (GAO) report on use of SSNs found that, “Although agencies that use SSNs to provide benefits and services are taking steps to safeguard the numbers from improper disclosure, our survey identified potential weakness in the security of information at all levels of government”. The problem is, the government has been “taking steps” for almost 70 years. You would think they’d have the hang of it by now.

In 1998, congress made identity theft a federal felony. It hasnt done much good. Indeed, identity theft is a booming crime in America. In 2001, the ID Theft Center www.idtheftcenter.org reported between 700,000 and 1.1 million cases in 2001, an all time high.

According to a 2002 GAO report, “Identity Theft, Prevalence and Cost Appear to be Growing”, complaints to the Social Security Administration about SSN misuse increased five fold from 1998 to 2001, with 81% of the allegations relating directly to identity theft. Furthermore, in 2000 the Postal Service reported that its investigations of identity theft had “increased by 67% from last year”.

It seems the same Congress, which legislated that SSNs be widely available to ID thieves, has also insured that the crime is committed more often.

As the Electronic Privacy Information Center (EPIC) has concluded, “Centralizing authority over personal identity necessarily increases both the risk of ID theft and the scope of harm when ID theft occurs”.

In recent years, Congress has also mandated that states require social security numbers for issuance of drivers licenses, a key component to recent attempts to turn the drivers license in an internal passport (national ID card). Pauls bill would also forbid the federal government from forcing states to adopt such uniform identifiers by threatening to withhold federal funds.

Today, the SSN as a national ID number is used to track, collect and store vast amounts of personal information about the private lives of Americans. This in turn has created a one stop shopping point for identity thieves as it steadily erodes traditional notions of privacy and autonomy.

To that, Congressman Paul says, “I would remind my colleagues that in a Constitutional Republic, the people are never asked to sacrifice their liberties to make the job of government officials easier. We are here to protect the freedom of the American people, not to make privacy invasion more efficient”.


Copyright (c) 2002, Independence Institute

INDEPENDENCE INSTITUTE is a non-profit, non-partisan Colorado think tank. It is governed by a statewide board of trustees and holds a 501(c)(3) tax exemption from the IRS. Its public policy research focuses on economic growth, education reform, local government effectiveness, and Constitutional rights.

JON CALDARA is President of the Institute.

MIKE KRAUSE is a Senior Fellow at the Independence Institute.

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