[Senate Hearing 110-555]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 110-555
 
   THE IMPACT OF IMPLEMENTATION: A REVIEW OF THE REAL ID ACT AND THE 
                  WESTERN HEMISPHERE TRAVEL INITIATIVE

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

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                     THE FEDERAL WORKFORCE, AND THE
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               ----------                              

                             APRIL 29, 2008

                               ----------                              

       Available via http://www.gpoaccess.gov/congress/index.html

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs

       THE IMPACT OF IMPLEMENTATION: A REVIEW OF THE REAL ID ACT

              AND THE WESTERN HEMISPHERE TRAVEL INITIATIVE

42-752 PDF

2008

                                                        S. Hrg. 110-555

   THE IMPACT OF IMPLEMENTATION: A REVIEW OF THE REAL ID ACT AND THE 
                  WESTERN HEMISPHERE TRAVEL INITIATIVE

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

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                     THE FEDERAL WORKFORCE, AND THE
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 29, 2008

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs


                     U.S. GOVERNMENT PRINTING OFFICE
42-752 PDF                 WASHINGTON DC:  2008
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                   DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan                 GEORGE V. VOINOVICH, Ohio
THOMAS R. CARPER, Delaware           TED STEVENS, Alaska
MARK L. PRYOR, Arkansas              TOM COBURN, Oklahoma
MARY L. LANDRIEU, Louisiana          JOHN WARNER, Virginia

                   Richard J. Kessler, Staff Director
                     Jennifer Tyree, Chief Counsel
             Jennifer A. Hemingway, Minority Staff Director
                           Tara Shaw, Counsel
                     Jessica Nagasako, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Akaka................................................     1
    Senator Voinovich............................................     3
    Senator Tester...............................................     6
    Senator Coleman..............................................     8
    Senator Collins..............................................     8
Prepared statement:
    Senator Stevens..............................................    59

                               WITNESSES
                        Tuesday, April 29, 2008

Stewart A. Baker, Assistant Secretary for Policy, U.S. Department 
  of Homeland Security...........................................    12
Derwood K. Staeben, Senior Advisor, Western Hemisphere Travel 
  Initiative, Bureau of Consular Affairs, U.S. Department of 
  State..........................................................    14
Hon. Donna Stone, President, National Conference of State 
  Legislatures...................................................    34
David Quam, Director of Federal Relations, National Governors 
  Association....................................................    36
Caroline Fredrickson, Director, Washington Legislative Office, 
  American Civil Liberties Union.................................    37
Roger J. Dow, President and Chief Executive Officer, Travel 
  Industry Association...........................................    39
Angelo I. Amador, Director of Immigration Policy, U.S. Chamber of 
  Commerce, and Executive Director, Americans for Better Borders 
  Coalition......................................................    41
Sophia Cope, Staff Attorney and Ron Plesser Fellow, Center for 
  Democracy and Technology.......................................    43

                     Alphabetical List of Witnesses

Amador, Angelo I.:
    Testimony....................................................    41
    Prepared statement with attachments..........................   121
Baker, Stewart A.:
    Testimony....................................................    12
    Prepared statement with attachments..........................    61
Cope, Sophia:
    Testimony....................................................    43
    Prepared statement...........................................   220
Dow, Roger J.:
    Testimony....................................................    39
    Prepared statement...........................................   116
Fredrickson, Caroline:
    Testimony....................................................    37
    Prepared statement...........................................   102
Quam, David:
    Testimony....................................................    36
    Prepared statement...........................................    94
Staeben, Derwood K.:
    Testimony....................................................    14
    Prepared statement with an attachment........................    68
Stone, Hon. Donna:
    Testimony....................................................    34
    Prepared statement with attachments..........................    75

                                APPENDIX

Post-Hearing Questions for the Record Submitted from:
    Mr. Baker....................................................   246
    Mr. Staeben..................................................   319
    Mr. Quam.....................................................   349
    Mr. Dow......................................................   350
Background.......................................................   351
Additional testimony submitted for the Record:
    Susan Gurley, Executive Director, Association of Corporate 
      Travel Executives..........................................   364
    Ruth Ann Minner, Governor, State of Delaware, letter dated 
      April 28, 2008.............................................   366
    Janice L. Kephart, former Counsel, 9/11 Commission and 
      President, 9/11 Security Solutions, LLC, prepared statement   369


                     THE IMPACT OF IMPLEMENTATION:
                 A REVIEW OF THE REAL ID ACT AND THE
                  WESTERN HEMISPHERE TRAVEL INITIATIVE

                              ----------                              


                        TUESDAY, APRIL 29, 2008

                                 U.S. Senate,      
              Subcommittee on Oversight of Government      
                     Management, the Federal Workforce,    
                            and the District of Columbia,  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:36 a.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Daniel K. 
Akaka, Chairman of the Subcommittee, presiding.
    Present: Senators Akaka, Pryor, Tester, Voinovich, Collins, 
and Coleman.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. I call the Subcommittee on Oversight of 
Government Management, the Federal Workforce, and the District 
of Columbia to order.
    I want to first thank our witnesses for being here today to 
testify as we review how the Department of Homeland Security 
and the Department of State are implementing the REAL ID Act 
and the Western Hemisphere Travel Initiative (WHTI).
    I also want to thank Senator Voinovich, my partner on so 
many issues on this Subcommittee, and welcome him here, too. 
Last year, following our hearing on REAL ID, he expressed his 
interest in holding another hearing to examine whether Federal 
agencies are prepared to implement both REAL ID and WHTI. I 
share this concern and I am happy that we can work on this 
issue together.
    Both REAL ID and WHTI stem from the 9/11 Commission's 
recommendations on how to improve our efforts to prevent and 
deter another terrorist attack in the United States. REAL ID 
was designed to enhance the security of drivers' licenses, as 
most of the September 11, 2001 hijackers acquired some form of 
U.S. identification document, some by fraud, which assisted 
them in boarding commercial flights and renting cars. WHTI is 
based on the Commission's recommendation that Americans have 
their identities securely verified when entering the United 
States.
    I support the 9/11 Commission's recommendations concerning 
identification security. However, as the saying goes, the devil 
is in the details. Unfortunately, both REAL ID and WHTI are 
controversial because of those very details. Both REAL ID and 
WHTI pose significant threats to Americans' privacy and civil 
liberties.
    REAL ID calls for all States to capture digital images of 
an individual's documents proving identity, such as birth 
certificate or passport, and provide electronic access to their 
databases to all other States. The massive amounts of personal 
information that would be stored in State databases that are to 
be shared electronically with all other States, as well as the 
unencrypted data on the REAL ID card itself, could provide one-
stop shopping for identity thieves.
    We have been told repeatedly that the model for this 
network of networks is the Commercial Drivers' License 
Information System (CDLIS), which allows States to exchange 
information about commercial drivers. CDLIS currently stores 
the name, date of birth, Social Security number, and State 
driver's license, and number of 13.5 million commercial 
drivers. Although proponents of REAL ID are quick to point out 
that CDLIS has never been breached, the attractiveness of such 
a network for computer hacking by identity thieves would 
increase exponentially as the number of individuals in the 
system increases to 245 million.
    In addition, it is unclear what privacy and data security 
laws would apply to this network of networks and what redress 
mechanisms are in place for individuals whose data is lost or 
stolen in another State.
    Because of the lack of privacy details in REAL ID, this 
expansive effort may create a false sense of security while 
actually making Americans more vulnerable to identity theft.
    Adding to my concern is the fact that some States are 
implementing enhanced drivers' licenses (EDLs) to comply with 
WHTI. EDLs are basically REAL IDs with a vicinity-read radio 
frequency identification chip. I am afraid this poses serious 
privacy and security risks, as anyone with a RFID reader will 
be able to monitor the activities of EDL holders.
    Both REAL ID and WHTI pose significant challenges to the 
economy and the travel industry. For example, last year, the 
State Department was not prepared for the overwhelming demand 
for passports caused by the implementation of WHTI for 
individuals traveling to Canada and Mexico. Due to the lack of 
staff and planning, the passport processing time went from 
several weeks to several months, causing many Americans to 
cancel their travel plans. I feel that DHS will be in the same 
boat in 2009 when the current extensions for REAL ID compliance 
expire.
    Several States have passed laws rejecting REAL ID and the 
list is growing. DHS must be prepared for how it will deal with 
partial compliance if the problems with REAL ID are not 
resolved. The American public will need to know what to expect 
in secondary screening. The Transportation Security 
Administration will need enough staff on hand to quickly screen 
passengers and avoid travel disruptions if States continue to 
reject REAL ID. Federal agencies will need guidance on how they 
can serve the public and provide benefits to those who visit 
them and do not have the REAL ID-compliant cards.
    Today, I hope to hear from both DHS and State as to how 
they are preparing for these implementation deadlines and what 
has been the impact of the current WHTI rules on the traveling 
public so far.
    Moreover, States are struggling to figure out how they are 
to pay for what is essentially an unfunded mandate. The matter 
is even more important given the current economic climate. 
States are trying to figure out how to pay for schools, roads, 
health care, and other essential services in a tight budget. 
Now they have to figure out how to pay for secure ID cards.
    Initially, DHS estimated the cost of implementing REAL ID 
to be $23 billion, of which $14 billion would be borne by the 
States. In the final regulations, the overall cost decreased to 
$10 billion, leaving the estimated cost to the States at $4 
billion.
    The Federal Government should pay for this unfunded 
mandate, but it is critical that we fix the problems with REAL 
ID first. We cannot spend billions of taxpayer dollars to erode 
Americans' privacy protections.
    That is why I introduced the Identity Security Enhancement 
Act, S. 717, with Senators Sununu, Leahy, Tester, Baucus, and 
Alexander, to repeal REAL ID and replace it with a negotiated 
rulemaking process and the more reasonable guidelines 
established in the Intelligence Reform and Terrorism Prevention 
Act of 2004. As you know, that Act brought together 
representatives from the Federal Government, State, and local 
governments, privacy groups, and other stakeholders to develop 
standards for drivers' licenses while ensuring privacy 
protections. By bringing everyone together, I believe that we 
can address the problems with REAL ID and have secure drivers' 
licenses faster than the time frame proposed through DHS's 
final rules.
    I am pleased that our bill now has the support of the 
National Conference of State Legislatures, the U.S. Conference 
of Mayors, the Association of Corporate Travel Executives, the 
American Civil Liberties Union, and the Center for Democracy 
and Technology.
    We all support improvements in our driver's license and 
identification cards, but Congress has the responsibility to 
ensure that the changes being implemented by the Administration 
really are improvements and are affordable, practical, and 
increase security against would-be terrorists and identity 
thieves.
    Now I turn to my good friend, Senator Voinovich, for any 
opening statement that he would like to make. Senator 
Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you, Mr. Chairman, and I really 
appreciate you holding this hearing today about two subjects 
that you and I have been concerned about for quite some time. I 
think it is apropos that we do because the folks that are going 
to be testifying here today are going to carry out these 
programs for the rest of the year and we want to make sure that 
the baton is handed off to the next Administration so that we 
don't have some of the screw-ups that we have had in the past 
implementing some of these programs.
    I think we all know that since the 9/11 Commission issued 
its findings and recommendations, we have passed several pieces 
of legislation to improve our Nation's security by implementing 
those recommendations. This has included legislation to 
implement the Commission's recommendation that everyone, 
including U.S. citizens, should carry a document enabling their 
identity to be verified when they enter the United States as 
well as the Commission's recommendation that the Federal 
Government should set standards for the issuance of sources of 
identification, like drivers' licenses. Easier said than done.
    Congress's legislative efforts in these regards have 
resulted in plans known as the Western Hemisphere Travel 
Initiative, and I think, Senator Akaka, you referred to it as 
WHTI. So if we keep using the word WHTI, everybody will know it 
is the Western Hemisphere Travel Initiative, and REAL ID, and 
that refers to the licenses that we are asking States to 
produce.
    There have been significant challenges in implementing each 
of these programs. First, the implementation of WHTI at our 
airports last year was, at best, chaotic. Through no fault of 
their own, numerous American travelers missed their departure 
dates to travel overseas when the amount of time it took to get 
a passport increased from 4 to 6 weeks to several months. These 
problems were due to an absolute failure to anticipate demand 
by the State Department. This was outrageous, and quite 
frankly, I believe it contributed to the defeat of the 
President's immigration legislation initiative because people 
believed that if the Federal Government could not do something 
simple like issue passports, how in the world could it ever 
implement the changes that were contained in the proposed 
immigration laws.
    There are times when I have asked myself, Mr. Chairman, 
whether we did good when we created the Department of Homeland 
Security, when we merged 22 agencies, over 200,000 people, with 
several of those departments in trouble already, and with 
different cultures. I have seen what has resulted of that. As 
we look back on it, I really wish that the Administration had 
been a little bit more aggressive in saying that maybe we were 
biting off too much.
    That is probably the biggest management change in the 
world. No corporation would ever have undertaken it. Compared 
to what we did with the Defense Department, at least there were 
some strings that went through the various Defense agencies. 
Here, we were trying to put together lots of departments, and 
so I think that there may be a day when we are going to have to 
look back and say whether we did this right and maybe look at 
maybe breaking some of that consolidation up.
    While I am told passport issuance problems have been 
resolved, I am interested in learning what steps the 
Departments of Homeland Security and State are taking to ensure 
that travelers don't face similar or worse problems with WHTI 
when we implement it at land and seaports next year. Are we 
going to have another fiasco?
    I am also interested in discussing how these policy changes 
could impact cross-border tourism and trade. I visited the 
Windsor port last summer when I was there with the U.S.-
Canadian Interparliamentary Group and heard about slow 
processing in Canada because of staffing shortages. Imagine my 
shock last week when I met with members of the Canadian 
Parliament Group, who I am going to be meeting with in the next 
several weeks and who told me about the lines and the waiting 
times because of U.S. staffing shortages. I question how we can 
successfully implement policies that could further slow cross-
border travel if we are doing such a poor job now to secure our 
borders in a way that facilitates the free flow of legitimate 
trade and travel.
    Now, I want you to know this is important to States like my 
State of Ohio, where in 2006 there was a $2.7 billion trade 
surplus with Canada--and there are over 500,000 Canadian visits 
to my State. We cannot have more embarrassments and problems 
like those that occurred last summer as the Departments of 
State and Homeland Security worked to implement WHTI at land 
and seaports.
    I also have real concerns about the REAL ID program, and 
Senator Akaka, I think, did a pretty good job in his opening 
statement to lay it out. I am troubled by the significant cost 
REAL ID compliance imposes on the States. I don't know why we 
never raised the issue that this was an unfunded mandate under 
the legislation that Congress passed several years ago. 
According to DHS regulations, REAL ID compliance is expected to 
cost States almost $4 billion, yet only $90 million has been 
appropriated for REAL ID grants to States to date. This is a 
small sum when you consider that Ohio estimates that its 
initial cost of compliance will be $15 million.
    I am also concerned about the fact that the Department of 
Homeland Security's regulations indicates States should utilize 
databases like the Electronic Verification of Vital Events 
System, to verify REAL ID applicants' information, even though 
DHS acknowledges that this and other systems are not ready for 
full implementation. What I am saying is there are six 
databases that are important to issue these REAL ID cards and 
those databases aren't even all up. When are they going to be 
up? I question how we can go forward with a proposal that asks 
a State to utilize systems that are not there.
    As we implement the 9/11 Commission recommendations, we 
must do so in a way that is intelligent, thoughtful, and 
involves good management practices. We cannot proffer 
artificial measures that will do more harm than good. Further, 
we must allocate the resources necessary to implement the 9/11 
Commission recommendations. In other words, are we giving you 
the resources that you need to do the job that we are asking 
you to do?
    I look forward to hearing from you today and I thank you 
for being here. I don't want you to interpret anything I have 
said to say that I don't think both of you gentlemen are doing 
the best that you can, but we have some real problems and I 
want you to know, as a former mayor and as a governor of Ohio, 
I was interested in good management and making sure that 
programs that I was involved with worked smoothly.
    You have a big burden on your shoulders and the real 
challenge is this stuff is not going to hit the fan soon--you 
will be gone. We want to make sure that next year, when a new 
Administration takes over, that it doesn't hit the fan, that we 
are all set. It needs to be smooth, and they will look back and 
say that the Bush Administration did everything that they could 
to make sure they eliminated the glitches so that the baton 
would be passed off smoothly. Thank you.
    Senator Akaka. Thank you very much, Senator Voinovich. 
Senator Tester.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. Thank you, Chairman Akaka, and I want to 
thank both you and Senator Voinovich for allowing me to be at 
the Subcommittee hearing today. I also want to thank both our 
panelists here for being here, Mr. Baker, especially. You have 
got a tough task ahead to defend REAL ID, but I really do 
appreciate you being here.
    I want to echo Senator Voinovich's thoughts. My frustration 
is with the policy. It is not with the people. And whatever we 
say here today is directed at that and not at anybody 
personally, because quite honestly, I have got some pretty 
strong emotions about REAL ID. It is, as I see it, the worst 
kind of Washington, DC boondoggle.
    I think we have folks who really have lost sight of the 
forest for the trees and we are implementing a law, and lost 
track of attaining a goal that we all share, and that is making 
this country more secure. The fact is that we are spending so 
much time on REAL ID that I think it has become a distraction 
from the very serious security challenges that do face this 
country.
    I live in Montana, right next to the Canadian border. We 
still are some 1,500 agents short on the Canadian border, on 
the Northern border. The technology that DHS planned to gain 
control of the Southern border has been shelved because it 
doesn't work and there are still significant other gaps on the 
Northern border, for sure, other than the 1,500 agents that we 
need to be addressing, sooner rather than later.
    Mr. Baker, I have read your testimony and I do think that 
we are looking for the same outcome. You are right that no 
State wants to see its identity documents used in the 
commission of a terrorist act and we need to do what we can to 
prevent such an attack. But the question is really whether this 
is the right way to go about it.
    REAL ID was enacted with no debate or chance to amend it. 
In the 3 years since the law was enacted, it has had all kinds 
of unintended consequences and no benefit whatsoever when it 
comes to making America more secure at this point. It is 
incredibly expensive and complicated. It is burdensome to 
States and individuals alike. And it is being implemented in a 
style that makes ordinary folks cringe.
    It was not possible for any State to comply with REAL ID by 
the statutory deadline, so DHS created a game where they waited 
until more than 2 years after it was enacted before issuing 
rules that said if the States said they were going to comply, 
you would treat them as if they were in compliance. However, a 
number of States sent letters to DHS that specifically said 
they could not or would not comply with REAL ID.
    Montana's Attorney General, for example, wrote, ``Since the 
Montana legislature will not convene again until January 2009, 
I cannot authorize implementation of the REAL ID Act.'' Your 
response to Montana was, ``I can only provide the relief you 
are seeking by treating your letter as a request for an 
extension, and gave my State and others an extension that they 
never requested.
    I might add that the bill that the Attorney General 
referred to that was passed in 2007, I believe was passed 
unanimously to not implement REAL ID, and the legislature is a 
pretty diverse group. To get an unanimous vote is nothing short 
of amazing.
    I am pleased that Montanans were not arbitrarily penalized 
under the law because I think that would have been a big 
mistake, but I really fail to see what this exercise actually 
accomplished other than to leave the details of implementing 
REAL ID to the next Administration.
    In short, the entire process of implementing REAL ID has 
become meaningless. Extensions were granted without cause and 
without any demonstrated security enhancements. Extensions were 
almost denied to certain States despite the fact that many of 
these States had actually done something productive in this 
area. This legal bobbing and weaving has done nothing to 
improve our homeland security.
    But the consequences for States and for individuals are 
very meaningful. They have no idea whether to go forward with 
the database construction, to redesign the drivers' licenses 
and the training of new DMV workers that REAL ID requires. If 
States do, in fact, undertake these costly efforts, they do so 
with no guarantee that the Federal Government will compensate 
their efforts, as has been mentioned earlier here today.
    And for individuals, the price may even be higher. More 
expensive drivers' licenses with more waiting time at the DMV 
may be the least of the individual worries. Above all, creating 
a national ID card--and make no mistake about it, that is 
precisely what this is--will open up countless opportunities 
for an individual's personal information to be stolen or used 
in a way that he or she has not agreed to.
    So as you can probably tell, I am not impressed with the 
REAL ID Act and I am not impressed with how it has been handled 
and I don't have the confidence that things are getting better. 
The Congress really needs to address this issue in a way that 
makes sense for this country and not continue to keep limping 
along from deadline to deadline.
    Chairman Akaka, as he talked about in his opening remarks, 
and others have introduced legislation that would take a new 
approach, giving States a seat at the table, which I think is 
critically important, and capitalizing on the improvements in 
drivers' license security that already have been happening in 
States. I am pleased to support him in that effort as a 
cosponsor of that bill.
    Like I said in my opening remarks, Mr. Baker, we have got 
to play the hands we have been dealt. You have been dealt a 
pretty terrible hand and I don't envy you having to go through 
this. But I look forward to your testimony and I look forward 
to explanation of some of the points that have been brought out 
today by the opening statements and I look forward to the 
questions. Thank you.
    Senator Akaka. Thank you, Senator Tester. Senator Coleman.

              OPENING STATEMENT OF SENATOR COLEMAN

    Senator Coleman. Mr. Chairman, I am going to yield to my 
colleague from Maine and submit my statement for the record. I 
would just briefly say that as a Northern border State, I have 
been focusing on the Western Hemisphere Travel Initiative, and 
actually, I will associate myself with the comments from my 
colleague, Senator Voinovich. I have a lot of concerns--I have 
traveled to Northern Minnesota--with some of the new rules 
regarding passports and drivers' licenses, and hopefully there 
is better communication now, but we have got to do it right. I 
look forward to the testimony.
    With that, I yield to my colleague from Maine.
    [The prepared statement of Senator Coleman follows:]

             PREPARED OPENING STATEMENT OF SENATOR COLEMAN

    I want to begin by thanking the Chairman and Ranking Member for 
holding this important hearing today on the Western Hemisphere Travel 
Initiative and REAL ID. WHTI is an issue I have been closely working on 
for many years now as a member of this Committee and as the previous 
Chairman of the Foreign Relations Western Hemisphere Subcommittee.
    Despite some frustrations and bumps along the way, I believe there 
has been some encouraging progress in recent months with the extension 
of the final deadline and the new passport card option for land and sea 
travel. I was also thrilled the State Department announced the addition 
of a walk-in, same day service passport office opening in the Twin 
Cities at the end of this year or early next year. I am hopeful the 
State Department will issue passport cards at this facility as well.
    The WHTI Final Rule will go into effect in a little more than a 
year and I want to be sure DHS and the State Department are doing what 
is necessary to continue to ease the burden on our constituents, 
especially those who live on the border. To that end, I have signed on 
as an original cosponsor to legislation that will be introduced by 
Senator Collins that would require DHS to establish temporary mobile 
enrollment teams in communities along the border for the purpose of 
assisting U.S. citizens in applying for passports and passport cards. 
This is an issue we developed together last year and would be another 
great step to help our border communities.
    I've worked hard to raise awareness on the issues I've heard from 
folks and businesses along the border with respect to WHTI. I am 
looking forward to hearing from our witnesses what is being done to 
effectively communicate what documents will be needed to cross the 
border in June 2009 and how they can obtain them. One of the biggest 
concerns I've heard throughout the entire WHTI process has been the 
lack of communication that has accompanied the many changes. I am also 
interested to hear how the new birth certificate requirement is 
impacting border crossings and what is being learned from the changes.
    Earlier this year, I visited the International Falls border to do a 
crossing for myself to observe the process firsthand and was pleased 
with what I experienced. That being said, we are on the doorstep of 
some of our busiest border crossing months and DHS and the State 
Department have a great opportunity to reassure folks through their 
conduct that the June 1st implementation date can go smoothly. We must 
not waste this opportunity. I look forward to hearing the testimony of 
our witnesses and thank them for participating in this hearing.

    Senator Akaka. Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman, and thank you for 
holding this important hearing.
    The attacks on our country on September 11, 2001, focused 
our attention on the security of our borders and the security 
of our identification documents. Recommendations for stronger 
border security and authentic drivers' licenses were proposed 
by the bipartisan 9/11 Commission. Both the Western Hemisphere 
Travel Initiative and REAL ID have been flawed programs, 
however, despite their worthy goals.
    In the case of the WHTI, the Department of Homeland 
Security has not been sufficiently attuned to how important 
cross-border travel is to the everyday lives of those who live 
in border communities. In the case of REAL ID, the Department 
has not yet resolved longstanding privacy and funding concerns.
    Meeting the challenge of securing the homeland requires 
that our borders be closed to our enemies but open to our 
friends. Along the Northern border, and in Maine in particular, 
that principle has special meaning. Our Nation's border with 
Canada has long been criss-crossed with the strands of kinship, 
friendship, commerce, health care, and other shared activities. 
Border crossings are a routine part of daily life in the cities 
and towns along our borders and they are vital to the economies 
of communities on both sides of the border.
    The Aroostook Valley Country Club in Northern Maine is a 
perfect example of just how integrated border communities are, 
so I want to describe it to my colleagues. This golf course 
literally straddles the border of Maine and New Brunswick. The 
pro shop and the parking lot are on the American side of the 
border, while the golf course and the clubhouse are on the 
Canadian side of the border. Members and guests from both 
countries come and go and have done so for more than 80 years. 
Recently, however, the Border Patrol blocked the road leading 
from Canada to the golf course. This inconvenienced local 
residents, and once the golf course opens for the year, there 
is a great deal of concern that it could actually endanger the 
very existence of the course.
    The challenges associated with the Aroostook Valley Country 
Club are similar to those at numerous other border communities. 
I have urged Customs and Border Protection to devise common-
sense solutions to border security issues, accommodating 
legitimate travel and trade while preventing entry by those who 
would do us harm.
    The Western Hemisphere Travel Initiative similarly poses 
burdens beyond mere inconvenience. While DHS has taken some 
important steps to accommodate legitimate concerns, such as 
adopting the long-held view of Senator Coleman and myself that 
it should not require children traveling with their parents to 
carry passports, more needs to be done to relieve the financial 
and commercial burden that the Initiative will place on our 
Nation's border residents.
    A positive step was the recent development of a passport 
card for land border crossings at half the cost of a passport. 
Its $45 cost is certainly an improvement. However, for a large 
low-income family, it still poses a significant burden. 
Reducing the cost of this document, having adequate port of 
entry staffing and infrastructure, and ensuring that the public 
is fully aware of the Initiative's document requirements are 
necessary steps that must be taken before WHTI goes into 
effect.
    That last point about communication is particularly 
important. I have heard time and again from people in the 
hospitality industry in Maine and throughout the United States 
that there is a lot of confusion about WHTI and that confusion 
is discouraging some Canadians from visiting Maine and other 
States.
    Turning from border security to the issue of REAL ID, I 
would note that the effective date for REAL ID has effectively 
been moved to the beginning of 2010, as all 50 States have now 
received extensions of the compliance deadline. These 
extensions headed off what might have been a disastrous day on 
May 11, when citizens of several States might have arrived at 
local airports only to find that their drivers' licenses would 
no longer be an acceptable ID for airport security.
    While these extensions have averted a near-term crisis, 
they do not resolve other problems with REAL ID. For example, I 
remain very concerned about the implementation cost to States 
from what is effectively an unfunded Federal mandate. I also 
continue to be troubled by the potential privacy threats 
associated with the program's information retention and 
verification policies. Many of the problems that States are 
encountering with REAL ID today would have been avoided if the 
original provisions of the Intelligence Reform Act of 2004 that 
Senator Lieberman and I authored had not been repealed.
    The Congress, the Administration, and States now have a 
year and a half to come together to resolve these remaining 
issues. If we fail, December 31, 2009, may see a group of 
States exercising their right to say no to the Federal 
Government. That does not advance the cause of homeland 
security and it does not advance the debate.
    We need to come together to solve the remaining problems, 
and they are real problems. So once again today, I encourage 
the Department to reach out and truly work with State 
officials, technology experts, privacy advocates, and other 
stakeholders, including the Members of this Subcommittee, to 
minimize and address the very real cost and privacy concerns 
that continue regarding REAL ID.
    Again, I want to commend the Subcommittee Chairman and the 
Ranking Member for convening this important hearing. Thank you.
    [The prepared statement of Senator Collins follows:]

                 PREPARED STATEMENT OF SENATOR COLLINS

    The attacks on our country on September 11, 2001, focused our 
attention on the security of our borders and the security of 
identification documents. Recommendations for stronger border security 
and authentic drivers' licenses were proposed by the bipartisan 9/11 
Commission.
    Both the Western Hemisphere Travel Initiative and REAL ID have been 
flawed programs, however, despite their worthwhile goals. In the case 
of WHTI, the Department of Homeland Security has not been sufficiently 
attuned to how important cross-border travel is to everyday life for 
those who live in border communities. In the case of REAL ID, the 
Department has not resolved long-standing privacy and funding concerns.
    Meeting the challenge of securing the homeland requires that our 
borders be closed to our enemies, but open to our friends. Along the 
northern border and in Maine, in particular, that principle has a 
special meaning. Our Nation's border with Canada has long been criss-
crossed with the strands of kinship, friendship, commerce, health care, 
and other shared activities. Border crossings are a routine part of 
daily life in the cities and towns along our borders and vital to the 
economies of communities on both sides of the border.
    The Aroostook Valley Country Club is a perfect example of how 
integrated border communities are. Its golf course literally straddles 
the Maine-New Brunswick border. The pro shop and parking lot are in the 
United States, while the course and clubhouse are in Canada. Members 
and guests come from both countries and have done so for more than 80 
years.
    Recently, however, the Border Patrol blocked a road leading from 
Canada to the golf course. This inconvenienced local residents and, if 
continued, could endanger the existence of the golf course.
    In responding to the challenges associated with the Aroostook 
Valley Country Club or those at numerous other border communities, I 
have urged Customs and Border Protection to devise common-sense 
solutions to border-security issues, accommodating legitimate travel 
while preventing entry by those who would do us harm.
    The Western Hemisphere Travel Initiative similarly poses burdens 
beyond inconvenience. While DHS has taken some important steps to 
accommodate legitimate concerns--such as adopting my long-held view 
that it should not require children traveling with their parents to 
have passports--more must be done to relieve the financial and 
commercial burden that WHTI will place on our Nation's border 
residents.
    A positive step was the recent development of a passport card for 
land-border crossing at half the cost of a passport. Its $45 cost, 
however, is still a burden for low-income families. Reducing the cost 
of this document, having adequate port of entry staffing and 
infrastructure, and ensuring the public is fully aware of the 
initiative's document requirements are necessary steps before WHTI goes 
into effect. That last point is an important one: People in the 
hospitality business in Maine have expressed concern that confusion 
over the WHTI requirement is discouraging some Canadians from visiting 
Maine and other States.
    Turning from border security to securing identification documents, 
I note that the effective date for REAL ID has been effectively moved 
to the beginning of 2010 as all 50 States have now received extensions 
of the compliance deadline.
    These extension headed off what might have been a disastrous day on 
May 11, when citizens of several States might have arrived at local 
airports to find that their drivers' licenses would no longer be an 
acceptable ID for airport security.
    While these extensions have averted a near-term crisis, they do not 
resolve other problems with REAL ID. For example, I remain very 
concerned about the implementation costs to States from what is an 
unfunded Federal mandate. I also continue to be troubled by potential 
privacy threats associated with the program's information-retention and 
verification policies. Many of the problems that States are 
encountering with REAL ID today would have been avoided if the original 
provisions of the Intelligence Reform Act of 2004 that Senator 
Lieberman and I authored had not been repealed by REAL ID.
    The Congress, the Administration, and the States have a year and a 
half to come together to resolve these issues. If we fail, December 31, 
2009, may see a group of States exercising their right to say ``No'' to 
the Federal Government.
    I encourage the Department to work with State officials, technology 
experts, privacy advocates, and other stakeholders to minimize the 
costs and privacy concerns that continue regarding REAL ID.
    I commend the Subcommittee Chairman and Ranking Member for 
convening this important hearing.

    Senator Akaka. Thank you, Senator Collins, for your 
statement.
    I want to welcome our witnesses and thank you for being 
here today. Testifying on our first panel is Stewart Baker, the 
Assistant Secretary for Policy at the Department of Homeland 
Security, and Derwood Staeben, the Senior Advisor on the 
Western Hemisphere Travel Initiative for the Office of Passport 
Services in the Bureau of Consular Affairs at the Department of 
State.
    It is the custom of this Subcommittee to swear in all 
witnesses so I ask you to please stand and raise your right 
hand.
    Do you swear that the testimony you are about to give this 
Subcommittee is the truth, the whole truth, and nothing but the 
truth, so help you, God?
    Mr. Baker. I do.
    Mr. Staeben. I do.
    Senator Akaka. Thank you very much. Let the record note 
that our witnesses answered in the affirmative.
    I would like our witnesses to know that although statements 
are limited to 5 minutes, their entire statements will be 
included in the record. Mr. Baker.

   TESTIMONY OF STEWART A. BAKER,\1\ ASSISTANT SECRETARY FOR 
          POLICY, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Baker. Thank you, Chairman Akaka, Ranking Member 
Voinovich, and Members of the Subcommittee. I am pleased to 
appear before you today and talk about the implementation by 
the Department of Homeland Security of the REAL ID Act and the 
Western Hemisphere Travel Initiative, two initiatives, as the 
Chairman said, that resulted from recommendations of the 9/11 
Commission that are designed to secure identification and 
protect our citizens.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Baker appears in the Appendix on 
page 61.
---------------------------------------------------------------------------
    At DHS, a big part of our job is making it harder for 
terrorists to travel to the United States and we need to do 
that at the same time that we allow innocent travelers to move 
quickly and smoothly to their destinations. Doing those two 
things requires two things in turn: Good information about our 
adversaries, so that we actually know who we should be looking 
for, who should get special scrutiny, and then a good way to 
make sure that they don't change their identities when they 
realize that we are onto them.
    We talk a lot about screening and getting good information 
about who our adversaries are. We have testified about that 
often. We are less often asked about how we can make sure that 
terrorists cannot easily change their identities to avoid the 
scrutiny that we have brought upon them, and so I am very 
pleased to be able to talk today about that aspect of our 
initiatives.
    False identification has long been a threat to the Nation's 
security. For years, loopholes in our identification document 
system have been exploited for purposes of breaking the law. 
Many of us have been victims of identity theft, which is often 
made possible by forged identity documents, and the same 
criminal networks that helped illegal workers obtain fraudulent 
identity cards so that they could use them to obtain jobs, that 
same network also aided the terrorists who attacked us on 
September 11, 2001. Eighteen of the 19 hijackers carried 
government-issued IDs. Many of them were obtained fraudulently. 
This led the 9/11 Commission to conclude that for terrorists, 
travel documents are like weapons, and the Commission made two 
important recommendations, that the Federal Government should 
set standards for the issuance of sources of identification, 
such as drivers' licenses, and that it should ensure that 
people crossing the border are not exempt from carrying secure 
identification.
    To carry out these recommendations, Congress has enacted 
and DHS is implementing two legal requirements. The REAL ID 
sets the standards for security of documents that most people 
use to identify themselves in the United States. Its purpose is 
to make identity theft and fraud by terrorists and others much 
more difficult.
    And the Western Hemisphere Travel Initiative requires that 
everyone entering the United States have a passport or 
acceptable identity and citizenship document. WHTI, as we are 
going to call it, is designed to ensure that when we encounter 
travelers at the border, they have a document that confirms 
their identity and their citizenship, something that is not 
true today.
    I am going to stop reading the prepared statement here and 
turn briefly to something that Senator Tester said in his 
generous remarks, that perhaps this wouldn't be the easiest job 
and perhaps we have been dealt a difficult hand to play. I 
would be lying if I said I thought I was going to have a great 
time for the next hour, but I will say that I am sustained 
because every once in a while, I get a letter like the letter I 
got from Maureen Mitchell from Madison, Ohio, just the other 
day.
    It begins, ``Dear Mr. Baker, as a repeat victim of the 
crime of identity theft, I am writing to offer my support for 
enhancing the security measures for issuing drivers' licenses 
and State ID cards. The State-issued drivers' licenses and 
photo ID cards fraudulently obtained by the identity theft 
criminals in our cases''--she is talking about herself and her 
husband--``were the weapons used to successfully assume our 
identities, wreak havoc on our lives, and fraudulent obtain 
$184,000 worth of goods and merchandise.''
    She goes on to describe the first theft in 1999, when 
criminal impostors were able to fraudulently obtain Illinois 
State ID cards that displayed the criminal's picture and my 
husband's name and data. They obtained $150,000 worth of goods 
with that fraud. She took special measures after that to make 
sure that her bank account was protected and only upon 
presentation of a photo ID was the account to be accessed, and 
yet 2 years later, the bank called her to say, we have some 
unusual activity, and it turned out that there had been four 
fraudulent withdrawals totaling $34,000 from her bank account 
by a woman named Tina Payne, who had an Ohio photo ID card, 
driver's license equivalent, that had Tina Payne's picture and 
Maureen Mitchell's address and date of birth on it.
    She goes on to explain the difficulty that she had clearing 
her name and says in closing, ``Mere words fail to convey the 
life-altering consequences my family and I have endured as 
victims of identity theft. Our good names and personal finances 
are one of the most private and sacrosanct areas of our adult 
lives and they will never be truly restored. REAL ID security 
protocol measures that stop terrorists, ID theft criminals, and 
illegal immigrants from fraudulently obtaining DMV-issued 
drivers' licenses and ID cards are of vital importance to our 
national security, our national economy, and our citizens.
    ``As an ID theft victim and consumer, I will be happy to 
spend a few extra dollars and wait a little longer in the line 
at the DMV to ensure the safety and well-being of my identity 
and our national security. The minor inconvenience is a small 
price to pay for our own sake and the sake of our Nation. Thank 
you for your efforts.''
    So every once in a while, someone sees what we are doing 
and agrees with us and we are delighted to help people like 
Maureen Mitchell by improving the security of the drivers' 
licenses that currently are used by so many identity thieves. 
Thank you.
    Senator Akaka. Thank you. And now we will hear from Mr. 
Staeben.

  TESTIMONY OF DERWOOD K. STAEBEN,\1\ SENIOR ADVISOR, WESTERN 
HEMISPHERE TRAVEL INITIATIVE, BUREAU OF CONSULAR AFFAIRS, U.S. 
                      DEPARTMENT OF STATE

    Mr. Staeben. Chairman Akaka, Ranking Member Voinovich, and 
distinguished Members of the Subcommittee, thank you for this 
opportunity to discuss the role of the Department of State in 
implementing the Western Hemisphere Travel Initiative to 
enhance the security of our borders and facilitate legitimate 
trade, travel, and tourism.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Staeben with an attachment 
appears in the Appendix on page 68.
---------------------------------------------------------------------------
    Our primary role is to provide American citizens with 
passports and soon passport cards so they can comply with the 
new travel document requirements that take effect on June 1, 
2009.
    Our increased workload indicates that Americans are already 
well aware of the new requirements. In fiscal year 2007, we 
issued 18.4 million passports, a 50 percent increase over 
fiscal year 2006 and an 80 percent increase over fiscal year 
2005. Currently, more than 89 million Americans have passports, 
roughly 28 percent of our population. Thus far in fiscal year 
2008, we are seeing a 7 percent increase in receipts over the 
same time period last year and our processing time is well 
within the standard 4 weeks for routine service and 2 weeks for 
expedited service.
    Our initial workload projections indicated demand for U.S. 
passports could reach as high as 26 to 29 million this fiscal 
year, 30 million in fiscal year 2009, and 36 million in fiscal 
year 2010. Although we continue to prepare for a possible 26 to 
29 million this year, our current workload indicates that it 
may be more in the range of 20 to 21 million. Although this 
lower demand may be due to recent legislation extending the 
implementation date, we fully expect to see an increase in 
demand in the months leading up to June 1, 2009.
    To meet the passport demand generated by WHTI, we are 
building the necessary staffing levels and infrastructure. To 
that end, we have hired hundreds of new passport adjudicators 
and support staff since spring of 2007 and are continuing our 
recruiting efforts into 2008 and 2009.
    We opened the mega-passport center in Hot Springs, 
Arkansas, 1 year ago to process 10 million passport documents 
per year and we are opening a second printing and shipping 
facility in Tucson, Arizona, this month with the same capacity, 
for 10 million documents. We are also opening three new 
passport agencies in Detroit, Dallas, and Minneapolis to better 
serve our border communities. We are expanding our agencies in 
Seattle, Miami, and Chicago, and we are doubling the size and 
adjudicative capacity of the National Passport Center in 
Portsmouth, New Hampshire. We have also established a reserve 
corps of passport adjudicators to supplement our full-time 
passport services staff during demand surges.
    One of the key objectives of the Department is to ensure 
that the passport application is as convenient as possible. The 
most convenient way to apply for a passport is at a Passport 
Acceptance Facility. Currently, there are more than 9,400 sites 
at post offices, clerks of court, and other government offices 
nationwide where citizens can apply for a passport. Since April 
2005, when WHTI was announced, the Department has added more 
than 2,400 facilities, many of which are located along the 
Northern and Southern borders. In fact, there are currently 301 
acceptance facilities located within 25 miles of the U.S.-
Canada border and 128 acceptance facilities located within 25 
miles of the U.S.-Mexico border.
    In response to the needs of the border resident communities 
for a more portable and lower-cost alternative to the 
traditional passport book, the Department will begin issuing 
passport cards this June. To meet the operational needs of 
Customs and Border Protection, the passport card will contain 
vicinity-read RFID technology to facilitate entry and expedite 
document processing at U.S. land and sea ports of entry. This 
card is the result of an interagency effort to produce the most 
durable, secure, and tamper-resistant card possible to the 
American public using state-of-the-art laser engraving and 
security features.
    The Department has benefited from the collaborative 
efforts, among others, of the National Institute of Standards 
and Technology, Sandia National Labs, DHS's Forensics Document 
Lab, and, of course, our colleagues at Customs and Border 
Protection Agency. In consultation with DHS's Forensics 
Document Lab, the card is designed with multiple layers of 
overt, covert, and forensics security features to guard against 
tampering and counterfeiting and to provide easy visual and 
tactile verification to Customs and Border Protection officers. 
It is important to note that there is no personal identity 
information on the RFID chip, only a unique number that points 
to the bearer's file in a secure government database. To 
mitigate the risk of tracking, the card will be issued with a 
protective sleeve to prevent unauthorized reading of the chip.
    To encourage Americans to apply for passports and cards and 
to level demand during our traditional peak season, we began 
accepting applications for the passport card on February 1, 
2008. As of yesterday morning, we have received 192,000 
passport applications.
    Public outreach, of course, is a key to successful 
implementation of WHTI. The Department awarded a contract to a 
marketing firm on March 3, 2008 to help inform Americans about 
WHTI requirements, the new passport card, and the differences 
between the card and a traditional book, and to encourage 
Americans to apply early for their documents.
    As we move toward full implementation of WHTI, we and our 
colleagues at DHS will continue our public outreach efforts, 
particularly in border resident communities, and will continue 
our outreach to business associations and stakeholder 
organizations. We, like our colleagues at DHS, are committed to 
implementing WHTI in a rational, intelligent manner, one that 
facilitates trade, travel, and tourism while enhancing our 
national security.
    I thank you again and I look forward to your questions.
    Senator Akaka. Thank you very much, Mr. Staeben.
    Mr. Baker, as you know, the REAL ID Act states that 
individuals who do not possess a REAL ID-compliant driver's 
license or identification card cannot use it to fly or enter 
Federal buildings. Therefore, Americans without REAL ID cards 
could be subject to secondary screening at airports. Given the 
number of States that have passed laws against REAL ID 
compliance, this could lead to major disruptions for the 
airline industry. Can you tell us what steps you are taking to 
ensure that TSA is prepared to handle the possible increase in 
secondary screening after December 31, 2009?
    Mr. Baker. As you know, we faced the prospect as early as 
May of this year that we would be doing that, and at the time, 
there were a number of States who had expressed opposition to 
REAL ID, several who said that they would not implement it, and 
we were in the process of preparing to handle the additional 
screening requirements on May 11 of this year.
    As it happens, and I think for very good reason, all of 
those States found a way to comply with the security 
requirements or to assure us that they are moving toward 
compliance with those security requirements, notwithstanding 
their statements and their legislation saying that they would 
not implement REAL ID.
    We expect that was a very practical solution. It has 
improved the security and put a number of drivers' licenses and 
put a number of States on a path to substantially increase the 
security of their licenses by the end of 2009. We expect that 
the same thing will happen in the run-up to December 31, 2009. 
States faced with the question, do I want to improve the 
security of my drivers' licenses or do I prefer less-secure 
licenses that people can't use to get on planes without going 
through secondary screening, have chosen to improve the 
security of their licenses? We fully expect them to do the same 
at the end of next year, which is what they did this year.
    Senator Akaka. So did you have a backup plan for TSA?
    Mr. Baker. I am glad to respond in a little more detail. 
Obviously, we left ourselves some months between the deadline 
for submitting a request for extension and the actual date on 
which we had to begin implementing REAL ID in the airports of 
the Nation, so we had some months of additional planning that 
we could do and so the planning was at an initial stage.
    But I can say that the plan was to focus first on the 
airports that were in the State that failed to meet the 
standards because we expected to see the largest number of 
licenses there. That is the largest amount of and most 
difficult planning. And we were considering a number of 
possible measures to separate the people who had good drivers' 
licenses or good ID from people who were unable to produce 
licenses or ID that met the standards of REAL ID.
    Senator Akaka. As I mentioned in my statement, I am 
concerned about the network of networks that will emerge 
connecting State motor vehicles offices with each other. In its 
final regulations, DHS mentions the Commercial Drivers License 
Information System run by the American Association of Motor 
Vehicle Administrators as a model for this network of networks. 
AAMVA claims that all of the information in CDLIS is owned by 
the States. Assuming that the laws governing CDLIS will also 
apply to the REAL ID State network, can you tell me what 
privacy laws govern the information in CDLIS, and if CDLIS is 
breached, what rules apply to protect drivers whose personal 
information is compromised?
    Mr. Baker. There are Federal privacy laws that actually 
apply directly to State DMVs, including the information that 
would be stored and handled through the systems. In addition, I 
would expect that any other State laws that provide for privacy 
of that data would provide for, say, notification of breach. I 
think that 40 or more States now have laws requiring 
notifications of breaches of personal data. I believe that the 
great majority of them apply to government agencies as well as 
the private sector so that you would expect notification of 
those breaches in accordance with State law.
    Senator Akaka. Mr. Baker, cost is a major issue for States 
in determining whether to comply with REAL ID. Allowing States 
to use up to 20 percent of their Homeland Security grants to 
pay for REAL ID is, in a way, a hollow solution. It is 
essentially robbing Peter to pay Paul. Of the approximate $80 
million in REAL ID grants available today, how much does DHS 
plan to give to States for development of the State motor 
vehicle hub and how much will be set aside for the other 
elements of REAL ID, such as improving card security and 
operational or maintenance costs at State DMVs?
    Mr. Baker. I think that is an opportunity to talk a little 
bit about the funding that we have made available. Hundreds of 
millions of dollars has been made available through the 20 
percent rule, and while States may say, well, we would prefer 
to spend that money on something else, it is nonetheless 
available to offset the costs of REAL ID.
    In addition, we have received $90 million in appropriations 
for grants. We have asked for, I believe, $110 million in 
fiscal year 2009 as well as an additional $50 million to pay 
for IT costs that will benefit the States overall.
    We currently have, as you said, about $80 million that is 
available in a grant program that we will be making available 
to States. We are still examining the question of how much we 
believe a hub would cost. We continue to be attracted to the 
idea of putting grant funds into the hub because, as I believe 
others have said, one of the concerns is that we need 
connectivity to several databases. The databases need to be 
available to all States so that the States can get access to 
that information to verify the particular documents they see. 
Therefore, we know all States will benefit from the 
construction of a mechanism for them to talk to all of these 
databases and no one today has that connectivity. So it is 
valuable and supplemental to existing expenditures.
    So we expect to fund the construction of that connectivity 
as part of the grant program. Some of that connectivity will 
likely be, in effect, paying the cost of individual States to 
hook up to the database, to the hub. That money could be spent 
centrally or it could be provided to the States so that they 
can make the hook-up on their own. We are still looking at that 
possibility.
    Senator Akaka. Thank you. Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    Mr. Baker and Mr. Staeben, as you know, I am unhappy with 
the passport issuance problems that resulted from the 
implementation of WHTI at airports and I am extremely concerned 
that we will have similar problems with the implementation of 
WHTI at land and seaports. I am equally concerned with Homeland 
Security's plans to implement the REAL ID Act. Will you or 
representatives of your Departments commit to briefing me and 
perhaps other Members of this Subcommittee on the strategic 
written plans for implementing WHTI and REAL ID, including how 
the programs will be transitioned to a new Administration and 
who will manage the program throughout the transition? I am 
really concerned who is going to carry it on. You are going to 
be gone, and who is going to take care of moving that program 
forward?
    And also, on the issue of costs, how are they being 
estimated and how are they being funded? I am extremely 
concerned about the amount of money that is in the 2009 budget 
and whether or not it is adequate for you to get the job done. 
Senator Akaka and I are very concerned about the handing off of 
the baton to the next Administration so it is not dropped.
    Mr. Staeben. Thank you very much for that question, sir. 
Yes, on behalf of the Bureau of Consular Affairs and the State 
Department, I would commit to briefing you and any other 
members on your staff on our long-term strategy, our plans in 
order to meet the passport demand that will be generated by 
WHTI, as well as to discuss our transition plans for the next 
Administration.
    I would also like to say that after we returned to our 
normal processing levels last fall, we took a very intensive 
review of all aspects of passport operations, from 
infrastructure, staffing levels, lockbox operations, call 
center operations, IT connectivity, printer capacity, as well 
as the number of acceptance facilities around the United States 
in order to take the necessary steps to see that what happened 
last year does not happen again. We are currently building our 
infrastructure and our staffing, as I mentioned in my 
testimony, in order to meet an anticipated 26 to 29 million by 
next year and 36 million by 2010.
    As far as you asked about funding, in 2008, we submitted 
Congressional notification for additional funding to meet--when 
we learned that initially we could be facing 26 to 29 million, 
we asked for additional funding. We currently have authority to 
hire upwards of 700 additional passport adjudicators this 
fiscal year. And the other point is in terms of long-term 
funding, with Congress' assistance and the Passport Services 
Enhancement Act of 2006, we obtained a funding stream to help 
us to fund the additional passport requirements that would be 
generated by WHTI.
    Mr. Baker. Senator, of course, I would be glad to commit to 
brief you on our transition plans for both of those programs. 
As you know, we have taken the transition, which will be DHS's 
first transition, very seriously. We have done a lot of 
planning. I have personally designated career officials who can 
carry over in the transition period because, of course, we know 
that in the past, terrorists have exploited power transitions 
and we don't want to see that happen again.
    Senator Voinovich. Have you personally visited various 
places on the Canadian border to see what is going on? I have 
to tell you that the Canadian Parliamentarians that we have met 
with have voiced some great concern about the lines and it 
seems the mismanagement. There is supposed to be a line 
apparently for commercial vehicles that is faster than the 
other and it stacks up. They just are very critical of the 
operation. Have you actually been up there to spend some time, 
to see it and----
    Mr. Baker. I have, and it is true that we have special 
lanes with readers, in fact, using RFID in order to move people 
faster. If the lane for the folks with the registered traveler 
cards is blocked by traffic, then it is--until you get to that 
lane, you don't get the benefits of being a registered 
traveler. However, I have to point out that the lanes leading 
up to the United States are in Canada and at the end of the 
day, the Canadians will have to make the decision to build 
infrastructure that allows those lanes to extend far enough for 
travelers to get the benefit.
    Senator Voinovich. I would like, because we are going to be 
getting together in the next couple of weeks with the 
Canadians, I would love to have your appraisal of where we are 
and also what you believe to be their responsibilities on how 
they could help us facilitate----
    Mr. Baker. Absolutely.
    Senator Voinovich [continuing]. This effort. And you 
understand that Canada is the No. 1 trading partner for 36 of 
our States. It is our biggest trading partner. We have this 
unbelievable surplus with Canada. Our economies are 
intertwined. We have a place called Cedar Point that gets an 
enormous number of folks coming down from Canada and they are 
concerned about their business. This is a big deal and we 
certainly want to make sure we secure the borders. But we have 
got to make sure that in the process of doing that, we do not 
stymie this economic vitality that is going on between our 
respective countries and also just the travel and tourism 
aspect of this, which is very important to both of our 
countries.
    It is my understanding that these databases for REAL ID 
aren't up and it would seem to me that before you would ask 
States to implement the REAL ID program, that you would wait 
until those databases are up and then say, now they are up, 
they are available, and give States a reasonable time to comply 
now that they have all of the information they need to really 
do the kind of job that they should be doing. Why we aren't 
doing that is one question.
    And the other question is, don't you think that if we are 
asking the States to do this that the Federal Government ought 
to pay for a good part of the infrastructure that they are 
going to have to put in initially to make this happen? I mean, 
that is a major part of the push-back. You are asking States to 
come in with an enormous investment on something and saying it 
is your responsibility when this is more than just the States' 
responsibility. It is the Federal Government's responsibility. 
We have mandated this in this legislation.
    Mr. Baker. Two thoughts. On the databases, we have indeed 
given States extra time, recognizing that the databases are not 
up. Nothing that is required right through the end of 2009 
requires them to utilize databases that are still under 
construction. During the next year or two, we expect, with the 
funding that we are going to be releasing, that many of these 
databases will be available. Already, the Electronic 
Verification for Vital Events has probably doubled or tripled 
the----
    Senator Voinovich. But what I am saying is you are going to 
ask--you are saying to me, go ahead and do it now with the 
databases that are in existence. Aren't you going to come back, 
or we are going to come back and say, now they are all up. Now 
do it over again.
    Mr. Baker. No. None of the things that we are asking States 
to do now are redundant of the things that they will be asked 
to do once the databases are available.
    And if I could just briefly, I will address the funding 
question. Yes, we do believe that the Federal Government should 
provide assistance to the States and we have provided, as I 
said, made available hundreds of millions of dollars, some of 
it directly focused on REAL ID to the tune of close to $200 
million, if our fiscal year 2009 request is granted. So we are 
bearing a substantial part of the financial burden.
    How much more this will cost is actually still to be 
determined. We all are using very speculative data that was 
originally provided to us by the States when they were asked, 
how much do you think this is going to cost you. They told us, 
and all of us have been using that data since. So until we can 
get some good data about the actual expenditures, we think we 
have provided a very substantial part of the cost already.
    Senator Voinovich. My time is up. Are we going to have 
another round?
    Senator Akaka. I will have another round, yes. Senator 
Tester.
    Senator Tester. Yes, thank you, Mr. Chairman.
    I kind of want to follow up on Senator Voinovich's 
questions here, and then we will go a different route later. 
Mr. Baker, you talked about hundreds of millions of dollars for 
REAL ID have been requested and in some cases appropriated, and 
$200 million is a lot of money. But we are talking about a $10 
billion program. If my math is right, if you had a program that 
cost $1,000, we are talking about $20 to $30, to put it more in 
layman's terms.
    So you are right on one hand that there have been hundreds 
of millions of dollars requested or that has actually come to 
fruition, but on the other hand, you are talking about a $10 
billion program, and $100 million here and $100 million there 
isn't going to get it done. Could you respond to that?
    Mr. Baker. Yes, I will be glad to. Many of the costs that 
we saw in this program have to do with how rapidly people are 
processed, how soon you require people to come in and renew 
their licenses, and we have substantially reduced that cost by 
providing the States with a longer period to bring people in 
and by allowing them to extend for people over 50 for a very 
substantial period of time so that they can get a lot of the 
under-50s through their system in a reasonable time. That is 
going to greatly reduce the cost. In addition, of course, we 
have provided additional funds.
    We will be asking the States, I think, to give us better 
estimates of the costs, but I think we heard an estimate of $15 
million from, I think, the State of Ohio as a cost. We have 
heard numbers on the order of two to five from other States. 
That doesn't add up to $10 billion.
    Senator Tester. OK. So how much less would you anticipate 
it being for overall implementation of the program?
    Mr. Baker. It is hard to know. If you took a $10 million 
cost from one State and you multiplied that by 50, you would be 
looking at $500 million.
    Senator Tester. OK. It is interesting. I just want to talk 
about the 20 percent rule just for a second. The President 
requested cuts in Homeland Security funding for the States from 
$550 million to $200 million. Twenty percent of that can be 
used for REAL ID to set up databases, background checks, DMV 
employee checks, countless other mandates. For Montana, that 
would amount to about $160,000, because we get about $800,000 
total. Twenty percent of that is $160,000. I have got to tell 
you, by Montana terms, where a dollar does go quite a ways, 
that is a mere pittance. Any thoughts about how that can be 
rectified?
    Mr. Baker. Well, I understand you are using the figures 
that the Administration proposed for substantially reducing 
that particular program----
    Senator Tester. That is right.
    Mr. Baker [continuing]. At the same time that the 
Administration proposed $160 million worth of funding directly 
for REAL ID. A $110 million of it would go straight to the 
States and presumably Montana's share of that would be 
substantially more than $160,000.
    Senator Tester. OK. Well, you get to my concern. My concern 
is the same concern probably--well, I shouldn't say 
exclusively, but the funding part of this is a big issue for 
States.
    I want to talk about encrypting data on the card. There is 
nothing put in the final regulations about it. Do you see it 
that the information has to be encrypted, or should it not be 
encrypted, or should it be encrypted, or what is going on 
there?
    Mr. Baker. We did not approach this with a priori sense of 
what the right answer was, but when we talked to law 
enforcement, they raised real questions about the value of the 
machine readable zone for them if it was encrypted. You can 
imagine, if you are a Montana State Trooper and you stop 
someone in the middle of a long empty highway drive, you need 
to be able to read that information quite quickly, and if you 
have to try to find an encryption key, it is not going to be 
easy.
    Senator Tester. I get that, but when you talk about the 
Maureen Mitchells of the world, if it is not encrypted, that 
means that bar owners--I am not saying they are bad folks--
clubs, people on the Internet that want to get one of these 
machines, and I think from my perspective that opens up 
identity threat to a much greater risk.
    Mr. Baker. Well, the information that is on the machine 
readable zone is the same information that is on the face of 
your driver's license. It doesn't include your Social Security 
number. It includes your name, address, date of birth. That is 
information that is very hard to hide in an Internet age, and 
the notion that somehow because it is on a machine readable 
zone it will become more available to identity thieves is, I 
think, pretty speculative.
    Senator Tester. Well, as long as you want to bring that up, 
you have 17 requirements. One of those requirements is, in 
fact, a Social Security number on the card, No. 4. Required 
documentation, date of birth, Social Security number, address 
of principal residence, and habitancy of lawful status.
    Mr. Baker. That is the information that must be provided to 
the Department of Motor Vehicles. It does not----
    Senator Tester. But it doesn't need to be on the card. OK.
    Mr. Baker [continuing]. Need to be on the card.
    Senator Tester. Let me ask you about folks in Montana, a 
couple issues. We get our drivers' licenses mainly by mail, is 
there any difficulty there?
    Mr. Baker. Certainly not mailing it out----
    Senator Tester. As far as security, as far as that kind of 
stuff?
    Mr. Baker. We have not tried to restrict central issuance 
of drivers' licenses because central issuance saves States a 
great deal of money and can provide more security.
    Senator Tester. OK. In Montana we have centralized 
Department of Motor Vehicles, places where you go to get your 
drivers' licenses. We also have a lot of places that may be an 
afternoon once or twice a month where DMV employees go out to a 
public building usually and take the tests and that material is 
gathered up in a room very similar to this one. Is there a 
problem with that?
    Mr. Baker. I think not, from what I understand of the 
process as you have described it. That is to say, people will 
be collecting the information and then mailing out the 
licenses. That should be something that can be accommodated 
under REAL ID.
    Senator Tester. OK. Does it concern you at all that after 
all is said and done, we are really not going to have anything 
until 2017 for sure everywhere, and that means if there are 
gaps--that is 16 years after the terrorist attack on September 
11, 2001. Does it concern you at all that we are extending out 
that far for this particular item?
    Mr. Baker. Obviously, we would love to be able to wave a 
magic wand and have everybody have good ID today, but we know 
that the biggest expense the States have was the process of 
bringing people in. So if we are going to reduce the cost, we 
have to extend that period. What we did is we said that 2017 is 
when the last person over 50 is going to get a REAL ID. 
Everyone under 50 will have it in 2014. We will be issuing the 
first of those completely compliant in 2011. That means that we 
will be able to check the IDs with confidence by 2014 of 
everyone under 50, and if you have to make a priority, I think 
that is an appropriate----
    Senator Tester. So the extensions are done to save money?
    Mr. Baker. If we could get this faster without breaking the 
bank for the States, we would be delighted to do it faster.
    Senator Tester. OK. Well, even 2014 is a ways out there. I 
mean, I will be pushing 60 by 2014. That is how far it is out 
there. [Laughter.]
    Thank you, Mr. Chairman.
    Mr. Baker. It is not that bad, Senator. [Laughter.]
    Senator Akaka. Thank you very much, Senator Tester.
    I will call now on Senator Collins, followed by Senator 
Coleman. We will have a second round of questions. Senator 
Collins.
    Senator Collins. Thank you, Mr. Chairman.
    I want to pick up, Mr. Baker, on the cost issue because 
this is of tremendous concern to our States and the 
Department's suggestion that States use a portion of an already 
inadequately funded State Homeland Security grant program just 
is not a sufficient answer. The cost to States of implementing 
REAL ID by the Administration's own estimate is expected to be 
approximately $4 billion over 10 years. Both the National 
Governors Association and the National Conference of State 
Legislatures have recommended that $1 billion be appropriated 
this year to assist States in improving the security of their 
drivers' licenses, a key part of REAL ID.
    So first, let me ask you, does the Department support such 
an appropriation, a targeted, earmarked--at the risk of using a 
word that is in disfavor in Washington, but a targeted $1 
billion appropriation for compliance with REAL ID?
    Mr. Baker. The Administration has supported targeted 
funding for REAL ID. The Administration budget put forward, as 
I said, $110 million in grants and another $50 million in in-
kind contribution from the Federal Government. It did not 
include the numbers that you are talking about, and obviously 
at this point the determination of the size of the grant is 
going to be determined by the Congress and not necessarily by 
our recommendation. But at this stage, our recommendation is 
that there be a targeted program, but the number that we would 
use is $110 million plus the $50 million.
    Senator Collins. See, that number puzzles me because the 
Department's own analysis suggests that far more is required to 
help States, especially since there are a lot of expensive 
start-up costs, particularly for States like Maine, like 
Montana, that have had to make sweeping changes in their 
approaches. This is not something that is easily affordable to 
any of our States. So I hope you will work with us to be more 
realistic on those up-front costs because the amount that the 
Administration is proposing does not begin to cover the costs 
that our States are having to incur at a time when the economy 
is poor and State revenues have declined sharply, leaving 
shortfalls in many States.
    Mr. Baker. We will be glad to work with you on this. We 
recognize that the cost estimates have been difficult to arrive 
at with any precision and we will be doing everything we can to 
produce better numbers that are more accurate for you.
    Senator Collins. Well, what would be most helpful is to 
have the Administration actually support our efforts to 
increase the funding for a targeted program, but I am going to 
move on to another issue.
    Your written statement notes that DHS plans to expand its 
mobile enrollment centers for the NEXUS Trusted Traveler 
Program in some of the Northern border States, and Senator 
Coleman and I, in particular, have been pushing for DHS to use 
these mobile centers in our States. If CBP is already deploying 
these teams to the field, why doesn't DHS also instruct these 
teams on how to accept passport card applications? After all, 
these officers are very skilled at reviewing identity 
documents. They could easily pass on to the State Department 
the verified applications for further processing.
    That would allow us to either greatly reduce or eliminate 
the $25 execution fee that first-time applicants have to pay, 
which is more than half the cost of the $45 for the passport 
card. If you could get the passport card's cost down to $25, it 
would be so much more acceptable to our constituents. And it 
seems to me it doesn't make sense to send out these teams--you 
also have TWIC teams that are going out. Why not use these 
mobile enrollment centers as a more full-service approach so 
that we don't have to pay $25 to the Postal Service each time 
one of these applications is handled?
    Mr. Baker. We certainly would support anything that would 
bring down the cost of the card, bearing in mind Senator 
Voinovich's stress that the State Department have the funds to 
handle the load. But I think on the question of the exact 
procedures for gathering the information that is necessary for 
a card, I should defer to Mr. Staeben.
    Senator Collins. Let me broaden the question to you because 
last year's Homeland Security law instructed the State 
Department to develop proposals for reducing that execution 
fee, including the use of mobile application teams, before the 
final rule on WHTI is issued. And the rule has been issued, but 
the State Department has yet to come up with a plan to use the 
mobile enrollment teams. Why isn't there more cooperation 
between DHS and the State Department on this?
    Mr. Staeben. Well, thank you for the question, Senator 
Collins. There are a couple of questions in there. One, on 
February 1 of this year, we did lower the cost of the execution 
fee from its previous $30 to $25. This was after extensive 
discussions with our primary acceptance facility agent, which 
is the U.S. Postal Service, and after these discussions, we all 
agreed to lower it from $30 to $25. The execution fee, of 
course, is the fee that these entities, such as the U.S. Postal 
Service, county clerks of court, charge on our behalf in order 
to cover their costs for processing the acceptance of these 
applications.
    I think from the State Department's perspective, we are 
looking for a more permanent solution in terms of increasing 
our acceptance facilities along the Northern and Southern 
border, which will be more permanent. We already have 301 on 
the Northern border. In fact, there are 17 Passport Acceptance 
Facilities within 25 miles of the Maine and Canada border 
already. We have been working with the Postal Service both to 
increase the number of acceptance facilities along the borders 
as well as to encourage them to conduct more ``Passport 
Fairs,'' which they have been doing very aggressively. I noted 
in discussions with your staff several months ago that they had 
already conducted at least two, I believe, in the State of 
Maine.
    So this is how we are approaching this. That, of course, 
does not preclude discussions with the Department of Homeland 
Security on other possible activities, but I will defer to Mr. 
Baker since that falls under his purview.
    Senator Collins. Mr. Chairman, I know my time has expired 
and I hope my colleague is going to follow up on this, but this 
just does not make sense. If DHS is sending enrollment centers 
out, mobile enrollment centers, which I applaud the Department 
for doing, for both the NEXUS program and the TWIC program, 
surely these individuals who are skilled in reviewing identity 
documents can also handle applications for the passport card 
and thus pool resources here and allow for a significant 
reduction in the fee. This is an example of the left hand not 
knowing what the right is doing, or perhaps knowing but not 
working together.
    Senator Akaka. Senator Coleman.
    Senator Coleman. Let me follow up. First, do you have a map 
showing the Northern border where these various acceptance 
agents are located? I have seen some old maps, at least in 
Minnesota, and the Northern border was pretty empty in those 
areas right by it. Do you have anything that you have 
available----
    Mr. Baker. I did not bring a map of that.
    Mr. Staeben. No, I am sorry. I do not have one with me. I 
can provide that information to you.\1\
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    \1\ The information provided by Mr. Staeben appears in the Appendix 
on page 74.
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    Senator Coleman. Mr. Chairman, I would like to actually 
take a look at that.
    Second, just following up, and this is Minnesota-specific, 
there is a new passport agency that we are opening up in the 
Minneapolis area. If $25 of the $45 cost is an execution fee, 
if folks then apply in a passport agency, does that mean that 
the cost for getting the passport card would be less if they 
are not working with the Post Office?
    Mr. Staeben. The $20 cost of the card is based on cost of 
service study, a requirement to recover the cost of producing 
the card. So the execution fee is just an incentive. Basically, 
it encourages the acceptance facilities to accept these 
passport applications on behalf of the Secretary of State.
    Senator Coleman. What Senator Collins and I are pushing 
here is that if you have ways in which folks get these cards 
without dealing with the Post Office or these acceptance 
facilities--in other words, if you get it directly, if you are 
not dealing with a third party, can we lower the cost? The 
message here is it sure would make a lot of sense, at least in 
my State where we have integrated communities. We have hockey 
teams that go back and forth between Fort Francis and 
International Falls.
    And by the way, the exception for kids is still in place, 
right? Minors will not have to be getting these cards?
    Mr. Baker. That is true.
    Senator Coleman. But then going to the adults, if, in fact, 
you have--as I understand this fee, there are two pieces of it. 
There is the execution fee, it is the administrative cost, and 
then there is the incentive to some of these acceptance 
facilities, Post Offices, for instance. But if folks can get it 
directly, are there ways to get the cost of this card down to 
the $20 or $25, either through the mobile teams that Senator 
Collins has talked about that I support or working directly 
with other facilities where you are not paying the Post Office 
the $25 to $30?
    Mr. Staeben. I would have to discuss this further with the 
Department of Homeland Security----
    Senator Coleman. I would appreciate that discussion, and--
--
    Mr. Baker. And I think you do deserve a more detailed 
answer and we will get it for you. I just want to point out 
that the reason the States are complaining about the cost of 
REAL ID is that it costs money every time somebody shows up at 
the counter and hands you papers and says, ``This proves that I 
am entitled to an identity document.'' Handing that burden to 
the mobile teams doesn't mean that there isn't a cost to doing 
it. There is a cost when the Postal Service deals with it. So 
it won't be free to do something like that. We will examine the 
question of whether it is nonetheless something that can be 
done and what the implications would be.
    Mr. Staeben. Yes. Also, I believe there may be a legal 
requirement to collect the execution fee as part of the 
application process. If it doesn't go to the passport 
acceptance facility, such as the USPS, or to county clerks of 
court, it goes to the U.S. Treasury. So we would have to 
investigate that, as well.
    Senator Coleman. There is no question, there is a cost of 
processing a document, but at least as I understood the 
breakdown, you have the administrative cost and then there is 
this incentive for others who have their own costs. But if we 
can short-circuit that or change that, then perhaps we can 
reach the point where, again, we are paying the administrative 
fee. There is no question about that.
    Let me kind of step back a little bit. When we came to 
January of this year, or last year, the system collapsed. Folks 
didn't really understand that they didn't need the passports at 
that time. We had all this pressure on passports. I dealt with 
thousands of cases in Minnesota, thousands of folks who 
simply--they paid the expedited fee and literally it was months 
before they got a passport. The staff was listening to people 
on Sunday nights before they were leaving on a honeymoon, long-
planned trip, etc., on Monday. I appreciate the fact the 
Department then put in some additional facilities, has 
increased the production capability.
    As we fast-forward now to June 1, 2009, another deadline is 
going to be approaching. How confident are you that we are not 
going to have the disaster that we had at the beginning of last 
year?
    Mr. Staeben. Well, thank you for that question. As I 
mentioned, or alluded to earlier, the plan here is to make sure 
that we have the infrastructure in place as well as the 
adjudicative capacity to meet whatever comes our way, whether 
it be 32 million or 36 million. We also have built in trip 
wires for surge capacity.
    For instance, if we hit the first trip wire, we will draw 
on our reserve corps of passport specialists that we have 
trained. They have other jobs, but we can draw on them, if 
necessary. The second trip wire is remote adjudication, where 
we will draw on the expertise of our consular officers at 
missions abroad to adjudicate renewal cases.
    So everything that we have done and all the steps that we 
have taken are to make sure that, first, we can meet an 
anticipated capacity of 36 million by 2010, and then to build 
in surge capacity so that if it does happen, we can respond 
very quickly and do not have a repeat of last year.
    In terms of informing the American people, particularly the 
border resident communities, we have contracted with this 
company which will begin its bulk outreach campaign probably in 
September, with a follow-up in December. The reason we are 
doing it then is because we are accepting the passport 
applications now for the cards, but we will not begin producing 
those until June. Then it will take a short time in order to 
issue all those cards that have been in the system, so we want 
to wait until September when we will have returned to our 
normal 4-week turnaround time for passport card applications to 
begin informing the border resident communities that the card 
is now out there. You can get it within a short time frame. 
Please apply now. And that still gives us 9 months before June 
1, 2009.
    Senator Coleman. I would hope there would be a very robust 
public communication effort to avoid the kind of confusion, or 
massive confusion that we had last year.
    I see my time is up, Mr. Chairman. There are other 
questions. I know there are other panels and I don't want to 
keep this panel here forever, so I anticipate submitting some 
questions for the record.
    Senator Akaka. Thank you, Senator Coleman.
    Mr. Baker, States are concerned that strings will be 
attached to the REAL ID grant funds. All States could use 
funding to improve the security of their drivers' licenses and 
identification cards, whether they comply with REAL ID or not. 
I would like to know, if a State receives funding under the 
REAL ID grant program, are they required to comply with REAL 
ID? If a State chooses not to comply with REAL ID, will it have 
to repay the grant funds?
    Mr. Baker. We are clearly not going to give REAL ID money 
to States who say that they are going to spend it on a yacht 
for the governor, so we do expect to get the security benefits 
that REAL ID requires from States that take these funds. And 
some States, New Hampshire among them, said--they actually 
received a grant and they returned it because they said, we 
aren't going to comply with REAL ID.
    Since then, I think the States that are looking at this 
question have discovered that they can refuse to comply with 
REAL ID and at the same time implemented all the security 
features that REAL ID calls for. That has allowed a number of 
States, including Maine and Montana, to say while we are not 
implementing REAL ID, we are implementing the security features 
of REAL ID because we believe in security.
    DHS has been flexible and accepted the substance of 
security without insisting on some kind of pledge of allegiance 
to REAL ID and we continue to expect to do that. So I hope that 
we can find a way to improve the security of State licenses, to 
help underwrite the cost of that without having an argument 
about what bumper sticker goes on the car.
    Senator Akaka. Mr. Staeben, in determining its cost 
estimate for REAL ID, DHS estimated that 75 percent of current 
driver's license holders would actually get a REAL ID card. Do 
you believe that those individuals who do not get a REAL ID 
card will instead apply for a passport? If so, what steps are 
you taking to prepare for the increase in passport applications 
from individuals who do not want to or cannot receive a REAL ID 
card?
    Mr. Staeben. Thank you for that question, Mr. Chairman. 
Actually, that was one of the variables in last year's 
experience. We believe that there is a growing demand for the 
U.S. passport for purposes other than international travel, as 
a premiere document for identity and citizenship, and we asked 
the contractor that conducted the survey last summer that led 
to the projections that we were using until the recent 
legislation indicated that we would be at 26 to 29 million and 
there was an attempt, although not particularly successful, to 
get a handle on that number. We are still trying to refine that 
number as to how many are out there applying for a passport 
book or a card for purposes of obtaining Medicaid benefits, for 
purposes of voter registration, or for purposes of compliance 
with the REAL ID.
    But in general, we think that the 36 million is a little on 
the high side, and yet we continue to prepare for that and we 
are--our strategy is to remain flexible so that we can increase 
very quickly if we need to, or we can scale back a little bit 
on our recruiting efforts, if necessary, if in fact the numbers 
aren't coming in as we anticipate.
    As I said, we are also working with the contractor in order 
to conduct yet another survey to follow up on that in order to 
further refine those numbers and get a better understanding of 
how many people will be applying for passport cards, presumably 
since they are less expensive, for purposes other than 
international travel.
    Senator Akaka. Mr. Baker, in light of all of the recent 
stories about personal data privacy breaches, it is 
particularly important that REAL ID be implement with strong 
protections for the privacy of personal data. This is 
especially true because REAL ID essentially requires the 
creation of a national database of driver information to be 
shared between States. Yet the final DHS regulations contain no 
plan to secure the shared driver information. Can you explain 
why the REAL ID final rules did not lay out a plan for 
protecting the personal data that will be accessible in the 
planned databases?
    Mr. Baker. First, we do require States to have security 
plans for the data, and that is an important protection. We 
want to leave room for States to make choices that make sense 
to them on exactly how to implement that to accommodate their 
individual circumstances and how they actually process data.
    In terms of ways to approach this problem for the future 
with respect to the hub, we expect to be addressing that in the 
course of actually deciding how the hub will function and what 
security measures will be in place, but that is a question for 
the actual implementation of the grant and the contracts that 
will produce the hub, and so we certainly do not expect it to 
be without security features.
    Senator Akaka. Mr. Baker, I want to commend your 
Department, acting through Customs, for taking action to 
enforce the Passenger Vessel Services Act on Hawaii's coast-
wide cruises. Maintaining a U.S.-flag cruise industry is 
important to both Hawaii and the Nation as a whole. Not only is 
this important to the State of Hawaii and to the U.S. economic 
and national security, but this issue is important to me 
personally. I hope that Customs will adopt the rule that 
adequately protects markets where U.S.-flag passenger ships 
operate, and that does not have unintended effects elsewhere in 
the United States.
    Has the Department considered implementing a more limited 
rule that specifically addresses the competitive harm to large 
U.S.-flag passenger ships by foreign-flag ships evading the 
coastwide laws in those markets?
    Mr. Baker. Well, Senator, as you know, we have looked hard 
at the possibility of addressing the question of what truly is 
an international cruise and what is not. There have been strong 
objections to the practice of having very brief stops after 
midnight in a single port outside the United States as a way of 
demonstrating that the international component has been met.
    Our proposed solution which we have published attracted 
quite a bit of controversy and we are looking very hard at the 
comments, both favorable and unfavorable, to see how we can 
best come to a final resolution. We are working at that very 
hard and I hope that we will be able to announce something, 
certainly in the next few months.
    Senator Akaka. Thank you, Mr. Baker. I will submit my other 
questions for the record. Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    I would like to know what plans you both have to explain to 
the public the requirements and procedures and documents WHTI 
is going to be requiring and the differences between the 
documents. In other words, I think you need to clarify what is 
going to be required. For example, the passcard cannot be used 
as a substitute for a passport for air travel, and it is 
important people understand that.
    Now, you made some reference before about the passcard. For 
example, I understand that TSA is going to require some day a 
REAL ID as you go through airport security. Would the passcard 
substitute for that REAL ID? If the States aren't going to go 
forward with REAL ID, what is going to happen in terms of when 
people go through and they are asked for their ID and it is not 
a REAL ID, it is my old driver's license from Ohio? Is that 
going to be adequate? There is a lot of questions that are out 
there and it seems to me that you ought to do a lot of work in 
working with travel and tourism, AAA and a lot of other 
organizations to have a plan in place to make sure that the 
information getting out is as clear as possible.
    For example, I understand now that if you are coming from 
Canada to the United States, in the old days, it was an oral 
declaration. Now, I think they are requiring a passcard or a 
driver's license or a birth certificate. Come June of next 
year, it is my understanding that you are going to have to have 
a passcard to come back into the United States or a passport. 
These are things that really need to be clarified so that folks 
understand just what they are going to use these documents for.
    Mr. Staeben. Thank you very much, Senator Voinovich, for 
that question. The passport card was designed specifically to 
meet the needs of the border resident communities. In fact, it 
was as a result of the Advanced Notice of Proposed Rulemaking 
that we issued in 2005. We received over 2,000 comments to 
that. Many of these comments specifically addressed a need for 
a document that was more portable and less expensive than a 
traditional passport book. That is really the genesis of the 
passport card that the Department of State is developing. It is 
not a globally interoperable document and therefore it is not 
under ICAO standards acceptable for the air environment. So we 
designed it specifically to meet the needs of the border 
communities.
    Senator Voinovich. Could it be used as a substitute for a 
driver's license?
    Mr. Baker. Yes, it could. If you are using it to go through 
TSA's checkpoints, we would, of course, accept it.
    Mr. Staeben. The passport card is, by definition, a U.S. 
passport and carries all of the rights and privileges of a U.S. 
passport book. So wherever a passport book would be accepted--
--
    Senator Voinovich. But for air travel, you need to have a 
regular passport?
    Mr. Staeben. That is correct, sir. In terms of public 
outreach, the public relations firm that we have contracted 
that will begin its outreach this September with a follow-up in 
December going to focus specifically on the differences between 
the book and the card so that people understand the 
differences. If all they do is they live in a border community, 
they cross the border, whether it is from Texas into Mexico or 
Maine into Canada, this is their life, then the card would 
probably be the correct document for them.
    Senator Voinovich. For example, I will just interrupt you, 
but we have a lot of folks in Cleveland who tell me that they 
go up to Windsor to gamble. I suspect that the gambling houses 
will tell them they need to get--by June of next year, they are 
going to have to have a passcard if they expect to get back 
into the United States, is that right?
    Mr. Staeben. That would be correct, sir. A passport card 
would probably be the document of choice in that situation if 
all they are doing is driving to Windsor for those purposes. 
If, on the other hand, you live in a border community and yet 
you have occasion to fly, then probably you would want to order 
both a passport book and a card, in which case the card is only 
$20 because it is treated as a renewal. So it is $20 in 
addition to the cost of the passport book.
    The public outreach campaign that we have is going to focus 
on the border resident communities. We look to DHS for the 
broader national campaign. However, we are coordinating very 
closely. In fact, their public relations firm is meeting with 
our public relations firm this week to begin coordinating our 
outreach activities. As I said, we will be focusing more on the 
border resident communities in order to inform them about the 
passport card.
    Senator Voinovich. How about the Canadians? We have Cedar 
Point that just gets a tremendous number of people coming in 
from Canada to take advantage of it. What are those Canadian 
people going to need to get into the United States come June of 
next year?
    Mr. Baker. The Canadian Government has not issued a 
passport card, but Canadian provinces have indicated strong 
interest in following up on the lead of the States in the 
United States who have begun issuing enhanced drivers' licenses 
that have the features of a passport card and can be obtained--
--
    Senator Voinovich. But we are the ones that are going to 
require it. I mean, for people coming in from Canada.
    Mr. Baker. Yes.
    Senator Voinovich. We are going to tell them, you can't 
come into the United States unless you have what?
    Mr. Baker. And we have--well, certainly a Canadian 
passport, also an enhanced driver's license from any of the 
participating provinces. British Columbia is already issuing 
them. Ontario, Manitoba, and others are launched on the 
planning for issuing theirs so that there should be an 
inexpensive alternative to a passport available to Canadians. 
The Canadians by and large have passports at a much higher 
percentage than the United States does, probably double U.S. 
penetration in terms of having passports, so that it may not be 
as necessary for them to have special cards to cross the 
border. They may already have what they need.
    Senator Voinovich. Well, one thing I would just leave with 
you is that we need to do as much as we possibly can to work 
with our Canadian brothers and sisters and try to get the best 
information that we possibly have to each other and make sure 
that things are as clear between us as possible, because I am, 
as I say, very active in the U.S.-Canadian Parliamentary Group. 
I have to tell you that our colleagues in the Canadian 
Parliament are very critical of what we are doing. Now, I 
suspect maybe some of them may be exaggerating it, but if that 
is the kind of feeling that they have, I just wonder whether or 
not you are spending as much time as you should with their 
ambassador here, Mr. Wilson, to make sure that all of the 
details are worked out and clarified so that there isn't a 
bunch of finger pointing next year about not cooperating.
    Mr. Baker. I think we have spent quite a good bit of time 
with Ambassador Wilson and with our Canadian partners, working 
very hard to make sure that information gets out. And in fact, 
it is worth remembering that what happens in June 2009 is the 
third and last stage in the process of imposing more effective 
documents at the border. We imposed a requirement in January 
2007 for everyone who flies to the United States and compliance 
is at 99.8 percent today, and was.
    When people realize you are going to enforce that deadline, 
the word gets out. Every Canadian media outlet was focused on 
that requirement and got the word out. When we imposed the 
requirement--when we got rid of the requirement that you could 
smile your way across the border without any documents, that 
new requirement was imposed in January of this year and while 
there was a lot of, again, what was called earned media, mostly 
consisting of people on both sides of the border predicting a 
disaster, everyone understood that they needed to have a birth 
certificate as well as a driver's license or a passport, and 
again, our compliance with that is above 95 percent today. 
People do come into compliance if they know you are going to 
enforce the deadline.
    And now, I think, we have one last step to take, which is 
to move from the idea that a driver's license and a birth 
certificate is as sufficient as an actual passport. That will 
take some doing. There will be a number of people who need to 
get those documents. We are getting the word out. We are going 
to spend $10 to $15 million over a period of years to make sure 
that word gets out. But our biggest allies in this are the 
people who will be covering it for the media, and we have had 
very good cooperation, if you can call it that, from people in 
the past saying this could be a disaster, watch out, and that 
alerts everyone. They all go out and get their documents and we 
have averted the disaster twice.
    Senator Voinovich. Thank you, Mr. Chairman.
    Senator Akaka. Thank you very much, Senator Voinovich. 
Senator Tester.
    Senator Tester. Yes, thank you, Mr. Chairman.
    I just want to echo the remarks of Senator Voinovich 
because I have heard some of the same, and I hope the meetings 
that you are having with the Canadian officials, are to a 
discussion, because quite honestly, the points that they have 
brought up to me, I hope to bring them up to you and I hope 
that they are not just pushed away. I hope they are addressed. 
I just implore you to do that.
    I want to go back to the Department of Motor Vehicles 
centralized. I asked you a question earlier on the first round 
about if, in fact, there were people that go out to public 
buildings and give the tests. I just want to make sure that 
what I heard was correct, and you said you did not think that 
would be a problem, that they could still go out to remote 
locations, give the test, and send the driver's license through 
the mail back to the applicant. Is that correct?
    Mr. Baker. Yes. I would have to get into the details, but 
if what they are doing is collecting the information so that 
they have the information that would otherwise be collected at 
the DMV----
    Senator Tester. Right.
    Mr. Baker [continuing]. Which I assume they have to do.
    Senator Tester. Right.
    Mr. Baker. Actually, central issuance, in our view, tends 
to be more secure than having multiple places that just print 
the license out on the premises.
    Senator Tester. OK. So what you are saying is they couldn't 
print them out on the premises?
    Mr. Baker. You mean like in the back of the mobile----
    Senator Tester. I mean, if they had--yes, in the back of a 
mobile.
    Mr. Baker. It is not that that is impossible, but it would 
require particular care to make sure that the materials are not 
subject to being diverted, etc.
    Senator Tester. OK. What I need from you, if you could, in 
your free time, if you could just send me a verification that 
this is possible, and if there are any caveats, include----
    Mr. Baker. We will be glad to look at that closely.
    Senator Tester. I would appreciate it because in a State as 
big as Montana, myself, for example, I live 80 miles from the 
nearest one, 50 miles from the one that meets three times a 
week, 35 miles from the one that is open once every month for 
half a day, so it is a big issue.
    Just a quick question and it deals with the September 11, 
2001 terrorists. They were here long after their visas expired. 
Why aren't we putting resources into a system to track and find 
visa overstays?
    Mr. Baker. We are. We have identified and deported more 
people in the last year than I think ever before in the history 
of the United States. And obviously, you have to prioritize 
them because there are a large number of overstays. We have 
just published a rule that will require everyone who comes to 
the United States by air to check out biometrically upon 
departure so that we can compare arrival and departures with 
biometric identification of the identities, which will give us 
a much better picture of who is arriving and who is leaving and 
who is overstaying.
    Senator Tester. That database is already constructed for 
the biometrics?
    Mr. Baker. No. We have proposed the rule. We are hoping to 
get the rule into final form by the end of the year.
    Senator Tester. OK, and so it will be operational when?
    Mr. Baker. The data would begin arriving sometime in 2009. 
It is not that we don't have some idea of who has overstayed. 
We often have some idea of----
    Senator Tester. I understand that, but----
    Mr. Baker. This will improve it, yes.
    Senator Tester [continuing]. To fill all the cracks in, 
that would be done by----
    Mr. Baker. I expect in 2009.
    Senator Tester. OK, 2 years after--2009, that is next year. 
You would have the database done by 2009?
    Mr. Baker. Yes, the plan is to have the data come in----
    Senator Tester. Good for you.
    Mr. Baker [continuing]. And that would allow us to do the 
matching.
    Senator Tester. I think that is great. My last point, and 
it is not a question, it is just a comment. The economic 
impacts, the potential economic impacts of people being able to 
flow across the border, Senator Voinovich talked about a little 
bit, are incredible. From a farming perspective, being able to 
go up into Canada and get repairs where they are not available, 
sometimes down in the States, is huge.
    And the other issue, if there is one good thing about the 
dollar being down, it is the Canadians come across and they 
like to spend money in the United States and they do it. And if 
they can't get across the border or if there is a minimal 
amount of hassle about getting across the border, they won't do 
it, and so we need to minimize the hassle. Thank you very much.
    Senator Akaka. Thank you very much, Senator Tester.
    I want to thank our first panel very much for your comments 
and your statements, as well, and your responses. That will be 
helpful to the Subcommittee.
    Mr. Baker. Thank you, Senator.
    Mr. Staeben. Thank you.
    Senator Akaka. Thank you very much.
    And now I would like to call our second panel. We have six 
members of this panel. Testifying on our second panel are the 
Hon. Donna Stone, a Representative from the 32rd District in 
the Delaware General Assembly and President of the National 
Conference of State Legislatures; David Quam, Director of 
Federal Relations for the National Governors Association; 
Caroline Fredrickson, Director of the Washington Legislative 
Office of the American Civil Liberties Union; Roger Dow, 
President and CEO of the Travel Industry Association; Angelo 
Amador, Director of Immigration Policy at the U.S. Chamber of 
Commerce; and Sophia Cope, Staff Attorney at the Center for 
Democracy and Technology.
    As you know, it is the custom of the Subcommittee to swear 
in all witnesses and I would ask all of you to stand and raise 
your right hand.
    Do you swear that the testimony you are about to give this 
Subcommittee is the truth, the whole truth, and nothing but the 
truth, so help you, God?
    Ms. Stone. I do.
    Mr. Quam. I do.
    Ms. Fredrickson. I do.
    Mr. Dow. I do.
    Mr. Amador. I do.
    Ms. Cope. I do.
    Senator Akaka. Thank you very much.
    Senator Tester. Mr. Chairman.
    Senator Akaka. Senator Tester.
    Senator Tester. I just want to express my regrets to the 
second panel. I have got to go preside on the floor. I will be 
checking out your testimony. I have already read a fair amount 
of it and appreciate your presence here today, and I really 
mean that. I am sorry I have to leave, because I would really 
love to follow up these questions with you guys, too.
    Senator Akaka. Thank you very much.
    Again, I want to thank all of you for being here today. As 
you know, your full statements will be placed in the record.
    Representative Stone, please proceed with your statement.

     TESTIMONY OF HON. DONNA STONE,\1\ PRESIDENT, NATIONAL 
                CONFERENCE OF STATE LEGISLATURES

    Ms. Stone. Good morning, Chairman Akaka, Ranking Member 
Voinovich, and distinguished Members of the Subcommittee. I 
appear before you today as President of the National Conference 
of State Legislatures. Mr. Chairman, thank you for the 
opportunity to testify today on the State impact of 
implementing the REAL ID and the Western Hemisphere Travel 
Initiative.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Stone with attachments appears in 
the Appendix on page 75.
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    State legislators across the country share the goal of 
ensuring the integrity and security of State-issued 
identification and recognize the need to provide adequate 
border protection. We hope to continue the dialogue with you 
and this Subcommittee on these programs.
    While NCSL had numerous concerns with the draft REAL ID 
regulations issued in March 2007, we commend DHS's efforts to 
provide States much-needed flexibility and to reduce State 
costs, per DHS, in the final regulations. However, the road to 
successful implementation is long, uphill, and in some places 
has rocky terrain due to a number of ongoing uncertainties, 
which include most importantly the Federal Government's 
commitment to fund the REAL ID; the connectivity to and 
governance of the databases that States will need to access in 
order to verify the validity of identity documents; the true 
cost of the REAL ID, including the user fees States will have 
to pay when accessing these databases; and the Department's 
recognition of State legislatures' critical role in the 
implementation of the REAL ID.
    I have provided more details on each of these items in my 
written testimony and ask that it be submitted for the record. 
I would welcome the opportunity to discuss them in detail 
during the question and answer period.
    Senator Akaka. It will be included.
    Ms. Stone. In order to address some of these implementation 
challenges, NCSL calls on Congress to repeal the REAL ID Act 
and reinstitute the negotiated rulemaking process created under 
the Intelligence Reform and Terrorism Prevention Act of 2004 
and to fully fund the requirements. Again, while NCSL 
recognizes that the final regulations provide States additional 
time and flexibility to implement the REAL ID, the negotiated 
rulemaking could address several remaining issues, including 
waiving the verification requirements for applicants who 
already have a federally-issued identity credential; 
prohibiting Federal agencies from charging States transaction 
fees for accessing the required electronic verification 
systems; and instituting a legislative trigger that would 
automatically release States from complying with REAL ID 
provisions in any fiscal year in which the Congress fails to 
appropriate funds for these purposes.
    Regarding WHTI, I again want to thank DHS and the State 
Department for recognizing the importance of cross-border 
movement of people to the families, communities, and businesses 
throughout the Nation, but particularly along the borders. I 
also commend the Department's efforts to work with States to 
create WHTI-compliant enhanced drivers' licenses and other 
border crossing documents.
    However, the experience of many of my colleagues in 
developing EDLs does not encourage me. Washington State is the 
first to conclude an EDL agreement with DHS, but I have heard 
that it is now harder and more time consuming to obtain an EDL 
than to get a passport. Other colleagues have expressed concern 
about the use of RFID. We also believe that DHS should conduct 
separate negotiations with each State and not use an EDL 
agreement with one State as a cookie cutter for all.
    Many State legislators who are wrestling with REAL ID and 
WHTI EDLs have noted that the U.S. passport achieves the same 
goals of both programs and that the process for obtaining the 
passport is much less onerous than what is required for either 
REAL ID or an EDL. The problem is the cost of a passport. At 
NCSL's spring forum just last week, we considered resolutions 
calling on Congress to reduce the cost of a passport.
    Mr. Chairman, I would like to reiterate that State 
legislators are committed to working with Federal policy makers 
to ensure the security and integrity of identity documents. 
However, we see the road to REAL ID as being closed for 
construction, and S. 717 is the best route to finalizing 
Federal standards for State-issued drivers' licenses and 
identification cards as long as it is accompanied by full 
funding.
    For WHTI, the road is bumpy at present, but if the Federal 
Government chooses the proper route, a smoother ride is still 
possible.
    I thank you for this opportunity to testify and look 
forward to questions from Members of the Subcommittee.
    Senator Akaka. Thank you very much, Representative Stone, 
for your statement. Mr. Quam.

  TESTIMONY OF DAVID QUAM,\1\ DIRECTOR OF FEDERAL RELATIONS, 
                 NATIONAL GOVERNORS ASSOCIATION

    Mr. Quam. Thank you, Chairman Akaka and Senator Voinovich, 
it is a pleasure to be back before you to talk about an issue 
that is of very large interest to governors.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Quam appears in the Appendix on 
page 94.
---------------------------------------------------------------------------
    The position of the governors remains as it was the last 
time I was before this Subcommittee. Our governors' policy is 
that of fix and fund: REAL ID has to be fixed, it has to be 
workable, it has to be cost-effective, and actually has to 
increase the security of driver's license systems. And it must 
be funded. When the Federal Government decides to come in and 
regulate a traditionally State-based activity, the Federal 
Government should pick up the tab.
    Before I get into my testimony, I did want to mention 
something that Assistant Secretary Baker said. He said that 
governors were recently faced with a choice, do I want to 
improve the security of my licenses or do I want less-secure 
licenses, and that was the choice they were facing as they came 
up on this deadline for asking for an extension. That was not 
the choice the governors faced. All governors are committed to 
having secure drivers' licenses. They are also committed to 
combatting identity theft. There is not a single governor who 
would say that they are not pro-security.
    The choice that they were given, however, was whether or 
not to inconvenience their citizens because their citizens and 
their legislatures and themselves had questions about whether 
REAL ID would work. Faced with that, ultimately, all States did 
receive an extension, but for several States, it was a Hobson's 
choice. It was a take-it-or-leave it and if you leave it, 
citizens will be the ones who are punished. It wasn't much of a 
choice, but all States did ultimately comply. I think we have 
to have a more cooperative system in the future if REAL ID is 
ultimately going to survive.
    Three main points that I want to make. First, what does it 
mean to be fixed, to fix REAL ID? All the focus must be on the 
electronic databases and this is really the cornerstone of REAL 
ID. It is also the source of all the uncertainty. When 
governors ask me to brief them about the databases, they ask 
the following questions: How will it work? Who will own it? How 
is it governed? How does it protect my citizens' individual 
data? What does it cost? We today cannot answer any of those 
questions, and so when you talked about fixing REAL ID, I think 
it is getting a handle on those systems and knowing what it is 
before States can commit.
    With regard to funding, again, governors believe that if 
the Federal Government steps in to dictate how States should do 
their business, then the Federal Government should pay for it. 
DHS has made a big deal of the cost estimate, the fact that it 
has gone down to about $4 billion. I think Assistant Secretary 
Baker was questioning whether maybe that was high. States, on 
the other hand, are questioning whether it is low.
    That $40 billion estimate misses several key points. First, 
we don't have cost estimates, nor are they included, on the 
security of the manufacturing centers. What will the buildings 
be required to have as far as making them secure? If all States 
need to build Fort Knox, that estimate is going to be low.
    Second, the transaction cost. This is the cost of actually 
asking each database a question about the applicant before you. 
DHS recently raised the rates for the SAVE database to 50 
cents. Well, 50 cents--and that is the minimum--per transaction 
when you have 242 million people is a large number that is not 
counted in this original estimate.
    And then third, in the spirit of Washington, DC accounting, 
the assumption was made that only three out of every four 
people would actually get a REAL ID. Well, it is easy to cut 
your costs when 25 percent of the population is taken out of 
who may have to be serviced. I think accurate numbers have to 
be found so that we know what is being asked of States.
    Finally, with regard to the grant process, governors were 
very concerned about the fact that there is only $90 million 
out there. States other than the State of Kentucky, which 
received some initial grants with regard to vital statistics, 
have not received one dollar. No money has come out under the 
grant programs. The existing grant programs favor the creation 
of the hub, a DHS priority, not a State priority. The 
governors' position is that governors and States should be 
deciding how those funds should be used. The appropriations 
were for States, not for DHS, to determine how best to move 
forward with REAL ID.
    Finally, with regard to WHTI, governors are taking a very 
close look at some of the pilot projects with regard to 
enhanced drivers' licenses, including the Washington project. I 
think some are encouraged by what they see as a more 
collaborative effort than REAL ID has been to date. Governors 
firmly believe that security and commerce can coexist, but it 
must be a collaborative process. I think there is a long way to 
go with regard to WHTI, but hopefully the cooperation that was 
shown there can help yield results on REAL ID.
    I would be happy to take questions. Thank you.
    Senator Akaka. Thank you very much, Mr. Quam. Ms. 
Fredrickson.

  TESTIMONY OF CAROLINE FREDRICKSON,\1\ DIRECTOR, WASHINGTON 
       LEGISLATIVE OFFICE, AMERICAN CIVIL LIBERTIES UNION

    Ms. Fredrickson. Chairman Akaka, Congress stands at a 
crossroads regarding our national policy for identification 
cards. Following one path, Congress can choose to do nothing 
and the REAL ID Act will gradually force the creation of a 
national ID card system. Disregarding the growing national 
consensus against this system, Congress could allow the REAL ID 
system to limp forward over the next decade or more, wasting 
billions in tax dollars and weakening, not enhancing, ID 
security in the process.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Fredrickson appears in the 
Appendix on page 102.
---------------------------------------------------------------------------
    Or Congress can follow another, better path, heeding the 
clear call of constituents and the States that want ID security 
but believe it can only come with protection of individual 
privacy. This more prudent path requires Congress to replace 
REAL ID with a plan that allows and encourages States to 
innovate, to improve ID security, but avoids the privacy and 
security risks of a national ID card system.
    On behalf of the American Civil Liberties Union (ACLU), our 
53 affiliates, and more than half-a-million members, we urge 
Congress to choose the second path. Stop building a national ID 
system that vastly increases the risk of identity theft and 
instead move towards a system that recognizes that security can 
be enhanced only by protecting privacy.
    Specifically, Mr. Chairman, we recommend that this 
Subcommittee work to enact your bill, S. 717, the 
Identification Security Enhancement Act of 2007, to replace 
Title 2 of the unworkable REAL ID Act of 2005.
    REAL ID will almost certainly generate ubiquitous demands 
for presentation of compliant cards. The REAL ID could soon 
serve as an internal passport. Card readers will proliferate in 
daily life, and going to the grocery store or the gym or the 
day care center will require passing through a series of 
internal domestic check points. Soon, no American will be able 
to operate without a REAL ID card, and every check point will 
degrade the privacy of our lives just a little more.
    The ACLU does not oppose identity security, but if REAL ID 
survives, its database would create one-stop shopping for 
identity thieves with the largest repository of private 
information on all Americans--our birth information, Social 
Security numbers, and biometric information. We don't want DHS 
to impose a system that makes our private information an easy 
target for identity theft.
    If Congress fails to change course, then REAL ID will 
continue to force wasteful expenditures of State and Federal 
funds during precarious economic times. If REAL ID made us 
safe, perhaps it would be worth the high price, but it won't. 
When criminals and terrorists obtain REAL ID licenses by using 
the stolen identities of law-abiding Americans, they will be 
able to walk through our society without scrutiny.
    As you can see from this map, the one with 2008 here,\1\ 
State opposition has led to the passage of numerous State laws 
prohibiting implementation of the REAL ID Act. Governor Butch 
Otter recently signed an act prohibiting Idaho from 
implementing REAL ID. Idaho became the eighth State to enact 
such a law, joining the seven States in red--Georgia, Maine, 
Montana, New Hampshire, Oklahoma, South Carolina, and 
Washington. Legislation is awaiting Governor Palin's signature 
in Alaska to prohibit funding of REAL ID.
---------------------------------------------------------------------------
    \1\ The map referred to appears in the Appendix on page 111.
---------------------------------------------------------------------------
    Ten additional States have unequivocally stated their 
opposition through passage of memorials and resolutions, with 
many calling on Congress to repeal REAL ID entirely. These 
States are Arkansas, Colorado, Hawaii, Illinois, Missouri, 
Nebraska, Nevada, North Dakota, South Dakota, and Tennessee. 
They appear in yellow on the map. Legislation opposing REAL ID 
has passed at least one chamber of a State legislature in an 
additional 11 States. And Missouri, confusingly, is green on 
this map, not yellow, because in addition to passing a 
resolution against REAL ID in 2007, the State legislature moved 
binding legislation through one house in 2008.
    Some States have asked for extensions of compliance 
deadlines, not to signal compliance but simply to run out the 
clock on the Bush Administration. Republican Governor Mark 
Sanford of South Carolina sent a letter to Congress this month 
calling REAL ID ``the worst piece of legislation I have seen 
during the 15 years I have been engaged in the political 
process'' and urged its repeal. When asked whether Montana 
would participate in REAL ID, Democratic Governor Brian 
Schweitzer explained, ``No, nope, no way, hell no.''
    Despite DHS's rhetoric to the contrary, States' opposition 
to REAL ID is accelerating, not slowing. So Congress should not 
sit idly by while the REAL ID Act creates a national ID card 
system at the cost of Americans' privacy and in the face of 
widespread opposition. Congress must choose the better path and 
pursue S. 717 and repeal REAL ID. Thank you very much.
    Senator Akaka. Thank you. Thank you very much. Mr. Dow.

  TESTIMONY OF ROGER J. DOW,\2\ PRESIDENT AND CHIEF EXECUTIVE 
              OFFICER, TRAVEL INDUSTRY ASSOCIATION

    Mr. Dow. Thank you, Chairman Akaka. I am pleased to appear 
before you on behalf of the Travel Industry Association and our 
strategic partner, the Travel Business Roundtable, to discuss 
the impact of the Western Hemisphere Travel Initiative (WHTI) 
on travel to the United States. We represent 1,700 public and 
private entities that make up the $740 billion travel community 
that employs over seven million Americans, generates $99 
billion in taxes, and produces a trade surplus. Travel and 
tourism is the front door of economic development and really is 
a critical element in public diplomacy.
---------------------------------------------------------------------------
    \2\ The prepared statement of Mr. Dow appears in the Appendix on 
page 116.
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    First, I would like to thank you for your leadership in 
assuring that our homeland security efforts are properly 
implemented in an efficient and effective manner. We commend 
Congress for prudently extending the WHTI deadline and defining 
reasonable benchmarks to ensure its successful implementation.
    The travel community is keenly aware and supportive of the 
need to protect our borders and to prevent admission of those 
who wish us harm. On the horrific day of September 11, 2001, it 
took hours to bring the travel industry to its knees and our 
economy followed weeks later, as did the world economy. We must 
protect both the physical security and the economic security of 
our country.
    Unfortunately, we have instituted increased travel and 
security measures while neglecting to properly communicate 
these new and cumulative security requirements to international 
visitors, and this has hampered travel facilitation and 
resulted in a significant decline and impact on overseas travel 
to the United States. We must not cause similar harm by not 
properly implementing and communicating WHTI to Canada, our 
closest neighbor.
    I would like to discuss four points covered in my written 
testimony. First, the travel community strongly supports a 
properly implemented WHTI. It is good policy, as long as we can 
enhance border security and as long as we have realistic 
deadlines, robust advanced communications, and the necessary 
infrastructure and staffing. TIA's support of WHTI is 
longstanding and consistent, whether it be through testimonies, 
starting a ``get a passport now'' website, and mobilizing more 
than 30 members of the travel trade community in support of the 
Administration's efforts on WHTI. We participate in the CBP 
Travel Advisory Group, lending our expertise on communications.
    As early as October 2005, we submitted comments on four 
separate occasions to DHS and to States on the need to develop 
a robust communications plan for WHTI. That did not happen, 
resulting in last summer's passport debacle. Senators Voinovich 
and Coleman talked about the left hand not talking to the right 
hand. We just heard two entities say that they have hired two 
separate public relations firms to accomplish the same job and 
communicate WHTI clearly to our friends across the border and 
to U.S. citizens.
    There is so much at stake if we don't implement WHTI 
correctly and properly. The negative receptions of poorly-
communicated air security rules over the last 7 years have 
caused us to lose millions of overseas visitors. Since 2000, 
the number of global long-haul travelers around the world to 
locations other than the United States has increased by 30 
percent, or 35 million visitors. During the same time period, 
travelers visiting the United States has dropped by two 
million, or 8 percent, and that is at a time when the U.S. 
dollar is at an all-time low. We should be booming and we are 
not.
    Successful implementation of WHTI is extremely important. 
It is a major priority because Canada is our closest travel 
partner, as has been said many times today. In 2006, 40 million 
Canadians and Americans crossed the border, Canadians bringing 
$13.5 billion to the United States. Just a 5 percent decrease 
in those Canadian travelers would cost us $700 million. We 
can't afford economically and diplomatically to mess this up.
    Communications is a critical key to making WHTI successful. 
We must have a preemptive, sophisticated, well-funded, and 
sustained public outreach campaign. DHS and States should have 
prepared this campaign years ago and used all communication 
channels--television, radio, print, Internet--outdoors. WHTI is 
very important. This is a sea change in culture and law, 
culture and practice and tradition from what has gone on in 
traveling to the United States. This communications campaign 
should have already begun and would better serve the needs of 
our country in the future.
    In S. 1661, the Travel Promotion Act, all of these factors 
are included. It is supported by you, Chairman Akaka, by the 
majority of this Subcommittee, and 40 additional U.S. Senators. 
The Act creates a public-private partnership to explain U.S. 
policies. It combines private execution with public sector 
oversight and does not require any funding from U.S. taxpayers.
    Last, the Subcommittee should be concerned about whether 
DHS has the staffing and the technology in place for WHTI. We 
all know that there are not enough CBP officers at all of our 
ports of entry. This is troubling in context with WHTI being 
implemented in 2009 during the busiest summer travel period, 
when millions of Canadians will be traveling. We recommend that 
you immediately lift the overtime cap for CBP officers and fund 
adequate new hires in the future.
    Our message is simple and clear. DHS and States must 
successfully and effectively implement WHTI and all other 
travel security programs. We live in a new era. Changing 
security is not a one-time occurrence, but will continue in the 
future. We must preserve our physical and our economic 
security. Let us work together to protect America and project 
America and welcome international visitors to the United 
States. Thank you.
    Senator Akaka. Thank you very much, Mr. Dow.
    I have to step away for a few minutes, and I will call a 
short recess until Senator Voinovich can return. He has 
questions, and I will have questions for you, as well.
    So at this time, the Subcommittee will stand in a short 
recess.
    [Recess.]
    Senator Voinovich [presiding]. The hearing is reconvened, 
and I apologize that I wasn't here for the testimony that has 
gone before. One of the things about being in the Senate is 
that you need to be at three places at the same time and 
justify all of them, and I really appreciate the fact that 
several of you have come a distance to testify today and we are 
greatly appreciative of your being here. We are very concerned 
about this and look forward to the rest of the testimony.
    Ms. Fredrickson, you have testified. Mr. Amador, you are 
up.

   TESTIMONY OF ANGELO I. AMADOR,\1\ DIRECTOR OF IMMIGRATION 
   POLICY, U.S. CHAMBER OF COMMERCE; AND EXECUTIVE DIRECTOR, 
             AMERICANS FOR BETTER BORDERS COALITION

    Mr. Amador. Thank you, Senator Voinovich, for the 
opportunity to present today on the impact of implementation of 
the Western Hemisphere Travel Initiative. I usually refer to it 
as WHTI, but since Senator Collins is not here, I will call it 
``witty.''
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Amador with attachments appears 
in the Appendix on page 121.
---------------------------------------------------------------------------
    Before I begin, I would like to ask that the three studies 
I sent earlier to the Subcommittee with in-depth analysis of 
border issues and recommendations on how to fix them be made 
part of the record, together with my written testimony.
    Senator Voinovich. Without objection.
    Mr. Amador. Thank you. My name is Angelo Amador and I am 
Director of Immigration Policy for the U.S. Chamber of Commerce 
and I am also the Executive Director of the Americans for 
Better Borders Coalition.
    The Chamber is committed to continue working with Congress 
and the Department of Homeland Security and States to 
successfully and efficiently implement WHTI. It is important to 
keep in mind that the efficient movement of people, goods, and 
services, and a secure border are not mutually exclusive or 
competing objectives.
    Furthermore, it is important to note that WHTI is not being 
implemented in a vacuum. A number of inefficiencies at the 
borders are threatening our competitiveness and WHTI places 
further pressures on our eroding infrastructure.
    The Chamber is concerned that the U.S.-Mexico and U.S.-
Canada border crossings are increasingly becoming a competitive 
disadvantage. The North American supply chain for many 
companies is tightly integrated. For these companies, the 
impact of border delays, fees, and strengthened security 
procedures are magnified because their products are required to 
clear Customs multiple times in the manufacturing process.
    The reports I submitted for the record contain many 
excellent recommendations to improve border security. I will 
mention only three of them.
    First, we need proper measurement of border wait times. 
This needs to be addressed so the severity of delays and their 
costs can properly be dealt with.
    Second, there is extreme anxiety in the business community 
due to the level of uncertainty created by border policies 
announced and implemented before the infrastructure is in 
place. The private sector needs to know what to expect in order 
to properly adjust. Mr. Dow mentioned the Travel Promotion Act 
earlier, so I am not going to go into details on that other 
than to say that we also support it.
    Third, inadequate staffing, reduced or changing hours of 
service, mandates for secondary inspection of some products, 
new fees, and outdated infrastructure are leading to long 
delays with a significant economic impact on businesses without 
apparently increasing security. We should increase funding for 
CBP to guarantee the adequate staffing and extended hours of 
service and upgrade our technology and infrastructure. In the 
House of Representatives, the Putting Our Resources Toward 
Security Act addresses some of these issues and we hope it can 
also be introduced in the Senate.
    As to WHTI, implementing it without addressing the existing 
border delays and the additional pressures that WHTI imposes 
may generate a new security problem with long lines of trucks 
idling like sitting ducks at the busiest ports of entry. In the 
final rule published this month, DHS stated that it intends to 
fully implement WHTI on June 1, 2009, the earliest possible 
date. The Chamber believes that more emphasis needs to be 
placed on doing it right versus doing it fast. Before pushing 
for full implementation, pilot programs need to be performed to 
assess the potential impact of WHTI on cross-border commerce. 
We must avoid the chaos, long lines, and 12-week paperwork 
backlogs that were created in 2006 with the hurried 
implementation of the WHTI air rules. The government was not 
prepared for the changes it made in policy.
    As to passport alternatives, the two most promising at this 
time are passport cards and enhanced drivers' licenses. 
However, for either document to be a true substitute to a U.S. 
passport under WHTI, they should be accepted at airports of 
entry as well as the proposed land and sea ports of entry.
    Also, although the passport card application fee at first 
blush seems reasonable--$20 for adults, $10 for minors--there 
are a number of additional fees in addition to the execution 
fee. You have picture fees and others. The approach explained 
earlier by Senator Collins is one that we support of deploying 
CBP staff to high-demand areas.
    As to enhanced drivers' licenses (EDLs), the Chamber has 
always called for the acceptance of a document that is as close 
to being non-discretionary as possible. EDLs have significant 
promise. However, the Chamber is concerned that there will not 
be a critical mass of WHTI-compliant EDLs in circulation before 
June 2009, the target for full implementation.
    As to REAL ID, the Chamber has never taken a position on 
this issue, but as long as Congress believes it should be 
enforced or remain law, Congress should also consider statutory 
changes to make REAL ID-compliant documents accepted as WHTI 
compliant.
    In conclusion, if we want to grow and remain competitive in 
the global market, we need to address the deteriorating 
problems at our borders and make sure that programs like WHTI 
do not exacerbate the problems we are trying to fix.
    Thank you for the opportunity to testify and I look forward 
to your questions.
    Senator Voinovich. Thank you very much. Ms. Cope.

  TESTIMONY OF SOPHIA COPE,\1\ STAFF ATTORNEY AND RON PLESSER 
          FELLOW, CENTER FOR DEMOCRACY AND TECHNOLOGY

    Ms. Cope. Thank you, Ranking Member Voinovich. The Center 
for Democracy and Technology has significant concerns with both 
REAL ID and WHTI. In the few minutes I have here today, I will 
focus on WHTI. However, both initiatives pose serious risks to 
the rights of American citizens and Congressional action is 
needed now.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Cope appears in the Appendix on 
page 220.
---------------------------------------------------------------------------
    CDT takes no position on the requirement that American 
citizens must now present a passport or equivalent document 
when seeking to reenter the United States at the land borders, 
nor do we find unreasonable Congress's desire to minimize 
congestion at the border due to this new requirement. However, 
the problem is that DHS and the State Department both have 
chosen an insecure technology, vicinity RFID, for the passport 
card and the enhanced drivers' licenses.
    Also, the Departments have not given any serious 
consideration to the risks to personal privacy and security 
posed by the use of this technology, despite concerns raised in 
thousands of public comments, two pieces of Federal 
legislation, and DHS's own Inspector General.
    Additionally, it is not clear why the Departments chose 
vicinity RFID. It does not provide unique operational benefits 
in the border crossing context and there is already a secure 
infrastructure in place for the electronic passport, which 
makes sense to use here.
    I would like to make two main points and then offer some 
recommendations for this Subcommittee. First, vicinity RFID 
technology is insecure and inappropriate for human 
identification. This technology was not created to identify 
people. Rather, it was intended to track things, like 
televisions, toilet paper, and toothpaste. It was designed to 
be quickly and easily scanned by standardized readers, 
unencumbered by security features, as products move through the 
supply chain.
    Sensitive information on the RFID chip can be picked up by 
unauthorized people because the information is stored and 
transmitted unencrypted and in the clear. The information can 
be read by any reader compatible with the common standard. And 
finally, these readers can secretly read the vicinity RFID chip 
remotely, from distances of 30 feet, and potentially many times 
more than that.
    Second, the risks to privacy here are very real. For 
example, the unique ID number on the RFID chip will, over time, 
become yet another identifier that can be used to track and 
profile the movements and activities of innocent Americans. 
Many citizens will likely not use a protective sleeve, and even 
those who do will likely take their cards out of the sleeve and 
use the cards for transactions that have nothing to do with 
crossing the border. The unique ID number on the RFID chip can 
be easily collected, along with other personal information from 
a transaction, such as name and address from a driver's license 
or even a credit card number.
    Therefore, the unique ID number will cease to be an 
anonymous, meaningless identifier as both DHS and States have 
asserted. Once a person's identity is associated with the RFID 
chip, he or she can be unknowingly identified or tracked by a 
network of compatible readers.
    Also, because the RFID chip includes information about the 
issuing entity, Americans traveling abroad could be identified 
as such and be vulnerable to security risks. Last, because the 
unique ID number on the RFID chip is transmitted in the clear, 
unscrupulous individuals might be able to use the number to 
access personal information held in government databases. 
Recent privacy breaches at the State Department support this 
concern.
    Finally, I would like to offer some recommendations for 
this Subcommittee. This Subcommittee should press DHS and the 
State Department to abandon vicinity RFID technology in favor 
of a machine-readable technology that requires the card to make 
contact with the reader. This is consistent with the 
Departments goal of prepositioning traveler information before 
the travelers reach the CBP inspection booth.
    In addition, this Subcommittee should insist that the 
citizen's unique ID number be encrypted or otherwise protected 
from unauthorized readers. This is how the new electronic 
passport works now. This Subcommittee should also strongly 
consider supporting legislation or regulations that prohibit 
the unauthorized skimming of the RFID chip by businesses and 
other third parties. And finally, this Subcommittee should 
consider supporting legislation or regulations that prohibit 
the use of the passport card and the enhanced driver's license 
by government agencies that have nothing to do with border 
security.
    Thank you, and I welcome any questions.
    Senator Voinovich. Thank you very much.
    Were all of you here for the testimony of our two first 
witnesses, Secretary Baker and Mr. Staeben?
    [Chorus of yesses.]
    Senator Voinovich. I have been in your chairs before, as 
President of the National League of Cities and Chairman of the 
National Governors Association, and I have always thought to 
myself, if I get a chance to be where I am right now that I 
would give people an opportunity to comment upon the testimony 
of the people that were here before, because I am sure when 
they were giving their testimony, there were some red flags 
that went up with all of you. I would like you to share with me 
your observations or your perspective on what they had to say 
in terms of its accuracy. Ms. Stone.
    Ms. Stone. Thank you very much.
    Senator Voinovich. And by the way, Ms. Stone, one of my big 
complaints, we used to have something called the Big Seven.
    Ms. Stone. Yes.
    Senator Voinovich. Yes. And I was kind of fortunate, 
because I am a former county commissioner, a former State 
legislator, and a former mayor and governor, and when I was 
Chairman of the National Governors Association, we did unfunded 
mandates relief legislation and welfare reform and I want to 
say that, and you are a leader in your organization, it would 
be very smart, I think, for those groups to get together to 
develop some priorities about what they would like to get done 
down here, because if you get all the local government, State 
Government organizations testifying before the Congress on a 
bipartisan basis on something and you are really committed to 
it, you can move mountains. There is no question about it.
    And my observation in the last number of years is that it 
hasn't happened. And so Mr. Quam, I am going to share that same 
thing with you. I have talked to Ray Sheppach about it and so 
forth, but you guys could be doing a better job of getting your 
act together and coming down here to testify, and I can tell 
you, if you have problems with this legislation and all of you 
get together, we are going to respond to your concerns. So I 
want to start with that.
    Ms. Stone.
    Ms. Stone. Well, thank you very much for those comments. 
NCSL's position on REAL ID has been very consistent from the 
beginning and our message has been as follows. Fix and fund the 
REAL ID or we call for its repeal. And our message is still 
consistent on that. We have asked the Administration to provide 
$1 billion in start-up costs for REAL ID. We have been very 
proactive since the bill was passed. Unfortunately, we were 
never invited to the table before the bill was crafted. And as 
very big stakeholders in what will happen as a result of REAL 
ID in the States, we should have been at the table. We should 
have been part of the entire process. After REAL ID----
    Senator Voinovich. Actually, it violates UMRA. I have asked 
the question why it wasn't raised, but the way it came in, it 
was a supplemental and I think it was one of the House members 
that stuck it in at the end and there was very little 
discussion about it and it just got zipped through here. I am 
going to do some research on it. Indeed, it is an unfunded 
Federal mandate.
    Ms. Stone. It definitely is, and I thank you so much for 
concurring with that because that is our position. And as you 
know, sir, the States are required, at least 49 of them, to 
have balanced budgets and that is--we do not have the luxury of 
operating at a deficit. And every time an unfunded Federal 
mandate is put down onto the States, it makes our fiscal lives 
that much more challenging.
    Senator Voinovich. Listen, I understand that. I was at the 
White House when the President signed that legislation, 
represented all the local government and State groups, so I 
understand that.
    Ms. Stone. I know you do. That was quite a victory for 
NCSL, too. We played a huge role in UMRA and our President 
then, who happened to be a Senator from Delaware, was actually 
present at the signing of that agreement and that was one of 
his proudest moments, I think, as President of NCSL.
    We have appreciated being part of the conversation during 
the rulemaking process and many of the concerns that were 
raised by NCSL were listened to and have been addressed. But we 
believe that there is much more room for conversation. We 
believe that a return to a negotiated rulemaking process can be 
very valuable. We believe it can move from a top-down coercive 
process to more of a collaborative process, which has always 
been what we are asking for, that brings all interested 
stakeholders to the table.
    We think it could produce more and even better buy-in from 
the States. I don't remember if you were in the room when the 
large displays were up here that Ms. Fredrickson brought, but I 
probably don't have to bring to your attention the number of 
States that have literally passed legislation that says we are 
not going to comply. All the States----
    Senator Voinovich. It is just a set up for a gigantic 
crash----
    Ms. Stone. Absolutely.
    Senator Voinovich [continuing]. And you have to regroup the 
troops, and because we didn't touch the bases before this thing 
was passed, we are now running into that problem----
    Ms. Stone. Absolutely.
    Senator Voinovich [continuing]. In which you are basically 
saying, now is the time to pull back on it, reevaluate it, get 
into some of the issues that you have raised, Ms. Fredrickson 
and Ms. Cope, about how we are going about doing it, and maybe 
just reevaluate where we are at right now and see if we can't 
remedy some of these things and understand that it is going to 
take resources, but more important than that, cooperation.
    And I want to say one other thing to all of you, we are 
really in bad shape in terms of the Federal Government. One of 
the things that I am looking at right now is all the money that 
we are spending in Homeland Security and where is the money 
going. A 374- or 375-mile wall down on the Mexican border, I 
mean, you are looking at some things that make me ask--are we 
allocating resources as wisely as we should be?
    I don't need to tell you that our national debt today is 
going to be over $10 trillion around the corner. We are the 
biggest violator of the credit card in the world today. And we 
have got some very serious problems facing our country, and the 
truth of the matter is the resources that we need to deal with 
our problems across the board are not available to us. No one 
wants to talk about it, but it is a fact of life and everyone 
should get it.
    I wish that we had to balance our budgets, like I did when 
I was mayor and governor.
    Ms. Stone. Yes.
    Senator Voinovich. But we have become--they talk about one 
group being ``tax and spend.'' We have become the group of 
``tax and borrow,'' and I think tax and spend is better than 
tax and borrow because at least you have some tension there 
that is going on.
    Ms. Stone. Right.
    Senator Voinovich. Other comments about the witnesses? Yes, 
Mr. Quam?
    Mr. Quam. Thank you, Senator. My biggest concern would be 
that of tone, and something I mentioned to Chairman Akaka, 
Assistant Secretary Baker had said that the choice governors 
were faced with was one of do I want to improve the security of 
my license or do I want a less-secure license. That is 
ridiculous. There is no governor who faced that choice with 
regard to these extensions.
    Every governor wants a secure license. Every governor works 
towards a secure license. Every governor wants to fight 
identity theft. The choice was, we don't know what REAL ID is, 
we don't know what we are being asked to sign up for, we have 
some serious questions, and yet we are asked to sign on the 
dotted line that we want an extension and possibly imply that 
we are going to meet you at the end of the day when we don't 
know what the house is going to look like that supposedly you 
are building.
    And the retaliation was against our citizens, governors' 
own citizens who might have to go to the airport and not be 
able to use their ID to get to Walt Disney, take the family 
out, and that, at the end of the day, was no choice at all. And 
so the governors came in, some with great reluctance, and 
eventually an extension was given, and you heard some of the 
dance that both DHS and States went through to get to that 
point.
    The other part would be funding.
    Senator Voinovich. By the way, I will never forget on 
Christmas Day getting a call, and the reason they were able to 
call me was that my telephone number is published in the church 
bulletin. [Laughter.]
    The caller said ``I am at the airport with my family.'' I 
am not sure where they were going to, but it was for mom and 
dad's fiftieth anniversary and they couldn't get the baby to go 
because they didn't have a birth certificate for her and the 
office were closed. And I had to spend probably an hour on the 
phone back and forth and finally got TSA to get involved and 
they let the baby go and then they had to fax the birth 
certificate down to wherever they went to so the baby could get 
back in the country. But that is the kind of stuff that goes 
on.
    Mr. Quam. Senator, REAL ID is one of those few laws that 
actually comes out of Washington where at the end of the day 
every citizen is actually going to know the term REAL ID. As 
this thing moves forward, this is going to be one of those that 
everybody will have REAL ID on the mind as they go through 
their DMVs or they go through the airport, depending on how 
this plays out. If they do it right, we will be OK. If we 
don't, then there is going to be some serious concerns.
    With regard to the funding, States do not appreciate, and I 
think the Subcommittee echoed it, this whole idea that through 
SHSGP funds, hundreds of millions of dollars have been made 
available. Nobody really believes it. What you really have is 
$90 million that has been appropriated, $6 million that has 
gone to one State to start a pilot project. I think the 
Department of Homeland Security has actually used $1.3 million 
to start its own program office and not one other dollar has 
actually gone to States to help implement REAL ID, what States 
are seeing out there is an unbuilt house, being asked to pick 
up a tab and sign on the dotted line, not a dollar in the 
coffers yet and wondering what is going ahead, and then asking 
Congress if this is your priority, then shouldn't there be 
money behind it to help States fund it?
    And so it is one of tone. Collaboration and cooperation, as 
you know, governors can work with an adversary type of 
situation, which sometimes we face in REAL ID, isn't actually 
going to get this done. So my biggest question would be that of 
tone and whether or not we can change it to something more 
cooperative.
    Senator Voinovich. Ms. Fredrickson.
    Ms. Fredrickson. Thank you, Senator, for letting us have 
this opportunity. I wanted to talk more about the privacy 
issues and the concerns we have with REAL ID, and I think Mr. 
Baker spent quite a bit of his testimony telling a story about 
a woman who had been the victim of identity theft.
    Senator Voinovich. From Madison, Ohio.
    Ms. Fredrickson. From Ohio, exactly. It was Maureen 
something.
    I think Senator Tester asked the right question, which 
wasn't really answered by Mr. Baker, which is about the fact 
that the information that is on the machine-readable part of 
that REAL ID is not encrypted. There is no requirement by the 
DHS in the regulations that those kinds of requirements are 
built into the REAL ID. And so Senator Tester asked Mr. Baker, 
doesn't that mean that the woman from Ohio is actually going to 
be much more subject to identity theft than she is under the 
current system, and I think that is a real danger that we run 
into.
    DHS really kicked that to the States, I think, to develop 
something called State security plans. Each State can develop a 
different plan. And how does that protect the woman in Ohio if 
another State has a plan that is not as secure as Ohio's and 
her information is being accessed through this nationwide 
database by that other State?
    So there are some very serious questions that I think 
certainly lead us at the ACLU and several of the other 
panelists to implore you to go back to the negotiated 
rulemaking process, have the different parties at the table, 
the States, the governors, the privacy experts, the technology 
experts, to really hash this out to make sure that the system 
that is put in place actually protects our security because it 
is our very strong belief that if privacy is compromised, 
security is compromised. Thank you.
    Senator Voinovich. I think that, first of all, from a 
practical point of view, if what you say is true, and I have no 
reason to doubt it--I am not that familiar with all of these 
various systems that they are putting in place. I think States 
are going to be reluctant to go forward with it if they feel 
that you have got a real privacy issue, and I think individuals 
will be very reluctant to participate because of their 
concerns.
    Ms. Fredrickson. I think Senator Tester also asked about 
the fact that this is unencrypted information and that when 
somebody goes into a bar, for example, and they have to give 
their ID, that bar can swipe the card and take the information 
off and store it in a database, and we all know--we have seen 
what happens with DoubleClick and all of these other companies. 
Where we go, what we buy, how we spend our free time is very 
valuable commercial information and the incentive to create 
databases and track people and their habits through the REAL ID 
card, I think is an inevitable fact of life if this issue is 
not addressed.
    Senator Voinovich. Thank you. Mr. Dow.
    Mr. Dow. Yes, sir. I would like to shift gears to WHTI. One 
of the things that is so critical is that we have botched 
communications of WHTI implementation.
    And the challenge we have got, we have to have some really 
robust and coordinated communications, and my two colleagues at 
DHS and the State Department earlier talked about each hiring a 
unique and different PR firm to start sometime in a few months 
to get the word out. Well, this takes more than PR. With WHTI, 
we are changing a lifestyle, a culture, a tradition of how 
people come to Ohio.
    Maybe it was glossed over, but when you asked about Cedar 
Point, you have 500,000 Canadians that come to Ohio. Sixty 
percent do not have a Canadian passport. My math says that is 
300,000 people that may not come to Ohio and Cedar Point and no 
communication is out there.
    So we are pushing very importantly, that is before the 
Senate right now, S. 1661--the Travel Promotion Act. New 
security is not a one-time occurrence. We have got an ongoing 
change of life here that we have to communicate. This is public 
diplomacy. This is how America is seen, and we are going to be 
seen as the hard-handed folks that don't want Canadians, as we 
are being seen around the world as the hard-handed folks that 
don't want anyone else from around the world. That is a 
problem.
    Senator Voinovich. I understand that fully. I was the main 
sponsor of the visa waiver legislation, and we didn't get 
really what we wanted on that, but it is a step forward. But 
you are right. From a public diplomacy point of view, things 
are very bad. From that point of view, public relations, public 
diplomacy, it is bad, but it is also, as you point out, very 
bad for our economy.
    I mean, one of my goals as Governor of Ohio was to increase 
travel and tourism. It is a big industry. And to not take that 
into consideration and to not get the information out there and 
just to leave it to public relations, there should be a joint 
effort by your organization and the government to figure out 
how we are going to get that information out to the best of our 
ability, using your resources and the government's.
    Mr. Dow. And that is the opportunity we will have with the 
Travel Promotion Act because we use the best of private with 
public oversight, and that is important.
    Senator Voinovich. You heard my remarks about the whole 
Department of Homeland Security, and that is our fault. It is 
very interesting that when we were going through that, I said, 
you ought to ask the people who are going to do the job how 
they think they best should be organized, and we said, no, we 
are smarter than they are. And I said that when the screw-ups 
happen, we will blame them instead of taking the responsibility 
ourselves, and we are starting to see part of that, and of 
course, it is always their fault. But we haven't got clean 
hands in this, either, in terms of the way this organization 
came together, and we don't have clean hands in terms of 
allocating resources to the various agencies.
    I am just doing a survey right now of all the places, all 
the Departments in the Federal Government where we have asked 
people to do jobs and we have not given them the resources to 
get the job done. And any of you that have been in business or 
government, if you ask somebody to do a job and you don't give 
them the resources to get the job done, then basically what you 
tell them is you don't think very much of what you are asking 
them to do.
    So this is not only the administrative side, but also the 
legislative. We have a big responsibility here and that is why 
I am interested in your suggestions that we had better pull 
this thing down, look at it, start all over again, touch the 
bases so we will be far better off than just to continue 
meandering down this stream. You think if we do, this thing is 
going to continue to explode here, there, and everywhere.
    Mr. Dow. When you talked about resources, my wife and I 
returned from Mexico 2 weeks ago into Houston and there are 40 
booths to process people and 22 of the 40 had ``closed'' signs 
up. Just multiply this by 40 million Canadian travelers, by the 
billion dollars coming across the border every day, and it 
dwarfs anything we have seen coming across the air borders 
where we are understaffed right now.
    Senator Voinovich. That is why we are going to get them in. 
Mr. Amador.
    Mr. Amador. Yes, thank you. I would just follow with some 
of the things that were said earlier. One of the issues we have 
is transparency, obviously, and communication. The tone that 
they take translates into the actions that they are taking, as 
well. When they use hyperbole and they talk about, well, it was 
time to stop letting people come in with a smile, that was 
never what we were asking for. That is not what many Senators 
who wrote to Chertoff were calling for. We had some very good 
solutions to the issue that we presented. The same thing with 
other issues with homeland security, whether it is a fence on 
the Southern border or other issues.
    And to rely as a PR campaign on negative publicity from the 
media as the way of getting the word out, we don't think that 
is the way to go because it does damage not only our tourism 
and our view abroad, but businesses of people that might be 
thinking of investing in the United States versus someplace 
else. So those are the kind of things that need to improve 
communication and transparency and it doesn't seem that it is 
taking place right now.
    Senator Voinovich. Well, the Chamber, I think, could do a 
better job of capturing the total amount of exchange between 
the United States and Canada, the number of trips. As I 
mentioned, I think back when I was Chairman of the National 
Governors Association, we set up a new thing with Canada, 
because for 36 of us, they were our No. 1 trading partner, and 
so we tried to find ways that we could enhance the relationship 
between Canada and the United States. I think we need to 
capture the amount of money that it is costing our respective 
economies because of this lack of movement back and forth and 
how it can even become worse with some of the things that we 
are talking about doing.
    Mr. Amador. And one of the reports is a joint report with 
the Canadian Chamber of Commerce, and another one, so we are 
trying to capture that data. GAO is working on a report and we 
have asked DHS to wait until all these economic data start 
coming out because even when they did their airfare analysis, 
they only really looked at tourism and we said, what is the 
cost to the economy from the commerce being delayed and from 
all these things?
    And again, with the changes and reasonable talk going back, 
it seems that all of the changes, and Mr. Dow knows from all 
the battles that we have fought, have to come from Congress. It 
seems that we tell them, you are not ready, you should do it 
later, maybe in June 2009, and they wait for Congress to 
mandate it before moving the deadline. And it seems that is 
happening with everything else, as well.
    Senator Voinovich. Ms. Cope, you are clean-up.
    Ms. Cope. Thank you, Senator. Well, first off, I think the 
first panel completely glossed over the privacy concerns 
related to the enhanced drivers' licenses and the passport 
card. But with that being said, they also completely glossed 
over the cost issue. This hearing has focused a lot on the 
costs of both programs and one thing they didn't address is 
that the passport card and enhanced driver's license programs, 
are going to mandate a third reader system.
    So at this point, if these programs move forward, we are 
going to have three different infra reader structures at our 
land borders and that just seems inefficient and probably a 
waste of money, as well. The Trusted Traveler programs require 
one type of infrastructure. The electronic passport requires a 
second type of reader and technical infrastructure. And then 
now the passport card and the enhanced driver's license will 
require yet a third reader infrastructure.
    Senator Voinovich. So it is not only the manpower, but it 
is the technology and the quality of the technology and then 
how are we kind of making it seamless so that we don't have 
three different systems that we are going to have to put up and 
train people to operate.
    Does anyone else want to make another comment? I only can 
hear from the witnesses, sir. Yes, Ms. Fredrickson?
    Ms. Fredrickson. I just wanted to point out, there was a 
really terrific op-ed by Governor Sanford of South Carolina 
that was in the Greenville paper just a couple of days ago, and 
I think one of the reasons that several of us up here have 
urged you to go back to the negotiated rulemaking process that 
Congress actually passed and then repealed shortly after REAL 
ID is because, as Governor Sanford points out, steroid use in 
baseball has now received more Congressional attention than 
REAL ID.
    We think Congress needs to go back, allow a negotiated 
rulemaking process to go forward to allow some real thinking to 
go into how to solve what are some very significant problems in 
setting up a system like this. We think that having all the 
stakeholders at the table can actually result in a much shorter 
implementation time and a much better outcome than what REAL ID 
envisions, where potentially, at DHS's best estimate, it will 
reach the public by 2017 and cover the full population. That is 
a really long window if this is really a security imperative.
    Senator Voinovich. Well, thank you all for coming, and the 
gentleman that wanted to say something, I will be glad to talk 
to you after this meeting.
    Folks, I don't know what your schedule is, but Senator 
Akaka said he is on his way back. I thought he wasn't coming 
back. So why don't you stay, please. I would appreciate it.
    We will stand in recess until Senator Akaka gets back.
    [Recess.]
    Senator Akaka [presiding]. This Subcommittee hearing will 
be in order. Thank you all for waiting.
    Representative Stone, I am pleased to see that NCSL 
supports my bill, S. 717, to repeal the REAL ID Act and 
reinstate the negotiated rulemaking process for the 
Intelligence Reform Act. Since some of NCSL's recommendations 
were incorporated into the REAL ID regulations, I would like to 
hear what you believe to be the benefits of repealing REAL ID 
and reinstating the negotiated rulemaking process. Would it 
ensure secure drivers' licenses faster than REAL ID?
    Ms. Stone. Thank you for the question, and thank you for 
the opportunity to be with you here today and for having this 
hearing.
    NCSL does see benefits to returning to the negotiated 
rulemaking process. We believe that it would move from a top-
down, what we perceive as a coercive process, to a more 
collaborative process that would bring all interested 
stakeholders to the table. We believe that it would produce 
more and better buy-in from State policy makers, and we think 
that is key because it is the State policy makers who will deal 
with all of the implications and all of the results when it is 
finally implemented.
    It provides an opportunity to address needed fixes that 
have not been addressed so far in the final rule, such as 
exempting populations as I discussed in my remarks, folks who 
already hold passports, folks who hold military IDs, folks who 
actually have Federal IDs.
    It also provides an opportunity for the stakeholders to 
negotiate the cost implications, and NCSL's message on REAL ID 
has been very consistent. Fix and fund, and certainly the cost 
is every bit as important to us as fixing the actual rules. It 
also allows the process to accommodate State experiences, best 
practices, and existing business practices and systems.
    So even though we have had an opportunity during the 
rulemaking process to be heard, we wish we had had that 
opportunity prior. We have appreciated that, but we do not 
think that the process is complete by any means and we would 
like to be able to participate as it moves forward.
    Senator Akaka. Thank you very much for your response.
    Mr. Amador, if States reject REAL ID, its citizens cannot 
enter Federal buildings because they do not have a REAL ID 
card. This will affect their access to private entities in 
addition to Federal agencies. For example, the DC Chamber of 
Commerce Visitor Information Center is located in the Ronald 
Reagan Building, which houses Federal agencies. What will the 
DC Chamber of Commerce and other businesses across the Nation 
do if they are located in Federal buildings and individuals do 
not have REAL ID cards?
    Mr. Amador. Well, it is really a question for--and it was 
asked during the previous panel. What are you going to do for 
those individuals that do not have a REAL ID? And we are still 
waiting for that answer. It is the same idea--they have so many 
requirements and it is not clear how they interact with each 
other. They used to call it a passcard. They themselves chose 
to call it a passport card and they said it is like a passport 
card unless you want to use it to get on a plane. Well, then it 
is not a passport, it is a different card. It is something 
else. They were asked whether the passport card would be able 
to be used as a REAL ID to get into buildings and they were 
like they never thought about it.
    So what other IDs are they going to accept to be able to go 
into a Federal building and how secure are these IDs going to 
be if it is not a REAL ID? We need to see what answers they 
come up with. I think they are complicating themselves by 
continuing to create more and more programs that don't 
necessarily interact with each other. But again, we are just 
trying to give them recommendations. We are not telling them 
how to do their job. But it is confusing, the more IDs and the 
more programs that they create instead of working together to 
make these things easier for everyone.
    Senator Akaka. Thank you. Mr. Quam, as you know, the final 
regulations for REAL ID reduced the cost to States from $14 
billion to $4 billion. While the delayed implementation time 
line helped reduce the cost, the Department made several 
assumptions that lowered the cost estimate, including that not 
everyone will want a REAL ID card.
    You mentioned in your testimony some skepticism about the 
cost estimate for the States to implement REAL ID. What do you 
think the real costs to the States will be?
    Mr. Quam. I think the likelihood is that it is actually 
higher than $4 billion. The Office of Management and Budget 
used some of the information that was developed by States early 
on when States had to try to establish a baseline for what this 
could cost. Certainly a lot of it is bringing people through 
the actual physical plant. The faster you have to bring 245 
million people in, the more draw-down there is going to be on 
your resources, on overtime, on your physical buildings. And so 
the 10-year time line that has been given was a recommendation 
of both NGA and NCSL and AAMVA as a way to help monitor and 
manage the line. And so there is some savings there. There is 
also savings in the flexibility to choose the type of security 
for your card.
    What is missing, again, is the fact that they have a new 
assumption that one out of every four drivers will choose not 
to get a REAL ID. The problem with that assumption is if REAL 
ID comes online and now you need it for a Federal building and 
you need it for an airport and you need it to get benefits and 
you need it maybe to get across the border and it fits all 
these different definitions, this is a card now that you can't 
do without. And so rather than one in four people not having 
it, I think everybody will actually want it, and so just 
reducing your price by 25 percent, I think we would all love to 
be able to do that. I don't think it actually comes to 
fruition.
    The other one, however, and a real troubling one for a lot 
of governors, is with all of these databases, there is an 
assumption that a lot of them will be paid for by fees, that 
with every query, ask if thy are to check with DHS, there is 
going to be some price tag attached to it. We do not know what 
those price tags are. I talked about the SAVE system, and this 
is through DHS. The minimum amount is 50 cents per query. You 
have 245 million drivers' licenses. Take half of that and all 
of a sudden, there is $100 million just for that one database. 
We have five that have to be queried for every single license.
    Having those costs not part of those cost estimates, I 
think raises suspicion for governors. I think it should raise 
suspicion for the Department of Homeland Security and Congress. 
We need some hard numbers so that we know what the tab is that 
States are being asked to pick up. Governors, just like NCSL, 
are on a fix and fund policy. Those cannot be separated. A 
workable regulation with no funding does not work. Total 
funding with unworkable regulations doesn't work. They have to 
go together. Only if they go together do I think REAL ID can 
get done.
    Senator Akaka. Thank you so much for your response.
    Mr. Dow and Mr. Amador, most land border crossings were 
built at a time when there was a lower volume of travel and 
less recognition of the need for security. According to GAO, 
CBP estimates that $4 billion in infrastructure improvements at 
ports of entry are needed. In addition to increasing CBP 
staffing, do you believe that investments in infrastructure at 
ports of entry could help with the problems you highlighted? 
Mr. Dow.
    Mr. Dow. Chairman Akaka, I do believe that we have a crisis 
on staffing and on the pinch point of going through these 
physical areas. If you look at the land crossings or even if 
you look at something as simple as Dulles Airport, that it is 
so antiquated for the volume we are trying to pull through, 
just think of all the Chinese that will be traveling here.
    And also, the other thing is the confusion factor that we 
have had among very educated, knowledgeable people in this room 
about what is going to happen with WHTI. Think of the poor 
Canadian or the poor U.S. citizen who has no idea about WHTI. 
That is why we need a comprehensive communications plan, and I 
want to just thank you as I close for your support of the 
Travel Promotion Act. You realize how important it is to our 
country, and to your State. Your colleague and friend, Mayor 
Hannemann, has been a good friend also on this with all the 
mayors and I appreciate that.
    Senator Akaka. Mr. Amador.
    Mr. Amador. Yes. As I said, it is in the written testimony 
and also in the oral testimony, we are supporting a bill in the 
House of Representatives called Putting Our Resources Towards 
Security Act, and that bill authorizes $5 billion over 5 years 
for the General Service Administration to address 
infrastructure deficiencies at land ports of entry. I think 
that will be a good start, together with increasing the 
staffing so the booths will be open and the hours will be 
extended. So we think that will be a good beginning. We would 
encourage the introduction in the Senate and we will be happy 
to talk to you and your staff about doing that.
    Senator Akaka. Thank you. Mr. Quam and Ms. Stone, while 
both of your organizations have similar concerns with the REAL 
ID Act, I am interested in your views with regard to WHTI, 
specifically enhanced drivers' licenses. Do States have similar 
concerns with EDLs as with REAL ID?
    Mr. Quam. Let me start. With regard to WHTI, the governors' 
position with regard to WHTI and any cross-border security 
measures is that security and commerce can coexist and must 
coexist, and that as DHS moves forward with any of these plans, 
the biggest mistake that it could make is not to work with the 
States who are on those borders to find a program that works 
for its citizens, because it knows--I think Senator Collins did 
an excellent job of talking about the golf course. That is a 
local issue. Only local officials are going to know that issue 
and find a way to solve it. And so you have really got to work 
with local officials, State, and local officials, when devising 
those programs.
    With regard to the enhanced driver's license, I know the 
Washington State project has had some success in working with 
DHS to get that off the ground. They have a great interest in 
having that program in place because of all the activity that 
happens on their border and with regards to the upcoming 
Olympics. Several other States are looking at that issue and 
seeing, does an enhanced driver's license make sense for their 
States?
    The important thing is that becomes a State decision. I 
think as Ms. Stone said, there cannot be a cookie cutter 
approach, that each State is a bit different. And so I think 
States are going to want to take the best practices from some 
of the others. They will have concerns on privacy that they 
will want to address. They will have concerns on cost and 
implementation. But if it is done at the State level, then it 
is much more possible to get that balance between security and 
commerce across the border.
    Senator Akaka. Representative Stone.
    Ms. Stone. Yes. Thank you very much. Very good question. It 
is our belief that DHS is actually using the economic impact of 
WHTI on border communities especially to pressure the border 
States into acting on EDLs. As we all know, the State of 
Washington has recently concluded a Memorandum of Agreement 
with DHS and they have launched the first EDL program. They 
cannot take a cookie cutter approach because it will not work. 
Every State's needs are different and we really are hopeful and 
insist upon a collaborative process.
    Probably the biggest problem for us with DHS on these 
issues has been that they seem to bypass the legislature and 
legislators when it comes to these issues and we are truly 
stakeholders in these processes. We are the ones who ultimately 
will fund anything. We are the ones that have to deal with the 
privacy concerns. We are the ones who make the policies.
    DHS has recently formed a working group with members from 
the Governors Association, and we are delighted to see that 
they are including them in a collaborative process. When we 
approached DHS to participate in that same working group, we 
heard a resounding no, and although we are delighted that they 
are including the governors, we believe that as legislatures 
and legislators, we are every bit as important to this process 
as the governors are.
    And so once again, our philosophy always has been, include 
us as stakeholders. Give us a seat at the table and allow us to 
participate in the process. It will ultimately result in better 
buy-in and it will ultimately result in a partnership, which it 
must be if we are going to be successful with providing the 
kind of security that we believe we need to have.
    Senator Akaka. Thank you for your response.
    Ms. Stone. Thank you.
    Senator Akaka. Ms. Cope, you have written in great detail 
about the problems with vicinity-read RFID chips. If DHS and 
States could not use vicinity RFID, how else could travel 
information be prepositioned?
    Ms. Cope. Thank you, Chairman Akaka. As I touched upon 
earlier, both Departments could use a machine-readable 
technology that requires the card to actually make physical 
contact with the reader, and those readers could be placed 20 
or 30 or however many feet away from the CBP inspection booth 
such that individuals either walking across the border or in a 
car would have to have their cards scanned well in advance of 
them actually being interviewed by the CBP officer. That would 
allow the information to be pulled up on the CBP computers, and 
be checked against various law enforcement and other terrorist 
watch lists. And so the goal of prepositioning can still easily 
be achieved with different technology that is more secure than 
vicinity RFID.
    Senator Akaka. Ms. Fredrickson, the ACLU has developed a 
REAL ID scorecard, a list of potential problems that have been 
identified with the REAL ID law by a variety of parties, 
including privacy advocates and survivors of domestic violence. 
I understand that many of these problems were identified prior 
to or soon after the enactment of the REAL ID Act of 2005. 
Others were raised in numerous meetings between interested 
parties and DHS since that time.
    According to your scorecard, DHS has failed to fix most of 
the problems you identified. Did DHS respond to any of these 
unaddressed problems in the regulations, and if so, what was 
the response?
    Ms. Fredrickson. Well, I think if you look at our 
scorecard, it is very lengthy. It identifies a very long list 
of concerns. There were certainly areas where DHS took some 
actions that made the regulations somewhat less problematic. 
But I think I would actually tell you to look at the rest of 
the list that is on the scorecard because there, the biggest 
concerns that we had were left unaddressed, and in those areas, 
DHS clearly failed to respond.
    And I think I would go back to the discussion that we had 
earlier about the privacy concerns, because for us as the ACLU, 
that is obviously first and foremost and that is something that 
DHS completely threw up its hands about, kicked it to the 
States and said, develop your security plans. We are not going 
to have any standards. And that will somehow protect Americans' 
private information.
    I think, again, I would go back to Mr. Baker's testimony 
where he talked about the dangers of identity theft and having 
insecure identification cards. Well, I would put to you that 
the system that would come about through the REAL ID would be 
much more prone to identity theft and to those dangers, to have 
a vast nationwide database with very little thought put into 
some kind of standards that would protect privacy.
    And that is why we are very strong advocates for your bill, 
S. 717, because we think we need to go back to the drawing 
board. We need to get the partners back at the table. We need 
to go through those kinds of concerns, because really, if you 
don't protect privacy, you can't protect security.
    Senator Akaka. Thank you. I want to thank all of you again 
for being here today. Thank you for your statements and your 
responses. As you know, the purpose of today's hearing was to 
review the impact of the implementation of the REAL ID Act as 
well as the Western Hemisphere Travel Initiative. You have 
certainly responded. Your participation has helped us 
understand whether or not the Federal Government is prepared to 
implement REAL ID and WHTI.
    Unfortunately, the concerns I had coming into this hearing 
have not been addressed. Privacy, funding, and overall planning 
remain critical issues that need to be addressed for us to have 
successful implementation of secure identification cards.
    I look forward to working with my colleagues to make this a 
reality and look forward to your participating in this, also.
    The hearing record will be open for 2 weeks for additional 
statements or questions from our Members.
    Again, I want to thank you very much for your patience. 
This hearing is adjourned.
    [Whereupon, at 1:09 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


                 PREPARED STATEMENT OF SENATOR STEVENS

    I would like to thank the witnesses for coming here today to 
provide us with an update on the status of the Western Hemisphere 
Travel Initiative and the REAL I.D.
    Implementation of both the Western Hemisphere Travel Initiative and 
the REAL I.D. has caused serious concern to many Members of the 
Congress and their constituents.
    When the REAL ID Act of 2005 passed the Senate, I voted in favor of 
it. A driver's license has long been used for much more than just 
proving that a person can legally drive a vehicle. A state driver's 
license is the principal form of identification American's use to enter 
federal buildings, fly on airplanes, and for any number of places proof 
of identification is required.
    When a document is this integral to our everyday lives, we need to 
work together to make sure it is as secure as possible. As a matter of 
fact, many of the 911 terrorists had driver's licenses they acquired 
fraudulently. This allowed them to rent vehicles, open bank accounts, 
and ultimately to fly on that fateful day.
    I understand there are valid concerns surrounding the REAL ID, and 
I hope we can work together to address those concerns. I believe the 
Department of Homeland Security has been quite flexible in allowing 
states an extension for implementation, and I commend the Department 
for this.
    I have two main concerns about implementation of REAL ID. The first 
is the cost to states. I hope we in Congress can work on all possible 
ways to aid states in the drastic costs associated with meeting the 
REAL ID requirements.
    I am also concerned that DHS has not executed sufficient public 
outreach on the REAL ID. Many citizens have serious privacy concerns 
about this, and although I believe the privacy of every American will 
continue to be protected, I do not feel as though DHS has been able to 
sufficiently get that point across. It is an important concern of the 
American people, and I hope DHS will work hard to ensure they 
understand that this is in no way intended as a national identification 
card.
    As many of you know, I have had serious concerns about the 
implementation of the Western Hemisphere Travel Initiative, W.H.T.I.
    Although I understand the importance of these new regulations, I 
continue to be concerned about the effect they will have on travel and 
trade with Canada.
    Alaska is the only state in which residents must drive through 
another country in order to reach another state. Many border 
communities in Alaska rely heavily on travel to and from Canada on a 
daily basis. As a matter of fact, if a resident of Haines, Alaska 
wanted to drive to Anchorage, another city in their own state, they 
would have to drive through Canada and re-enter Alaska.
    I was pleased that Secretary Chertoff sent DHS staff to Alaska last 
month to visit with some of our border communities about the new and 
upcoming border document requirements.
    It was very helpful to have DHS personnel there to answer questions 
these communities had, and to listen to the unique aspects of these 
communities that must be kept in mind when implementing new 
requirements.
    Many in Alaska do not have the correct information when it comes to 
what is currently required at the border, and what will be required 
once WHTI is fully implemented. Again, as with REAL ID, I am concerned 
that DHS is not doing enough public outreach to these communities to 
ensure they, and all Americans, understand exactly what is needed now 
and what will be needed in the future.
    I hope DHS will move forward with aggressive public outreach 
campaigns so that we can avoid any delays or problems at our borders.
    I am also concerned about another backlog for passports as the land 
and sea implementation date nears.
    As you know, the State Department suffered a severe backlog of 
passport requests as the air implementation deadline neared. Some 
waited 12 to 13 weeks for their passports, and travel, in some cases, 
was impeded. So much so in fact, that passport requirements had to be 
changed during the backlog to accommodate those who had applied for, 
but had not yet received their passports.
    Before air implementation, I was assured by the State Department 
that they were well prepared for the increase in passport requests they 
would receive. This was not the case. I hope the State Department is 
better prepared this time to accommodate those requesting passports and 
passcards.
    Thanks you, and I look forward to your testimony today.

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