Statement of Frederick G. Streckewald
Assistant Deputy Commissioner for Program Policy
Office of Disability and Income Security Programs
House Committee on Ways and Means
Subcommittee on Social Security
Hearing on “Social Security Number High Risk Issues”
March 16, 2006
Mr. Chairman and Members of the Committee:
Thank you for inviting me today to discuss the Social Security Administration’s (SSA’s) enumeration process. This is the process used to assign a Social Security Number (SSN) to an individual. This series of hearings the Subcommittee is holding have served to highlight the importance of this core agency function. As stewards of the Social Security program, one of our strategic objectives is to strengthen the integrity of the enumeration process. We recognize that protection of the SSN is one of the top issues facing SSA management, and I am pleased to have the opportunity to discuss SSA’s enumeration process.
History of the Social Security Number and Card
The Social Security Number is a nine-digit number, used to identify the record of earnings an individual has in employment or self-employment. A numbering system that is based on digits allows for the orderly assignment of numbers and for the potential assignment of as many as 900 million unique SSNs excluding the 900 series reserved for the use of the Internal Revenue Service (IRS). SSA has assigned over 436 million SSNs since 1936.
At the time the Social Security card was developed, its only purpose was to provide a record of the number that had been assigned to the individual so that employers could accurately report the earnings of people who worked in jobs covered under the new Social Security program. This is still the primary purpose for which SSA assigns a number and issues a card.
The card was never intended and does not serve as a personal identification document—that is, the card does not establish that the person presenting it is actually the person whose name and SSN appear on the card. Although SSA has made many changes to make it counterfeit resistant, the card does not contain information that would allow the card to be used as proof of identity.
Use of the SSN Expands Over Time
The purpose of the SSN and card was narrowly drawn at the beginning of the program. However, the use of the SSN as a convenient means of identifying records in large systems of records increased over the years. In 1943, Executive Order 9397 required Federal agencies to use the SSN in any new record system maintained on individuals. Using the SSN as an identifier in federal record systems proved to be an early reflection of what has become an enduring trend expanding the uses of the SSN.
The simplicity and efficiency of using a seemingly unique number that most people already possessed encouraged widespread use of the SSN by both government agencies and private enterprises. As record-keeping and business systems moved to automated data processing, the characteristics of the SSN made it a popular choice for record identification. In 1961, the Federal Civil Service Commission established a numerical identification system for all Federal employees using the SSN as the identification number. The next year, the IRS decided to begin using the SSN as its taxpayer identification number (TIN) for individuals. In 1967, the Defense Department adopted the SSN as the service number for military personnel. At the same time, use of the SSN for computer and other accounting systems spread throughout State and local governments and to the private sector, especially to banks, credit bureaus, hospitals, and educational institutions. There were no legislative restrictions on the use of the SSN at that time.
Statutory Provision Relating to the Public Sector
The first explicit statutory authority to issue SSNs was enacted in 1972. Prior to that time, SSNs were issued pursuant to administrative procedures that the Agency had established. Subsequent Congresses have enacted legislation requiring individuals to have an SSN in order to receive Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), Medicaid, and food stamps. Additional legislation authorized States to use the SSN in the administration of tax, general public assistance, driver's license, and motor vehicle registration laws.
Partly in response to concerns about the proliferation of the use of the SSN, Congress enacted the Privacy Act of 1974. It provided that, except when disclosure is required by Federal statute or by state or local statute or regulation adopted prior to January 1975, no Federal, State, or local government could withhold a right, privilege or benefit from a person simply because the person refused to furnish his or her SSN.
In the 1980s and 1990s, new legislation authorized additional governmental uses of the SSN, including income and eligibility verification, military draft registration, and for operators of stores that redeem food stamps. Legislation was also enacted that required taxpayers to provide the SSNs of dependents on tax returns.
A further expansion of the government’s use of the SSN was included in welfare reform legislation enacted in 1996. In order to improve child support enforcement, Congress required the SSN to be recorded in a broad array of records, including applications for professional licenses and marriage licenses, and placed in the record of divorce decrees, support orders, and paternity determinations.
Use of the SSN by the Private Sector
Generally, there are no restrictions in Federal law on the use of the SSN by the private sector. Businesses may ask for a customer’s SSN for such things as renting a video, applying for credit cards, obtaining medical services, and applying for public utilities. Customers may refuse to provide their number; however, a business may, in turn, decline to furnish the product or service.
Continuing advances in computer technology, the ready availability of computerized data, and rapidly increasing use of the internet have encouraged the growth of information brokers who amass and sell large volumes of personal information, including SSNs collected by businesses. When possible, information brokers store and retrieve information about an individual by that individual’s SSN because the SSN provides an easy method of maintaining computerized records and can be used to compare those records with other business systems which may also use the SSN as a file identifier.
Contemporary Challenges Regarding the Use of the SSN
The use of the SSN has become widespread in our society. The cumulative effect has been that the SSN has become the most widely used identifier by both government and the private sector in establishing and maintaining information about a given individual in various public as well as private record systems. An unintended consequence is that the SSN has also become a tool used by those intent on stealing another person’s identity or creating a false identity. We are very concerned about the misuse of the SSN, and we work closely with SSA‘s Inspector General, the Federal Trade Commission and the Department of Justice to help deter identity theft and assist in the apprehension and conviction of those who engage in this crime.
Assignment of the SSN
Prior to 1972, SSNs and cards were issued in our local field offices. Since 1972, SSNs have been issued centrally.
Generally, to obtain an SSN, individuals must apply for an SSN by filing a signed Form SS-5 "Application for a Social Security Card” and by submitting the required evidence. Currently, all applicants for an original number and card must submit evidence of age, identity, and United States citizenship or alien status to a Social Security field office (FO). FO personnel assist with the completion of the SS-5 application. Applicants for replacement Social Security cards must submit evidence of identity, and foreign born applicants must also provide evidence of their immigration status. The SS-5 application includes information about the applicant’s name, mailing address, citizenship, sex, race/ethnic description (optional), date and place of birth, mother’s maiden name and SSN, and father’s name and SSN. However, a parent’s SSN is only required for applicants for an original SSN who are under age 18.
While the information required on the SS-5 application has remained essentially the same over the years, the law and enumeration process have changed to ensure that SSA assigns SSNs only to eligible individuals. To strengthen the process, SSA has instituted additional safeguards to prevent a person from fraudulently obtaining an SSN. For example:
SSA verifies immigration status with DHS before assigning an SSN to a non-citizen.
SSA requires a mandatory in-office interview with all applicants age 12 or older since the majority of individuals born in the U.S have been assigned an SSN by the time they reached age 12.
As a result of Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA), Public Law (P.L.)108-458, SSA implemented policy changes effective December 17, 2005 that restrict the issuance of replacement SSN cards to no more than three per year and no more than ten per lifetime; establish minimum verification standards for documents submitted in support of an application for an SSN; and require independent verification of birth records of individuals of all ages applying for an original SSN card.
Effective November 2005, we added systems edits to our Enumeration at Birth (EAB) program so that children who have not yet been given a first name in the hospital are not assigned a Social Security Number until the parent submits documentation of the child’s name. SSA has also implemented additional safeguards designed to prevent the assignment of multiple SSNs to the same child.
I would also like to highlight some earlier changes that SSA implemented over the years to strengthen the enumeration process.
At the inception of the program, all SSNs were assigned and cards issued based solely on information provided by the applicant. Evidence of identity was not required. Over time, as the use of the number was expanded for other purposes, SSA recognized that changes were necessary to protect the integrity of the card and enumeration process. Beginning in November 1971, persons age 55 and over applying for an SSN for the first time were required to submit evidence of identity. As of April 1974, non-citizens were required to submit documentary evidence of age, identity and immigration status. This made it more difficult to obtain a card on the basis of a false identity. SSA was also concerned that individuals who had been assigned SSNs for purposes other than work might use the card to obtain unauthorized employment. Therefore, in July 1974, we began to annotate our records to reflect the fact that a non-citizen had been issued an SSN for nonwork purposes. Several years later, the integrity of the SSN was further improved. In May 1978, we began requiring all SSN applicants to provide evidence of age, identity and United States citizenship or non-citizen status.
Enumeration at Birth Process (EAB)
Because of increased demand for SSNs for children at earlier ages due to tax and banking requirements, SSA developed the EAB process in 1987. SSA recognized that all the information needed to process an SSN application for a newborn was gathered by hospital employees at the child’s birth and verified with the respective bureaus of vital statistics. Nearly three-quarters of all requests for an original SSN are now completed through this process.
This program is available in the fifty states, the District of Columbia, and Puerto Rico, and allows parents to indicate on the birth certificate form whether they want an SSN assigned to their newborn child. When a parent requests an SSN for a child, the State vital statistics office receives the request with the birth registration data from the hospital and then forwards this information to SSA. Under these procedures, the parent is not required to file a separate application for an SSN for the child. Based on the information the State forwards to SSA, we assign an SSN and issue a card for the child.
It is important to note that EAB is a voluntary program on the part of the hospitals and the States and other jurisdictions. No law requires state or hospital participation. The program is administered under the provisions of a contract between each state and SSA. SSA reimburses the states for participation on a per item basis (currently $2.04 for each birth record). EAB is a far more secure way to enumerate newborns. In addition, the program provides significant savings to the Federal government and a convenient service option for the public.
Enumeration at Entry (EAE)
To reduce fraud and improve government efficiency, SSA inaugurated our Enumeration-at-Entry process in October 2002. Under this process, SSA has entered into agreements with DHS and the Department of State (DOS) for those agencies to assist SSA in enumerating aliens. To assist SSA, DOS collects enumeration data as part of the immigration process. When the immigrant enters the United States, DHS notifies SSA and the card is issued.
Social Security Cards
In the beginning of the Social Security program, no special efforts were needed to prevent the Social Security card from being counterfeited. However, as the card’s use expanded and technology improved, counterfeiting became a concern. Beginning in 1983, the Social Security Act required that SSN cards be made of banknote paper, and to the maximum extent practicable be a card that cannot be counterfeited. SSA worked with the Bureau of Engraving and Printing, the Secret Service, and the Federal Bureau of Investigation to design a card that met these requirements.
All Social Security cards issued since October 1983 incorporate a number of security features intended to make the card counterfeit-resistant and tamper-proof. Some of these features include, but are not limited to, a tamper-proof marbleized background; Intaglio printing in some areas of the card; and colored planchettes (small discs) randomly displayed on the card. Obviously, while some security features have been made public, other features have not in order to protect the security of the card.
The immigration and welfare reform legislation passed in 1996 required SSA to develop a prototype of a new card as well as study and report on different methods for improving the Social Security card process. In 1997, SSA issued a report to Congress on “Options for Enhancing the Social Security Card,” and earlier this year provided the Subcommittee with an update on some of the findings in the report.
As you are aware, the expertise of counterfeiters and the wide availability of state-of-the-art technology make it increasingly difficult to develop and maintain a document that cannot be counterfeited, despite best efforts to guard against such incidents. Therefore, SSA continues to evaluate new technology as it becomes available to determine if additional features should be included.
As required by P.L. 108-458 , SSA, in consultation with DHS, has formed a taskforce to establish requirements that will further improve the security of Social Security numbers and cards. Since current law requires the card to be printed on banknote paper, the taskforce is limited to consideration of improvements to this type of card. The taskforce includes representation from DHS and several other agencies, including the Federal Bureau of Investigation, Department of State and the Government Printing Office. The taskforce is considering a wide range of security features that would strengthen the Social Security card, and we will develop a plan for implementing the taskforce recommendations.
The cost of replacing the current SSN card with a new version that includes enhanced security features would depend upon features to be included, e.g. biometric identifiers, and the universe of card-holders needing a new card. The cost of the card itself is minimal. The cost is driven by the cost of verifying the identity of the person applying for the card and, in the case of aliens, determining the immigration status and work authorization.
Last year, we estimated a card with enhanced security features such as biometric identifiers would cost approximately $25.00 per card, not including the start-up investments associated with the purchase of equipment needed to produce and issue this type of card. While any estimate would ultimately depend on the details of the proposal, last year’s estimate for replacing cards for 240 million cardholders nationwide was approximately $9.5 billion. Currently however we know that the cost of issuing SSN cards has increased by approximately $3.00, due to new requirements for additional verification of evidence, so we anticipate an increase in the total cost estimate when we update our figures to reflect current dollar costs.
Legends on the SSN Cards
I would now like to discuss the relationship between the Social Security card and work authorization. The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for an employer to knowingly hire anyone not legally permitted to work in the United States. Under IRCA, all employers are required to verify the identity and employment eligibility of all new employees regardless of citizenship or national origin. There are a number of documents specified in the law and DHS regulations which may be used for this purpose. Some documents, such as a United States passport, establish both employment eligibility and identity. Others, including a Social Security card without a restrictive legend, can be used to establish employment eligibility but do not establish identity and must be accompanied by an identification document, such as a State driver’s license.
It is important to note that, just as the Social Security number or card does not establish identity, neither does it always reflect an individual’s current work authorization status. The SSN card only reflects an individual’s work authorization status at the time the card was issued—it is a snapshot in time. An individual’s work authorization status may change over the years, and the DHS has sole jurisdiction over work authorization determinations for noncitizens.
The vast majority of original Social Security cards are issued to United States citizens or to non-citizens who have been permanently authorized to work in the United States. These cards show only the name and SSN of the individual.
Unlike the cards issued to United States citizens or to non-citizens who have been permanently authorized to work in the United States, cards issued to non-citizens who are not authorized to work or who are only temporarily authorized to work bear one of two legends describing work authorization status at the time the card was issued.“Not Valid for Employment”
Initially, SSA issued the same type of Social Security card to everyone, whether or not the individuals were authorized to work. In 1974, SSA began assigning SSNs for nonwork purposes, but the card was not specifically annotated. Beginning in May 1982, SSA started issuing cards printed with the legend “Not Valid for Employment” to non-citizens who are not authorized to work. This was due to the increasing need for individuals to have SSNs for nonwork purposes and concerns that such individuals might otherwise use their SSNs for work. With this restrictive legend appearing on a card, employers were able, for the first time, to determine whether the individual to whom the card was issued was authorized to work. Of course, an employer could not rely solely on the card to establish that the person presenting the card was the person to whom the SSN was assigned.
Cards containing this legend are often referred to as “nonwork SSNs.” In October 2003, SSA significantly tightened the rules concerning issuance of nonwork SSNs. SSA only issues such an SSN when 1) a Federal statute or regulation requires an SSN to receive a particular benefit or service, which an alien has otherwise established entitlement; or 2) a State or local law requires an SSN to get public assistance benefits, to which the alien has otherwise established entitlement and for which all other requirements have been met.“Valid for Work Only with DHS Authorization”
Beginning in September 1992, SSA began issuing cards with the legend “Valid for Work Only with INS Authorization” to noncitizens lawfully in the United States with temporary authorization to work. This legend has been changed to “Valid for Work Only with DHS Authorization” to reflect the change from “INS” to “DHS”. In these cases, employers must look at the non-citizen’s DHS documents to determine if the individual has current work authorization. In addition a participating employer may use the DHS employment eligibility verification service, known as the Basic Pilot, to confirm employment eligibility for newly hired employees, which includes verification with SSA records and for noncitizens, with DHS records.
In Fiscal Year (FY) 2005, SSA issued approximately 5.4 million original cards. Of these, 4.3 million were issued to United States citizens. Approximately 1.1 million cards were issued to non-citizens with temporary or permanent work authorization.
Over the years SSA has made continual enhancements to the Social Security card. Because of the substantial cost of replacing all cards in use, older versions of the card remain valid. Thus, there are about 50 different variations of the SSN card that have been issued since 1936.
SSA also issues cards to aliens legally in the United States but who are not authorized to work by DHS. Last year SSA issued fewer than 15,000 of this type of non-work card. Each year as required by Section 414 of the Illegal Immigration Reform Act of 1996, P.L. 104-208, SSA reports to Congress the number of SSNs assigned to aliens who were not authorized to work in the United States when the card was issued for whom we receive Form W-2s. The most recent report stated that earnings were credited to 555,227 SSNs assigned to non-citizens who did not have authority to work in the United States at the time the SSN was assigned. It is important to note that since the work authorization status of a non-citizen may change, an earnings report under a nonwork SSN does not necessarily mean that unauthorized work was performed.
Additional Efforts to Strengthen the Enumeration Process
SSA has taken a number of steps to further strengthen the processes associated with assigning SSNs. You will recall that SSA formed a high-level response team to develop recommendations on enumeration policy and procedure in the aftermath of the terrorist attacks of September 11, 2001. As previously reported to this Subcommittee, implementation of many of the team's recommendations has strengthened our capability to prevent those with criminal intent from obtaining and using SSNs and SSN cards. As mentioned earlier in my testimony, beginning June 1, 2002, SSA began verifying birth records with the issuing agency for all United States born SSN applicants age one or older. In addition, beginning in July 2002, SSA began verifying the authenticity of all immigration status with DHS before assigning SSNs to non-citizens.
We also continue to look for additional ways to make the enumeration process more efficient and secure. In November 2002, SSA piloted a Social Security Card Center in Brooklyn, New York. The Card Center represents a joint effort by SSA, SSA’s Office of the Inspector General (OIG) and Department of Homeland Security (DHS). The collaboration of these parties is intended to strengthen SSN application procedures, and to ensure that applications are processed with a high degree of integrity, efficiency and expertise.
In April 2005, SSA established another Social Security Card Center in Las Vegas, Nevada. The Las Vegas Social Security Card Center is dedicated exclusively to helping Las Vegas Valley and southern Nevada residents apply for a new or replacement Social Security Card. SSA plans to open additional centers as resources permit over the next several years based on SSN workloads and other service delivery factors.
SSN Verification Processes
Many diverse organizations request SSN verifications for various purposes. SSA must consider each request to determine whether to deny or permit verification and what information, if any, may be disclosed. SSA also must consider each request to ensure that the proper safeguards are in place to protect the information being disclosed. SSA must also be reimbursed for any work not related to the administration of our programs. Of course, by law, we cannot fulfill requests for non-program purposes if doing so would impede our mission.
For many years, most SSN verifications were processed in our field offices. This was a manual process which was highly labor intensive. In 1983, SSA implemented the Employee Verification Service (EVS) in order to better manage the verification workloads. Since then SSA has provided additional ways to access SSN verification routines as technology has evolved.Employers
Employers are our primary requestors for SSN verifications because they must accurately report wage information for the people they employ. One of SSA’s core business processes is maintaining the accuracy of earnings for all workers to ensure that they receive credit for the work on which FICA taxes were paid. Accurate earnings information is important because a worker’s earnings record is the basis for computing retirement, survivors, and disability benefits.
SSA has successfully provided SSN verification services to the employer community for many years. Employers can verify SSNs for their employees by telephone, by submitting paper listings or by magnetic media.
To further improve our service to employers, SSA piloted an online service, known as Social Security Number Verification Service (SSNVS), in April 2002. In June 2005, SSA expanded the availability of this service to all employers. This optional, free and secure Internet service provides employers with an immediate response for a limited number of SSN verification requests or a next business day response for high volume SSN verification requests.
As mentioned earlier in my testimony, employers may participate in the Basic Pilot program, an ongoing joint initiative in which SSA supports DHS in assisting participating employers in confirming employment eligibility for newly hired employees. Participating employers may use the automated system to verify SSNs and alien registration or admission numbers through verification checks of SSA and DHS databases.
In 2005, through the EVS, SSNVS, and Basic Pilot programs, we estimate we provided a total of 67 million employer verifications, up from 62 million in 2004.Federal and State Agencies
Many Federal, State, and local agencies request SSN verification services for numerous purposes, from issuing food stamps to tracking convicted felons. Some of the agencies receive information as a result of legislation. Some of these organizations include, but are not limited to:
- The Department of Education
- The Department of Justice
- The Office of Child Support Enforcement
- The Internal Revenue Service
- The Department of Veterans Affairs
- The Selective Service System
- Any Federal agency which uses the SSN as a numerical identifier in their record system
- Federal, State, and local agencies for validating the SSN used in administering income or health maintenance programs
- Federal, State, and local agencies where SSN use is authorized under Federal statute and they are involved in programs such as Temporary Assistance for Needy Families, Food Stamps, Medicaid, and Unemployment Insurance
- State Motor Vehicle Agencies
- Law enforcement fugitive felon operations
- SSA OIG.
SSA provides verifications to some State agencies, such as State motor vehicle licensing agencies via the American Association of Motor Vehicle Administrators (AAMVA).Third Parties
Under the Privacy Act, SSA may verify or release SSNs to third parties that have obtained the written consent of the number holder, regardless of the purpose of the request. SSA has been providing such third party verifications for many years through existing verification processes.
Impact of Public Law 108-458
Section 7213 of P.L. 108-458 contains several provisions to strengthen the integrity of our enumeration process. Two key provisions include the implementation of limits on the number of replacement SSN cards an individual can receive to three per year and ten per lifetime with limited exceptions and the addition of death and fraud indicators to SSN verification routines for employers, State agencies issuing driver's licenses and identity cards, and other verification routines as determined to be appropriate.
As I mentioned previously, SSA implemented the restrictions on replacement SSN cards effective December 17, 2005 as required by IRTPA. In addition, although most death records were already available to employers and DMVs through our SSN verification services, we have also added the State death records that were previously restricted as authorized by IRTPA. Those additional death records were added to SSN verification routines on March 6, 2006, well before the implementation deadline set by IRTPA. We continue to work to ensure that fraud indicators will be added to the SSN verification routines by December 2007.
Section 7213 of IRTPA also required SSA to establish minimum standards for verification of documents submitted in connection with an SSN. To this end, SSA established rigorous new standards for evidence of U.S. citizenship and identity submitted in connection with an application for an SSN.
IRTPA also required SSA to form an interagency taskforce specifically charged with establishing security requirements, including standards for safeguarding SSN cards from counterfeiting, tampering, alteration and theft. This interagency taskforce is working to improve the security features included on the current banknote card. SSA will prepare for implementation of the taskforce recommendations by June 2006.
In conclusion, the Social Security number was originally intended as a means to provide a record of the earnings of people who worked in jobs covered under the new Social Security program. We must remember that with all the improvements in the assignment of SSNs, the Social Security card is still just a record of the SSN assigned to the individual and not an identity document.
However, as we all know, the use of the SSN for other purposes has grown significantly over the years. The challenge we face is to balance SSA’s commitment to assigning numbers quickly and accurately to individuals who qualify for them and need them to work, with the equally important need to maintain the integrity of the enumeration system to prevent SSN fraud and misuse.
I want to thank the Chairman and members of the Subcommittee for inviting me here today, and I look forward to working with you to continue to improve SSA’s processes.
I will be happy to answer any questions you might have.