[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




                 E-VERIFY: CHALLENGES AND OPPORTUNITIES

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
                     ORGANIZATION, AND PROCUREMENT

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 23, 2009

                               __________

                           Serial No. 111-59

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                   EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland         JOHN M. McHUGH, New York
DENNIS J. KUCINICH, Ohio             JOHN L. MICA, Florida
JOHN F. TIERNEY, Massachusetts       MARK E. SOUDER, Indiana
WM. LACY CLAY, Missouri              JOHN J. DUNCAN, Jr., Tennessee
DIANE E. WATSON, California          MICHAEL R. TURNER, Ohio
STEPHEN F. LYNCH, Massachusetts      LYNN A. WESTMORELAND, Georgia
JIM COOPER, Tennessee                PATRICK T. McHENRY, North Carolina
GERALD E. CONNOLLY, Virginia         BRIAN P. BILBRAY, California
MIKE QUIGLEY, Illinois               JIM JORDAN, Ohio
MARCY KAPTUR, Ohio                   JEFF FLAKE, Arizona
ELEANOR HOLMES NORTON, District of   JEFF FORTENBERRY, Nebraska
    Columbia                         JASON CHAFFETZ, Utah
PATRICK J. KENNEDY, Rhode Island     AARON SCHOCK, Illinois
DANNY K. DAVIS, Illinois             ------ ------
CHRIS VAN HOLLEN, Maryland
HENRY CUELLAR, Texas
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
PETER WELCH, Vermont
BILL FOSTER, Illinois
JACKIE SPEIER, California
STEVE DRIEHAUS, Ohio
------ ------

                      Ron Stroman, Staff Director
                Michael McCarthy, Deputy Staff Director
                      Carla Hultberg, Chief Clerk
                  Larry Brady, Minority Staff Director

  Subcommittee on Government Management, Organization, and Procurement

                 DIANE E. WATSON, California, Chairman
PAUL E. KANJORSKI, Pennsylvania      BRIAN P. BILBRAY, California
JIM COOPER, Tennessee                AARON SCHOCK, Illinois
GERALD E. CONNOLLY, Virginia         JOHN J. DUNCAN, Jr., Tennessee
HENRY CUELLAR, Texas                 JEFF FLAKE, Arizona
JACKIE SPEIER, California            ------ ------
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
MIKE QUIGLEY, Illinois













                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 23, 2009....................................     1
Statement of:
    McNeill, Jena Baker, policy analyst for homeland security, 
      the Heritage Foundation; and Angelo Amador, Executive 
      Director for Immigration Policy, U.S. Chamber of Commerce..    44
        Amador, Angelo...........................................    58
        McNeill, Jena Baker......................................    44
    Ratliff, Gerri, Deputy Associate Director of the National 
      Security and Records Verification Directorate, U.S. 
      Citizenship and Immigration Services, Department of Human 
      Security; and David Rust, Deputy Commissioner for 
      Retirement and Disability Policy, Social Security 
      Administration.............................................     4
        Ratliff, Gerri...........................................     4
        Rust, David..............................................    15
Letters, statements, etc., submitted for the record by:
    Amador, Angelo, Executive Director for Immigration Policy, 
      U.S. Chamber of Commerce, prepared statement of............    60
    McNeill, Jena Baker, policy analyst for homeland security, 
      the Heritage Foundation, prepared statement of.............    46
    Ratliff, Gerri, Deputy Associate Director of the National 
      Security and Records Verification Directorate, U.S. 
      Citizenship and Immigration Services, Department of Human 
      Security, prepared statement of............................     7
    Rust, David, Deputy Commissioner for Retirement and 
      Disability Policy, Social Security Administration, prepared 
      statement of...............................................    17

 
                 E-VERIFY: CHALLENGES AND OPPORTUNITIES

                              ----------                              


                        THURSDAY, JULY 23, 2009

                  House of Representatives,
            Subcommittee on Government Management, 
                     Organization, and Procurement,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Diane E. Watson 
(chairwoman of the subcommittee) presiding.
    Present: Representatives Watson, Bilbray, Connolly, 
Cuellar, Speier, and Duncan.
    Staff present: Bert Hammond, staff director; Adam Bordes 
and Deborah Mack, professional staff; Dan Blankenburg, minority 
director of outreach and senior advisor; Adam Fromm, minority 
chief clerk and Member liaison; Marvin Kaplan and Mitchell 
Kominsky, minority counsels.
    Ms. Watson. The Subcommittee on Government Management, 
Organization, and Procurement of the Committee on Oversight and 
Government Reform will now come to order.
    Today's hearing will provide an overview of E-Verify and 
examine how current challenges are affecting its implementation 
and potential for future expansion. The subcommittee is 
particularly interested in hearing how the September 2009 
deadline for Federal contractors to comply with E-Verify is 
impacting their ability to serve our agencies and programs.
    In addition, the subcommittee will be examining the overall 
efficacy and efficiency to the E-Verify program, including 
issues associated with system accuracy, capacity, and usability 
by those in the employer community.
    Without objection, the Chair and the ranking minority 
member will have 5 minutes to make opening statements, followed 
by opening statements not to exceed 3 minutes by any other 
Member who seeks recognition.
    Without objection, Members and witnesses may have 5 
legislative days to submit a written statement or extraneous 
materials for the record.
    I want to first thank all the witnesses for appearing here 
today to discuss recent developments in the administration's E-
Verify program.
    E-Verify is designed to electronically verify information 
contained in the Employment Eligibility Verification Form known 
as I-9, which all newly hired employees are required by law to 
submit to their employer in a free Web-based program operated 
by the Department of Homeland Security's U.S. Citizens and 
Immigration Services [USCIS], in partnership with the Social 
Security Administration. The program is designed to strengthen 
the employment verification process and protect against the use 
of fraudulent documents on the part of new hires.
    According to most recent figures at the subcommittee's 
disposal, as of January 2009, a little over 103,000 employers 
had registered with E-Verify. In fiscal year 2008, USCIS 
reported that E-Verify handled about 7 million requests. 
Authorization and funding for E-Verify has been extended by 
Congress a number of times, most recently through September 30, 
2009.
    On July 8, 2009, Department of Homeland Security's Janet 
Napolitano announced the administration's support for a 
regulation that will award Federal contracts only to employers 
who use E-Verify to check employee work authorization. It is my 
understanding that the administration has mandated that the new 
regulations will go into effect by September 8th while DHS 
continues to work on strengthening E-Verify in order to guard 
against errors, enforce compliance, promote proper usage, and 
enhance security.
    Critics of E-Verify claim that the system suffers from a 
number of major, perhaps irreconcilable, weaknesses. Among the 
weaknesses often cited by critics of E-Verify are: one, E-
Verify's limited capability to detect certain types of identify 
fraud; No. 2, system inefficacies and inaccuracies; third, the 
lack of sufficient system capacity; and fourth, privacy 
concerns and employer non-compliance that results in misuse of 
E-Verify to the detriment of both current employees and new 
hires.
    I would be most interested in hearing what the 
administration is doing on an ongoing, forward basis to address 
these concerns and, moreover, what its current thinking is on 
extending E-Verify beyond the September 30th expiration date. 
Specifically, the Senate-passed versions of the fiscal year 
2010 Homeland Security appropriations bill, H.R. 2892, would 
make E-Verify permanent. Does the administration support this 
provision?
    I also am interested in learning what plans the 
administration is putting in place to implement Secretary 
Napolitano's July 8th announcement that all Federal contractors 
will be required to use E-Verify. For example, how many new 
queries does USCIS anticipate E-Verify will need to handle when 
the Federal contractor rule is implemented? Does E-Verify have 
sufficient capacity to deal with the increased workload of 
electronically verifying employment status of Federal 
contractors?
    And how does USCIS intend to deal with the almost certain 
increased number of non-final, non-confirmations that cannot be 
appealed and the fact that legal aliens and naturalized U.S. 
citizens are more likely to receive erroneous, tentative, non-
confirmations? And what regulations will DHS propose to guide 
employers in dealing with employees who are not authorized to 
work? And, finally, will DHS propose regulations to protect 
workers as they are seeking to overturn tentative non-
confirmations?
    I hope today's hearing will shed some light on a number of 
outstanding issues surrounding the implementation and use of E-
Verify on a going forward basis.
    Once again, I thank all of today's witnesses for appearing 
and I look forward to an informative exchange.
    Now I would like to yield time to our most distinguished 
minority leader. I don't like to call you that; you are more 
than that. Mr. Bilbray.
    Mr. Bilbray. Thank you very much, Madam Chair. Madam Chair, 
I thank you for this hearing. First of all, Madam Chair, I 
would ask for unanimous consent that three statements from the 
construction industry, from the Human Resource Initiative for 
Legal Workforce, and for the Center of Immigration Studies be 
entered into the hearing record.
    Ms. Watson. Without objection.
    Mr. Bilbray. Thank you, Madam Chair.
    Madam Chair, let me, first of all, say there are so many 
times, in oversight, we get testimony about how the system 
doesn't work and the breakdown of the system or the abuses of 
the system. E-Verify, I think, is going to go down in history 
as one of those examples--a small example, but a very clear 
example--of when the system works properly.
    Back in the early 1990's, a lowly Federal bureaucrat 
approached a Member of Congress with an idea and asked the 
Congressman to look into this. That Congressman was Ken 
Calvert, somebody that nobody would even know about because I 
don't think he was on committees of jurisdiction or whatever. 
But the idea that was given to this Congressman because of our 
ability for people in the front line to talk to policymakers, 
and for that policymaker then to take it up to the appropriate 
committee and work it through has really shown in this issue.
    He implemented, back in the mid-1990's, the pilot program 
where five States introduced this idea, basically helped to 
evolve it from a telephone to a computer system. That program 
in those five States had a level of success to the point to 
where Congress overwhelmingly agreed to make it a national 
model under the volunteer aspect, and that allowed it to grow 
and be improved and to be fine-tuned as the process goes down.
    Now we are seeing the next step taken in this evolution of 
a small little mustard seed that was planted by a Federal 
bureaucrat, the little guy at the bottom, watching it grow into 
quite a program that I think that any one of us, if we tried to 
design it from Harvard, Yale, or from Capitol Hill, never would 
have come to this conclusion.
    So I just want to say, as we get into this hearing, the 
source of this program I think is one of the inspirations of 
showing that sometimes the system does work and really is an 
incentive for all of us as policymakers to remember to listen 
to the little guy who doesn't seem to have a lot of power and 
influence, but he does have a lot to say and a lot of good to 
give into the system if we will just listen.
    With that, Madam Chair, I will yield back my time.
    Ms. Watson. Thank you.
    Mr. Cuellar.
    Mr. Cuellar. Thank you, Madam Chair. I appreciate your 
having this particular meeting.
    I know that in my other committee, in Homeland, we have 
covered this issue, but there are a lot of issues that I think 
this committee will cover. I guess one of the issues that I am 
looking at is, like any other program that you have, what sort 
of input are we getting from the private sector, and that part 
I hope the witnesses can talk about that.
    I know the U.S. Chamber and other folks have shown concern. 
I know in the past, when I have talked to some of the Federal 
folks, they have said we have taken input, but I would 
hopefully like to have some discussion as to exactly what they 
have done, how broad of a diverse have they brought in, the 
folks, the private sector, because we want to make sure we do 
this right.
    So, Madam Chair, I appreciate your having this meeting. It 
is a good meeting. I look forward to the witnesses.
    Ms. Watson. Thank you.
    It is the committee policy that all witnesses are sworn in, 
and I would like the witnesses to now stand as I administer the 
oath of office. The first panel, please, just the first panel. 
Would you raise your right hands, please?
    [Witnesses sworn.]
    Ms. Watson. Thank you. Let the record show that the 
witnesses have answered in the affirmative and you are now 
seated.
    If there are no additional opening statements--I don't see 
any others--we will now turn to our first panel. I ask that 
each of the witnesses give a brief summary of your testimony 
and, if you can, please keep this within 5 minutes in duration. 
Your complete written statement will be included in the hearing 
record.
    I would first like to introduce Ms. Gerri Ratliff, who 
currently serves as Deputy Associate Director of the National 
Security and Records Verification Directorate for the U.S. 
Citizenship and Immigration Services [USCIS]. Ms. Ratliff's 
prior assignment included working as the First Chief of the 
Verification Division of USCIS and serving as Acting Director 
of the INS Office, Congressional Relations. Before joining 
USCIS, Ms. Ratliff was the counsel to the Deputy Attorney 
General and Special Counsel in the Department of Justice's 
Office of Legislative Affairs.
    Ms. Ratliff, would you now please proceed?

 STATEMENTS OF GERRI RATLIFF, DEPUTY ASSOCIATE DIRECTOR OF THE 
 NATIONAL SECURITY AND RECORDS VERIFICATION DIRECTORATE, U.S. 
   CITIZENSHIP AND IMMIGRATION SERVICES, DEPARTMENT OF HUMAN 
 SECURITY; AND DAVID RUST, DEPUTY COMMISSIONER FOR RETIREMENT 
     AND DISABILITY POLICY, SOCIAL SECURITY ADMINISTRATION

                   STATEMENT OF GERRI RATLIFF

    Ms. Ratliff. Chairwoman Watson, Ranking Member Bilbray, 
members of the subcommittee, I am Gerri Ratliff, Deputy 
Associate Director of the National Security and Records 
Verification Directorate of USCIS. This is the directorate that 
oversees the E-Verify program as well as the Fraud Detection 
and National Security Division, the Records Division, and the 
National Records Center. I am very grateful for the opportunity 
to be here today to discuss our shared goal of effective 
employment eligibility verification.
    First, let me express our appreciation for the House's 
vigorous support for the President's budget request to extend 
and continue funding E-Verify.
    E-Verify has grown exponentially over the past several 
years. Over 137,000 employers are now enrolled and the 
statistic I find most significant is that number translates 
into over half a million work sites today. In addition, over 14 
percent of all non-agricultural new hires in the United States 
are run through E-Verify currently. We really are beginning to 
show up on the map. We are growing at the rate of 1,000 
employers a week and already have over 2,000 employers signed 
up as Federal contractors.
    We believe E-Verify is the best available tool for 
employers committed to maintaining a legal work force, but we 
also are working hard to effectively serve workers by giving 
accurate and quick verification of their employment 
authorization. Our goals are to improve E-Verify's ability to 
instantly verify new hires, to strengthen employer training, 
and our monitoring and compliance functions, and to protect 
employees' rights.
    Complaints about E-Verify fall largely into three 
categories: one, the system is inaccurate; two, E-Verify 
doesn't combat identity theft; three, the system can result in 
discrimination. I would like to briefly discuss each in turn.
    First, accuracy. Well, today, 96.9 percent of queries 
result in an automatic confirmation that the worker is 
employment authorized. Of the remaining 3.1 percent of queries, 
only 1 in 10 is ultimately found to be work authorized. Those 
are statistics we are very, very proud of. We have worked hard 
to reduce the initial mismatch rate for authorized workers.
    We have made changes to reduce typographical errors made by 
employers that had resulted in mismatches. We have added data 
bases to our automated checks that have enabled us to verify 
authorized workers more quickly. We have made system changes 
and entered into a partnership with the Department of State to 
share passport data that has enabled us to more quickly verify 
naturalized and derivative citizens.
    Even though we have had success in this area, we will 
continue to work harder to do even better.
    Not every mismatch can be prevented simply by adding data 
or system changes, however. For example, if someone changes 
their name through marriage or divorce, but doesn't then update 
their Social Security records, it can result in a mismatch. 
That, in fact, right now is the largest category of 
successfully contested mismatches.
    Second, identity fraud. E-Verify was not initially designed 
to combat identity theft or to do identity authentication, but 
identity theft and document fraud are growing issues that we 
have to grapple with, so we are trying to respond. We are 
giving E-Verify tools to begin to detect document fraud. Last 
year, we added a photo screening tool that has DHS photos in it 
for green cards and employment authorization documents, and can 
be used for the Form I-9 purposes. This tool has already 
detected hundreds of fraudulent green cards and employment 
authorization documents.
    In fiscal year 2010, we plan to add U.S. passport photos to 
the photo tool and we would like to add driver's license 
information and photos, because driver's licenses are the most 
commonly used document for the Form I-9. We need the States' 
help to do that.
    We are also in the final stages of developing an initiative 
to let identity theft victims lock and unlock their own Social 
Security numbers in E-Verify to prevent their number being used 
without their knowledge.
    Finally, E-Verify must protect the rights of workers. We 
have expanded our information from workers, even working with 
the Department of Homeland Security's Civil Rights and Civil 
Liberties Division to create videos aimed at employee rights, 
as well as employer rights; and we are growing our Monitoring 
and Compliance Branch that is very focused on system misuse 
that is evidence of discrimination. In fact, this week we put 
our first compliance letters in the mail to employers who may 
not be using E-Verify correctly.
    We are beginning to use a system that was just deployed at 
the end of June that will enable us to do more and more 
compliance work. We are also working to refer instances of 
fraud, discrimination, and system misuse to the appropriate 
enforcement authorities. And we work very closely with the 
Justice Department's Office of Special Counsel for unfair 
immigration-related employment practices on charges of E-
Verify-related discrimination.
    In summary, E-Verify has made great strides, we believe, in 
becoming a fast, easy-to-use, and more accurate tool, and we 
are dedicated to improving the program even more.
    Thank you for the opportunity to testify before the 
subcommittee and, again, we appreciate your continued support 
of our program.
    [The prepared statement of Ms. Ratliff follows:]



    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Ms. Watson. Thank you.
    I would like to announce the arrival of Congresswoman 
Jackie Speier. Welcome.
    Mr. David Rust is the Social Security Administration's 
Deputy Commissioner for Retirement and Disability Policy. In 
this role, Mr. Rust directs and manages the planning, 
development, and issuance of operational policy and 
instructions. Mr. Rust previously served as Executive Secretary 
for the agency and he also held high ranking positions with the 
Department of Health and Human Services, the Department of 
Agricultural, and as a professional staff member for the 
Congress.
    Mr. Rust, please proceed.

                    STATEMENT OF DAVID RUST

    Mr. Rust. Madam Chairwoman, Ranking Member Bilbray, members 
of the subcommittee, thank you for this opportunity to discuss 
the Social Security Administration's supporting role in E-
Verify, the DHS-administered electronic employment eligibility 
system. I am David Rust, the Deputy Commissioner for Retirement 
and Disability Policy. My responsibilities include development 
and coordination of policy in the oversight of related issues 
to E-Verify and to our core workloads, which are the Old-Age, 
Survivors and Disability Insurance program and the supplemental 
security income program.
    Before I discuss our supporting role with E-Verify, I would 
like to briefly mention some of the key purposes we have 
developed over the years for the use of the Social Security 
number.
    Assigning SSNs and issuing SSN cards is one of our core 
workloads and a key to administering our program. We developed 
the SSN as a way for employers to accurately report an 
employee's earnings. We use the SSN to credit wages to the 
permanent earnings record that we maintain for each worker, 
which is the basis of their Social Security coverage and 
benefits. We have great confidence in the integrity of our 
workers, and for our program purposes the SSN serves us very 
well.
    Let me now turn to our role in the E-Verify program.
    An employer submits information on a new hire to DHS. DHS 
then sends this information to us electronically to verify the 
SSN, the name, and the date of birth in our records. For new 
hires alleging U.S. citizenship, we confirm citizenship status 
based on information in our records. For any naturalized 
citizen whose U.S. citizenship we cannot confirm, DHS verifies 
the naturalization status and, thus, authorization for work.
    For all non-citizens, if there is a match with our records, 
DHS then determines current work authorization status. DHS 
notifies the employer of the result of the verification. E-
Verify automatically confirms, as Ms. Ratliff said, work 
authorization in 96.9 percent of all queries.
    Next month we will complete a much anticipated improvement 
in our computer systems that serve E-Verify. Currently, we use 
the same system developed in the late 1990's, when E-Verify was 
a small pilot program in just five States. Our improved system, 
known as the Isolated Environment, will ensure that there is no 
interference between our own mission critical workloads and 
DHS's E-Verify program.
    At the request of DHS, we designed the system to handle up 
to 60 million queries a year, but we can increase that capacity 
with additional hardware and funding if the need arises. The 
new system also includes redundancy measures that ensure that 
E-Verify does not experience unnecessary outages.
    We worked closely with DHS over the last few years to 
improve the E-Verify program. These changes have increased the 
efficiency and effectiveness of the system and have helped to 
control the workload effects on our field offices. In the last 
2 years, these changes reduced by about half the number of 
workers who need to visit our offices to resolve tentative non-
confirmations.
    In fiscal year 2009, we will handle about 75 contacts for 
every 10,000 queries run through the E-Verify system. Despite 
these improvements, we remain focused on further reducing the 
need for workers to visit our field offices to resolve 
tentative non-confirmations.
    Madam Chairwoman, our own mission critical workloads are 
increasing at an alarming rate. Based on the newest economic 
assumptions and actuarial projections, we now estimate nearly 
250,000 more retirement claims will be filed and 350,000 more 
disability claims will be filed in fiscal year 2010 than we 
projected in the President's fiscal year 2010 budget, which was 
delivered to Congress in May. Our field offices are under great 
strain to keep pace with these growing workloads. Any 
additional field office visits related to E-Verify will only 
add more challenges to our efforts to deliver the level of 
service the public expect and deserves.
    I must also mention that under the Social Security Act we 
cannot use Trust Fund dollars to finance the work we do for E-
Verify or any other work that does not fall within our core 
mission as specified in the Social Security Act. Since E-Verify 
began, Congress has appropriated funds to DHS to administer the 
program, and each year DHS has provided funds to us to cover 
our E-Verify related costs. These include our systems costs and 
the cost of assisting new hires in resolving tentative non-
confirmations. Receiving timely and adequate reimbursement from 
DHS for our E-Verify work is thus critical to us.
    In conclusion, I want to thank you for giving me an 
opportunity to discuss our role in assisting DHS in 
administering the E-Verify system. We look forward to your 
continued support for our critical programs. I would be glad to 
answer any questions you may have.
    [The prepared statement of Mr. Rust follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Watson. Thank you so much, and I will begin by asking 
the first few questions.
    First to Ms. Ratliff. Secretary Napolitano recently 
announced that, starting on September 8, 2009, the 
administration would implement a regulation requiring that 
Federal contractors use E-Verify according to the USCIS 
statistics, and E-Verify has handled more than 6 million 
queries thus far this fiscal year. How many queries do you 
anticipate E-Verify will need to handle next year if the 
Federal contractor rule is implemented?
    Ms. Ratliff. Madam Chairwoman, we estimate that in the 
first year about 3.8 million queries would be run pursuant to 
that regulation. There is a little under 170,000 Federal 
contractors in our analysis and, given our current system 
capacity of over 60 million queries annually, we are well 
poised to meet that challenge.
    Ms. Watson. OK. Do you see any problems in the system? 
These are staggering numbers.
    Ms. Ratliff. We are always analyzing to see what could be 
tweaked and fixed and made better. We feel that we do have a 
program that is ready to handle the challenges of the Federal 
contractor role and other growth. We have a team of system 
engineers, program experts who are always looking to see what 
could be improved; could your educational materials be more 
extensive. We have added languages to our materials.
    To implement the Federal contractor rule, we are planning 
now a second wave of outreach to Federal contractors through 
Webinars and other events to make sure they have the 
information they need to successfully enroll and use E-Verify. 
We have, in the registration process, a tailored approach for 
contractors and a tailored tutorial. We are always open to 
ideas for additional improvements in other materials, but we do 
feel that we are ready.
    Ms. Watson. All right. Do you support giving E-Verify 
participants the option of verifying current employees and 
could E-Verify handle the potential increase? I think you have 
probably already answered that.
    Ms. Ratliff. Well, our 3.8 million query estimate under the 
Federal contractor rule for the first year does include an 
estimate for a certain number of contractors choosing to run 
their entire existing work force, which would be an option 
under that regulation. We also are constantly doing forecasting 
and building costing models for other larger scenarios so that 
we would be ready for whatever Congress sees fit to send our 
way.
    Ms. Watson. And how effective is E-Verify in authenticating 
employees' identities, as well as authorizing their right to 
work?
    Ms. Ratliff. Identity fraud is something that we are 
spending a lot of time thinking about and developing the tools 
that are possible for us to put in our tool kit. We cannot 
today catch every form of identity fraud. We have the photo 
tool that we are using to the fullest ability that we can use 
it, by putting Department of Homeland Security identity 
document photos in it for the new hires who show a green card 
or an employment authorization document for the Form I-9.
    We are planning, next year, to put in the photo tool the 
U.S. passport citizen photos, but the biggest document used for 
the Form I-9 is the driver's license, and we, on our end, have 
done outreach to States to see if there is a willing partner 
who would work with us to add their driver's license photos to 
the photo tool. That is the step that would take us the 
farthest down the path of detecting identity fraud in terms of 
the photo tool.
    We are also monitoring for duplicate uses of Social 
Security numbers and will be referring to ICE, our sister 
enforcement agency, identity fraud patterns that we see under 
that initiative. We are exploring in-house possible biometric- 
and biographic-based identity authentication options. I know 
that is a topic of great interest and we are already looking to 
see and working with stakeholders, including in the business 
community all stakeholders who are interested in working with 
us to put good ideas together and see what would be worth 
testing out and learning from.
    Ms. Watson. Let me just refer to ICE and the raids that 
were held in 2007 on the Swift Meat Packing Co. I understand it 
netted about 1,200 workers and reportedly contributed to $30 
million in losses to the company. It is my understanding that 
Swift participated, and still participates, in E-Verify pilot 
programs who were found and they were not verified. So can you 
explain what the breakdown in the system was at that time, what 
the weaknesses were and how you plan to overcome those?
    Ms. Ratliff. Yes, Madam Chair. The photo tool that we have 
added to the system was added after the Swift incident.
    Ms. Watson. The photo tool, faces?
    Ms. Ratliff. Yes, ma'am. It is the green card and 
employment authorization document photos. So when a new hire 
shows one of those documents to the employer for the Form I-9 
process, we are now able to pull up in the system the photo 
that should be on that card, the photo that we put on the card.
    So if the new hire is using a completely fraudulent green 
card or employment authorization document, or has taken a real 
card and photo-substituted their picture, the photo tool will 
detect that by showing the photo that should be on the card. So 
it is a very easy match. It is not a matter of saying, well, 
you got a haircut and your shirt is different; it should be 
exactly, 100 percent, the same photo that we put on the card. 
And as we are working to expand the photo tool, that will 
expand our ability to help employers detect identity fraud.
    And I do want to note that Swift, you are absolutely right, 
it underscores why we are moving to add tools to E-Verify to 
allow employers to detect identity fraud and why we need to do 
more.
    Ms. Watson. My time has expired, so I am going to yield to 
our ranking member, Mr. Bilbray.
    Mr. Bilbray. Thank you. I guess the point here, we had a 
hearing not too long ago, Madam Chair, about the improvement of 
the Federal identification systems and the new technologies we 
are using there.
    So, Ms. Ratliff, as the States and the Federal Government 
improve our documentation ourselves, our IDs itself, that will 
strengthen the E-Verify because that is a basis for a lot of 
this information gathering, isn't it?
    Ms. Ratliff. Yes, sir. To the extent that E-Verify is able 
to have access to those photos on those identity documents, 
yes.
    Mr. Bilbray. OK. So you can't operate in isolation. As 
other improvements are made, as the States improve their 
programs, as the Feds improve theirs, your efficiency will be 
improved proportionally down the line.
    Ms. Ratliff. Absolutely.
    Mr. Bilbray. Mr. Rust, you have been resting for too long, 
I am going to have to get to you. Westat commissioned a study 
that came out and said that there was 99.6 confirmation of U.S. 
citizens to the program for native born, or 99.9. That was 
pretty substantial. And that the 97 are for foreign born 
nationals. The question is I guess that also reflects the fact 
that is where the most fraud is, is in foreign born. Is that 
safe to assume that?
    Mr. Rust. I think intuitively you could assume that, but 
this is one of the things we are looking at all the time. We 
are looking at ways to make the information in the Numident 
more accurate, have a more substantial basis for it. We have 
increased the evidentiary requirements for the information in 
the Numident, so we are also, just as DHS is doing, we are 
continually improving the quality of the data in the system to 
reduce that number.
    Mr. Bilbray. Ms. Ratliff was bringing up this issue of 
women forgetting to notify Social Security when they get 
married, change their names. I don't know why ladies do that, 
but it happens to be some kind of conspiracy out here to 
confuse the system. But, at the same time, we have the same 
problem, coming from local government, with IDs in State 
government trying to get the names changed. It is always a big 
deal about notifying people go to your DMV, look at your 
registration and a lot of other stuff.
    My question is with the accuracy level that we have with E-
Verify, the Social Security Administration provides Social 
Security payments for individuals. I am looking at a comparison 
to this level of efficiency. What is the percentage of payments 
that are sent out to the wrong person or not sent out at all? 
What is the efficiency of the Social Security payments to 
retired individuals?
    Mr. Rust. Mr. Bilbray, I may have to provide that for the 
record, if you don't mind.
    Mr. Bilbray. I would appreciate that. Let me just say this. 
I think those of us that have worked in local government look 
at this percentage, 99.6. When you get up in the high 90's, you 
really are at a level the government very seldom ventures into. 
So I was very interested in that aspect of it.
    Mr. Rust. But remember, for the people who are 
beneficiaries, they have a vested interest in letting us know 
changes of address, changes of name, and things of that nature. 
We are sending them a benefit every month. So they are very 
good about coming into us and correcting the record.
    Where the bigger gap for us is, many of us got our Social 
Security card when we were 16; now many are enumerated at 
birth. But then you may go decades without having any 
interaction with the Social Security Administration. It is 
during that period of time when we probably have the greatest 
discrepancies in the data. When a person gets ready to draw 
benefits, they are in to see us and to correct those 
situations.
    Mr. Bilbray. Right.
    Mr. Rust. Another thing we do is we send a statement out 
every year, the Social Security Statement, to everybody above 
age 25, and it has information in there on earnings and other 
information; and we ask people if there is anything wrong with 
the data we are presenting to you in this Social Security 
Statement, would you come and notify us so we can correct it. 
So we are trying on a regular basis to get those things cleaned 
up.
    Mr. Bilbray. I would also be interested in the people that 
get checks after their loved ones have passed away and forget 
to notify you. I think those are one of those things.
    Mr. Rust, the phase 2 has been pretty successful, but what 
is the average waiting time to resolve a mismatch over the 
phone? What type of issues can be resolved over the phone?
    Mr. Rust. From our point of view,--I believe you have a 
telephone response system, correct? Maybe you might want to 
respond and then I will respond.
    Ms. Ratliff. If I might answer. The Social Security 
Administration mismatches are typically resolved by an in-
person visit. It is the DHS mismatches that we have a process 
where you can call us. We have a 1-800 number. We typically are 
able to resolve over 90 percent of those calls within 2 days.
    In addition, we most recently added another option for 
citizens to call DHS, instead of doing into SSA, where they had 
a naturalization-related mismatch, and we are able to check our 
naturalization records, and 90 percent of the time we are able, 
over the phone, to confirm their citizenship. And this could be 
a case where the naturalized and haven't yet gone to SSA to 
update their citizenship status. But we know they are 
naturalized, we naturalized them, so with just a phone call we 
are able to verify that they are in fact work authorized.
    Mr. Rust. For the ones that come to us, it is almost all 
walk-in; there is very little that can be resolved by the 
phone. And I think they have 7 or 8 days to contact us, and 
then we resolve it as quickly as we can. It depends, in many 
cases, on how quickly they give us the documentation.
    Mr. Bilbray. Bring in a marriage certificate?
    Mr. Rust. Marriage certificate. If they don't have a birth 
certificate, they may have to go to the vital records in their 
home State or something of that nature. They have to get some 
sort of documentation to resolve the issue for us.
    Mr. Bilbray. And all of this will be streamlined as the 
States go into basically electronic data files on birth 
certificates and all that other stuff, which is a different 
piece of legislation.
    Mr. Rust. And death records and things of that nature. All 
those electronic systems help us keep our data base up to date.
    Mr. Bilbray. Thank you.
    Ms. Watson. I will now yield to Congresswoman Speier.
    Ms. Speier. Thank you, Madam Chair.
    Ms. Ratliff, 103,000 employers, approximately, participate 
voluntarily in E-Verify, according to our briefing paper. So 
what percentage of the employers in this country are actually 
participating in E-Verify, then?
    Ms. Ratliff. Well, there are two statistics we use to 
answer that question. The statistics on the number of employers 
is always hard to keep accurate because it changes every day, 
with about 1,000 more adding each week. The current number is 
137,000. That represents over half a million work sites, 
because one employer----
    Ms. Speier. No, I understand that. I just want to know how 
many employers you have as a percentage. Do you have that 
figure?
    Ms. Ratliff. Yes, ma'am. It is a half a million divided 
into about 7.2 million employers nationwide, so it is about 
one-fourteenth of the U.S. employer work force.
    Ms. Speier. So a very small percentage of the employers.
    Ms. Ratliff. It is small, yes, ma'am.
    Ms. Speier. Why is it we haven't made it mandatory?
    Ms. Ratliff. Well, Congress authorized it as a pilot to 
make sure that it was working appropriately and was scalable 
for 7 million employers, and I think that, as a matter of the 
program perspective, not as a matter of the policy perspective, 
we are building a program that could be made mandatory so that 
when the time is right, we can be successful.
    Ms. Speier. So how much longer do you think you need to be 
able to absorb 13th, 14ths more of a work force?
    Ms. Ratliff. As a matter of the IT infrastructure, we are 
ready today. We have a system capability of 65 million queries 
today, and, on average, there are about 60 to 65 million new 
hires a year. As a matter of the staff to do monitoring and 
compliance, we don't want to hire staff earlier and incur costs 
for salaries, etc., earlier than the ratio would support, but 
we have training modules----
    Ms. Speier. Can you give me just an estimate? I mean, is it 
2 years away, is it 3 years away? You are saying the IT is up 
and running.
    Ms. Ratliff. Yes, ma'am.
    Ms. Speier. So you don't have the work force to accommodate 
the kinds of inquiries. Is that basically what is missing, 
then?
    Ms. Ratliff. We could, within several years, hire staff to 
support monitoring and compliance if Congress saw fit to fund 
it at that level, and we could, today, support the mismatch 
resolution process.
    Ms. Speier. And do these employers who are voluntarily 
participating in the program right now, do they pay a fee for 
doing so?
    Ms. Ratliff. E-Verify is free.
    Ms. Speier. It is free?
    Ms. Ratliff. Yes, ma'am.
    Ms. Speier. So if we were to charge for it, what would we 
charge for it?
    Ms. Ratliff. Well, we would have to look at how Congress 
chose to phase in E-Verify. The costs would do down per query 
as more employers were enrolled. Past forms of legislation over 
the last few years have had varying phase-in years, so that 
would be a big factor. Also, if Congress chose to add a 
specific form of biometric, that would influence the cost. 
Right now, the authorizing statute doesn't speak to identity 
authentication.
    Ms. Speier. All right, what I would like for you to do, Ms. 
Ratliff, if you would, is just provide to the committee what 
the actual cost would be per employer if it was going to 
operate on a user fee basis.
    Ms. Ratliff. Yes, ma'am.
    Ms. Speier. I can't imagine that employers wouldn't embrace 
something like E-Verify, because what they are required to do 
now is very time-consuming and it is a huge cost to business. 
So if there was a simple IT solution, I think that they would 
embrace it. I am just kind of surprised that more employers 
haven't taken advantage of it.
    Mr. Bilbray. Would the gentlelady yield just for a second?
    Ms. Speier. I certainly will.
    Mr. Bilbray. Especially if we went to a universal 
application, because then you would divide the total cost among 
the entire universe, rather than just those who were 
volunteering.
    Ms. Watson. As I understand, Ms. Speier, it is optional, so 
maybe we can do this, make it permanent, and then once we get 
that information, out spread across the universe, I think the 
fee would be minimal. But we need that information.
    Ms. Ratliff. Yes, ma'am.
    Mr. Rust. Could I add?
    Ms. Speier. Mr. Rust, I have a question for you. Did you 
want to respond to that?
    Mr. Rust. If I could. From our point of view, we would be 
glad to work with DHS on bringing about mandatory coverage, but 
we would ask--funding would be an issue, adequate funding for 
it would be an issue because it would take us from something 
like 50,000 people walking into our offices to probably 450,000 
or thereabouts if we went up to the level of 60 million a year 
being run through. So it would be a substantial workload 
increase on the Social Security field offices.
    The systems aspect of it would not be very costly for us 
because we have modernized that and I think it can handle those 
number of inquiries. But there would certainly be a fallout in 
our field offices and it would be substantial.
    Ms. Speier. Well, the answer may be in trying to do sectors 
of employers over a period of time and bring them onboard over 
a number of years, as opposed to just turning a switch and 
having the program operate.
    I have one question for you, Mr. Rust. In California, we 
have taken action to prevent the use of Social Security numbers 
as a health insurance identifier. Is that also the law on a 
Federal level?
    Mr. Rust. Our position has been, since the agency was 
created in the mid-1930's, that the Social Security number is 
not a national ID number, that it was created specifically for 
the use in maintaining records on people's employment and 
earnings to determine their benefits. We actively discourage 
the private use of the numbers, but it is widely used.
    Ms. Speier. OK, so the answer to my question is no, there 
is no Federal law that prevents health insurers from using 
Social Security numbers as an identifier.
    Mr. Rust. Not that I am aware of.
    Ms. Speier. All right. Thank you.
    I yield back.
    Ms. Watson. Thank you.
    Now we will call on Mr. Connolly.
    Mr. Connolly. Thank you, Madam Chairwoman. Thank you for 
holding this hearing. I would ask, without objection, that my 
opening statement be entered into the record at this point.
    Ms. Watson. Without objection.
    Mr. Connolly. I thank the Chair.
    Let me walk through this just a little bit to make sure I 
understand where we are in E-Verify. The Bush administration 
started this program, with congressional support, on an 
optional and voluntary basis, is that correct?
    Mr. Bilbray. No.
    Ms. Ratliff. The program has actually been authorized for 
about 10 years, so it has spanned several administrations.
    Mr. Bilbray. Would the gentleman yield?
    Mr. Connolly. Yes.
    Mr. Bilbray. The program actually was implemented under the 
Clinton administration under the five-member pilot program.
    Mr. Connolly. But remaining an optional voluntary program, 
correct?
    Ms. Ratliff. Yes, sir.
    Mr. Connolly. Now, you have had a number, for example, of 
Federal contractors who have participated in the program on a 
voluntary basis as part of the pilot, is that correct?
    Ms. Ratliff. That is correct, sir.
    Mr. Connolly. And has that worked successfully?
    Ms. Ratliff. It has. We have had about 2,000 employers, as 
they have registered, self-select as Federal contractors. In 
anticipation of the Federal contractor rule becoming effective, 
we built a registration module where a business could self-
identify as a Federal contractor, and about 2,000 have, so far, 
taken advantage of that.
    Mr. Connolly. I talked with some Federal contractors last 
week who participated in the pilot program at the behest of the 
Federal Government. You are familiar with some of those 
candidates?
    Ms. Ratliff. With some of the 2,000 who are participating 
in E-Verify?
    Mr. Connolly. Yes.
    Ms. Ratliff. I know a few of them, yes, sir.
    Mr. Connolly. Right. One of the concerns they had was that 
when you move to the new stage in this program in September, 
that all of the hard work they have done in E-Verifying their 
employees, they are not going to get credit for it; they have 
to start all over again as if they were like anybody else who 
didn't participate in the pilot or voluntary program. Is that 
correct?
    Ms. Ratliff. That is partially correct, sir. If I may 
explain. The new hires who they have already run through E-
Verify they will not need to run again. Beginning September 
8th, under the Federal contractor regulation, they will have to 
run an additional portion of their current work force through 
E-Verify, and those are the people who they are going to put on 
the Federal contract. So that between their new hires and the 
work force working on the Federal contract that were already in 
place, they can have staffing to the Federal project that has 
been 100 percent run through E-Verify. So there will be a piece 
that they have to do that is additional.
    They also will have the option to query E-Verify for their 
entire current work force, whether or not those employees are 
working on a Federal contract.
    Mr. Connolly. Well, I am not sure I understood your answer. 
If I am a Federal contractor who volunteered and participated 
in the pilot program for E-Verify, it was only for new hires.
    Ms. Ratliff. Currently, yes, sir.
    Mr. Connolly. Those new hires, if they are still on my 
payroll, I won't have to go back and duplicate the E-
Verification of those?
    Ms. Ratliff. That is correct, you will not have to.
    Mr. Connolly. All right. Because I think there was some 
confusion about that in terms of what the requirement is going 
to be.
    Were there some Federal contractors who went beyond new 
hires and, in fact, used E-Verify for their current work force?
    Ms. Ratliff. If any employer has done that, it would be a 
misuse of E-Verify.
    Mr. Connolly. They were not allowed to do that?
    Ms. Ratliff. It would not be proper.
    Mr. Connolly. But it will be proper come September.
    Ms. Ratliff. Yes. As of September 8th, if they run current 
workers who are assigned to a Federal contract, that will be a 
part of their requirement. Then they also could choose to run 
their entire current work force. Large companies, they may have 
employees who are on Federal contracts; they may have a whole 
group of other employees who work on private sector projects.
    Mr. Connolly. Why would it have been a misuse, why in fact 
would it be a misuse of E-Verify today for me to do that, but 
it will be an option available to me in 2 months?
    Ms. Ratliff. Because the way our statute is written, it is 
just for new hires, it is not for current work force. President 
Bush signed an Executive order that is the underpinning of the 
Federal contractor regulation that said in order to ensure a 
stable and work-authorized Federal work force--because we 
already are running Federal Government new hires through E-
Verify--the administration wanted to ensure that the Federal 
contractors who are also working on Federal Government projects 
had also been run through E-Verify. And the Executive order 
found that for the interest of a secure, stable, Federal work 
force, contractors who were moving to a Federal contract should 
also be queried and verified through E-Verify.
    Mr. Connolly. What about the potential misuse of this data 
base? We have had hearings in this committee about the issue of 
cybersecurity. We have had testimony that the incidents of 
hacking and attempted hacking into Federal data bases have 
skyrocketed. And with the best of intentions with E-Verify, are 
we putting Federal contractors at risk of similar hacking 
incidents? What kind of security provisions are we undertaking 
to ensure that those data bases are secure and people's privacy 
isn't unwittingly invaded?
    Ms. Ratliff. Sir, E-Verify, as a matter of the IT 
infrastructure, meets the very stringent Department of Homeland 
Security IT security standards. We also meet all Privacy Act 
standards. Our privacy impact assessment and system of records 
notices are both up to date with how we use our information, 
and we will continue to meet those stringent standards with an 
eye toward the importance of the very issues you are 
mentioning.
    Mr. Connolly. Madam Chairwoman, my time is up, but I would 
just say to you, Ms. Ratliff, that is a bureaucratic answer. My 
question was what measures are you taking. Meeting standards, 
lots of Federal agencies are meeting standards, and the hacking 
incidents are growing and becoming more successful. My question 
to you was what are we doing with this new program, creating 
this new data base for Federal contractors, to ensure their 
security. Meeting standards is not a satisfactory answer for 
this Member of Congress.
    Ms. Ratliff. I know we are out of time, but I would commit 
to submitting information, meeting with your staff to discuss 
this in detail.
    Mr. Connolly. OK. My time is up.
    Ms. Watson. Yes.
    Mr. Bilbray.
    Mr. Bilbray. Madam Chair, I would just like to point out, 
because I think it is quite appropriate, as we develop these 
systems, that we armor them and protect them, and that is a 
universal application. The gentleman from Fairfax County can be 
reminded, too, that one of the greatest identity thefts in the 
United States--and I think Mr. Rust will reinforce this--is the 
hijacking of people's Social Security numbers. And this helps 
to armor that to some degree.
    So as we look at the hi-tech threat of going to the 
electronic system, we also need to recognize that it is the 
low-tech where the greatest abuse of Social Security identity 
theft is, and that is of people getting a number and being able 
to use it because we don't have a check system. The old I-9 
documentation system has been a farce; we have all known it. So 
as we move forward, I think the gentleman from Fairfax has 
pointed out that as we move away from an old system that was 
very vulnerable, let's try to armor the new system and protect 
it. That is an issue that we have been talking about with E-
Verify and all our electronic data stuff.
    I yield back, Madam Chair.
    Ms. Watson. And I just have a few more questions to ask Mr. 
Rust, and then we are going to move on to the second panel.
    The House passed the version of the fiscal year 2010 
Homeland Security appropriations bill, it was H.R. 2092, and it 
includes a provision to require that both the Social Security 
Administration and the Department of Homeland Security enter 
into an agreement each fiscal year to provide funding to the 
Social Security Administration to cover the full cost of the 
agency's E-Verify-related responsibilities. What do you think 
about this provision? Did you know about it?
    Mr. Rust. We have had a very good working relationship with 
DHS and we have been able to work this out year after year to 
get the adequate funding that we need to do most especially the 
fallout that occurs in our field. We always appreciate when 
Congress helps us to make certain that we get that level of 
funding, but our relationship with DHS has been very collegial 
and this has worked very well.
    Ms. Watson. OK. And do you believe that the Social Security 
Administration can, with this provision, receive the kind of 
funding for E-Verify in the absence of such a statutory 
requirement? And given our crisis at the time, how do you think 
this is going to really facilitate what you do?
    Mr. Rust. I think it will simply reinforce the relationship 
we have had, the excellent working relationship we have had, so 
I think it will be helpful in that sense. One of the things I 
would stress, why we stress the importance of this, I mentioned 
the growth in our workloads in terms of 250,000. This is more 
retirees than we expected. 350,000 more disability claims. We 
budgeted for 2.5 million. This is 350,000 on top of that. So we 
are an agency under stress in that sense, so any assistance we 
get from DHS to help handle that workload is very much 
appreciated and very critical to us.
    Ms. Watson. A 2006 report by the Social Security 
Administration Inspector General on the accuracy of the 
Numident data base, that was relied on by E-Verify, found that 
there were discrepancies in approximately 17.8 million of the 
435 million Numident records could result in an incorrect 
feedback. The report noted particular concern about the extent 
of incorrect citizenship information.
    What has been done to improve the accuracy of Numident and 
have any more recent studies been conducted on this particular 
issue? And how do you expect the Social Security Administration 
and its field offices to be impacted by the new Federal 
contractor rule?
    Mr. Rust. To answer your second question first, we have 
gotten it to the point now where about 0.75 percent, or about 
75 out of every 10,000 queries that go through E-Verify end up 
in someone walking into our offices to resolve a non-
confirmation. So if we are able to maintain that and we worked 
very closely with our colleagues to reduce that workload, but 
as the number of verifications go through E-Verify, if that 
ratio holds, we will see more and more people coming into our 
offices.
    So, again, like I say, just 2 years ago it was 3 percent; 
now it is down to 0.75. So working with DHS we have 
substantially reduced that, but it is still a fairly sizable 
workload. So, like I say, this year it is over 50,000 visits to 
our office related to E-Verify non-confirmations.
    Going back to your first question, the 17 million is 4.1 
percent of the entries. The Inspector General looked not at 
those cases, for instance, if you had ones that were no match 
in the E-Verify system; this was just an overall look at the 
Numident. We have now about 455 million entries in there. 
Everybody who has had a Social Security number since 1936 has 
an entry in there.
    As I mentioned, I think, to Mr. Bilbray a little while ago, 
most of the information we get comes from individuals telling 
us stuff, so if you went and got your Social Security card at 
16, and then you don't come to us again for many years, that is 
when the marriage could happen, a name change could happen, a 
divorce could happen, other things like that can happen that 
would then cause a discrepancy in the number. So we have 
mechanisms for clearing it up and for strengthening it.
    You asked what we have done to strengthen the Numident. One 
I mentioned is the Social Security Statement which goes out 
every year, presents the information to people and asks them, 
if there are any discrepancies, to contact us to clean it up. 
Second, we use enhanced evidentiary requirements now. We have 
birth certificates, we see marriage licenses and marriage 
certificates; we see naturalization papers. We ask for 
documentation now when people come in to make these 
corrections. So we think the Numident is steadily becoming more 
accurate.
    We now enumerate most children born in the United States at 
birth, so that is going to give us the hospitals handling it at 
the State, statistics units will be handling it, so we will be 
getting data electronically, we will be getting it cleaner, we 
will be getting it quicker; and then we will know citizenship, 
because they were born in this country. So things of that 
nature, these electronic mechanisms we are doing to make the 
data more accurate and more up to date.
    Ms. Watson. I am going to yield now to Mr. Bilbray.
    Mr. Bilbray. Yes. The gentleman from the great Commonwealth 
of Virginia brought up a very interesting issue, and this is 
about the fact that we created barriers in the past from having 
employers use E-Verify on existing employees, and I think, to 
clarify, there were concerns about who would pick and choose 
which employees, and we created that barrier for a good reason 
for that time.
    But he did bring up this item that I have to say shows why 
these hearings are great. Is there a reason why or is there a 
great barrier for the Federal Government to lead through 
example and start a process of phasing in checking all our 
existing employees, as pointed out by the gentleman from 
Fairfax County? Do we have the capability to lead through 
example and start having our own internal operation now, start 
checking up with these?
    Ms. Ratliff. That wasn't an issue that we actually looked 
at quite deeply last year. The leading by example was a theme 
of great interest to the last administration, as well as now, 
and we did spend time looking at what are the current processes 
that the current workers have already been run through to 
verify their work authorization status, and given that was 
found that they are already quite vigorous. So at that time, it 
didn't seem an appropriate use of resources to basically 
duplicate what had already been done in other steps through----
    Mr. Bilbray. Security checks and----
    Ms. Ratliff [continuing]. OPM checks, and also the 
Government's preparation for the SHPD-12 process of producing 
even more secure identity documents for us as employees. But 
that was something that was looked at very deeply.
    Mr. Bilbray. OK, and I would like to see that, because I 
think that we need to revisit it and make sure that just 
because the majority of the time we have already covered it 
because of other security checks and stuff doesn't mean there 
isn't enough that we need to look into.
    And while we are on the subject, seeing that you have two 
former county chairmen here, when we do this contract 
requirement, does that apply to our local governments when we 
start giving them grants? And are we going to now start 
requiring government that gets our money to start responding in 
the same manner that we are requiring the private sector to 
respond?
    Ms. Ratliff. The answer to your question is no. The FAR 
regulation does have some discreet exemptions. Subcontractors 
for contract values of less than $3,000 are exempted. COTS, the 
commercial office-the-shelf products, those contracts are 
exempted as well.
    Mr. Bilbray. OK. Now, you said that for the private sector. 
How about the public sector? Is there any requirement that 
local governments, when they start getting grants, that we 
start phasing this? I am wondering about this issue because 
when we start giving transportation funds, the American people 
are starting to say we want to make sure that Federal funds 
aren't going into fraud.
    Are we requiring that at all of our States and our counties 
and our cities as they get Federal funds? Has this become a 
tradition or have we just basically been blind-sided on that 
and we are just working on the private sector right now?
    Ms. Ratliff. The grants are excluded from the FAR 
regulation.
    Mr. Bilbray. OK.
    Thank you very much, Madam Chair. I have a feeling that we 
need to revisit this whole thing again, leading through 
example, and that means the Federal Government and the local 
government and the States need to lead through example. I yield 
back.
    Ms. Watson. Mr. Connolly of Virginia.
    Mr. Connolly. I have no further questions of this panel, 
Madam Chair.
    Ms. Watson. All right.
    Mr. Duncan of California.
    Mr. Duncan. Tennessee.
    Ms. Watson. Tennessee. Excuse me. Come on to California.
    Mr. Duncan. You are from California. [Laughter.]
    Well, I am sorry that I wasn't able to get here before now, 
but let me just ask a couple quick questions.
    How much does the Federal Government spend on this program 
at this time?
    Ms. Ratliff. Sir, the E-Verify budget for this year is 
comprised of about $100 million in appropriations that was 
given for fiscal year 2009, and we also had $20 or $30 million 
from fiscal year 2008 appropriations that we wisely and 
efficiently did not spend, and it rolled over. So, this year we 
will be spending close to the $120, $130 million budget. Some 
of those are one-time costs for system improvements that will 
not need to be put into our baseline program funding.
    Mr. Duncan. And is my information accurate that there is 
now 134,000 employers or companies that have used this system?
    Ms. Ratliff. Well, that was 3 weeks ago. It is growing by 
1,000 a week, so now we are up to about 137,000.
    Mr. Duncan. That was going to be my next question, how fast 
it was growing. It is growing at about 1,000 more employers per 
week?
    Ms. Ratliff. Yes, sir.
    Mr. Duncan. And I am also told that right now there is 1 
employee for each 1,250 employers, roughly. And it is a 
voluntary program right now, so do you think the DHS is 
equipped to make this program mandatory?
    Ms. Ratliff. Sir, in terms of our staffing, there is a 
certain baseline staffing you need whether E-Verify has 1,000 
employers in it or 7 million. For example, it takes a certain 
number of staff to write a regulation no matter how many 
employers it is going to affect, so our staffing number, we 
have about 200 employees right now working on E-Verify, 
roughly. That will not grow in huge numbers as the program 
grows; a lot of that is a baseline program staffing.
    The pieces that grow, the biggest piece will be outreach, 
so we are appropriately helping employers who are signing up 
know how to use the system; and monitoring and compliance so we 
are able to make sure those employers are using the system 
properly and reaching out to them if they are not.
    So we have been basically building a program that would be 
ready if Congress chooses to make it mandatory, and I think 
that we are very far down the road in terms of being ready 
should Congress authorize such a change to the program.
    Mr. Duncan. And the 7 million figure that you mentioned 
just a few moments ago, is that the number of employers that 
your Department estimates are in this country today?
    Ms. Ratliff. Yes, sir. We use the statistic of about 7.2 
million employers.
    Mr. Duncan. So even that high figure of 137,000 employers 
using this system now is just a tiny percentage, then, of the 
total number of employers in the country.
    Ms. Ratliff. It is. The 137,000 represents about a half a 
million work sites, and that is the more apples-to-apples 
comparison to the 7.2 million. But, yes, we look forward to a 
lot more growth in E-Verify as more employers join.
    Mr. Duncan. All right, thank you very much.
    Ms. Watson. Thank you, Ms. Ratliff, Mr. Rust, for your 
witnessing. We appreciate it and you may now leave the table.
    I would like to invite our second panel of witnesses to 
come forth. And remain standing, please.
    It is the committee's policy that all witnesses are sworn 
in. I would like you to raise your right hands as I administer 
the oath.
    [Witnesses sworn.]
    Ms. Watson. Thank you. Let the record show that the 
witnesses have answered in the affirmative.
    You may now be seated.
    I ask that each one of you now give a brief summary of your 
testimony and to keep your testimony within 5 minutes if you 
can, because your complete written statement will be included 
in the hearing record. Thank you.
    I first would like to introduce Ms. Jena Baker McNeill, who 
is the Heritage Foundation's homeland security policy analyst, 
where she focuses on broader security, immigration technology, 
and other issues. She previously worked for the Hutchinson 
Group LLC as a research assistant and as an environmental 
management consultant for Booz Allen Hamilton, and for former 
Maryland Governor Robert Ehrlich.
    Ms. McNeill, would you please proceed now? Thank you.

 STATEMENTS OF JENA BAKER MCNEILL, POLICY ANALYST FOR HOMELAND 
SECURITY, THE HERITAGE FOUNDATION; AND ANGELO AMADOR, EXECUTIVE 
   DIRECTOR FOR IMMIGRATION POLICY, U.S. CHAMBER OF COMMERCE

                STATEMENT OF JENA BAKER MCNEILL

    Ms. McNeill. Thank you, Madam Chairwoman. Madam Chairwoman, 
Ranking Member Bilbray, and the members of the subcommittee, 
thank you for the opportunity to testify today on the topic of 
E-Verify. I should state beforehand that the views expressed in 
this testimony are my own and should not be construed as 
representative of an official position of the Heritage 
Foundation.
    Workplace immigration enforcement is vital to breaking the 
cycle of dependency on illegal labor. These policies, however, 
should center on three goals: first, keeping America free; 
second, keeping America safe; and, third, keeping it 
prosperous. We should not compromise one of these goals to gain 
another, and all three can and should be met with respect to 
America's immigration policy.
    E-Verify is a tool that meets these requirements. But I 
want to emphasize up front that E-Verify remains only one piece 
of the immigration puzzle. The right approach to solving the 
immigration dilemma will include the following aspects: first, 
enforcement of immigration laws in the workplace; second, a 
safeguarding of the southern border; third, promotion of 
economic development in Latin America to provide illegal 
immigrants economic opportunities at home; fourth, enhancement 
of legal worker programs here in the United States to meet the 
needs of employers and immigrants; fifth, reforms of 
citizenship at immigration services to handle legal immigration 
in a better way; and, finally, strengthening of citizenship 
requirements and programs to foster assimilation.
    Effective enforcement doesn't require a costly amnesty that 
would erode rule of law and be patently unfair to legal 
immigrants. E-Verify tackles the immigration problem by going 
to the heart of what draws illegal immigrants to the United 
States, finding employment. At present, more than 137,000 
employers participate in E-Verify voluntarily. And E-Verify is 
being used to determine work authorization for one in four new 
hires nationwide.
    Contributing to this success is that E-Verify helps 
employers enforce immigration laws in a way that is humane and 
fair, cost-effective for business, and maintains privacy. E-
Verify can determine quickly and accurately the authenticity of 
the personal information and credentials offered by new hires.
    Of course, E-Verify isn't without its challenges. It has 
low error rates, but more can be done to drive down the rate of 
error. While the software is free, there is a cost to doing 
business with E-Verify. But this cost is negated by driving 
down other costs, such as the cost of having to find a new 
employee later if an employee tends out to be illegal, or the 
stiff penalties if discovered.
    Finally, the only personal information entered into E-
Verify is the employee's name, date of birth, Social Security 
number, and citizenship status. This is information already on 
the I-9, and neither the E-Verify employees nor the employer 
can access any more information, maintaining privacy.
    The administration's recent announcement to abandon Social 
Security no-match, however, is a step backward in terms of 
workplace enforcement. This action sends the message that DHS 
will not enforce the law against employing illegal workers. 
Furthermore, DHS has yet to implement the Federal contractor's 
provision, signed by President Bush in 2008, which requires all 
Federal contractors to use E-Verify. The administration has 
announced plans to comply, and this is a step in the right 
direction.
    Going forward, Congress should permanently authorize E-
Verify and provide adequate funding for its implementation. DHS 
should craft E-Verify rules to apply to all workers under 
Federal Government contracts; otherwise, the result will be 
less workplace enforcement, not more. DHS and Congress should 
work together to drive down the already low error rates. And, 
finally, DHS should not abandon no-match, but should, instead, 
move forward with it. At the same time, Congress should grant 
the Social Security Administration the ability to share data 
directly with DHS, allowing DHS to target large-scale employers 
of illegal workers.
    A truly smart and tough enforcement policy will be one that 
creates disincentives to unlawful immigration, is cost-
effective, protects individual data and privacy, and minimizes 
the burdens on employers while addressing concerns over safety 
and security. E-Verify does this, meeting those ultimate goals 
of keeping America free, keeping it safe, and keeping it 
prosperous.
    Thank you, and I would be happy to answer your questions.
    [The prepared statement of Ms. McNeill follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Ms. Watson. All right.
    We will proceed now to Mr. Angelo Amador. He serves as the 
U.S. Chamber of Commerce's Executive Director of Immigration 
Policy, where he works with business leaders to shape the 
Chamber's position on immigration reform, legalization, border 
security, visa processing, and guest worker programs. Mr. 
Amador also represents the Chamber before the Congress and 
Federal agencies.
    Mr. Amador, please proceed.

                   STATEMENT OF ANGELO AMADOR

    Mr. Amador. Thank you very much.
    I had prepared an oral statement, but after listening to 
the questions, I would rather use the 6-minutes or the 5-
minutes that I have to give some concrete examples of what you 
have been talking about.
    A lot has been said about what DHS should mandate or not 
mandate. I will point out again that the underlying law says 
the Secretary of Homeland Security may not require any person 
or other entity to participate in the E-Verify program. They 
call it a pilot program, but it is the underlying law that gave 
to the creation of E-Verify. We do believe that Congress has 
that authority to mandate it; that is why we continue to come 
to Congress and that is why we are here today.
    Now, I also want to point out that it has been said let's 
put a fee because this program is free and the word free is 
used quite a lot. Actually, using E-Verify doesn't do away with 
any of the other requirements, you still need to do the I-9, 
you still need to do the other processing that you need to do 
when you hire a new worker.
    It is estimated that already employers spend between 10 to 
12 million hours in the hiring and processing of about, as you 
heard, 50 to 60 million workers. A study in 2005 said that the 
estimated total compliance costs of workplace regulations is 
about $91 billion. Five years later, when they did a followup 
study using 2004 dollars, the cost was already at $106 billion.
    When you make these requirements, we had a witness come 
that owned about seven Burger King franchises, he testified as 
to the cost of training, the cost of following up with 
tentative no-confirmations, attorneys and all these things. So 
when you think about a fee, I just want to point out this is 
not free. The employers are willing to help the Government with 
the mandated program. We are willing to support and we have 
supported mandated programs in the past. We could support a 
Federal contractor's mandate, but only if you have certain 
requirements.
    One of the numbers that was used in the prior panel was 
one-fourteenth of all employers use this. This is less than 1 
percent. Now, when we look at--actually, sorry, this is 7 
percent. When we look at this body of employers is very small. 
Most of the comments I get from people complaining about the 
program and complaining about what is about to be required are 
people using the program. They sign an MOU, which is a 
contract. They agree with the Government to do certain things.
    What Congress is saying and what the administration is 
saying is to change that contract. They agreed to verify new 
hires. We hear that the program can handle 60 million queries. 
That is about how many new hires you have every year. That 
doesn't count re-verification.
    It is interesting that every time the Government has looked 
at running their own program, which has been an idea, and is an 
idea that is being pushed by AFL-CIO and might be one of the 
only things we agree with them on in this Congress, the 
Government looks at it and they always say, well, let's only do 
new hires. But if we are going to implement it on employers, do 
everybody.
    I was just talking to UPS 2 days ago, and they were telling 
me that they have 250,000 employees in the United States. They 
cannot verify which one is going to touch a package that goes 
under a Federal contract, so they would have to re-verify every 
single individual. They have been using E-Verify since 2007.
    So it adds an additional hurdle if they have to figure out, 
first, who was hired after 2007. They will have to them 
recreate an I-9 application, an I-9 process, because the 
current E-Verify requires that you use current documents. And 
they tell me that is going to cause thousands of manpower hours 
just to bring everybody back in for 250,000.
    There are ways of doing this. Senator Obama had an 
amendment, when he was a Member of the Senate in 2007, that 
said, let's share the information with the Social Security 
Administration getting no-match, let DHS send a letter to the 
employer saying re-verify these workers, but don't re-verify 
your entire work force. If it is a small employer, we do not 
oppose the language that makes re-verification voluntary, 
because if you have three employees, you and two others, and 
you want to verify them, that is fine. But all the large 
employers, and all of them, again, are the ones that sign on 
these contract that use E-Verify have told me that this is not 
the way to go.
    Finally, on the subcontractor liability, there was an 
amendment that was presented in 2005. Chairwoman, you voted 
against it, but we would hope to have your support next time. 
But Congressman Duncan, Congressman Cuellar, in 2005, voted to 
keep liability for contractors only if they knew the 
subcontractor was violating the law, because there are a lot of 
things on the MOU and the contractor cannot be held responsible 
for everything, because that is why you go with a 
subcontractor, so you don't have to run the work force.
    Finally, in my last 10 seconds, I will just point out that 
we need to create one law. We need to strengthen the preemption 
language that we have because employers should be able to 
comply with immigration law by complying with Federal law.
    Thank you very much.
    [The prepared statement of Mr. Amador follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. Watson. I want to thank you both.
    We are now going to move to the question period and we will 
proceed under our 5 minute rule.
    Let me ask Ms. McNeill, first, are adequate steps being 
taken by the Social Security Administration and the USCIS to 
balance the requirements of E-Verify with ongoing agency 
demands and are the additional agency staff members being hired 
to deal with an influx of queries related to E-Verify or are 
existing staff members being reassigned?
    Ms. McNeill. Madam Chairwoman, I can answer your question 
as far as I think that right now the Social Security 
Administration and the Department of Homeland Security are well 
equipped to handle what we have now and well equipped to handle 
the number of workers that could happen if we had a universal 
system.
    But I want to emphasize that a universal system might not 
be the silver bullet approach right now. I think they are well 
equipped at the moment, they have the right kind of staff in 
place, but a universal system, they may not have the staff in 
place for that now, and I think that it shows that not only 
would a mandatory system right now not be the best approach for 
all industries.
    Obviously, we want to move toward a system where everyone 
would use the system, use E-Verify, but I think that using it 
in a mandatory fashion right now would not be the best approach 
either from the Government's side or from the business side, 
because we don't have the right things in place to ensure that 
all employers and the Government are doing things in an 
accurate, cost-effective manner.
    Ms. Watson. OK. With fewer than 2 percent of all employers 
enrolled in E-Verify, how can we possibly gauge whether the 
current system will be able to handle a rising number of 
queries on an annual basis?
    Ms. McNeill. Well, Madam Chairwoman, I think the biggest 
thing that shows how good the system is right now is that 96.9 
percent of the people who are put into E-Verify right now are 
getting a confirmation that says you are great, go and work; 
and only 2.8 percent are getting a final non-confirmation. That 
shows how accurate the system is. It is really hard to find 
that level of accuracy in other data bases and other parts of 
Government, and this is the right kind of efficiencies that we 
need to have in the Federal Government. So I think that just 
the success of E-Verify on a small level shows the ability of 
DHS and the Social Security Administration to take this to a 
much larger scale.
    Ms. Watson. Mr. Amador.
    Mr. Amador. Yes. I would point out the numbers and how you 
deal with accuracy differ, and I want to point out that Intel 
Corp. did its own study as to the accuracy or how often did 
they get a tentative non-confirmation, something other than 
confirmed, for their employees.
    I want to compare it with the individual that testified 
that uses E-Verify for seven Burger King franchises in Arizona. 
They both came back with about 15 percent of the time they got 
an answer other than tentative non-confirmation, and every time 
that happens--because, again, we are not just talking about 
swipe a card, green, red light, you get in or you get out; this 
is an employee you have.
    You have a number of other requirements; you need to be 
very careful that you do not change training, you do not change 
work hours, you do not change any of these things. So liability 
opens up and there are other burdens. And, for them, the number 
they are looking at is 15 percent, it is not whether, 3 months 
down the road, you finally fix the problem with the Social 
Security number. They are looking at today I ran you through 
the system, it came as a TNC, what do I do now; and there is a 
process for that.
    So the 2 percent, 1 percent, or whatever number, it is up 
to Congress to decide what error rate they want to live with; 
it is not up for businesses. But since no program is going to 
be 100 percent accurate, you then need to look at the 
safeguards, because employers and employees are going to have 
to live with this. There was a provision, again, in the Senate 
that passed that provided lost wages for employees that, at the 
end of the day, got fired and it ended up being an error of the 
system.
    And even though Chertoff, at the time, was saying that this 
was a wonderful, almost perfect program, they opposed that 
amendment based on the lost wages and based on the fees that 
employers would get if it was an error of the system.
    We are all for a mandated program, but we have to do it 
right because there will be errors and somebody is going to pay 
the consequences.
    Ms. Watson. Still a work in progress.
    In what ways have some of the recent enhancements to E-
Verify, including the use of the photo tool, helped to improve 
the system for businesses?
    Mr. Amador. Well, it is an improvement in the system. Now, 
it also opens up the employer to more liability. When we had 
our witness testify, he said, well, I have a central location 
where we do the I-9s and we put it in the system, so they were 
faxing the copy of the person's ID to compare with the 
computer. The guy in the field would copy the license, fax it 
to the guy in the central office doing the E-Verify on the 
computer, and now he is looking at a copy and he has to make a 
determination. And he said, you know, we found more often than 
now how accurate is my comparison and what happens in an audit.
    When they go and do audits, we have an audit right now on 
652 employers. I got a call from somebody who said that he was 
getting 47 citations out of the 59 I-9s he had on record 
because he failed to write the address of the employer. The 
employer's I-9s are being kept by his side, he has his name, 
and he said, well, I will write them right now. We were just 
being quick, we were hiring a lot of people. He said, no, that 
is 47 citations.
    We need to make sure--and they look at E-Verify. Yet, 
another potential for liability when they do audits on 
paperwork and other misuses other than not running somebody 
through the system. So those are the safeguards we are looking 
for.
    Ms. Watson. Well, with the concept of this is a work in 
progress, we would like to hear from you as to how you think we 
can perfect the system.
    Mr. Amador. Well, one of the things we continue to say is--
--
    Ms. Watson. And, as I said, you don't have to give us all 
your ideas now.
    Mr. Amador. No, I understand. But one of the things that 
should be instrumental is to start implementing a tier process; 
and it cannot be done by DHS, it has to be done by Congress. 
Starting doing it in a tier process. Eighteen thousand firms 
basically hire 50 percent of all Americans, so it might make 
sense to go with bigger employers first, but you need to also 
put those safeguards. And then as this comes up and you realize 
the problems that they have, then keep on going. But employers 
are different. You cannot expect the 4 million that 0 to 4 
employees, to have the same capacity as the 18,000.
    Ms. Watson. Yes. And we are going to depend on you letting 
us know what you think we need to do to correct the system. We 
are going to hold another hearing down the line, too, on E-
Verify, just to see what we need to do in terms of policy.
    Now I would like to call on Congressman Duncan of 
Tennessee.
    Mr. Duncan. Thank you very much, Madam Chairwoman.
    Mr. Amador, you make a point that this system, while it is 
usually referred to as being a free system, it is not really 
free to businesses. Could you elaborate on that a little bit 
and how much it might cost? I assume it varies from employer to 
employer.
    For instance, I have noticed over the years that a company 
like UPS, when I go visit UPS facilities, I will find people 
that have worked there, commonly, 20 or 25 years. Yet, fast 
food places, they have, some of them, 300 percent, 400 percent 
a year turnover, so people work an average of 3, 4, or 6 months 
there. How does that factor in?
    Mr. Amador. Yes. I guess our view is that there is no such 
thing as a free lunch and there is no such thing as a free 
mandate, and this is a perfect example. You need to spend time. 
One of the biggest expenses, according to this gentleman, 
Mitchell Laird, from Arizona, who owns seven Burger King 
franchises, that they have a high turnover rate.
    So you need to take people out of the work, the system 
managers that are doing the hiring, to train them, and the 
training alone--and you basically get hit twice; you have the 
person in training and you don't have them at the work site. 
The fact that you have all these new employees you need to 
continuously be running these individuals.
    Then you have large companies who have other concerns. When 
you talk about the large Federal contractor, they say, well, we 
really don't have a big problem using E-Verify now for new 
hires, but we would have a big problem if we need to go out. 
Ingersoll Rand, which is our immigration subcommittee chair, 
has 45,000 employees and they are all over the United States. 
They don't have a centralized system.
    They said we are going to have to start paying for auditors 
to go over there. We need to bring everybody in and give them 
training so everybody does it the same way, because the moment 
one place starts doing it different, then you have to, well, 
wait a second, what are you trying to do? You are trying to 
discriminate against people in Texas versus people in 
Washington. So those are all costs; the training and the 
facilities and the manpower and the hours is a big concern for 
them.
    Mr. Duncan. Do you think that because this is such a big 
and overwhelming problem, that it is just going to be 
impossible to do something about? Do you feel like we are 
tilting at windmills here or beating our heads against concrete 
walls? Do you think we should just have open borders and not do 
anything about illegal immigration?
    Mr. Amador. No, not at all. And I think we can even mandate 
an employment verification program, but what we have continued 
to say is we want to make sure--and even outside of 
comprehensive reform, what my members are telling me, we just 
need to make sure that it is the right program and it has the 
right safeguards. It is for Congress to decide what error level 
they can live with.
    If you want to mandate it on Federal contractors, then we 
want to sit down with you and tell you, well, this is what the 
Federal contractors, particularly the ones that are using it 
right now, are telling me they could live with and ways of 
addressing the issues. For example, if what you want to do is 
figure out whether the name, which is what E-Verify does, the 
name and Social Security number of those currently working 
match, there is a process for that.
    Now, the numbers go to the Social Security Administration 
and there was an amendment that put the burden on DHS to send a 
letter to the employer saying verify these individuals, and the 
employers are willing to do that. So that is a way of doing 
that. Re-verification, as Grassley, Baucus, and Obama said in 
the letter to Chertoff, shouldn't be a requirement.
    Subcontractor/contractor liability, the amendment from 
Congressman Westmoreland that, you know, I thank you for your 
vote in favor of it, stated as long as the contractor didn't 
know what the subcontractor was doing in his internal 
operations of the system, he should not be held liable. That is 
current law. If the contractor is trying to hire a 
subcontractor to get around immigration law, yes, hold him 
liable, but not create vicarious liability for a contractor to 
be held liable. These are the kinds of things that, if you put 
them in a mandatory employment verification system, employers 
will be able to get behind it.
    Now, a blanket language like the one that is coming from 
the Senate on the Department of Homeland Security 
appropriations we oppose because it doesn't create exemptions 
like even the ones in the regulation for commercial over-the-
shelf items or small employers, and it has a broad mandate for 
re-verification. We have always opposed that; we opposed it in 
2005 and we still oppose it today.
    Mr. Duncan. Let me say, before my time runs out, first of 
all, I think that your suggestion about going to the biggest 
employers first is just common sense. Second, almost all 
Federal contracts are so ridiculously lucrative it seems to me 
that we should require, first, compliance by Federal 
contractors.
    But let me ask Ms. McNeill, maybe this testimony has 
already been given when I wasn't here, maybe I missed it, but 
of the 6 million inquiries, how many are found to be illegal 
out of that 6 million? Do you have those figures?
    Ms. McNeill. I don't have those figures on hand. I would be 
happy to see if I could find them and provide them for you for 
the record. However, I will say that 2.8 percent of the people 
are found to be final non-confirmations, and both Pugh Hispanic 
Center and the Center for Immigration Studies estimated that 
the amount of unauthorized workers in the work force was about 
4 to 5 percent. So it is about, on average----
    Mr. Duncan. OK. Well, that is good enough. Have there been 
any examples of any legal worker who has lost his or her job 
due to incorrect information under this system?
    Ms. McNeill. Well, there are going to be people who were 
denied positions because they were final non-confirmations, but 
that doesn't mean that they were necessarily denied incorrectly 
for the position.
    But I will also say, Congressman, that if there is a 
situation where it becomes a discriminatory situation, where it 
is a pre-screening thing that is against E-Verify, there are 
penalties in place for that, and I think that we need to 
educate employers better on figuring out how to use E-Verify in 
an effective way, because a lot of employers are confused on 
subjects such as how to use E-Verify in the way that actually 
meets the law. So I think that is also an important, that 
education angle as well.
    Mr. Duncan. All right. Thank you very much.
    Ms. Watson. Mr. Connolly.
    Mr. Connolly. Thank you, Madam Chairwoman.
    If I can pick up on my friend from Tennessee's questioning, 
isn't it true that 2.8 percent you are referring to, they may 
be denied employment because they are found to be non-
compliant, is that not correct?
    Ms. McNeill. That is absolutely true, Congressman.
    Mr. Connolly. But the system doesn't tell you whether the 
non-compliance is as to their immigration status or just the 
failure to provide proper documentation.
    Ms. McNeill. Congressman, that is absolutely correct.
    Mr. Connolly. So there is no way you are ever going to get 
back to Mr. Duncan giving him numbers about here is the 
estimated number of illegals the system has caught. For 
example, I only have 8 days in which to provide a birth 
certificate, for example, or a marriage certificate, and if I 
am in California applying as a new hire for a job and those 
documents are back home in Virginia, it is conceivable, 
bureaucracies being bureaucracies, that documentation just is 
not forthcoming within the requisite time period. Is that not 
correct?
    Ms. McNeill. That is absolutely correct, and I think we 
need to work on the accuracy, absolutely.
    Mr. Connolly. And I would be found to be non-compliant in 
failing to provide that document and, thus, not to be hired, is 
that correct?
    Ms. McNeill. It is very possible that could happen, 
Congressman.
    Mr. Connolly. And I would just say, if I were a major 
employer, even if I were a small business employer, that would 
concern me, because, as an individual, I am not in control of 
how quickly such documentation may be made available to me, and 
not everyone can fly back to the State capital and get that 
birth certificate.
    Ms. McNeill. And I think, Congressman, that makes the point 
for why we need to work on the accuracy of E-Verify, for those 
exact situations that are very few and far between. But I don't 
think it is a reason to derail E-Verify as a useful tool in 
enforcement.
    Mr. Connolly. No, but I am just pointing out a potential 
flaw in the system that doesn't really capture whether someone 
is here illegally or not; it may just capture the failure, for 
whatever reason, to provide the necessary documentation.
    Ms. McNeill. And, Congressman, I think we absolutely want 
any American worker or legal immigrant that is here to work, we 
want to get them into those positions. So I think working to 
remedy errors and accuracy and making it so that people can fix 
stuff easily is vital to the process.
    Mr. Connolly. And, Mr. Amador, I want to give you an 
opportunity to comment on this as well, because I see this as a 
potential inefficiency we are adding, with the best of 
intentions, that we have to address. But let me just say you 
were way too modest just a little bit earlier in your 
testimony, referring to the fact that maybe there was only one 
area you were, the Chamber, and AFL were in agreement on.
    I want to remind you that, of course, I was only too happy 
to support the Chamber's position on the Economic Recovery and 
Reinvestment Act, which you supported, as did the AFL-CIO. And 
I also would note that you have come out, the Chamber has come 
out in support of the reauthorization of the surface 
transportation act, known as SAFETEA-LU, also supported by AFL-
CIO, and also certainly supported by me.
    Mr. Amador. Yes, we have.
    Mr. Connolly. So you were way too modest in talking about 
common ground just a little bit earlier.
    Mr. Amador. No, I would say that on immigration and 
employer issues we do meet more often and reach agreement more 
often than the lawsuits. I haven't seen any lawsuit except 
dealing with immigration issues, where the first words is AFL 
and U.S. Chamber, as opposed to AFL versus U.S. Chamber or vice 
versa.
    I would point out that few and far between is fine, as long 
as you are not the one that lost the job. What we are saying is 
for these individuals, whether it is 1 person or whether it is 
10--and, again, that is an argument made stronger by the civil 
rights groups--we didn't support or oppose the lost wages 
provision. Our concern was let's make sure they don't come 
after the employer, because we are just doing the Government's 
job.
    And I always found interesting that was the one reason why 
DHS, at the time, came after the amendment. They said, wait a 
second, we cannot be paying back lost wages. I said, well, if 
it is an error in the system, if the person were willing to put 
protections that said the person must follow all these steps, 
they must do everything, but if, at the end of the day, you 
didn't get your papers on time and you were fired because we 
were asked to fire you, then you should have some recourse. And 
these are the kinds of things that need to be addressed.
    We are not saying do not move forward with E-Verify. But as 
you make an E-Verify mandate stronger and you hold employers 
accountable for the results of E-Verify, you need to also 
provide the protections for both employers and their employees. 
And that is why I said E-Verify is good, but just saying few 
and far between and ignoring it is not the right way to go. 
Let's make sure we do it right. Again, we are all going to have 
to live with it.
    And on the requirements, whether we use it right or wrong, 
you pointed out something to the prior panel that is very 
important here. These rules keep on changing. Employers would 
like to start verifying individuals before they even start to 
work, because they would like to know if there is going to be 
any problem. That is illegal today. We have been asking for it.
    Employers do not want to re-verify. That is illegal. One of 
the things UPS pointed out is since it was illegal, it is on 
their labor contracts--and most of the drivers are members of 
unions--that they cannot re-verify this work force, and they 
are trying to figure out if we have to go back, how do we 
renegotiate that with the unions, because now we are going to 
be in breach of a contract and negotiating with unions is not 
always, from our perspective, one of the easiest things to do.
    Mr. Connolly. And, Mr. Amador, did you cite the statistic--
I thought I heard you say a little bit earlier--that when you 
look at the number of new hires every year in the United 
States, it is approaching 60 million?
    Mr. Amador. Correct.
    Mr. Connolly. So if we had a 2.8 percent non-compliance 
rate, for whatever reason, that is a lot of people. That is 
almost 1.8 million people, is that not correct?
    Mr. Amador. That is correct.
    Mr. Connolly. So it sounds like it is an acceptable 
statistical margin of error, but it is actually a lot of people 
denied employment, and when you start with Federal 
contractors--and I will end on this note, Madam chairman--the 
problem is it is not just, gee, I could get fined if I get you 
wrong, so let's put you over there and hopefully you will get 
your documentation and then we can consider your employment. 
There may be hundreds of millions of dollars of Federal 
contracts at stake. You are collateral damage. I haven't got 
time to wait for verification or the documents to arrive in 
time.
    So I am a little bit worried about that because, with the 
best of intention moving forward, there are a lot of people who 
could fall through the cracks purely innocently because of the 
mail system or the lack of responsiveness by some other 
bureaucracy somewhere else providing a document, and I hope we 
are going to monitor that very carefully.
    Mr. Amador. And the 15 percent that came tentative non-
confirmed at Intel, they were all confirmed at the end of the 
day. But that takes a long time and it takes help from the 
employer as well.
    Mr. Connolly. I thank you.
    My time is up, Madam chairman.
    Ms. Watson. Thank you.
    Are there other questions?
    Mr. Bilbray. Yes.
    Mr. Amador, the percentage that you were talking about, the 
4 percent we are playing around with, would you agree that the 
overwhelming majority of that percentage either do not contest 
the ruling or are found to be not qualified?
    Mr. Amador. Most of them do not contest the ruling.
    Mr. Bilbray. Right. Why would they not contest it?
    Mr. Amador. Well, according to the Government study, they 
said because they go to another job, it takes too long, and 
they do something else.
    Mr. Bilbray. In other words, you don't think the majority 
of non-contestants are people who aren't qualified?
    Mr. Amador. I am not an expert in that field. That is what 
the Government is saying, and I will go with what the 
independent study says.
    Mr. Bilbray. OK, the fact is that we have 1,000 new 
employees voluntarily going onto a system right now. I don't 
know, we are sitting at 94 percent efficiency. Can you show a 
Federal program that you know of that is at that level of 
efficiency today?
    Mr. Amador. I am not an expert in other programs.
    Mr. Bilbray. OK.
    Ms. McNeill. I don't have actual data for a specific data 
base, but I would say that is a high level of efficiency and 
accuracy for a Federal Government data base.
    Mr. Bilbray. And let me just say this. We forget about what 
the old system is. My family has been in the tax business since 
the year I was born. I guess my mother took one look at me and 
decided to get in another business than having children, but 
that is a separate issue.
    Look, have you ever experienced a situation where somebody 
gets your Social Security number and uses it to file, or do you 
know of anybody that has ever run into the old system where the 
fraud of illegal use of a Social Security number and the 
problems that are related to that?
    Mr. Amador. Excuse me? Sorry, I didn't understand the 
question.
    Mr. Bilbray. Are you aware of the problems with the old 
system with the fraud occurring from somebody using someone 
else's Social Security number and the complications that caused 
for the innocent bystander whose number has been picked up and 
used for illegal employment or to avoid detection?
    Mr. Amador. I am aware that other studies, including the 
Government's, state that E-Verify is going to make that problem 
worse because people are going to be looking for real Social 
Security numbers and names, which is what it does, it matches 
the number to the name.
    Mr. Bilbray. Let me say the E-Verify, the way we are 
busting that now is through electronic filing, sir, so it is 
just the opposite. The trouble is when you get notified that 
your tax return can't be filed. You are saying that you think 
E-Verify will cause more fraud in the system than the paper 
system that we have had for the last 20 years?
    Mr. Amador. What I am saying is that the Government study 
that looked at it, and GAO as well, stated that E-Verify 
promotes more identity fraud because now, instead of just 
making a Social Security number on paper and having IDs that 
look real, you need somebody's actual name and Social Security 
number; and they are saying that E-Verify is promoting that. 
Again, Swift, that was raided and they found all these 
undocumented, they had all been through E-Verify and they all 
had real names and real Social Security numbers.
    Mr. Bilbray. Do you have a comment to that?
    Ms. McNeill. Congressman, I think the point to be made is 
that Mr. Amador is correct that there are problems with 
identity theft and with off-the-books employment that E-Verify, 
right now, they are working toward it, but they can't catch 
that right now.
    But that is why I would emphasize that E-Verify is a great 
tool for document fraud. We should implement it and then we 
should also followup with things like Social Security no match, 
enforcement, investigations, and other things that help us 
squeeze out the process. You know, you stop people first from 
document fraud, then--eventually, we are going to get to a work 
force that is----
    Mr. Bilbray. But as the previous witnesses pointed out, 
this is not in isolation. We have now, online, the real ID 
bill, so that the base documents will have the electronic 
capability where an employer now will have more reliable tools 
to draw on for identification. And won't you agree that----
    Mr. Amador. We supported----
    Mr. Bilbray [continuing]. A State-issued identification, 
when it is upgraded to the real ID standard, will help 
substantially in addressing this issue from an employee's point 
of view?
    Mr. Amador. Well, we haven't taken a position on the real 
ID, so I don't know about the real ID standard.
    Mr. Bilbray. I am not talking about the law itself; I am 
talking about the application of biometric fraud-resistant 
documentation to be able to be presented to the employer.
    Mr. Amador. We have always asked for--first we asked for 
the list of identification that was accepted on the I-9 to be 
narrow, because we think it is too broad. We have asked for at 
least a study on making the Social Security card, which is one 
of the IDs that are allowed under the current system, to be at 
least made plastic.
    Mr. Bilbray. Is there a reason, in your opinion, that we, 
as the Federal Government, have not upgraded the Social 
Security card since 1937, when it was introduced? And why is 
the Federal Government Federal identification document for 
employment a piece of paper with a name and a number, when no 
other government agency that I know of is using that technology 
today?
    Mr. Amador. I guess the view is that it is expensive. That 
is not our view; we are in favor of updating the Social 
Security. We would love for the Social Security card to be 
updated because that is a prime form of identification. I 
think, from what I have read, the main reason is the cost.
    Mr. Bilbray. I yield back, Madam Chair. Thank you.
    Ms. Watson. If there are no other questions?
    Mr. Connolly. Madam chairman.
    Ms. Watson. Yes.
    Mr. Connolly. If I might just say to my good friend from 
California, I do not disagree with him about the benefits of 
the E-Verify program potentially and really. My concern is that 
we, as quickly as we can, identify what could go wrong, though, 
in anticipation of that so we can manage it and we can address 
those issues, rather than having a program get very far down 
the road and very large, only to discover we have all kinds of 
problems. And I know, like my friend from California, I am 
always skeptical of anything that has a whiff of being an 
unfunded mandate, because, having been in local governments, we 
know the burden that can put on----
    Mr. Bilbray. And I appreciate that, and my biggest concern 
is the fact that, as somebody who comes from local government, 
like you, is utilizing those resources in the most cost-
effective way and that, rather than having--that is why real ID 
is so essential; it eliminates the need for citizens to have a 
Federal ID. If States are upgraded to a minimum Federal 
standard, you avoid the Federal ID issue.
    But the Feds do have an obligation here, as the 
representative of the Chamber pointed out, that, while everyone 
else is improving and has evolved, it appears to the public 
that the Federal Government has a constant strategy of saying 
we won't upgrade, and the cost issue just evaporates when you 
look at I don't see that as being the argument used by local 
governments across this country for upgrading driver's licenses 
over the years, but the political aspect of it.
    And I will just point out that one of the greatest 
breakthroughs for the consumer in privacy and in efficiency 
that the IRS has implemented is the E-Filing. It has been such 
a great breakthrough and it has been one of the greatest helps 
at early detection of fraud, because, before, somebody could 
steal your Social Security number, file under your number, and 
you would never know about it until years later, until you are 
audited for income that you didn't declare, that you didn't 
even know, but it got filed.
    Today, you are notified within a short period of time. In 
fact, you can't file your tax return if somebody has filed your 
number ahead of time; it notifies you, so you get that warning. 
E-Filing has been a great breakthrough.
    I think that this technology is one of those things we need 
to embrace, we need to improve. We shouldn't accept it as a 
god, but we darn well want to see it as a great tool that we 
need and the private sector has gone to. And I will just say 
this about E-Verify. Visa, since 1970, has handled trillions of 
transactions, and it is the standard for every citizen that I 
know of in cash exchanges and everything else. If they have 
been able to do it since 1970, the Federal Government should be 
able to transfer numbers and information at least half as 
efficiency. So I think there is the big challenge we have here.
    Thank you very much, and I yield back.
    Ms. Watson. Yes. I would want to thank the panel for your 
testimony and for the information of our Members. We will have 
a followup hearing and I would like to invite our witnesses and 
those in the audience that are vested in E-Verify contact us 
with ideas of how we can improve. We do have to commit the 
dollars if we broaden the system and correct any weaknesses in 
it. That would be a consideration. There was a suggestion at 
the committee today by Ms. Speier that we find out some way to 
maybe charge for this service.
    Mr. Amador. And we oppose that.
    Ms. Watson. You oppose it. The Chamber of Commerce 
speaking.
    And that is not anything that we would say would be 
factual, but it did come up in the testimony.
    So, if there are no further questions, I thank you and you 
may be excused. We appreciate your testimony and this 
particular meeting is adjourned.
    [Whereupon, at 12 p.m., the subcommittee was adjourned.]

                                 
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