[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                 SOCIAL SECURITY ADMINISTRATION'S ROLE

                  IN VERIFYING EMPLOYMENT ELIGIBILITY

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



                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 14, 2011

                               __________

                           Serial No. 112-SS3

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                      SAM JOHNSON, Texas, Chairman

KEVIN BRADY, Texas                   XAVIER BECERRA, California
PAT TIBERI, Ohio                     LLOYD DOGGETT, Texas
AARON SCHOCK, Illinois               SHELLEY BERKLEY, Nevada
ERIC PAULSEN, Minnesota              FORTNEY PETE STARK, California
RICK BERG, North Dakota
ADRIAN SMITH, Nebraska

                       Jon Traub, Staff Director

                  Janice Mays, Minority Staff Director


                            C O N T E N T S

                               __________
                                                                   Page

Advisory of April 14, 2011, announcing the hearing...............     2

                               WITNESSES

Richard M. Stana, Director, Homeland Security and Justice, United 
  States Government Accountability Office........................     6
Marianna LaCanfora, Assistant Deputy Commissioner, Office of 
  Retirement and Disability Policy, Social Security 
  Administration.................................................    21

                                 ______

Tyler Moran, Policy Director, National Immigration Law Center....    34
Ana I. Anton, Ph.D., Professor, Department of Computer Science, 
  College of Engineering, North Carolina State University, on 
  behalf of the Association for Computing Machinery..............    48
Austin T. Fragomen, Jr., Chairman of the Board of Directors of 
  the American Council on International Personnel, on behalf of 
  the HR Initiative for a Legal Workforce........................    70

                       SUBMISSIONS FOR THE RECORD

The Honorable Mr. Dreier.........................................    94
AARP.............................................................    96
American Civil Liberties Union...................................    98
American Federation of State County and Municipal Employees......   109
American Immigration Lawyers Association.........................   111
American Meat Institute..........................................   113
Asian American Center for Advancing Justice......................   118
Jessica St Pierre................................................   121
Joint Committee on Taxation......................................   123
National Committee to Preserve Social Security and Medicare......   132
National Council of Social Security Management Associations......   135
National Immigration Law Center..................................   146
Secure ID Coalition..............................................   150

                   MATERIAL SUBMITTED FOR THE RECORD

Questions and Responses for the Record:
Ana I. Anton, Ph.D...............................................   154
Austin T. Fragomen, Jr...........................................   158
Marianna LaCanfora...............................................   163
Richard M. Stana.................................................   166


                 SOCIAL SECURITY ADMINISTRATION'S ROLE



                  IN VERIFYING EMPLOYMENT ELIGIBILITY

                              ----------                              


                         THURSDAY APRIL 8, 2011

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.

    The subcommittee met, pursuant to call, at 2:06 p.m., in 
Room B-318, Rayburn House Office Building, the Honorable Sam 
Johnson [chairman of the subcommittee] presiding.
    [The advisory of the hearing follows:]

HEARING ADVISORY

       Chairman Johnson Announces Hearing on the Social Security 
       Administration's Role in Verifying Employment Eligibility

Thursday, April 07, 2011

    Congressman Sam Johnson (R-TX), Chairman, Subcommittee on Social 
Security of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on the Social Security 
Administration's (SSA's) role in verifying employment eligibility. The 
hearing will take place on Thursday, April 14, 2011, in room B-318 
Rayburn House Office Building, beginning at 2:00 p.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Subcommittee and 
for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    The Immigration Reform and Control Act (IRCA) of 1986 made it 
illegal for employers to knowingly hire immigrants who were not 
authorized to work in the United States, requiring employers to examine 
documentation from each newly hired employee to prove his or her 
identity and eligibility to work. IRCA led to a process based on the 
Form I-9, Employment Eligibility Verification, requiring employees to 
attest to their work eligibility and employers to certify that the 
documents presented reasonably appear to be genuine and relate to the 
individual. The Social Security card is one of a number of documents 
the employee may use to demonstrate employment eligibility.
      
    The Illegal Immigration Reform and Immigrant Responsibility Act of 
1996 required the then Immigration and Naturalization Service, which 
became part of the U.S. Department of Homeland Security (DHS) in 2003, 
to conduct three pilot programs, including the Basic Pilot, to 
determine the best method of verifying an employee's employment 
eligibility.
      
    Although initially a temporary program, the Basic Pilot's 
authorization was extended and ultimately expanded to be available to 
employers nationwide. In the 2010 Department of Homeland Security 
Appropriations Act (Public Law 111-83), the Basic Pilot was renamed 
``E-Verify'' and the program was extended until September 30, 2012.
      
    E-Verify is an internet-based system administered by the U.S. 
Citizenship and Immigration Services within DHS in partnership with the 
SSA. The employer enters information into the E-Verify system from the 
Form I-9. Verification requests are first transmitted to the SSA, which 
checks whether the worker's information matches the SSA's records; 
those involving non-citizens are then routed to DHS. If a worker's 
information does not match these government databases, a tentative 
``non-confirmation'' notice is sent and the worker then must contact 
either SSA or DHS to present needed documentation in order to keep 
their job.
      
    While E-Verify is free, and participation is mostly voluntary, some 
companies may be required to use E-Verify by State law (including 
Arizona and Mississippi) or Federal regulation. All Federal agencies 
are required to use E-Verify for their new hires and certain Federal 
contractors and subcontractors are required to use E-Verify for new 
hires and existing employees working directly under the contract.
      
    Since fiscal year 2005, the number of E-Verify requests each year 
has grown from 980,000 to about 16.5 million in fiscal year 2010. 
Currently, about 254,000 employers (approximately 4 percent of all 
employers) are registered to use E-Verify at approximately 867,000 
worksites.
      
    In a recent report to the Subcommittee (Federal Agencies Have Taken 
Steps to Improve E-Verify, but Challenges Remain, GAO-11-146), the 
Government Accountability Office found the E-Verify system had made 
progress in improving accuracy with immediate confirmations rising to 
97.4 percent. However, the study also noted the system was still 
vulnerable to unauthorized workers and unscrupulous employers 
presenting stolen or borrowed documents for the purpose of identity 
fraud.
      
    In announcing the hearing, Chairman Sam Johnson (R-TX) stated, ``A 
broken federal worksite enforcement policy keeps Americans out of a 
job, leaves workers vulnerable to identity theft, law-abiding employers 
with uncertainty and unscrupulous employers able to exploit the system. 
We can and must do better.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on the progress made and challenges created 
by E-Verify, including the potential burdens on employees, employers 
and the SSA. The Subcommittee will examine how the current shortcomings 
of the system could be improved to ease the verification process during 
this critical time of job creation. Finally, the Subcommittee will also 
review other proposals to expand employment eligibility verification, 
including enhancing the Social Security card with tamper-proof, 
counterfeit-resistant or biometric features and increasing enforcement 
through the sharing of taxpayer wage information.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word or 
WordPerfect document, in compliance with the formatting requirements 
listed below, by the close of business on Thursday, May 5, 2011. 
Finally, please note that due to the change in House mail policy, the 
U.S. Capitol Police will refuse sealed-package deliveries to all House 
Office Buildings. For questions, or if you encounter technical 
problems, please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental 
sheet must accompany each submission listing the name, company, 
address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 

    Chairman JOHNSON. The subcommittee will come to order. 
Welcome, everyone.
    Employers are on the front lines of ensuring a legal 
workforce, and it is a battle for these employers. Consider for 
a moment that due to our broken immigration enforcement system, 
the Pew Hispanic Center estimates there are over 8 million 
illegal workers in this country. With unemployment around 9 
percent, these illegal workers often compete with lawful 
citizens for much-needed jobs.
    Today's hearing will examine the employment verification 
systems available for employers' use, including E-Verify, the 
largely voluntary system jointly administered by Social 
Security and Homeland Security. Since our last hearing on this 
subject nearly 3 years ago, the use of E-Verify has expanded. 
Today there are over 250,000 employers. That is about 4 percent 
is all of all U.S. employers registered to use the system. In 
addition, the use of E-Verify has been mandated in three 
States, and for the Federal Government, and certain Federal 
contractors and subcontractors.
    Social Security is an integral partner in E-Verify because 
it has the only database that can confirm citizenship. I want 
to make clear, however, I am very uncomfortable that Homeland 
Security is checking on U.S. citizens. That said, Social 
Security and Homeland Security have, to their credit, worked 
together to make E-Verify more workable and more accurate. 
However, as we shall hear shortly from the Government 
Accountability Office, E-Verify remains vulnerable to identity 
theft and to employer fraud.
    As my Texas colleague and chairman of the Judiciary 
Committee, Lamar Smith, has said, perhaps the most valid 
criticism of E-Verify is the identity theft loophole. And I 
couldn't agree more. If an employee presents a stolen Social 
Security number and fraudulent photo ID, E-Verify will 
erroneously indicate that the individual is authorized to work. 
The employer has been duped, and an innocent American may face 
years of financial and legal woe because his identity has been 
stolen.
    To build on the successes of E-Verify while making needed 
adjustments to ensure successful implementation, last Congress 
I introduced H.R. 5515, the New Employee Verification Act, or 
NEVA. NEVA would achieve three important goals: One, ensure a 
legal workforce, safeguard workers' identities, and protect 
Social Security.
    It is true that Congress gave the American people an 
employment verification system that works while protecting 
Social Security's ability to serve the public. I would hope 
that this is one immigration-related issue where both sides 
could find common ground. As we move forward, we must carefully 
consider the potential burdens to Social Security and, most 
importantly, to workers and employers struggling in these 
trying times to get Americans working again.
    I appreciate all of you all being here. I think that we are 
going to have a good panel today, and I thank you for joining 
us. So I look forward to hearing our expert testimony from all 
of you.
    Chairman JOHNSON. And I now recognize my friend and the 
ranking member, Xavier Becerra, for his opening remarks.
    Mr. BECERRA. Mr. Chairman, thank you for calling today's 
hearing to examine the impact of electronic employment 
verification eligibility verification systems and the impact it 
has on the Social Security Administration (SSA) and on our 
workers in the United States.
    The Social Security Administration has played a critical 
role in the verification of our workforce since 1997, when the 
basic pilot program began, which is now, of course, known as E-
Verify. Today the majority of employees who are checked through 
E-Verify are cleared fairly quickly; however, some workers are 
not. Our witnesses today will describe what happens to a worker 
when they receive a tentative nonconfirmation that the 
information submitted by their employer does not match 
information contained on government databases.
    A recent Government Accountability Office (GAO) report 
concluded that individuals often face significant difficulties 
in resolving nonconfirmations. This is not a trivial matter 
because the inability to resolve an erroneous nonconfirmation 
can lead to loss of a job.
    In addition, I am deeply troubled to learn that many 
employers do not comply with E-Verify program rules designed to 
prevent discrimination or abuse of the system. In this 
downturned economy, one job loss due to mechanical or technical 
error or employer noncompliance with E-Verify requirements is 
one job lost too many.
    Mr. Chairman, at this time, I would like to submit into the 
record the stories of Americans who have suffered greatly from 
problems with E-Verify. These illustrate the kinds of 
challenges U.S. citizens and legally authorized workers face in 
keeping their jobs.
    Chairman JOHNSON. Without objection.
    Mr. BECERRA. Thank you.
    Mr. BECERRA. Many would like to expand the E-Verify system, 
but we should not do so unless we first address the kinds of 
problems with the existing system that is identified in today's 
hearing. In addition, to be able to meet the needs of this 
growing program, more research has to be dedicated to it.
    While some have proposed making E-Verify a permanent, 
mandatory program, the Congressional Budget Office has 
estimated that this would cost the taxpayers nearly $18 billion 
over the next 10 years.
    As we work forward and make progress in trying to improve 
this program, the ultimate solution to what we are trying to 
address through E-Verify is to reform our broken immigration 
system. In places like Arizona, where E-Verify is mandatory, 
some employers have resorted to paying their employees under 
the table or have simply just stopped complying with the 
program. The State has also seen a loss of income tax revenue, 
confirming predictions that mandatory E-Verify in the absence 
of immigration reform simply drives employees into the 
underground economy.
    Chairman Johnson, I look forward to working together to 
jointly improve our electronic employment verification system, 
and I thank you for calling today's hearing.
    Chairman JOHNSON. Thank you, sir.
    Today we are joined by five witnesses. Our first witness 
will be Richard Stana, Director of Homeland Security and 
Justice, United States Government Accountability Office. Next 
is Marianna LaCanfora, Assistant Deputy Commissioner, Office of 
Retirement and Disability Policies, Social Security 
Administration. Next is Tyler Moran, Policy Director, National 
Immigration Law Center. Next is Ana Anton, Ph.D. professor, 
Department of Computer Science, College of Engineering, North 
Carolina State University, on behalf of the Association for 
Computing Machinery. And finally, Austin Fragomen, Chairman of 
the Board of Directors of the American Council on International 
Personnel, on behalf of the HR Initiative for a Legal 
Workforce.
    I welcome all of you, and we look forward to hearing your 
testimony. Each witness will have 5 minutes, and your written 
statements will be made part of the record in the event that 
you run over a little. So I thank you, and I welcome you.
    And thank you, Mr. Stana. You are recognized for 5 minutes.

STATEMENT OF RICHARD M. STANA, DIRECTOR, HOMELAND SECURITY AND 
    JUSTICE, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. STANA. Thank you, Mr. Chairman. Thank you, Mr. Becerra 
and Members of the Subcommittee. I am pleased to be here today 
to discuss the results of our work on E-Verify, which is a 
voluntary program that can be used to verify the work 
authorization of newly hired employees.
    I would like to discuss three points from our report, and 
then later I would like to briefly discuss some issues that may 
be of interest to the subcommittee on how it would affect the 
Social Security Administration.
    First let us discuss the TNCs, the tentative 
nonconfirmations. The USCIS has substantially reduced the 
number of TNCs from about 8 percent of all queries just a few 
years ago to 2.6 percent in fiscal year 2009, which was the 
subject of our study, down to 1.7 percent last year. So that is 
moving in the right direction. This was done by expanding the 
number of databases that are queried. They now look at 
naturalization databases, and they look at passport data. USCIS 
also screens for common data entry errors like transpositions 
or a European date format that can be easily fixed. But 
erroneous TNCs continue to occur when employee names are 
misspelled, or they are transposed, or people with multiple 
surnames use different surnames in one document than they use 
in another document, and thus it triggers a TNC.
    Erroneous final nonconfirmations can occur when SSA field 
office staff do not update the EV-STAR system, which is an 
information system on workers who receive SSA TNCs, but SSA is 
addressing this issue, so we hope that this will be resolved 
soon.
    Mr. BECERRA. Mr. Stana, we ask that you, instead of using 
the acronyms, mention the names of these programs, because a 
lot of folks who might be watching may not understand what a 
TNC and all those other things are.
    Mr. STANA. Okay. Thank you.
    An FNC is a final nonconfirmation, which is the final 
notice that you are not confirmed. It is not redressable. In 
other words, there is no appeal mechanism for that, which may 
get to the issue you both were talking about with Americans who 
are work-authorized but get a bad shake out of the system.
    So improving government data sets, increasing employee 
awareness, and making sure employees have a sufficient amount 
of time to redress the TNC notices is really what is needed 
here.
    Now, I would like to turn briefly to the issue of identity 
theft that both of you have mentioned. This is a very important 
issue, and it is one that the system has not been able to 
address. Identity theft can occur if I were not work-authorized 
and would use another person's identity to say that my Social 
Security number is this, and my driver's license number is 
this, and the E-Verify system says I am work-authorized when I 
am really not.
    Westat did a study on E-Verify a couple of years ago. They 
found that about 3 percent of the confirmed work-authorized 
people really aren't. In other words, it creates a false 
positive. And sometimes this is done by individual workers 
getting an identity that works. Sometimes it is done with the 
complicity of the employer; the employer says these documents 
are valid, let us enter these into the E-Verify system, and we 
will put you on our payroll.
    USCIS has taken a number of steps to try to address this, 
like a photo-matching tool for 3 of the 26 documents you can 
use to validate your authorization to work in the United 
States. But again, this whole system hinges on the integrity of 
the employer. The employer looks at the photo on the screen, 
looks at the photo that you present, or looks at the person who 
is before them and either says it is or it is not a match. So 
that is an issue that they have to work on a little bit more, 
finding a key to unlocking the identity theft issue.
    Turning to some of the discrimination issues, there is 
concern that people who have hyphenated names may get a bad 
shake out of the system, or people who have hyphenated names 
may encounter certain challenges that those of us who don't do 
not. They may order their names in a certain sequence 
differently on different documents. It is not against the law 
to do that, but it is going to trigger a tentative 
nonconfirmation.
    USCIS has a monitoring and compliance unit that they use to 
try to identify discriminatory behaviors among employees, such 
as seeing if a person is not given work assignments or reduced 
pay until a final confirmation comes through. This is against 
the law. But again, with about 80 people across the country in 
this unitand no on-site inspection--I take that back. There was 
one at the Social Security Administration--it is difficult to 
determine whether discriminating behavior exists.
    My last point from our report involves resources. Like the 
I-9 system, unless the E-Verify system is properly resourced, 
it is not likely to work well. This is because you have to have 
someone on site to make sure that the system is properly used 
and, to the extent possible, to make sure that identity theft 
is minimized or eliminated. USCIS has to rely on ICE for 
investigating, sanctioning and seeking prosecution of 
noncompliant employers, but given its priorities, ICE is not 
likely to devote many resources to this area. So policy 
decisions are going to have to be made on how many resources 
the Congress wishes ICE to put into worksite enforcement.
    Lastly, I'd like to discuss E-Verify's impacts on SSA. 
First, to the extent that SSA staff needs to resolve tentative 
nonconfirmations, it does take time away from other duties. 
When the TNC rate goes down from 8 to 1.7 percent, that is 
helpful. If we go to a mandatory system, we may need more 
resources so it does not adversely impact the SSA workload.
    The other thing that could impact the SSA workload is the 
self-check system, where an employee or potential employee like 
you or me could query a system to see if the system would 
identify us as work-authorized. It is new. It is being piloted. 
While the pilot is ongoing, it doesn't now seem to be stressing 
the SSA workload too much. If it becomes mandatory, or if the 
pilot is expanded nationwide, it could have an effect. But I 
will let the Social Security Administration discuss ant adverse 
impact.
    That concludes my statement. I will be happy to answer any 
questions.
    Chairman JOHNSON. Thank you, sir.
    [The prepared statement of Mr. Stana follows:]

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    Chairman JOHNSON. Ms. LaCanfora, you are recognized for 5 
minutes.

STATEMENT OF MARIANNA LACANFORA, ASSISTANT DEPUTY COMMISSIONER, 
  OFFICE OF RETIREMENT AND DISABILITY POLICY, SOCIAL SECURITY 
                         ADMINISTRATION

    Ms. LACANFORA. Thank you. Chairman Johnson, Ranking Member 
Becerra and Members of the Subcommittee, thank you for the 
opportunity to discuss SSA's supporting role in E-Verify, DHS's 
electronic employment eligibility verification system. I would 
like to start by briefly describing the purpose of our Social 
Security numbers, or SSNs.
    Assigning SSNs is key to administering Social Security 
programs. We establish the SSN as a way for employers to report 
an employee's earnings accurately. We use the SSN to credit 
wages to the earnings record that we maintain for each worker. 
The earnings record is the basis for determining eligibility 
for, and the amount of, Social Security benefits.
    The SSN also plays a key role in E-Verify. By law, all 
employers are required to verify the identity and employment 
eligibility of new employees. E-Verify is a voluntary, 
electronic tool that employers can use to comply with the law. 
When an employer submits information about a new hire, DHS 
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 also confirm citizenship based on 
the information that we have in our records. For any 
naturalized citizen whose U.S. citizenship we cannot confirm 
using our records, DHS verifies naturalization and thus the 
authorization to work. For noncitizens, if there is a match 
with our records, DHS will then determine the current work 
authorization status. DHS notifies the employer of the results 
of these verifications.
    So far this fiscal year, we have handled about 7.5 million 
queries. In fiscal year 2010, E-Verify handled over 16.5 
million queries and automatically confirmed work authorization 
in about 98 percent of these queries instantly or within 24 
hours. The remaining 2 percent received an initial systems 
mismatch. We call that a tentative nonconfirmation. Of that 2 
percent, just under half contacted us at Social Security to 
resolve the mismatch.
    When an individual comes into one of our offices with a 
tentative nonconfirmation, we work to resolve the discrepancy. 
For example, the person may need to change their name in our 
records due to a marriage or a divorce that they had not 
previously reported to us.
    It is important to note that we need to verify the identity 
of any individual whose record we update. That is why we must 
process almost all of these updates during face-to-face 
interviews in our local offices. In some cases we may be unable 
to resolve the discrepancy the same day because the individual 
may need to obtain evidence, such as a marriage certificate.
    We use EV-STAR, which is a Web-based portal, to update the 
E-Verify system with the status of a pending case. Once we 
resolve the discrepancy by updating our records, or by 
determining that our records should not be changed, we again 
update EV-STAR to show the outcome of the case. The employer 
can check E-Verify for the status of the case and see the final 
confirmation or nonconfirmation.
    We have worked with the DHS over the last few years to 
improve the E-Verify system. For example, in 2009, we completed 
a significant improvement to our computer systems that support 
E-Verify. This improved system ensures that there is no 
interference between our 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 per year. With additional 
hardware and funding, we could increase our capacity if the 
need arises. Even with this and other improvements we remain 
focused on further reducing the need for workers to visit our 
local offices.
    Each year DHS provides funds to cover our E-Verify-related 
costs. Our costs include systems maintenance costs and the cost 
of assisting individuals to resolve the tentative 
nonconfirmations. Receiving timely and adequate reimbursement 
from DHS for E-Verify is critical.
    In conclusion, I thank you for giving me this opportunity 
to discuss our role in assisting DHS to administer the E-Verify 
system. I would be happy to answer any questions you may have.
    Chairman JOHNSON. Thank you, ma'am.
    [The prepared statement of Ms. LaCanfora follows:]
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    Chairman JOHNSON. Ms. Moran, welcome. You are recognized 
for 5 minutes.

STATEMENT OF TYLER MORAN, POLICY DIRECTOR, NATIONAL IMMIGRATION 
                           LAW CENTER

    Ms. MORAN. Thank you. Good afternoon, Chairman Johnson, 
Ranking Member Becerra and Members of the Committee. Thank you 
for the opportunity to testify on E-Verify. The National 
Immigration Law Center has worked on E-Verify since it was 
implemented in 1997, and I have personally advocated for 
improvements in this program for almost a decade.
    E-Verify faces a number of challenges despite the progress 
that it has made, and these challenges would be greatly 
exacerbated if this program is made mandatory. That is why it 
is particularly troubling that there may be a bill in the House 
this year to make this program mandatory, because it almost 
certainly would pass. According to the Congressional Budget 
Office, a mandatory E-Verify bill would result in over $17 
billion in tax losses because undocumented workers would not 
leave the country. They and their employers who are currently 
paying taxes would simply go underground to get around the 
system.
    SSA also testified in 2007 that over 3 million workers 
would have to go to SSA to stand in line and correct database 
errors or lose their jobs. And this is a system, as Mr. Stana 
has testified, that doesn't detect half of undocumented 
workers.
    Additionally, if a mandatory system is put on line without 
legalizing the 8 million undocumented workers in our economy, 
it is going to set the system up for failure, not to mention to 
decimate industries like agriculture.
    I want to start by addressing the error rate. The 98 
percent confirmation rate sounds very impressive, and there 
have been a lot of improvements to the programs. But I think it 
is more helpful to talk about the number of workers affected 
versus the percentage. Using Westat's conservative estimates, 
in the mandatory system, 1.2 million people would have to stand 
in line at SSA to correct their records or lose their jobs, and 
770,000 people would likely lose their jobs. This is an 
underestimate because every employer that has audited, their 
own data comes up with higher error rates. For example, when 
Los Angeles County audited its use of E-Verify, it found on the 
low end that 2 percent of SSA TNCs were erroneous. To make this 
really concrete, a 2 percent error rate in Texas would mean 
244,000 people going to SSA or losing their jobs. And in 
California that would mean 362,000 people--78,000 alone in L.A. 
going to only 7 SSA offices.
    So these are future projections, but using Westat's 
statistics in fiscal year 2010 alone, 80,000 U.S. citizens and 
lawful immigrants lost their jobs. Jessica, a native-born U.S. 
citizen from southern Florida, is one of those people who 
called our office. She got a job offer that she accepted at a 
good-paying telecommunications company. They told her she got a 
TNC. She went to SSA. She provided the documentation. They 
said, you are all set, and provided her with paperwork that her 
name and SSN matched. She went back to her employer, who at 
first said okay. Three days later they said, I am sorry, you 
got a final nonconfirmation, we are going to have to fire you. 
She went back to SSA, waited in line and said, I thought it was 
okay. They said it is okay. She went back to the employer and 
the employer said, I am sorry. She was very frustrated. She 
called USCIS, DHS, and finally called us. She was out of work 
for 3 months, including over the Christmas holiday. And she now 
has a lower-paying job.
    The worst part about this is that there is no due process 
in the system, and there is nothing we can do for Jessica to 
get back her wages or to get back her job. So it is important 
to note that Jessica is not the only one that faces these 
challenges at SSA. People have to take off time from work. It 
takes costs them money and often they have to go back multiple 
times.
    I want to highlight Arizona because I think it is a good 
window into what a mandatory system could look like without 
legalizing undocumented workers. Arizona is the first State to 
make E-Verify mandatory, and there is three main takeaways. 
One, undocumented workers didn't leave the State, they didn't 
leave the country; they went into the underground economy, or 
they are now popping up as independent contractors. Number two, 
employers are coaching workers how to get around the system. 
And number three, despite penalties and mandates, half of 
employers aren't even using it. So you might think this is all 
worth it if the system works. But again, 54 percent of 
undocumented workers aren't detected by the system.
    So what are the solutions? As I said in my opening 
statement, E-Verify has made a number of improvements, but it 
is just not ready for prime time. If and when Congress decides 
to make this program mandatory, there are a number of policies 
that have to accompany it, and they are in my written 
testimony, but I want to highlight three.
    Number one, it has to be paired with a path to legal status 
for the 8 million undocumented workers. People aren't going to 
pack their bags because of E-Verify. They are going to stay 
here, and there are going to be major repercussions for the 
economy.
    Number two, we have to create due process so people have a 
way to challenge these errors, and that they get back pay if 
they lose their jobs. We have 9 percent unemployment. We can't 
have 1 million workers losing their jobs.
    And number three, you should phase in E-Verify with 
performance evaluations along the way for database accuracy, 
privacy, and employer compliance to make sure the system works 
for workers and businesses alike.
    So in a year when Congress is all about cutting budgets and 
high-performance programs, mandatory E-Verify just doesn't make 
sense. When this bill goes to the House floor, you are going to 
hear a lot about protecting jobs and undocumented immigrants, 
but I think the members of this committee can play a really key 
role in highlighting the impact on SSA and impact on U.S. 
citizens who are the people that are most affected by this 
program.
    Thank you.
    Chairman JOHNSON. Thank you, ma'am.
    [The prepared statement of Ms. Moran follows:]
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    Chairman JOHNSON. It sounds like you don't like the 
program. We have got to do something to stop the illegal 
workers.
    Ms. MORAN. If we pair it with legalization, then we can 
talk.
    Chairman JOHNSON. Dr. Anton, you are recognized for 5 
minutes. Thank you.

  STATEMENT OF ANA I. ANTON, Ph.D., PROFESSOR, DEPARTMENT OF 
COMPUTER SCIENCE, COLLEGE OF ENGINEERING, NORTH CAROLINA STATE 
    UNIVERSITY, ON BEHALF OF THE ASSOCIATION FOR COMPUTING 
                           MACHINERY

    Ms. ANTON. Good afternoon, Chairman Johnson, Ranking Member 
Becerra and Members of the Subcommittee. Thank you for the 
opportunity to testify. This statement represents my own 
professional position, as well as that of the Association of 
Computing Machinery's U.S. Public Policy Council.
    By way of introduction, I am a professor of software 
engineering at North Carolina State University and the director 
of an academic privacy research center. In addition, I serve on 
several industry and government technical boards and advisors, 
including the DHS Data Privacy and Integrity Advisory 
Committee.
    The E-Verify pilot system is intended to ensure that only 
authorized citizens and legal residents can be employed in the 
United States, a laudable objective, especially in a time of 
notable unemployment. Unfortunately the intent has not matched 
the realization. Complex systems such as E-Verify are fallible 
and often misused and subject to mission creep. One large-scale 
evaluation of E-Verify reported that the majority of illegal 
immigrants checked through the system were incorrectly deemed 
eligible to work primarily as a result of identity fraud. Thus 
E-Verify remains vulnerable to and incentivizes the use of 
identity fraud.
    Among the issues noted in my written testimony are three 
that are especially critical to consider from a systems 
engineering perspective. First, E-Verify must be able to 
accurately identify the individuals and employers authorized to 
use the system in a trustworthy manner before it is widely 
deployed. Second, proof of success with a pilot must be 
required before extensively expanding it. Third, complex 
systems such as E-Verify are often misused and repurposed in 
ways that violate sound principles of security and good 
software engineering. This should be considered in the design 
of the system and in supporting legislation.
    Given the identification-authentication concerns in E-
Verify, it is important to distinguish between an identifier 
and an authenticator. Both have very special technical meanings 
and are often confused. In my written testimony I described the 
differences between identification and authentication. In 
brief, an identifier is a label associated with a person. An 
authenticator provides a basis to believe that some identifier 
accurately labels the person.
    Within the context of E-Verify, the self-check pilot 
system, which we heard of a few minutes ago, it authenticates 
individuals by requesting information that can easily be 
obtained via the white pages and public tax records by 
individuals other than the holder of the Social Security 
number. The requested information is not sufficient for proper 
authentication. The pilot allows unauthorized individuals and 
fraudsters to access the system, allowing them to check stolen 
information to determine if it can be used to craft a new 
fraudulent identity to obtain employment. As currently 
configured, mandated use of E-Verify would encourage an 
increase in computer fraud, abuse and identity theft.
    Additionally, to protect the innocent, employers who take 
action on nonconfirmation returns without informing applicants 
and providing them an opportunity to appeal and correct 
mistaken records must face strong penalties. Exceptions for 
cases of natural disaster or emergency should also be built in. 
Under such circumstances, requirements should be waived or 
suspended when seeking new employment.
    In the time remaining, I will highlight a few 
recommendations from my written testimony, again from a systems 
engineering perspective. First, it is critical to eliminate the 
weaknesses in E-Verify and objectively audit the pilot before 
it is scaled up or extended to individuals for anything other 
than employment. Lack of proper system validation and 
verification will almost certainly lead to cost and schedule 
overruns, system breakdowns, intrusions and perhaps 
obsolescence.
    Second, it is imperative that vulnerabilities be examined 
and risks addressed to protect the system as well as the 
identity of the individual whose information is contained 
within it.
    Third, adopting biometric technologies as a solution to the 
E-Verify authentication problem would be premature and is 
unlikely to solve some of the fundamental problems with the 
current system.
    In conclusion, we are encouraged by your attention to these 
issues, and the computing professionals that I represent stand 
ready to help you in your efforts.
    Thank you for your attention.
    Chairman JOHNSON. Thank you, ma'am. I appreciate your 
comments.
    [The prepared statement of Ms. Anton follows:]
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    Chairman JOHNSON. Mr. Fragomen, welcome. You are recognized 
for 5 minutes.

STATEMENT OF AUSTIN T. FRAGOMEN, JR., CHAIRMAN OF THE BOARD OF 
 DIRECTORS OF THE AMERICAN COUNCIL ON INTERNATIONAL PERSONNEL, 
      ON BEHALF OF THE HR INITIATIVE FOR A LEGAL WORKFORCE

    Mr. FRAGOMEN. Thank you, Mr. Chairman, Ranking Member 
Becerra, Members of the Subcommittee. I wish to thank you for 
your kind invitation to share my thoughts on employment 
eligibility verification and the problems U.S. employers face.
    Before we discuss E-Verify, I would like to acknowledge the 
fine job done by the U.S. Citizenship and Immigration Services 
in expanding and improving the program. Based on the agency's 
last numbers, enrollment is up to 254,000 employers, and you 
just heard that 98.3 percent of the queries result in automatic 
response within 24 hours, which shows a steady improvement over 
the past decade. However, the number of participants only 
represents about 3 percent of all employers, and scalability is 
still a concern.
    While E-Verify has become very effective in matching a name 
with a Social Security number, it is not effective in making 
certain that the employee is who he or she claims to be on the 
form I-9. According to a December 2009 report, 54 percent of 
unauthorized workers who undergo E-Verify are erroneously 
confirmed as work-authorized.
    E-Verify has made some progress towards solving this 
problem. One example is the incorporation of photographic 
images from green cards, Department of Homeland Security work 
authorization cards and U.S. passports. And we appreciate that 
there are plans to include driver's license data from motor 
vehicle departments around the country, but so far there is 
only one State involved in a pilot program.
    Over the past 2 years, the employer community has witnessed 
much more scrutiny by Immigration and Customs Enforcement 
Agency, not that I am objecting to enforcement of the law, I 
think that is perfectly appropriate. But employers want 
certainty. Employers want to know they have a true safe harbor 
when they obey the law, and those are really the two 
cornerstones.
    Under the status quo, employers do not have clear guidance 
on what to do when informed of a Social Security record 
mismatch, or when the information does not match government 
records, there is no assurance that the employers are not 
victims of identity fraud.
    I believe the solution to the unauthorized employment 
problem and ultimately an important weapon in addressing 
illegal migration is reliable employment eligibility 
verification. Before we can eliminate false nonconfirmations in 
E-Verify, there must be sufficient resources allocated to the 
Social Security Administration to clean up its records. We also 
need clear guidance on what to do with Social Security number 
mismatches. However, we do not believe it is necessary for all 
employers to reverify their entire workforce.
    For the system to be effective, additional steps are 
necessary to stop identity fraud. Matching photographs, of 
course, will have a positive impact, but it does not eliminate 
subjectivity on the part of the employer. Instead, this will 
require incorporating biometric technology, such as that 
proposed in the Johnson-Giffords New Employment Verification 
Act, and other comparable technology. If we can stop identity 
fraud, it will give law-abiding employers a safe harbor and at 
the same time take away the subjectivity that encourages 
discrimination, either deliberate or inadvertent.
    Further, having an effective and reliable system would 
strengthen the argument for Federal preemption in immigration 
enforcement, something that business and immigrant rights 
advocates both want.
    Finally, an effective eligibility program is a critical 
component of law enforcement filling the gaps that border 
control and visa tracking currently leave in the process.
    Thank you for this opportunity to share my thoughts.
    Chairman JOHNSON. Thank you, sir.
    [The prepared statement of Mr. Fragomen follows:]
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    Chairman JOHNSON. What is the State that is using the 
driver's license?
    Mr. FRAGOMEN. Mississippi.
    Chairman JOHNSON. Thank you.
    We have got a vote. There will be two votes. I am going to 
put the committee in recess for 30 minutes, or if we get back 
sooner. Thank you. We stand in recess.
    [Recess.]
    Chairman JOHNSON. The committee will come back to order.
    I would like to ask Mr. Fragomen, the most critical issue 
facing America today is jobs. And I think without jobs and job 
creation, our country is doomed to a lower standard of living 
for decades to come. What steps need to be taken, in your 
opinion, to ensure that employment verification, in particular 
an expanded E-Verify, doesn't complicate or impede creating a 
job and hiring the right person for the job?
    Mr. FRAGOMEN. I think that is a very critical issue. The 
most important factor is to move into this slowly if we have 
mandatory verification, and to make sure that it is possible to 
scale the system to the level that it would need to be and to, 
as they say, get it right. Now, in order to get it right----
    Chairman JOHNSON. When you say ``scale the system,'' what 
do you mean?
    Mr. FRAGOMEN. In terms of increasing it. The system now 
covers about 3 percent of employers.
    Chairman JOHNSON. We have been fighting that for years.
    Mr. FRAGOMEN. It needs to cover 100 percent, which means we 
have to add about 7.5 million employers to the system, which 
means that the volume of transactions that the E-Verify, for 
instance, would have to be able to accommodate would be 
multiples of what it is currently. And you know the problems 
that software encounters when you try to increase its capacity 
by that magnitude. And the second thing is----
    Chairman JOHNSON. I know. But Social Security claims they 
have the most modern system available today. I mean, that is 
what they tell me.
    Mr. FRAGOMEN. They might. Except the number of tentative 
nonconfirmations, when you multiply it by that number of 
employees, becomes a very significant number if you figure 
about 1 to 1.5% percent of the cases wind up as tentative 
confirmation. There are ones that don't get resolved easily.
    The other aspect of it is that there be adequate resources 
dedicated to Social Security so that they do it right, that the 
system be fully electronic, that it incorporate biometrics or 
other fraud-prevention technology or software; and secondly, 
that we have a uniform law, that this applies everywhere, and 
it preempts the current State laws.
    I think it is very important that the employer is offered a 
safe harbor, because at the end of the day, it is really the 
government's responsibility to get the system right to protect 
the employer, and to offer a safe harbor, and to protect the 
employees against potential discrimination. But to accomplish 
all of those goals, it really has to be a government-driven 
system that can prevent identity fraud.
    Chairman JOHNSON. Well, every expert we have talked to 
acknowledged the fact that E-Verify can't detect identity fraud 
very well and may, in fact, encourage it. So that puts the 
employer on the frontline of trying to detect and prevent 
identity fraud. So can you tell us the challenges faced by your 
companies in their attempts to detect identity illegalities and 
yet fill the jobs that Americans need?
    Mr. FRAGOMEN. I think it is very frustrating to companies 
who have to go through this process, because essentially they 
have to accept the documentation that is given to them by the 
employee as long as it looks reasonable on its face. And there 
is really nothing further, no further steps they can take. If 
they ask for additional documentation, they could easily be 
accused of discrimination. And the companies, of course, are 
generally very concerned about making certain they do things 
right and they don't hire workers that aren't legally 
authorized to work because, of course, they could lose these 
employees in an enforcement action, and then, of course, that 
would hinder their ability to deliver the service that they are 
delivering.
    So it is counter--it is a counterintuitive situation 
because you have--you are presented with documentation, you 
really don't like the way the documentation looks, but you have 
no reason to say with certainty that there is anything 
inappropriate, you just have to accept it. So I think it puts 
the companies in an extremely difficult position. And of 
course, if it turns out that the documentation, in fact, is 
fraudulent, then the employer's whole business is at risk, and 
an enforcement action, and he loses a big portion of his 
workforce.
    Chairman JOHNSON. Thank you very much.
    My time has expired. Mr. Becerra, you are recognized.
    Mr. BECERRA. Mr. Chairman, thank you very much. And I thank 
each of and every one of you for your testimony.
    I don't believe there is a person in this Congress and, I 
suspect, sitting here in this audience who wouldn't agree that 
as a sovereign Nation, we have to do everything we can to make 
sure that we understand who is in our country and who is 
securing employment in our country. And I know that we continue 
to try to figure out the best way to get there. So your 
testimony is important because Congress is going to make every 
effort to try to take us to a place where we can tell the 
world--not just Americans, tell the world--that we are going to 
determine the best way to figure out who should come into the 
country and who should be able to work in our country. And so I 
wish you great deal of good fortune as you continue to assemble 
the information and the data that will help us make the best 
decisions here.
    I am concerned about two things in particular: As we try to 
move forward in verification for employment, that we are not 
undermining the essential work that is supposed to be done by 
the agencies that might be placed in a position of charge to do 
the work. So in the case of Social Security Administration, you 
are already backlogged in trying to deal with disability claims 
from Americans who are trying to get their benefits. You are 
backlogged when it comes to trying to secure the different 
resources you need to do the other things that come from having 
the most popular identifier in the world, the Social Security 
number. So I am wondering if you can give us a better sense.
    Right now E-Verify is a program used in 2 or 3 percent of 
the employment community. And if you expand it and make it 
mandatory throughout the Nation, we are expanding it 
dramatically. And we have already heard the stories of the 
potential fraud, potential misuse of identity, and certainly 
the dramatic dislodgement of employment that an American may 
have secured rightfully and then loses it. How are we prepared, 
then, to move to a fully national mandatory system?
    And so perhaps what I can do is ask Mr. Stana first to give 
us a sense if you think any of the Federal agencies that would 
be in charge of a nationwide mandatory system are equipped 
today with resources and personnel to go to ramp up to full 100 
percent participation of the employment community.
    Mr. STANA. Well, I think, as you pointed out in your 
statement, the CBO estimated it would take billions of dollars 
to make sure that Social Security and DHS and whoever else 
would be involved would have both the technology and the 
personnel to make this happen. Currently do they have that to 
ramp up right away to a mandatory system? Probably not. But 
with proper resources, they could get there.
    The other questions you raised about the ID theft and 
making sure that you don't have false negatives, the system 
will need adequate resources to get on top of these issues. The 
challenges do not pertain to the 95 percent of the population 
that is properly handled, it is about the 5 percent that is 
problematic.
    Mr. BECERRA. But the 95 percent of the population might pay 
the price as we try to deal with that 5 percent.
    Mr. STANA. You can't ignore the 95 percent.
    Mr. BECERRA. But, Ms. LaCanfora, let me ask you this. 
Social Security in this tough budget environment is taking a 
hit in this 2011 budget. Chances are it might take a hit in the 
2012 budget. You are already having a difficult time dealing 
with all of these other responsibilities you have to our 
Americans who are applying for retirement benefits, for 
disability benefits, survivors' benefits. Can Social Security 
ramp up to a 100 percent E-Verify participation without 
sufficient resources to do this?
    Ms. LACANFORA. The simple answer is no, Mr. Becerra. We 
appreciate and share your concerns about funding. It really 
depends largely on what you consider mandatory 100 percent 
expansion. Right now E-Verify is largely used for new hires, 
with few exceptions, and if you look at the current volume, we 
get about 16.5 million queries a year. If you ramp it up to new 
hires nationwide, that would be around 60 million queries a 
year. If you ramp it up even further to include current 
employees, you could be getting up to 140 million queries a 
year or more.
    So it depends on the mandate. But certainly any mandate 
would have a significant impact on Social Security, increased 
traffic in our local offices, and we would need to be funded 
for that.
    And I would also support the comment made by one of my 
colleagues earlier to say that any mandatory move should be 
phased in so that we have the opportunity to ramp up and hire 
as needed.
    Mr. BECERRA. And, Dr. Anton, and, I hope, Mr. Fragomen, you 
as well will continue to provide us with some information that 
helps us pinpoint some of what your testimony really focused 
on, and that is how you make this work. How do you collect the 
information? How do you deal with this Internet fraud that is 
out there? We really need that to be able to move forward.
    Ms. Moran, I hope you will continue to give us the real 
case, real live examples of individuals, U.S. citizens, lawful 
permanent residents who have been impacted because we haven't 
done this perhaps as quickly in implementing a workable program 
as we would like. So as we continue to figure out how to ramp 
up, I hope you all will continue to give us information.
    Unfortunately my time has expired, but I would have loved 
to have gotten into it more with you all. But I appreciate very 
much your time with us today.
    Thank you, Mr. Chairman.
    Chairman JOHNSON. Thank you. I appreciate your comments.
    Mr. Paulsen, you are recognized for 5 minutes.
    Mr. PAULSEN. Thank you, Mr. Chairman.
    Mr. Fragomen, small businesses are top job providers. How 
much of a barrier is not having Internet access for using E-
Verify for those folks?
    Mr. FRAGOMEN. Well, not having Internet access certainly 
makes it much more difficult. As you know, you could make 
verification available by telephone again, but that is not a 
particularly desirable way to do it. I suppose the good news is 
this is becoming less of a problem as telephones now are 
morphing into Internet-enabled devices. So I think it will 
become less of a problem over a period of time. But certainly 
it is an issue now.
    And the other big issue, too, I think, for small businesses 
is just the impact on the small businesses if they have a small 
staff. Since they tend to not have too many employees that have 
to go, quote, hang around the Social Security office with 
thousands of other people who will be doing the same thing at 
the same time, you can imagine what the impact of that would be 
on these smaller companies.
    Mr. PAULSEN. I was kind of wondering if you thought smaller 
employers essentially should be held to the same standard as 
larger companies in terms of a compliance measure. They can't 
get access to the Internet like larger employers. Are you 
concerned that a work verification system might not only 
discriminate against the workers, but also against potential 
small employers?
    I should ask you, what about the situation where a 
potential worker is caught in a tentative nonconfirmation 
problem, and the need for communications between Social 
Security and the employer become critical?
    Mr. FRAGOMEN. Once again, that is a big issue. I think, in 
fact, most situations are going to require the employee to 
actually go to the Social Security office or whatever to try to 
get these problems resolved. I don't know how many of them are 
really going to be successfully resolved electronically. But 
certainly, not having Internet access would be a big problem, 
and I think it would require on behalf of the smaller employers 
that they may just have to try, as I say--try to use some of 
these technologies so that they can get more in the game.
    Now, whether it would be reasonable to exempt them, I think 
that becomes difficult when you consider the number of small 
employers there are, and the fact that frequently these small 
employers are where the undocumented immigrants may be 
employed. So I think giving them sort of exemption would 
probably be a good idea maybe for a period of time.
    Mr. PAULSEN. That was my follow-up. I was curious if you 
thought it would be a reasonable option to give them an 
exemption for a certification for a business, the smaller ones 
in particular, if they have shown to be good employers or they 
have had a good-faith effort to actually abide by the law.
    Mr. FRAGOMEN. Yeah, I think it would be very reasonable to 
do that for, as I say, a period of time, because as we 
discussed a minute ago, it would be important to phase in the 
program, and the larger employers could be phased in first 
before smaller employers.
    Mr. PAULSEN. Thank you.
    I yield back, Mr. Chairman.
    Chairman JOHNSON. Thank you, sir.
    Mr. Berg, you are recognized for 5 minutes.
    Mr. BERG. Thank you, Mr. Chairman.
    My question, Ms. LaCanfora, concerns some new hires are 
authorized to work. We heard a little bit about receiving an 
erroneous tentative nonconfirmation from the E-Verify system. 
It seems like we have got too much bureaucracy in here that is 
really creating a problem for people that are obviously getting 
kicked or flagged with the system. So I guess my question is, 
we know Social Security can extend the deadline, and we have 
field office employees that can make the entry into the 
electronic system, the EV-STAR. What is SSA doing to try to 
improve this and keeping people from falling through the 
cracks?
    Ms. LACANFORA. Thank you for the question. Over the past 2 
years, we have worked closely with DHS to decrease the number 
of tentative nonconfirmations. It used to be somewhere, I 
think, as my colleague said, up around 8 percent. Right now 
tentative nonconfirmations are around 1.7 percent of the total, 
and less than 1 percent actually come to Social Security. So 
the other tentative nonconfirmations may be resolved through 
DHS. So we get less than 1 visit for every 100 queries coming 
through the system. That is far lower than it has been in 
previous years.
    In terms of the EV-STAR System, we have, as a matter of 
fact, next week an enhancement to the system coming in where if 
someone walks into one of our offices as a result of a 
tentative nonconfirmation, they don't have to tell our employee 
that. They can say, listen, I have some sort of discrepancy I 
need to resolve. And what will happen is when our employee goes 
into the system, an alert will pop up saying, check EV-STAR, so 
we can assure that we catch every one of these cases and then 
document it properly in the system. We expect that that 
enhancement will significantly increase our use of EV-STAR.
    Mr. BERG. Thank you.
    I yield back, Mr. Chairman.
    Chairman JOHNSON. Thank you, sir.
    Mr. Smith, you are recognized for 5 minutes.
    Mr. SMITH. Thank you, Mr. Chairman.
    Mr. Fragomen, would you talk about the impact of the 
patchwork of laws on employers? If you could emphasize that, 
and then about the challenges this creates for Homeland 
Security in determining the volume of E-Verify workloads.
    Mr. FRAGOMEN. Well, impact is very significant. The State 
laws basically differ from each other. They frequently differ 
from the Federal law. States sometimes struggle with issues 
that would seem very simple, but in a modern economy, it 
becomes les obvious. For instance, what is the place of 
employment; if you physically work in one location, but you 
report into and you are paid by an employer or an office that 
is in the State; or perhaps there is no office at all in the 
State, but you actually, in fact, render services that benefit, 
for instance, a company with whom you have a contract in that 
State. So they have a lot of difficulty identifying what the 
different standards are. And then, of course, you have your 
virtual employees who are just working at home.
    So the bottom line is that it is a very, very expensive 
proposition for corporations to try to track all of these 
different rules and try to comply with them on a State-by-State 
basis.
    Mr. SMITH. And, Ms. LaCanfora, everything is fully 
reimbursed at Social Security, right?
    Ms. LACANFORA. Yes. DHS reimburses us for all of our costs.
    Mr. SMITH. Can you elaborate how that reimbursement takes 
place?
    Ms. LACANFORA. Sure. What happens is at the beginning of 
the year, DHS will estimate the number of queries that they 
expect. We at Social Security estimate the amount of the 
fallout that we expect to happen; in other words, the number of 
people that will actually walk into a field office. And with 
those two numbers, we then estimate the amount of money that 
DHS should reimburse us for the year, and they pay us that 
money up front, and then at the end of the year, after we know 
how many queries we actually got and how many field office 
visits we actually got, then we reconcile those numbers and we 
sort out the change.
    Mr. SMITH. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Chairman JOHNSON. Thank you.
    Mr. Tiberi.
    Mr. TIBERI. Thank you, Mr. Chairman.
    As I left, I told Mr. Fragomen--just to let everybody else 
know before I ask the question--just this morning I had an 
employer talk to me about this issue. A family-owned business, 
participating voluntarily in the E-Verify system, has been very 
frustrated with the lack of continuous continuity in the 
system. Sometimes it takes up to 7 days for verification. At 
that point, usually if it takes that long, the applicant that 
he is going to hire is gone and goes to another employer who 
doesn't have an E-Verify system. So he is frustrated from that 
perspective.
    He is frustrated that this small business owner who owns 12 
restaurants in Ohio was audited in a voluntary manner by ICE 
and found that 83 of his employees in total that were E-
Verified had given him incorrect information on the I-9 form, 
so he got fined. He fired the 83 employees, and they are 
probably working somewhere else. And here is an employer who is 
actually trying to participate in the system.
    So I have grave concerns about how a mandatory system would 
work when clearly the voluntary system is not working for 
employers--some employers today. So I would like to ask each of 
you--and we can start at the end here, what do I tell my 
constituents about why I should support a mandatory system when 
clearly the voluntary system is not working?
    Mr. STANA. When we did our work that resulted in the report 
that was issued a few months ago, we went out to the State of 
Arizona and North Carolina and a few other places and talked to 
employers and employer groups, and asked them what they wanted 
in an E-Verify system. Some of the issues you are bringing up 
today really weren't on their radar screen. They said they want 
something that is reliable, fast and not burdensome. And they 
are worried about other employers having a competitive 
advantage because they misuse the system. They fear they could 
lose an employee who later goes down the street to another 
employer who misuses the system and gets hired.
    So I think what I would say to your constituent is that to 
the extent that this system is reliable, fast and not 
burdensome, it would be ready for prime time, in our 
estimation.
    Mr. TIBERI. But today he would argue--I am not sure it is 
not reliable--the E-Verify system is not reliable, sometimes 
takes up to 7 days, and in this case not very timely or 
accurate.
    Mr. STANA. Without knowing the facts and circumstances of 
that case, maybe he described it differently. He shouldn't have 
sent the information into the E-Verify system until he actually 
hired the individual. You shouldn't use it for screening. That 
is a no-no. But if it takes 7 days to get a response, that is 
an exception. If such delays happen a lot, then that is of 
concern.
    Mr. TIBERI. It happens a lot, he said.
    Ms. LACANFORA. I would say SSA has a very limited role in 
E-Verify. We obviously have a database, as was mentioned 
earlier, with over 450 million records of Social Security 
numbers, which include dates of birth and some citizenship 
information. But DHS is responsible for all other aspects of 
the E-Verify system. I have to defer to them largely to respond 
to your question.
    Mr. TIBERI. Ms. Moran.
    Ms. MORAN. I am not going to convince you to support a 
mandatory system. In fact, I don't think that you should. What 
we need to do is find a solution to the broken immigration 
system. The employer in your state wants those 83 employees. 
They need employment. We need to just find a solution so that 
employer in good faith isn't liable for immigration violations, 
and he or she can get the workers that they need.
    Mr. TIBERI. Thanks.
    Ms. ANTON. I would just like to point out there is another 
issue that has been raised that affects small employers, which 
is the fact that small employers generally don't have the 
resources to properly secure their systems. And so in addition 
to being fined for that kind of thing, they are going to have 
data breaches, they are going to have databases which contain 
information that identifies other people, and they are going to 
be easy targets for people to hack into their systems, insider 
or out. So that is another consideration is they don't have the 
resources; not just Internet access, but the fact that their 
systems are vulnerable to botnets they don't even know that are 
on there, viruses, et cetera.
    Mr. TIBERI. Great point. Thank you, sir.
    Mr. FRAGOMEN. Well, it seems to me that if the government 
mandates that you go through this process, that they then have 
to assure that as a trade-off, that the system will be certain, 
and you will be given a safe haven if you do what you are 
supposed to do. So before the system, in my mind, is ready for 
prime time, it has to be--it has to be improved to the point 
where that is possible. And it has to address this whole issue 
of identity fraud. And until it addresses identity fraud, has 
adequate resources, fully electronic, et cetera, it should not 
be mandated because it is not reliable.
    Mr. TIBERI. Thank you. I yield back.
    Chairman JOHNSON. Thank you.
    Mr. Brady, you are up.
    Mr. BRADY. Chairman, thank you for holding this hearing.
    I really appreciate the comments of all of the witnesses 
today. I am convinced in the broader issue that we have to 
close the back door of illegal immigration so that we can keep 
open the front door of legal immigration. Workforce 
verification being timely and accurate is the key to that, to 
do it successfully and fairly.
    Dr. Anton, you had an interesting comment in your testimony 
about mission creep and how databases start to tie into one 
another, and before you know it, you are going to have a 
dangerous situation. Some have suggested that Social Security, 
IRS and Homeland Security share taxpayer data in the workforce 
hires. We hear that often. We, the committee, have been very 
apprehensive about any sharing of taxpayer data. Now, our 
jurisdiction regarding Section 6103 in the IRS Code prevents 
it. In fact, our staff asked the Joint Committee on Taxation to 
prepare a report on these provisions in preparation for this 
hearing, and, Mr. Chairman, I request that this report be 
entered into the hearing record.
    Chairman JOHNSON. Without objection.
    Mr. BRADY. So, Doctor, can you speak to the taxpayer data 
issue and mission creep and workforce issues.
    Ms. ANTON. Certainly. So from a privacy point of view, 
clearly when you start commingling IRS data with other 
databases in the United States, that raises a lot of red flags.
    As a technologist, I can say that requiring, for instance, 
authentication--for authentication, let us say that you had to 
provide what was the figure on line 19 of your IRS statement 
from tax returns from last year. That is something that no one 
else can get. That is something that only I can look at. So, 
from that perspective as an authenticator, it is pretty strong. 
But the concern, then, is that that raises a lot of risks once 
you start providing that kind of access between systems, and 
every time you start piggy-backing databases, then you are 
ultimately increasing the risk of security problems, 
transmission of information, data leaks, data peeping, like 
when there is celebrity peeping, et cetera. So it raises a lot 
of the different risks that have to be considered, and how do 
you secure all of those transactions as well.
    Mr. BRADY. In laymen's terms, businesses and agencies today 
focus on keeping their data secure. How much greater does the 
risk increase when you start sharing those types of data across 
agencies?
    Ms. ANTON. Ultimately the more data that you have about 
someone in a database, the easier it is to access a lot more 
information and cobble together new identities, and so it 
becomes a very rich target for attack. So that is something the 
government has to think about is what do we really--there is no 
such thing as a secure system. We have centuries of experience 
with war to show that there is no such thing as a secure system 
or country, et cetera. And so with that knowledge, we have to 
think about do we really want a system that will eventually be 
broken into, that will make it easier for people to propagate 
identity fraud.
    Ms. ANTON. So there are just different risks that we have 
to do. And we need to consider how do you design the system in 
such a way that we address the real problem at hand instead of 
patching things on in the hopes that we keep putting Band-Aids 
on--okay, well, maybe if we just check people to see whether or 
not they are eligible to work--and then we have all of these 
other problems. And the real problem, I think, is an 
immigration problem. So I will just throw that there.
    Mr. BRADY. Got it. Chairman, thank you.
    Chairman JOHNSON. Thank you, Mr. Brady. That is 
interesting. You know your line 19 on your IRS form?
    Ms. ANTON. I don't. I just threw that out there. But the 
point is that I would have to look it up. And if I have to look 
it up, then someone else can't use it.
    Chairman JOHNSON. I am not sure I could find mine 10 days 
after I file the form.
    You know, all of you, use of biometric data is always 
another proposal for ID and authentication. We have been 
talking about that for a long time, and, of course, it is not 
perfect either. But can each of you comment on biometrics and 
what you think of this?
    Mr. STANA. Let me answer that two ways. First off, it could 
be very expensive to do it right. And to do it right might be 
something other than putting a chip in a card and sliding it 
into a reader, because those kinds of systems have been hacked 
in a matter of hours. So that is not good. You have to have a 
separate data set. So that could be very expensive, but maybe 
in some form necessary to make this thing work.
    Second, biometrics raise all kinds of privacy concerns. How 
much of your identity should the government have? That is a 
question that I am not ready to answer. Should the government 
have my retina scan? Should the government have my fingerprint? 
Well, they already have my fingerprints, but how much 
information do you want the government to have? And then you 
get into the data privacy and security issues.
    Chairman JOHNSON. I would like to give it to them so I can 
get through the airport quicker.
    Mr. STANA. Well, that is the other thing. Some people would 
be perfectly willing to give it up if they could bypass the 
system somehow; they'd like to put their hand on a reader, and 
instantly be work-authorized. Others are very sensitive about 
that.
    Ms. LACANFORA. I will preface my comment by saying I am not 
an expert in biometrics, but I do agree that incorporating 
biometrics into E-Verify would be a costly proposition. DHS, it 
was mentioned earlier, is allowing employers now to access 
passport photos and is working to obtain driver's license 
photos. And looking at photos is one means of identity 
assurance, although not foolproof. I think decision makers need 
to weigh those options against the biometric option to see what 
is cost-effective and what gets the job done to the extent 
possible.
    Chairman JOHNSON. Thank you.
    Ms. MORAN. So the cost and the accuracy issues have already 
been mentioned. And I encourage you to look at some studies of 
the Transportation Worker Identification Credential, the TWIC 
card. It is like a billion dollars, huge error rate, it is kind 
of in a mess. So I would encourage you to look at that. I think 
it is the closest thing.
    The point is that----
    Chairman JOHNSON. It worked, though.
    Ms. MORAN. I mean, for some it does, but there has also 
been some very high error rates, and also the census folks got 
a 20 percent error rate on fingerprints when they tried to do 
it for the workers last time around.
    So I think the point is that E-Verify, biometrics, nothing 
is a magic bullet. Again, not to repeat myself, but if you 
still have undocumented workers in the economy, just like E-
Verify, they are just going to go underground and get around 
the system.
    Chairman JOHNSON. Thank you.
    Ms. ANTON. So I would just note that if you also add 
biometrics to a database, that becomes a very, very rich, 
wonderful asset for anyone who wants to gain access to it.
    And another challenge with biometrics is this is another 
single-factor authentication approach. And so we really are 
advocating a layered approach where we have multiple ways to 
authenticate people.
    There are places in which biometrics, I think, work very 
well. For instance, to enter in the Olympic Village, there is 
always hand geometry, and your hand geometry gets compared to 
your badge. That isn't retained in any database. So I have to 
have my credential with me to get in. And so that is a very 
nice way, approach to do it because you don't have the 
responsibility of having a database with all the biometrics 
stored in it.
    On the other hand, it is extremely expensive because it 
means you have to have a reader every single place, and there 
can be hardware failure associated with that.
    Chairman JOHNSON. Thank you.
    Mr. FRAGOMEN. If over half of the unauthorized workers who 
undergo E-Verify are erroneously confirmed as work-authorized, 
it seems as though we are creating a pretty vast system which 
impacts on the whole populace, and we are not being very 
effective at ferreting out unauthorized workers. So it seems to 
me that as problematic as it might be because of the cost, you 
still must stop the use of false breeder documents which can 
lead to issuance of fraudlulent identification suggesting you 
are someone different from who you really are, and which can 
cause obvious data security problems. It seems to be that 
unless we tackle identity fraud and false breeder document 
problems, at the end of the day, I don't know that we are being 
very effective in keeping unauthorized workers out of the 
workforce.
    Chairman JOHNSON. It is a cumbersome idea, but it might 
work.
    Mr. Becerra, do you care to question?
    Mr. BECERRA. You actually inspired a question that sort of 
stems from something Dr. Anton mentioned earlier. You mentioned 
that trying to expand E-Verify when is prone to errors, prone 
to intrusion, and loss of privacy, and at the very end you 
close by saying it is almost as if we are trying to build a 
system that hasn't been proven to work effectively because we 
have a decrepit immigration system that is not helping us keep 
tabs of folks in the first place we are authorized to work. So 
it sounds like we are piling on top of a broken system.
    Other systems that we are not quite sure are ready for 
prime time may cause difficulties for Americans' privacy and 
security and may lead to a lot of businessmen and women having 
to go through some expense and perhaps difficulties with their 
business if they must go through a system that doesn't always 
give them the check they need. And so it seems like we would 
rather than pile on, we should clear the dust and deal with the 
foundation of why we are talking about coming up with a 
verification system in the first place.
    Ms. ANTON. Yes, I wholeheartedly agree, and as you were 
speaking, it reminded me of everything we would read about 
business process for engineering during the late 1980s, early 
1990s, where one of the problems is that people were building 
systems that automated existing broken business processes and 
practices. And so that is why systems become obsolete.
    And so I think it is really good to think out of the box 
and think it would be really big, this is a grand challenge, if 
you will, and how do we solve a problem; and then build a 
system that really supports a well-designed business practice.
    Mr. BECERRA. Mr. Fragomen, a question for you. If you could 
take control of this, could you devise a system that would work 
for verification purposes?
    Mr. FRAGOMEN. Well, I think it would be possible. You have 
to start with the premise that you have to try to limit the 
number of persons that enter the U.S. illegally. That has to be 
the first step. You have to have more effective border 
security. You have to have better systems to keep persons who 
enter legally from overstaying their status and becoming 
illegal.
    You have to then--once you have a more secure entry system 
and better control, it seems to me then you definitely have to 
have a workplace enforcement system that is driven by 
bioidentifiers.
    Interior enforcement doesn't work. For instance, the law 
that Arizona passed and, of course, was just found 
unconstitutional, it doesn't really work, and it never has, 
because you can't basically formulate reasonable suspicion to 
believe who is in the U.S. illegally, which would then arguably 
give you a right to question that person; reasonable suspicion 
to believe that they are an alien unlawfully present in the 
U.S. So you really can't do that without using racial 
appearance as a primary factor. So that is never going to work.
    So really your only shots at this are border enforcement, a 
legal immigration system that allows a larger number of people 
to come into the country to work legally, and workplace 
enforcement. I think you need those three things combined.
    Mr. BECERRA. It sounds like you have just read off the 
litany of things that most people say we need for comprehensive 
immigration reform.
    Mr. FRAGOMEN. It is certainly a number of those pieces.
    Mr. BECERRA. Thank you. I appreciate all of your testimony, 
and we will probably have you back again soon.
    Chairman JOHNSON. Thank you all for being here. I 
appreciate you taking the recess with us. We did do two votes, 
and, you know, the world is still turning.
    Thank you all so much. This meeting is adjourned.
    [Submissions for the Record follow:]
             Prepared Statement of The Honorable Mr. Dreier
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                Prepared Statement of National Committee
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                   MATERIAL SUBMITTED FOR THE RECORD
                   Questions from Ana I. Anton, Ph.D.
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