[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
  PROPOSALS FOR IMPROVING THE ELECTRONIC EMPLOYMENT VERIFICATION AND 
                      WORKSITE ENFORCEMENT SYSTEM
=======================================================================



                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                CITIZENSHIP, REFUGEES, BORDER SECURITY,
                         AND INTERNATIONAL LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 26, 2007

                               __________

                           Serial No. 110-18

                               __________

         Printed for the use of the Committee on the Judiciary

      Available via the World Wide Web: http://judiciary.house.gov



                     U.S. GOVERNMENT PRINTING OFFICE

34-927 PDF                 WASHINGTON DC:  2006
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
DC area (202)512-1800  Fax: (202) 512-2250 Mail Stop SSOP, 
Washington, DC 20402-0001


                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. SCOTT, Virginia            HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
MARTIN T. MEEHAN, Massachusetts      CHRIS CANNON, Utah
WILLIAM D. DELAHUNT, Massachusetts   RIC KELLER, Florida
ROBERT WEXLER, Florida               DARRELL ISSA, California
LINDA T. SANCHEZ, California         MIKE PENCE, Indiana
STEVE COHEN, Tennessee               J. RANDY FORBES, Virginia
HANK JOHNSON, Georgia                STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
                 Joseph Gibson, Minority Chief Counsel
                                 ------                                

          Subcommittee on Immigration, Citizenship, Refugees, 
                 Border Security, and International Law

                  ZOE LOFGREN, California, Chairwoman

LUIS V. GUTIERREZ, Illinois          STEVE KING, Iowa
HOWARD L. BERMAN, California         ELTON GALLEGLY, California
SHEILA JACKSON LEE, Texas            BOB GOODLATTE, Virginia
MAXINE WATERS, California            DANIEL E. LUNGREN, California
MARTIN T. MEEHAN, Massachusetts      J. RANDY FORBES, Virginia
WILLIAM D. DELAHUNT, Massachusetts   LOUIE GOHMERT, Texas
LINDA T. SANCHEZ, California
ARTUR DAVIS, Alabama
KEITH ELLISON, Minnesota

                    Ur Mendoza Jaddou, Chief Counsel

                    George Fishman, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             APRIL 26, 2007

                           OPENING STATEMENT

                                                                   Page
The Honorable Zoe Lofgren, a Representative in Congress from the 
  State of California, and Chairwoman, Subcommittee on 
  Immigration, Citizenship, Refugees, Border Security, and 
  International Law..............................................     1
The Honorable Steve King, a Representative in Congress from the 
  State of Iowa, and Ranking Member, Subcommittee on Immigration, 
  Citizenship, Refugees, Border Security, and International Law..     3
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Chairman, Committee on the 
  Judiciary......................................................     4

                               WITNESSES

The Honorable Elton Gallegly, a Representative in Congress from 
  the State of California
  Prepared Statement.............................................     7
The Honorable Ken Calvert, a Representative in Congress from the 
  State of California
  Oral Testimony.................................................     9
  Prepared Statement.............................................    11
The Honorable David Dreier, a Representative in Congress from the 
  State of California
  Oral Testimony.................................................    12
  Prepared Statement.............................................    14
The Honorable Silvestre Reyes, a Representative in Congress from 
  the State of Texas
  Oral Testimony.................................................    23
  Prepared Statement.............................................    24
The Honorable Luis V. Gutierrez, a Representative in Congress 
  from the State of Illinois
  Oral Testimony.................................................    25
  Prepared Statement.............................................    27
The Honorable Jeff Flake, a Representative in Congress from the 
  State of Arizona
  Oral Testimony.................................................    28
  Prepared Statement.............................................    29
Mr. Randel Johnson, Vice President, Labor, Immigration & Employee 
  Benefits, U.S. Chamber of Commerce
  Oral Testimony.................................................    42
  Prepared Statement.............................................    45
Mr. Robert Gibbs, Partner, Gibbs Houston Pauw, on behalf of the 
  Service Employees International Union
  Oral Testimony.................................................    55
  Prepared Statement.............................................    57
Mr. Jim Harper, Director of Information Policy Studies, The Cato 
  Institute
  Oral Testimony.................................................    69
  Prepared Statement.............................................    71
Ms. Jessica Vaughan, Senior Policy Analyst, Center for 
  Immigration Studies
  Oral Testimony.................................................    88
  Prepared Statement.............................................    90

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Zoe Lofgren, a Representative 
  in Congress from the State of California, and Chairwoman, 
  Subcommittee on Immigration, Citizenship, Refugees, Border 
  Security, and International Law................................     2
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Chairman, Committee on the Judiciary...........................     5
Prepared Statement of the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas, and Member, 
  Subcommittee on Immigration, Citizenship, Refugees, Border 
  Security, and International Law................................     6

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of Susan R. Meisinger, President and CEO, 
  Society for Human Resource Management and Chair, HR Initiative 
  for a Legal Resource...........................................   105
Joint Statement of the Air Conditioning Contractors of America, 
  the Associated Builders and Contractors, the Associated General 
  Contractors, the Mason Contractors Association of America, the 
  National Association of Home Builders, the National Roofing 
  Contractors Association, the National Utility Contractors 
  Association, and the Plumbing-Heating-Cooling Contractors--
  National Association...........................................   128
Prepared Statement of the Electronic Employment Verification 
  System Working Group by Angelo I. Amador, Co-Chair United 
  States Chamber of Commerce; Kelly Knott, Co-Chair, Associated 
  General Contractors of America; and Scott Vinson, Co-Chair, 
  National Retail Federation/National Council of China 
  Restaurants....................................................   136
Prepared Statement of the Essential Worker Immigrant Coalition...   143
Prepared Statement of the National Council of La Raza............   145
Prepared Statement of Tyler Moran, Employment Policy Director, 
  National Immigration Law Center................................   152


  PROPOSALS FOR IMPROVING THE ELECTRONIC EMPLOYMENT VERIFICATION AND 
                      WORKSITE ENFORCEMENT SYSTEM

                              ----------                              


                        THURSDAY, APRIL 26, 2007

                  House of Representatives,
Subcommittee on Immigration, Citizenship, Refugees, 
             Border Security, and International Law
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:42 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable Zoe 
Lofgren (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Lofgren, Berman, Waters, Sanchez, 
Ellison, King, Gallegly, and Goodlatte.
    Staff present: Ur Mendoza Jaddou, Chief Counsel; J. Traci 
Hong, Majority Counsel; George Fishman, Minority Counsel; and 
Benjamin Staub, Professional Staff Member.
    Ms. Lofgren. I would like to open the hearing of the 
Subcommittee on Immigration, Citizenship, Refugees, Border 
Security, and International Law and welcome the Subcommittee 
Members, the witnesses, and the public.
    This is the Subcommittee's fifth hearing on comprehensive 
immigration reform. This week, we have been focusing on the 
inability of existing paper and electronic systems to 
accurately verify the immigration status and employment 
eligibility of workers in the United States.
    Since one of the main reasons for undocumented immigration 
is the lure of jobs in the United States, it is imperative that 
comprehensive immigration reform include an employment 
verification system that prevents the employment of 
unauthorized immigrants. At our hearing on Tuesday, we learned 
that the employment verification systems created in 1986 and 
1996 have failed to meet the critical need of verifying 
employment eligibility.
    We heard expert witnesses identify several problems with 
current Form I-9 paper employment eligibility verification 
systems created in 1986 and required to be completed by all 
employers and all workers in the United States each time a 
person gets a new job, as well as the Basic Pilot program 
created in 1996 and used voluntarily by 16,000 employers across 
the Nation.
    The problems included: the use of fraudulent documents, 
including the use of documents by a person other than to whom 
they belong to gain employment; an unacceptably high number of 
errors in the Social Security Administration and U.S. 
Citizenship and Immigration Services databases leading to false 
negatives for U.S. citizens, legal permanent residents, and 
other work-authorized individuals erroneously denied work 
authorization; employer discrimination against work-authorized 
individuals who look or sound foreign; problems in processes 
and protections for workers and employers who suffer from 
erroneous denials of employment verification; and concerns 
about the protection of SSA and USCIS data from theft exposure, 
and other privacy issues.
    These are serious and legitimate concerns that must be 
addressed so that we may move from today's voluntary 
participation of 16,000 employers in the Basic Pilot program to 
mandatory participation by all 7 million employers in the 
United States.
    I look forward to the testimony of our witnesses today, all 
of whom provide proposals on employment verification. I am 
particularly interested in how each of the proposals presented 
here today will address the concerns raised during our Tuesday 
hearing. It is time for accurate and workable solutions on 
employment verification.
    Today's hearing should be the first step in developing an 
appropriate system that accurately verifies the employment 
eligibility of workers in the United States to prevent the 
employment of unauthorized immigrants.
    I would now like to recognize our distinguished Ranking 
minority Member, Mr. Steve King, for his opening statement.
    [The prepared statement of Ms. Lofgren follows:]
 Prepared Statement of the Honorable Zoe Lofgren, a Representative in 
Congress from the State of California, and Chairwoman, Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and International 
                                  Law
    I would like to welcome the Immigration Subcommittee Members, our 
witnesses, and members of the public to the Subcommittee's fifth 
hearing on comprehensive immigration reform.
    This week, we have been focusing on the inability of existing paper 
and electronic systems to accurately verify the immigration status and 
employment eligibility of workers in the U.S. Since one of the main 
reasons for undocumented immigration is the lure of jobs in the U.S., 
it is imperative that comprehensive immigration reform include an 
employment verification system that prevents the employment of 
unauthorized immigrants.
    At our hearing on Tuesday, we learned that the employment 
verification systems created in 1986 and 1996 have failed to meet the 
critical need of verifying employment eligibility.
    We heard expert witnesses identify several problems with the 
current Form I-9 paper employment eligibility verification system, 
created in 1986 and required to be completed by all employers and all 
workers in the U.S. each time a person gets a new job, as well as the 
Basic Pilot program, created in 1996 and used voluntarily by 16,000 
employers across the nation. The problems included:

          The use of fraudulent documents, including the use of 
        documents by a person other than to whom they belong, to gain 
        employment;

          An unacceptable high number of errors in the Social 
        Security Administration (SSA) and U.S. Citizenship and 
        Immigration Services (USCIS) databases leading to ``false 
        negatives'' where U.S. citizens, legal permanent residents, and 
        other work authorized individuals are erroneously denied work 
        authorization;

          Employer discrimination against work authorized 
        individuals who look or sound foreign;

          Problems in processes and protections for workers and 
        employers who suffer from erroneous denials of employment 
        verification;

          Concerns about the protection of SSA and USCIS data 
        from theft, exposure, and other privacy issues;

    These are serious and legitimate concerns that must be addressed so 
that we may move from today's voluntary participation of 16,000 
employers in the Basic Pilot program to mandatory participation by all 
seven million employers in the U.S.
    I look forward to the testimony of our witnesses today, all of whom 
provide proposals on employment verification. I am particularly 
interested in how each of the proposals presented here today will 
address the concerns raised during our Tuesday hearing.
    It is time for accurate and workable solutions on employment 
verification. Today's hearing should be the first step in developing an 
appropriate system that accurately verifies the employment eligibility 
of workers in the U.S. to prevent employment of unauthorized 
immigrants.

    Mr. King. Thank you, Madam Chair. I appreciate you holding 
this hearing today.
    Today's hearing is a continuation of last Tuesday's hearing 
on the Basic Pilot Employment Eligibility Verification System. 
We will examine what we can do to make that system work better, 
especially to combat identity fraud.
    I appreciate these two hearings on the topic since accurate 
employment eligibility is essential in order to have successful 
U.S. immigration policy.
    Illegal employment is the biggest incentive for illegal 
immigration and if we don't do everything we can to end the job 
magnet, we will never have national security or economic 
security.
    I am pleased that our first panel of witnesses consists of 
several of our House colleagues who have taken leadership roles 
on this issue. Mr. Calvert has reintroduced his bill to make 
the use of the Employment Eligibility Verification System, the 
Basic Pilot program, as we know it, make them use that for all 
U.S. employers and phase it in over a 7-year span.
    That phase-in system was laid out by Mr. Calvert's 
legislation. It is an inspiration for the Employment 
Eligibility Verification provisions in last year's Border 
Protection, Antiterrorism and Illegal Immigration Control Act. 
It passed the House by a vote of 239 to 182.
    Aside from the use of the Basic Pilot Employment 
Eligibility Verification program, the other way to ensure 
employment eligibility is the use of machine-readable, 
tamperproof biometric Social Security card by all jobseekers. 
Mr. Dreier has proposed that in H.R. 98, the Illegal 
Immigration Enforcement and Social Security Protection Act of 
2007. He developed it along with Border Patrol Union Chief T.J. 
Bonner, who has been before this Committee a number of times. 
Such a card would directly combat the theft or misuse of a 
Social Security number.
    Mr. Gallegly, a longtime Member of this Subcommittee and 
the deputy Ranking Member, has introduced several pieces of 
legislation aimed at improving the Employment Eligibility 
Verification process. For instance, H.R. 136 would require the 
Social Security Administration to notify DHS, the Treasury 
Department, and the individual rightfully possessing a Social 
Security number that has been submitted by one employer eight 
or more times at at least four different addresses. And H.R. 
850 would require the IRS to withhold and tax refunds of earned 
income tax credit from any alien whose work authorization had 
expired but did not stop working in the United States. 
Commonsense proposals.
    At Tuesday's hearing, the U.S. Citizenship and Immigration 
Services witness discussed the Basic Pilot program, or the 
EEVS, in general and some of the improvements that have been 
brought forward to the system. I was particularly interested in 
the fact that the system works so quickly. Over 92 percent of 
the inquiries get a response within 3 seconds, and I have run 
that system myself and the longest delay I could find was 6 
seconds. But 99.8 percent of U.S.-born citizens receive 
confirmation in that period of time.
    We also heard the exception here, which I think we need to 
pay attention to. Foreign-born employees have been more likely 
to receive a tentative non-confirmation, though. A total of 1.4 
percent of work-authorized employees received a tentative non-
confirmation. So it worked pretty good.
    In the past, there was often a 6 to 9 month delay between 
an immigration's arrival in the United States and the 
availability of information in the DHS databases for 
verification purposes. That delay is now down to around 10 
days.
    USCIS is taking steps to improve EEVS, the Basic Pilot. 
They are conducting a pilot program that allows employers to 
make sure the worker standing in front of them matches the 
picture on file with the DHS employment authorization 
documents. USCIS is adding more data source to the database and 
monitoring for patterns of fraud, employment discrimination, 
and employer misuse. These are steps in the right direction, 
and it is open to making even more improvements.
    For the most part, the witnesses at Tuesday's hearing 
agreed that the biggest problem facing the EEVS system is it 
vulnerability to identity theft. To combat this, DHS must have 
access to Social Security Administration data so it can 
investigate situations in which a single Social Security number 
was submitted more than once by a single employer or where a 
number was submitted by multiple employers in a manner that 
suggests fraud.
    Of course, Mr. Dreier's proposal deals with identity fraud 
directly. One question, though, is whether there is consensus 
for a biometric Social Security card. I am interested in the 
witnesses' testimony today. I recognize there are also 
proposals brought forth by Mr. Reyes this morning, and by the 
Flake-Gutierrez proposal that we will hear this morning and I 
am interested in that testimony as well.
    It is really pleasing to me to see this kind of activity on 
the part of Members, the leadership role that has been taken. I 
look forward to your testimony.
    I thank you again, Madam Chair, and I yield back.
    Ms. Lofgren. Thank you, Mr. King.
    We are pleased to be joined by the Chairman of the full 
Judiciary Committee today, and I would now invite Chairman 
Conyers for any opening remarks that he may have.
    Mr. Conyers. Thank you so much. I would like permission to 
put my statement in the record.
    Ms. Lofgren. Without objection.
    Mr. Conyers. And I just want to congratulate this new 
Lofgren-King alliance that is leading us through a subject-
matter by subject-matter inquiry into this huge, complex 
subject. I am very proud of the way that you are moving on 
this.
    The only point I wanted to make in my whole statement is 
this problem of worker exploitation or retaliation. You see, 
when a company like Swift wants to help find out who is a legal 
worker and who isn't, and it turns out that this is like 
putting cheese out for a mouse, then you spring on the people 
that have provided you the information and, guess what, you are 
the bad guy. And that is not going to attract a lot of support 
as we go along.
    We have got to have safeguards, and the privacy concerns 
must be taken into consideration. And I am so happy to see this 
thoughtful group of Members putting their bills and ideas right 
on the line. Let's put everything--whatever you have got, put 
it on the table, ladies and gentlemen, because this train is 
moving out and we are going to come out with a bill. It is 
resolved.
    And the challenge for us is how do we do it and accommodate 
so darned many competing interests, and it is in that spirit 
that I issue and extend a warm welcome to you, and I 
congratulate our Subcommittee Chairwoman.
    [The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
in Congress from the State of Michigan, and Chairman, Committee on the 
                               Judiciary
    Earlier this week, the Subcommittee held a hearing examining 
problems in the current employment verification and worksite 
enforcement systems. Today, we have an opportunity to study possible 
solutions to these problems.
    One possible solution concerns the electronic employment 
verification system, also known as ``EEVS.'' This system is now 
recognized as playing an increasingly critical role in comprehensive 
immigration reform. To ensure that the system will--in fact--actually 
be a solution, it must be efficient, enforceable, and evenhanded. And, 
there must be safeguards to prevent abuse.
    Let me explain each of these requirements.
    First, EEVS must be efficient. Without doubt, the verification 
requirements of the 1986 immigration law reforms became substantially 
undermined by the increasing availability of fraudulent identification 
documents. While pilot programs established under the 1996 immigration 
law reforms sought to verify the identity of prospective employees 
through government databases, these programs have been plagued with 
bureaucratic red tape and extensive false negatives.
    Clearly, if an employment verification system is not reliable and 
easy to use, employers simply will not utilize it and we will simply be 
left--again--with a broken immigration system. For example, we learned 
earlier this week about the odyssey of a staffer on this very 
Subcommittee who encountered the problem of ``false negatives'' when 
she began her employment with us. One can only imagine how different 
her experience would have been if she was a low-wage worker in a rural 
area without the support of a Congressional subcommittee behind her. 
Clearly, an EEVS system must be fair to everyone, not just the educated 
or informed users.
    Second, this system must be enforceable and evenhanded. By this, I 
mean that the system should have appropriate incentives and sanctions. 
As we heard the other day from one company that tried to comply with a 
pilot verification program in good faith, it paid substantial 
consequences. We should not punish employers that voluntarily seek to 
comply with Federally-sanctioned employment verification programs.
    Third, the system must have safeguards so that it does not become a 
tool of worker exploitation or retaliation whether in response to 
formal organizing activities or as a way to punish individual employees 
who demand their rights as workers. Unscrupulous employers should not 
be allowed to profit from worksite enforcement. Also, as part of these 
safeguards, privacy concerns must be taken into account both from the 
perspective of the employee and the employer.
    I am pleased that some of our colleagues who introduced bills in 
this Congress concerning employment verification systems are here to 
discuss their respective proposals and to share their insights on 
reform. I extend a warm welcome to each of you for your hard work on 
this important issue.
    I, of course, express equal appreciation to our other witnesses 
from the business community and the public policy sectors. I am 
particularly pleased that the representative from the Service Employees 
International Union is joining us today. All too often, anti-immigrant 
forces have tried to insert wedges in the labor community by alleging 
that immigrants will steal American jobs and undercut unionization 
efforts.
    Today's debate on the employment verification system today will 
certainly contribute to our efforts to enact immigration law reforms 
that will result in a system that is controlled, orderly, and fair.

    Ms. Lofgren. Thank you, Mr. Conyers.
    In the interest of proceeding to our witnesses and mindful 
of our schedules, I would ask that other Members submit their 
statements for the record within 5 legislative days. And, 
without objection, all opening statements will be placed in the 
record.
    Without objection, the Chair is authorized to declare a 
recess of the hearing at any time.
    [The prepared statement of Ms. Jackson Lee follows:]
       Prepared Statement of the Honorable Sheila Jackson Lee, a 
    Representative in Congress from the State of Texas, and Member, 
 Subcommittee on Immigration, Citizenship, Refugees, Border Security, 
                         and International Law
    Today marks the fourth hearing in a series of hearings dealing with 
comprehensive immigration reform. This subcommittee previously dealt 
with the shortfalls of the 1986 and 1996 immigration reforms, and most 
recently the difficulty that employers encountered when they attempted 
to verify that potential foreign employees have work authorization. We 
heard testimony from Marc Rosenblum that false negatives occur during 
the I-9 process therefore employers err on the side of caution, making 
it more difficult for legitimate documented workers to find employment. 
Certainly making a mistake can be costly to an employer.
    We heard testimony from the VP of Swift Meat Packing Company, John 
Shandley. Mr. Shandley mentioned that they were sued by the Department 
of Justice (DOJ) for going too far in trying to determine the 
employment eligibility of a potential employee. Eventually they would 
settle the case for less than $200,000. Likewise, the recent raid on 
Swift plants cost the company over $31 million in lost revenue. More 
than 1,200 employees were detained, while Immigration & Custom 
Enforcement (ICE) officers searched for undocumented workers. Despite 
their difficulties with employment verification, Mr. Shandley expressed 
an eagerness to assist us in coming up with practical solutions to this 
problem, as Swift held no ill will towards Members of Congress.
    As we move towards a practical solution, and consider various 
proposals to improve employment verification I want to reemphasize the 
three ``E's'' articulated by Stephen Yale-Loehr, enforcement, 
evaluation, and entry. There has been a consistent lack of enforcement 
on the part of the federal government. Violations of the employment 
verification provisions may result in civil penalties ranging from 
$100-$1,000 per employee. However, only 417 Notices of Intent to Fine 
were issued in FY1999, 178 in FY2000, 100 in FY2001, 53 in FY 2002, 162 
in FY 2003, and only three (3) in FY 2004. How can we address the 
problem if the agency deemed responsible for enforcing our laws has not 
maintained their responsibilities?
    Along those same lines we must address the enormous use of 
fraudulent documents that occurred as a result of the 1986 and 1996 
immigration reform. When Mr. Yale-Loehr spoke about evaluation he 
stressed the difficulty that employers encounter when they evaluate the 
documents that a potential employee presents for verification. Likewise 
the Basic Pilot Program can only verify that a social security number 
exist. The Basic Pilot Program can not tell a prospective employer that 
the person presenting the social security number is actually the 
individual to whom the social security number belongs. Finally let us 
speak about entry. Keeping in mind that practicality is the key to 
comprehensive immigration reform, Mr. Yale-Loehr mentioned the need for 
a temporary guest worker program. While I am a staunch supporter of 
protecting our borders, and enforcing our immigration laws, we must 
find a way to effectively deal with the 12 million undocumented workers 
already here. A guest worker program may be a possible solution.
    In conclusion let me say that every single employer in the United 
States will be impacted by the new employee verification mandates 
Congress enacts as part of comprehensive immigration reform. Therefore 
the system must be workable, simple, and reliable. We must also 
recognize that employers in the United States are vastly different in 
both size and levels of sophistication, and any verification system 
that we employ must accommodate those differences. It is time to end 
the confusion within the employer verification system because the 
consequences for individual workers and the economy are significant.

    Ms. Lofgren. We have two distinguished panels of witnesses 
here today to help us consider the important issues before us. 
In our first panel, we are very grateful to each Member for 
being here. We know how busy your schedules are. We have 
brought together Members of the House of Representatives who 
have introduced bills with provisions on employment eligibility 
verification systems in this Congress to discuss their 
proposals with us.
    I would note that Mr. Gallegly, a Member of our 
Subcommittee, has a written statement that will be included in 
its entirety in the record but has asked that he not be a 
witness because he has another commitment that he is going to 
run off to do, and we respect that request on his part.
    [The prepared statement of Mr. Gallegly follows:]
Prepared Statement of the Honorable Elton Gallegly, a Representative in 
                 Congress from the State of California
    Madam Chairwoman, thank you for holding this important hearing on 
one of the most critical issues that must be addressed if our country 
is serious about reducing illegal immigration--the development and 
implementation of an efficient and secure worksite enforcement system.
    Illegal immigration is one of the most serious problems facing our 
nation. The high number of immigrants crossing the border illegally has 
overwhelmed our schools, hospitals and communities. It is also a direct 
threat to our national security and counter-terrorism efforts. Illegal 
workers also hurt American workers by taking jobs and keeping wages and 
benefits down.
    Under current law, a person must provide a social security number 
in order to get a job. In many cases, an illegal immigrant simply 
provides a false name and social security number. In other cases, an 
illegal immigrant adopts the identity of an American who is unaware 
that his identity has been stolen until he is refused a loan or 
contacted by an irate creditor.
    The federal government could stop misuse of Social Security 
numbers, but has failed to do so. My legislation would change that.
    Every year, employers are required to file W-2 forms with their 
workers' names, social security numbers and addresses. Currently, when 
the Social Security Administration receives multiple W-2 forms with the 
same social security number and different names, it simply ignores it--
even when it is obvious that more than one person is using a Social 
Security number.
    In other cases, when an employer files a W-2 with a name and Social 
Security number that does not match, the government simply mails the 
worker a letter. That's it. There is little or no follow-up.
    This has led to a serious accounting problem in the Social Security 
program. A GAO report found that as of November 2004, the Social 
Security Administration has been unable to resolve discrepancies 
involving 246 million W-2's--involving $463 billion--that were filed 
with names and Social Security numbers that do not match.
    A bill I introduced, H.R. 138, the Employment Eligibility 
Verification and Anti-Identity Theft Act, would solve this problem by 
requiring workers to resolve discrepancies involving their name and 
Social Security number.
    A companion bill, H.R. 136, the Identity Theft Notification Act 
would require the Social Security Administration to investigate if it 
receives information that more than one person is using one Social 
Security number.
    If there is evidence of fraud and identity theft, the Social 
Security Administration would be required to contact the Department of 
Homeland Security (DHS) for prosecution. It would also be required to 
notify the innocent owner of the Social Security number, so that he can 
take steps to protect his good credit and good name.
    I have also introduced H.R. 849, the Stop the Misuse of ITINs, 
which would require the Internal Revenue Service (IRS) to notify the 
Department of Homeland Security (DHS) when it receives a W-2 indicating 
that a foreign national is working illegally. IRS would also be 
required to notify the employer that the worker does not have proper 
work authorization.
    Finally, H.R. 850, the IRS Illegal Immigrant Information Act, would 
require that each December the DHS provide IRS with a list of the 
people whose work authorization or employment-based visa expired before 
the calendar year.
    If a return is filed by someone working illegally, IRS would be 
required to notify DHS. The IRS would also notify the employer that the 
worker does not have proper work authorization and withhold any refund 
due or Earned Income Tax Credit claimed.
    For example, in December 2007, DHS would provide IRS with the names 
and Social Security numbers of foreign nationals whose work 
authorization or employment-based visa expired before December 31, 
2006. If the IRS receives a W-2 in January of 2008 indicating that the 
person continued to work in 2007, the IRS would notify both IRS And the 
worker's employer.
    All four of these bills would give the worker an opportunity to 
resolve the discrepancy or provide proof of current employment 
authorization.
    Enacting these proposals, in addition to requiring that all 
employers use an improved Basic Pilot Program, will substantially 
reduce the number of people illegally crossing the border. This will 
allow the border patrol to concentrate on securing our borders against 
terrorists, drug smugglers and other criminals.
    Madam Chairwoman, thank you again giving me this opportunity to 
explain my proposals. I look forward to working with you and the 
distinguished Ranking Member to identify additional ways to reduce the 
number of people who come to this country illegally.

    Ms. Lofgren. Let me go to the other Members who are able to 
testify before us today.
    First on the panel, and who arrived first in the room, 
Congressman Ken Calvert represents the 44th Congressional 
District of California. Throughout his 15 years of 
congressional service, Mr. Calvert has been instrumental in 
advancing legislation to protect against identity theft. Prior 
to his tenure in Congress, Representative Calvert directed Ken 
Calvert Real Properties.
    Representative Dave Dreier has been a Member of the United 
States House of Representatives since 1981, representing 
California's 26th Congressional District. He has served in many 
leadership capacities over the years, from Chair of the House 
Rules Committee as well as his current position as Chair of the 
Republican Congressional Delegation from California, where he 
and I very often collaborate. He graduated with a bachelor's 
from Claremont McKenna College in 1975 and received his 
master's from Claremont Graduate School in 1976.
    Congressman Silvestre Reyes has served in the House for 11 
years as a Representative from the 16th District in Texas, but 
began his career with the U.S. Immigration and Naturalization 
Service and the U.S. Border Patrol. He started as a Border 
Patrol Agent, rising through the ranks to immigration 
inspector, instructor at the Border Patrol Academy and 
assistant regional commissioner in Dallas, Texas. During his 
time with the Border Patrol, Congressman Reyes was known as an 
effective and innovative manager of the border and, of course, 
we know him as somebody we can rely on with expertise here in 
the House.
    Representative Luis Gutierrez has represented the 4th 
Congressional District of Illinois since 1993. Throughout his 
service in the House, he has worked as a stalwart leader on 
comprehensive immigration reform. Mr. Gutierrez chairs both the 
Congressional Hispanic Caucus, and the Democratic Caucus, 
respective Immigration Task Forces. He also sits before us as a 
senior Member of this Subcommittee. Before his arrival in 
Washington, Congressman Gutierrez worked as a teacher, social 
worker, community activist and city official. He graduated from 
Northeastern Illinois University.
    And, finally, we are expecting Congressman Flake, who is on 
his way to testify. Mr. Flake is serving his fourth term 
representing the 6th Congressional District of Arizona. Before 
serving in the House, Mr. Flake was Executive Director of the 
Foundation for Democracy, a foundation monitoring the southern 
African nation of Namibia's independence process and, following 
his work at the Foundation, he was named the Executive Director 
of the Goldwater Institute. Mr. Flake graduated from Brigham 
Young University, where he received a BA in international 
relations and a master's in political science.
    So we will begin with--you all know the drill. Your entire 
written statement is part of the record, but we would invite 
you to make an oral statement.
    And we will start with you, Ken Calvert.

  TESTIMONY OF THE HONORABLE KEN CALVERT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Calvert. Thank you. I thank my colleague from 
California and friend, Chairwoman Lofgren, Ranking Member Steve 
King, and the entire Subcommittee for inviting me to testify on 
my bill, The Employment Eligibility Verification System.
    As you know, there are approximately 16,000 employers using 
the Basic Pilot program, and the program continues to evolve to 
meet new demands. As you heard this past Tuesday, it is 
incorporating a photo tool to enable employers to better verify 
the identity of non-citizen new hires. The Basic Pilot program 
is also exploring other ways to deter and detect fraudulent 
documents, fraudulent or other improper use of the system in 
instances where employers fail to properly follow program 
procedures.
    The program is developing a system to flag multiple uses of 
Social Security numbers in different locations. The Basic Pilot 
program has been steadily preparing to go mandatory and is 
currently capable of handling 25 to 40 million queries a year.
    My legislation, HR 19, would make the Basic Pilot program 
mandatory over a period of 7 years. Companies with 10,000 
employees or more would be required to be compliant a year 
after enactment. Companies with 5,000 employees or more would 
be required to be compliant until after 2 years and so on down 
to businesses with fewer than 100 employees, which would be 
required to be compliant after 7 years. My bill does not 
require employers to retroactively check employees already 
hired, only newly hired employees.
    The current Basic Pilot program was created from 
legislation I drafted in the 104th Congress. The legislation 
was included in the omnibus consolidated appropriations act of 
1997 and several Members of both the Subcommittee and full 
Judiciary Committee voted in favor of the bill. In the 107th 
Congress and the 108th Congress, the Basic Pilot program was 
extended and expanded. Both bills were agreed to by voice vote 
in the House.
    I recognize there are concerns about the current Basic 
Pilot program. The program was not originally designed to catch 
identity theft, and I understand this is a desirable capability 
to add. However, the United States Citizenship and Immigration 
Service is beginning to address this problem through the 
development of a photo tool and a new monitoring and compliance 
office that will analyze system usage by employers to detect 
compliance issues leading to follow-up or referral to 
Immigration and Custom Enforcement and the Department of 
Justice.
    The question before this Subcommittee and Congress is how 
best to build upon an effective, working program for which 
Congress has voted for three times. To create a new program 
from scratch would be a step backwards that would be hard to 
explain to budget-conscious taxpayers.
    The Basic Pilot program has the ability and authority to 
address the concerns regarding identity theft and with the 
support of Congress through the passage of H.R. 19, our country 
will continue to have a working employment verification system 
with a decade of experience behind it.
    Thank you again for inviting me to testify, and I welcome 
any questions you may have.
    [The prepared statement of Mr. Calvert follows:]
 Prepared Statement of the Honorable Ken Calvert, a Representative in 
                 Congress from the State of California


    Ms. Lofgren. Thank you, Mr. Calvert, and for your 
leadership on this issue.
    Congressman Dreier?

 TESTIMONY OF THE HONORABLE DAVID DREIER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Dreier. Thank you very much, Madam Chairwoman and Mr. 
King and Chairman Conyers, Mr. Gallegly, Mr. Goodlatte.
    I must say, as I listen to Chairman Conyers talk about this 
great Lofgren-King combo that is here, I can't help but tell 
you that I am here to offer what I think really builds on that 
and is the closest thing to a panacea for this.
    Not only do I have as lead cosponsor of my bill, H.R. 98 
Silvestre Reyes, but this is a bill that has, as cosponsors, 
Elton Gallegly, Bob Goodlatte, Mr. King; you, Madam Chair--I 
don't know if you are a cosponsor, you have certainly indicated 
an interest in support of it. But I will tell you that I know 
that Maxine Waters has been a cosponsor along with Tom Tancredo 
and Grace Napolitano.
    It really is to me the one measure that we have on this 
issue of dealing with immigration reform that does really go 
all the way across the spectrum philosophically.
    In the last Congress, as we all know, we had 10 votes on 
what Mr. King really appropriately in his opening remarks 
described as focusing on the supply side, increasing the size 
of the Border Patrol, Silvestre's former colleagues, the 
building of the fence, utilizing unmanned aerial vehicles and 
motion detectors. All of this stuff focused on the supply side 
and virtually nothing focused again on what Mr. King talked 
about, the demand side, the magnet that draws people into this 
country illegally.
    Now, this legislation that Silvestre and I have introduced, 
we call it H.R. 98. Why? Because 98 percent of the people who 
come into this country illegally come here for one reason. They 
are looking for economic opportunity. They are looking to feed 
their families. They are looking for a job. And if we can end 
that magnet that draws people into the country illegally and at 
the same time, we hope, see the economy of Mexico and other 
countries enhanced to the point where people aren't fleeing 
those countries, I believe that we can turn the corner and, 
frankly, bring what would be tantamount to an end to this 
problem.
    Now, what we call for is a smart, counterfeit-proof Social 
Security card. My brilliant staffer Matthew Daniel Tully has 
just given me his original Social Security card. He is a young 
guy. I don't know where in the hell mine is. I lost it years 
ago. But it is nothing but a flimsy piece of paper, which is 
what anybody had going back to 1935.
    Not one attempt whatsoever has been made to update since 
1935 the Social Security card. Now, I am not a proponent of a 
national ID card, but I do know this: if we were to establish a 
smart, counterfeit-proof Social Security card--that is not 
biometric by the way, Mr. King, all is it is it has an 
algorithm strip on the back that the employer would swipe, and 
that card would go with information that the Government already 
has, no new information, as to whether this person is an 
American citizen, if they are here on an H-1B visa, H-2A, 
whatever, and I know you are looking at new descriptions of 
those visas. But they would have--whether or not that person is 
in fact a qualified worker.
    And then that information would come back and the employer 
would get this, yeah or nay, and they could then hire that 
person.
    One of the big problems we have had, of course, is lack of 
enforcement. And I opposed the 1986 Immigration Reform and 
Control Act not only because of amnesty but because of employer 
sanctions. But we have employer sanctions today. As we all 
know, they are not enforced. I didn't want to see small 
businessmen and women turned into Border Patrol agents. I left 
that to Silvestre Reyes and his colleagues.
    The fact of the matter is we have it today. There is a lack 
of enforcement. And what we have seen, and Chairman Conyers 
raised this by talking about one particular company, we have 
seen many people out there knowingly hiring people who were 
here illegally.
    Well, what we do with this card is people in this country 
looking for a new job, anyone looking for a new job, whether 
you are a citizen or not, you would have to have one of these 
cards. Now, no retiree would have to have one of these cards. 
We are reelected, we don't need to have one of these cards. We 
only see people who are in the job force, looking for a new 
job, required to have one of these cars.
    And I believe that going through a 2-year phase-in, we 
could utilize this as a means to take place of the combination 
of 94 different documents, as we well know, that people utilize 
to get their jobs, I mean, to qualify. I mean school ID cards, 
library cards, you know, obviously Social Security cards, and 
one of the real problems has been a real abuse of the Social 
Security system.
    Now, our problem has been, frankly, the Ways and Means 
Committee and the Finance Committee in the Senate and some in 
the White House who have opposed this. I have been talking 
about this until I was blue in the face for the last 3 years. 
And I hope very much that we can--I have testified before the 
Ways and Means Committee on this, their Social Security 
Subcommittee, and I am hoping very much that we can get them to 
move on it. There are a number of people who are concerned 
about getting the Social Security Administration involved in 
this.
    I hope very much, Madam Chair, that we can in fact move 
forward and incorporate this as a very important part of our 
process. And I thank you all very much for listening to me.
    [The prepared statement of Mr. Dreier follows:]
 Prepared Statement of the Honorable David Dreier, a Representative in 
                 Congress from the State of California


















    Ms. Lofgren. Thank you very much, Congressman Dreier.
    Congressman Reyes?

TESTIMONY OF THE HONORABLE SILVESTRE REYES, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Reyes. Thank you, Madam Chair and Members of the 
Committee and Chairman Conyers. Thank you so much for holding 
this hearing and agreeing to take on what is an important part 
of what I think is our national security landscape.
    I mention that because whatever the figure is, and we don't 
know what that figure is exactly, between 9 million and 12 
million people are living in a shadow world in our country 
today. So it is incumbent upon us as Members of Congress to 
work and find a way to greatly reduce or eliminate this shadow 
world because we are concerned that there may be those in that 
shadow world, in our country, that are here to harm us and have 
that potential as long as that shadow world exists.
    I am very proud to be here with my colleagues because I 
know all of us want to find a solution to this perplexing issue 
and I am particularly proud of my two colleagues here to my 
left, Congressman Flake and Congressman Gutierrez, for the 
legislation that I have endorsed that is comprehensive in 
nature.
    I think that if we are going to be successful, if we are 
going to be able to address the issue that is facing us today, 
you have to have three very critical components. You have to 
have legalization, you have to have border security and you 
have to have a guest worker program. So I am proud to endorse 
their legislation, and I hope all Members of Congress take a 
close look at that.
    We were at the White House yesterday. I will let 
Congressman Gutierrez talk more about that meeting, at least I 
hope he does, because we had a meeting with President Bush, who 
is very much interested for the same reasons of national 
security that we address this.
    I am also proud to have had a role in H.R. 98 with my 
colleague David Dreier, and actually we have introduced this 
the last three Congresses, and we have testified a number of 
times before this Committee and other Committees about this 
proposal. I was thinking as David was speaking. In 1977 I 
headed up the first computer program to create a system that 
would identify potential legal visitors to this country. It was 
called the Alien Documentation Identification and 
Telecommunications System. That was in 1977.
    I find it incredible, and I find it appalling, that with 
all of the advances in telecommunications, all of the advances 
in computers and our ability to be able to monitor, that we 
haven't come up with a system like H.R. 98 or perhaps one like 
my colleague Mr. Calvert was talking about, that we haven't 
utilized technology to give us a system that does three very 
important things: increases our security by knowing who is 
coming into our country; secondly, gives employers the ability 
to verify conclusively and therefore takes them out of the loop 
in terms of responsibility as to who they are hiring and who is 
on their payroll; and, third, puts the onus on the Department 
of Homeland Security, where it should be, to enforce our 
Nation's immigration laws.
    So I am proud to be part of this effort. I hope that we in 
this Congress are serious about comprehensive immigration 
reform. We can't afford to postpone it a day more. And when 
people talk about the cost that it is going to entail, I would 
remind all of us, the cost of another hit like the one we took 
on 9/11. This is an investment in ourselves. This is an 
investment in the future for our children, and our 
grandchildren, and the security of our country. It is a 
national security issue.
    And that is why I believe that comprehensive immigration 
reform with those three components--legalization, a guest 
worker program and border security, which includes what H.R. 98 
does--is so critical and so important. That was our message to 
President Bush yesterday. It is I think an understandable and 
cohesive message that everybody needs to understand on both the 
House and the Senate side.
    So thank you very much for taking on this issue. I do have 
a written statement.
    Ms. Lofgren. The written statement will be included in the 
record.
    Mr. Reyes. And I will be glad to answer any questions.
    [The prepared statement of Mr. Reyes follows:]
 Prepared Statement of the Honorable Sylvestre Reyes, a Representative 
                  in Congress from the State of Texas
    I would like to begin by thanking Chairwoman Zoe Lofgren and 
Ranking Member Steve King for holding this very important hearing 
today. As the lead Democratic cosponsor of H.R. 98, the Illegal 
Immigration Enforcement and Social Security Protection Act, I have been 
pleased to work with my friend and colleague from California, Mr. 
Dreier, on the bill, and I appreciate his leadership on this issue.
    Before coming to Congress, I served for 26\1/2\ years in the U.S. 
Border Patrol. Half of the time I was a Border Patrol Sector Chief, 
first in McAllen, then in El Paso. As the only Member of Congress with 
a background in border enforcement, I have first-hand knowledge of what 
we need to do in order to reduce illegal immigration while keeping our 
borders and the nation safe.
    I have always said that we need a comprehensive immigration reform 
plan with three main components: strengthened border security; earned 
legalization for those who qualify; and a guest worker program with 
tough employer sanctions. Comprehensive reform is like a three-legged 
stool. Without one leg, the stool topples.
    I applaud the Committee for today's hearing and for gaining insight 
about one of the three components: the need for stricter employer 
sanctions. I have witnessed firsthand the difference that tough 
employer sanctions can make in discouraging attempted illegal entries 
into the United States.
    In 1986, the Immigration Reform and Control Act passed Congress and 
contained provisions which would penalize employers who hire illegal 
immigrants. After enactment, in parts of the country such as the border 
region where those of us in law enforcement had the resources to 
enforce those sanctions, there was a dramatic decrease in illegal 
entries into the United States. Clearly, once word got out that illegal 
immigrants were not being hired, the incentive to enter the United 
States was gone and attempted entries dropped off considerably.
    H.R. 98 would expand and improve on the Immigration Reform and 
Control Act by enhancing the protection of Social Security cards and 
allowing employers to instantaneously verify a prospective employee's 
eligibility to work in the United States. The bill would also increase 
civil and criminal penalties for employers who hire illegal immigrants 
or fail to verify their employment eligibility.
    If properly funded and with appropriate oversight and privacy 
protections, H.R. 98 would be an important step toward halting the flow 
of people seeking to enter the United States illegally in order to find 
employment. Our immigration and border security personnel will then be 
able to focus more of their time, effort, and resources on those who 
may be trying to enter the country to do us harm.
    If we are really serious about enacting comprehensive immigration 
reform, we must include tough employer sanctions as one of the 
proposals within the final bill. Thank you for allowing me to testify 
on behalf of H.R. 98, and I look forward to continue to work with the 
Subcommittee in the future.

    Ms. Lofgren. Thank you so much.
    Congressman Gutierrez?

TESTIMONY OF THE HONORABLE LUIS V. GUTIERREZ, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Gutierrez. Chairwoman Lofgren, Subcommittee Ranking 
Member Mr. King, full Committee Chairman Mr. Conyers, and I 
have to say all of my colleagues here, Mr. Dreier, Jeff Flake 
and Silvestre Reyes, I am really delighted and it is such a 
pleasure to be here with people with such a wealth of valuable 
information.
    And I always said that Silvestre always brings such a great 
historical perspective given what he did before he came here to 
serve in the Congress of the United States, and I thank him for 
bringing that very valuable bipartisanship here and 
bipartisanship yesterday, Madam Chairwoman, at the White House, 
where we brought these issues up.
    And I wanted to say that because of Silvestre Reyes' 
historical knowledge, Congressman Pastor from Arizona and 
Xavier Becerra from California and I said to the President, we 
need enforcement, but we don't need roundups of innocent 
individuals throughout our community, and we were able to speak 
with not only the knowledge of our conviction but with the 
historical knowledge that Silvestre Reyes brought us about what 
Ronald Reagan was able to do when he approached the issue of 
comprehensive immigration reform back in 1986 and halted the 
severe worker raids that were hurting people and say we wish to 
help and our broken immigration system.
    Let me begin by saying that an employment verification 
system must be part of a comprehensive immigration reform. We 
will be setting ourselves up for continued failure if such a 
system is not implemented with strong border security, a new 
visa program for future workers and a tough but fair earned 
legalization program for the estimated 12 million unauthorized 
individuals currently living and working.
    With that important point in mind, I would like to focus my 
testimony today on the employment verification system in 
STRIVE, which would allow the shortfalls of our current system 
to be corrected.
    The Electronic Employment Verification System in STRIVE 
would require the creation of a biometric, machine-readable, 
tamper-resistant Social Security card. In addition to this 
card, the bill limits the number of other documents an employer 
could accept as proof of identity and work eligibility and 
require that they be biometric in some instances.
    Going back to what Mr. Dreier said about the multiple uses, 
we need to limit what an employer can accept. It can't be just 
everything. That wouldn't help us.
    Limiting the number of documents to those that are secure 
and tamperproof would help to eliminate the lucrative market of 
false documents, but we need to do more. The STRIVE Act also 
requires DHS to set up a system to prevent identity theft and 
individuals from misrepresenting themselves. Establishing an 
employment verification system that will apply to all workers 
in the U.S. is a massive undertaking and must be approached 
prudently with a roll out plan that is contingent upon the 
system's accuracy.
    Going back to Mr. Calvert, who has a 7-year roll out 
period, it is going to take years, Madam Chairwoman. I don't 
know how we do it well and be fair to American workers unless 
we do it that way.
    STRIVE phases in the use of our system, starting with 
critical infrastructure employers, followed by large, then 
small, employers.
    H.R. 1645 also requires the Comptroller General to certify 
on an annual basis that the verification system is responding 
accurately and effectively to employer queries before it can be 
expanded.
    Performance benchmarks are essential to employer confidence 
in the system and to prevent U.S. citizens and others who are 
work-authorized from being denied eligibility to work.
    Individuals will also be allowed to check their own records 
for accuracy. In addition, workers can contest inaccurate 
determinations of the system; if wrongfully denied work 
eligibility they will have the right to administrative review, 
lost wages and, if necessary, judicial review.
    The mandatory expansion of such a system also raises 
legitimate privacy concerns. Technology, such as encryption, 
regular testing of the system and implementing regular security 
updates, would have to be used. Information to be stored in the 
system would also have to be limited and could only be used for 
employment verification purposes.
    The bill also provides and levies stiff penalties for 
unlawful access or modification of employment system 
information. In its annual review, the Comptroller General must 
also certify that our system is protecting the privacy of 
records in the system.
    Witnesses before this Subcommittee have testified that 
employment discrimination has been an inherent problem under 
the current system. The STRIVE Act forbids employers from using 
the system to discriminate against job applicants or employees 
on the basis of nationality; terminating employment due to an 
initial tentative non-confirmation; using the system to screen 
potential employees; reverifying outside of the law the 
employment status of an individual; or, using the system 
selectively.
    Last point: we cannot have a robust employment verification 
system without equally robust enforcement. Increased penalties 
for individuals who falsely attest to being authorized to work 
and employers who do not comply with the new system's 
requirements or knowingly hire unauthorized. Our bill also 
debars employers from using the system for Government 
contracts, grants, and agreements who violate the system.
    With regard to enforcement resources, the STRIVE Act 
requires Immigration and Customs, ICE, to spend at lease 25 
percent of their time.
    I would submit the rest of the testimony, but I would like 
to say that we must make sure as we roll out the system, Madam 
Chair, that there be safe harbors for employers. If an employer 
is using our system, our Federal system, and they are doing it 
in good faith and they are checking it and they hire those that 
are undocumented, we must also provide a safe harbor for them 
as we protect employees, we protect employers until we perfect 
our system.
    Thank you so much, Madam Chair.
    [The prepared statement of Mr. Gutierrez follows:]
Prepared Statement of the Honorable Luis V. Gutierrez, a Representative 
                 in Congress from the State of Illinois
    Chairwoman Lofgren, Ranking Member King and my colleagues on the 
Subcommittee, thank you for this opportunity to testify on my and 
Congressman Jeff Flake's proposal in the STRIVE Act, H.R. 1645, to 
improve the electronic employment verification and worksite enforcement 
system.
    Like a number of witnesses who have recently come before this 
Subcommittee, I want to begin my comments with what I think is the most 
essential element in crafting an employment verification system that 
works. That is, the system must be part of comprehensive immigration 
reform. If such a system is not implemented with strengthened, 
coordinated border security, a new visa program that provides the 
future workers our economy needs, and a tough, but fair, earned 
legalization program for the estimated 12 million unauthorized 
individuals currently living and working underground, we will be 
setting ourselves up for continued failure on this front.
    I would like to focus my testimony today on addressing how the 
employment verification system proposed in STRIVE would address or fix 
the shortfalls of the current system, as identified by recent 
witnesses' testimonies before this Subcommittee.
     any employment verification system must prevent document fraud
    The Electronic Employment Verification System (EEVS) in the STRIVE 
Act, first and foremost, would require the creation of a biometric, 
machine readable, tamper-resistant social security card. In addition to 
this fraud-proof card, the only other documents an employer could 
accept to prove identity and work eligibility under the new system are 
a U.S. passport; a state driver's license or identity card that meets 
the requirements of PL 109-13 (REAL ID); a permanent residence or green 
card; or a tamper-proof employment authorization card issued by the 
Department of Homeland Security.
    Requiring a limited number of secure documents would be a great 
step forward in eliminating the lucrative market of false documents, 
but we need to do more. To prevent individuals from using valid 
documents that are not, in fact, their own, the STRIVE Act also 
requires the Secretary of the Department of Homeland Security to 
establish reliable and secure ways under the new verification regime to 
determine if the information in the system's databases match the hired 
employee whose eligibility is being verified.
eevs must maintain and provide accurate data and otherwise be reliable 
               enough to instill confidence in the system
    Establishing an employment verification system that will apply to 
all workers in the U.S. is a massive undertaking and must be approached 
prudently, under a realistic timeline and with a roll out plan to the 
entire workforce that is contingent upon the system's accuracy. STRIVE 
phases in the use of the EEVS, starting with critical infrastructure 
employers, followed by large, then small, employers.
    H.R. 1645 also requires the Comptroller General to certify on an 
annual basis that the verification system is responding accurately and 
effectively to employer queries before it can be expanded. It is 
essential to build in performance benchmarks so that employers have 
confidence in the system, and are not tempted to circumvent it. We also 
want to prevent U.S. citizens, legal residents and others work-
authorized from being denied eligibility to work.
    Individuals will also be allowed to check their own EEVS record for 
accuracy.
    If the verification process results in a tentative nonconfirmation 
or a final nonconfirmation of a worker who is, in fact, work 
authorized, STRIVE ensures recourse for the worker.
    In the case of a tentative nonconfirmation, a worker is granted 15 
business days to contest it. If a worker is wrongfully denied work 
eligibility (``final nonconfirmation'') by EEVS they will have a right 
to administrative review, lost wages in the case of an error caused by 
the system itself, and, if necessary, judicial review.
     eevs and the protection of privacy and security of information
    The mandatory expansion of such a system also raises legitimate 
privacy concerns. DHS, in consultation with the Social Security 
Administration (SSA), would have to design and operate the system so 
that privacy is safeguarded by the technology used (use of encryption, 
regular testing of the system and implementing regular security 
updates). Information to be stored in the databases would also be 
limited to the individual's name, date of birth, social security 
number, employment authorization status, the employer's name and 
address and record of previous inquiries and outcomes.
    Such information could be used for employment verification purposes 
only, and the bill prohibits and levies stiff penalties for the 
unlawful access or modification of EEVS information.
    In its annual report reviewing benchmarks for the system's roll 
out, the Comptroller General must also certify that the EEVS is 
protecting the privacy of records in the system.
             protection of individuals from discrimination
    Recent witnesses before this Subcommittee have discussed how 
employment discrimination has been an inherent problem under the 
current employer sanctions regime and the Basic Pilot program. The 
STRIVE Act forbids employers from using the new system to discriminate 
against job applicants or employees on the basis of nationality; 
terminating employment due to a tentative nonconfirmation; using the 
system to screen employees prior to offering employment; reverifying 
the employment status of an individual in violation of the law; or, 
using the system selectively. Civil fines for unfair immigration-
related employment practices are also increased and additional funding 
is authorized for the dissemination of information to employers, 
employees and the general public about the rights and remedies of these 
protections.
                    the need for robust enforcement
    Of course, we cannot have a robust employment verification system 
without equally robust enforcement. H.R. 1645 creates significant 
criminal penalties for individuals who falsely attest to being 
authorized to work, civil penalties for employers who do not comply 
with the new system's requirements and criminal penalties for knowingly 
hiring unauthorized workers. Our bill would also debar employers who 
repeatedly violate these provisions from government contracts, grants, 
and agreements.
    In addition, the bill requires DHS to establish a complaint and 
investigation process regarding potential violations related to hiring 
or continuing to employ unauthorized workers.
    With regard to enforcement resources, the STRIVE Act requires 
Immigration and Customs Enforcement (ICE) to spend at lease 25 percent 
of their time on worksite enforcement.
    In sum, the Employment Eligibility Verification System in the 
STRIVE Act would address a number of the shortfalls of the current 
system as created by the immigration laws passed in 1986 and 1996. As 
we all know, the current system does not work, and perhaps most 
troubling, it does nothing to prevent illegal immigration or the 
employment or exploitation of unauthorized workers. As part of a 
comprehensive solution to our broken immigration system, I believe that 
the EEVS in STRIVE will provide us with a system that is tough, fair 
and works to bring both employers and workers under the rule of law.
    Thank you, Madam Chairwoman.

    Ms. Lofgren. Thank you.
    And we finally have Congressman Flake.

  TESTIMONY OF THE HONORABLE JEFF FLAKE, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Flake. Thank you, Chairwoman Lofgren and Ranking 
Minority Member King and Chairman Conyers. It is great to be 
back in the Judiciary Committee for the first time since my 
involuntary leave. I appreciate being invited, and I appreciate 
the way that you are conducting these hearings and the 
seriousness with which you are addressing this issue. This is 
important today, to talk about the importance of comprehensive 
reform, in particular employment verification.
    I am glad to be here with this panel, with Mr. Calvert, the 
father of Basic Pilot, basically, who has done so much good 
work there, and David Dreier, with the secure Social Security 
card, which we incorporated into our legislation. And I think 
that we have got a good package here.
    Since Luis did such a good job explaining what our 
legislation does in this regard, let me just kind of talk a 
little bit about the need for it and why this is so important. 
We need to always remember that of the illegal population that 
is here, it is estimated between 12 million and 20 million, 
there are really no good estimates, but the best ones seem to 
be about 7.2 million in the workforce. The bulk of those have 
managed to deceive their employer somehow with unsecure 
documentation, documentation that is fraudulent. So we have to 
have a way to combat that.
    There are some tools out there right now. Basic Pilot is 
out there. But we need to go further than that. I should note 
that Swift, the meatpacking plant, Swift, I believe, had been 
using Basic Pilot since 1997. Basic Pilot does a great job of 
telling you whether or not a Social Security number is valid. 
But there are limitations on whether it can tell you whether 
that same Social Security number is being used 500 times.
    And so we have got to attack the identity theft and fraud 
issue, and that is why it is so important to use the Dreier 
language and go further. And Luis is exactly right in talking 
about the need to do it thoughtfully and to roll it out well 
and to make sure that employers have those tools and have the 
confidence to use them as we go forward.
    As we have mentioned before, there are four real main 
elements to comprehensive reform. Obviously, we need more 
border security. We need a mechanism to deal with those who are 
here illegally now. We need a guest worker plan moving forward 
so we won't find ourselves in the same pickle we are in today, 
not having a legal framework to bring people in that our 
economy so desperately needs.
    But most important here, the lynchpin to everything, is to 
make sure that employment can be verified. Forty percent of 
those who are here illegally didn't sneak across the border. 
They came legally and overstayed. And they simply have found 
their way into the workforce. So we can do all we want to at 
the border, but we haven't solved the problem unless we have 
employer verification, and that is what this is all about.
    I am glad to be here with this distinguished panel.
    [The prepared statement of Mr. Flake follows:]
  Prepared Statement of the Honorable Jeff Flake, a Representative in 
                   Congress from the State of Arizona
    Thank you, Madam Chairwoman, for holding this important series of 
hearings on various aspects of immigration policy, and for inviting me 
to testify. The ability of employers to quickly and accurately verify 
the authorization of their employees to work in the United States will 
be a crucial component of getting a handle on our broken immigration 
system.
       employment verification is crucial to comprehensive reform
    We have heard various estimates--and, of course, no one can know 
the true number for sure--of how many people are illegally present in 
the United States. The number most consistently used is 12 million. Of 
those 12 million, the Congressional Research Service estimates that 7.2 
million people are unauthorized workers in the civilian labor force. 
That figure represents five percent of the U.S. labor force. These 
workers have either fooled their employers with false documents and 
identity fraud, or are working for an employer aware of their status. I 
believe that most workers fall into the former category, rather than 
the latter.
    Simply put: many of those that are here in our country illegally 
are here for employment. However, they did not all risk an illicit 
border crossing to get here. According to a Pew Hispanic Center survey 
published last year, nearly half of those who are here illegally didn't 
sneak across the border. Rather, they entered the country legally 
through a port of entry like an airport or a border crossing checkpoint 
and overstayed their visas. Over the past 15 years, we have tripled the 
size of the Border Patrol and increased its budget tenfold. Congress 
has gone so far as to mandate the construction of a wall on our 
southern border. And still they come.
    Border enforcement alone won't solve our illegal immigration 
problem. Border enforcement is a crucial component of a comprehensive 
solution to solving the problem of illegal immigration, along with 
resolving the status of the millions of undocumented aliens, fixing 
backlogs in legal immigration, and ensuring interior enforcement of our 
immigration laws. A guest worker program that provides employers with 
the legal workforce of essential workers they so desperately need is 
essential to ensuring that our immigration laws are enforced. Clearly, 
as is the focus of this hearing, fixing our broken immigration program 
will also require a workable and fraud-proof employment verification 
system.
    As I am sure many of you are aware, measures to ensure that those 
that are unauthorized to work in the U.S. are prohibited from doing so 
are not new to the immigration reform debate.
                1986 attempt at employment verification
    The Immigration Reform and Control Act of 1986 (IRCA) made it 
illegal for employers to knowingly hire, recruit, or refer for a fee, 
or continue to employ an alien who is not authorized to be so employed. 
IRCA's employer sanctions also included penalties, both civil and 
criminal, for those violating the prohibition on unauthorized 
employment. However, under the 1986 law, employers were deemed to have 
met their obligation if the document presented to verify work 
authorization ``reasonably appeared on its face to be genuine.'' This 
approach was almost universally derided as fruitless, due to the 
prevalence of fraudulent documents and the ease with which undocumented 
workers could obtain them. Unauthorized workers could easily find 
employment, either by presenting counterfeit documents or stealing 
another's identify.
                1996 attempt at employment verification
    A decade later, Congress again sought to solve the problem of 
unauthorized employment when it included the Basic Pilot program in the 
Illegal Immigration Reform and Immigrant Responsibility Act of 1996. As 
many of you are aware, Basic Pilot is a voluntary, online verification 
system that allows employers to confirm the eligibility of new hires by 
checking the personal information they provide against federal 
databases. Originally started in 1997 with limited geographic 
availability, the system is currently available nationwide, but suffers 
from severe limitations including the fact that it is still voluntary 
and prone to fraud.
    The raids of the Swift meat packing plants in December illustrated 
more clearly than anything else the limitation of the Basic Pilot 
program. The company had been trying for years to comply with our inept 
and broken immigration system. They were actually sued for 
overzealously inquiring into the backgrounds of job applicants 
suspected of presenting fraudulent documents--this became the basis for 
a discrimination lawsuit by the Department of Justice. Swift has 
participated in the Basic Pilot Program since its inception in 1997, 
but was well aware of its shortcomings--namely, the program does not 
catch identity theft by workers. Employers can check whether an 
applicant has presented a valid Social Security number, but Basic Pilot 
will not note the fact if the number has been used 500 times in the 
past year. In the end, it was this shortcoming of Basic Pilot that 
permitted the company to utilize the system and still hire hundreds of 
illegal workers. This is the kind of charade that, unfortunately, 
characterizes much of our current immigration policy.
        the strive act of 2007 employment verification approach
    More than two decades since IRCA, the song remains the same: the 
true key to enforcing our immigration laws will involve worksite 
enforcement. As trite as it sounds, those who forget the past are 
doomed to repeat it. As part of a comprehensive approach to immigration 
reform, the STRIVE Act of 2007 takes note of the lessons learned 
through past attempts and would provide the crucial employment 
verification system that is enforceable and prevents against ID fraud.
    The legislation introduced by Congressman Gutierrez and I would 
create a mandatory system for employers to electronically verify 
workers' employment authorization. It also establishes criminal 
penalties for employers and workers who operate outside the system and 
implements strong enforcement mechanisms.
    The Employment Eligibility Verification System, or EEVS, mandates 
the Homeland Security Department and Social Security Administration to 
develop a mandatory system for employers to verify the employment 
authorization of all new workers electronically or telephonically and 
establishes an interim verification regime for employers to use while 
the system is under development. The system would be gradually phased 
in over time, starting with critical infrastructure employers, followed 
by other employers based on size: largest employers would be required 
to use the system first, with smaller employers following in successive 
years.
    Importantly, the legislation limits the number of documents that an 
employer can accept in order to verify a worker's eligibility to work. 
It follows the lead of legislation introduced by Congressman Dreier, in 
mandating an improved, biometric, tamper-resistant and machine-readable 
Social Security card. It is important to note that these provisions 
will not create a new secure National ID, but rather will prevent 
identify fraud exclusively in an employment verification setting.
    In addition to the secure Social Security card, other documents 
that could be presented to prove work authorization include a United 
States passport, a REAL ID-compliant driver's license, a permanent 
resident card, and a secure card that the Secretary of Homeland 
Security could create to indicate work authorization. This is a vast 
improvement over the vast alphabet soup of documents that employers 
must currently accept from workers and try to verify as authentic.
    The mandatory EEVS system would establish a secure and responsive 
system that would provide a safe harbor for employers to ensure that 
the workers they are hiring are legally present in the U.S. The new 
System will use a cross-agency, cross-platform system to share 
immigration and Social Security information necessary to verify an 
individual's work authorization. The System will not only determine if 
an individual's name matches a Social Security number on file, but also 
whether the person standing before the employer does, in fact, bear the 
name and number that they've presented to the employer.
    A key component of the EEVS system is the creation of new and 
significant penalties for those workers and employers operating outside 
of the system. Scofflaw employers would be fined on a sliding scale for 
hiring unauthorized workers. This would entail fines of between $500 
and $4,000 for each unauthorized worker for first-time wrongdoers, but 
quickly escalate to $20,000 for each unauthorized worker for repeat 
offenders. Concurrently, employers who do not follow the rules for 
record-keeping or verification practices would face fines of up to 
$6,000 for repeat offenders. These employers could also face prison 
sentences of up to three years. Repeat violators would also be barred 
from federal contracts for five years.
    Madam Chairwoman, in conclusion, I would like to emphasize how 
crucial I believe the issue of employment eligibility verification is 
to the success of the broader comprehensive immigration reform. Giving 
employers the tools they need to determine if their workforce is legal 
will eliminate any excuse they currently have to fall foul of the law. 
Ensuring that those employers who choose to disobey the law will be 
held accountable will give the American people confidence that the days 
of lax enforcement are over and a new temporary worker program can be 
competently implemented and enforced.

    Ms. Lofgren. Well, thank you very much.
    What a distinguished panel this is, and we are so grateful 
that you took the time to be with us.
    We have questions, but we, as much as anyone, understand 
your schedule. I mean, we have the Chairman of the Intelligence 
Committee, the Ranking Member of the Rules Committee, just as 
examples. So if any of you need to leave before we ask 
questions, we will respect that and understand it. Those of you 
who can stay, we also very much appreciate that.
    So if you need to leave, you may.
    Mr. Dreier. We are here for the long haul.
    Ms. Lofgren. On for the long haul. Then we will go to 
questions, and I am going to begin.
    My question reflects the testimony we will receive from the 
Cato Institute later this morning. I think all of us, and I 
include myself, have talked about the need for an employment 
verification system. We feel that we have Basic Pilot, we are 
looking at ways to improve it, whether we rename it or 
whatever. And your testimony has been very helpful and very on 
target.
    But when you are in a mode like that, I always think it is 
important to listen to the voices that are saying, ``Wait a 
minute,'' and address those issues. And one of the things that 
our Cato witness has pointed out is that when you have 
information sent to Social Security and the Department of 
Homeland Security, that information becomes, I am quoting from 
his testimony, ``Very easy for those entities to access, copy, 
or use. It is likely combined with metadata information about 
what information was collected from whom and so on. And can 
then be correlated with information at the IRS or educational 
loan department, health records,'' and on and on.
    And the witness goes on to say, ``Unless there is a clear, 
strong, verifiable data destruction policy in place, any 
electronic employment verification system will be a 
surveillance system, however benign in its inception, that 
observes all American workers.''
    And I think as the testimony concludes, the old saw is 
true, again, this is a quote from the testimony: ``Information 
is power. Uniform government ID systems have important 
consequences in terms of the individual's relationship to 
government. A major concern with national IDs is the power that 
the identification gives to government,'' and that the lesson 
that the witness hopes we will take is to ``design a system 
that uses one key to control access to our intangible lives, 
our finances, communications, health care and so on, is a risk 
to our freedom and privacy,'' to summarize.
    These are issues that all of us care about. That is not 
new.
    Any comments on these concerns? And if they are real 
concerns and we still do have a need to verify, what do we do 
about that concern? What protections do we build in or should 
we worry about it? Anyone who wants to answer?
    Ken?
    Mr. Calvert. I think we all agree that a verification 
system is needed in the United States and any verification 
system, obviously, by its own definition, imposes some problems 
with privacy.
    However, that is a reasonable tradeoff in order to make 
sure that people that come into this country are coming here 
legally and working legally.
    A system similar to the Basic Pilot program, whether or not 
we come up with a way to make it counterfeit proof, is, I 
think, the best program, the most nondiscriminatory program, 
because it checks the document itself, to ensure that the 
people who come here have a legitimacy to come into the work 
force.
    I was in the restaurant business also. I had a number of 
restaurants. And it was--when I was an employer, it was 
impossible when we filed the I-9 form to check to see whether 
people were here legally or not. I went through the system, 
filed the I-9 form, put the several identifications on the back 
of the form and complied with the law.
    However, I knew because I could not ask nor could I look 
into the background of individuals that I hired, that some 
probably were here illegally.
    So a system such as this is necessary and I think that we 
are all on the same path, and I think it is necessary to impose 
this system and allow employers to check the veracity of the 
documents and the people they employ.
    Ms. Lofgren. Anyone else?
    Mr. Dreier. Yes, Madam Chair.
    First of all, let me just say that I think Ken Calvert 
brings tremendous perspective from his experience as a 
restauranteur, and I am strongly supportive obviously of his 
Pilot program. And I appreciate the fact that my friends Luis 
Gutierrez and Jeff Flake have included H.R. 98 as part of 
STRIVE.
    James Madison, in ``Federalist 51,'' talked about the need 
for us to make sure that Government gets control of itself. And 
the fact of the matter is that I describe myself as a small 
``L'' libertarian Republican. I echo and regularly talk about 
every one of those concerns that the Cato witness has brought 
forward because I believe that the notion of having the 
Government get too much information is something that I find 
absolutely abhorrent.
    We obviously have had some sacrifices that have had to be 
made. We all have recognized that since September 11 of 2001. 
That is one of the reasons I have been very particular and 
careful in crafting this legislation to ensure that the 
Government doesn't get any new information that it doesn't 
already have.
    Now, the Cato witness has talked about the potential for 
the sharing of information and the leaking of that information, 
which I think is a very, very valid concern. That is why in 
H.R. 98 I have included very, very harsh penalties for any of 
the activity that has been described there, and I too am 
concerned, as I said in my opening remarks, about the prospect 
of some kind of national ID card. I know there are some people 
who have opposed it in the past but are now supportive of that 
notion.
    But it is absolutely right and the Cato witness is 
absolutely right in talking about the need to ensure that we 
don't have a national ID card, number one, and, number two, 
that we don't see the Internal Revenue Service gaining access 
to information that they should not have access to.
    Ms. Lofgren. Thank you very much.
    I am almost up, but I don't want to cut you off, Mr. Flake.
    Mr. Flake. Let me just briefly say, in our legislation we 
are cognizant of that risk, so we actually have four different, 
maybe five different pieces that can be used as secure 
documentation. They just all have to be machine readable, 
tamperproof, and so you won't have one national ID out there. 
It can be the secure ID, passport, an identification card that 
DHS wants to come up with, but there won't be just one piece. 
So that is a valid concern.
    Mr. Gutierrez. I am going to punt this right back.
    Madam Chairwoman, with you and Mr. Conyers, I can just--
Berman, Jackson Lee, Waters, Meehan, Delahunt. I am confident 
that if the Committee does its work, we are going to put those 
protections in there.
    Ms. Lofgren. Thank you very much.
    And thank you, Mr. Ranking Member, for your indulgence in 
my going over.
    Mr. Dreier. Could I just say one quick thing, if I could, 
Madam Chair?
    Ms. Lofgren. Certainly.
    Mr. Dreier. And that is, to Jeff's point, I think it is 
important for us to know, one of the concerns that I have had 
about other documents is that they create the potential for 
discrimination, and that is why the utilization of the Social 
Security card really eliminates that. And the reason I say that 
is, you hear, well, you know, we will have a card for the guest 
workers who are here, a special card for the guest workers.
    Well, how do you ask? You look at someone and you say, 
well, is this a guest worker or is this an American citizen? I 
find that appalling, and that is why I think the Social 
Security card, which would mean that anyone in the labor force 
looking for a new job would be required to have that one 
document, and that is why I think that that is the way for us 
to go.
    Thank you very much.
    Ms. Lofgren. Thank you.
    Mr. King?
    Mr. King. Thank you, Madam Chair.
    At first, I would note that Mr. Dreier quoted from 
``Federalist 51'' and then he said, ``Too much information is 
something that I find absolutely abhorrent.''
    I find your brain is full of all kinds of information, Mr. 
Dreier, none of which is abhorrent to me. I wanted to make that 
remark.
    Mr. Dreier. I have some, I bet, that you would.
    Mr. King. I would like to first turn to Mr. Calvert.
    Before Basic Pilot was implemented, was there any way that 
the employer could verify that the name on the I-9 form 
actually matched the name that matched the Social Security 
number that was presented?
    Mr. Calvert. No. There was no system available to an 
employer to check the veracity of the documents that were being 
used.
    Mr. King. And now can--does an employer know if they run 
the Basic Pilot that that name matches the Social Security 
number and the identity to that number?
    Mr. Calvert. Yes. The system works not perfectly but pretty 
well. And the statistics that you used earlier, way over 90 
percent of the time you can check the veracity and effect of 
the document that is being used or the person that is applying 
for work.
    Mr. King. But if it is a ``no match,'' on those names, if 
they give you the wrong name but a good Social Security number, 
you get a non-confirmation?
    Mr. Calvert. That is correct.
    Mr. King. And then the applicant gets time to cleanup their 
records.
    Mr. Calvert. To cleanup their records, to check to find out 
if there is a problem within the Social Security 
Administration.
    Mr. King. And we are always going to have problems when we 
go into a huge database, 300 million people in this country. 
And I want to submit this proposal or just a philosophy and ask 
you to respond to it, and that is, if we had a database that 
wasn't 100 percent clean, which obviously every database has 
some problems in it, I am looking at it from the standpoint of 
using it cleans up those records, because that is the only way 
you can really get it cleaned up, is to use it.
    Mr. Calvert. Well, I would point out, when we started down 
this path back in 1997, we had tremendous amount of problems 
getting this thing rolling. I started out with a number of 
States. It started out, if you will remember, the folks that 
were involved in this, seven States, and then we rolled it all 
50 States. And we had problems all the way along the way.
    So the Social Security Administration, Homeland Security, 
others, have now involved themselves in this, and have worked 
their way through a lot of these problems. Certainly, what 
happened with Swift is unfortunate, but I would like to point 
out that 50 employers a day sign MOUs to get onto the Basic 
Pilot program. This program will double in the next year. We 
have several large employers, I mean by large mega-employers 
that are looking on putting this program on voluntarily.
    So it is a system that works and it is a system that 
employers want to use.
    Mr. King. This Basic Pilot goes out to a pair of databases, 
Social Security Administration, DHS. And in DHS it has the FBI 
database, NCIC, National Crime Information Center database. Do 
you know of any instances where that information went to an 
NCIC database and there were wants and warrants out there on an 
individual that was perhaps sitting in the HR office of a 
prospective employer? Has that done anything to pick up any of 
the people on the streets, even on the Top 10 Wanted List?
    Mr. Calvert. I don't know of that being used in the system. 
I have primarily been focused on employment verification.
    Mr. King. Would you be for or against utilization of that 
to help make our system cleaner?
    Mr. Calvert. Well, certainly, looking at it, the problem is 
that anytime you start expanding the basic system, which what 
we are trying to accomplish here is whether or not people are 
eligible for employment, it becomes in fact more complicated, 
more difficult. But it is, you know, I guess we could take a 
look at that, but that is what would occur.
    Mr. King. Thank you, Mr. Calvert.
    Mr. Dreier, when one presents the magnetic stripe on the 
Social Security card that you have presented here today, how 
does an employer verify that that actually matches the biology 
of the person whom it was submitted to?
    Mr. Dreier. Because the way this works is that there is a 
photo imbedded on the card, and the card that is provided has 
the number. They swipe that card and it goes into the databank, 
the DHS databank, which would simply give a yes or no as to 
whether or not this is in fact a qualified worker.
    So there is a photo embedded on that card. And that is the 
end. The natural question is, well, we are all issued these 
cards when we are kids. The photograph is taken once one enters 
the labor force, the workforce, so that you don't have a baby 
picture on there.
    Mr. King. I have seen some of these congressional pictures, 
though, and I can't recognize the people on the card.
    Mr. Dreier. Yes. That looks like my staff member has got 
his baby picture on there, and it was taken last week, so----
    Mr. King. Would there be a requirement to update that 
picture, say----
    Mr. Dreier. That would obviously be something that would 
have to be addressed, because as you said, a lot of people have 
pictures in which they look a lot younger than they are.
    And the whole process would be phased in. Again, this is 
one of the arguments that has been given against this, talking 
about the fact that there may be 40 million of these needed 
because there are 40 million people who are changing jobs on an 
annual basis, and that is one of the things that has led a 
number of people to oppose this.
    But, you know, obviously there is going to be a cost to 
anything that we are going to do, and I think that if you look 
again at these multifarious documents that are provided, to get 
down to one, because there has been no attempt whatsoever to 
update since 1935 this card. I think that this is really the 
single best route for us to take on this.
    Mr. King. Thank you, Mr. Dreier.
    If I could, just a quick question of Mr. Flake.
    The issue that I raised with regard to using the Basic 
Pilot program and when that search goes through the database of 
DHS, FBI, NCIC, down through there, would you be supportive of 
using that for law enforcement so that if we are going to run 
all these databases, we can pick some of these people up off 
the street?
    And then in conjunction with that question, we have 
employers that are deducting billions of dollars in expenses 
that are being paid to illegal employees, illegal wages. Would 
you support using that also to ask the IRS to deny the 
deductibility of wages and benefits paid to illegals?
    Mr. Flake. I want to be sensitive to any unfunded mandates 
that we are passing on to people at the local level or 
businesses that may not have the tools to do it. But to the 
extent--I mean, our legislation, what we are trying to do in 
this is to make sure that we have interagency cooperation, that 
we can--obviously, these databases that we are going to be 
using, when you have a biometric, can be used by law 
enforcement agencies and everything else. So that is really the 
ultimate goal of where we are going.
    At the present time, I just don't know what kind of 
mandates or costs would be borne by the local entities, so I am 
not sure.
    Mr. King. Thank you, Mr. Flake.
    Ma'am, I yield back.
    Ms. Lofgren. Thank you, Mr. King.
    I would now recognize our Chairman, Mr. Conyers for his 5 
minutes of questions.
    Mr. Conyers. Jeff Flake, I commend you and Luis for the 
antidiscrimination provision that is in your electronic 
employer verification system. I think it is very important.
    But why was Javier Rodriguez, on Amy Goodman's program, so 
critical of this bill that you two are proposing when--and he 
suggested it is corporate sponsored or corporate favored. Is 
President Bush with us? Or to what extent--I know we talked 
about him being there, but I need to know what that really 
means.
    And my dear former Chairman, you know, calling a national 
ID--it is not a national ID card. It is not a national ID card. 
But you know the problem you are going to have, they are going 
to say it is an ID card.
    Mr. Dreier. No. They have been.
    Mr. Conyers. They may have already started. I really don't 
know.
    And, finally, back to Jeff Flake, how do we get to balanced 
enforcement for treatment of employer? Safe harbor may be a 
nice way, a cozy way, of helping them out, but then we don't 
want to hang them out like Swift was hung out to dry for 
cooperating.
    So I leave this for all of you to help me unravel. And I 
know we are going to be seeing each other, so the world doesn't 
end when my 5 minutes ends. We are going to be talking a lot 
about this.
    Mr. Flake. Let me just say, to answer the first, I can't 
speak for the President on this. I know the President has been 
supportive consistently of comprehensive reform. As far as the 
details of our legislation, our legislation as a whole, he has 
not come out and taken a position on it. But I know and 
appreciate that he has been consistently in favor of 
comprehensive reform, including employer verification.
    With regard to the second point, as far as equal 
enforcement, I have always felt that we need better 
enforcement, more severe enforcement, and that is why our 
legislation increases the penalties on employers if they 
knowingly violate immigration law. But they have got to have 
the tools. And that is the balance that I think that you are 
referring to.
    Heretofore, employers haven't had all the tools even though 
there have been some tools out there. They still--they are 
imperfect or incomplete tools right now.
    Mr. Calvert. Mr. Chairman, I might point out, bringing it 
to Swift, that was an extremely unfortunately situation. But I 
would point out that this program is not perfect, but I would 
challenge anyone here to find a Government program that is 
perfect. But it is the only system out there today. And for the 
whole, the great majority, well over 90 percent, it is working 
to verify documents that are used for employment.
    As far as the issue of discrimination, this program, the 
Basic Pilot program, was never intended to be a prescreening 
program to discriminate against potential employees, and the 
current program is developing and monitoring a compliance 
office to detect and follow-up on these fraudulent and other 
misuse of the systems and with instances of employers not 
following program procedures.
    I want to point out that under the 1986 Simpson-Mazzoli 
Bill, there were significant fines in the bill that could be 
imposed by the immigration folks if in fact an employer 
knowingly hired somebody illegally. However, there was no 
system until the Basic Pilot program came on, for the employer 
to verify whether or not the documents that were being used 
were legitimate. So today it is the only system that is 
available.
    Mr. Conyers. But what about the small business people in 
your Basic Pilot program? There has got to be some financial 
incentives. The moms and pops aren't going to be able to afford 
your plan.
    Mr. Calvert. Well, I would--I was a small businessman, 
relatively a small businessman. And I wanted to do the right 
thing. Most small businesspeople I know across America, when I 
go back home, are absolutely in favor of the Basic Pilot 
program, and it is proven by the fact that the program is 
literally doubling every year.
    Thousands and thousands of small employers are signing up 
to get on the Basic Pilot program. Small restaurateurs, small 
drycleaners, businesses all across America.
    Mr. Dreier. Let me just say that our 5 minutes has ended, 
but I am glad that the Chairman has indicated that life will go 
on beyond the 5 minutes, and I will just say very quickly that 
I think that on this notion of a national ID card, my idea is 
that the Social Security card is thrown into your desk drawer. 
You only use it when you are applying for a new job, and that 
is the only use that is going to be out there for it.
    Mr. Conyers. Thank you, all.
    Ms. Lofgren. Thank you.
    And as noted, the Chairman of the full Committee has been 
very engaged in this process, which is a wonderful phenomena.
    Before recognizing the gentlelady Ms. Jackson Lee, I would 
like to note that the former Chairman of the Immigration 
Subcommittee, former Congressman Bruce Morrison, is here, and 
he is associated with the Society for Human Resource 
Management, who has a statement that, by unanimous consent, 
will be made a part of our record.
    I would now recognize the gentlelady from Texas, Ms. 
Jackson Lee, for 5 minutes.
    Ms. Jackson Lee. Thank you very much.
    I do appreciate the series of hearings that we are having 
and look forward to being able to discuss a multitude of 
legislative initiatives, which could include the Save America 
Comprehensive Immigration Reform Bill that I have authored for 
a number of years, and I believe that combined with trying to 
fix some of the missteps of 1986 and 1996, I think amongst the 
witnesses today we have a broad range of options and 
opportunities to take this issue very seriously.
    Let me just acknowledge that I have young Claudia Ocampo 
with me today from Arlington, Texas, and she is with Girls, 
Inc. We are very proud of her. And I will just simply say that 
she has an immigrant background, but her family are 
contributing, and we are excited that she is here with us 
today.
    I think that is the tone in which I want to utilize my 
time; as a backdrop of how we fix the immigration system. I 
think we need to start from the premise that we have 
individuals who want to contribute to society. We have 
individuals who are contributing to society. And we have got to 
find a way that balances privacy, due process--those are some 
issues that I am very concerned about, the nondiscriminatory 
practices against employees and enforcement.
    Yesterday, I think, and I don't know, Madam Chairwoman, the 
days are running together. I think we were in a hearing either 
yesterday or the day before, and I asked the representative 
from Swift, ``Did you come to this hearing to complain about 
your treatment?''
    And he was forthright. ``Absolutely not. But can you tell 
us what the law is, because we would like to comply with the 
law.''
    My Texas contractors who are looking for roofers and 
electricians and, of course, all of us say find Americans, and 
that is what I say to them, but they are looking for all of 
these skills and they say simply tell us the law.
    Mr. Dreier, you are talking about a card which I would just 
jump ahead and say, you know, on many occasions on the floor we 
have indicated that it is a national ID card. But if we are 
going to start afresh, let's try to find out what it is.
    And my concerns would be, you can help me understand the 
safeguard provisions that would protect the privacy of the 
information that would be on the card. I have heard you 
previously say put it in the drawer, it is only supposed to be 
used for employment purposes. You know about theft. You know 
that people keep cards in their wallet more than they probably 
need to.
    And so what would be your take on how we would ensure the 
privacy and what non-immigration information do you think would 
be recorded on the card?
    And before you answer, let me just pose to Mr. Flake so he 
can be thinking about it, let's get it right. And, frankly, I 
want to make it clear that I am not faulting ICE. They are 
doing their job. They need to have rules and regulations. But 
the raids that are going on create a massiveness of 
intimidation. I don't know if they have been occuring in your 
district. You might want to comment on that. But I think I 
would like to hear from you as to what a constructive 
enforcement system would do to utilize ICE resources where they 
should be, where people are flagrantly, outwardly saying, ``I 
am not even going to worry about the system.'' You can think 
about that.
    Mr. Dreier?
    Mr. Dreier. Thank you very much, Ms. Jackson Lee.
    Before you came into the room, I actually had an exchange 
on this issue with Mr. King and with the distinguished Chair of 
the Subcommittee in which we were talking about the fact that 
there is understandable concern over the notion of any of this 
information being shared. That is one of the reasons that when 
the employer gets the information back, they don't get the 
exact status of a person, whether or not they are a citizen or 
they are here on some kind of visa. They just get yes or no, in 
fact is this a qualified worker.
    And we do have very harsh penalties that we include in the 
legislation for anyone who is utilizing this information 
incorrectly
    As I said, I would be very troubled at the notion of the 
Internal Revenue Service gaining access to this kind of 
information that may be coming in. And so that is why we have 
been careful to make it clear that the Government is not going 
to be able to gain any new information.
    Now, I would also argue that if look at the fact that the 
flimsy little piece of paper that has been the Social Security 
card, Ms. Jackson Lee, since 1935, and no attempt whatsoever to 
update that, that having a smart, counterfeit-proof card would 
in fact play a role in diminishing the threat for duplication 
and fraudulent use of that card. So that is why I believe that 
this is indicated.
    And, again, to Mr. Conyers' very appropriate point on the 
issue of discrimination, this card prevents some other card 
being utilized and asking someone whether or not, you know, you 
have your guest worker card, and looking at someone and saying, 
well, that must be a guest worker. And that is why the Social 
Security card is an----
    Ms. Jackson Lee. But it wouldn't have any extraneous 
information--extra information that would not be necessary.
    Mr. Dreier. Absolutely. You are absolutely right.
    Madam Chair--thank you, Mr. Dreier.
    May I let Mr. Flake answer on getting a system in----
    Ms. Lofgren. Certainly.
    Ms. Jackson Lee [continuing]. So we can balance this 
raiding that is going on.
    Mr. Flake. I wish I had a good answer as to how these raids 
can be nondiscriminatory and effective and not catching other 
people in the net that shouldn't be in the net. ICE struggles 
with that. So do local governments.
    In my district, the city of Chandler years ago had a type 
of roundup where they thought that they could check documents. 
In the end, they included in the net a lot of people that 
shouldn't have been in the net.
    But I can't see how ICE can simply not try to enforce 
current law. So we are in a horrible period right now, until we 
get the kind of identification that we are talking about. That 
is why it is so important that we move through and get 
comprehensive reform. It is a very good question.
    Ms. Jackson Lee. We need to fix the system.
    Mr. Flake. Yes.
    Ms. Jackson Lee. Thank you.
    Ms. Lofgren. Thank you.
    The gentlelady from California, Ms. Sanchez, is recognized 
for 5 minutes.
    Ms. Sanchez. Thank you, Madam Chair.
    I would just like the folks on our first panel to know that 
we appreciate the thoughtfulness with which you have tried to 
tackle this problem.
    Earlier in the week, we had another hearing in this 
Subcommittee dealing with the same issue. And Jonathan 
Scharfen, the deputy director of USCIS, was here to answer 
questions, and I asked him the same question that I am going to 
ask all of you, which is: my concern with the Basic Pilot 
program and extending this to all employers is what happens 
when employers misuse the system? And I am going to give you a 
few examples.
    Employers who may not enter somebody into the verification 
system until--and still hire them, still hire workers--and then 
later enter them into the system when, say, a labor complaint 
has been filed against the company. Or unauthorized employees 
having access to the employment verification system, not 
something that I would want to happen with my information.
    So I asked him, what kind of penalties exist for employers 
who misuse the system and how often does that happen and there 
weren't any clear statistics and they really didn't have an 
answer for what are the penalties for an employer who misuses 
the database.
    So I am going to ask each of you, how would you address 
that problem, of employers misusing the electronic employment 
verification system?
    Mr. Dreier. Let me just say that I am not here, Ms. 
Sanchez, as an expert on the employer verification system. I am 
here arguing that the answer is for us to have a smart, 
counterfeit-proof Social Security card and the employer would 
get no information whatsoever other than is this person in fact 
a qualified worker. Meaning are they in this country legally. 
And that is the only thing that employers would have as 
information by utilizing the smart, counterfeit-proof Social 
Security card.
    Ms. Sanchez. Mr. Flake, what is your response?
    Mr. Flake. That is a very good question and that has been a 
concern whenever we are dealing with this, as we talked about 
before, identification that people will construe as a national 
ID, we want to make sure that it is secure. And so we have 
specific mandates in terms of who can utilize that information 
within the company and then specific penalties if it is misused 
by others. So if you look in our legislation, there are 
safeguards there. It is an important point and one that we took 
seriously.
    Ms. Sanchez. Okay. Just out of curiosity, what types of 
penalties do you envision?
    Mr. Flake. In terms of--I think they are roughly equivalent 
with the penalties that we have for basically hiring those who 
are illegal once you knowingly do it, which I think are $20,000 
on the second occurrence, between $4,000 and $10,000 on the 
first.
    Ms. Sanchez. Okay. I thank you.
    Mr. Dreier. Let me just say that on H.R. 98, we have a 400 
percent increase in the penalty from $10,000 to $50,000 and a 
mandatory 5 years in prison for employers who are out there and 
who are knowingly hiring, and that is how we focus on the whole 
notion of enforcement so that we don't see businesses out there 
abusing this.
    Ms. Sanchez. Okay. But we are talking about----
    Mr. Dreier [continuing]. Right, I know.
    Ms. Sanchez. Because you are talking hiring. I am talking 
about misusing of the----
    Mr. Dreier. Right. Right. I am talking about the hiring.
    Ms. Sanchez. I understand. Thank you very much, Mr. Dreier.
    I yield back.
    Ms. Lofgren. Well, thank you very much.
    And thanks to the Members who have so generously given of 
their time. We know how busy you are. And your commitment of 
time shows us how committed you are to this issue and we 
appreciate it a great deal.
    I am going to ask that our second panel of distinguished 
witnesses come forward at this time.
    First, I am pleased to introduce Randel Johnson, who is 
Vice President of the Labor, Immigration and Employee Benefits 
at the United States Chamber of Commerce. Prior to joining the 
U.S. Chamber, Mr. Johnson worked as the labor counsel and 
coordinator for the Republican staff of the House Committee on 
Education and the Workforce and spent 6 years as an attorney 
with the U.S. Department of Labor. He served as a member of 
several commissions concerning immigration, including the 
Department of Homeland Security Data Management Improvement 
Task Force, the 21st Century Workforce Commission, and the 
Carnegie U.S. Mexican Migration Study Group. Mr. Johnson holds 
degrees from Dennison University, the University of Maryland 
School of Law, and the Georgetown University Law Center.
    We are also pleased to have Robert Gibbs with us, a 
founding partner with the Seattle law firm of Gibbs Houston 
Pauw. Mr. Gibbs has specialized in immigration and employment 
law for over 20 years, advising organizations spanning a host 
of different industries, from agriculture to construction to 
food processing. He addresses us today on behalf of the Service 
Employees International Union. Mr. Gibbs holds his law degree 
from the University of Washington Law School.
    We are also pleased to have Jim Harper with us, the 
Director of Information Policy Studies at the Cato Institute 
here in Washington. Mr. Harper has written extensively on the 
intersections between privacy concerns and modern data 
technology systems, and he serves as a member of the Department 
of Homeland Security's data privacy and integrity advisory 
committee. Mr. Harper holds his JD from Hastings College of 
Law.
    Finally, I would like to welcome Jessica Vaughan, the 
senior policy analyst for the Center of Immigration Studies. 
Ms. Vaughan has worked for the Center since 1992, having 
developed her expertise in the Executive Branch's 
implementation of immigration policy. Before joining the 
center, Ms. Vaughan worked as a Foreign Service Officer with 
the State Department. She earned her bachelor's degree at 
Washington College in Maryland and master's degree from 
Georgetown University.
    As you have heard, each of your written statements, which I 
have read and appreciate a great deal, will be made a part of 
the official record. We ask that you summarize your testimony 
in 5 minutes. When the yellow light goes on there, that means 
you have a minute to go. And when the red light goes on, it 
means your time is up and we would ask that you summarize.
    So, if we could, we will begin with Mr. Johnson.

TESTIMONY OF RANDEL JOHNSON, VICE PRESIDENT, LABOR, IMMIGRATION 
         & EMPLOYEE BENEFITS, U.S. CHAMBER OF COMMERCE

    Mr. Johnson. Thank you, Chairwoman Lofgren and Ranking 
Member King.
    I think it was sort of gratifying to see the apparent 
consensus of the last panel in terms of what I think was 
comprehensive immigration reform, if I was hearing the Members 
correctly, and it certainly marks a change in the debate, I 
think, and is a hopeful indication of what we can get done in 
the House in the next several months.
    I am Randy Johnson, Vice President of Labor, Immigration 
and Employee Benefits at the U.S. Chamber. I do want to note 
that the Chamber also co-chairs the Essential Worker 
Immigration Coalition and separately the Employment Eligibility 
Verification Working Group. Both of these groups are very 
broadly based across industry sectors. They will be submitting 
separate statements, and I think much of what I will say today 
will be reflected in their statements, indicating that there is 
a general concern in many of the areas I will talk about today 
across industry.
    I do confess that when I went down to the Chamber as Vice 
President, I didn't think I would be testifying in front of a 
panel here in the House in favor of a broad, sweeping mandate 
on employers. But here I am, and hopefully I will still have my 
job when I get back to the office.
    But I think the fact that the Chamber and other business 
groups are willing to step into a broadening mandate indicates 
how important we think it is to achieve comprehensive 
immigration reform. With that being said, while a lot of the 
press has been focused on temporary worker programs and the 
undocumented, I think there has been a lack of attention to 
title 3 and the employer verification system, which is why I 
think we so much appreciate the fact the Committee is holding 
this hearing today specifically on this issue.
    There has been a lot of discussion in prior hearings with 
regard to the degree of accuracy of the pilot program. We can 
debate that back and forth. I am not sure if it is 20 percent 
or 1 percent, frankly, and DHS won't tell us. Hopefully they 
will tell us in the future and, more importantly, they will 
tell you.
    However, it is important to note that even with a 1 percent 
error rate, you are talking about disqualifying perhaps over 1 
million Americans from their livelihood. Not a credit card 
transaction. We are talking about people losing their jobs, 
U.S. citizens and not just immigrants. So the stakes, I think, 
could not be higher, not just for the employer community but 
also for employees. And certainly none of us want to see a 
system rolled out that disqualifies U.S. citizens from jobs 
that they are properly authorized to work.
    And now, as I said, it is important from a business 
community standpoint that any rollout of a system is part of 
comprehensive immigration reform, and I know that has been 
noted by many others, so I won't belabor it. But it is 
important that it is seen as part of a package.
    With regard to key elements, phase-ins, if those--and 
Congressman Calvert made a compelling case with regard to the 
pilot program today, with regard to its accuracy and its 
workability, and that is fine and that is great. Even he 
proposed a phase-in of 7 years. But if the Department of 
Homeland Security and others have such a strong belief that 
this will work, surely they will not oppose a benchmark that 
tests the accuracy of the system as it rolls out.
    The business community has a jaundiced view of the ability 
of the Government to roll such a massive program out in the way 
it has been promised, but if it can be done, then surely those 
proponents won't be afraid of solid benchmarks and so the 
program will be tested before it is rolled out to the next 
part.
    Secondly, we think it should be limited to new hires. We 
know that is controversial, but there are 140 million employees 
in the workforce today. Think of the burden on employers to 
reverify all of those employees. And given that there are 50 
million to 60 million new hires every year just in a general 
turnover in the workforce, over time people will be reverified 
anyway. So we think no reverification of the existing workforce 
but certainly, obviously, new hires.
    Third, we think that the existing law with regard to the 
subcontractor-contractor relationship should be retained. That 
is a contractor should not be liable for the violation of a 
subcontractor absent, of course, knowing that the subcontractor 
is in fact violating the law. That is indefensible and it 
should remain so, but imputed knowledge of some sort, we think, 
is not a proper level of fault or liability.
    Obviously, we think--and this is where there is a contrast 
between realtime verification and testing, whether or not what 
the Government gives you is true, but employers do need a quick 
response and an accurate response when they put an employee's 
name in there, and they need a final decision by the Government 
fairly quickly with regard to whether or not that person can be 
hired. We think 30 days is about right. Others think perhaps a 
longer time.
    Lastly, with regard to--two more things. With regard to 
fees, not surprisingly we don't think the business community 
ought to have to support this system or pay for it. It is of 
general importance to this country and we think it should be 
funded generally by taxpayers and through the Government, 
normal appropriations, and not through fees imposed on the 
private sector.
    With regard to enforcement, we don't think the debarment 
process has a role here. The debarment process is a separate 
issue with regard to enforcement of labor laws. Labor laws and 
immigration laws ought to be left to those in law enforcement 
and the debarment process should not be part of that.
    Preemption, we think we need sound preemption across the 
board of State laws in this area. And, lastly, we are concerned 
about parts of certain bills we see which appear to be sort of 
quiet ways to expand labor laws and push a labor agenda beyond 
immigration and for separate reasons we would oppose that, and 
we would hope this issue is limited to immigration issues and 
not a quiet way of pushing a labor agenda that has nothing to 
do with immigration.
    Thank you.
    [The prepared statement of Mr. Johnson follows:]
                Prepared Statement of Randel K. Johnson




















    Ms. Lofgren. Thank you, Mr. Johnson.
    Mr. Gibbs?

  TESTIMONY OF ROBERT GIBBS, PARTNER, GIBBS HOUSTON PAUW, ON 
      BEHALF OF THE SERVICE EMPLOYEES INTERNATIONAL UNION

    Mr. Gibbs. Thank you, Madam Chairwoman and Ranking Member 
King and other Members of the Committee.
    I am most pleased to be here and hear this discussion this 
morning, particularly, as Mr. Johnson mentioned, the emphasis 
on comprehensive reform, which is of strong interest to the 
Service Employees International Union.
    The Service Employees Union has extensive experience 
assisting its members in dealing with the kinds of problems 
that employers face in verifying the authorization of employees 
for work. Because of that and because of the problems that we 
see with discrimination in existing systems and with 
inaccuracies in Social Security and Immigration Service 
records, we are particularly concerned that this Committee 
makes sure that anything that is done in this regards gives a 
system that is right, particularly as we talk about expanding 
the program from a system that only involves less than 1 
percent of the employers in this country to one that would 
involve 8 million employers and 160 million workers. You are 
talking about a massive problem if we make even small errors 
and small missteps in the process of construction an electronic 
verification system.
    For a verification system to work, it must accurately 
identify those who are qualified for employment while providing 
a workable means for needed workers to timely obtain 
documentation of their authorization to work.
    For the first tie, this kind of program would provide to 
the Government the power to order employers to terminate 
workers. And if we are expanding that to every employer/every 
employee, it is a massive expansion of a Government program.
    What does this mean to each of us, to the Members of the 
Committee? The testimony here this week from Citizenship and 
Immigration Services was that under the Basic Pilot program, 8 
percent are erroneously non-confirmed, at least at a 
preliminary basis, of all workers. Not just immigrant workers 
but citizen workers, everybody who is verified, it is an 8 
percent error rate.
    One may think 8 percent, that is not too bad. Eight percent 
of the workers in your district is 24,000 workers; 24,000 
workers coming into your district offices, asking your staff 
for help is a lot of work and a lot of problem for your staff 
to deal with. That is why it is so critical that we get this 
right. Unless these errors are cured, there are going to be 
major problems in your offices and for the families in our 
districts who are losing their jobs and trying to figure out 
how to support their families.
    Proposals to require employers to electronically utilize a 
Government verification program will only succeed if it is part 
of a program of comprehensive reform. Why is that the case? It 
is not just because we want comprehensive reform. But unless 
you shrink the size of the problem down to something that is 
manageable, this program will collapse of its own weight.
    There has to be both a program to remedy the 7 million to 
12 million unauthorized worker situations here in a broad way 
and not a narrow program that only fixes half of those people, 
plus a program for future immigration worker flows so that we 
are not back here 10 years from now dealing with a problem that 
we haven't cured in 2007.
    It is only if those workers--only if there is not both the 
supply of undocumented workers there who are attractive to 
employers who would like to use their work without having to 
pay competitive wages and decent working conditions, does an 
electronic verification system have a chance to work. If there 
is a major supply of workers and a labor market that demands 
the use of those workers, some employers will find ways to get 
around whatever system this Committee devises.
    What we saw with the creation of the Immigration Reform and 
Control Act's employer sanctions in 1986, which created the I-9 
form and required employers to verify every employee by the 
employee's presenting documents was that the employer filled 
out the I-9 form and the employee presented the document. 
Unfortunately, some number of those employees presented made up 
documents. They made up a name, they made up a Social Security 
number and they presented it.
    Now what we are getting, as we try to tighten the system, 
is that we get rather than completely made up documents which 
don't injure some real person, we are starting to see the kind 
of situation that happened at Swift, where employees then have 
to find a legitimate name and a legitimate Social Security 
number and birth date to use to generate documents which will 
clear the Basic Pilot program.
    So as we tighten the system you get a response, and the 
response is identity fraud problems. If we want to roll that 
out on a national basis, we would better figure out how we are 
going to keep that from happening at the same time, but there 
are other consequences, then, that flow from trying to tighten 
up the identity fraud problem.
    There are several things that we think need some fixing in 
the various bills for employment verification. We think that 
the efforts to limit the number of documents have gone too far. 
There are too few documents in the most recent proposal. In 
other words, the pendulum has swung way too far the other 
direction.
    Why is this a problem? Well, there are several reasons. One 
is, the passport, which only 25 percent of U.S. workers have, 
is a very expensive and increasingly time-consuming process to 
get. The Real ID, five States have bowed out of that. Homeland 
Security only accepts a very few number of documents, charges a 
lot of money and takes a lot of time to generate them.
    Ms. Lofgren. Mr. Gibbs, your time is----
    Mr. Gibbs. I will wind up and respond to questions.
    [The prepared statement of Mr. Gibbs follows:]
                 Prepared Statement of Robert H. Gibbs
























    Ms. Lofgren. Thank you very much.
    Mr. Harper?

    TESTIMONY OF JIM HARPER, DIRECTOR OF INFORMATION POLICY 
                  STUDIES, THE CATO INSTITUTE

    Mr. Harper. Thank you very much, Madam Chair.
    I feel like I have to confess, I should maybe be docked a 
couple of minutes because your question came out of my 
testimony. I won't volunteer to be docked those minutes, but 
thank you for asking that question. I appreciate you focusing 
on those issues because I do think they are very important.
    Congratulations and thank you very much for conducting 
extensive hearings on the immigration reform issue, and 
particularly this issue. It is a pleasure to me to see broad 
agreement on comprehensive immigration reform, and I want to 
make a blanket statement that if I don't repeat enough may 
hold: that I understand and accept entirely the good faith, the 
good intentions, and sincerity of everybody who testified 
before you on this panel and everybody on this Committee to try 
to solve difficult problems and come up with some solutions.
    I sometimes relish being the skunk at the garden party. I 
don't in this case. But I do want to highlight some very 
serious concerns about the expansion of Basic Pilot and 
electronic employment verification generally.
    There really are formidable problems with creating a 
workable and acceptable employment verification system for 
Federal immigration law enforcement. A nationwide system for 
checking identity and eligibility is much more easily said than 
done.
    It is not surprising, of course, that there is a push to 
improve the current system. There are a lot of problems with 
it. I think we should have a marker that it is more important 
that American citizens and eligible people should be able to 
work than it is to exclude illegal aliens from working, the 
discrimination issue we have heard about so much already.
    The theory of using employment eligibility to reduce the 
power of the U.S. economic magnet makes logical sense. But it 
is very difficult to prove work eligibility under IRCA on a 
mass scale. The credential that we are talking about, 
eligibility, is a personal one; that is, it attaches to an 
individual and is nontransferable.
    So the process requires two steps: identification and 
determination of that eligibility. Frankly, I don't know how 
you get away from identification, a mass identification system, 
which could probably be characterized accurately as a national 
identification system.
    As to ID, as to the system now, we use identification in 
our personal transactions all the time. We are built to do that 
with our eyes and ears to recognize other people. And so we 
very often rely on identification as a bulletproof way of 
getting things done.
    But remote identification, identification of strangers, 
identification using cards, is a different process. It is a 
process that is much more open to fraud in various dimensions 
of it, and that is why the current I-9 system doesn't work very 
well.
    At the outset of an employment relationship, particularly 
in the low-skill areas, employers really don't know their 
employees from Adam, so they have to accept documents that are 
often fraudulent. They are not in a good position to verify the 
accuracy or the tamper-resistance of the documents they are 
looking at.
    I think that moving to an electronic verification system 
would reduce illegal working somewhat by creating a simple sort 
of background check, checking to see if this name and Social 
Security pair exists, is paired also in the Social Security 
system databases. You could do rough logic checks, as was 
discussed. See if a Social Security name pair had been used 
before several times in succession. That would give you some 
suggestion that fraudulent documents were being used.
    But what exactly you do with that information is very 
difficult, because you would be just as likely to take the 
honest, law-abiding worker and make them a tentative non-
confirmation as you would the fraudulent worker.
    The system would create a great demand, because of its 
toughness, would create a great demand for additional identity 
fraud, that is to get new, unused name and Social Security 
pairs. So there would be a lot more demand for that 
information. It would come from the law-abiding citizens and 
the data would be stolen lots of different places. We know 
about the data breaches that have happened in the public and 
private sectors.
    The response is a secure card. I don't know how you do it 
without making it a biometric card, and I do think that in 
fairness it would have to be some kind of national ID system.
    There are very, very advanced technical ways that you could 
create a biometric credential that doesn't share any other 
information, but that is a couple generations down the road. It 
is possible, but I don't see it happening in the very near 
future.
    You brought up some of the privacy concerns, and I very 
much appreciate that. An electronic system is different in 
kind, not degree, from a paper-based system. When an employer 
puts an I-9 form in a file, that is one thing. When the 
information is submitted to the Government electronically, that 
is a very, very different thing. And the information can be 
collected, stored, and used. I appreciate the good faith of law 
writers saying we do not want it used, we do not want it 
converted to other uses. But you know the Social Security 
number was supposed to be for operating the Social Security 
system, and we know well that we are well beyond that date.
    Ms. Lofgren. Mr. Harper, I am not docking you your time, 
but I am going to keep you to 5 minutes----
    Mr. Harper. Very well.
    Ms. Lofgren [continuing]. As we have a vote coming up on 
the floor soon.
    Mr. Harper. I do appreciate the consensus on broad reform. 
And thank you for hearing me.
    [The prepared statement of Mr. Harper follows:]
                    Prepared Statement of Jim Harper


































    Ms. Lofgren. Thank you.
    Ms. Vaughan, your 5 minutes.

TESTIMONY OF JESSICA VAUGHAN, SENIOR POLICY ANALYST, CENTER FOR 
                      IMMIGRATION STUDIES

    Ms. Vaughan. Thank you, Ms. Lofgren and Mr. King, for the 
opportunity to testify this morning.
    My view is that the electronic employment verification 
system works very well and we are accomplishing the two goals 
of helping employers avoid hiring illegal workers and making it 
harder for illegal workers to deceive their employers.
    Congress does not need to make changes to the way the 
system operates or how it processes queries as has been 
proposed in the STRIVE Act. After 10 years of tests, 
evaluations and improvements, we know that it works. It is an 
efficient system. It has safeguards to prevent wrongful 
termination and discrimination and employers report that it is 
easier to use than the existing I-9 paperwork system and brings 
no disruption to the company or to legal workers.
    The system is working well, but it is not perfect. The 
biggest problem with EEV is that it is still voluntary. Those 
employers who wish to excuse themselves from the law can choose 
not to participate. Not only is this unfair, it means the 
program is not nearly as effective as it could be in preventing 
illegal employment.
    Companies who must compete with scofflaws are at a 
disadvantage. Congress has a responsibility to ensure that 
conscientious employers who perform their due diligence in 
hiring are not put at a disadvantage for doing so. The most 
obvious way to do this is to phase in mandatory participation 
in EEV, ideally starting with industries that have historically 
attracted large numbers of illegal workers.
    If the program were to be made mandatory tomorrow, most 
businesses would be able to comply. Even most small businesses 
already use the Internet and can access the system. Companies 
who don't want to do it themselves can pay their own 
accountants or lawyers or hire one of the more than 300 private 
sector designated agents to verify workers for them.
    If the EEV program is made mandatory, it is important that 
certain processes that have been honed over the 10-year pilot 
phase be preserved. For example, the current practice is to do 
the manual confirmations that are more costly and time 
consuming only when an employee contests a tentative non-
confirmation result.
    Those who do not contest are assumed to be ineligible and 
the agencies don't have to spend anymore time on them. This 
self-weeding feature will be even more important as the volume 
of queries increases.
    The STRIVE Act, on the other hand, requires that manual 
verification be done even before determining if an employee is 
going to contest a tentative non-confirmation. That is going to 
be wasteful. And the verification office would quickly be 
bogged down trying to verify however many thousands of 
unverifiable cases are turned up.
    The other major issue that has to be addressed, of course, 
to improve the system is identity fraud. While this is a 
vulnerability, it is not a fatal flaw, and a number of options 
exist to overcome the system's limitation.
    First, Congress should support the USCIS plan to develop a 
monitoring and compliance unit in the verification office by 
providing resources for staff and technology. And in addition 
to electronic monitoring, the unit should institute a through 
on-site audit process to check both paperwork and employees. It 
should be done on both a random basis and also to follow-up on 
leads generated by monitoring the queries that go through. And 
the Social Security Administration should be directed to 
routinely share information with DHS on possible immigration 
violations.
    There are other ways for companies to pick up on this kind 
of fraud on their own. For almost 2 years, the Social Security 
Administration has offered an electronic verification service 
called SSNVS. So employers can monitor their payrolls, and we 
are talking about current employees, not just new hires, and 
they can detect discrepancies between the company records and 
the Social Security record.
    Nearly 20,000 employers used it last year to verify more 
than 25 million employees, making this program even bigger than 
Basic Pilot. Arizona has been doing SSNVS audits for more than 
a year and the State of North Carolina considers it a best 
practice and insists that their State employers do it on a 
quarterly basis. If Swift & Company had made use of this tool, 
it might have been spared the big disruption that was caused 
when ICE raided its worksites at the end of last year.
    Congress should consider requiring all employers of a 
certain size to perform regular SSNVS audits as an alternative 
to retroactive EEV screening.
    Some have proposed that the identity fraud issue be 
addressed through the creation of a biometric work 
identification card. While this might be a desirable goal for 
the future and definitely deserves further study, I don't see 
how it will help improve the existing verification system.
    Besides the cost of developing the program, even if every 
legal worker had a biometric card to prove it, very few if any 
employers have the capability to authenticate the identity of 
job applicants. While plenty of barber shops, snowball stands, 
and gas stations use the Internet on a regular basis, it is not 
realistic to expect them to acquire fingerprint readers or 
retina scanners or that type of equipment at this point in 
time, and it is not fair to expect communities around the 
Nation that are shouldering the burden of illegal immigration 
to wait until that kind of technology becomes affordable and 
available before they see serious immigration law enforcement.
    Finally, there must be a more vigorous worksite enforcement 
effort from ICE to address off-the-books employment.
    Thank you very much.
    [The prepared statement of Ms. Vaughan follows:]
                Prepared Statement of Jessica M. Vaughan




















    Ms. Lofgren. Thank you, Ms. Vaughan. Thank you for 
summarizing.
    I am going to be quick because we are expecting a vote 
within the next 10 minutes on the floor that will consume 40 
minutes or so.
    I will just say that in terms of assuming that those that 
do not adequately contest are not eligible, I think would be a 
mistake, and I am going to give an example, because she has 
given me her permission, which is the Counsel for this 
Subcommittee.
    Ms. Hong has been a United States citizen for over 15 
years, and the Congress participates in the Basic Pilot. Even 
though she had her United States passport, it came back not 
eligible. And Ms. Hong, it took her 7 days, three trips to the 
Social Security office, three trips to the House employment 
office, three trips to the Judiciary Committee. She is an 
immigration lawyer, her boss is the Chair of the Immigration 
Subcommittee. She was successful in getting this straightened 
out.
    But I am mindful that there are people who are not 
immigration lawyers, whose boss is not the Immigration 
Subcommittee Chair, who might actually give up, and they would 
still be United States citizens. So I think we need a better 
system than just to assume that if you fail it is okay.
    I just would like to say and ask this question I guess of 
whoever can answer it, maybe to Mr. Harper. First, we need an 
accurate database. Right now it is inaccurate. But the point 
you are raising is that having an accurate database actually 
poses a threat to the privacy and freedom of the United States.
    Can you see any provisions or steps that we might take, 
other than fines, because it is the Government that you have 
expressed a concern about, Big Brother for lack of a better 
word, by involving the private sector or some other steps we 
might take to ease the concerns that you have raised in your 
testimony?
    Mr. Harper. It is a good question. You are definitely 
between a rock and a hard place in terms of a system that works 
really well. Well, it has to have really good data and a really 
strong biometric connection to the individual. The hard place 
is that that puts a lot of power in the hands of the Government 
to monitor people, to control them, and we should write policy 
with an eye down the horizon to a time when none of us are in 
power and someone might be in power that we don't want to have 
in power.
    I think our Government is a great one. Our system is a 
great one. But it is not perfect and there is an uncertain 
future, so we have to design these systems, which are very 
powerful, with that in mind.
    The Federal Trade Commission had a meeting earlier this 
week, Monday and Tuesday. I didn't attend all of it, but what I 
heard of it was very exciting, because I think people there 
recognize that distributed systems can provide all the security 
in some cases without the surveillance. And there are systems 
beginning to be created that put the person in control. It 
might be a card or token that the person carries and controls. 
And they have the power over what happens with the information.
    Centralizing is dangerous. Dispersing is better. There is a 
lot to come before we know how to do it.
    Ms. Lofgren. Thank you very much. And I think I will ask 
the staff to follow-up with the FTC on that distributed system 
idea. That is a new one to me.
    I am going to yield to Mr. King now, since we are expecting 
votes, for his 5 minutes.
    Mr. King. Thank you, Madam Chair.
    Mr. Johnson, as I read through your testimony and read 
through your testimony, it was very efficiently delivered here, 
I want to comment, too. You got to a lot of material in in a 
short period of time.
    The question occurs to me, and it seems to me that when we 
step back and take a look at a situation that we have and ask 
how do we really want to fix this problem, how would you set 
your priorities first. And so I want to say this: if this 
Congress could devise a way to pass legislation that 
successfully brought compliance with the current law, with 
regard to illegal labor and illegal immigration and unlawful 
presence in the United States, and those that were unlawfully 
present in the United States transitioned back to their home 
countries, would you support that kind of legislation?
    I am not talking about a roundup. I am talking about 
legislation that simply puts incentives in place and if human 
nature fit our design, if they flowed back, do you want them to 
go home?
    Mr. Johnson. Well, Congressman, I think if it would allow 
them to go back to their home countries and then therefore--and 
not disqualify them from returning legally--in other words, 
they would not be subject ot the five or 10 year bar, we would 
certainly support that. But we wouldn't support a requirement 
that would, well, require them to go back to their so-called 
home countries because I think as the Pew study has shown, 
frankly 5 percent of our workforce is compromised of 
undocumented workers, and many Members of the Chamber and other 
people representing part of our coalition believe these workers 
are necessary parts of their workforce.
    Mr. King. Mr. Johnson, I am asking you, are they more 
necessary than the rule of law in the United States of America? 
Isn't the rule of law a pillar of this Nation's success?
    Mr. Johnson. Absolutely. But there are obviously various 
ways by which people can be punished for violating the law and 
being required to leave the country is one option. A civil fine 
is another option. There are many ways in which all of us as 
U.S. citizens ``violate the law,'' whether we are speeding or 
otherwise. But you have to have a measure of proportionality 
and practicality and certainly civil fines----
    Mr. King. I understand your answer. And I thank you for 
that.
    I turn to Mr. Gibbs. You brought some curiosity, as I 
listened to your testimony, when you testified that 8 percent 
of the initial applicants that are run through Basic Pilot are 
rejected.
    Could it be possible that even that full 8 percent or 
perhaps more than that would be not lawful for them to work in 
the United States? It could be illegal applicants?
    Mr. Gibbs. No. That number is----
    Mr. King. How would you know?
    Mr. Gibbs. Well, that number is from CIS themselves. Their 
testimony this week, and Mr. Rosenbaum's testimony was, that is 
8 percent incorrect non-confirmation.
    Mr. King. I understand the basis for that response, but I 
would point out to you that it is not incorrect, because we 
have 98.6 percent of those applicants are ultimately approved 
between the initial check and the follow-up, where they have 
got the opportunity to present their records.
    And so I will submit that that is an indication that the 
Basic Pilot program is working. And many of those people that 
won't apply for the secondary within that 72 hours probably 
have figured out that they have been caught in this process and 
that is why they don't appeal.
    The gentlelady here has got such an interesting case. It is 
interesting also that she is here legally and she made the 
appeal and even then it was difficult, but she had the 
conviction because she had the confidence that she is lawfully 
present here. Many of those people do not. Do you concede that 
point?
    Mr. Gibbs. Well, no, I don't concede the point. It seems to 
me that the numbers are 8 percent of people are erroneously 
non-confirmed and they----
    Mr. King. I won't agree to that. Because 98.6 percent of 
them are ultimately approved. So if they are erroneously 
identified, that means there is something flawed in our system. 
We have got 99.8 percent of all natural born American citizens 
that are approved. We have got 98.6 percent of all applicants 
that are approved. Eight percent rejected in the first test, 
and then the balance of those up to that 98.6 percent are 
approved. So I don't know how you can make that statement, Mr. 
Gibbs.
    Mr. Gibbs. Eight percent in your district is 24,000 people 
who would have to do what Ms. Hong had to do.
    Mr. King. That doesn't mean, though, that they have been 
rejected. That just means that our system is working and we are 
cleaning the system up.
    Mr. Gibbs. I appreciate that.
    Mr. King. Let me ask you another question, then, and that 
is how would you go about cleaning up a system if you weren't 
to use it? I will submit that is the way we clean it up. We are 
cleaning it up now. Ms. Hong is--that is clean. I am glad that 
is clean. It is going to be a little hard work, but how else 
would you clean up the system?
    Mr. Gibbs. I really don't understand how the agency--what 
they need to do. That is something the agency can best work on.
    Let me just make one other point, though. The 24,000, there 
is an important problem here, because many employers, according 
to WestStat studies, almost half of employers use the program 
to prescreen workers. So they were barred from even--they 
weren't even told they were non-confirmed, but that is why they 
didn't get offered the job.
    Ms. Lofgren. The gentleman's time has expired.
    Mr. King. I yield back.
    Ms. Lofgren. We will go to Mr. Conyers, and if we can go 
very quickly so we don't come back after this set of about 40 
minutes of voting.
    Mr. Conyers. Absolutely.
    Just as I was recovering from the Chamber of Commerce 
representative's very fair and equal--a very excellent 
statement, and just as I was pulling out of it and making 
adjustments from my previous assumptions, here comes a Cato 
representative who sounds perfectly reasonable and normal about 
this approach to the subject matter and raises very clearly the 
concern that is where does the American worker fit into the 
immigration picture.
    I congratulate you, sir. Both of you are going to have to 
explain to your organizations why Conyers is aligning with you 
at this point. But that is your problem.
    But where do we fit in here, Gibbs and Harper? What is the 
deal? And this is a very important part of it. I come from 
where? Detroit, where we are being ripped to shreds by economic 
automobile relocation. Talk to me.
    Ms. Lofgren. Quickly talk to him.
    Mr. Conyers. Well, not Johnson. Johnson goes for it, but I 
want to hear from Gibbs and Harper.
    Mr. Gibbs. Well, that is why the union is so concerned 
about this program. The program will affect every worker. It 
will affect American workers who were born here, like you and I 
were. It affects people who immigrated here, like Ms. Hong. It 
affects workers who came seeking a better life but who haven't 
been able to work through the Immigration Services system.
    That is why this program is so important, because it 
interfaces the Immigration Service process with our own 
citizenship process. If we don't get it right, we are going to 
harm our entire workforce, whether it is citizens or non-
citizens. That is why the union is so concerned, because we 
have Members who are the whole spectrum.
    Mr. Harper. I guess I come to this issue and this broad 
problem with a disability, which is that I don't know the 
answer to the total immigration reform problem.
    Analyzing this particular subset of the problem, I think 
that huge costs fall on the law-abiding native-born citizen 
from this kind of program, but I don't have a solution that 
gets you out the other side. It is just that you have 
incredible costs in dollars, privacy, from an expanded or 
anywhere near perfected electronic verification system.
    Mr. Conyers. I appreciate your candor and thank you all.
    Ms. Lofgren. The gentleman from California, do you have 
one--we have about 6 minutes before the vote will be called, so 
we are going to have to----
    Mr. Berman. Just one question to Mr. Harper.
    From what I know about Cato, you are very concerned about 
intrusions on individual liberty and want to preserve maximum 
amounts of freedom and you hate regulation. What I ask is 
whether or not you can contemplate in a situation where we need 
to deal with an intolerable situation, which is the status quo, 
you conceive of regulatory measures glommed on to an electronic 
employment verification system which can minimize the potential 
for abuse of that system.
    Mr. Harper. Hate is such a strong term. We have many 
concerns about excessive regulation.
    You know, you are going to do what you are going to do, and 
I am here to call it like I see it. I understand the good faith 
of everybody working on this problem to try to come to a 
solution.
    Frankly, in my written testimony, going through this, 
trying to figure out where to go on this, the sloppy system we 
have right now in the paper I-9, listen, I don't think 
requiring employers to be immigration agents is a good policy 
in the first place. But if you are going to do it, the sloppy 
system you have now might be the best way. If you want to 
absolutely minimize false positives----
    Mr. Berman. It is not a system. It is not a system.
    Mr. Harper. It is a system. It is a really messy system.
    Mr. Berman. That insults the concept of system.
    Mr. Harper. If you strengthen it, you are going to hurt 
Americans.
    Ms. Lofgren. Ms. Waters, do you have any compelling----
    Ms. Waters. Just quickly. No, it is not a compelling 
question except to say this. Immigration reform is very 
complicated and we are going to have to work very, very hard. 
And in order to get a reasonable policy on a path to 
legalization, we are going to have to get tough on something. 
And tough on border enforcement and tough on employers and 
enforcement of sanctions against them for not really trying to 
do a good job is going to happen.
    And I just want to tell my friends at the Chamber of 
Commerce and any place else that coming here under the red, 
white and blue flag, trying to defend those practices and not 
wanting a tough verification system, it ain't going to happen.
    Ms. Lofgren. Thank you for that statement.
    At this point, I am going to thank the witnesses for their 
testimony today.
    Without objection, Members will have 5 legislative days to 
submit any additional written questions to you, which we will 
forward and ask you to answer as promptly as you can to be made 
part of the record.
    Without objection, the record will remain open for 5 
legislative days for the submission of other employment 
eligibility verification proposals and any other additional 
materials related to this important issue.
    Our hearing today has helped illuminate numerous issues 
concerning this system. Our next hearing will be on Wednesday, 
May 2, at 2 p.m. in Room 2237. We will talk about the point 
system that the White House is discussing.
    With that, this hearing is adjourned.
    [Whereupon, at 11:35 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Prepared Statement of Susan R. Meisinger, President and CEO, Society 
  for Human Resource Management and Chair, HR Initiative for a Legal 
                                Resource
    Madam Chairwoman, Congressman King, Members of the Committee. I am 
pleased to submit the following statement on behalf of the Society for 
Human Resource Management and the HR Initiative for a Legal Workforce.
    The Society for Human Resource Management (SHRM) is the world's 
largest association devoted to human resource management. Representing 
more than 217,000 individual members, the Society's mission is both to 
serve human resource management professionals and to advance the 
profession.
    The Human Resource Initiative for a Legal Workforce represents 
human resource professionals in thousands of small and large U.S. 
employers representing every sector of the American economy. The HR 
Initiative and its members are seeking to improve the current process 
of employment verification by creating a secure, efficient and reliable 
system that will ensure a legal workforce and help prevent unauthorized 
employment, a root cause of illegal immigration.
    On behalf of both organizations, we thank the Committee for its 
work thus far in the area of improving America's employment 
verification process. Our members represent the front lines on 
workforce verification, and offer a critical viewpoint. In the end, 
this is not just a debate about immigration reform, it is a debate 
about workplace management--which impacts all U.S. employers and all 
American workers, not just the foreign born. We do not believe there is 
a one-size-fits-all solution to employment verification. Rather we 
believe that private sector technologies can be effectively 
incorporated into the verification and hiring process.
    The subject of today's hearing, ``Improving the Electronic 
Employment Verification and Worksite Enforcement System'' is central to 
deterring illegal immigration to the United States. It is no secret 
that the wide availability of jobs in this country has become the 
magnet for unauthorized migration. The most critical element for true 
immigration reform, therefore, is establishing a foolproof system for 
certifying that an applicant is authorized to work in the United 
States. Unfortunately, the electronic verification system in place 
today is inadequate to meet the demand, and current proposals before 
Congress fall far short of what is needed.
    Currently, employees are permitted to submit up to 29 different 
legally-acceptable documents as proof of eligibility to hold a job in 
the United States. This document-based system is prone to fraud, 
forgeries and identity theft, making it difficult, if not impossible, 
for an employer to differentiate between the legal and illegal worker. 
Adding to the problem, the federal government's voluntary electronic 
verification program, the ``Basic Pilot,'' is inadequate to meet the 
needs of all U.S. employers because it cannot stop identity fraud.
    U.S. employers, whether large or small, cannot be expected to 
consistently identify unauthorized workers using the existing system, 
but they are liable for severe sanctions if these workers find their 
way onto the payroll. At the same time, they are subject to claims of 
discrimination if they question the validity documents too much.
    The proliferation of false or stolen documents can and does cause 
reputable employers to mistakenly hire individuals who are not eligible 
to work. At the same time, the lack of certainty and threat of 
government-imposed penalties may lead some employers to delay or forego 
hiring legal workers who are eligible. In either case, the costs are 
high for both U.S. employers and legal workers.
    Employers need the right tools to verify a legal workforce. 
However, HR cannot--and should not--be America's surrogate border 
patrol agents. Rather, employers are entitled to an unambiguous answer 
to the query whether an employee is authorized to accept an offer of 
employment.
    Congress must transform the current paper-based verification 
process into a state-of-the-art electronic system that is accurate, 
reliable, cost-efficient, easy-to-use, and shares responsibility among 
government, employers and employees. Specifically, we advocate a system 
that would verify identity through additional background checks and the 
potential use of biometric enrollment conducted by government certified 
private vendors. By eliminating subjective determinations of work 
authorization documents, this system will eliminate discrimination and 
simplify enforcement.
    However, before any employment verification system is mandated, it 
must meet the following Principles:

Principle 1: Shared Responsibility Among Government, Employers and 
Employees--U.S. employers, employees and the federal government share 
responsibility for a reliable, efficient, accurate system to verify 
employment eligibility.

Principle 2: Fair Enforcement--U.S. employers should be liable for 
their own hiring decisions, not those made outside their control.

Principle 3: Accuracy and Reliability--Employers should not be forced 
to participate until the government provides assurances that the system 
is accurate and reliable.

Principle 4: Ease of Use--The new verification system should be easy to 
understand and to implement at all worksites.

Principle 5: Deployment of Latest Technologies--A new verification 
system must make false documents and identity theft ineffective. One 
way to achieve effective and efficient worksite enforcement is to 
include biometric identifiers or other state-of-the-art technology in 
the identity and work authorization process that is capable of 
automatically recognizing an individual's identity.

    If adequately funded and fairly administered, SHRM and the HR 
Initiative believe this new system could eradicate virtually all 
unauthorized employment--thereby eliminating a huge incentive for 
illegal immigration. It will also eliminate discrimination by taking 
the subjectivity out of the verification process.
    True employment verification is the only way to ensure fair and 
equitable treatment for those individuals who should have access to 
legitimate jobs. It is essential for a legal workforce and for 
America's national and economic security.
    I would again like to thank the Committee. We look forward to 
working with you to implement the solutions advocated by SHRM and the 
HR Initiative for a Legal Workforce.
    Attached are the following HR Initiative for a Legal Workforce 
documents:

        1.  Principles

        2.  Concepts for Secure Electronic Employment Verification 
        System

        3.  Frequently Asked Questions

                              ATTACHMENTS










































  Joint Statement of the Air Conditioning Contractors of America, the 
      Associated Builders and Contractors, the Associated General 
Contractors, the Mason Contractors Association of America, the National 
    Association of Home Builders, the National Roofing Contractors 
  Association, the National Utility Contractors Association, and the 
       Plumbing-Heating-Cooling Contractors--National Association
















  Prepared Statement of the Electronic Employment Verification System 
 Working Group by Angelo I. Amador, Co-Chair United States Chamber of 
  Commerce; Kelly Knott, Co-Chair, Associated General Contractors of 
    America; and Scott Vinson, Co-Chair, National Retail Federation/
                 National Council of China Restaurants














     Prepared Statement of the Essential Worker Immigrant Coalition




         Prepared Statement of the National Council of La Raza














    Prepared Statement of Tyler Moran, Employment Policy Director, 
                    National Immigration Law Center




























                                 
