[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]







                     HEARING ON THE SOCIAL SECURITY
                        ADMINISTRATION'S ROLE IN
                       COMBATTING IDENTITY FRAUD

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


                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 24, 2023

                               __________

                          Serial No. 118-SS02

                               __________

         Printed for the use of the Committee on Ways and Means












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                              __________

                  U.S. GOVERNMENT PUBLISHING OFFICE

54-359                    WASHINGTON : 2024













                      COMMITTEE ON WAYS AND MEANS

                    JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio                  BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
DREW FERGUSON, Georgia               LINDA SANCHEZ, California
RON ESTES, Kansas                    BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania          TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma                 SUZAN DelBENE, Washington
CAROL MILLER, West Virginia          JUDY CHU, California
GREG MURPHY, North Carolina          GWEN MOORE, Wisconsin
DAVID KUSTOFF, Tennessee             DAN KILDEE, Michigan
BRIAN FITZPATRICK, Pennsylvania      DON BEYER, Virginia
GREG STEUBE, Florida                 DWIGHT EVANS, Pennsylvania
CLAUDIA TENNEY, New York             BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota        JIMMY PANETTA, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio

                       Mark Roman, Staff Director

                 Brandon Casey, Minority Chief Counsel

                                 ------                                

                    SUBCOMMITTEE ON SOCIAL SECURITY

                    DREW FERGUSON, Georgia, Chairman

MIKE CAREY, Ohio                     JOHN LARSON, Connecticut
DAVID SCHWEIKERT, Arizona            BILL PASCRELL, New Jersey
RON ESTES, Kansas                    LINDA SANCHEZ, California
BLAKE MOORE, Utah                    BRIAN HIGGINS, New York
RANDY FEENSTRA, Iowa                 DAN KILDEE, Michigan
GREG STEUBE, Florida
DAVID KUSTOFF, Tennessee

















                         C  O  N  T  E  N  T  S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Drew Ferguson, Georgia, Chairman............................     1
Hon. John Larson, Connecticut, Ranking Member....................     2
Advisory of May 24, 2023 announcing the hearing..................     V

                               WITNESSES

Sean Brune, Deputy Commissioner for Systems and Chief Information 
  Officer, Social Security Administration........................     4
Katie Wechsler, Co-Executive Director, Consumer First Coalition..    13
Margaret Hayward, Private citizen and mother of three............    26
Robert Roach, President, Alliance for Retired Americans..........    33
Jeffrey Brown, Deputy Assistant Inspector General, Office of 
  Audits, Office of the Inspector General, Social Security 
  Administration.................................................    43

                    MEMBER QUESTIONS FOR THE RECORD

Member Questions for the Record to and Responses from Sean Brune, 
  Deputy Commissioner for Systems and Chief Information Officer, 
  Social Security Administration.................................    80

                   PUBLIC SUBMISSIONS FOR THE RECORD

Public Submissions...............................................    92



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                    SOCIAL SECURITY'S UNIQUE ROLE IN 
                       COMBATING SOCIAL SECURITY 
                     NUMBER-RELATED IDENTITY FRAUD 

                              ----------                              


                        WEDNESDAY, MAY 24, 2023

                  House of Representatives,
                   Subcommittee on Social Security,
                               Committee on Ways and Means,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:01 p.m. in 
Room 2020, Rayburn House Office Building, Hon. Drew Ferguson 
[chairman of the subcommittee] presiding.
    Chairman FERGUSON. We will call the subcommittee to order.
    Welcome today to today's hearing on Social Security 
Administration's role in combating identity fraud.
    When the Social Security Administration began issuing 
Social Security numbers in 1936, they were simply used to track 
workers' earnings and administer the Social Security program. 
Times have changed dramatically since then, and now the Social 
Security number, or SSN, is the linchpin of American identity. 
SSNs are used for a number of reasons, some required by law, 
others not. If you want a job, you must--or if you want to buy 
a home, if you want to open a credit card, you need a Social 
Security number.
    But after countless data breaches, it is clear that Social 
Security numbers are far from safe and far from a secret. In 
2022 alone, there were more than 1,100 data breaches that 
included Social Security numbers. So it should come as no 
surprise that the Social Security number is still an attractive 
target for criminals and fraudsters, and that identity theft is 
real--is a real threat to millions of Americans, and that 
includes our children and our seniors.
    In 2021, roughly 1.25 million children were the victims of 
identity fraud, which cost American families real time, real 
money, and real worry to resolve this crime. The last thing 
that somebody needs when they are trying to protect themselves 
or a loved one from identity fraud is red tape. But 
unfortunately, resolving an issue related to a stolen Social 
Security number can be a long and complex ordeal, placing 
additional burdens on victims, and it extends time for 
criminals and fraudsters to misuse the Social Security number.
    As the creator and issuer of Social Security numbers, the 
Social Security Administration is uniquely positioned to not 
only combat Social Security number fraud, but also protect 
people whose Social Security numbers have been compromised from 
harm due to identity fraud. But Social Security's policies 
don't always make things easy. Today we will have an 
opportunity to hear firsthand about how difficult it is to 
resolve issues related to lost Social Security numbers or 
stolen Social Security numbers and discuss some ways that the 
Social Security Administration can make it easier for Americans 
to protect themselves from harm before it occurs.
    If a burglar breaks into your house, you call the police. 
They don't tell you to wait a few weeks and hope that your 
situation improves. Instead, they send an officer to respond. 
It is not always how victims of identity theft are treated, and 
that is a problem. The American people deserve a similar 
response from government services when they are victims of 
identity theft. That is why I have partnered with Ranking 
Member Larson to reintroduce the Improving Social Security 
Service to Victims of Identity Theft Act that would require the 
Social Security Administration to provide a single point of 
contact for individuals whose numbers have been misused, and to 
help resolve cases as quickly as possible.
    We have also had a chance to hear from both--we will also 
have a chance to hear from both Social Security Administration 
and its Office of Inspector General about ongoing efforts at 
the agency to combat identity fraud and the ways these can be 
improved. The agency's records are valuable anti-fraud tools 
because they associate the numbers, Social Security numbers, 
with other verified identity data such as the name, date of 
birth, and date of death. In limited cases, these records have 
been leveraged to help combat fraud by sharing death data with 
other Federal and state agencies, and by partnering with the 
private sector to establish Electronic Consent-Based Social 
Security Verification number, or the ECBSV.
    But as we will hear today, there is more that the SSA and 
Congress can do to improve the effectiveness of these efforts. 
Identity theft is a serious issue, and we all have a 
responsibility to do a better job of protecting Americans from 
this threat and to restore the public trust.
    I want to thank our witnesses for joining us today, and we 
look forward to your testimony.
    Chairman FERGUSON. I am pleased to recognize the ranking 
member from Connecticut, Mr. Larson, for his opening statement.
    Sir, you are recognized.
    Mr. LARSON. Thank you, Mr. Chairman, and I am honored to 
join with you in terms of putting forward this legislation.
    As you have indicated in your remarks, identity theft is 
vitally important to the American people, as is Social Security 
itself, the nation's number-one insurance plan, the nation's 
number-one program with respect to making sure that our elderly 
stay off of poverty and our children stay off of poverty. And 
more veterans, of course, rely on Social Security disability 
than they do the VA. Yet important as identity theft is--and it 
is, and we must take it serious--it is also important that we 
fund Social Security appropriately.
    And the Social Security Administration is the most 
effective and efficient agency we have in the Federal 
Government. In insurance parlance, they operate at what is 
called a 99 percent loss ratio. I come from an insurance 
capital. That means that they are able to operate their agency 
and serve the more than 66 million Americans with under 1 
percent administrative costs. They don't need to be cut, they 
need to be enhanced, and especially in this area of identity 
fraud, as well.
    And so I think it is incumbent upon us not only to 
strengthen the Social Security Administration so they are 
capable of doing their job, especially after the devastation we 
have seen from the pandemic and what that has done all across 
the country and the nation, and specifically with a agency--
there is no other Federal agency, none, that operates and 
administers what it has to do with under one percent. That is 
incredible. We should be striving to make a model of what 
Social Security does and how effective they have been in terms 
of getting--because they certainly, as we all would agree, 
having talked to our constituents, can do better.
    So, Mr. Chairman, I as well wanted to do this, as well as 
at the start. I have a card for everybody. You even have your 
picture on it there, Mr. Chairman. But I am going to have them 
pass it out for both Democrats and Republicans. I intend to 
give these to everyone in the Congress. And I hope that we can 
join together, because I think the most important thing that we 
can do with regard to identity theft and with regard to Social 
Security is enhance the program. And Social Security has not 
been enhanced since Richard Nixon was the President of the 
United States in 1971. There have been no improvements.
    So, when you get your card--and Mr. Chairman, I took the 
liberty--you know, I blew up your card and my card, but 
everyone is going to get these. And on it, it will tell you 
just how many Social Security recipients you have in your 
district, and then it will break it down to those children in 
your district that are getting Social Security, to those 
veterans that are getting that Social Security. But most 
importantly, and something we don't talk enough about as well, 
is how this is an engine for economic recovery.
    Mr. Chairman, you have 161,374 Social Security recipients 
in Georgia's 3rd, and monthly your district gets $270 million 
comes into the district. That is incredible. I have 147,662 
Social Security recipients who get $270 million monthly. We 
have not improved or enhanced that in 52 years. A gallon of 
milk cost $0.72 in 1971. Obviously, everybody on this committee 
knows what has happened in terms of prices.
    And when you add that to what we are living in now, in 
terms of what political scientists and historians are calling a 
poly-crisis, when you look at what is happening globally, just 
in the area of, let's say, the pandemic, the supply chain 
issues, the ensuing global inflation, and then add to that a 
global war--that is, in essence, what the Ukraine war amounts 
to--and you look at the pressure, who is the group that that 
impacts the most? Seniors. How so?
    Everybody knows this, but we don't talk about it enough. Of 
the more than slightly over 1.2 million people who have 
perished in this pandemic, 855,000 were over the age of 65. Of 
the people that are impacted the most on inflation, those are 
people on fixed incomes. Those are the 66 million people on 
Social Security. They need our help, and they need it now, not 
only in terms of protecting identity theft, but most 
importantly, the theft of not having their Congress do what it 
should do. Five million of our fellow Americans get below-
poverty-level checks, having worked all their lives, and paid 
into a system that only Congress can change.
    Chairman FERGUSON. Mr. Larson, you are about a minute over 
here, and we all appreciate and share----
    Mr. LARSON. My passion. I'm sorry that I went over time.
    Chairman FERGUSON. Quite all right. This is an important 
topic, an important program. And in the coming months----
    Mr. LARSON. I apologize, Mr. Chairman, and I yield back. 
[Laughter.]
    Chairman FERGUSON. Thank you. And while all of the points 
that you made are worthy of intense debate and discussion, 
today we do not want to miss an opportunity to focus on a very 
important topic, which is identity fraud, and so now I will 
introduce our witnesses.
    Mr. Sean Brune is the deputy commissioner for systems and 
chief information officer at the Social Security 
Administration.
    Ms. Katie Wechsler is the co-executive director at Consumer 
First Coalition.
    Ms. Margaret Hayward is a private citizen and a mother of 
three who has been invited to share her personal experience 
trying to resolve an issue related to her daughter's lost 
Social Security number.
    I would also like to take a point of privilege to recognize 
your husband and children who are here. Thank you for joining 
us, as well. We are glad to have you here and look forward to 
the commentary from the back row back there. [Laughter.]
    Chairman FERGUSON. Mr. Robert Roach--good to see you 
again--as President of the Alliance for Retired Americans.
    And Mr. Jeffrey Brown is the deputy assistant inspector 
general at the Office of Audits for the Office of Inspector 
General at the Social Security Administration.
    Welcome to you all and thank you for your time today.
    Mr. Brune, your written statement has been made part of the 
record, and you are now recognized for five minutes, sir.

 STATEMENT OF SEAN BRUNE, DEPUTY COMMISSIONER FOR SYSTEMS AND 
   CHIEF INFORMATION OFFICER, SOCIAL SECURITY ADMINISTRATION

    Mr. BRUNE. Thank you, Mr. Chairman, Ranking Member Larson, 
and members of the subcommittee. Thank you for inviting me to 
discuss Social Security Administration's role in combating 
identity theft. I am Sean Brune, the Deputy Commissioner for 
Systems and Chief Information Officer for SSA.
    Today I will talk about our efforts to mitigate the harm 
resulting from criminals who try to misuse SSNs for their own 
gain. All of us play a role in finding the solutions to this 
misuse, and I greatly appreciate the subcommittee's many years 
of work on this important issue.
    The Social Security Act of 1935 did not mandate the use of 
SSNs, but it did authorize the creation of a record-keeping 
system for accurate wage reporting. We designed the SSN to 
allow employers to uniquely identify and properly report 
individual earnings, and to help us track earnings, determine 
eligibility for benefits, and pay the correct amount. Today, 
almost 90 years later, the SSN remains at the core of our 
record-keeping, and is essential to carrying out our mission.
    Over many decades, use of the SSN for non-programmed 
purposes has spread. Businesses now use the SSN to track, 
identify, and exchange information about individuals. Data 
aggregators amass and sell large volumes of personal 
information, including SSNs, collected by businesses. As SSN 
use has expanded, so have incentives to obtain fraudulent SSNs.
    At one time it may have been helpful to use the SSN as 
secret information, something that would only be known by the 
person to whom the SSN was assigned. That is no longer the case 
and has not been the case for many decades. The SSN was never 
and will never be evidence of someone's identity. It is simply 
a number associated with specific individual--with a specific 
individual in our records.
    Over time, SSN misuse and identity theft, including 
synthetic identity theft, have continued to persist. Identity 
thieves have learned to target children because of their credit 
history are clean, and their records may be used for years 
before anyone realizes someone has stolen their identities or 
misused their SSN. None of this is acceptable.
    We understand the frustration, distress, and economic 
hardship SSN misuse and identity theft causes victims. As a 
matter of practice, online and in our field offices we provide 
individuals who suspect their identities have been stolen with 
up-to-date information about steps they can take to minimize 
the damage caused by the criminals. We also help to prevent 
identity theft by continuing to work with government agencies 
and external groups to raise awareness of the problem. And we 
support our Office of Inspector General Office of Investigation 
in their law enforcement efforts to stop identity theft.
    Awareness, however, is only part of the answer. Even though 
we advise people to keep their SSN confidential, public and 
private data leaks have greatly reduced the likelihood that 
SSNs are secret. This is why SSA's lawfully authorized 
electronic SSN verifications have become so important. 
Annually, we perform over 2 billion automated SSN verifications 
through more than 3,500 data exchanges. Using electronic 
systems such as our Social Security Number Verification Service 
and the Electronic Consent-Based Verification Service, we are 
making it harder for identity thieves to operate.
    Given the importance of our electronic SSN verifications in 
defending against synthetic identity fraud, we are also working 
to expand the ability of Federal benefits programs to use these 
services as part of their identity verification processes. We 
intend to enable Federal benefit programs to verify SSNs 
directly or through other Federal agencies using real-time 
verification requests.
    We understand the significant challenges associated with 
identity theft, with both--within both government and private 
sector. As long as the SSN remains key to accessing things of 
value, the SSN itself will have commercial value, and it will 
continue to be targeted for misuse. SSA will continue to do 
what we can to prevent and mitigate the effects of SSN use, 
misuse, and identity theft. We stand ready to work with you and 
with other government and private industry partners as you 
consider ways to protect Americans' personal information.
    Thank you, and I would be happy to answer any questions.
    [The statement of Mr. Brune follows:]
   
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    Chairman FERGUSON. Thank you, Mr. Brune.
    Ms. Wechsler, you are now recognized for five minutes.

 STATEMENT OF KATIE WECHSLER, CO-EXECUTIVE DIRECTOR, CONSUMER 
                        FIRST COALITION

    Ms. WECHSLER. Chairman Ferguson, Ranking Member Larson, and 
members of the subcommittee, thank you for the opportunity to 
testify on SSA's role in combating identity fraud.
    I am here to discuss a top priority of the Consumer First 
Coalition: preventing synthetic identity fraud through the use 
of SSA's Electronic Consent-Based SSN Verification, or ECBSV 
service, a service that, on a bipartisan basis, Congress 
directed SSA to establish.
    A criminal creates a synthetic identity by combining real 
information such as a person's SSN with fabricated information, 
using that to apply for credit, and having a credit report 
created at the credit bureaus. With some patience, the criminal 
will spend time building up the credit profile of the synthetic 
identity. Later, the criminal obtains a large credit limit, 
maxes it out, and vanishes. The victims are the owners of the 
stolen Social Security numbers, many of whom are children.
    Over one million children a year are victims of identity 
theft. The fraud may only be uncovered years later, when an 18-
year-old applies for a student loan or credit card. Undoing 
synthetic identity fraud is a huge burden on that individual 
and his parents. This fraud costs the credit industry billions 
in losses every year, making credit more costly for all.
    Recognizing this fraud problem in the mid-2000s, SSA used 
its existing legal authority to create a paper-based service, 
enabling users, for a fee, to verify whether a name, date of 
birth, and SSN matched SSA's records, with written consent from 
the SSN holder. That paper-based process is too slow for our 
increasingly digital credit system.
    In 2018 Congress mandated that SSA create an electronic, 
real-time version of the paper-based system. Thus, ECBSV became 
part of SSA's mission. This committee was essential to that 
enactment, as it unanimously passed the legislation that 
ultimately became the law.
    The ECBSV system allows financial institutions, with a 
consumer's electronic consent, to verify whether a name, date 
of birth, and SSN combination match SSA's records. The response 
is either a match or no-match result. Twenty-two entities use 
the system, many of whom are service providers submitting on 
behalf of multiple financial institutions.
    Our coalition has worked closely with SSA since the 2018 
law was passed. I want to focus on the execution of this 
congressional mandate.
    Improvements are necessary for the viability of the 
program. I do not say this lightly. The ECBSV system is at risk 
of collapse if changes are not made.
    First, SSA must extend the timeframe for recovering the 
cost of the system. The law mandates that users fully reimburse 
SSA, and we wholly accept that obligation. However, SSA is 
attempting to recover $38 million in the next 3 years, a 
deadline not in the enacting statute, by substantially 
increasing user fees.
    There was a price increase last April and another one takes 
effect in July. Some users will be expected to pay more than 22 
times what they originally paid for the exact same system. If 
this continues, it is highly likely that current and potential 
users will be deterred. Some users may stop altogether, and 
some may submit transactions only for high-risk scenarios. That 
means fewer transactions, which could cause SSA to increase the 
fees again for the remaining users. That is not viable.
    We ask Congress and SSA to work with us to extend the cost 
recovery timeframe to 10 years.
    Second, SSA should explore ways to provide further detail 
on a no-match result. It is impossible to determine, based on 
that result alone, if there is synthetic identity fraud. Data 
shows that roughly 40 percent of the no-match results are 
fraud, while the rest are typos or another benign issue. 
Enhancements to the technology of the system and additional 
granularity, all while protecting consumers' privacy and data, 
are worth exploring. This could significantly improve the 
usefulness of the system and attract more users.
    Finally, SSA should consider how else ECBSV could be used. 
Other entities in both the public and private sector may find 
this system worthwhile. We have a vested interest in ensuring 
ECBSV is a success, as it could be a model of good government 
and public-private collaboration. If it fails, the only people 
that benefit are criminals.
    Thank you for the opportunity to testify, and I look 
forward to your questions.
    [The statement of Ms. Wechsler follows:]
    
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    Chairman FERGUSON. Thank you, Ms. Wechsler.
    Ms. Hayward, we now look forward to hearing from you. You 
are recognized for five minutes.

 STATEMENT OF MARGARET HAYWARD, PRIVATE CITIZEN AND MOTHER OF 
                             THREE

    Ms. HAYWARD. Chairman Ferguson, Ranking Member Larson, and 
members of the subcommittee, thank you for the opportunity to 
share our family's story with you.
    Through no fault of her own, our infant daughter's identity 
was put at risk when she was just a few weeks old. This 
experience has been stressful for our family during an already 
vulnerable time and is something that I hope other families 
won't ever experience.
    At the beginning of August last year, my husband and I 
welcomed our third child shortly after relocating to 
Pennsylvania. When she was seven weeks old, I realized we had 
never received her Social Security card. I checked the Social 
Security Administration's website, and saw it was taking about 
three weeks to issue them. Being well beyond that window, I 
immediately called the 1-800 SSA telephone number.
    When I reached an SSA representative, he listened to my 
concerns, encouraged me to be patient, and give it a few more 
weeks. He told me it didn't matter if she had been assigned a 
number or not, because either way I could just complete the 
form requesting a new card. I told him from an identity 
standpoint, it did matter. It mattered significantly. If she 
had already been issued a card, her identity could be at risk 
because someone else could have it. According to that 
representative, our only option was to request a new card. I 
could not receive her social security number over the phone so 
we could begin the process of protecting her identity. Marcy 
and I would have to visit a field office, and the only way to 
be assured her identity was protected--assigning a new number--
was not an option.
    Going anywhere with a newborn, much less waiting at a 
government office, is no small feat. For us, this requirement 
became extra challenging. I planned to go to the Social 
Security office right away. However, just hours after I called, 
our daughter became acutely ill and was admitted to the 
hospital for RSV. Three weeks later our child was finally 
healthy and durable enough to visit our local Social Security 
office in person.
    Off we finally went to the SSA field office to complete our 
online request for a new card and find out our daughter's 
Social Security number. The visit followed the same pattern. It 
was once again suggested I be patient and give it more time. 
And contrary to what the telephone representative told me, they 
also would not provide me with our daughter's assigned number. 
All we could do was finalize the request of a replacement card 
and wait.
    When it comes to protecting your child, waiting, and hoping 
is not an acceptable course of action.
    When Marcy was three months old, the replacement card 
arrived, and we finally learned our daughter's Social Security 
number. It was only then that we were able to begin the 
laborious process of monitoring and protecting her credit 
through each of the non-government credit bureaus. Her original 
card remains unaccounted for and could be in anyone's hands.
    The Social Security Administration personnel made what was 
already a stressful time even more difficult with inconsistent 
and inaccurate information. On top of the frustration, we had 
to weigh the risks of bringing a medically fragile baby to a 
field office to move the process of protecting her forward. 
Each interaction went the same way: repeating our situation and 
pushing to be connected to the right resources.
    Many parents don't have the education, time, or experience 
navigating complex systems that I do, and until this is fixed, 
it is their children who stand to lose the most.
    Before she was even a month old, a vital piece of our 
daughter's identity was compromised. And she has no choice but 
to use that number for life. As long as we are successful at 
protecting her, Marcy won't meet the SSA's threshold to receive 
a new number. At best, she will be inconvenienced with a locked 
credit forever.
    A singular, knowledgeable point of contact within the SSA 
who was familiar with our case and could help us navigate this 
process would have been immensely helpful. A new Social 
Security number for our daughter would prevent us and someday 
her from a lifetime of credit and identity monitoring, saving 
hours of time and years of stress and attention.
    Prior to our daughter's birth, I worked as a family nurse 
practitioner. And when it comes to one's health, prevention is 
so much more valuable than treatment. I would like to see the 
SSA apply the same philosophy to identity protection. Even the 
threat of identity compromise is time consuming and exhausting.
    I am heartened by the subcommittee's focus on this 
important issue and implore you to continue your work to 
ultimately pass legislation that will give my family and so 
many others readily attainable peace of mind. Thank you so much 
for allowing me to share our family's story with you today.
    [The statement of Ms. Hayward follows:]
    
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    Chairman FERGUSON. Thank you, Ms. Hayward.
    Mr. Roach, you are now recognized for five minutes.

  STATEMENT OF ROBERT ROACH, PRESIDENT, ALLIANCE FOR RETIRED 
                           AMERICANS

    Mr. ROACH. Good afternoon. I am Robert Roach, president of 
the Alliance for Retired Americans. I would like to thank 
Subcommittee Chairman Ferguson and Ranking Member Larson, my 
good friend, and members of this committee for this opportunity 
to testify and participate in this hearing.
    Founded in 2001, the Alliance is a grassroots organization 
with 4.1 million members in 38 states working to strengthen 
retirement security for all. Nearly 66 million Americans, 1 out 
of every 5 households, rely on Social Security's lifetime 
guaranteed benefits. These benefits are essential to all who 
rely on them, including seniors, people with disabilities, and 
their families of deceased workers [sic].
    All Americans are rightly concerned about identity theft. 
Last week, as part of our Older Americans Month celebration, 
the Alliance held a retiree town hall with the Social Security 
Administration commissioner. During that event she specifically 
addressed the issues of fraud and identity theft and the 
efforts that SSA is making to combat them. We applaud SSA's 
efforts to increase public awareness of fraud and identity 
theft.
    If the already short-staffed Social Security Administration 
was forced to cut the budget by 22 percent as prescribed in 
House Bill 2811, the agency's work to protect Americans from 
identity theft would be hampered. In fact, the drastic funding 
cuts in the bill would dramatically reduce the services 
beneficiaries depend on. Less staff and fewer field offices 
will mean much longer waits for people who need information 
about their Social Security and Medicare benefits. People 
applying for Social Security and disability benefits will have 
to wait two months longer than they do now.
    Instead of shrinking the Social Security Administration's 
budget, Congress needs to strengthen the program, including 
providing adequate funding to administrate it. Administrative 
expenses come from Social Security trust fund paid for by 
workers and employers. The Social Security Administration's 
funding must be predictable year over year, especially at a 
time when 10,000 Americans turn 65 each year.
    Another way to strengthen Social Security is by passing 
legislation such as the Ranking Member's--Larson's soon-to-be-
reintroduced Social Security 2100 Act. Among the most critical 
items, it increases Social Security benefits, extends solvency 
of Social Security--of the Social Security Trust Fund. It 
repeals the windfall elimination provision and the government 
provision offset.
    The practical way to strengthen Social Security is by 
lifting the cap on Social Security payroll taxes above the 
current $160,200; require the wealthy of us to pay their fair 
share into the system.
    This is more about--this is much more about the numbers and 
how we pay for something. This is about people. Firsthand, I 
have seen people standing in line, senior citizens at my 
supermarket and other supermarkets, who are leaving food at the 
cashier because they are unable to pay for food, food that they 
normally and customarily buy. Coming from Pentagon City, where 
we spent $800 billion a year to protect the nation from foreign 
adversaries, less than a mile away people are making decisions 
whether to buy food or medicine on a daily basis. In the 
world's most powerful, richest country in the world, this is 
just unacceptable.
    This is now a family issue because now--and everybody has a 
story. This is a family issue because, as people grow older and 
because of the dwindling income that they have, because of the 
decimation of pension plans and Social Security has not kept 
pace with inflation, everybody has a story about how they are 
taking care of parents and grandparents. Some of us have 
resources and others don't.
    In this--at this committee in 2019 you heard the story of 
Katrina Brown, who was on her way to being a doctor, full 
scholarship to Ivy League colleges. And because her mother got 
sick, all that got put aside. Those are a few examples 
underlying our country's desperate need to expand Social 
Security benefits.
    Social Security importance cannot be overstated because the 
decline in traditional pension plans, decades of stagnant wages 
that have made it harder for individuals to save for 
retirement. It is sapping our human resources because the youth 
are now taking care of grandma and grandpa.
    The U.S. Labor Department representatives for pensions and 
retirement say that almost two-thirds of beneficiaries receive 
50 percent or more of their total income from monthly Social 
Security checks. And one-third of elderly beneficiaries count 
on Social Security to provide 90 percent or more of their 
income.
    Moreover, Social Security benefits are insufficient, 
evidenced by the average monthly Social Security benefit for a 
retired worker, which is a modest $1,833 a month.
    Our members are frustrated. Instead of acting--we want 
common-sense changes enacted, and we want it done on a 
bipartisan basis. This is not a White problem. This is not a 
Black problem. This is not a Hispanic problem or an Asian 
problem. This is an American problem. And we anticipate, we 
hope that the united Congress will pass a bill, 2100 Act or 
something similar, and work together to fix this problem for 
all Americans and all their families. We are in desperate 
times, and we put our faith and our hope in the good people 
that we send to Congress to help us fix our problems.
    [The statement of Mr. Roach follows:]
    
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    Mr. ROACH. These proposals----
    Chairman FERGUSON. Mr. Roach, thank you for your testimony. 
Your time has expired. I look forward to continuing the 
conversation.
    Mr. Brown, you are now recognized for five minutes.

STATEMENT OF JEFFREY BROWN, DEPUTY ASSISTANT INSPECTOR GENERAL, 
   OFFICE OF AUDITS, OFFICE OF THE INSPECTOR GENERAL, SOCIAL 
                    SECURITY ADMINISTRATION

    Mr. BROWN. Thank you and good afternoon, Chairman Ferguson, 
Ranking Member Larson, and members of the subcommittee.
    I commend you for holding this important hearing today on 
the Social Security Administration's role in combating identity 
fraud.
    Social Security touches the lives of every American. About 
175 million people work and pay Social Security taxes, and 
nearly 67 million receive a Social Security benefit each month.
    As we heard in earlier testimony, the SSN was originally 
intended to track earnings, but it has become the de facto 
national identifier. This has given rise to individuals using 
other people's SSNs for illegal purposes. And as the chairman 
said in his opening remarks, the SSN has become the linchpin to 
identity theft, one of the fastest growing crimes in America, 
affecting millions each year.
    The Office of the Inspector General, or OIG, plays a vital 
role in combating SSN misuse and identity theft. And throughout 
our history, SSN misuse has been a priority in our oversight 
efforts. OIG has established a multi-disciplinary team of 
professionals that develop and implement innovative approaches 
to combat identity theft and scams. This is done through 
audits, criminal investigations, and prosecution, civil 
enforcement, and public outreach and education. I would like to 
briefly touch on these approaches.
    The OIG's Office of Audit identifies vulnerabilities in 
SSA's programs and operations that may result in identity 
theft. Our audits found, among other things, instances where 
fraudsters improperly used the SSN of older adults and deceased 
children.
    Our audit work also examined potential vulnerabilities in 
the Internet services that SSA offers. Since the COVID-19 
pandemic, users rely heavily on e-services, increasing the need 
for our oversight. We found that bad actors exploited some of 
NSA's public-facing systems to potentially commit identity 
fraud. These instances underscore the need for SSA to 
thoroughly evaluate its systems to--for potential 
vulnerabilities to ensure users are who they claim to be, and 
that systems aren't misused.
    Many of the cases our Office of Investigations has 
successfully conducted involve SSN misuse, including synthetic 
identity theft. As we heard earlier, synthetic identity theft 
is a unique form of fraud that combines the SSNs of real people 
with fraudulent information, such as false names and dates of 
birth, to create new identities. It is one of the most 
difficult forms of fraud to detect because fraudsters build 
good credit over time using a fake profile before making 
fraudulent charges and abandoning the identity.
    For example, in one of our joint investigations individuals 
were charged with using approximately 700 synthetic identities 
between January 2017 and August 2020 to open bank accounts and 
credit cards and to create shell companies. They are alleged to 
have fraudulently obtained over $20 million from the Payroll 
Protection Program. The pandemic resulted in criminals finding 
ways, such as the case I just mentioned, to fraudulently take 
advantage of the infusion of trillions of dollars in Federal 
funding.
    Identity theft is a common thread running through many 
investigations related to the misuse of pandemic relief funds. 
Since the start of the pandemic, OIG has engaged with other law 
enforcement agencies, and we have been involved in over 150 
investigations related to pandemic relief programs, funds, and 
scams.
    For over a decade, the American public has been plagued by 
scammers impersonating government agencies with the goal of 
stealing money or personal information, including SSNs. 
Safeguarding the public from financial fraud and scams is a top 
priority for the OIG. We hold a National Slam the Scam Day each 
year. This campaign amplifies our outreach efforts and 
encourages the public to hang up or ignore suspicious calls or 
messages. In other words, to slam the scam.
    We thank the Members of Congress for helping to educate 
your constituents to protect themselves from Social Security-
related and other government imposter scams.
    In conclusion, I want to thank the subcommittee for 
inviting me here today to highlight OIG's oversight and 
outreach efforts in combating and preventing misuse of SSNs.
    I will be pleased to answer any questions you have.
    [The statement of Mr. Brown follows:]
    
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    Chairman FERGUSON. Thank you, Mr. Brown. We are now pleased 
to recognize the chairman of the full committee, our colleague 
from Missouri, Jason Smith.
    Mr. Smith, you are now recognized for five minutes for an 
opening statement. Thank you for joining us today.
    Chairman SMITH. Thank you, Chairman Ferguson, Ranking 
Member Larson. Thank you all for the opportunity to share a few 
remarks on an important topic that affects every American.
    We all know someone who has had to go through the ordeal of 
identity theft. One of the reasons I wanted to hold this 
hearing was after learning about, about everything our former 
colleague, Governor Kristi Noem, had to deal with after 
Congress publicly disclosed the Social Security numbers of her, 
her husband, all of her children, and her son-in-law. I asked 
the governor to share with this committee about her experience, 
the difficulties since her family's numbers were made available 
to the public, and what reforms we should consider through our 
jurisdiction to help families who find themselves in a similar 
unfortunate circumstance.
    I have with me a statement from Governor Noem expressing 
her appreciation for and interest in the committee holding 
today's hearing. Governor Noem writes in part, ``It is 
troublesome enough that identity thieves and fraudsters can try 
to steal our personal information right out from under us. But 
the government should not be doing fraudsters favors by 
improperly disclosing these important numbers that provide 
intimate access to one's identity. Furthermore, government 
should also be a help and not a hindrance for those whose 
Social Security numbers have been compromised.''
    ``While disclosing your Social Security number for a 
legitimate purpose causes millions to take a pause, it is even 
more alarming when a citizen can't trust their own government 
to keep their personally identifying information secure. 
Unfortunately, that is exactly what happened to me and my 
family when Congress exposed the Social Security numbers of me, 
as well as that of my husband, my three children, and son-in-
law to the entire world.''
    Governor Noem goes on to describe how the disclosure 
occurred, and how she found out. ``In December of 2020 my 
family and I provided our Social Security numbers to the White 
House as part of an official visit in my capacity as governor 
of South Dakota. However, these records went unredacted to the 
National Archives, and were provided to the United States 
Congress. They were then needlessly and carelessly published, 
again without redaction, for all those on the Internet.''
    ``Unbelievable as that is, of equal concern I learned of 
the public disclosure of our private information through 
reports in the media. That is outrageous. It wasn't a call from 
the Social Security Administration or from any of the 
governmental bodies who published our personal information for 
millions to see. Failing at each turn to safeguard the personal 
information entrusted to it, instead, I learned from the media 
and reporters who reached out about the disclosure.''
    In her statement Governor Noem also highlights the 
financial fallout from this experience that has already 
occurred, and the burden on her family going forward. She 
writes, ``My family has already had to spend time and money to 
protect ourselves from the government's careless disclosure of 
our personal information. And already, bad actors have tried to 
use that information to their advantage. It may be years before 
we experience the full impact of this disclosure. But for the 
foreseeable future, we must closely monitor every financial 
transaction we see, realizing there may be ones out there we 
never see.''
    ``Congress needs to take steps to not only better protect 
the Social Security numbers of American citizens, but for those 
who do have their numbers compromised, at a minimum, make sure 
they are made aware of such a disclosure.''
    ``Additionally, we must cut the bureaucracy and red tape 
one must go through when trying to navigate the cumbersome and 
difficult situation of replacing their own or their child's 
Social Security number, once it is compromised.''
    I ask unanimous consent to insert the governor's entire 
statement into the record.
    Chairman FERGUSON. Without objection, so ordered.
    [The information follows:]
    
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    Chairman SMITH. Thank you, Mr. Chairman. And I yield back.
    Chairman FERGUSON. Thank you. Thank you again to the 
witnesses for your testimony. We will now begin with the 
question-and-answer session, and I will begin.
    Ms. Hayward, thank you again for being here today, and 
thank you for sharing your story. You touched in your testimony 
about the difficulties that you experienced in trying to solve 
this problem. Tell us a little bit how a single point of 
contact would have been--would have made this easier for you.
    Ms. HAYWARD. A single point of contact would allow a 
certain amount of consistency, obviously. That would have been 
so helpful. I wouldn't have been jockeying around and starting 
from scratch every time I was interacting with a representative 
or a person, an employee in the office. And having one person 
who could follow up with me and make sure that I was doing what 
I should be doing, make sure that, you know, there wasn't 
anything that could be done to, you know, move things more 
quickly. Because as we have learned through the testimony 
today, you know, it sounds like the time that you don't know 
your number is time that you can't be protecting your child, in 
my case.
    Chairman FERGUSON. Okay, thank you. This is a follow-up 
question. You have obviously spent a lot of time on this. 
Personal resources that you and your family have had to expend 
on this. What do you think that cost is?
    Ms. HAYWARD. It is impossible to quantify the amount of 
time that we have spent, the worry, freezing her credit, trying 
to navigate all of the different elements between the Social 
Security Administration, FTC resources, the three non-
government credit bureaus. And that is to say nothing of our 
actual experience just trying to acquire her replacement card. 
We have had to squeeze this in between school pickups, doctor's 
appointments, hospitalizations, and woken up in the middle of 
the night occasionally worrying about this.
    And this isn't going to go away either after this hearing. 
It will continue to be with us unless our daughter is able to 
get a new Social Security number.
    Chairman FERGUSON. Thank you.
    Mr. Brune, if--when someone like Ms. Hayward has a problem 
like this, what do you think the cost of that is to the agency 
in terms of a dollar amount to help solve this problem? I mean, 
what kind of resources does it take?
    Mr. BRUNE. Chairman Ferguson, in our field offices and on 
our 800 number, we strive to provide courteous and empathetic 
professional service to each person who visits or calls. Each 
contact is handled with great care, according to our policy----
    Chairman FERGUSON. I understand. I am looking for a number 
here. Does it cost--do you think it costs $1,000, $10,000, 
$20,000----
    Mr. BRUNE. I----
    Chairman FERGUSON [continuing]. In agency resources to 
address the problem?
    Mr. BRUNE. Well, you know, I am an IT guy, not the CFO.
    Chairman FERGUSON. All right. Well, I will tell you what, 
why don't we go to Mr. Brown?
    Do you have a rough idea of the costs associated with 
resolving--an average cost of resolving a particular case?
    Mr. BROWN. Mr. Chairman, I don't have that information.
    The agency does have costs associated with its----
    [Audio malfunction.]
    Chairman FERGUSON. Okay, thank you.
    Ms. Wechsler, the Social Security Administration, as you 
noted in your testimony, it will be updating its fee structure 
on the ECBSV service. I think you mentioned that you have got 
concerns about how this would, you know, would impact usage. 
Can you dive into that just a little further, and tell us what 
you anticipate?
    Ms. WECHSLER. Thank you for the question. I would be happy 
to.
    We do think this new tier structure is going to discourage 
use from both the current users and possible users that aren't 
quite using the system. I want to give one example to help 
quantify this.
    So, one user that initially was expected to pay $276,500 is 
about to be expected to pay $6.25 million for the same service. 
That is 22-fold increase over just 2 years. That discourages 
use. There is no way about that it does not discourage use. 
That is like Netflix saying your $15 a month subscription is 
going up to $330. So, our concerns is this tight timeframe for 
them to recover their cost is creating a vicious cycle. It 
would be less users, and then the cost would have to increase 
again.
    So, we want to work with SSA and Congress to make sure that 
does not happen because that is in no one's interest.
    Chairman FERGUSON. Mr. Brune, it is my understanding that 
the Administration did not conduct an analysis of how 
increasing the fees on the system would affect utilization. So 
how did you determine the initial fee structure, and what 
considerations have been made for the subsequent fee 
structures?
    Mr. BRUNE. Thank you for the question, Chairman Ferguson.
    The fee structure is based on input from the coalition and 
industry partners who use the service, and their expected 
volume of verifications, as well as guided by the statute that 
authorized the program, ECBSV, and appropriations law, which 
requires us to collect our costs for building and operating the 
system within a specific period of time.
    Chairman FERGUSON. It seems like Ms. Wechsler has an 
excellent point, that if you increase fees so rapidly, that it 
is going to discourage use. Was that not taken into account 
when this new fee structure was put in place?
    Mr. BRUNE. We have had extensive conversations and ongoing 
discussion with the coalition Ms. Wechsler represents. And our 
intent is to incentivize usage, thereby increasing the, you 
know, number of verifications and generating more fees.
    Chairman FERGUSON. Well, I----
    Mr. BRUNE. We are open to further discussion with you about 
ways to resolve this challenge, and we do want to make it an 
efficient and effective service.
    Chairman FERGUSON. Okay. Thank you.
    Mr. Brown, obviously, Social Security number fraud and 
theft is a real problem, and it has been done for, basically, 
the same way for a number of years now. A real threat on the 
horizon is artificial intelligence. Have you been able--has 
your office been able to look at criminal activity around 
artificial intelligence?
    And also, do you think that your office and the 
Administration is prepared to address theft via artificial 
intelligence in the future?
    Mr. BROWN. Thank you, Mr. Chairman. That is absolutely a 
rapidly evolving technology that I think we are all trying to 
keep up with. And I think it is important for the agency and 
for the OIG to monitor this very closely.
    Artificial intelligence has, I think, the opportunity for 
tremendous benefit to the agency in helping to process claims 
and handle its workloads. But there is also considerable risk 
if it gets in the hands of bad actors, risks that we can't even 
contemplate at this point.
    There has been an incident a few years ago where it did 
appear that artificial intelligence was calling the Social 
Security Administration to try to process direct deposit 
changes on behalf of Social Security beneficiaries. And we 
worked with the agency to alert its employees of this scam.
    But like I said, it is a rapidly evolving technology, and 
we need to keep tabs on this very closely.
    Chairman FERGUSON. Thank you. I now recognize the ranking 
member, Mr. Larson.
    You are recognized for five minutes.
    Mr. LARSON. Well, thank you, Mr. Chairman, and I want to 
thank all of our witnesses also. And I am sorry the chairman 
had to leave, but I completely concur with him that there is--
that is a travesty, what happened to Governor Noem, and we 
should be doing everything to make sure that sensitive data 
like that is always redacted. And that is a shame.
    I also want to thank the witnesses, especially Ms. Hayward.
    You are a model for what an American citizen should be in 
terms of impacting your family directly, and then seeking a 
resolution, and then making sure that you are speaking out for 
the, as you indicated, the many mothers who perhaps aren't in 
the same situation like you and have taken the time and care--
or have that time and care to do that.
    Mr. Brune, how is it that her situation cannot be resolved 
more timely, and given the individual the security and the 
notion that this is being looked into?
    Mr. BRUNE. Congressman Larson, we regret the stress and 
confusion that was caused to Ms. Hayward. We do strive to 
provide timely answers. We are glad that the replacement for 
the SSN card was, in fact, issued after her field office visit, 
and we would be happy to work with Ms. Hayward to identify if 
there are any other ways that we might improve our service.
    Mr. LARSON. Well, it seems to me like--and I know that 
there is difficulty in getting a new card, but her testimony 
seemed to indicate that she is not going to feel secure until 
they have been issued a new card. How long should that take?
    Mr. BRUNE. In the state of Pennsylvania, where Ms. Hayward 
lives, I believe three weeks for the issuance of the card is 
still the case. Once it processes through our----
    Mr. LARSON. Well, could we charge you to be personally 
responsible to make sure that this matter gets looked into?
    And listen, as I said in my opening statement--and 
everybody should know this, as well, and I think Mr. Brown 
brought it up when you asked him the question, Mr. Chairman--
there are costs associated with all this, aren't there?
    And has the Social Security Administration been funded 
appropriately?
    Mr. BROWN. We have not done audit work to look at whether 
SSA has been funded appropriately.
    Mr. LARSON. And to make this technological--and the 
chairman is completely right, too, about artificial 
intelligence. After all the hearings that we have had on this 
and the capability that exists out there, we better get 
prepared really quick to deal with this. And that is not going 
to be something that we say we can reshuffle the agency and 
they are going to be able to do this on their own. That is 
simply isn't going to happen.
    And most importantly, when we are talking about all of 
this--and Ms. Wechsler, you brought it up, and I am empathetic 
to your concerns, but you too said--what is the cost, $38 
million I think you referenced?
    You know, again, the agency has got to be able, again, to 
deal with the--Mr. Roach pointed out--the 10,000 Baby Boomers a 
day become eligible for Social Security--a day. That is 
3,650,000 a year. So, it will be over 70,000 Social Security 
recipients within a couple of years. So, we are going to need 
to have to fund Social Security. We are not going to be able to 
solve this problem by cutting Social Security, and cutting 
benefits, and cutting the agencies so that they can deal with 
this problem.
    And in fact, Mr. Chairman, I think we should look into, 
especially as it relates to artificial intelligence, what we 
have to do, because we may have to take that as a whole 
separate entity. But noting that this is the number-one 
insurance program for the country, and along with Medicare and 
the military budget account for 70 percent of our overall 
budget, this is an area where I believe that we can work in a 
bipartisan manner to solve this problem so no mother--and, 
hopefully, because of your efforts, Ms. Hayward--that no other 
mother has to go through this process.
    But we have to make sure that we are providing the funding 
that is needed, and further investigate technologically, along 
with the humanization of our agencies as to how we can best 
operate.
    Chairman FERGUSON. Thank you, Mr. Larson, and I do look 
forward to bipartisan conversations related to this. Next we 
will call on Mr. Carey.
    You are recognized for five minutes.
    Mr. CAREY. Thank you, Mr. Chairman. I want to thank all the 
witnesses for participating in this very important conversation 
regarding the role of Social Security Administration in 
combating identity fraud.
    As many of our panelists have mentioned, Social Security 
numbers have become a common identifier for a range of purposes 
beyond what was intended to--to tracking income and Social 
Security benefits. Unfortunately, the frequent use of the 
Social Security numbers has exposed Americans to fraud, 
identity theft, which in turn causes unsuspecting Americans to 
become victims of fraud each year.
    While the financial loss is often borne by the financial 
institution, the owners of those stolen Social Security numbers 
are true victims. There was a study done--and we were talking 
about--Ms. Hayward mentioned unmeasurable and how--in terms of 
how much it costs you. On average, we have seen an estimate 
that 1 in 50 children were victims of identity fraud. The 
average cost to the family trying to resolve that issue is $372 
in expenses. So, I just thought I would throw those numbers 
out.
    Recently, a constituent of mine back in my district had her 
bank account hacked and her identity stolen. The constituent's 
Social Security benefits were also stolen. And now the 
fraudster, believe this or not, has continually contacted SSA 
to try to get additional information. Now, my team back in the 
district is working hard to potentially get the constituent 
back their stolen benefits. However, we need to prevent this 
from ever occurring again.
    As my dear friend from Georgia brought up in his opening 
testimony, in 2021 an estimated 1.25 million children were 
victims of that identity fraud. As the users of Social Security 
numbers, the SSA is in a unique position to help combat theft 
and the misuse of the Social Security numbers.
    As Ms. Wechsler mentioned in her testimony, to combat 
identity theft Congress directed the SSA to establish an 
Electronic Consent-Based Verification System so no financial 
institution can match a consenting--so no financial institution 
can match a consenting consumer's information with the Social 
Security numbers to verify their identity.
    Quickly, I am running short on time, Mr. Brune, why is the 
SSN adhering so closely to a short timeframe to recoup the 
costs of implementing the ECBSV?
    Mr. BRUNE. The appropriations law requires us to recoup all 
our costs and sets a designated timeframe for doing so.
    Mr. CAREY. Okay, so what plan does the SSA have in place to 
mitigate the risks of loss to the trust funds if the SSA fails 
to recoup the development and the operational costs of the 
ECBSV?
    Mr. BRUNE. Congressman Carey, as I mentioned in my prior 
response, we are committed to making sure ECBSV continues to be 
an efficient and effective operating tool to combat identity 
theft.
    We have ongoing conversations with the coalition Ms. 
Wechsler represents to understand impediments to usage, and to 
try to address them, with your assistance.
    Mr. CAREY. Okay, so how many data exchange agreements does 
the SFA--or SSA have with other Federal and state agencies?
    Mr. BRUNE. In total, as I stated in my statement, we have 
approximately 3,500 agreements and verifications where we 
verify SSN numbers and data associated with the SSN.
    Mr. CAREY. Okay. I got a lot of remarks, but let me just 
ask a simple question. If Ms. Hayward was worried--and she says 
she has to worry about it, and I believe it, I have got a 17-
month-old, so I get it--is it possible that that card was lost 
in the mail, right? Is it possible--I mean, your daughter is 
how old?
    Ms. HAYWARD. Nine months.
    Mr. CAREY. Nine months. Is it impossible to get a new 
Social Security number, instead of just a card, so we don't 
have to worry about--she doesn't have to do the monitoring like 
I have to do because my military records were breached?
    I mean, is that something that we can do?
    Mr. BRUNE. Our policy does allow for that. And we would--
you know, according to our policy, we would look at what 
options were available to, in this case, the young Miss 
Hayward.
    And it is not a panacea to issue a new number. Right as 
soon as they are issued----
    Mr. CAREY. But, I mean, if the kid is nine months old, I 
mean, wouldn't it be better to do that than all of a sudden, 12 
years from now, all of a sudden, we have got to go back and we 
found out they have got a yacht booked off of--or booked in 
Boca Raton someplace?
    Mr. BRUNE. We would be happy to look into that for Ms. 
Hayward.
    Mr. CAREY. All right. Thank you, Mr. Chairman. I yield 
back.
    Chairman FERGUSON. Thank you.
    The gentleman from New Jersey, Mr. Pascrell, you are now 
recognized for five minutes, sir.
    Mr. PASCRELL. Thank you, Mr. Chairman. Mr. Chairman, every 
member of this committee that I have listened to for a few 
years, and new folks, support efforts by the Social Security 
Administration. I have heard nothing different; I don't know, 
maybe you have to secure Social Security numbers and combat 
misuse and scammers. I have never heard somebody stand up and 
support that. You haven't, either.
    But I want to highlight how Social Security is America's 
greatest achievement. We cannot let this hearing distract us. 
Some folks on your side have manufactured the crisis that 
threatens to blow up America's entire economy. If we breached 
the debt limit, we will not be talking about one or two or 
three or thousands of frauds. Over and over, there are those in 
the Congress threatening to gut Social Security. I didn't read 
that incorrectly, and I didn't hear that incorrectly, nor did 
you.
    Some House members want to force Americans to retire later, 
work through illness, and make financial stability harder. As 
significant as this hearing is, you know it. You know this 
stuff already. We should be doing everything we can day in and 
day out to preserve Social Security.
    I mean, you talk about making public names. Look what they 
did to that poor woman 14 years ago, 14 years ago. What are we 
talking about it now for? Well, because it is either got to be 
for everybody or nobody. And the Lerner investigation, 14 
Democrats made to be axe murderers. And then no movements were 
made against them. They were innocent people. All--may be funny 
to you, but it is not funny to me. I just want you to know 
that. Fourteen of us were investigated by the same folks you 
want to investigate. And you are right in doing it. But what is 
good for one should be good for all.
    So, I want to ask Mr. Roach a question, if I may. My staff 
recently met with the AFGE, the union representing frontline 
workers at Social Security. They shared the anguish and stress 
of being unable to help callers quickly with the existing 
staffing levels, just like we heard from the IRS. House 
Members' default on America act would double down by slashing 
customer service funding. The Republicans' plan would cut 
customer service staff, clear and simple.
    How would further cuts to Social Security Administration, 
Mr. Roach----
    Mr. ROACH. Well----
    Mr. PASCRELL [continuing]. Have a budget impact, because 
you have been here a little while, you know what is going on.
    Mr. ROACH. Yes, the services that have been drastically cut 
already--further services would be cut. People trying to get 
disability would have to--a much longer waiting period. And, 
you know, offices have been closed, and people were unable to 
get in touch with the Social Security office to get things 
done. It would be dramatic. It would be drastic for further 
cuts in the Social Security Administration.
    Mr. PASCRELL. By the way, Mr. Roach, if we have a default--
and God forbid we have one--will--the members that exist in 
your department, will they be able to assist beneficiaries in 
the event of a default?
    Mr. ROACH. I don't think there would be any place to hide. 
But I think that if there is a default, retirees will take the 
first brunt of it.
    Mr. PASCRELL. Mr. Roach, the study committee from the other 
side, God bless them, their budget plan lengthens the Medicare 
waiting period from two years to five years. This denies 
severely disabled Americans. There are a lot of those folks out 
there, Mr. Roach, I don't have to tell you. You could tell me 
better. But for three years. What the heck is that going to 
mean for those people waiting for Medicare okays?
    Mr. ROACH. It means that no one with disabilities severe 
enough to qualify for Social Security Disability Insurance 
should be without health insurance, period. It shouldn't 
happen. Two years is already two years too long to wait. So 
clearly, adding three more years for anyone waiting for 
urgently-needed health benefits is cruel, unacceptable in a 
country as wealthy as ours.
    Mr. PASCRELL. And there is a two-year wait for getting 
disability benefits, correct?
    Chairman FERGUSON. The gentleman's time----
    Mr. PASCRELL. I am in the middle of the question. Can I 
finish it, please?
    Chairman FERGUSON. Very quickly, my friend. Very quickly.
    Mr. PASCRELL. I finished the question.
    Chairman FERGUSON. Okay.
    Mr. PASCRELL. The question. What does those three years' 
weight mean?
    Mr. ROACH. It means that people will be--it means--three 
additional years for anyone waiting for urgently-needed health 
benefits, that would mean that would be cruel and unacceptable 
in the country, as other people would be out of their benefits 
for five years.
    Mr. PASCRELL. Thank you, Mr. Roach.
    Mr. Chairman, I want to thank you for putting this together 
today on this critical issue. We are all against fraud, though.
    Chairman FERGUSON. Absolutely.
    Mr. PASCRELL. Thank you.
    Chairman FERGUSON. And the good news is we are all against 
it, and we are all here to help solve the problem. With that, 
the gentleman from Utah, Mr. Moore, is recognized for five 
minutes.
    Mr. MOORE of Utah. Thank you, Mr. Chairman, and to all of 
our witnesses today, thank you for being here to discuss this 
really important opportunity to help protect our communities 
from fraud and theft. And we want to focus on this. These are 
important aspects of this subcommittee to be able to address 
this. And if we can, you know, talk about these issues, we can 
help avoid more tough things like the Hayward family had to go 
through. So, again, thank you for your testimonies.
    Ms. Wechsler, the Social Security Administration is hoping 
to recover the costs of the ECBSV within just three years by 
raising rates on users. You know, there is always externalities 
to this type of stuff and other intended consequences--
unintended consequences. For the users who do continue to use 
the system, how will these costs be passed along to consumers?
    Ms. WECHSLER. Congressman, thank you for the question. I 
agree, as far as the cost of fraud is felt by everyone that 
uses financial products or services. And that is why we are 
here today, is to try to solve that problem and make those 
costs not be as significant as they are. And the best way we 
can do that is to extend the timeframe for ECBSV to recover 
that--or for SSA to recover the costs, and to make it as 
efficient and effective as possible and talk about, you know, 
other ways that ECBSV could be used, and then--and, you know, 
really bringing some predictability and sanity to the fee 
structure.
    Mr. MOORE of Utah. Awesome. And continuing on with that, if 
more entities were permitted to use ECBSV and the base of users 
contributing user fees were broadened, this would alleviate 
some of the financing issues that we are seeing with the 
program.
    However, the question is whether it is appropriate to 
expand the number of entities permitted to use ECBSV. Do you 
think there are legitimate uses for entities in different 
industries--telecommunications, health care, you name it--to 
use this program?
    Ms. WECHSLER. I am so glad you are raising this point, 
Congressman. Yes, absolutely.
    Our world is increasingly digital, and most sectors of the 
economy beyond financial services, they have a need to verify 
that a consumer is providing accurate identity information and 
is not trying to run a scam. So I think telecom providers is a 
great example of potential users of this system. Utility 
companies, residential landlords, others in the private sector. 
And maybe there is other ways for state and Federal Government 
agencies to be using the system. ECBSV put in a lot of 
resources for the system, and we think there is really strong 
reasons for expanding the use.
    Mr. MOORE of Utah. Thank you.
    Ms. Hayward, I have an 18-month-old at home too, and so I 
can only imagine having--with all the other you have to deal 
with, dealing with what you have done. It is an incredible 
story, and I am glad you are working through it, and I 
appreciate you being here today.
    Identity theft is one of the fastest-growing crimes in 
America. Shockingly, one million kids are victims of identity 
theft every year. Following our difficult experience--your 
difficult experience addressing the issue for your child, in 
your opinion, what is one change that could be made to the 
Social Security Administration to improve customer service for 
individuals, you know, trying to address identity theft?
    You have talked a little bit about having a point person 
and things like that. And candidly, I ask the question because, 
like, this is something that we need to make sure we are doing 
across the board in our government agencies. And we talk a lot 
about the IRS, our congressional offices are working closely 
with our constituents to help them to liaise on this. We have 
been a big--you know, Republicans and Democrats have been a 
supporter of increasing the technology that they need to sort 
of get into the 21st century in a lot of cases. Is there things 
like that that you are thinking of that you wanted to add to 
your testimony about ways to improve?
    Ms. HAYWARD. For us, the best way to improve would be to 
have a new Social Security number for our daughter. The ability 
to do that would really alleviate a lot of our time and effort 
in this area. And from that, you know, the singular point of 
contact, someone who could knowledgeably provide us with the 
most up-to-date information as things change over time, would 
be immensely calming and helpful for a family in our situation.
    Mr. MOORE of Utah. Awesome. Thank you.
    Mr. Brown, final question. You mentioned that Social 
Security Administration's OIG is working to find ways to defend 
against identity theft empowered by AI. Can you expand on the 
threats that are growing as a result of this?
    Mr. BROWN. Congressman, as I mentioned briefly earlier, 
there was an incident a few years ago that alarmed, I think, 
the agency and the OIG of what appeared to be AI making 
automated phone calls to the 800 number to redirect 
beneficiaries' direct deposits. Since then, we are seeing this 
technology evolve very rapidly, including just in the last few 
months, as we have seen in the media. We are playing catch-up 
here. I think a lot of organizations are.
    So, as I said earlier, it is something that we need to 
really get in front of as best we can.
    Mr. MOORE of Utah. Awesome, thank you.
    Thank you, Chairman.
    Chairman FERGUSON. Before I recognize the next member, the 
ranking member has requested a point of personal privilege.
    You are recognized.
    Mr. LARSON. Thank you, Mr. Chairman. As I looked out into 
the audience, I was pleased to see a dear person who I think, 
in the minds of many of us up here, will get a direct shot to 
heaven at some point. But we have been joined today by Elsie 
Pascrell, as well, who is Bill Pascrell's beloved wife, and 
someone we admire and deeply respect.
    Thank you for joining us, Elsie.
    Chairman FERGUSON. Welcome, and thank you for being here.
    Next, we will recognize the gentleman from Florida, Mr. 
Steube.
    Mr. STEUBE. Thank you, Mr. Chairman.
    The employer correction request notices, or the no-match 
letters, are letters that were sent from the Social Security 
Administration to notify employers when their employees' Social 
Security numbers did not match government records. It was 
established during the Clinton Administration, and in the first 
few years approximately 1.7 million workers responded to no-
match letters and had their missing wages reinstated, which is 
a good thing.
    No-match letters were ended by the Obama Administration one 
week after the DACA program begun, which initially required 
applicants to disclose any Social Security numbers they would 
have used, essentially admitting to a felony in writing. The 
Trump Administration resumed the practice, sending out 1.6 
million letters. Though there was a pause during the early part 
of the pandemic, these letters included a new attachment on 
instructions on how to register for and use business services 
online to view Social Security number mismatches.
    The Biden Administration discontinued the practice again in 
April of 2021. Not every no-match letter means that there is 
fraud. When a woman changes her maiden name, for example, and 
doesn't notify the Social Security Administration is an 
example. If someone is unaware of a mismatch and has no 
opportunity to correct the errors, they would receive no Social 
Security benefits on account of the reported wages. Again, the 
Biden Administration discontinued this practice, but appears to 
be relying on the business services online.
    The website says, ``We have discontinued mailing EDCOR 
letters effective April 2021. We will continue to modernize our 
systems to make it easier for you to do business with us.''
    Mr. Brune, the website says ``continue to modernize.'' What 
gaps are still in the business service online system, and how 
accurate is this new system in detecting both fraud and 
accidental errors?
    Mr. BRUNE. Congressman, thank you for your question. The 
accurate collection of wage reports from employers is vital to 
our program. We work closely with the employer community, as 
well as payroll providers to continuously improve our 
electronic wage reporting.
    Our free business services online system includes multiple 
tools for employers to reduce instances of no-matches before, 
during, and after they submit wage reports. So instead of a 
letter after the fact in real time, we are communicating with 
them after they have registered and, you know, authenticated 
properly. We are sharing with them as quickly as possible where 
they have inaccuracies that need to be corrected.
    Mr. STEUBE. Would you be able to provide the committee with 
statistics on the effectiveness of the program?
    Mr. BRUNE. We would be happy to get back to you for the 
record, yes.
    Mr. STEUBE. Okay. And what impact has this specifically had 
on illegal immigration employment?
    Mr. BRUNE. Well, wage reporting is one of the mechanisms, 
but that is pretty much after the fact.
    We also support the Department of Homeland Security on E-
Verify, and that allows a verification up front at the time of 
request for employment.
    Mr. STEUBE. So, with the no-match letters--with the end of 
no-match letters, is the Social Security Administration being 
proactive in contacting American citizens when there are no-
matches? Or is the expectation that the citizens must be 
proactive in reaching out to you?
    Mr. BRUNE. Well, as I said, we work closely with the 
employer and the payroll provider community, and they are 
responsible for communicating with their employee when a no-
match occurs, if that is appropriate.
    Mr. STEUBE. Okay. Is there any value in continuing the use 
of the no-match letters in addition to the business services 
online, especially for senior citizens who don't rely on 
technology?
    Mr. BRUNE. We think the tools available in the business 
services online, which are largely used by the business and 
employer community, are effective because of their timeliness, 
how quickly they provide a match or a no-match, and that allows 
more immediate action to address the situation.
    Mr. STEUBE. So, in the minute that I have left, how can we 
improve the Social Security Administration's collaboration with 
state authorities to ensure that they have the necessary 
technology to protect against data breaches?
    Mr. BRUNE. We have many data exchanges with state 
authorities, and continually work to provide verifications that 
support accuracy of federally administered programs.
    Mr. STEUBE. So what tools are lacking, in your opinion, 
from SSA currently to protect American citizens?
    Is there things that Congress can do to ensure the 
protection of identity fraud and their Social Security number 
being fraudulently used that we--that currently isn't 
available?
    Mr. BRUNE. Well, Congressman, as you noted in your 
questions--and Mr. Brown has indicated--technology evolves 
rapidly. Responding to those evolutions in technology requires 
continued focus on updating of our system and policies and 
procedures. Those updates, you know, obviously, require funding 
to be implemented.
    I think that our verifications are robust. They cover not 
only Federal use of the SSN, but we have extensive partnerships 
with state and local entities as well as the business community 
that--and the payroll provider community.
    Mr. STEUBE. My time is expired. Thank you, Mr. Chairman.
    Chairman FERGUSON. Thank you. Next the gentlelady from 
California, Ms. Sanchez.
    You are now recognized for five minutes.
    Ms. SANCHEZ. Thank you, Mr. Chairman and Ranking Member 
Larson.
    Today's hearing revolves around the Social Security 
Administration's role in combating identity theft and what 
fixes can be implemented to protect people from identity theft, 
which is a serious and an important topic. And I don't think 
anybody on this subcommittee will disagree with how serious 
this issue is, or how seriously we take our role as Members of 
Congress in finding a bipartisan solution to combat identity 
theft. And the witnesses today have provided some helpful 
suggestions on the steps that we could potentially take in 
order to combat this.
    But I will note for the record that not one witness has 
suggested that we cut funding to the Social Security 
Administration or to the recipients who receive Social Security 
as a solution to combating identity theft. I just want to point 
that out, because we are at risk of seeing massive cuts to the 
system that would be devastating.
    I want to turn my attention a little bit to an issue that 
is very high on the priority list of seniors in my district. I 
interact with seniors quite frequently, as often as I can. And 
while identity theft is an important issue, the issue that they 
most often raise for me is improving the cost-of-living 
adjustment formula to better reflect inflation so that they can 
actually make ends meet.
    Sadly, many of my Republican colleagues don't want to do 
that. Instead, the Republican Study Committee's most recent 
budget plan would cut the annual cost of living adjustments by 
using the Chained Consumer Price Index, which would result in a 
lower annual cost of living adjustment and less money for 
seniors to live off of.
    Mr. Roach, what would be the impact of a lower cost of 
living adjustment on retirees who rely on their Social 
Security?
    Mr. ROACH. Well, Social Security, as Ranking Member Larson 
indicated, hasn't had any improvement in 52 years, and the cost 
of living adjustment over that period of time has fell way 
behind the normal cost of living that it takes us to live. So, 
to slow that and not increase it would be devastating on 
seniors and, again, seniors and their families who are trying 
to take care of these seniors. It would be a terrible thing to 
do. And again, it would be devastating on all our seniors.
    Ms. SANCHEZ. Thank you. And Mr. Roach, that same report 
calls for the privatization of Social Security, diverting 
worker and employee contributions directly into the stock 
market. How would privatizing Social Security affect benefits 
for recipients?
    Mr. ROACH. Another terrible idea. It would just enhance, 
you know, investment bankers and those type of people. Today 
the stock market is drastically down, and seniors would be 
hurting. And you can't depend on the stock market to feed your 
family and to feed yourself. As a result, this organization, 
the Alliance for Retired Americans, was born out of fighting 
privatization of Social Security. It is money that is paid into 
the system, and we expect to get--we demand that we get the 
money back that we put into the system, and we don't want to 
put that money at risk.
    Ms. SANCHEZ. And if we were to follow the Republican Study 
Group's guide to privatize Social Security and the government 
were to default, what would that do to the stock market and to 
retirees' savings that they are depending on to live off of?
    Mr. ROACH. Well, I think that--I think if you look at the 
data, when I sat down here it was already--because some remarks 
were made that we may not get there by a public official, and 
it is already cratering. So, it would be devastating.
    Ms. SANCHEZ. Okay.
    Mr. ROACH. The stock market, you know, was down. Unless it 
got up, you know, a little while ago, it was--yesterday and 
today have been pretty much an example of what would happen if 
we default. We would--we could just--you know, basically, if we 
default--let me get real--we could just put up the Chinese flag 
and, you know, be a third-world country. That is what would 
happen.
    Ms. SANCHEZ. I thank you for your honest and frank opinion.
    We know that Social Security is a popular program because 
Americans know that they can count on it. It is a guaranteed 
benefit, which you have said, you know, they have earned after 
a lifetime of hard work and paying into the system. Along with 
many of my colleagues on this committee, we believe that the 
program needs to be strengthened for future generations. What 
are some fixes that Congress could make to the program to 
address the--to extend the life of the Social Security Trust 
Fund and increase benefits for recipients?
    Mr. ROACH. I think the CPI that we talked about could be 
more advanced and up to date for the current cost of living. We 
could increase benefits; we could increase benefits and we can 
make the program solvent so people aren't worried about it 
every day. We could fix the many public sector employees that 
don't have access to Social Security. There is a whole number 
of things, and I believe the 2100 addresses all those concerns. 
And I think that is what we could do.
    And if you lift the cap of the 160,000, which is the 
maximum that people pay in, lift that and garner some of the 
wealthiest people in the country, we would have sufficient 
funds for Social Security to be self-sufficient. So basically, 
we are not asking for Congress to appropriate funds that they 
have to borrow, we are saying we want the funds we--if you lift 
the cap, use the numbers, it will--the system will pay for 
itself.
    Chairman FERGUSON. Mr. Roach, thank----
    Ms. SANCHEZ. Excellent, thank you so much for your 
testimony, and I yield back.
    Chairman FERGUSON. Thank you. Next, I recognize the 
gentleman from Tennessee, Mr. Kustoff.
    Mr. KUSTOFF. Thank you, Mr. Chairman, for calling today's 
hearing, and thank you to the witnesses for appearing.
    Ms. Wechsler, to you, for--as a means of prevention, would 
you recommend to somebody that they have their credit reports 
frozen in order to prevent Social Security theft?
    Ms. WECHSLER. Well, you know, speaking personally, that is 
something that we do in my household. And after hearing my 
fellow panelist's story, I am going to take the process to do 
it for my young children, as well.
    Mr. KUSTOFF. Yes, I--so I want to follow up on that.
    Ms. Hayward, after what happened to you, to your daughter, 
you personally--you had you and your husband's credit reports 
frozen, right?
    Ms. HAYWARD. At this time, we have been focusing our 
attention on our daughter and our children, and learning more 
about what we need to do to protect ourselves.
    Mr. KUSTOFF. Yes.
    Ms. HAYWARD. As you can understand, it is--can be difficult 
for an independent citizen to know exactly what the best 
practice would be. And it has ramifications when opening a line 
of credit or taking out a loan or buying a house. So at this 
time, you know, we are still trying to figure out what the best 
course of action would be, and are hoping that we can be 
provided with the best information to follow.
    Mr. KUSTOFF. Fair enough. Thank you.
    Ms. Wechsler, back to you. Is there--there is a difference 
in the process between freezing the credit of an adult versus a 
minor child, isn't there?
    Ms. WECHSLER. That is my understanding, yes.
    Mr. KUSTOFF. Okay. And it is more complicated, maybe 
substantially more complicated, to freeze the credit of a minor 
child versus an adult.
    Ms. WECHSLER. Right. I can tell you, just because I have 
done a little research on what that looks like. Yes, there is a 
lot of documents we have to provide, as the parents of the 
children.
    Mr. KUSTOFF. Good, thank you.
    If I can, Mr. Brown, as it relates to you and to OIG, can 
you talk about the scammers who target, I guess, individuals 
versus groups?
    Because there are both, right? There are some that are 
individuals, there are some that are professional groups.
    Mr. BROWN. The scammers are, yes, individuals or groups.
    Mr. KUSTOFF. Okay. Can you talk about the different types 
of groups that conduct the scamming?
    Mr. BROWN. I think I can refer to--drawing on that example 
from a few years ago. The artificial intelligence that was 
likely backed up by unknown individuals, not likely one 
individual. And it was difficult to track the perpetrators down 
because this is all being done electronically through voice-
over Internet telephone systems, calls that are being 
originated from outside the United States.
    So, my point here is it is very difficult to identify the 
perpetrators, whether they are individuals or groups.
    Mr. KUSTOFF. And the ones that are coming from outside the 
U.S., do you know or do you have an opinion where they are 
coming from?
    Mr. BROWN. I will have to get back to you on that. I think 
our investigative work has tracked some of that down, but I 
don't have the information readily available.
    Mr. KUSTOFF. Thank you. Do you coordinate with different 
law enforcement agencies?
    Mr. BROWN. We do.
    Mr. KUSTOFF. Primarily the FBI?
    Mr. BROWN. Correct.
    Mr. KUSTOFF. Can you think of any prosecutions in the last 
five years of these scammers?
    Mr. BROWN. Unfortunately, my background is in the Office of 
Audit. The investigative side is not sort of in my portfolio. 
So, I would be happy to get some more information for you for 
the record.
    Mr. KUSTOFF. Yes, I would appreciate that, if you could, if 
you could let me know if there have been any prosecutions, 
because it would seem like--I am a former Federal prosecutor, 
former U.S. attorney--that, you know, when you have one or X 
number of successful prosecutions, that it sends a strong 
deterrence effect to those who think about trying to perpetrate 
the same or similar crime.
    Now, a lot of times they will adapt, and sometimes after 
the expansion of time they seem to go away. But the more those 
investigations and the more those prosecutions and the 
notoriety that they receive, that--there is no doubt that there 
is a deterrence effect. So, if you could follow back up with 
me, I would appreciate it.
    Mr. BROWN. Yes, sir.
    Mr. KUSTOFF. Thank you, Mr. Chairman, as my time is 
expiring, I yield back my 10 seconds.
    Chairman FERGUSON. Thank you.
    Before we go to the next member, the ranking member and I 
have both commented several times on the artificial 
intelligence piece. And Mr. Brown or Mr. Brune--Mr. Brown, 
specifically--you keep going back to the one incident that you 
have been made aware of, which was a program that was calling 
in. Are you all doing anything right now to kind of survey 
where you may be in this process?
    I mean, you are aware of one thing, but how much--is there 
a way to track penetration from AI into the system? I think we 
are just both kind of, you know, concerned about this. So, you 
know, it is--are you all doing anything to monitor that, or is 
it hard to do because you don't know what it is yet?
    Mr. BROWN. Hard to do because we don't know what it is yet. 
Also, hard to track where it is coming from.
    So, we are looking at data to try to decipher where this--
these potentially fraudulent calls are coming from. But 
fraudsters have found ways to spoof legitimate phone numbers, 
redirect calls, so it looks like they are coming from within 
the United States when they are not. So, they are always, you 
know, sort of one step ahead of us, and we are trying to catch 
up here.
    Chairman FERGUSON. Okay, thank you. Next, a gentleman from 
Arizona is recognized for five minutes.
    Mr. SCHWEIKERT. Thank you, Mr. Chairman. And to my--I will 
call him my friend, Ranking Member, he and I both have a 
fixation on stability and survival of Social Security, though I 
think we see the actual financing mechanisms very different.
    We did some of the math last night on the floor and showed 
that if you were to stabilize U.S. sovereign debt at 95 to 97 
percent--because the real problem is actually more in the 
Medicare--I need a 24 percent payroll tax tomorrow and a 20 
percent VAT tax tomorrow to stabilize U.S. sovereign debt to 97 
percent of debt to GDP. That is the CBO math. And so, you can 
go--if you want to argue, go argue with CBO.
    Mr. Chairman, back----
    Mr. LARSON. Mr. Chairman----
    Mr. SCHWEIKERT. My time--back about two years ago, we 
actually had a hearing in this room, maybe even three or four 
years ago--actually, I think you may have been in the chair--
and there was part--one of the discussions was is there a way 
to actually sort of have a revolution on how we both have a--
more--as we are using a Social Security number or a national ID 
number functioning--is what it becomes--for Medicare, Medicaid, 
Social Security, so many other items, to have a rotating 
encryption on it.
    We actually, I think, at that time had a technology expert 
come speak to us saying, okay, just like, you know, here is the 
number, but underneath it is always a token that is rotating, 
or some sort of ability to--like this. Because my fear is, if I 
am reading the materials or even--and I am sorry, I ran back to 
the office to see if I could find the binder. I couldn't find 
it from a couple of years ago that had some of the material in 
it.
    Has there been any type of research project, whether it be 
the Social Security level, you know, the IG, someone saying as 
technology gets better, as the AI gets better, as the data 
mining gets better, the fraudsters are going to get better. Is 
there a way we could build a much more bulletproof token that 
is also that tax ID?
    And you seem to have the most expertise on this. I mean, 
what would you do?
    Ms. WECHSLER. I appreciate the question, Congressman. I am 
not a technology expert, but I work with them, and we are happy 
to have these discussions.
    I do agree, as far as the strong reliance that our country 
has on Social Security numbers, and that makes it such an 
attractive target for fraudsters. And that is, you know, why we 
have so much focus on the ECBSV program. But we are happy to 
have more discussions about that.
    Mr. SCHWEIKERT. But within that, I think, actually, we had 
had some testimony in the back that--the amount of fraud that 
is in our Medicare system, even our Medicaid systems, often 
using--walking into an emergency room and using someone else's 
Social Security number and these things. So, this is a much 
greater scale than I fear we completely have our heads around. 
And maybe the goal here should be not only identifying the 
problem, because we seem to do this every couple of years, but 
are we ready to bring in some true experts?
    Is there a way--you know, if I can carry around my bank 
accounts on this thing, and they are substantially bulletproof, 
is there a way we could provide that type of protection to the 
American taxpayers?
    And just everyone, because, you know, we all have to live 
with this number.
    And the other thing, how old is the little girl?
    Ms. HAYWARD. Our daughter is nine months old.
    Mr. SCHWEIKERT. So cute. The insane thing, I have a 10-
month-old little boy we just adopted. And so, you are--hearing 
your story, and I am all of a sudden going, oh, God, we need to 
check. So, you see what you caused?
    But to everyone on the panel--and then I will yield back, 
Mr. Chairman--if you come across any literature, a discussion 
of what we could do to actually fix this, you know, I would 
love us to actually be working on a fix instead of planning for 
next year's hearing again to do the same thing over.
    So with that, I yield back.
    Chairman FERGUSON. Thank you. The gentleman from New York, 
Mr. Higgins, is recognized.
    Mr. HIGGINS. Thank you, Mr. Chairman.
    You know, it has long been known and long ignored that 
Social Security has a customer service problem. You know, 
benefits are not cut, but when the administration is cut, it 
makes services for our individual constituents, every 
congressional district, very, very difficult.
    Next Friday $25 billion in Social Security benefits are 
scheduled to be paid out but will not if the nation defaults on 
its debt.
    You know, if there is a problem with fraud and abuse, 
whether it is an internal source or an external force, you 
know, the logical extension is that resources, that money is 
needed to fix that. President Biden proposed budget increases 
to improve Social Security services, including cutting fraud 
and theft by nearly $2 billion for a total of $15 billion; 224 
million was to protect the program's integrity.
    Part of the program's integrity is to ensure that it 
fulfills its mission in a way that is effective and efficient, 
because every single week $25 billion in Social Security 
benefits are paid out. That is $100 billion every single month. 
These are people that primarily depend on those resources to 
survive.
    Additionally, they are net contributors to the American 
economy. These people do not save their Social Security 
payments. They spent a whole life contributing to it so that 
they could experience a life of dignity.
    You know, there is a lot of talk about, you know, debt and 
deficit, and both parties are responsible, and that is true. 
What is not talked about as much is that American debt in the 
form of Treasury bonds, bills, and securities is the greatest, 
safest investment in the world. When there is a global 
recession or a national recession, it is called a flight to 
safety. That is what world markets buy because 60 percent of 
the world's economy is dependent on the American dollar. The 
full faith and credit of the United States shall never be 
questioned. That is the gold standard by which people invest in 
American debt.
    Yes, the debt is a problem, but the way that you deal with 
that is through economic growth. And anybody that questions 
whether or not growth can do that, look back to the 1990s, 1992 
to the year 2000. Sustained economic growth of four percent 
every single year for eight years. We did not have budgetary 
deficits. We had budgetary surpluses of $300 billion. We paid 
$400 billion down on the national debt. That kind of growth was 
only made possible by the investment that this Congress made in 
the American people and the growth of the American economy. And 
somebody says, well, you have four percent growth, you have an 
inflation problem. No, you didn't. Inflation was at 2.25 
percent for that 8 years.
    You know, you can't continue to hold the American people 
hostage because of a debt situation that you helped create. 
Seventy percent of American debt is owed to Americans. That is 
what the Chinese would love. They would love for us to default 
on our debt. Do you want to know why? Because they want to be 
the world's lead currency in the end.
    The other issue which I still don't understand, but our 
friends on the other side in the House Ways and Means Committee 
prioritize who would get paid if we defaulted on our debt, and 
China was first. Not the American people, not the Social 
Security program, not the Medicare program.
    So, I just simply want to say--and I have heard very 
clearly your your testimony, it has been very valuable to me in 
terms of learning a little bit more about this extraordinary 
program that, by the way, lifted 50 percent of American seniors 
out of poverty when it was enacted in 1935. We have a 
demographics problem. People are living longer. We should be 
celebrating that. And that is why John Larson's Social Security 
2100 Act is so visionary, is so valuable, not only to the 
American people, but to the American spirit.
    I see my time is expired. I will yield back.
    Chairman FERGUSON. Thank you, Mr. Higgins. And we all agree 
that raising the debt ceiling is something that should be done. 
We cannot default on the debt. And House Republicans have been 
the only ones in Washington, D.C. to vote to raise the debt 
limit so far in this discussion.
    With that, I will yield to my colleague from Iowa, Mr. 
Feenstra.
    Mr. FEENSTRA. Thank you, Chairman Ferguson. And I also want 
to thank Ranking Member Larson. Thank you for having this 
hearing, and it is really important and, you know, 
collaboratively, all right, I don't care about politics. I care 
about solutions, how we can work together.
    You came here, each one of you came here to give testimony. 
You came here to discuss this critical issue that we have in 
front of us. And we need to find a solution together, and I 
thank you for that.
    In Iowa our state has already received more official 
complaints of identity theft this year than all of 2022, and we 
are not even 6 months into the year yet. So this is a real 
concern. And so, Ms. Wechsler, I am just curious. Do you have 
any idea why we are seeing such an onslaught of identity theft 
starting already this year, compared to years past?
    And by the way, is this nationally or is it more Midwest-
driven?
    Ms. WECHSLER. Thank you for the question, and I am 
sympathetic that so many of your constituents are already 
victims of identity theft this year. We are seeing that 
nationally in, you know, identity theft, but also specifically 
synthetic identity theft and fraud. It is the fastest-growing 
type of financial crime in the U.S., and it is the--and 
synthetic identity fraud is the largest type of identity theft.
    And, you know, it is not just in the credit industry, but 
it is in other sectors of--you know, with government benefits 
and unemployment benefits. And we have heard from some of my 
fellow panelists on that. And that is why, you know, again, it 
is--ECBSV is such a critical tool for combating synthetic 
identity fraud. And we have to maximize the use and the 
effectiveness of this system.
    Mr. FEENSTRA. Yes, so I agree. Thank you for those 
comments. I want to extrapolate on that just a little bit.
    So, with AI, what is happening in AI, do you think--I mean, 
I get worried when you see things doubling so quickly. Do you 
think AI is the biggest producer of what is happening, you 
know, phishing attacks and all this other stuff?
    I mean, is this something that oh, wow, I mean, we have got 
problems ahead of us? What is your thoughts?
    Ms. WECHSLER. I know data breaches are more and more 
common.
    Mr. FEENSTRA. Yes.
    Ms. WECHSLER. And that is certainly an opportunity for 
Social Security numbers to become vulnerable and then be taken 
over.
    Mr. FEENSTRA. Yes.
    Ms. WECHSLER. So, is there other technology that is making 
that possible? That is very likely.
    Mr. FEENSTRA. Yes, yes. So, I sat on the Science, Space, 
and Technology Committee last year, and I was the ranking 
member of the Research and Technology Committee. We talked a 
lot about artificial intelligence and, you know, obviously, it 
is a safety issue.
    Are you working with other agencies--I am just thinking out 
loud here--like NIST, NSF, DoE, or is there any way that you 
guys can work collaboratively?
     I mean, it just seems like--and I am hoping it is not the 
case that we are all in little silos trying to do our little--
our work. I mean, is there ways that we can work together with 
some of these that we are all trying to somewhat combat this 
situation?
    Any thoughts there, Ms. Wechsler or anybody else?
    Ms. WECHSLER. We are certainly open to collaboration across 
the public and private sector. That is certainly what we are 
trying to achieve with ECBSV. And on a larger scale, 
absolutely.
    Mr. FEENSTRA. Yes. And anyone else that you see, hey, I 
have done--we are doing X, Y, and Z with this different 
organization?
    Mr. BRUNE. Congressman, at the Social Security 
Administration we are very collaborative with our Federal 
partners and with the technology community who not only 
provisions technology to the government, but to--you know, to 
the nation.
    In recent, you know, discussions we have coordinated with 
multiple executive branch agencies to both learn more about 
the, you know, emerging technologies and identify positive use 
cases that help the government mission.
    Mr. FEENSTRA. Awesome, glad to hear that. So, we are 
Congress. I am asking you questions I want to ask you, what can 
we do? All right? What do you see that Congress can do, Mr. 
Brune and Ms. Wechsler, all right? If you could say, hey, if 
you guys could do this, if you men and women could do X, what 
would that be?
    Mr. BRUNE. Well, Congressman, I would say that as 
technology advances and as threats, as you have identified, 
change, adequate, sustained funding is an important measure to 
continue to advance the government's defenses.
    Mr. FEENSTRA. Yes, thank you.
    Ms. Wechsler----
    Ms. WECHSLER. Just the important role you have played in 
making sure ECBSV was created to begin with, and then ensuring 
its efficiency and effectiveness.
    Mr. FEENSTRA. Perfect. Thank you so much for your 
testimony, and I yield back.
    Chairman FERGUSON. Thank you.
    Our dear friend and colleague from Michigan, glad to have 
you back, sir, and healthy. You are now recognized for five 
minutes.
    Mr. KILDEE. Thank you so much, Mr. Chairman. It is good to 
be back, I will say, and I have mentioned this a couple of 
times, I am not 100 percent yet. It still hurts for me to talk, 
which makes this a completely shared experience. [Laughter.]
    Mr. KILDEE. I do want to thank the witnesses for being 
here, and I do agree with my colleagues, and I am glad this 
conversation is taking place. The notion that Americans, like 
Ms. Hayward and others, have to deal with the frightening 
reality of identity theft is something that we have to take 
very seriously, and we have to deploy whatever capacity, 
whatever technology, whatever policies we can to try to address 
that. And I am pleased to hear that there are some ideas that 
we might need to invest in. We need to hold these bad actors 
accountable.
    But we do also have to recognize that everything we do here 
has some impact on the capacity of the agency to address that. 
So, I am concerned, as some of my colleagues have expressed, 
that any steps that we might take that would potentially limit 
the resources available to the Social Security Administration 
or any other body of government could have the exact opposite 
effect of what we are trying to address during this hearing.
    According to the acting Social Security commissioner, some 
of the cuts that could be proposed, for example, in the so-
called Limit Save and Grow Act--at least this is according to 
the acting commissioner--could force the agency to close field 
offices and lay off, quite literally, thousands of people who 
go to work every day trying to make the agency's mission more 
achievable.
    You know, I think about this--about, you know, in terms of 
how it affects the people I represent. Back home in Michigan, 
two million seniors rely on Social Security. And as Mr. Larson, 
who has supplied us regularly with data, my particular district 
is one that has a fairly high number of Social Security 
recipients, both seniors but also other beneficiaries of Social 
Security. And I am very concerned that we not talk about steps 
to address identity fraud and at the same time weaken the 
ability of the agency itself or the Administration to address 
this.
    So if I could start with Mr. Roach, ask if you might just 
comment on how the proposed--and I know this is not something 
that is necessarily shared by all members on the other side of 
the aisle, but a majority of our Republican colleagues are a 
member of the Republican Study Committee that put forward these 
proposals--how this will impact the loss, for example, of field 
offices, the loss of employees who go to work every day trying 
to make the Social Security Administration more responsive to 
those Americans who have paid in?
    What will be the impact on our ability not just to deal 
with this issue of identity fraud, but of all the challenges 
that come with running a large organization that provides 
benefits that, for many of the people who are the 
beneficiaries, is their principal, if not their sole source of 
income? Mr. Roach, could you just comment on that?
    Mr. ROACH. Yes. Well, I know firsthand I had a problem with 
Social Security. Not--you know, I needed assistance. They had 
closed my office in Arlington, Virginia. I would have to travel 
many miles away. The phones weren't being answered in a timely 
fashion. They would call you back. It would be devastating. 
Many seniors are confined. They have to communicate and try to 
get information on various issues that come through. And every 
year there is a different issue.
    So it would be a devastating thing to continue to close--I 
mean, to continue to do what is already happening. And that, 
you know, expand those offices and expand the ability to 
communicate directly with Social Security. As you said, you 
know, communicating is very tough. And we cut staff. Nobody is 
answering the phone. And so, it would be--worsen--exacerbating 
a bad situation.
    Mr. KILDEE. Well, I appreciate that. And I would just add 
to that by saying that I also think we ought to be careful. And 
I know, again, this often comes up where some would criticize 
the people who work in the Social Security Administration or 
any other agency of government as being bureaucrats and subject 
to all sorts of, I think, really unfair characterization.
    These are people--these are Americans who go to work every 
day to serve their fellow American citizens. We ought to hold 
them up. We ought to support them, and especially when we are 
trying to deal with this really significant threat of identity 
fraud. Let's not on one hand say that we want to stop that, and 
on the other hand make it more difficult for the people who go 
to work every day trying to address these problems, to get 
their work done.
    With that, again, Mr. Chairman, thanks for holding this 
hearing. I really appreciate it very much, and I appreciate 
your nice comments at the outset. Thank you.
    Chairman FERGUSON. And you will appreciate the fact that I 
agree that that was not entirely too painful for either of us.
    So, with that, the gentleman from Ohio, Dr. Wenstrup, is 
recognized for five minutes.
    Mr. WENSTRUP. Well, I do want to welcome my friend back.
    I am glad you are doing well.
    And I want to thank you, Chairman Ferguson, Ranking Member 
Larson, for having this committee and for all of you being here 
today.
    The fraud is a great concern of mine. Child identity theft 
is a serious problem in our country. I am concerned that maybe 
the Social Security Administration isn't doing enough to 
protect our children and grandchildren from having their 
identity stolen. That is one thing.
    But maybe there is more we can do to protect these 
children, and that is that is where I want to go. Children's 
identities are valuable to criminals. It is a bonanza for them 
when they get it. They can go undiscovered for years, until 
that child is old enough to work, drive, or try to establish 
credit, and then it comes forward. And when children's Social 
Security numbers fall in the hands of the wrong person, it sets 
a stage for a future of financial hardships and problems before 
a child is even old enough to walk.
    I do want to talk about the Social Security Child 
Protection Act. You know, as made clear by Ms. Hayward's 
testimony, the Social Security Administration's current 
policies make it extremely difficult for families who are 
trying to obtain a new Social Security number after being a 
victim of a comprised [sic] Social Security number.
    I can tell you firsthand, when you adopt not immediately at 
birth, but say maybe months later, the advice you are given as 
parents of that child, new parents to that child, is ``Get a 
new Social Security number,'' because of this very reason. 
Fortunately, we were given that advice and did just that.
    It is just shocking to hear that such a vital piece of a 
child's identity was compromised before he--before she was only 
one month old. And fortunately, the story is not unique, 
apparently, and that is why we were given the warning. So, I 
want to make sure that people can address this and have the 
ability to protect their children from having their identity 
stolen, and deserve the opportunity to open bank accounts, et 
cetera.
    So that is why last Congress I worked with my colleague, 
Representative Blumenauer, to introduce the Social Security 
Child Protection Act. This common-sense bill would allow Social 
Security Administration to issue a new Social Security number 
to children aged 14 and under if their Social Security number 
has been compromised by theft of their Social Security number. 
So, we are planning on reintroducing this act this week, and I 
invite all the members here to join in this effort to protect 
our children and assist their families when their lives have 
been upended by child identity theft.
    The Social Security Administration has a responsibility to 
provide protection for our children, to prevent what happened 
to Ms. Hayward and her family from ever happening again. I 
think we can make a big dent in that if we work together on 
this.
    Ms. Hayward, can you discuss how things may have been 
different for you and your family if the Social Security 
Administration would have had the ability to issue your 
daughter a new Social Security number when you realized it had 
been compromised?
    Ms. HAYWARD. Thank you. Yes. You know, from my 
understanding, from what I have been told is that we have to 
wait until there has been some harm incurred. We have to have 
substantial proof of that harm, which can take months, years, 
maybe even decades to even learn about.
    And so if we had been able to have a new Social Security 
number given to us, even though we didn't have proof of harm 
yet, thank goodness, then it would save us and buy us more time 
to do what we needed to do--apply for a passport, you know, 
open a 529, that sort of thing--and give us a peace of mind 
that at least she is working with a clean slate.
    Mr. WENSTRUP. Thank you very much.
    I yield back, and I hope we can get this act passed. It is 
bipartisan. Let's work on that and help others out. Thank you, 
I yield back.
    Chairman FERGUSON. Okay. Thank you for reintroducing that. 
I look forward to working with you to get that across the 
finish line.
    Next, the gentleman from Illinois.
    Mr. Davis, you are now recognized for five minutes, sir.
    Mr. DAVIS. Thank you, Mr. Chairman, and let me thank you 
for giving me the opportunity to waive onto this hearing. I am 
not a member of the Social Security Subcommittee, but I have 
such a vital interest, and Social Security is so important to 
the district that I represent that I wanted to make sure that I 
heard what I could hear, and that I contributed whatever it is 
that I could contribute.
    I am very interested in fraud and in Social Security. But I 
am really more interested in Social Security than I am in 
fraud. Both are very important, and we want to eliminate as 
much of it as we possibly can, not only in terms of individuals 
attempting to what we call in the community where I live 
``pimping the system,'' and we certainly don't want to see the 
Social Security system pimped.
    But we also want to be careful that we don't eliminate and 
leave out--I recall how Social Security sort of came into 
being, and people who were left out. And I am sure that the 
designers and promoters did not intend, but I grew up in rural 
America, and many of the people that I grew up with were 
farmers, they were sharecroppers. And so, they went many years 
without paying into Social Security. They were not allowed to 
pay in.
    Therefore, as they reached retirement age, or even as they 
reached the age where they could contribute--and my father was 
one of those individuals, so I know exactly when they were able 
to contribute, and I also know exactly what his Social Security 
check was after he retired. He lived with me, and he was 92 
years old.
    His check was $536 a month, and he was a very proud 
individual. And often times, if we went to dinner or whatever, 
he would attempt to pay. He said, ``Oh, let me pay for this.' 
'' He would reach up, and pull out his money and he would 
always say to my wife, ``Vera, I am paying for your dinner. 
Now, your husband can, you know, do the best he could.'' 
[Laughter.]
    Mr. DAVIS. But I thought if he only had $536--fortunately, 
he was okay, he had children that he could live with and all of 
that, and so he didn't have to worry. So, I think we have to be 
very careful.
    And I am hearing, you know, people wanting to raise, raise, 
and raise the retirement age. Well, I think we need to be very 
careful about that, as well. I think one of the reasons that 
Social Security has been so popular is that people know that 
they can depend on it. Social Security benefits for many 
people, of course, is about $20,000 a year. Many of the 
individuals in my districts about half of that. It is about 
$20,000. It is about $10,000 for them, and that is what many of 
them get.
    So, I want to make sure that we protect Social Security as 
much as we can. And I hear this thought, this idea about 
privatization and privatizing. Well, you know, I think, to me, 
that is kind of like a gamble. And you never know what the 
outcome is going to be.
    So, Mr. Roach, let me ask you. The idea of privatizing 
Social Security, how do your members--how do you react to that?
    Mr. ROACH. You know, our members will not be satisfied with 
that. My organization, the Alliance of Retired Americans, was 
born out of the initial talks to privatize Social Security and 
put our money at risk. We put the money in and trust to the 
government Social Security. And we depend on that money coming 
out. And to put it at risk in stock markets and other financial 
institution instruments would be devastating mentally and 
physically to our members and Social Security recipients as a 
whole.
    Mr. DAVIS. And the idea of more of a guarantee because we 
have been fortunate. We have never missed a payment yet, and 
people have been able to reap the benefits and have the 
security of--just about knowing, and they wait for the first of 
the month.
    Mr. ROACH. Absolutely. The guarantee of the Federal 
Government means it is very comforting to all of our Social 
Security recipients, the fact that they are not looking at--
they have to look at the stock market go up and down.
    And, you know, people who are--have money outside of Social 
Security, they are more vulnerable to fraud and theft because 
the numbers are all over the place. And it is very difficult to 
keep track of these things. We are doing some work in that 
arena. But no, privatization and lack of a guarantee would be 
devastating to Social Security recipients and potential future 
Social----
    Chairman FERGUSON. Thank you for your comments, Mr. Roach. 
The gentleman's time has expired.
    I would like to thank each of our witnesses for coming 
today. Your testimony has been helpful. It has caused us to 
want to explore this area even more, and really be a partner in 
helping solve this very serious problem for our fellow 
Americans.
    Please be advised that the members have two weeks to submit 
written questions to be answered later in writing. Those 
questions and your answers will be made part of the formal 
hearing record.
    With that, this subcommittee stands adjourned.
    [Whereupon, at 4:03 p.m., the subcommittee was adjourned.]
      

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