[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
IS THE FEDERAL GOVERNMENT DOING ALL IT CAN TO STEM THE FLOW OF ILLEGAL 
                              IMMIGRATION?

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON REGULATORY AFFAIRS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 25, 2006

                               __________

                           Serial No. 109-234

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCMIDT, Ohio                        (Independent)
BRAIN P. BILBRAY, California

                      David Marin, Staff Director
                Lawrence Halloran, Deputy Staff Director
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

                   Subcommittee on Regulatory Affairs

                 CANDICE S. MILLER, Michigan, Chairman
CHRIS CANNON, Utah                   STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              WM. LACY CLAY, Missouri
LYNN A. WESTMORELAND, Georgia        CHRIS VAN HOLLEN, Maryland
JEAN SCHMIDT, Ohio

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                       Ed Schrock, Staff Director
               Kristina Husar, Professional Staff Member
                         Benjamin Chance, Clerk
                     Krista Boyd, Minority Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 25, 2006....................................     1
Statement of:
    Gerry, Martin H., Deputy Commissioner, Office of Disability 
      and Income Security Programs, Social Security 
      Administration; Alfred B. Robinson, Jr., Acting 
      Administrator, Wage and Hour Division, Employment Standards 
      Administration, U.S. Department of Labor; Janis Sposato, 
      Associate Director, U.S. Citizenship and Immigration 
      Services, U.S. Department of Homeland Security; Matthew C. 
      Allen, Acting Deputy Assistant Director, Smuggling and 
      Public Safety Division, U.S. Immigration and Customs 
      Enforcement, U.S. Department of Homeland Security; and K. 
      Steven Burgess, Director, Examinations, Small Business/Self 
      Employed Division, Internal Revenue Service................     9
        Allen, Matthew C.........................................    40
        Burgess, K. Steven.......................................    54
        Gerry, Martin H..........................................     9
        Robinson, Alfred B., Jr..................................    24
        Sposato, Janis...........................................    31
Letters, statements, etc., submitted for the record by:
    Allen, Matthew C., Acting Deputy Assistant Director, 
      Smuggling and Public Safety Division, U.S. Immigration and 
      Customs Enforcement, U.S. Department of Homeland Security, 
      prepared statement of......................................    43
    Burgess, K. Steven, Director, Examinations, Small Business/
      Self Employed Division, Internal Revenue Service, prepared 
      statement of...............................................    56
    Gerry, Martin H., Deputy Commissioner, Office of Disability 
      and Income Security Programs, Social Security 
      Administration, prepared statement of......................    13
    Miller, Hon. Candice S., a Representative in Congress from 
      the State of Michigan, prepared statement of...............     4
    Robinson, Alfred B., Jr., Acting Administrator, Wage and Hour 
      Division, Employment Standards Administration, U.S. 
      Department of Labor, prepared statement of.................    26
    Sposato, Janis, Associate Director, U.S. Citizenship and 
      Immigration Services, U.S. Department of Homeland Security, 
      prepared statement of......................................    33


IS THE FEDERAL GOVERNMENT DOING ALL IT CAN TO STEM THE FLOW OF ILLEGAL 
                              IMMIGRATION?

                              ----------                              


                         TUESDAY, JULY 25, 2006

                  House of Representatives,
                Subcommittee on Regulatory Affairs,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m. in 
room 2154, Rayburn House Office Building, Hon. Candice S. 
Miller (chairman of the subcommittee) presiding.
    Present: Representatives Miller, Lynch, and Schmidt.
    Also present: Representatives Bilbray and Foxx.
    Staff present: Ed Schrock, staff director; Rosario 
Palmieri, deputy staff director; Kristina Husar, professional 
staff member; Benjamin Chance, clerk; Karen Lightfoot, minority 
communications director/senior policy advisor; Krista Boyd, 
minority counsel; and Cecelia Morton, minority clerk.
    Mrs. Miller. Good morning. I would like to call the 
Subcommittee on Regulatory Affairs to order.
    I certainly want to welcome everyone to our hearing today 
on the Federal Government's ability to enforce current 
immigration laws against employers who flout the law by 
employing illegal workers with impunity, quite frankly.
    If lawmakers are committed to stemming the tide of illegal 
immigrants across our borders, it is certainly essential to 
enforce the laws that we have against employing illegal aliens. 
It is the promise of these jobs, of course, that entices so 
many illegal aliens to leave their homeland, and to risk the 
perils of a border crossing. However, through generations of 
practice, they have learned that once in America, they are home 
free, essentially. Many employers have also come to realize 
that no one is checking up on them. And in some industries, 
this makes the lure of cheap illegal labor almost irresistible.
    These immigrants and employers long ago figured out the 
very sorry fact that we have only recently become aware of, 
that the 1986 immigration law was designed to fail. The current 
system in place hampers the ability of the Federal Government 
to enforce immigration laws and to crack down on employers who 
openly disregard the law.
    Let me briefly detail some of the problems that we think 
are in the provisions that currently prevent the Federal 
Government from being as proactive as one would like us to be.
    No. 1, with respect to documentation, there is a very low 
level of certainty that employee documents are valid, because 
employers are forced to accept a diverse variety of 
identification, sort of the breeder documents and work 
authorization documentation. Unless a prospective employee's 
i.d. is obviously fake, the employer must accept it. These 
identification documents include school i.d. cards, Canadian 
driver's licenses, school report cards and day care or nursery 
school records as proof of identity.
    Additionally, the 1986 immigration law set the penalties 
for violating the law very low and the standard for proving the 
violation very high. There is no requirement that employers 
retain copies of the identification and work authorization 
documents that they review or any subsequent documentation that 
they might receive that pertains to the work authorization of 
the individual. This of course not only makes the immigration 
laws very difficult to enforce, it also provides a perverse 
incentive for the proliferation of a fraudulent document and 
identity theft.
    No. 2, the current legal framework puts up firewalls 
between the Social Security Administration and the Department 
of Homeland Security that prohibit the Social Security 
Administration from sharing actionable information about the 
most egregious violators of immigration law with the 
Immigration and Customs Enforcement [ICE], the agency charged 
with enforcing the 1986 immigration law and of course the 1996 
reform legislation as well.
    SSA has a data base called the Earning Suspense File that 
could be used to crack down on employers who hire illegal 
workers. However, SSA has no authority to take action against 
the employer who submits wage reports that contain what they 
call ``no matches.''
    Additionally, SSA is interpreting the IRS Code to prevent 
them from sharing information derived from wage reports with 
any other agency, absent explicit statutory authorization. ICE 
has indicated that access to some of this information would be 
a very valuable tool to help focus their enforcement 
activities.
    Meanwhile, the IRS is the only agency with both the W-2 
information and the enforcement capability, based on their 
authority to target individuals who submit fraudulent tax 
documents. Unfortunately, the IRS seems to have decided as a 
matter of policy and priority to not pursue these violations. I 
am sure we are going to get to that in today's questioning.
    And then No. 3, finally and perhaps most disturbing, is 
that no Government entity is really charged with inspections of 
the I-9 forms, absent reasonable suspicion of wrongdoing. The 
Department of Labor has authority to review the I-9 documents, 
but I-9 inspections occur only as an inquiry of a directed fair 
labor investigation. The Department of Homeland Security also 
has authority to review I-9s, but they have to rely on tips. 
And if they are denied access to the ESF, the Department of 
Homeland Security has very limited ability to target private 
sector employers who consistently violate our laws.
    To use a tongue in cheek example, this would be like asking 
all Americans to go ahead and file their taxes in good faith 
with zero threat of IRS inspectors ever checking on our 
submissions.
    In summary, Congress has devised a system that asks 
employers to be familiar with 30 plus obscure documents under 
penalty of law, but with a wink and a nod declines to establish 
a system to verify compliance of these laws. Quite frankly, it 
is my personal observation that this pervasive attitude and our 
very porous border situation has evolved over several decades. 
It didn't just happen during this Congress or this 
administration or the last Congress or the previous 
administration. As I say, it has happened over a number of 
decades.
    And really again, my personal observation is it is only 
recently that the American public, as is often the case, is 
ahead of the politicians. Because the American public is losing 
their sense of humor with the porous border situation and the 
lax enforcement of our current immigration laws, Congress 
finally is developing the political will to focus our attention 
and resources on this problem.
    And I think this is going to be a very, very interesting 
hearing. Certainly every administration is bound by the laws 
that we in the U.S. Congress pass. It is incumbent on us as 
Members of Congress to understand the problem as it exists and 
to offer some realistic solutions as well. With that, I would 
like to recognize the distinguished member from Massachusetts, 
Ranking Member Lynch, for his opening statement.
    [The prepared statement of Hon. Candice S. Miller follows:]

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    Mr. Lynch. Thank you, Chairman Miller.
    First of all, I want to thank the panelists who have come 
before us to testify. We have great coverage, Madam Chair, with 
this panel. I think we have every angle and every aspect of the 
problem that is before us covered by the expertise of the 
panelists, the IRS, the Department of Labor, Citizenship and 
Immigration Services and also Customs Enforcement.
    Just for a little bit of background, before coming to 
Congress, I was an iron worker for about 18 years, strapped on 
a pair of work boots, went out there and did my job. I worked 
basically in the private sector, everything was by competitive 
bid. And it was a continuing frustration for me as a worker, as 
a manager on a construction project and also as a general 
foreman, to prepare bids in a competitive environment only to 
have our bids undercut by contractors who we knew, we knew were 
using illegal labor and not paying them the full wages.
    So this is a competitiveness issue. While I certainly am 
understanding of our immigration problems in the United States, 
I also think we owe it to our citizens to give them a fair 
shake and have a full and fair opportunity to get good jobs and 
not have to compete on illegal lines. I hope that is the 
beginning of the job we are going to do here this morning.
    As Congress continues to look at how our current 
immigration system can be improved, it is important that we 
keep in mind the need to protect the rights of workers who are 
authorized to work in the United States. It is important to 
create an atmosphere that encourages compliance with the law 
while at the same time ensuring that all authorized workers 
have a full and fair opportunity to work.
    I am a firm believer that we have operated a system of open 
borders in this country for a very long time. I don't believe, 
as people say, that 10 million or 12 million people sneaked 
into America, sneaked into the United States; 12 million people 
don't sneak in anywhere. We operated with a system of open 
borders in this country for many years. We shouldn't be 
surprised that illegals came into this country. We also 
operated a system that allowed them to come and go to work here 
under, in many cases, very dubious circumstances.
    Today's hearing will explore the current worker 
verification system. Under current law, our employers are 
required after hiring a worker to check the worker's Social 
Security number or other approved documents to verify the 
worker's identity and eligibility to work. Employers must then 
fill out a form certifying that the worker's documents have 
been reviewed and that they appear to be legitimate. Employees 
can voluntarily participate in the Social Security number 
verification system, which allows them to check employees' 
names and Social Security numbers against the Social Security 
Administration's numbers. This system allows employees to be 
more proactive in complying with the law.
    One of the issues that we need to hear about, however, is 
whether it would be beneficial to increase the information 
about employers and employees that could be shared between the 
Social Security Administration, the IRS and the Department of 
Homeland Security. I hope that as part of the discussion, the 
witnesses here today who have joined us will address some of 
the concerns that have been raised regarding these proposals. 
For example, the impact that sharing tax information would have 
on taxpayer privacy and how those concerns can be addressed.
    I am also interested in hearing from the witnesses how, 
with the increased use of verification systems, we can protect 
against unfair and unlawful terminations when employees 
challenge ``no match'' results. In looking at employer 
verification requirements, we can't ignore one of the biggest 
problems with our current system: the administration's lax 
enforcement. The Washington Post reported on June 19, 2006, 
that between the years 1999 and 2003, worksite enforcement 
operations, this used to kill me in the field, trying to get 
somebody to go out there and inspect, you knew there were 
foreign workers, they had Canadian plates and we knew these 
workers who were coming over the border from Canada in New 
England.
    The Washington Post reported that between 1999 and 2003 
worksite enforcement operations were scaled back 95 percent. So 
while verbally we say we want to enforce it, we are doing 95 
percent fewer inspections and fewer enforcement operations by 
the Immigration and Naturalization Service, now called U.S. 
Immigration and Customs Enforcement.
    The number of employers prosecuted for unlawfully employing 
unauthorized immigrants dropped from 182 in 1999 to 4, 4 in 
2003. Fines collected went from $3.6 million to $212,000. We 
just stopped doing it.
    The Department of Homeland Security has increased 
enforcement efforts in recent months, but overall, as GAO 
reported last month, ``Worksite enforcement has been a 
relatively low priority.''
    I hope to hear from the witnesses who are with us today 
from the Department of Homeland Security in terms of what is 
happening with enforcement. I want to thank you all again for 
coming here and for taking the time to help the committee with 
its work.
    Madam Chair, I yield back. Thank you.
    Mrs. Miller. Thank you very much, Mr. Lynch.
    Because we are an oversight committee with subpoena 
authority, it is the custom of the committee to swear in all of 
our witnesses. So if you will all please rise and raise your 
right hands.
    [Witnesses sworn.]
    Mrs. Miller. Thank you very much.
    Our first panelist today is Martin Gerry. He was appointed 
by President Bush as Deputy Commissioner of Social Security for 
Disability and Income Support Programs in 2001. Prior to 
assuming his current position, Mr. Gerry served as a research 
professor and director of the Center for the Study of Family, 
Neighborhood and Community Policy at the University of Kansas, 
where he was also a faculty member within the University 
schools of law and education.
    Mr. Gerry, we appreciate your attendance here at the 
subcommittee, and look forward to your testimony.

 STATEMENTS OF MARTIN H. GERRY, DEPUTY COMMISSIONER, OFFICE OF 
   DISABILITY AND INCOME SECURITY PROGRAMS, SOCIAL SECURITY 
ADMINISTRATION; ALFRED B. ROBINSON, JR., ACTING ADMINISTRATOR, 
 WAGE AND HOUR DIVISION, EMPLOYMENT STANDARDS ADMINISTRATION, 
 U.S. DEPARTMENT OF LABOR; JANIS SPOSATO, ASSOCIATE DIRECTOR, 
 U.S. CITIZENSHIP AND IMMIGRATION SERVICES, U.S. DEPARTMENT OF 
 HOMELAND SECURITY; MATTHEW C. ALLEN, ACTING DEPUTY ASSISTANT 
     DIRECTOR, SMUGGLING AND PUBLIC SAFETY DIVISION, U.S. 
    IMMIGRATION AND CUSTOMS ENFORCEMENT, U.S. DEPARTMENT OF 
      HOMELAND SECURITY; AND K. STEVEN BURGESS, DIRECTOR, 
 EXAMINATIONS, SMALL BUSINESS/SELF EMPLOYED DIVISION, INTERNAL 
                        REVENUE SERVICE

                  STATEMENT OF MARTIN H. GERRY

    Mr. Gerry. Madam Chair, Mr. Lynch and members of the 
subcommittee.
    The President has proposed a comprehensive approach to 
immigration reform, one that works to better secure our 
borders, enforce worksite employment requirements and address 
the variety of economic issues related to immigration. This 
comprehensive approach calls for the creation of a true 
temporary worker program that allows individuals to achieve 
legal status by paying their taxes, learning English and 
gaining and sustaining employment in our society.
    It is against that backdrop that I want to thank you for 
inviting me here today to talk about the wage reporting and 
Social Security number verification processes, the Earning 
Suspense File and no match letters that we issue, and the Non 
Work Alien File.
    The Social Security Administration's role in the wage 
reporting process is to ensure that all workers receive credit 
for the work for which they and their employers paid Social 
Security taxes. Each year, the Social Security Administration 
processes approximately 235 million W-2s, from 6.6 million 
employers that are sent to us either electronically or on 
paper. Social Security records these earnings to each worker's 
account so that they are considered in determining eligibility 
for benefits, that would be retirement, disability benefits, 
survivors benefits, and the amount of benefits to be paid. This 
information is also passed on to the Internal Revenue Service 
for income tax purposes.
    Social Security number verification is a key to ensuring 
that wage reports are properly matched to the right Social 
Security number. Over the years, we have developed three 
alternative methods for employers to verify Social Security 
numbers. In 2005, through a combination of these methods, we 
estimate that we provided a total of 67 million employer 
verifications. The employee verification service is a free, 
convenient way for employers to verify employee Social Security 
numbers. It provides employers with several options, depending 
on the number of Social Security numbers to be verified.
    To further increase the ease and convenience of verifying 
employee Social Security numbers, we developed the Social 
Security Number Verification Service. After obtaining a PIN and 
password, in a simple registration process, employers can use 
the Internet to get immediate verification of the accuracy of 
the employees' names and Social Security numbers.
    Now, neither of these first two approaches deals with work 
authorization. I just want to make that clear. They are really 
ways for employers to be sure that they have a name and number 
match. Any employer in all 50 States, however, may participate 
in the Basic Pilot Program, an ongoing voluntary program in 
which the Social Security Administration supports the 
Department of Homeland Security in assisting employers who want 
to confirm employment eligibility for newly hired employees. 
The information the employer submits to the Department of 
Homeland Security is sent to Social Security to verify that the 
Social Security number, name and date of birth submitted 
matches information in Social Security Administration records.
    The Social Security Administration also confirms U.S. 
citizenship, thereby confirming work authorization. The 
Department of Homeland Security confirms current work 
authorization for non-citizens. Then finally, the Department of 
Homeland Security notifies the employer of the employee's 
current work authorization status and whether the name and 
Social Security number match SSA's records.
    As of July 2006, the Department of Homeland Security and 
Social Security have signed agreements with over 10,000 
employers, and so far, for fiscal year 2006, the Social 
Security Administration is receiving an average of 150,000 
Basic Pilot requests per month.
    The Earnings Suspense File is an electronic holding file 
for wage items reported on forms W-2 that cannot be matched to 
the earnings records of individual workers. A mismatch occurs 
when Social Security cannot match the name and SSN on a W-2 to 
information in our records. If the Social Security 
Administration later resolves this mismatch, we can remove the 
item from the suspense file and credit the wages to the proper 
person's record.
    While the Earnings Suspense File represents an accounting 
of unassociated wage items, the taxes on these wages have been 
paid and are credited to the trust funds. Each year, 
approximately 10 percent of the W-2s we receive, about 23.5 
million, have invalid name and Social Security number 
combinations. Using computer routines, we subsequently are able 
to post more than half of these W-2s. These routines are 
basically computer tests which can tell whether there are some 
numbers reversed or there is some minor error that creates the 
initial problem.
    By October 2005, if you looked at the 2003 data, so about a 
year and a half later, less than half these wage items 
initailly sent to the earnings suspense file are still there. 
Each year, 10 percent have an invalid name and Social Security 
number. The routines reduce that to less than 5 percent by 
October of the year after the year in which we actually process 
the data, so in 2005 we were down to 8.8 million or about 3.8 
percent of all W-2's received. So we have gone from 10 percent, 
we then resolved more than half and we reduced to 3.6 percent.
    And subsequent processing reduces this still further. To 
give you an example, for the 1995 year, today only 2.3 percent 
of the original are unposted. So over time, we do resolve many 
of these mismatches.
    It has been widely reported that most of the wage items in 
the Earnings Suspense File can be attributed to work by illegal 
aliens. We cannot determine the specific number of wage items 
that are attributable to earnings of individuals not authorized 
to work in the United States. And while some percentage of name 
and Social Security number mismatches are attributable to 
unauthorized workers, mismatches occur for a variety of other 
reasons, including typographical errors, unreported name 
changes and incomplete or blank Social Security numbers.
    It is important to note that wage items that remain in the 
Earnings Suspense File include wages paid to individuals who 
were not and may not currently be authorized to work in the 
United States. These individuals have actually paid taxes into 
the Social Security Trust Fund and are unable to receive 
benefits.
    In certain instances, when a Social Security number does 
not match the worker's name, the Social Security Administration 
notifies employers of this situation through what is commonly 
called a ``no-match'' letter. We send these letters to 
employers who submit more than 10 wage items when more than 
one-half of 1 percent of the items that they submit consist of 
a Social Security number and name combination that does not 
match. I said half a percent, it is 5 percent.
    In 2005, we sent ``no-match'' letters to approximately 
127,000 employers. The only source of information that Social 
Security receives about a taxpayer, employer and earnings is 
from tax related information on a W-2. We receive and process 
this information as an agent for the Internal Revenue Service. 
Use and disclosure of tax return information is governed by 
Section 6103 of the Internal Revenue Code. We currently have 
the authority to use this information only for the purpose of 
determining eligibility for and the amount of Social Security 
benefits.
    The administration supports legislative proposals that 
would allow the disclosure of ``no-match'' data to the 
Department of Homeland Security in the interest of national 
security and for law enforcement purposes. Each year, Social 
Security 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 earings were reported. The 
most recent report that we submitted to Congress stated that 
earnings were credited to 522,403 individuals with those Social 
Security numbers.
    It is important to know, however, that because the work 
authorization status of a non-citizen may change, an earnings 
report under a non-work Social Security number does not 
necessarily mean that unauthorized work was performed.
    In conclusion, I want to say that the Social Security 
Administration strongly supports the President's comprehensive 
immigration reform approach and remains committed to ensuring 
that the American public's hard-earned wages are properly 
credited, so that they will be able to receive all the benefits 
to which they may be entitled.
    Thank you for the opportunity to appear before the 
subcommittee, and I would be pleased to answer any questions 
you might have.
    [The prepared statement of Mr. Gerry follows:]

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    Mrs. Miller. Thank you. We appreciate that.
    Our next witness is Alfred Robinson, Jr., who was named the 
Acting Wage and Hour Administrator effective June 2004. The 
Wage and Hour Division of the Employment Standards 
Administration administers and enforces a variety of labor 
standards and statutes that are national in scope and that 
enhance the welfare and protect the rights of the Nation's 
workers. Prior to joining the U.S. Department of Labor, Mr. 
Robinson was a member of the South Carolina House of 
Representatives. And prior to serving in the General Assembly, 
he worked on the board of the South Carolina Jobs Economic 
Development Authority, where he focused on job creation and 
economic development.
    Mr. Robinson, we appreciate your attendance here at the 
subcommittee and look forward to your testimony, sir.

              STATEMENT OF ALFRED B. ROBINSON, JR.

    Mr. Robinson. Thank you, Madam Chair, Ranking Member Lynch 
and members of the subcommittee.
    I am pleased to appear before you today to discuss the 
activities of the Wage and Hour Division of the U.S. Department 
of Labor's Employment Standards Administration in support of 
the Department of Homeland Security's enforcement of the 
Employee Eligibility Verification provisions of the Immigration 
and Nationality Act. This enforcement is commonly called the I-
9 process, after the form that employers must complete to 
document the verification of their workers' eligibility for 
employment.
    Wage Hour's mission is to promote and achieve compliance 
with labor standards that protect and enhance the welfare of 
the Nation's work force. We are responsible for administering 
and enforcing some of the Nation's most comprehensive labor 
laws, in particular the Fair Labor Standards Act. It requires 
the payment of minimum wage and overtime.
    The administration supports a comprehensive approach to 
immigration reform that includes securing our borders, worksite 
enforcement and a temporary worker program. We look forward to 
working with Congress as it considers a comprehensive approach 
to immigration reform that will enhance coordinated enforcement 
of the INA and U.S. labor laws to better protect U.S. workers.
    Employment Standards and Homeland Security have sought to 
coordinate worksite enforcement activities and entered into a 
memorandum of understanding on November 28, 1998. It clarifies 
the enforcement roles and responsibilities of each agency. The 
MOU also promotes more effective and efficient use of agency 
resources, reduces duplication of effort and improves 
communication and appropriate coordination between the 
agencies.
    Wage Hour and Office of Contract Compliance Programs are 
covered by the MOU. Wage Hour recently began working with 
Homeland Security to update the MOU. As Acting Administrator, I 
will focus my testimony on our agency's role in helping 
Homeland Security reduce the employment of unauthorized 
workers.
    The MOU obligates Wage Hour's investigative staff to 
perform two activities to assist Homeland Security. First, 
during an onsite visit to an employer's premises, Wage Hour 
staff advises employers about their responsibilities to verify 
the employment eligibility of potential employees, advises 
employers about the anti-discrimination provisions and provides 
employers with a copy of a Homeland Security publication on 
completing the I-9, as well as information from the Office of 
Special Counsel for Immigration-Related Unfair Employment 
Practices.
    Second, Wage Hour inspects the I-9 forms. Wage Hour 
conducts such reviews of completed I-9 forms only in non-
complaint investigations, so as to not discourage workers, 
regardless of their immigration status or that of their co-
workers, from reporting potential violations of employment 
standards. In other words, these reviews are limited to 
investigations initiated by Wage and Hour.
    Wage Hour's I-9 review is designed to identify potential 
violations for Homeland Security's enforcement action, based on 
a review of the face of the form. If a Wage Hour review 
discloses apparent serious violations, such as an employer's 
unwillingness to allow Wage Hour to complete the I-9 review, an 
employer's failure to maintain the I-9's or obvious fraud, such 
as entering a person's Social Security number with the same 
nine-digits, then the appropriate Homeland Security office is 
immediately advised, usually by phone.
    Wage Hour investigators have no authority to issue an 
employer a warning notice or notice of intent to fine. Only 
Homeland Security can take appropriate enforcement action for 
an alleged violation of the employment eligibility verification 
provisions.
    Under the MOU, Wage Hour investigators record the results 
of their review on an ESA 91 form, which is transmitted to 
Homeland Security when potential violations are disclosed. Wage 
and Hour refers suspected violations described above, as well 
as then non-serious violations, such as minor paperwork errors, 
to Homeland Security via the form. If there are no violations, 
then Wage Hour returns the form in the file.
    In conclusion, the administration looks forward to working 
with Congress to enact a comprehensive immigration reform that 
includes securing our borders, worksite enforcement and a 
temporary worker program.
    Thank you for inviting me, Madam Chair. This concludes my 
statement, and I will be pleased to respond to any questions 
from members of the subcommittee.
    [The prepared statement of Mr. Robinson follows:]

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    Mrs. Miller. Thank you. We appreciate that.
    Our next panelist is Janis Sposato. She is the Associate 
Director for the National Security and Records Verification 
Directorate with the U.S. Citizenship and Immigration Service 
for the Department of Homeland Security. She is a career Senior 
Executive Service leader. She brings 31 years of Federal 
Government experience in a very large, complex organization. 
She is an attorney by profession and is highly focused on 
national security issues impacting U.S. citizenship and 
immigration service. She was a Deputy Associate Director, 
Domestic Operations Directorate, since the inception of USCIS 
in 2003, after assisting in the transition of several 
components of the legacy Immigration and Naturalization Service 
in 2002, to the Department of Homeland Security.
    We appreciate your attendance at the subcommittee and look 
forward to your testimony, ma'am.

                   STATEMENT OF JANIS SPOSATO

    Ms. Sposato. Good morning. Thank you for giving me the 
opportunity to talk with the subcommittee about what my agency, 
U.S. Citizenship and Immigration Services, can and is doing to 
stem the tide of illegal immigration.
    USCIS is the part of Homeland Security that adjudicates 
applications for immigration benefits, and we maintain the 
immigration records. I am the Associate Director of USCIS for 
National Security and Records Verification. My office was 
created in February of this year by our Director, Emilio 
Gonzalez, for the express purpose of demonstrating the 
expanding contribution that USCIS makes to the integrity of the 
immigration system. Our employment verification program is an 
important part of our contribution to immigration integrity and 
it is the centerpiece of our efforts to discourage illegal 
immigration.
    We all recognize that employment in the robust American 
economy is a strong magnet for illegal immigration. The USCIS 
employment verification program is a simple and straightforward 
way to make illegal employment in the United States 
substantially more difficult to obtain. It works like this: 
After hiring the new employee, the participating employer 
submits a query on the Internet to the USCIS employment 
verification Web site. The query provides the new employee's 
name, date of birth, Social Security number and whether the 
individual claims to be a U.S. citizen or a non-citizen who has 
authorization to work in the United States. For non-citizens, 
the employer also provides an immigration identifying number.
    The employer receives a response online within seconds. In 
most cases, the response confirms the individual's employment 
eligibility and the verification process is complete. Behind 
the scenes, the system transmits the new hires information to 
the Social Security Administration NUMIDENT data base. In the 
case of non-citizens, the information is sent to a USCIS data 
base as well. That is all there is to the verification process 
in the vast majority of cases.
    When the initial verification is not successful, the system 
issues a tentative non-confirmation to the employer and more 
work must be done. The employer must notify the employee of the 
tentative non-confirmation and give him or her an opportunity 
to contest the finding within 8 business days.
    While the process differs somewhat depending on whether the 
failure to confirm employment eligibility emanated from the 
Social Security or USCIS data base, in either case, a 
representative of the Government will work with the individual 
who contested the tentative non-confirmation to find and 
correct the reason for the discrepancy. Problems may be as 
simple as the failure of the Government data base to account 
for a change of name at the time of the marriage or a divorce.
    Once the contesting individual provides the clarifying 
information, USCIS generally resolves its cases within 3 days. 
The process at Social Security is very similar.
    Today, use of the USCIS employment verification program by 
employers is voluntary. The program began in 1997 as a tiny 
pilot. Over time, it has expanded to support employers in all 
50 States. In the past 6 months, the program has grown to 
support an additional 200 employers per month. Yesterday, we 
had the pleasure of announcing that we passed the 10,000 mark 
with more than 10,000 employers enrolled in the program.
    And we are not done. We have much more capacity and we are 
actively seeking new employers to join the program.
    I want to take a moment to discuss the problem of fraud. We 
all know that no system is foolproof. On the other hand, when 
electronic verification from Government data bases is added to 
the presentation of documents at the work site, the use of 
counterfeit cards and identities becomes much more difficult. 
In order to be accepted, the counterfeits must now match the 
data in the Government computer system.
    Beyond that, USCIS is exploring new and innovative ways to 
combat imposter fraud and if we receive our requested 
appropriation in fiscal year 2007, we will add monitoring and 
compliance activities to our program. Already, we work closely 
with ICE worksite enforcement and we look ahead to being able 
to make a larger and larger contribution to the 
administration's ongoing interior enforcement strategy.
    We in USCIS are in a unique position to understand the 
importance of having a legal way for individuals to enter and 
work in the United States. Enforcement alone is not enough. 
That is why we and the President support comprehensive 
immigration reform that includes interior and border 
enforcement, in addition to a temporary worker program.
    I thank the subcommittee for the opportunity to briefly 
describe our employment verification program, and I look 
forward to hearing your questions and comments.
    [The prepared statement of Ms. Sposato follows:]

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    Mrs. Miller. Thank you very much. We appreciate that.
    Our next witness is Mr. Matt Allen. Mr. Allen is currently 
the Acting Deputy Assistant Director of the Smuggling and 
Public Safety Investigations Division of the U.S. Immigration 
and Customs Enforcement Agency. In this position, he has 
operational oversight of the contraband smuggling, human 
smuggling and trafficking, identity and benefit fraud, worksite 
enforcement, human rights violators and public safety, which is 
gangs, programs within the Office of Investigations. Prior to 
this assignment, Mr. Allen served as a unit chief for the 
Contraband Smuggling Unit at ICE headquarters. In that 
capacity, he had operational oversight of all of ICE's drug and 
contraband smuggling investigation throughout the United 
States.
    We appreciate your attendance at the subcommittee, Mr. 
Allen, and look forward to your testimony, sir. The floor is 
yours.

                 STATEMENT OF MATTHEW C. ALLEN

    Mr. Allen. Thank you, Chairwoman Miller and members of the 
subcommittee. Thank you for welcoming me here today to talk 
about U.S. Immigration and Custom Enforcement's efforts in 
worksite enforcement and how we are investigating and 
prosecuting employers that hire illegal aliens.
    ICE's worksite enforcement strategy is part of a 
comprehensive layered approach that focuses on how illegal 
aliens get to our country, the ways in which they obtain 
identity documents, allowing them to become employed, and the 
employers who knowingly hire them. ICE's worksite enforcement 
program is just one component of the Department's overall 
interior enforcement strategy, and is a critical part of the 
Secure Border Initiative.
    As part of our strategy, ICE is focused on bringing 
criminal prosecutions and using asset forfeiture as tools 
against employers of illegal aliens. An example of our worksite 
efforts occurred in April 2006, when ICE conducted the large 
worksite enforcement operation ever undertaken. This case 
involved IFCO Systems, a Houston-based company. ICE agents 
executed 9 Federal arrest warrants, 11 search warrants and 41 
consent searches at IFCO worksite locations throughout the 
United States. In addition, ICE agents apprehended 1,187 
unauthorized workers at IFCO work sites.
    This coordinated enforcement operation also involved 
investigative agents and officers from the Department of Labor, 
the Social Security Administration, Internal Revenue Service 
and the New York State Police. The criminal defendants have 
been charged with conspiracy to transport and harbor unlawful 
aliens for financial gain, as well as fraud and mis-use of 
immigration documents.
    Our worksite enforcement efforts also include critical 
infrastructure protection. In June of this year, for example, 
an ICE investigation resulted in the apprehension of 55 illegal 
aliens working at a constructionsite at Dulles International 
Airport, just outside Washington, DC.
    By carefully coordinating our detention and removal 
resources, and our investigative operations, ICE is able to not 
only target the organizations unlawfully employing illegal 
workers, but to detain and expeditiously remove the illegal 
workers that we encounter. For example, in a recent case in 
Buffalo, NY, 34 illegal workers were apprehended, detained and 
voluntarily repatriated to Mexico within 24 hours. Such actions 
send a strong message to illegal workers here and to foreign 
nationals in their home countries that they will not be able to 
move from job to job in the United States. Rather, they will be 
detained and promptly deported.
    What impact will this have? Criminally charging employers 
who hire undocumented aliens and rapidly removing illegal 
workers that are encountered will create the kind of deterrence 
that previous enforcement efforts did not generate. We are also 
identifying and seizing the assets that employers derive from 
knowingly employing illegal workers in order to remove the 
financial incentive to hire them and to pay them substandard 
wages.
    The magnet of employment is clearly fueling illegal 
immigration, but the vast majority of employers do their best 
to comply with the law. ICE has provided training and tools on 
our Web site to help employers avoid violations. However, the 
growing prevalence of counterfeit documents interferes with the 
ability of legitimate employers to hire lawful workers. In 
short, the employment process cannot continue to be tainted by 
the widespread use and acceptance of fraudulent identification 
documents.
    Accordingly, in April 2006, Deputy Attorney General Paul 
McNulty and Assistant Secretary Myers announced the creation of 
ICE-led Document and Benefit Fraud Task Forces in 11 major 
metropolitan areas. The DBF task forces are built on strong 
partnerships with USCIS, the Social Security Administration, 
the Postal Inspection Service and the Departments of State, 
Justice and Labor. The task forces identify, investigate and 
dismantle organizations that supply identity documents that 
enable illegal aliens, terrorists or other criminals to 
integrate into our society undetected.
    While ICE has made substantial improvements in the way that 
we investigate and enforce worksite, DHS also supports several 
of the additional tools contained in pending legislation. We 
look forward to working with Congress as it considers 
comprehensive immigration reform, including proposals to 
enhance worksite enforcement. The administration has sought the 
authority to have additional access to the Social Security 
Administration ``no-match'' data to improve immigration 
enforcement. Greater access to ``no-match'' data would provide 
important direction to ICE investigators to target their 
enforcement actions toward those employers who have a 
disproportionate number of these no matches, who have reported 
earnings from multiple employees on the same Social Security 
number and are therefore more likely to be engaging in unlawful 
behavior.
    Additionally, provisions in current legislative proposals 
regarding document retention by employers are crucial to 
worksite enforcement criminal prosecutions. Asking employers to 
retain documents for at least as long as the statute of 
limitations for these crimes is simply common sense.
    Although criminal prosecution of egregious violators is our 
primary objective in worksite cases, a need also exists for a 
new and improved process for issuing fines and penalties that 
carry a significant deterrent effect and that are not regarded 
as a mere cost of doing business. The United States can have an 
effective worksite enforcement program only with a strong 
compliance program combined with the issuance of meaningful 
penalties. The administration has proposed a streamlined 
administrative fines and penalties process that gives the 
Secretary the authority to administer and adjudicate fines and 
penalties.
    As I have outlined in my testimony, ICE has greatly 
advanced its worksite enforcement program and its efforts are 
part of a comprehensive strategy that focuses on several 
different layers of the problem simultaneously, including 
illegal employment, document and benefit fraud, and the 
smuggling that gets illegal aliens to the United States.
    Our responsibility at ICE is to do everything that we can 
to enforce our laws. But enforcement alone will not solve the 
problem. Accordingly, the President has also called on Congress 
to pass comprehensive immigration reform that accomplishes 
three objectives: strengthening border security, ensuring a 
comprehensive interior enforcement that includes worksite 
enforcement, and establishing a temporary worker program. 
Achieving these objectives will dramatically improve the 
security of our infrastructure and reduce the employment magnet 
that draws illegal workers across the border.
    ICE is dedicated and committed to this mission, and we look 
forward to working with this subcommittee in our efforts to 
secure our national interests. Thank you for inviting me, and I 
will be glad to answer any questions you may have.
    [The prepared statement of Mr. Allen follows:]

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    Mrs. Miller. Thank you. We appreciate that very much.
    Our final witness today is Mr. Steve Burgess. He is the 
Director of Examinations for the Small Business/Self Employed 
Division of the Internal Revenue Service. As the Director of 
Examinations, he oversees all compliance policy and audit 
activities dealing with small business and self-employed 
taxpayers in the Nation. Prior to this assignment, he served as 
the Acting Director of Reporting Enforcement and was also 
responsible for policy issues related to abusive tax avoidance 
transactions, anti-money laundering and the fraud program.
    Mr. Burgess, we welcome you to the subcommittee and look 
forward to your testimony, sir.

                 STATEMENT OF K. STEVEN BURGESS

    Mr. Burgess. Good morning, Madam Chairwoman Miller, Ranking 
Member Lynch and members of the subcommittee.
    I am pleased this morning to discuss the Internal Revenue 
Service's limited role in the immigration debate. Comprehensive 
immigration reform, including enhanced border security, robust 
interior enforcement and temporary worker program is top 
administration priority. Perhaps the most difficult part of 
this issue is framing it properly and understanding fully the 
different yet sometimes complementary roles provided by the 
Social Security Administration, the U.S. Department of Homeland 
Security and the Internal Revenue Service.
    My written statement attempts to do that, as well as walk 
through our role, both in identifying instances where 
mismatches between employee names and Social Security numbers 
occur, as well as our enforcement authority against employers. 
The most critical point to keep in mind from an IRS perspective 
is that our role is tax collection and administration. We want 
to make sure that everyone who earns income within our borders 
pays the proper amount of taxes, even if they may not be 
working here legally.
    If someone is working without authorization in this 
country, he or she is not absolved of tax liability. Instead of 
using a Social Security number to file a tax return, that 
person frequently uses an individual taxpayer identification 
number, or what we call an I-10. For tax year 2004, at least 
2.5 million returns were filed by aliens using an I-10. These 
2.5 million returns voluntarily reported taxes of over $5 
billion. More than 2.3 million of them include income from 
salaries and wages.
    Under current law, the burden of preventing illegal aliens 
from working in this country falls on employers. When they are 
hired, an employee is charged with completing two documents 
which demonstrate their ability to work in this country. The 
first is an I-9, which is required by the Department of 
Homeland Security. It is to be completed and kept on file by 
the employer. The second is the W-4 form, an IRS form on which 
the employee designates the number of deductions that should be 
made from his or her salary.
    Both forms request, among other things, the Social Security 
number of the employee. However, there is no requirement that 
the employer verify the information that the prospective 
employees provide. If the employee provides an inaccurate 
number, it will first be discovered when the employer submits 
the W-2 form to the Social Security Administration at the end 
of the year. The Social Security Administration will discover 
that the numbers do not match any of the information in their 
data base. After attempting to identify why the name and 
numbers do not match, the Social Security Administration will 
eventually send a letter to both the employee and the employer, 
asking that the correct number be submitted.
    Social Security Administration, however, has no enforcement 
authority in this area. The IRS has enforcement power, but this 
is not an area in which we would normally initiate an 
examination. Rather, this is an issue that we would review as 
party of a general employment tax audit.
    There are several problems with this issue from an 
enforcement perspective. The cases in this population tend to 
have very low audit potential. The wages from mismatched W-2s 
are generally very low. In 2004, the average wage reported for 
mismatched W-2s was under $7,000.
    We have also found that employers that have high W-2 
mismatch rates generally do not always have corresponding 
problems with fulfilling their employment tax obligations. 
Perhaps the most significant is that employers can generally 
demonstrate that they have requested a valid Social Security 
number and had reasonable cause to believe that the Social 
Security number that was given was accurate.
    I will conclude by repeating the need for comprehensive 
immigration reform, but I urge that any changes in the current 
system encourage the type of behavior that is both desired from 
both employees and employers. We recognize the positive 
benefits of comprehensive reform for tax administration. For 
example, the creation of a temporary worker program, will 
likely result in additional taxpayers entering the system.
    However, failure to enact comprehensive immigration reform 
could have negative consequences for tax administrations if 
procedures are imposed on employers and employees that have the 
effect of driving certain economic activities underground.
    Thank you for inviting me to testify this morning. I will 
be happy to take any questions you may have.
    [The prepared statement of Mr. Burgess follows:]

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    Mrs. Miller. Thank you very much.
    Where to start, I guess, we certainly had a lot of very, 
very interesting testimony.
    I sit on the House Armed Services Committee as well. It was 
interesting listening to the 9/11 Commission really identify 
what a big problem that our Nation had and continues to have is 
the inability of various agencies to share information. I think 
a lot of what we heard here today points to a continuation of 
that. So I am hoping that this hearing will allow us to 
understand how we in the Congress can assist the various 
agencies.
    One of the acts that we have recently passed in an effort 
to help us with illegal immigration, as well as homeland 
security, is something called the Real I.D. Act. This of course 
is a piece of legislation that will require all the States, as 
they are using their breeder identification documents, to issue 
either a driver's license or State identification card, to be 
able to verify who these individuals are. We saw the horrific 
attacks on our Nation of September 11th. Literally you had all 
except one of the murderers who had valid driver's licenses. 
Mohamed Atta had a visa that had been expired for 6 or 7 months 
and still had a valid driver's license. It is the foundation, I 
think, to your identity.
    I am also aware that the States, in addition to the 
driver's licenses, and I will address this question to Mr. 
Gerry, because of the Welfare Reform Act, trying to get 
deadbeat parents as they go from State to State, when you get a 
driver's license you have to verify now, I believe every 
Secretary of State or DMV or whatever in the Nation has to 
verify the Social Security number of that individual who is 
applying for a driver's license or State identification card.
    I am just wondering, because everything that we are talking 
about today focuses on the veracity and integrity of your data 
base and the verification for Social Security numbers, how is 
that working amongst the States? I am assuming it is the same 
process as is being utilized by the employers. Maybe you could 
explain that to us.
    Mr. Gerry. I am trying to figure out which question to 
address first. We do in fact operate through a hub, which is 
set up between the Social Security Administration and AAMVA, 
which is the American Association of State Motor Vehicle 
Administration. We do verify for driver license purposes.
    What we actually do is match names and numbers. We go 
through a procedure that is quite similar to what we would go 
through with respect to, remember I mentioned three different 
verification systems we use, well, really the two that don't 
involve work authorization, where we are just looking at 
whether the name and number match. And as far as I know, I 
would be happy to supplement this for the record, that has been 
working quite successfully. We have a longstanding working 
relationship with AAMVA.
    But that process does not ger involved with this whole 
question of work authorization and immigration to the same 
extent as the Basic Pilot process. So in that sense, it is 
somewhat different.
    Mrs. Miller. I was trying to take some notes when you were 
speaking there, you were talking about the three methods. I 
think you said there were 67 million verifications. Then you 
explained a little bit about how the employers got the PIN and 
the password to use the Internet.
    But yet in the pilot program as well, I believe that the 
percentage of employers who are actually participating in that 
currently is less than one-tenth of 1 percent nationally.
    Mr. Gerry. I think my testimony was there were 6.6 million 
employers, and I think we just said we went over 10,000. I 
can't do the math in my head, but that sounds like a reasonable 
calculation. It is a small percentage of all employers that are 
participating in the Basic Pilot.
    Mrs. Miller. Less than small.
    Mr. Gerry. It is a growing, but small percentage.
    Mrs. Miller. Could you tell us a little bit about your 
reasoning behind your determination that you are unable to 
share the information in the ESF with the Department of 
Homeland Security as well?
    Mr. Gerry. Well, basically the question of what information 
we can share, tax-related documents, is primarily a question, 
of course, for the Secretary of the Treasury, for the Internal 
Revenue Service. Because Section 6103 of the Internal Revenue 
Code lays out the conditions under which this information can 
be shared. We of course look to the Department of Treasury with 
respect to what the meaning of that statute is and the 
regulations that are issued.
    The longstanding understanding that we have from the 
Department of Treasury and that we have relied on is that, as I 
testified earlier, we may only use the tax-related information 
for purposes directly related to our programs, the operation of 
our programs and the determination of benefit amounts. So in 
that sense, any information that we have that is tax-related, 
that would be right now the only purpose for which we could use 
it.
    The one very limited circumstance which is slightly outside 
of that is certain circumstances where the Inspector General of 
the Social Security Administration has initiated an 
investigation, often in conjunction with the Department of 
Homeland Security. At that point, we can in fact make that 
information available. But that is far along in the 
investigation and prosecution process.
    So we do share in those very limited circumstances data 
that would be covered by Section 6103. But otherwise, we are 
under this general restriction on the use of that data.
    Mrs. Miller. I appreciate that. I see my counsel taking 
some notes here for possible legislation I think to assist you 
with that. Since we talked a little bit about the IRS, Mr. 
Gerry put you on the seat there as well, let me direct a 
question to our individual from the IRS. Have you been working 
with the Social Security Administration as well as ICE in order 
to promote the information sharing within the bounds of the law 
with this ESF? And perhaps as a followup question as well, you 
mentioned that the mission of the IRS is to collect taxes. I 
was a former county treasurer, so I have that, right? Through 
Biblical times, even, the tax collectors were always the most 
hated people. Regardless that is our mission.
    What about all of these employers who are using as a 
corporate deduction the amount of compensation that they are 
paying to illegal aliens? What about legislation that would 
remove them, I don't know if this is something you want to 
opine on, but I am sort of thinking out loud now, what about 
removing that from their corporate deduction? We have to have 
some penalties in order for people to comply with this. I think 
that would be a way. I don't know if you have any opinion on 
that.
    Mr. Burgess. Actually, Madam Chair, that would be in terms 
of consideration from Treasury, which would obviously require 
legislation. I guess maybe to indirectly answer, but if I was 
looking in terms of additional penalties and that sort of 
thing, to drive, it still roots back to some of the basic 
problems in terms of what information is provided to that 
employer. Unless there is a significant change in legislation 
as to what information is provided, as I testified right now, 
if someone provides evidence of a Social Security number and 
that is an accurate number, and signs that under penalties of 
perjury, it absolves the employer of responsibility to exercise 
reasonable care.
    So even in terms of looking at additional legislation, that 
is something we would have to be mindful of in terms of, it 
wouldn't solve the problem.
    Mrs. Miller. Thank you.
    Mr. Lynch.
    Mr. Lynch. Mr. Allen, I appreciate your testimony this 
morning. I want to go over the enforcement end of this that you 
are involved with. We just had a troubling incident up in the 
Boston area where one of our employers, it was actually an 
enforcement action that was conducted at an LNG facility in 
Boston, which is right beside a very large oil and 
petrochemical facility. So we have LNG, we have LNG tankers, we 
have LNG liquified natural gas and we have a massive petroleum 
product depot.
    Inside the facility, we basically apprehended 16 illegal 
aliens working for one of the contractors there. This is a 
facility that is critical infrastructure with respect to 
homeland security. Yet I also read the Washington Post from 
last month where onsite inspections have been scaled back 95 
percent between 1999 and 2003, this is after September 11th, 
continued to drop. The number of employers prosecuted for 
unlawfully employing unauthorized immigrants dropped from 182, 
which isn't a lot, figuring, as Mr. Gerry said, we have 6.6 
million employers, we actually prosecuted 182 of those in 1999. 
Then that number has reduced to four. We actually prosecuted 
four, four companies for illegal employment of unauthorized 
immigrants.
    It just doesn't read well with what your earlier testimony 
was that we are trying to reduce duplication of services and 
trying to work smarter and trying to get this job done. It 
seems like not only have we reduced duplication of services, we 
have reduced everything, down to basically zero. I know it is 
not your fault, but I am just trying to figure out how are we 
going to get our arms around this problem if we are not more 
aggressive than what we are? This is basically, we are doing 
nothing at this point, from what I can see.
    Mr. Allen. Let me start with your last point first, and 
that is, how do we get our arms around this problem. I think 
the consistent theme that we have put forward this morning is 
that the answer to this is comprehensive. As the chairwoman 
pointed out in her opening remarks, this is a situation that we 
have found ourselves in over the course of virtually two 
decades. We are not going to arrest our way out of it. It is 
virtually impossible, and none of the agencies sitting at this 
table are resourced to go out and arrest 12 million people to 
resolve the issue that way.
    Mr. Lynch. Nor do we want you to. But we do have some 
leverage with employers to help us police this whole process. 
It is going to require a collaboration. I think there is a way 
out of this, but it doesn't look like we are taking any 
meaningful steps.
    Mr. Allen. I hope that my testimony pointed out that there 
has been a shift in strategy. I think the shift has been away 
from administrative worksite enforcement, which I think also in 
the last two decades has kind of illustrated that it hasn't 
been the kind of deterrent that we would want, to a focus on 
the two pillars that you pointed out and started with. And that 
is critical infrastructure, in light of September 11th and in 
light of the 9/11 Commission report, recognizing that access to 
critical infrastructure is the key, and that our first pillar 
has to be focused on removing that access and working with 
employers to make sure that they self-police. Many of the 
operations that we do at critical infrastructure sites are done 
in collaboration with employers who want to make sure that 
their work force is secure and that we remove access to people 
who should not be in the United States, first of all, and 
shouldn't be in critical infrastructure in the second place.
    Then the second part of our strategy really does focus on 
that criminality. Those employers, who as part of their 
business model structure, work in such a way that they 
virtually knowingly hire unauthorized workers. By focusing on 
those two pillars, we take care of critical infrastructure on 
the one hand and focus on criminality and those who really 
build their business model on the other hand, and criminalize 
that activity.
    Mr. Lynch. OK, thank you.
    Mr. Gerry, if I could just touch on a point that Madam 
Chair was hitting on earlier, about the sharing of information 
and the sensitivity of that. We heard that we have in many 
instances illegal immigrants who are working here who are 
actually filing these I-10's. So they are getting employer i.d. 
numbers, they are paying taxes. But I think what might be 
happening here is, we have no way of verifying if the number of 
deductions that they are claiming is valid.
    So while we are saying, yes, they paid X number of dollars 
in taxes, it is probably very likely that they are claiming in 
their W-4E, which is exempt, or W-4 with 25 deductions. So we 
are getting very little of what we should be getting in terms 
of the proper tax load. I am just wondering, how do we get at 
that problem? Because without sharing that information, we 
understand you are trying to be respectful of that division of 
authority, we would have to have you go onto these jobs sites 
under the guise of enforcing the proper tax load on those 
individuals. Instead of asking Mr. Allen and his group to go in 
with ICE and under a straight immigration protocol, we are 
asking you to go in to enforce the tax laws.
    So we have to sort of collaborate here. I think we have the 
right group here. We just have to figure out who is going to do 
what.
    Mr. Gerry. I think amongst us you have the right group. I 
think our problem in the I-10 situation is we might well have 
no information whatsoever. This is a person who is not 
enumerated by us. It is possible that they could have 
dependents who are enumerated by us, but it would be total 
speculation at this point.
    The restriction on sharing of tax-related information of 
course doesn't apply to the Internal Revenue Service. It is in 
fact their role. So any information that we have that is tax-
related, of course they have complete access to.
    So I understand the problem that you are posing is probably 
really a better problem for the IRS to talk about. I think 
right now, I don't see any immediate barriers to our working 
with the Treasury on this. It would depend on whether we had 
data whether it was not tax-related and whether there are 
regulatory projibitions on sharing it. One question is to the 
privacy of that data. But I don't know that comes up in this 
case.
    Mr. Lynch. Madam Chair, I asked the wrong person. Could I 
have Mr. Burgess----
    Mrs. Miller. The time has expired, and we do have a couple 
of Members who do have to leave. There will be a second round 
of questioning.
    Mrs. Schmidt.
    Mrs. Schmidt. Thank you.
    I am going to direct two questions to Mr. Allen. The first 
one is regarding ICE and the training of locals. In the 
surrounding district, Sheriff Jones in Butler County has really 
come to the scene in the greater Cincinnati market, saying that 
he would like to be able to go in and collect illegals and put 
them in jail; but he lacks the authority. His complaint is that 
ICE can't train his folks to do it in a timely manner. He has 
been told that it is anywhere from 6 to 18 months to train his 
officials to do that.
    Is that a valid statement or not?
    Mr. Allen. I will answer briefly, and then we can talk 
offline or I can take one for the record if you want. ICE has a 
very robust 287(g) program, which you are talking about, which 
is the mechanism that we have under the INA to train State and 
locals to perform immigration functions. We have been working 
aggressively to try and identify State and local agencies to 
work with us cooperatively. I would say that our focus right 
now is on the southwest border. Six to 18 months sounds like 
something that I am going to have to check on and find out if 
that is a real time line. I don't have oversight of that 
division of the Office of Investigations. So I will have to get 
back to you whether or not that is an accurate time line for 
training in your area.
    Mrs. Schmidt. OK, thank you. Second, and I wasn't going to 
bring this up, but you have it in your testimony on page 7, and 
it is regarding the Fischer Homes issue. I don't know how to 
delicately talk about this. In the United States, we are 
innocent until proven guilty. Mr. Fischer does not live in my 
district, he lives in Kentucky. I represent Ohio.
    But a few weeks ago, he came to my office with tears in his 
eyes over the heavy-handedness that the Federal Government is 
applying to him regarding Richard Pratt. He shared with me all 
of the documents that the Federal Government had laid on his 
table. He was there with his attorney.
    What I saw in it was a statement by the Federal Government 
saying that if he admitted to culpability and paid $1 million, 
things would go away. But if he didn't, they were threatening 
to seize all of his assets until such time it would be 
demonstrated whether he had culpability or not.
    That was troubling to me, because I don't know whether Mr. 
Fischer is innocent or guilty. But what worries me is, if the 
Federal Government comes in to someone that is innocent and 
puts liens on all of his homes that he can't sell, in essence, 
that individual is going to go broke. And if he is innocent, 
then the blame is on us.
    I am sure you may not know all of the issue here today. But 
I did read those documents and I read them very, very 
carefully. And they were from the Federal Government. And it 
indeed troubled me.
    I also want to add, Mr. Fisher asked me to do nothing on 
his behalf, which is why I never contacted your agency or any 
other agency. All he wanted to show me was the heavy-handedness 
of the Federal Government, so that I could be aware for the 
future. So again, Mr. Fischer asked me to say nothing or to do 
nothing. And I wouldn't have said anything today except on page 
7 you talk about this issue. So I am bringing it to your 
attention that whether he is guilty or not, from what I saw 
from the documents that he gave to me, the Federal Government 
is assuming guilt, which I don't think we do in our 
Constitution.
    Mr. Allen. Thank you. At the risk of appearing to dodge it, 
I will defer perhaps to the Department of Justice who, based on 
your description, probably is the author of those documents. 
That case is ongoing and I believe there are negotiations 
between the Federal Government and the defendants in the case.
    Mrs. Miller. Mr. Bilbray.
    Mr. Bilbray. Thank you, Madam Chair. First of all, I would 
like to thank you for allowing me to participate on the panel.
    Ladies and gentlemen, before you really is the answer to 
illegal immigration. Mr. Allen, in all fairness, it is not 
border patrolmen at the border. Interior enforcement is 
obviously where we have the missing line.
    Mr. Gerry, I appreciate that you bring up the fact that you 
have laws that don't allow you to share information. I think 
all of us have read the September 11th report. The 9/11 
Commission specifically said, September 11th happened because 
we had so many firewalls that were developed after the 
Watergate period that agencies couldn't communicate.
    I think, Madam Chair, our goal should be right now in 
Government Reform to destroy these firewalls and allow the 
communication so the American people can be protected.
    Mr. Allen, I have to apologize to you right off, because 
you are, to a large degree, going to be the focus of my wrath 
today. How old were you in 1986?
    Mr. Allen. I was 21 years old.
    Mr. Bilbray. Twenty-one. Well, let me remind you that in 
1986 we did pass what was called comprehensive. And part of 
that comprehensive plan that was implemented was the amnesty 
program.
    What wasn't implemented, obviously, from the records, was 
workplace enforcement. 1986 caused the greatest influx of 
illegal immigration that we have ever seen in this republic. In 
fact, as somebody who grew up and lives down south along the 
border, you can set your watch by every time somebody in the 
administration talks about comprehensive, because the flow of 
illegal immigration pours across the border, because they hear 
amnesty.
    Now, my concern is that when we talk about what to do about 
the 12 million that are here is that we don't cause another 30 
million to come because they see that they were fools to wait 
to immigrate legally. There is one gaping hole that we have in 
the system, and I need you to give us the answer. That is, we 
haven't been doing interior enforcement. I want to ask you, why 
can't my border patrol agents, who have checkpoints north of my 
district, south of my district, east of my district, cannot 
leave my district, leave my county without going through border 
patrol agents.
    But the same border patrol agents are specifically told 
they cannot go to my Home Depot and check illegal aliens. Why 
is there a gag rule on my uniformed officers in San Diego 
County?
    Mr. Allen. Speaking on behalf of ICE, and not being the 
organization that CBP border patrol agents work for, I will 
have to defer to CBP on that policy question. But obviously, 
focus on worksite is what we are here to do. I can't answer on 
behalf of CBP.
    Mr. Bilbray. OK. In all fairness, I think that I would just 
ask that we look at the fact that any time someone, Madam 
Chair, talks about sending more agents to the border, as 
somebody at the border, I would say, send them to Tennessee, 
send them to Kentucky, send them to the interior, send them to 
Alexandria, so that we can start doing enforcement.
    Mr. Gerry, in 1937, is that when our Social Security card 
was developed?
    Mr. Gerry. Approximately, yes.
    Mr. Bilbray. Every driver's license in America was a name 
and a number on a piece of paper, right?
    Mr. Gerry. I think so.
    Mr. Bilbray. How many States have that kind of i.d. for 
their driver's license today?
    Mr. Gerry. A piece of paper--I don't know the answer. I 
have a license, I have had licenses in Texas, Kansas and 
Maryland in the last 15, 20 years, and I haven't seen anything 
on paper.
    Mr. Bilbray. It is a pretty good guess that all the States 
have left that system? Is there any possibility we may be able 
to work between the administration and this legislature to 
upgrade our Social Security card to reflect the real i.d. 
standards that we have set on driver's licenses?
    Mr. Gerry. Actually, Congress passed requirements which 
asked the agency to develop, with respect to the bank note 
paper requirements, a new approach to try to secure the card. 
The Commissioner has recently forwarded to the Congress a 
report that outlines several different things that could be 
done to dramatically improve security of the bank note card. 
That is what the statute that governs us right now requires.
    And we haven't really gone beyond that because the SSN card 
is not an identification document. However, the President 
talking about the whole question of immigration has talked 
about a biometric card for foreign job applicants, which I 
think by its very definition would have to be something other 
than a paper, bank note card.
    Mr. Bilbray. That is where it gets down to your work and 
Mr. Burgess' work. An employer right now is required to get a 
Social Security number from an employee?
    Mr. Burgess. Yes, Congressman. They are required to ask for 
an accurate Social Security number provided by the employee.
    Mr. Bilbray. But we really don't have a true tamper-
resistant document, so that the employer could see that the 
number actually, have justifiable cause that the number applies 
to the person that is standing before them, asking for a job? 
Either one of you guys.
    Mr. Gerry. That is correct.
    Mr. Burgess. Yes, sir, that is correct.
    Mr. Bilbray. So what we have is that the Federal Government 
has never done with its Social Security card what we are 
requiring States under the Real I.D. bill to do with all 
driver's licenses and all i.ds? Is that fair to say?
    Mr. Gerry. I think it is fair to say.
    Mr. Bilbray. I would ask, Mr. Burgess, when we were talking 
about the tax issue, how many taxpayers, do we know how much 
money is paid out without using Social Security numbers, using 
the tax i.d. number?
    Mr. Burgess. In terms of the mis-match fund, Congressman?
    Mr. Bilbray. No, I am talking about the use of those tax, 
not just mis-match, but also those who are using the tax i.d. 
number in lieu of the Social Security number.
    Mr. Burgess. The I-10, the taxpayer identification number? 
Actually, the $5 billion that I referred to was the net in 
terms of, obviously those individuals, some individuals may 
have received refunds. Obviously even someone that is here 
illegally that is filing a return would be entitled to 
deductions. However, they would not be entitled to earned 
income tax credit.
    Mr. Bilbray. Why would they not be?
    Mr. Burgess. They specifically by statute do not qualify. 
You would need to be a citizen. But as far as the other 
deductions in terms of deductions for exemptions other items, 
they would qualify for and have claimed on returns.
    Mrs. Miller. The gentleman's time has expired, if I could 
interrupt. There will be a second round of questioning.
    At this time I would like to call on Ms. Foxx.
    Ms. Foxx. Thank you, Madam Chairwoman.
    I too am bothered by this constant use of the term failure 
to enact comprehensive immigration reform. That seems to be the 
answer that all of you have.
    I would like to ask Mr. Allen a question. Tell me exactly 
what you mean in using that phrase, ``by establishing a 
temporary worker program as part of a comprehensive immigration 
reform.'' What is that program going to look like?
    Mr. Allen. Well, ICE in all likelihood would not administer 
the program. It would be administered by CIS and other parts of 
the Department.
    Our vision for a temporary worker program is an opportunity 
to do something that is very important. I think it has been 
pointed out a couple of times during the discussion this 
morning. And that is to bring in people from the shadows, and 
identify people who are in the United States, get them 
identified and have an ability to know who is actually in our 
country. Once they are identified, allow them to work in jobs 
that are available and that are not currently being worked by 
U.S. citizens. In other words, fill jobs that are currently not 
filled by our citizens.
    Ms. Foxx. How is that different from the temporary worker 
programs that we already have? Don't we already have a lot of 
temporary worker programs? Tell me what is new about what you 
are talking about. You are talking about establishing a 
temporary worker program for illegals. I want to know, what is 
that, what do you mean by a temporary worker program?
    Ms. Sposato. Congresswoman, if it is all right, I will try 
to take that, because it is my part of the Department of 
Homeland Security that would administer such a program. I would 
like to go back to your slightly earlier question about how 
would the temporary worker program differ from the employment 
based programs that we administer today. And I think the answer 
to that is, not necessarily in substantial ways, but when the 
administration expresses its desire and openness for a 
temporary worker program, it is looking to manage the 12 
million or so people who we believe to be in the United States 
in the shadows, and to give them an opportunity to come forward 
and be employed in positions that are not occupied by U.S. 
workers.
    Ms. Foxx. So are you saying then you would simply expand 
the existing temporary worker programs that we have by 12 
million, if that is what it needs to be? And do you assume that 
all 12 million of those people are currently working?
    Ms. Sposato. I can't say that the number of qualifying 
individuals would be 12 million. But I believe the 
administration has expressed an openness to various kinds of 
programs that the Congress might propose, and the Senate has 
proposed a program. The administration is willing to work with 
the Congress to develop the best program that can be put in 
place.
    Ms. Foxx. I have one more question. I would like to get a 
copy of the training manual that you use for local people, 
local law enforcement people, to come up to the standards that 
ICE has set. I want to see all of the manuals or the outlines, 
the syllabus, whatever you have that you use that you say 
people have to adhere to in order to be qualified to do what 
ICE says they have to do.
    Then I want to see the comparable material that you use for 
your own officers to say that they meet the standards to be 
enforcement officers. I would like to see those. And I would 
like to see them fairly soon. I don't want to wait 6 or 8 
months to get them. I am assuming that they exist and that it 
shouldn't be any problem to get a copy of them. I would like to 
see them right away, because I would like to review them.
    Mr. Allen. I will certainly take that for the record. The 
only thing I would point out right up front is that the 
training course, the 287(g) training course is about a 5-week 
course that we teach to State and local officers. I believe our 
special agent training right now is in the range of 27 weeks at 
the Federal Law Enforcement Training Center. And they are 
different courses, they teach completely different skill sets; 
immigration authority being one subset of the skills that we 
teach our investigators.
    Ms. Foxx. What does the length of the program have to do 
with my request?
    Mr. Allen. I don't think it did.
    Ms. Foxx. Thank you.
    Mrs. Miller. Thank you. I am one of these who really does 
believe that we have to have a comprehensive approach to 
immigration reform and to assisting all the agencies to enforce 
our current laws, etc. I will tell you I just came back from a 
very eye-opening trip for me, over the weekend, to our southern 
border.
    We were in Yuma watching the Kentucky National Guard 
actually there build a wall. We were down in Nogales with some 
of the ICE agents and the Customs and Border Protection, 
looking at the processing centers there with hundreds and 
hundreds of illegals that they had just picked up that night, 
as well as the drugs. There was marijuana about to the ceiling 
of this room. It was unbelievable, the amount of drug 
interdiction that is happening as the National Guard is now 
able to supplement the work for the Customs and Border as well. 
And in El Paso, looking at some of the different things that 
are happening there.
    I do think we need a comprehensive. I mean, you have to 
have a wall, perhaps, you need to be able to utilize 
technology. You need to have additional resources. You need to 
have judges and attorneys that can adjudicate the system so 
that we can stop this catch and release, etc. A big part of why 
we are having this hearing here today is so we can understand 
again what tools we need to give the various agencies in the 
Federal Government to dis-incentivize employers from hiring 
known illegal aliens. I just want to read off the Social 
Security Administration's Web site under Employer Reporting 
Instructions and Information, I just thought this was 
interesting.
    ``Do not use any of this information, essentially, to take 
punitive action against an employee whose name and Social 
Security number do not match Social Security's records. A 
mismatch does not make any statement about an employee's 
immigration status, is not a basis in and of itself for taking 
adverse action against the employee.'' Here is the kicker. 
``Doing so could subject you to anti-discrimination or labor 
law sanctions.''
    In other words, don't do anything with this information or 
you are going to really be in trouble. So again, the purpose of 
this hearing is, how can we assist all of you. I want to focus 
my final question here, on the I-9 form, the employment 
eligibility verification form. Ms. Sposato, I think you were 
mentioning in your testimony, you said it was a very simple and 
straightforward process that we are attempting to do with 
employers to make sure that they can understand the process.
    But so far, as we understand it, you have not issued a 
final rule which would align the I-9 verification documents 
with the 1996 amendments. I am wondering, what is the plan of 
your agency to do so, and does it require legislation or can 
you promulgate a rule? What is the delay and is that a dis-
incentive to employers who are trying to understand the 
bureaucratic maze of paperwork?
    Ms. Sposato. Madam Chair, that is a great question. As I 
mentioned in my oral statement, my organization came to being 
in February. So I really can't speak to why something hasn't 
happened previously. But I can tell you that I agree with you 
completely that the I-9 form and process needs to be 
simplified. I do have staff working on it and I have a pledge 
from my colleague here in ICE that they will work with us to 
simplify the form, reducing the number of documents that may be 
presented to employers.
    Combined with mandatory employment verification through 
data bases, I think that will be a tremendous advance in 
stemming illegal immigration.
    Mrs. Miller. Even though you are not able to answer my 
question here today, obviously, about promulgating a rule, or 
passing a final rule, the committee is interested in knowing 
what the time line is from your agency on that. If you could 
get back to us on that, I would appreciate that.
    Ms. Sposato. I will do that.
    Mrs. Miller. If I could, to the Department of Labor, Mr. 
Robinson, again on this I-9 form, and I think you testified, I 
was trying to take some notes during your testimony, that the 
Department of Labor has no authority to issue employers a 
violation, even after you might have determined that a 
violation of immigration laws has occurred. Are your field 
officers trained to detect fraud? How are they determining that 
a violation has occurred? Are they trained to detect fraud, for 
instance, on these I-9 forms? Do they know it when they see it?
    Mr. Robinson. Madam Chair, the review that our field 
officers and investigators do is a review of the face of the 
form. So they look for irregularities, refusals, numbers that 
might be the same, things of that nature. That is what they 
report. As part of what we do train our employers, our 
investigators, they do those through training, but we try to 
be, if you will, eyes, and then we use that to report to 
Homeland Security.
    Mrs. Miller. So you don't have the authority to issue a 
violation. Would it be helpful, would it assist you if you did 
have such authority, rather than transferring that information 
to another agency? And when you do so, do you even followup to 
see what has happened with that?
    Mr. Robinson. Well, Madam Chair, I think our No. 1 priority 
is to make sure that, for example, the Fair Labor Standards Act 
is enforced correctly. I think that is something that Congress 
should evaluate and debate. As we noted earlier, we report 
these types of violations to Homeland Security, which has been 
the enforcer, if you will, under the INA. But I think that is 
something that the administration would enter into debate as 
well as discussions with Congress, to determine what would be 
the best appropriate program.
    Mrs. Miller. OK. It is interesting, every one of you 
obviously has a mission. Yours is the Fair Labor Standards, 
yours is to collect taxes, etc. But before we do all these 
things, we are still Americans and we need to enforce the law. 
And we need to give you the tools to assist to break down these 
silos. I think that is something that is really becoming very 
clear to the committee today.
    Mr. Lynch.
    Mr. Lynch. Thank you, Madam Chair.
    Let me just join the chorus here in calling for a 
comprehensive immigration bill. I personally think that we have 
so inflated that political football that I don't hold much hope 
for it. Maybe after elections are over, maybe cooler heads 
prevail and common sense comes to pass on a lot of people, and 
we can do something. I really recognize the need for 
immigration. This country's demand for engineers and scientists 
and our future is tied directly to our immigration policy, not 
to mention that it says a lot about what our country has become 
and who we will be in the future.
    I think we need an immigration bill that is not Mexico-
centric. I think it needs to recognize the global need for 
immigration to this country. And I think we need to have a 
deliberate, cogent, and workable system that doesn't frustrate 
people who would genuinely love to be U.S. citizens and who 
abide by the law and want to come here and work hard and take 
part in the American dream. Like I say, how we solve those 
problems says a lot about who we will be in the future.
    But putting that aside for a moment, I want to go back to 
Mr. Burgess if I could. Let me summarize what I had asked 
before of Mr. Gerry. Do you think it is possible to increase 
the flow of information from the Social Security 
Administration, from the IRS as well, to the Department of 
Homeland Security, but at the same time respecting taxpayers' 
privacy. Is there a way to enhance what we are doing right now 
without going over the line that apparently has been drawn?
    Mr. Burgess. Congressman, the problem I see right now in 
reference to Code Section 6103 is that, in my opinion, it would 
actually take an amendment of that section to provide an 
exception. It does govern, it is obviously there to protect 
taxpayer privacy of their tax-related data. It is a fundamental 
foundation of our tax system.
    So I believe that it would actually take an amendment of 
that particular Code section.
    Mr. Lynch. All right. Thank you, Mr. Burgess.
    Mrs. Miller. Mr. Bilbray.
    Mr. Bilbray. Thank you very much, Madam Chair.
    Mr. Burgess, that whole privacy thing sort of struck me 
hard, because I was required, the State of California demanded 
that I show my tax return to be able to get in-State tuition 
for my children. I just wonder where the privacy issue is 
there, when you have to give that kind of document to be able 
to justify basically a taxpayer's right.
    I would like an answer from the two ends on one issue. I 
think from the hearings that we have had, let me just first off 
really congratulate the ranking member. I appreciate his 
attitude about this whole issue. But one of the things that has 
really come down from the hearings is this lack of not 
crackingdown on illegal immigration, but the lack of real, 
substantial crackdown on illegal employment. One of the basic 
issues that keeps being raised by the business community is the 
1986 law. When it came to enforcement, it had things like the 
civil rights issues and the discrimination issues, almost to 
the point where you don't do it.
    H.R. 98, which really needs work, I think Democrats and 
Republicans can meet and agree on something, and that is, let's 
make it so simple for an employer to know who is qualified to 
work here and who is not that there is no excuse to hire 
somebody who isn't. And H.R. 98 is a bill by Chairman Dreier 
and Silvestre Reyes of Texas that basically says, let's upgrade 
the Social Security card to a tamper-resistant document like 
our driver's license. That and only that would be the document 
that you would check to get the Social Security number you 
require.
    Has the Social Security Administration taken a position on 
H.R. 98 yet?
    Mr. Gerry. No, Mr. Bilbray, we haven't. Obviously the 
focus, and we have been working on this with IRS and DHS, has 
been the immigration issue. Of course, H.R. 98, as you are 
describing it, would go well beyond that. I testified before 
the Senate Judiciary Committee where we had members who were 
interested in a question of estimates of cost if we were to 
have a hard or tamper-resistant card. So we have provided some 
testimony with respect to what we think it would cost for the 
agency to do that. But we have not looked at the question as a 
policy matter or provided any kind of an answer.
    Mr. Bilbray. Although, you are aware that their bill only 
requires new hirees to get the document.
    Mr. Burgess, one of the things I saw when I was a tax 
consultant, my family still runs the business, and we don't 
talk about this now, is the stealing of identification by 
illegals by using Social Security numbers. When an auditor 
tells you, Mr. Jones, you have three jobs that you haven't 
disclosed, and you have to prove that somehow an illegal got 
there, wouldn't the fact that if we simplify it to where, when 
an employer gets a number they get it off a tamper-resistant 
card, rather than just taking the word of somebody? Has your 
department taken a look at that at all, or do you have a 
position on H.R. 98? Or do you personally have an opinion about 
that kind of approach?
    Mr. Burgess. Congressman, I would defer that to Treasury. I 
can speak to the fact in terms of, as I have indicated in my 
testimony, one of the problems that we have had in terms of 
enforcing penalties for inaccurate numbers is the fact that the 
employer relies on information that is furnished by the 
employee.
    Mr. Bilbray. OK. Mr. Allen, I want to ask you a question 
about your guest worker program. Your guest worker program is 
being supported by the administration. Who would qualify to get 
into that guest worker program?
    Mr. Allen. I think as I testified before, it is not ICE's 
program, we would not administer it. I will defer to CIS on 
what the criteria would be.
    Mr. Bilbray. Anybody from the administration, anybody from 
the administration, who qualifies under this guest worker 
program?
    Ms. Sposato. I believe that the administration has asked 
the Congress to propose a guest worker program. The only 
proposal that I am aware of is the Senate bill. That proposal, 
at the risk of summarizing it incompletely or inaccurately, I 
believe it allows people who have been in the United States for 
a certain amount of time to apply for and be granted guest 
worker status if they pass security checks.
    Mr. Bilbray. When you said then, are you talking about 
legal or are you talking about illegally in the country for a 
certain amount of time?
    Ms. Sposato. I believe that the Senate proposal covers 
people regardless of whether their status in the United States 
today is legal or illegal.
    Mr. Bilbray. OK. Would somebody who is not in the United 
States, who has never entered the United States, would they be 
allowed to participate in that program?
    Ms. Sposato. I believe that is also a part of the Senate 
bill.
    Mr. Bilbray. And who would have priority over, what would 
you do with the illegals who are here now? Where do they stand 
in this program?
    Ms. Sposato. Again, I am a little bit reluctant to be 
precise, because I am not that familiar with the ins and outs 
of the bill. But I believe that if the person who is in the 
United States today illegally has been here for a specified 
amount of time they are allowed to a qualify for the----
    Mr. Bilbray. My question is, if you have never been here 
legally, how do you qualify for the 2-years to 5 years of being 
here?
    Ms. Sposato. Under that bill, as I understand it, it is 
physical presence, not legal presence, that matters.
    Mr. Bilbray. So what you are telling me is that those who 
are waiting in other countries with applications to emigrate, 
or to try to get a work card, they would not qualify under this 
guest worker program, but somebody who has violated our 
immigration laws for 5 years would qualify under the program?
    Mr. Gerry. Let me just clarify. What we are talking about 
is a Senate bill. I am looking at a document issued by the 
White House Office of Communications on June 1st in which the 
President outlines his principles for what a guest worker 
program would be. And they are inconsistent with what we are 
now talking about.
    Mr. Bilbray. Right. And that is what I want to clarify. 
Because the President supported the House bill strongly before 
it was passed. And now the Senate is proposing a bill that 
would allow somebody who is illegally in the country to have 
access to a guest worker program that those who have never 
violated our immigration laws would not qualify for, which 
really violates the original context that we never allow, the 
administration said we do not allow those who are illegally 
here to move ahead of those who have applied.
    We have almost 100 million people that would one way or the 
other love to emigrate here. Then we end up with this conflict. 
So I just wanted to clarify that, because it is a very 
important message, not only to those who are illegally in this 
country, but those who are outside the country, listening to 
this debate. Because right now what they are saying down in 
Guahaca is, my cousin who broke the law is going to qualify for 
a program that I am not going to qualify for, because I didn't 
break the law. That is a very strong message.
    Mr. Gerry. If you would like, I can read from this.
    Mr. Bilbray. Go ahead.
    Mr. Gerry. I am just reading from the President. This is 
the White House Office of Communications, June 1st. ``A 
temporary worker program would create a legal path for foreign 
workers to enter our country in an orderly way for a limited 
period of time.'' That is the first statement. Then below that, 
``The President believes illegal immigrants who have roots in 
our country and want to stay,'' so that is the second group of 
people, ``should have to pay a meaningful penalty for breaking 
the law, pay their taxes, learn English and work in a job a 
number of years. People who meet these conditions should 
eventually be permitted to apply for citizenship like other 
foreign workers, but approval would not be automatic and they 
will have to wait in line behind those who played by the rules 
and followed the law.''
    Mr. Bilbray. OK, that is the catch word, Mr. Gerry.
    Madam Chair, we have to clarify. This country takes almost 
a million legal immigrants a year, more than the rest of the 
world combined. And the fact is, Mr. Gerry, in reality, if you 
put them behind everyone who is playing by the rules, they will 
never enter this country, because we never take everyone who is 
applying.
    So that word about putting them behind, if it is truly the 
intent of the legislation, then you have to say that in 
reality, we are never going to process them, because we have 
those who are playing by the rules who will never get through 
the system themselves.
    Mr. Gerry. I just want to clarify, I am not speculating on 
the intent of the legislation. I am just talking about what the 
President has laid out as the administration's view of what the 
legislation should include.
    Mrs. Miller. I appreciate that, and I am going to say that 
the gentleman's time has expired. And I am going to conclude 
the hearing as well, because we have another subcommittee that 
wants to use this room here shortly. But we certainly, on 
behalf of the entire committee, appreciate all of the witnesses 
coming here today.
    Obviously the issue of illegal immigration is a very 
emotional one for every American. It is a very complicated 
issue as well. When you see the House and the Senate at 
loggerheads over various aspects of their individual bills, in 
all the different nuances within that, it is a very difficult 
issue as the Congress is reflective, I think, of what is 
happening nationally with the electorate. And it is not going 
to go away after the election, no matter what happens.
    So that again was the purpose of this hearing today. I 
think the committee got a lot of good information about 
possible opportunities that we have again to assist the various 
agencies to enforce current laws, regardless of what happens, 
whether or not we pass any further immigration legislation. 
What we have currently on the books, I think we have a huge 
amount of opportunity to do the right thing for our Nation as 
well.
    With that, again, we appreciate all of the witnesses' 
attendance today.
    Mr. Bilbray. Madam Chair.
    Mrs. Miller. Mr. Bilbray.
    Mr. Bilbray. I would just like to thank you again for 
allowing me to participate, and I would like to compliment Mr. 
Allen. He looks much younger than he really is. [Laughter.]
    Mrs. Miller. Thank you very much.
    With that, the committee will be adjourned.
    [Whereupon, at 11:40 a.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]

[GRAPHIC] [TIFF OMITTED] T4662.042

                                 
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