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Social Security Numbers: Original Intent or Identity Theft?

Opinion Editorial
December 22, 2006

By Mike Krause

According to Immigration and Customs Enforcement (ICE), it was identity theft that led to recent raids on meatpacking plants in Greeley, Colorado and other states. “I can tell you that identity theft is a very real threat,” said an ICE spokesman, about the raids.

Yet it has been Congressional mandates forcing Americans to routinely disclose their social security number (SSN) in order to go about their daily lives that have made the SSN ridiculously easy for identity thieves to obtain and misuse.

In other words, the “real threat” of identity theft is in part a consequence of big and intrusive government.

Social Security numbers were introduced as part of the Social Security Act of 1935. Then President Franklin Roosevelt assured Americans 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 the SSN as a taxpayer identification number.
Today, thanks to continuing federal mandates, the SSN is required-among many other things- to open a bank or brokerage account, rent a moving van, or get a passport, driver’s license or state ID card. Indeed, the number is demanded for nearly every government service and government regulated activity imaginable, from hunting and fishing licenses to veteran’s benefits and food stamps to consumer credit and insurance.

A 2006 Government Accountability Office (GAO) report notes, “Agencies at all levels of government frequently collect and use SSNs to administer their programs, verify applicant’s eligibility for services and benefits, and perform research and evaluation of their programs.”

Unfortunately, as an earlier GAO report found, “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”.

As for the private sector, GAO continues, “Certain private sector entities routinely obtain SSNs from various public and private sources, and use SSNs for various purposes…”

A 2005 survey by Javelin Strategy and Research found that nearly twenty three percent of identity theft cases where the source of fraud was discovered were the result of “dishonest employees.”

If you are at all an active participant in the modern economy, the list of companies that have your SSN is depressingly long.

In 1998, congress made identity theft a federal felony. It didn’t do much good; complaints to the Social Security Administration about SSN misuse actually increased five fold from 1998 to 2001, with 81% of the allegations relating directly to identity theft and the problem has only grown since.
“There is no one law that comprehensively regulates SSN use and protections,” continues the 2006 GAO report.

But since as far back as 1998, Congressman Ron Paul (R-TX) has been introducing into Congress the “Identity Theft Protection Act,” which would, among other things, require the Social Security Administration to issue all Americans new SSNs, and restrict use of the number to the administration of Social Security benefits; in other words, a return to the original intent of the number.

As Rep. Paul 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.

While such a policy may be at odds with our modern economy and the federal government’s ever-increasing information collection demands, it is telling that the act-which in no way increases the power of politicians and bureaucrats-gets no traction in Congress.

Under Paul’s bill the new numbers would be the legal property of the recipients rather than the government, giving individual citizens at least some say over the use of their SSN, and thus their privacy.

“Privacy thrives when aware and empowered citizens are able to exercise control of information about themselves” Says Jim Harper, director of information policy studies at the Cato Institute and author of Identity Crisis: How Identification is Overused and Misunderstood. Harper continues, “Because privacy is subjective, government regulation in the name of privacy can only create confidentiality or secrecy rules based on politicians’ and bureaucrats’ guesses about what “privacy” should look like.

For more than half-a-century, politicians’ and bureaucrats’ idea of social security number privacy has been a large and intrusive government that demands the SSN as a national identifier, while enabling identity theft and fraud.