ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS

Subcommittee on Social Security

Shaw Announces Joint Hearing on Preserving the Integrity of Social Security Numbers
and Preventing Their Misuse by Terrorists and Identity Thieves

Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on Social Security of the Committee on Ways and Means, today announced that the Subcommittee will hold a joint hearing with the Subcommittee on Immigration, Border Security, and Claims of the Committee on Judiciary, chaired by Congressman George W. Gekas (R-PA), on preserving the integrity of Social Security numbers and preventing their misuse by terrorists and identity thieves.  The hearing will take place on Thursday, September 19, 2002, in 1100 Longworth House Office Building, beginning at 1:00 p.m.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.

BACKGROUND:

Although Social Security numbers (SSNs) are used for many legitimate purposes, wide availability, and easy access to this very personal information has greatly facilitated Social Security number-related crimes and fueled growing concern for safeguarding individuals’ privacy.

Identity theft is considered the fastest growing financial crime in the country, affecting an estimated 500,000 to 700,000 people annually, regardless of age, gender, or race.  Older Americans will become an increasingly attractive target by criminal elements, since they hold substantial wealth and because seniors are often dependent on caregivers.  In addition, the rising cost of this crime increases the cost of banking, insurance, and credit cards for all Americans.

Worse yet, according to the Federal Bureau of Investigation, terrorists have utilized Social Security number fraud and identity theft to obtain employment, access secure locations, and finance their operations, thereby posing a significant threat to our national security.  Forged documents, whether bogus birth certificates, fake SSN cards, or false immigration documents, are increasingly available from those who make their living selling false identities.  There are now illegal markets throughout the cities of the United States where anyone can acquire a false or stolen identity.

The Social Security Administration (SSA) serves as the front line of defense in ensuring  SSN integrity, because it is responsible for accurately assigning SSNs and ensuring the wages earned and Social Security benefits claimed on that number are only those of the number holder.  Last year, SSA issued 18.1 million SSN cards, of which 5.8 million were new and 12.3 million were replacement SSN cards.  The SSA’s Inspector General (IG) has long criticized the agency’s failure to verify the authenticity of identification documents, and in a recent report estimated that of the 1.2 million SSNs issued to non-citizens in 2000, nearly 100,000 were based on invalid or inappropriate immigration documents.  This year, the SSA began verifying supporting immigration records before issuing SSN cards.  The agency is also working with the Immigration and Naturalization Service (INS) and the U.S. Department of State (DoS) to implement new data sharing initiatives and an Enumeration at Entry initiative.

Each year the SSA receives about 250 million wage reports from employers covering approximately 150 million workers.  For tax year 2000, employers reported almost 9.6 million wage items, equaling almost $50 billion in wages, that could not be credited to individuals due to lack of key information or submission of erroneous information, although further efforts to reduce these discrepancies is ongoing.  According to the SSA, after all processing is complete, 2 to 3 percent of wage items will remain unmatched.  Earnings that cannot be matched to a particular worker are recorded in separate file known as the Earnings Suspense File (ESF).

According to the SSA IG, the ESF contains over 237 million wage items and $375 billion in wages accrued between tax years 1937 and 2000.  However, approximately two-thirds of growth in the file occurred between 1990 and 2000.  The IG has referred to the ESF as a “major management challenge” for the agency because of its potential impact on benefit amounts and administrative costs, and because it represents a significant portion of SSN misuse.  This year, the SSA extended its outreach to employers by sending letters to all employers who submitted earnings records that did not match SSA’s records and asking them to provide corrected information.  In addition, the SSA began piloting an on-line system to supplement existing verification procedures and more quickly enable employers to verify the names and SSNs of newly hired employees.

Although SSA issues SSNs in order to track individual’s wages and right to Social Security benefits, the agency assigns SSNs for limited non-work purposes to certain individuals who are not U.S. citizens and are not authorized to work by the INS.  Today, SSA only issues non-work SSNs to these individuals if Federal statute requires one to access a particular benefit or service, or State or local law requires one to get general assistance benefits.  However, despite their “non-work” designation, in tax year 2000 approximately 600,000 individuals with non-work SSNs earned over $21 billion, though in some cases individuals may have become authorized to work without notifying the SSA.

In announcing the hearing, Chairman Shaw stated:  “This Subcommittee has extensively examined identity theft by criminals and heard first-hand testimony of the personal devastation caused by this type of robbery.  In the year since the September 11 attacks, we have also learned how SSN fraud can enable terrorism.  That is why my legislation to improve the privacy of SSNs has generated bipartisan support.  The SSN protection must be an integral part of a comprehensive effort to strengthen homeland security.  It is one very tangible way we can help prevent the American public from being further victimized by terrorists.”

Chairman Gekas added: “The privacy of the Social Security numbers of every American is under attack by terrorists, international criminals, and an increasing number of identity thieves.  I believe the Social Security Administration can do more to tighten up its procedures for issuing Social Security Cards to prevent fraud.”

FOCUS OF THE HEARING:

The Subcommittees will examine:  the role SSN fraud plays in crime and terrorist activities and methods by which criminal fraud is accomplished utilizing stolen SSNs; the integrity of the SSA’s enumeration and wage crediting process; Federal agency coordination and cooperation, including data sharing, to verify identification documents, and to detect and prevent fraud; and recommended legislative proposals aimed at combating SSN misuse and protecting privacy.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Due to the change in House mail policy, any person or organization wishing to submit a written statement for the printed record of the hearing should send it electronically to hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to (202) 225-2610, by the close of business, Thursday, October 3, 2002.  Those filing written statements who wish to have their statements distributed to the press and interested public at the hearing should deliver their 200 copies to the Subcommittee on Social Security in room B-316 Rayburn House Office Building, in an open and searchable package 48 hours before the hearing.  The U.S. Capitol Police will refuse sealed-packaged deliveries to all House Office Buildings.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below.  Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee. 

1. Due to the change in House mail policy, all statements and any accompanying exhibits for printing must be submitted electronically to hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to (202) 225-2610, in Word Perfect or MS Word format and MUST NOT exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.

2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3.  Any statements must include a list of all clients, persons, or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers of each witness.

Note: All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call (202) 225-1721 or (202) 226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.