Social Security Administration: Improved Agency Coordination	 
Needed for Social Security Card Enhancement Efforts (29-MAR-06,  
GAO-06-303).							 
                                                                 
The Social Security Administration (SSA) has issued more than 430
million Social Security numbers (SSN) and cards since the Social 
Security program began in 1935, of which an estimated 300 million
belong to living number holders. SSNs have a key role in	 
verifying individuals' authorization to work in the United	 
States, but SSN cards are also vulnerable to theft and		 
counterfeiting. The Intelligence Reform and Terrorism Prevention 
Act of 2004 requires that SSA consult with the Department of	 
Homeland Security (DHS), form a task force, establish standards  
for safeguarding the SSN and card, and provide for implementation
by June 2006. Concerns about unauthorized workers and the use of 
counterfeit documents led the Chairman of the House Judiciary	 
Committee to ask that GAO (1) review SSA's progress to safeguard 
the SSN and enhance the card as required under the Intelligence  
Act, (2) identify key issues to be considered before enhancing	 
the card, and (3) outline the range of options available to SSA  
for enhancing the card. 					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-303 					        
    ACCNO:   A50317						        
  TITLE:     Social Security Administration: Improved Agency	      
Coordination Needed for Social Security Card Enhancement Efforts 
     DATE:   03/29/2006 
  SUBJECT:   Authorization					 
	     Biometrics 					 
	     Eligibility determinations 			 
	     Employment 					 
	     Federal social security programs			 
	     Forgery						 
	     Fraud						 
	     Identification cards				 
	     Internal controls					 
	     Safeguards 					 
	     Social security number				 
	     Standards						 
	     Identity verification				 
	     Counterfeiting					 

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GAO-06-303

     

     * Results in Brief
     * Background
          * Social Security Cards and Noncitizen Employment Eligibility
          * Efforts to Enhance the Card and Drivers' Licenses
     * SSA Has Made Progress on Intelligence Act Provisions, but Sl
          * Replacement Cards Limited
          * Minimum Standards for Verifying Documents Established
          * Birth Certificates for Card Applicants under Age 1 Independe
          * Progress Made on Enumeration at Birth Process
          * Work on Death Indicators Taken and Fraud Indicators Initiate
          * SSA Has Moved Slowly to Convene the Interagency Task Force f
     * The Difficulty of Counterfeit-proofing the Card, the Role th
          * A Counterfeit-proof Social Security Card Is Difficult to Dev
          * The Card Is a Weak Link in the Employment Verification Proce
          * Real ID Act May Improve Links to the Card and Employment Eli
     * A Range of Enhancement Options Exists, and Costs Would Vary
          * Options for Enhancing Cards
               * Adding secure features to the paper card
               * Adding machine--readable features
               * Adding biometric features
               * Eliminating the card
          * Factors Affecting the Cost of Card Options
          * Issuance Options Affect Cost
               * Mass issuance
               * Staggered issuance
     * Conclusions
     * Recommendation for Executive Action
     * Agency Comments
     * GAO Contact
     * Staff Acknowledgments
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Report to the Chairman, Committee on the Judiciary, House of
Representatives

United States Government Accountability Office

GAO

March 2006

SOCIAL SECURITY ADMINISTRATION

Improved Agency Coordination Needed for Social Security Card Enhancement
Efforts

Social Security Administration
GAO-06-303

Contents

Letter 1

Results in Brief 3
Background 6
SSA Has Made Progress on Intelligence Act Provisions, but Slow Action to
Form the Interagency Task Force May Limit Card Enhancement Efforts 9
The Difficulty of Counterfeit-proofing the Card, the Role the Card Has in
the Employment Verification Process, and Improvements to Drivers' Licenses
Are Critical Issues to Consider 15
A Range of Enhancement Options Exists, and Costs Would Vary 23
Conclusions 32
Recommendation for Executive Action 32
Agency Comments 33
Appendix I Scope and Methodology 37
Appendix II Department of Homeland Security Form I-9 39
Appendix III Comments from the Department of Homeland Security 42
Appendix IV Comments from the Social Security Administration 44
Appendix V GAO Contact and Staff Acknowledgments 49
Related GAO Products 50

Tables

Table 1: Original SSNs and Replacement Social Security Cards Issued in
Fiscal Year 2005 7
Table 2: Social Security Administration Timeline for Implementing Social
Security Card Enhancements 13
Table 3: Examples of Fraudulent Social Security Card Activity 16
Table 4: Acceptable Documents in the Employment Verification Process 18
Table 5: Requirements for State-Issued Drivers' Licenses or ID Cards under
the Real ID Act of 2005 22
Table 6: Factors that Affect Costs of Enhanced Card Options 30
Table 7: Card Issuance Options 31

Figures

Figure 1: Interagency Task Force Required by the Intelligence Act,
November 2005 14
Figure 2: Examples of Possible Social Security Card with Reverse Showing
Magnetic Stripe and Secure Bar Code 25
Figure 3: Examples of Biometrics-Fingerprint, Facial Recognition, and
Photograph 27

Abbreviations

DHS Department of Homeland Security OIG Office of the Inspector General
SSA Social Security Administration SSN Social Security number

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separately.

United States Government Accountability Office

Washington, DC 20548

March 29, 2006 March 29, 2006

The Honorable F. James Sensenbrenner, Jr. Chairman Committee on the
Judiciary House of Representatives The Honorable F. James Sensenbrenner,
Jr. Chairman Committee on the Judiciary House of Representatives

Dear Mr. Chairman: Dear Mr. Chairman:

The Social Security Administration (SSA) has issued more than 430 million
Social Security numbers (SSN) and cards since the Social Security program
began in 1935. SSA uses the number to track workers' earnings and
eligibility for Social Security benefits, while the card serves as an
individual's record of the number. Over the years, the SSN is increasingly
used as a unique personal identifier by government agencies and businesses
to maintain records and by individuals to file tax returns, open bank
accounts, apply for credit, and conduct consumer transactions. Since
passage of the Immigration Reform and Control Act of 1986, Social Security
cards, drivers' licenses, birth certificates, and other documents are also
used to verify individuals' eligibility to work in the United States as
well as apply for government benefits. However, these documents can and
have been altered, counterfeited, or stolen to gain access to legitimate
documents, create false identities, obtain employment, or commit financial
crimes. The National Commission on Terrorist Attacks upon the United
States (the 9/11 Commission) reported that all but one of the hijackers
had acquired U.S. identification documents, some by fraud. The 9/11
Commission recommended that the federal government strengthen the issuance
standards for birth certificates and drivers' licenses, and subsequent
legislation also included Social Security cards. The Social Security
Administration (SSA) has issued more than 430 million Social Security
numbers (SSN) and cards since the Social Security program began in 1935.
SSA uses the number to track workers' earnings and eligibility for Social
Security benefits, while the card serves as an individual's record of the
number. Over the years, the SSN is increasingly used as a unique personal
identifier by government agencies and businesses to maintain records and
by individuals to file tax returns, open bank accounts, apply for credit,
and conduct consumer transactions. Since passage of the Immigration Reform
and Control Act of 1986, Social Security cards, drivers' licenses, birth
certificates, and other documents are also used to verify individuals'
eligibility to work in the United States as well as apply for government
benefits. However, these documents can and have been altered,
counterfeited, or stolen to gain access to legitimate documents, create
false identities, obtain employment, or commit financial crimes. The
National Commission on Terrorist Attacks upon the United States (the 9/11
Commission) reported that all but one of the hijackers had acquired U.S.
identification documents, some by fraud. The 9/11 Commission recommended
that the federal government strengthen the issuance standards for birth
certificates and drivers' licenses, and subsequent legislation also
included Social Security cards.

The Intelligence Reform and Terrorism Prevention Act of 2004 requires that
SSA consult with the Department of Homeland Security (DHS) and form an
interagency task force to establish standards to better protect the SSN
and card from counterfeiting, tampering, alteration, and theft, and
provide for the implementation of security requirements including
standards for safeguarding Social Security cards from counterfeiting and
theft by June 2006. Although SSA is responsible for issuing the card, DHS
monitors employers who are responsible for certifying the authenticity of
documents, such as the card, when presented as proof of eligibility to
work. Congressional concerns about identification documents and questions
about unauthorized workers prompted your request for us to The
Intelligence Reform and Terrorism Prevention Act of 2004 requires that SSA
consult with the Department of Homeland Security (DHS) and form an
interagency task force to establish standards to better protect the SSN
and card from counterfeiting, tampering, alteration, and theft, and
provide for the implementation of security requirements including
standards for safeguarding Social Security cards from counterfeiting and
theft by June 2006. Although SSA is responsible for issuing the card, DHS
monitors employers who are responsible for certifying the authenticity of
documents, such as the card, when presented as proof of eligibility to
work. Congressional concerns about identification documents and questions
about unauthorized workers prompted your request for us to review SSA's
efforts under the Intelligence Act.1 In response to the request, we (1)
reviewed the progress of SSA's efforts to safeguard the SSN and enhance
the card as required under the act, (2) identified key issues to be
considered before enhancing the card, and (3) outlined the range of
options available to SSA for enhancing the card.

In conducting our review, we met with officials from the Social Security
Administration and the Department of Homeland Security. We also met with
officials from the Government Printing Office who administer the contract
for printing Social Security cards. We documented key issues SSA should
consider as it proceeds with changing the Social Security card by
interviewing officials from SSA, DHS, the American Association of Motor
Vehicle Administrators, and state motor vehicle administrators in
Illinois, West Virginia, and Wyoming. We selected these three states
because they used various security features in their drivers' licensing or
identification processes such as fingerprinting, advanced optical printing
and inks, or holograms and other features, which already met stated or
anticipated federal legislative requirements for improving drivers'
licenses and identification cards. We reviewed identification initiatives
using biometrics at the United States Visitor and Immigrant Status
Indicator Technology program and the Transportation Security
Administration's Registered Traveler program.2 Finally, we met with
employer association groups identified by the U.S. Chamber of Commerce. To
examine the range of options available to SSA for enhancing the card, we
researched and analyzed technical literature; identified card
technologies; interviewed biometrics technology experts, vendors, and
industry associations; and consulted the National Institute of Standards
and Technology. We also met with Banknote Corporation of America, the
contractor that prints Social Security cards, to discuss advances in
security printing techniques. We performed our work between April 2005 and
January 2006 in accordance with generally accepted government auditing
standards. Appendix I discusses our scope and methodology in greater
detail.

1As used in this report, the Intelligence Act refers to the Intelligence
Reform and Terrorism Prevention Act of 2004, Pub. L. No. 108-458 (2004).

2Biometrics is a technology that uses automated methods of recognizing a
person based on analyzing physiological or behavioral characteristics such
as fingerprints or facial features among others.

                                Results in Brief

The Social Security Administration has implemented several Intelligence
Act provisions intended to help safeguard the SSN and the card, and made a
preliminary decision to add improved security features to the card before
convening the interagency task force that was required to develop
safeguards for the card. SSA has implemented measures to limit the number
of replacement cards, verify birth certificates for applicants under age
1, and improve the application process of the Enumeration at Birth
Program.3 SSA has also taken action to include death indicators and
initiated action to include fraud indicators in its database.
Additionally, SSA set eight specific tasks and timelines to develop
safeguards for enhancing the card before reaching the statutory
implementation date of June 17, 2006. Three tasks were expected to be
completed before convening the interagency task force and thereby
involving DHS-researching the range of available security features, coming
to an internal agreement on new security features for the paper card, and
developing a publicity campaign for the new card. SSA officials told us
that a preliminary decision had been made to develop an improved version
of the current paper card and issue the improved cards only to new card
applicants. Although the card plays a significant role in verifying
individuals' authorization to work, SSA did not consult with DHS as it
worked for nearly a year on these three tasks. Further, SSA did not
convene the task force until late January 2006, allowing the task force
less than 6 months to consider critical issues that affect card
enhancement options before new safeguards are to be established in June
2006. SSA is required to provide for the implementation of security
requirements by the same date. These officials told us that the agency is
unlikely to take action beyond enhancing features of the paper card
without specific legislative direction to do so.

The difficulty of counterfeit-proofing the card, the role the card has in
determining employment eligibility, and ongoing enhancements to state
drivers' licenses and identification cards are critical issues to consider
before enhancing the Social Security card. Counterfeit protections were
first put on the card in 1983, but older versions of the card remain in
circulation, and all cards, including those issued before counterfeit
protections were put in place, are still valid. Use of these older
versions of the card would adversely affect the intended benefits of a
newly enhanced card. Additionally, when SSA began issuing Social Security
cards in 1936, individuals applying for a card were not required to
provide information useful for determining employment eligibility, such as
evidence of age, identity, or citizenship status-not until 1978 were all
persons required to provide this information. Since older cards never
established employment eligibility, employers cannot be certain if
individuals with older Social Security cards are eligible to work.
However, the Social Security card is a key document for verifying an
individual's authorization to work. Prior GAO work shows that the
employment verification process is jeopardized by document and identity
fraud, the wide array of documents that applicants can present, weak
worksite enforcement, and flaws in the voluntary electronic verification
system.4 To improve the employment verification process, DHS is currently
considering reducing the number of acceptable documents permitted to
verify employment eligibility. Further, recent legislation will require
states to verify the Social Security numbers and legal presence of
individuals applying for state drivers' licenses and identification
cards---linking the estimated 250 million licenses and identification
cards to the Social Security number and immigration documents. These
improved licenses and identification cards could improve the employment
verification process. However, they are not meant to prove employment
eligibility, since states are not required to determine and note worker
status when verifying the Social Security number with SSA and immigration
documents with DHS.

3Since 1989, SSA has used the voluntary Enumeration at Birth Program to
allow parents the option of requesting SSNs for their newly born children
at the birth facilities rather than having to visit an SSA field office.

Once these critical issues are considered, a variety of options exist for
enhancing the card, ranging from enhancing the paper card to adding
machine-readable or biometric features such as photographs and
fingerprints, to eliminating the card entirely. Additionally, the costs of
implementing each option will vary. First, the paper card could be made
more counterfeit-resistant with features such as the use of paper with a
fiber content that reacts to certain chemicals or security threads similar
to those used in U.S. paper currency. Second, the card could be plastic
and include some machine-readable features such as a magnetic strip or
secure bar code; employers would use automated equipment to determine an
individual's employment eligibility status. Third, the card could include
some form of biometrics that links the card to the cardholder, such as a
fingerprint or a photograph. Finally, SSA could eliminate the card and
instead issue a letter with an individual's Social Security number; in the
absence of the card, employers could use a system such as Basic Pilot, or
some similar system, to verify employment eligibility through SSA and DHS
using the Social Security number or Alien number provided by the worker in
combination with an identification document such as a driver's license.
Each option provides different alternatives for improving the ability to
verify employment eligibility. Choosing the type of card and the method
for issuing new cards will have a significant effect on costs and the
agency's workload. For example, if cards are machine-readable or require a
fingerprint or photograph, additional infrastructure will be needed to
obtain and read these features. Reissuing new cards to all 300 million
current cardholders could improve the cards' counterfeit resistance and
strengthen the card as a worker authorization document, but would be
costly. Staggering issuance of an enhanced card to certain groups, such as
those who change jobs, would require a lower initial investment of
resources. Decisions about the card's role for SSA as well as in
employment eligibility authorization will be crucial to determining the
most cost-effective strategy for enhancing the card.

4GAO, Immigration Enforcement: Weaknesses Hinder Employment Verification
and Worksite Enforcement Efforts, GAO-05-813 (Washington, D.C.: Aug. 31,
2005), and GAO, Social Security: Better Coordination among Federal
Agencies Could Reduce Unidentified Earnings Report, GAO-05-154
(Washington, D.C.: Feb. 4, 2005).

As the SSA-led task force develops ways to protect the Social Security
card, we are making a recommendation to the Secretary of Homeland Security
and the Commissioner of Social Security to work together to resolve the
weaknesses of the Social Security card in proving employment eligibility.

In response to our draft report, DHS agreed that much could be done on an
interagency basis to improve the integrity of Social Security cards and
numbers as required under the Intelligence Act. DHS stated that
determining what to do to make the card more secure or eliminating the
card altogether appears to be appropriate, and DHS will continue to work
with SSA through the interagency task force. SSA said that it agreed in
part with our recommendation; although SSA stated that some aspects of the
recommendation were outside the scope of what Congress provided in the
Intelligence Act, SSA said it would continue to work with DHS on issues
related to employment eligibility and verification. SSA also expressed
concern that current law requires that the Social Security card be made of
banknote paper, and thus limits the task force's consideration of
improvements. SSA also suggests that requirements under the Real ID Act
could be modified so that drivers' licenses could be made to reflect work
authorization. DHS and SSA's comments are reproduced in appendixes III and
IV.

                                   Background

The Social Security Act of 1935 authorized a record-keeping system to help
manage the Social Security program and resulted in the creation of the
SSN. SSNs are now issued to most U.S. citizens at birth. They are also
available to noncitizens lawfully admitted to the United States with
permission to work. Lawfully admitted noncitizens may also qualify for an
SSN for nonwork purposes when a federal, state, or local law requires that
they have an SSN to obtain a particular public benefit or service. SSA is
responsible for paying retirement, survivors', and disability benefits to
eligible insured persons based on their lifetime earnings in covered
employment. SSA maintains a historical record of each worker's annual
earnings, which are identified by the worker's name and SSN.

Social Security Cards and Noncitizen Employment Eligibility

Since the Social Security program began, SSA has issued over 430 million
Social Security numbers and cards, of which an estimated 300 million
represent living number holders.5 As shown in table 1, in fiscal year
2005, SSA issued a total of 17.5 million SSN cards to U.S. citizens and to
noncitizens, of which about 12.1 million were replacement cards. SSA
issues replacement cards when individuals' cards are lost, stolen, or
require corrections to the original card. In fiscal year 2005, SSA issued
about 4.3 million original SSNs to U.S. citizens, of which 3.9 million
SSNs were issued to newborns through the voluntary Enumeration at Birth
Program. Under this program, parents can request SSNs and cards for
newborns at hospitals and other facilities at birth. The Enumeration at
Birth Program eases SSA's work demands in its approximately 1,300 field
offices because parents using the Enumeration at Birth Program generally
do not need to visit SSA field offices.

5SSNs are assigned for the life of the number holder and remain valid
indefinitely even after a number holder's death for the purposes of
administering survivor benefits.

Table 1: Original SSNs and Replacement Social Security Cards Issued in
Fiscal Year 2005

Numbers in millions               
                                     U.S. citizens Noncitizens Overall Total 
Original SSNs and cards issued             4.28        1.12          5.40 
Replacement Social Security cards         11.27        0.81         12.08 
Total                                    15.55a       1.94a        17.48a 

Source: SSA.

aTotals by category may not equal overall total because of rounding.

The card has also become a document used in controlling unauthorized work.
In 1986, Congress enacted the Immigration Reform and Control Act to help
reduce the attraction of employment to illegal aliens coming to this
country.6 The act made it illegal for individuals and entities to
knowingly hire, continue to employ, or recruit unauthorized workers. The
act required employers to review documents that established newly hired
workers' identity and eligibility to work in the United States and to sign
statements certifying that the documents they review, such as a Social
Security card, appear genuine and refer to the prospective worker. DHS has
responsibility for implementing and enforcing the act and has authorized a
combination of 27 documents that employees can choose from and provide to
prove identity and eligibility to work. See appendix II for DHS's Form
I-9, which contains a list of the documents used to verify employment
eligibility.

Efforts to Enhance the Card and Drivers' Licenses

As uses for the SSN have grown, misuses of the number and counterfeiting
of the card have increased. Since the SSN's creation, SSA has used the
same basic wallet-sized card but included additional information on the
card to meet the evolving role of the SSN. At present, there are 50 valid
versions of the card-many of which have little or no counterfeit
protection. On several occasions, Congress considered directing SSA to
issue cards that were more resistant to tampering and counterfeiting. In
1983, the Social Security Act was amended to require that the card be made
of banknote paper and to the maximum extent practicable be a card that
cannot be counterfeited. Later that year, SSA introduced a card with
security features including tinted patterns that show when information is
erased, small multicolored discs randomly placed on the paper, and special
raised ink. Some members of Congress subsequently expressed disappointment
that these security features did not make the card significantly more
difficult to counterfeit and that employers could not easily determine the
card's authenticity for employment authorization purposes. In 1996,
Congress asked SSA to study and report on different methods for improving
the Social Security card and develop a prototype of a
counterfeit-resistant Social Security card. In the report, SSA provided
several options for enhancing the card, along with estimated costs, but
did not recommend options for implementation. In 1998, we reviewed SSA's
estimates and agreed that a mass issuance of a more secure card would cost
billions of dollars but concluded that alternative approaches to issuing
new cards may provide a more cost-effective approach to verifying
individuals' authorization to work.

6Pub. L. No. 99-603, (1986), 8 U.S.C.S: 1324a et seq.

Since the terrorist attacks of September 11, 2001, Congress has focused
attention on verifying identity and protecting American forms of
identification. In December 2004, Congress enacted the Intelligence Act,
which required improvements to birth certificates, drivers' licenses, and
Social Security cards. Under the act, minimum standards for birth
certificates are to be established, such as certifications by state or
local governments that they issued the document, the use of safety paper
or an alternative, the use of a seal representing the issuing government
entity and other features designed to prevent fraud. For the Social
Security card, the act required improvements to the process for issuing
the card and required that the Social Security Commissioner consult with
the Secretary of Homeland Security to form a task force for the purpose of
safeguarding Social Security cards and numbers. Within an 18-month time
frame following the December 2004 enactment of the act, the task force is
to establish

           o  standards for safeguarding Social Security cards from
           counterfeiting, tampering, alteration, and theft;

           o  requirements for verifying documents submitted for the issuance
           of replacement cards; and

           o  actions to increase enforcement against the fraudulent use or
           issuance of Social Security numbers and cards.

The SSA Commissioner is to provide for the implementation of such security
requirements by June 2006.

In 2005, Congress enacted the Real ID Act, which, among other things
amended the security requirements of the Intelligence Act for state
drivers' licenses.7 Under the Real ID Act, the Secretary of Homeland
Security must determine whether states meet certain minimum security
requirements for drivers' licenses and personal identification cards. The
law provides that, in order to be federally recognized, the state-issued
card must have certain physical security features designed to prevent
tampering, counterfeiting, or duplication, including a digital picture and
machine-readable technology. The Real ID Act also requires individuals to
provide evidence of their legal status to obtain a driver's license and
provide proof of their Social Security numbers so that states can verify
the information with SSA. Additionally, the law requires that states
verify individuals' immigration status with DHS. Ultimately, Real ID
prohibits federal agencies from accepting state-issued drivers' licenses
or identification cards as identity documents unless they are determined
to meet certain minimum security requirements.

 SSA Has Made Progress on Intelligence Act Provisions, but Slow Action to Form
         the Interagency Task Force May Limit Card Enhancement Efforts

SSA has made progress implementing the Intelligence Act requirements
enacted in December 2004. The agency implemented provisions for obtaining
replacement cards, verifying birth certificates of applicants under age 1,
and improving the application process of the Enumeration at Birth Program.
In addition, SSA has taken actions to include death indicators and
initiated action to include fraud indicators on Social Security records.
In the effort to safeguard the Social Security card and number, SSA did
not contact DHS until November 2005 to form an interagency task force, and
the task force did not meet until late January 2006. This allows the task
force less than 6 months to consider critical issues that affect card
enhancement options before the establishment of security standards in June
2006. In addition, SSA is required to provide for the implementation of
standards for safeguarding the card and number from counterfeiting,
tampering, alteration, and theft by the same date. Before convening the
task force, SSA made a preliminary decision to improve the current paper
card.

Replacement Cards Limited

The Intelligence Act requires that, generally, SSA limit the number of
replacement cards it issues to individuals to 3 annually and 10 over a
lifetime, and the act increased requirements for verifying the
authenticity of documents presented before issuing replacement cards.
SSA's policy prior to the Intelligence Act allowed individuals to obtain
as many as 52 replacement cards annually, generally, requiring only proof
of identity for U.S. citizens to receive the cards. GAO previously
reported on the potential for fraud with SSA's replacement card policy.
Our investigators were able to obtain 8 replacement cards in less than 6
weeks before SSA placed a fraud alert on the SSN accounts.8 In response to
the act, SSA reported that the agency had

7Pub. L. No. 109-13, Emergency Supplemental Appropriations Act for
Defense, the Global War on Terror, and Tsunami Relief, 2005, Title II,
(2005).

           o  modified its computer system to enable monitoring the number of
           cards issued to individuals;

           o  published interim final regulations on replacement cards in the
           Federal Register on December 16, 2005;

           o  issued operating instructions for SSA employees to use in
           processing claims and conducting the daily business of the agency;
           and

           o  provided training to staff on SSA's new policy on replacement
           cards.

Minimum Standards for Verifying Documents Established

The Intelligence Act requires that SSA establish minimum standards for
verifying documents or records that individuals present when applying for
original and replacement Social Security cards other than through the
Enumeration at Birth process. SSA reported that it had

           o  published operating instructions that describe the minimum
           standards for verifying all documents submitted for enumeration;

           o  created a new fact sheet for applicants explaining the
           Intelligence Act provisions and revised public information, such
           as brochures and pamphlets; and

           o  provided training to SSA personnel on the minimum standards for
           verifying all documents.

8GAO, Social Security Administration: Actions Needed to Strengthen
Processes for Issuing Social Security Numbers to Children, GAO-05-115
(Washington, D.C.: Jan. 31, 2005).

Birth Certificates for Card Applicants under Age 1 Independently Verified

The act required that SSA independently verify birth certificates that
individuals submit to establish eligibility for a Social Security number.
Prior to the act, SSA required verification of birth certificates for
individuals over age 1, but required only a visual inspection of birth
certificates for children under age 1 who were assigned SSNs outside the
Enumeration at Birth process. Both GAO and SSA's Office of the Inspector
General (OIG) identified the potential for fraud with the verification of
birth certificates because SSA personnel could not detect counterfeit
birth certificates by visual inspection, and because no verification of
documents with the issuers was required for replacement Social Security
cards. GAO investigators posing as parents of children under age 1 used
counterfeit birth certificates to get two SSNs for fictitious children. In
one instance, the investigators supplied the counterfeit documents in
person; in the other, they mailed the counterfeit documents. In both cases
SSA staff verified the counterfeit documents as valid and SSA issued the
SSNs and cards. SSA reported that upon enactment of the Intelligence Act,
the agency changed its policy for verifying birth certificates for
individuals under age 1. Specifically, SSA

           o  issued Program Operations Manual System requirements for
           independently verifying birth certificates, and

           o  provided training to SSA personnel on specific requirements for
           verifying birth certificates.

Progress Made on Enumeration at Birth Process

The Intelligence Act requires that SSA undertake to improve the
application process for assigning Social Security numbers to newborns. The
act requires that SSA improve the

           o  assignment of Social Security numbers to unnamed children,

           o  issuance of SSNs to prevent assigning more than one Social
           Security account to the same child, and

           o  system to prevent other opportunities for fraudulently
           obtaining a Social Security account number.

Prior GAO work showed that SSA did not have sufficient internal controls
in place to minimize fraudulent activities that could affect the
Enumeration at Birth data that SSA uses to issue SSNs and cards.
Additionally, the SSA OIG reported various vulnerabilities in the
Enumeration at Birth Program and suggested that SSA provide more
systematic oversight and management. As of our review, SSA reported that
the agency has made systems changes to improve the Enumeration at Birth
Program. For example, a more detailed check of the child's name will be
made to prevent assigning SSNs to "Baby Boy" or "Baby Girl," or to issue
two different SSNs to the same child by honoring the parents' request at
the hospital but then honoring a second request a short time later through
a field office with a claim of nonreceipt of the SSN through the hospital
or an urgent need for the SSN. SSA submitted a report to Congress
detailing these improvements in December 2005.

The act also required that SSA conduct a study to determine the options
for ensuring the integrity of the Enumeration at Birth Program.
Specifically, the report must include an examination of available methods
to reconcile hospital birth records with birth registrations submitted to
state agencies that submit data to SSA as part of the Enumeration at Birth
process.

SSA reported that it asked the Inspector General to conduct the required
study, and the Inspector General plans to deliver the study to Congress by
June 2006.

Work on Death Indicators Taken and Fraud Indicators Initiated

The Intelligence Act requires that SSA add death and fraud indicators to
the systems for verifying Social Security numbers so employers and state
agencies issuing drivers' licenses and identification cards can receive
accurate information when verifying the SSN. Death and fraud indicators
are "flags," or "alerts," that SSA would place on SSN accounts to warn
inquirers that certain SSN accounts belong to a deceased person or were
used for fraudulent purposes. SSA is required to add death indicators by
June 17, 2006, and fraud indicators by December 17, 2007. SSA reported
that the agency currently maintains death information in its records and
has added state death information to its verifications as of March 6,
2006. SSA reported that it has begun to discuss what steps are needed but
has not yet drafted guidance for handling fraud indicators.

SSA Has Moved Slowly to Convene the Interagency Task Force for Safeguarding the
Card

The Intelligence Act requires that SSA consult with DHS and form an
interagency task force to safeguard Social Security cards and numbers.
Under the act, the task force has 18 months to establish standards for
preventing counterfeiting, tampering, alteration, and theft. During the
first 12 months since enactment, SSA has conducted research on enhancement
options, come to a preliminary internal agreement on the features a newly
enhanced card might have, and discussed what type of publicity campaign is
needed to promote an enhanced paper Social Security card. However, SSA did
not consult with DHS about the formulation of an interagency task force
until November 2005, and the task force did not meet until late January
2006, allowing the task force less than 6 months before security standards
are to be established in June 2006. SSA is required to provide for
implementation of the new safeguards by the same date. Prior to consulting
with DHS on forming the interagency task force, SSA made a preliminary
decision to enhance security features for the paper card. According to
SSA, the agency wanted to have an approach to present to the task force
once it convened. Table 2 shows the timeline SSA has set for implementing
tasks related to card enhancement.

Table 2: Social Security Administration Timeline for Implementing Social
Security Card Enhancements

Intelligence Reform and Terrorism Prevention Act passed           12/17/04 
Task name                                                   Start   Finish 
Research and benchmarkinga                                 1/3/05  8/16/05 
SSA internal agreement on new security features for SSN                    
cards                                                     8/18/05 12/16/05
Develop publicity campaignb                               8/18/05 12/16/05 
Interagency task force agreement on new security                           
features                                                 12/19/05  3/17/06
Prepare new contract for SSN card                         3/20/06  6/16/06 
Provide SSA systems support for changes                   3/20/06  6/16/06 
Finalize SSA publicity campaign                           3/20/06  6/16/06 
Report to Congress                                        6/17/06  6/17/06 

Source: SSA.

aResearch and benchmarking were not completed as of February 3, 2006 to
allow for coordination with the Document Security Alliance regarding card
enhancement options.

bThe publicity campaign has been discussed but is not yet complete. SSA
noted that these timelines are internal guidelines with room built in to
allow for slippage, but the agency fully expects to meet the legislated
completion date of June 17, 2006.

SSA officials told us that they expect the interagency task force to
include representation from DHS and several other agencies. According to
SSA, the task force's first meeting in January 2006 addressed the
Intelligence Act requirement to establish standards for verifying
documents submitted to obtain replacement cards. SSA reported that the
task force will address other requirements of the Intelligence Act, such
as enhancements to the Social Security card in future meetings. While the
task force has broad latitude to address issues relative to the Social
Security card, information SSA and DHS provided at the time of our review
does not indicate that the task force will address the role of the card in
verifying employment eligibility. According to SSA, final agreements on
the new features to add to the card will be made based partly on results
from work being performed by the Document Security Alliance, a group of
experts on document security with representatives from industry and
government agencies. Figure 1 shows the task force membership and
structure as proposed by SSA.

Figure 1: Interagency Task Force Required by the Intelligence Act,
November 2005

 The Difficulty of Counterfeit-proofing the Card, the Role the Card Has in the
Employment Verification Process, and Improvements to Drivers' Licenses Are
                          Critical Issues to Consider

The Social Security card is a critical federal government document that is
used in daily American life, and understanding what is needed to protect
the card is essential to enhancement efforts. Critical issues to consider
include the difficulty of developing and maintaining a counterfeit-proof
card, the role the card has in the employment verification process, and
new requirements of state drivers' licenses and identification cards that
provide links to the card and immigration documents and could help improve
the employment verification process.

A Counterfeit-proof Social Security Card Is Difficult to Develop and Maintain

In the past 30 years the Social Security number and card have become
critical to daily functions in the United States, such as filing tax
returns, opening bank accounts, applying for credit, conducting consumer
transactions, and obtaining employment. As uses for the number and card
have grown, demand for counterfeit cards has risen. In testimony before
Congress, SSA's Assistant Deputy Commissioner for Disability and Income
Security Programs (Program Policy) stated that when the Social Security
program began, no special efforts were needed to prevent the Social
Security card from being counterfeited, but as the card's use expanded and
technology improved, counterfeiting became a concern. According to the
Assistant Deputy Commissioner, SSA has incorporated a number of security
features to make the card counterfeit-resistant since 1983, but the
expertise of counterfeiters and the wide availability of state-of-the-art
technology make it increasingly difficult to develop and maintain a
document that cannot be counterfeited.9 Table 3 describes four examples of
fraudulent Social Security card activity.

9Testimony of the 109th Congress, Social Security Testimony before
Congress, November 1, 2005, Statement of Frederick G. Streckewald,
Assistant Deputy Commissioner, Office of Disability and Income Security
Programs (Program Policy), before the House Committee on Ways and Means,
Subcommittee on Social Security.

Table 3: Examples of Fraudulent Social Security Card Activity

Document fraud: Law enforcement officials investigating an alleged case of 
document fraud in the state of Maryland in December 2005 expressed concern 
that technology has improved so much that it is difficult to identify      
counterfeit documents. These officials arrested an individual for          
allegedly selling a fake Social Security card and an immigration document  
(resident alien card) for about $250 to a law enforcement official posing  
as an undocumented immigrant. According to the law enforcement report, two 
passport-sized photographs were provided so that a resident alien card     
could be made, along with a Social Security card, both of which were ready 
in 3 days.                                                                 
Document fraud: In testimony before the House Committee on Ways and Means  
in November 2005, the Deputy Inspector General for SSA stated that         
investigators had apprehended an individual who used counterfeit           
immigration documents to obtain over 600 valid Social Security numbers to  
sell to undocumented immigrants at a price of $1,000 to $2,000. In         
addition, this person had multiple Social Security cards and photocopies   
of cards. Counterfeit Social Security cards and activities have also       
involved U.S. citizens.                                                    
Identity and mail fraud: The SSA Inspector General reported in August 2005 
that a university professor was indicted on 33 counts of mail fraud for    
posing as a parent and using students' personal information to obtain      
Social Security cards, credit cards, and birth certificates.a              
Identity and document fraud: The Deputy Inspector General testified that   
in August 2005, one individual was sentenced to 18 months' incarceration   
for submitting more than 200 applications for Social Security numbers for  
fictitious children using fraudulent birth certificates and other          
falsified documents. The individual used two identities, one of which      
belonged to a person who had been dead for a year.                         

Source:Montgomery County, Maryland Police Department and SSA Inspector
General.

aOffice of the Inspector General, Social Security Administration,
Universities' Use of Social Security Numbers as Student Identifiers in
Region VI, A-06-05-15100 (August 2005).

Although the card is now used as documentation for government and
nongovernment functions, the card was never intended as a personal
identification document and does not establish the person presenting the
card as the person whose name and SSN appear on the card. According to
SSA, while the card has some counterfeit-resistant features, it does not
contain information that would allow the card to be used as proof of
identity. In its 1997 Report to Congress on Options for Enhancing the
Social Security Card, SSA reported that

"The only way the Social Security card can, with certainty, assure that
the bearer of the card is the assigned number holder is if the number
holder's identifying information, picture, fingerprint, or biometric
identifier is on the card itself. Then, someone needing assurance the card
bearer is the assigned number holder could perform a visual comparison
with the number holder's picture or identifying information, or an
electronic comparison to a biometric identifier stored on the Social
Security card."

SSA reported that linking the number holder to the card would entail
collecting and maintaining biometric data, a step the agency reported
would be costly for the agency and complicated for the public. Although
the technology has advanced since the 1997 SSA report, the agency
maintains that the same principles of cost and complexity apply. The
ability to tie the card to the cardholder could assist SSA in reducing the
number of instances in which wages are not credited to the correct Social
Security account and assist DHS in its efforts to confirm the immigration
status of nonimmigrants.

The Card Is a Weak Link in the Employment Verification Process

The Social Security card is commonly presented as a document to prove
authorization to work. As part of the employment verification process, job
applicants can choose from a list of 27 documents that employers then use
to verify identity and employment eligibility. Employers are required to
certify on DHS's Form I-9 that they have examined the documents presented,
and that the documents appear genuine and relate to the person presenting
them. As shown in table 4, documents from three categories may be used to
establish identity and employment eligibility. See appendix II for Form
I-9.

Table 4: Acceptable Documents in the Employment Verification Process

            List A                  List B                   List C           
                                                                              
Documents that establish Documents that         Documents that establish   
both identity and        establish identity     employment eligibility     
employment eligibility                                                     
                            (a document from this  (a document from this      
(only one document from  category must be used  category must be used with 
this category needed)    with one from List C)  one from List B)           
(1) U.S. passport        (1) Driver's license   (1) U.S. Social Security   
                            or ID card issued by a card issued by SSA         
                            state or U.S.          
                            possession             
(2) Unexpired foreign    (2) ID card issued by  (2) Certification of birth 
passport                 federal, state, or     abroad issued by the State 
                            local governments      Department                 
(3) Permanent Resident   (3) School ID card     (3) Original or certified  
card or Alien            with a photograph      copy of a birth            
Registration Receipt                            certificate issued by a    
card with photograph                            state, county, etc.        
                                                   bearing an official seal   
(4) Unexpired Temporary  (4) Voter's            (4)Native American tribal  
Resident card            registration card      document                   
(5) Unexpired Employment (5) U.S. military card (5) U.S. citizen ID card   
Authorization card       or draft record        
(6) Unexpired reentry    (6) Military           (6) ID card for use of     
permit                   dependent's ID card    resident citizen in the    
                                                   United States              
(7) Unexpired refugee    (7) U.S. Coast Guard   (7) Unexpired employment   
travel document          Merchant Mariner's     authorization document     
                            card                   issued by DHS              
(8) Unexpired employment (8) Native American    
authorization document   tribal document        
issued by DHS with a                            
picture                                         
                            (9) Driver's license   
                            issued by a Canadian   
                            government authority   
                            (10) School record or  
                            report card            
                            (11) Clinic, doctor or 
                            hospital record        
                            (12) Day-care or       
                            nursery school record  

Source: Department of Homeland Security.

While the employment verification process relies on a variety of documents
to establish identity, the role of the Social Security card in proving
authority to work has limitations. Millions of existing cardholders have
not proven their employment eligibility status to SSA, because SSA did not
begin requiring identification documents from all persons until 1978.
According to SSA, at the inception of the Social Security program, all
SSNs were assigned and cards issued based solely on information provided
by the applicant. In 1971, SSA began requiring evidence of identity from
individuals age 55 and over who were applying for an original number and
Social Security card. From the first issuance of the Social Security
number and card until evidence of identity was first required, SSA issued
over 194 million SSNs and cards. SSA first required that noncitizens show
evidence of age, identity, and status in 1974, by which time SSA had
issued another 26 million original SSNs and cards. In his testimony, the
SSA Deputy Commissioner stated that in 1974, the agency began to annotate
its records to show the issuance of SSNs to noncitizens for nonwork
purposes because the agency was concerned that individuals might use SSNs
assigned for purposes other than work to obtain unauthorized employment.
Beginning in 1978, SSA required all SSN applicants to provide evidence of
age, identity, and United States citizenship or noncitizen status, by
which time SSA had issued about 253 million original SSNs and cards. In
1982 SSA began printing the legend, "NOT VALID For Employment," on the
cards of noncitizens not authorized to work.

To reduce the instances of fraudulent activity associated with documents
used in the employment verification process, both SSA and Homeland
Security offer employers voluntary electronic verification of information
on the Social Security card and immigration documents. However, in August
2005, GAO reported several weaknesses in the current employment
verification process.10 The wide array of documents permitted leaves the
employment verification process vulnerable to fraud. Various studies show
that document fraud (use of counterfeit documents) and identity fraud
(fraudulent use of valid documents or information belonging to others)
have made it difficult for employers to accurately verify individuals'
eligibility to work. In its 1997 report to Congress, the U.S. Commission
on Immigration Reform noted that the widespread availability of false
documents made it easy for unauthorized workers to obtain jobs in the
United States. Prior GAO work shows that the problems with document and
identity fraud undermine the employment verification process. For example,
in 1999 we reported that large numbers of unauthorized workers either
fraudulently used valid documents that belong to others or presented
counterfeit documents as evidence of employment eligibility.11 In 2004, we
reported that unauthorized workers were able to use false documents to
illegally gain entry to secure areas of critical infrastructure sites,
such as airports, nuclear power plants, and military bases. To improve the
employment verification process, DHS reported it is considering reducing
the number of acceptable documents permitted to verify employment
eligibility.

10 GAO-05-813 .

11GAO, Illegal Aliens: Significant Obstacles to Reducing Unauthorized
Alien Employment Exist, GAO/GGD-99-33 (Washington, D.C.: Apr. 2, 1999).

DHS has made worksite enforcement a relatively low priority, given the
other immigration enforcement programs that compete for DHS resources.
Since the terrorist attacks of September 11, 2001, DHS has focused its
investigative resources on national security, and worksite enforcement has
focused on identifying and removing unauthorized workers from critical
infrastructure sites such as airports and nuclear power plants. However,
fraudulent use of SSNs among immigrants remains a problem. In September
2005, the SSA Inspector General reported that some nonimmigrants may
remain in the United States and continue working without DHS
authorization,12 while others leave the country, and in their absence,
someone else may use these individuals' SSNs to obtain employment. Using a
universe of about 800,000 nonimmigrants that SSA enumerated in fiscal year
2000, the Inspector General estimated that about 32,000 nonimmigrants
continued working after their immigration status expired or someone else
may have used their SSNs to work after they left the country. 13

DHS has a voluntary "Basic Pilot" program where employers can choose to
verify employment eligibility electronically, but few employers
participate, and technological flaws hinder the program's effectiveness.
Most of the nation's approximately 5.6 million employer firms rely on
visual examination of documents individuals present, while about 5,500
employer firms signed up to participate in Basic Pilot as of March 2006.14
Basic Pilot enables employers to verify Social Security numbers with SSA
and work authorization and immigration status with DHS. Basic Pilot shows
promise for detecting document fraud, but if an unauthorized worker
presents valid documentation that belongs to another person who is
authorized to work, Basic Pilot may verify the individual as
work-authorized. If the use of Basic Pilot expands, some unresolved
problems, such as delays in data entry and timely verification, will need
to be resolved.

12A nonimmigrant is a foreign-born individual who is granted temporary
admission to the United States for a specific purpose, such as students
and temporary workers.

13Office of Inspector General, Social Security Administration, Impact of
Nonimmigrants Who Continue Working after Their Immigration Status Expires,
A-08-05-15073 (September 2005).

14This indicates the number of businesses that have signed memorandums of
understanding with DHS and is not indicative of the number of active
participants.

Real ID Act May Improve Links to the Card and Employment Eligibility
Determinations, but Limitations Exist

Improvements to state drivers' licenses and identification cards, as a
result of the Real ID Act, may help the government's ability to identify
individuals and establish better links to the Social Security card and
employment eligibility determinations. The Real ID Act will require that
the estimated 250 million state drivers' licenses and identification cards
have a biometric such as a digital photo; physical security features, such
as a special hologram, to prevent tampering, counterfeiting, or
duplication; and a common machine-readable technology. Before issuing
drivers' licenses and identification cards, states will be required to
verify the Social Security numbers and legal presence of applicants. While
licenses and identification cards are meant to prove identification, under
the new law states are not required to establish employment eligibility
and will not be checking worker status as they verify the Social Security
number with SSA and immigration documents with DHS. Beginning 3 years
after the date of enactment, a federal agency may not accept a state's
driver's license or identification card for any official purpose, unless
the state meets certain requirements. Table 5 shows the key requirements
of the Real ID Act.

Table 5: Requirements for State-Issued Drivers' Licenses or ID Cards under
the Real ID Act of 2005

Minimum issuance standards  Applicant must present evidence and have       
                               verified                                       
                                                                              
                                  o  Photo identification or nonphoto         
                                  identification with full legal name and     
                                  date of birth on the document               
                                  o  Date of birth                            
                                  o  Proof of valid SSN or verification that  
                                  the person is not eligible for one          
                                  o  Address of principal residence           
Minimum document            The driver's license must contain              
information standards                                                      
                                  o  Full legal name                          
                                  o  Date of birth                            
                                  o  Gender                                   
                                  o  Driver's license or identification       
                                  number                                      
                                  o  Digital photo of the person              
                                  o  Address of principal residence           
                                  o  Security features meant to prevent       
                                  counterfeiting, tampering, or duplication   
                                  o  Common machine-readable technology with  
                                  defined data elements                       
Evidence of lawful status   A state shall require that a person provide    
                               valid documentary evidence that the person     
                                                                              
                                  o  Is a citizen or national of the United   
                                  States                                      
                                  o  Is an alien lawfully admitted for        
                                  permanent or temporary residence in the     
                                  United States                               
                                  o  Has conditional permanent resident       
                                  status in the United States                 
                                  o  Has an approved application for asylum   
                                  in the United States or has entered into    
                                  the United States in refugee status         
                                  o  Has a pending application for asylum in  
                                  the United States                           
                                  o  Has a pending or approved application    
                                  for temporary protected status in the       
                                  United States                               
                                  o  Has approved deferred action status      
                                  o  Has a pending application for adjustment 
                                  of status to that of an alien lawfully      
                                  admitted for permanent residence in the     
                                  United States                               
                                  o  Has a valid, unexpired nonimmigrant visa 
                                  or nonimmigrant visa status for entry into  
                                  the United States                           
Temporary drivers' licenses Temporary drivers' licenses and identification 
and identification cards    cards will only be accepted by federal         
                               agencies if they                               
                                                                              
                                  o  Are valid only during the time in which  
                                  the individual is authorized to reside in   
                                  the United States or, if there is no        
                                  definite end to the period of authorized    
                                  stay, a period of 1 year                    
                                  o  Clearly display that the license has     
                                  been temporarily issued and plainly display 
                                  the expiration date                         
                                  o  With respect to a temporary driver's     
                                  license or temporary identification card,   
                                  may only be renewed upon presentation of    
                                  valid documentary evidence that the status  
                                  has been extended by the Department of      
                                  Homeland Security                           

Source: Real ID Act.

          A Range of Enhancement Options Exists, and Costs Would Vary

A range of options exists for enhancing the Social Security card, and
these options provide different levels of counterfeit protection and
capacity to verify employment eligibility. Options range from adding
counterfeit-resistant features to the paper card, adding machine-readable
features such as a magnetic stripe or bar code, and adding biometric
features such as photographs and fingerprints, to eliminating the card
entirely. Currently, the cost of providing a card to a cardholder is
approximately $25, and the cost of some of these options will be higher.15
The total cost of enhancing the card will be significantly affected by how
many people are issued new cards and the time frame for distribution.
Options for distribution include providing enhanced cards only to new
cardholders, reissuing cards to all of the 300 million estimated
cardholders, or staggering issuance by providing cards to new cardholders
and to individuals who change jobs. The options that we describe below are
not intended to be an all-inclusive listing of options available to
enhance the security of the card, but provide a framework of approaches
for doing so.

Options for Enhancing Cards

  Adding secure features to the paper card

There are a wide range of features that could be added to the current
paper card to make it more counterfeit-resistant. According to Government
Printing Office officials and other industry experts, these features could
include such improvements as printing a hidden image that appears when the
card is tilted to the light, changing the paper content of the card to
include fiber that reacts to certain chemicals, and incorporating various
security features currently used on currency, such as a security thread in
the paper. Government Printing Office officials and industry experts
report that these are relatively inexpensive changes that would help
protect the card by rendering obsolete many of the counterfeit techniques
currently used. Adopting these types of changes to the current card would
be the least disruptive to SSA operations and to cardholders.

  Adding machine--readable features

Adding machine--readable features such as a magnetic stripe or secure bar
code feature could offer some measure of security of the card, though some
experts question the value of this option. Machine--readable technology
varies in the amount and type of information that can be included on the
card. For example, a card with a magnetic stripe similar to those on
credit and debit cards may contain the information currently displayed on
the Social Security card plus the individual's work status. A secure bar
code can also store identifying information such as a photograph or
fingerprint. Much like the process to verify credit cards,
machine-readable technology combines the security of counterfeit-resistant
features on the card with features that can be read and verified by an
external device. Employers and SSA would rely on machines to read the
cards, thus adding another step to assess the cards' validity and protect
the cards from counterfeiting. See figure 2 for a possible SSN card
showing a magnetic stripe and a secure bar code.

15Based on fiscal year 2004 data.

Figure 2: Examples of Possible Social Security Card with Reverse Showing
Magnetic Stripe and Secure Bar Code

The main change to the card would be the introduction of machine- readable
technology. The primary advantage of machine--readable technology is that
it combines the security of counterfeit-resistant features with those that
can be read by an external device. The use of machine-readable features
could be useful as part of DHS's employment eligibility authorization
process. Current DHS guidelines state that an employer has to review
documents provided by new employees to prove their eligibility to work and
make a reasonable determination as to the validity of documents presented.
Use of machine-readable features would take the burden off employers to
make a determination that the card that is presented is valid. Due to the
large number of documents that can be presented, including the many
versions of the Social Security card, employers are often ill equipped to
determine if documents are valid. A secure card with machine-readable
features could also be used by SSA or other programs in determining the
validity of the card and eligibility for benefits.

Card technology experts have noted that certain machine-readable
technology offers little protection against counterfeiting. For example,
magnetic stripe technology is relatively easy to counterfeit with
inexpensive equipment that is widely available. Other industry experts
stated that even though the data included in a secure bar code may be
encrypted, or coded so that the data cannot be read by unauthorized
persons, the data may still be copied in its encrypted form and included
on a counterfeit card.

  Adding biometric features

A highly secure card could incorporate biometric security features to
effectively establish an individual's identity and backup systems to
authenticate an individual's eligibility for benefits or work status.
Biometric features cover a wide range of technologies that can be used to
verify a person's identity by measuring or analyzing his or her
characteristics. Some widely used and well-known biometric features
include fingerprints, which uses distinct ridges of the fingertips to
establish an individual's identity, and digital pictures, which are
commonly used in drivers' licenses. These digital pictures support facial
recognition, which electronically compares facial features in the digital
pictures with those of the individual. Biometric cards would be made of
plastic or other durable material and could incorporate smart card
technologies.16 See figure 3 for examples of biometrics that might be used
on a Social Security card's front or reverse sides depending on the card's
design.

16Smart cards are plastic devices about the size of a credit card that use
integrated circuit chips to store and process data.

Figure 3: Examples of Biometrics-Fingerprint, Facial Recognition, and
Photograph

Biometrics-enhanced cards could be supported by a central SSA database to
store the biometric information to verify the identity of an individual.
Storing identifying information on a central system would provide
additional protection if some of the physical security features used on
the card are able to be counterfeited. For example, many motor vehicle
administrations maintain central databases to compare stored photos with
those of individual renewing a driver's license. The ability to make
similar verifications to a centralized database could also establish if
individuals are eligible to work in the United States. The biometric
feature could also be stored only on the card, but some industry experts
indicate that data stored only on the card are far more vulnerable to
fraud than data in a centrally located database of identifying
information.17 However, experts also caution that a centralized database
has its own set of security concerns, which will require a risk assessment
to determine the most cost-effective solution for storing biometric data.
For example, techniques would need to be developed to ensure that
biometric information provided to the centralized database actually
represents the individual, and a method would need to be implemented to
handle the inevitable situations where the information in the central
database did not agree with information provided. Prior GAO work on
biometrics outlines the strengths and concerns raised with the use of
biometric technology.18

An additional consideration in using biometrics on the Social Security
card is determining when a biometric can first be captured from a
cardholder, as in the case of fingerprints or a picture or the need to
update the biometric in the case of a photograph. This may require SSA to
issue a temporary card through the Enumeration at Birth process and then
issue a card with a biometric at some other time, such as when the
individual reaches adulthood or enters the workforce. Depending on the
biometric selected, such as a digital picture, SSA would also need to
reissue the card at intervals to update these data.

A biometric Social Security card could raise general privacy concerns
about the card becoming a national identification card. A new Social
Security card with a biometric identifier issued to all number holders
could create a central database capable of identifying 300 million
individuals. A system that stores biometrics related to individuals'
identity may raise concerns about how the government would use and protect
the data. The Privacy Act of 1974 limits federal agencies' collection,
use, and disclosure of personal information, such as fingerprints and
photographs. While the act includes exemptions for law enforcement and
national security purposes, representatives of civil liberties groups and
privacy experts have expressed concerns regarding the adequacy of
protections for security, data sharing, identity theft, and other
identified uses of biometric data and the potential intrusiveness of such
an approach. Additional concerns focus on the ease of using biometrics and
their effect on the ability of the agency to complete its mission.

17American Association of Motor Vehicle Administrators officials have
pointed out that the combination of a number of security features raises
the overall level of security of a card or document.

18GAO, Information Security: Challenges in Using Biometrics, GAO-03-1137T
(Washington, D.C.: Sept. 9, 2003).

  Eliminating the card

Finally, another approach would be to eliminate Social Security cards
entirely and use other, more secure documents to prove employment
eligibility. Under a no Social Security card option, each person who is
assigned an SSN would receive a letter, not a card, with an SSN on it.
Like the current card, the letter would record the number assigned and
provide individuals with a written record of their number. Eliminating the
Social Security card would mean that the card itself would not be used as
documentation for obtaining government benefits, and the burden of finding
a means to secure the card would be removed. Changing from a card to a
letter would not require that SSA deviate from its current issuance
process,19 which would save SSA the time, inconvenience, and many of the
costs associated with issuing an enhanced card. Documentation of an
individual's identity could be tied to other documents such as a driver's
license and require some link between the SSN and drivers' licenses, which
are currently undergoing improvements, or other identity documents.

Factors Affecting the Cost of Card Options

The current cost of issuing an original or replacement Social Security
card is approximately $25. This includes approximately 4 cents for the
banknote paper card, and as table 6 shows, to enumerate an applicant, SSA
needs to interview applicants, verify documents such as birth certificates
with the agencies that issued them, and determine work eligibility status.
Including additional features on the card would increase the cost of the
card. For example, in 1997, SSA reported that the cost of the current
Social Security card document was 5 cents; a plastic card with security
features was 12 cents; a plastic card with a picture was 14 cents; and a
plastic card with a magnetic stripe was 22 cents. According to SSA, these
costs have likely decreased somewhat since its 1997 estimate. But this
estimate also showed that processing costs accounted for the bulk of
issuance costs for most options it considered. SSA's processing costs
would increase if additional features were included on the card. In 2004,
SSA estimated that the cost of obtaining a number holder's picture and
biometric identifier would add 5 minutes, or $3.50, to the cost of issuing
a card. Adding machine-readable or biometric features to the card would
also require additional equipment in SSA's approximately 1,300 field
offices, and employers and other users would also need equipment if they
were expected to read features on the card. Further, biometric features
would likely require cardholders to have their biometric information
updated at periodic intervals-greatly affecting the number of cards
cardholders would receive in their lifetime and long-term card issuance
costs.

19SSA currently has numerous means of establishing an individual's
identity. These include verifying the individual's identity by asking
open-ended questions and confirming this information with information
previously provided in SSA's records. If there are questions about the
individual's identity, SSA staff may request identification documents,
check telephone directories, or contact persons or organizations who may
know the individual. They are not constrained by any single document or
question.

Table 6: Factors that Affect Costs of Enhanced Card Options

                                         New         New    Periodic updates  
                         Determine   equipment at equipment    needed from    
                        employment    SSA field    at job   cardholder at SSA 
Card options        eligibilitya    offices      sites     field offices   
Unchanged paper           X                              
card                                                     
Machine-Readable          X            X           X     
                                                            
(paper or plastic)                                       
Biometric                 X            X           X             X         
No card-letter to         X                              
notify assigned SSN                                      

Source: GAO.

aThis includes interviewing applicants and verifying documents

Issuance Options Affect Cost

Specific costs for each card option are not yet available. However,
issuing 300 million enhanced cards at the current cost of approximately
$25 each is costly, but maintaining the current method of issuing cards
and permitting older versions of cards to remain valid would do little to
stem counterfeiting or help employers determine whether applicants are
eligible to work. Permitting older versions is cost-effective for SSA,
since new cards have to be issued only to new applicants and people
needing replacement cards. About 17 million new and replacement cards are
issued annually. Table 7 shows three card issuance options, including the
number of cardholders requiring new cards.

Table 7: Card Issuance Options

                                                      Document used to prove
                                                      employment eligibility
                        Cards issued in the initial  Old cards Only new cards 
Issuance options                       12 months    valid       valid      
Current issuance                                      X     
process                              18 milliona            
Mass issuance                        300 million                  X        
Staggered issuance                   45 millionb                  X        

Source: GAO analysis of SSA data.

aTotal rounded to next million.

bThis figure represents the approximately 34 million people who SSA
estimates change jobs annually, 5.4 million original Social Security cards
issued annually, and SSA's estimate of 6 million individuals who would
request replacement cards under this option.

  Mass issuance

While mass reissuance of Social Security cards to all 300 million Social
Security number holders would ensure a more effective tool for
establishing employment eligibility, mass issuance could cost billions of
dollars. Number holders would need to be notified through costly mass
mailings that they would need to come to an SSA field office with
appropriate documentation to obtain their new card, and field offices
would need to be staffed and equipped to verify the identity of the number
holders and issue the cards. To help ease the strain on SSA field offices
and resources, costs for a mass issuance could be phased in over several
years.

  Staggered issuance

Staggering issuance of an enhanced Social Security card to new hires or
individuals who change jobs could help increase the likelihood that the
card is a valid document in the worker verification process and help
reduce the cost of a mass issuance. Under this issuance option, only an
enhanced card would be permitted for determining employment eligibility.
As a result, the 34 million workers who change jobs each year would need
to obtain an enhanced card. In addition, SSA issues approximately 5
million cards to new cardholders annually. Further, SSA has estimated that
this option would include about half, or 6 million, of the replacement
cards issued annually. Therefore, staggering issuance to job changers and
new cardholders would result in a total of about 45 million enhanced cards
issued during the first year of an enhanced card issuance.

                                  Conclusions

Congress has long recognized that the Social Security card is vulnerable
to misuse and has considered various approaches to minimizing this
vulnerability and securing the card against counterfeiting. However, with
50 valid versions, many of which lack any counterfeit protections, the
card is difficult to counterfeit-proof completely, making it an element in
identity theft and benefit program fraud, as well as an ineffective tool
in verifying employment authorization. We recognize that the Intelligence
Reform and Terrorism Prevention Act does not, specifically, require SSA to
establish safeguards for the card for the purposes of employment
eligibility, but the act intends for SSA to establish standards for
safeguarding the card from fraudulent use. In doing so, SSA is thus far
considering card protection solely within the context of the Social
Security program; the agency is not currently planning to address card
protection as part of the broader question of the card's role in
employment verification or the potential impact of other identification
advances such as the new state driver's license requirements on the use of
the card.

While DHS is represented on the SSA-led task force to address card
protection, the task force has been convened late in SSA's card
enhancement process, only a few months before SSA must provide for
implementing new card safeguards. This approach allows little time to
involve DHS in addressing the scope of critical issues affecting the role
of the card. Yet DHS's ongoing reevaluation of which documentation
represents acceptable proof of employment authorization is clearly
relevant to the card's role and the types of security elements that might
be warranted. It is important that the card's role in the employment
eligibility documentation process not be overlooked in SSA's work on
enhancements. Although consideration of this issue may not be specified in
law, broader thinking about the card's use and security could mitigate the
need to revisit card enhancement issues in the future.

                      Recommendation for Executive Action

As the SSA-led task force develops ways to protect the Social Security
card, it is important that the card meets the needs of DHS in the
employment verification process; therefore, we recommend that

           o  the Secretary of Homeland Security and the Commissioner of
           Social Security work together to resolve the weaknesses of the
           Social Security card in proving employment eligibility.
           Specifically, they should consider the millions of cards that do
           not prove employment eligibility, the inability to tie the card to
           the cardholder, flaws in the voluntary employment verification
           system, improvements to identification cards by the Real ID Act,
           and the current ease of counterfeiting the card.

                                Agency Comments

The Department of Homeland Security and the Social Security Administration
provided comments on a draft of this report.

In its response, DHS agreed that much could be done on an interagency
basis to improve the integrity of Social Security cards and numbers, as
required by the Intelligence Reform and Terrorism Prevention Act of 2004.
In addition, DHS agreed with SSA's decision to link the role of the card
with verifying employment eligibility later in the task force's
deliberative process. DHS stated that determining what to do to make the
card more secure, or eliminating the card altogether, appears to be the
appropriate task at this stage and DHS will continue to work with SSA
through the interagency task force. DHS's comments are reprinted in
appendix III. We also received technical comments, which we incorporated
where appropriate.

In SSA's response to our recommendation, SSA agreed in part, although it
stated that some aspects of the recommendation are outside the scope of
what Congress provided in the Intelligence Act. But otherwise SSA is
continuing to work with DHS on issues related to employment eligibility
and verification through the Basic Pilot program. While we assessed SSA's
implementation of the Intelligence Act provisions, we also studied the
role of the Social Security card and number in the context of employment
verification. We recognize that the Intelligence Act does not specifically
state that the task force is to establish safeguards for the card for the
purposes of employment eligibility. However, the act was broadly written
and provides sufficient authority to address such issues, given the act's
requirement to consult with DHS to form an interagency task force. Our
work showed major flaws with the Social Security card's role in the
employment verification process, which raises concern when SSA did not
involve DHS early enough in the process to fully consider its input to
card enhancement decisions. That is why we recommended that SSA and DHS
work together more closely to resolve the weaknesses of the Social
Security card in proving employment eligibility.

SSA states that the Intelligence Act requires SSA to have a plan for
implementation by June 2006 and that the agency is on target to develop a
plan for implementation by June 2006. While developing a plan for
implementation is certainly consistent with the Intelligence Act's
mandate, we do not view the Commissioner's responsibilities under the law
to be limited solely to developing a plan. Specifically, the Intelligence
Act requires that "Not later than 18 months after the date of enactment of
this Act, the task force shall establish, and the Commissioner shall
provide for the implementation of, security requirements,
including-standards for safeguarding social security cards from
counterfeiting, tampering, alteration, and theft."

SSA further notes that our report has various references to SSA moving
slowly and is not convening the task force until a time so late in the
process that successful implementation would be nearly impossible. We
believe our report accurately characterizes SSA's actions to date. The
Intelligence Act requires that SSA consult with DHS and form an
interagency task force to establish standards to better protect the SSN
and card. Instead of having the task force direct efforts to establish
safeguards for the SSN and card, SSA studied card enhancement options for
nearly 1 year and made a preliminary decision without task force input. By
the time SSA convened the task force, the group had less than 6 months to
study and establish standards for safeguarding the card.

SSA stated that current law requires that the card be made of banknote
paper, and as a result, the task force was technically limited to
improvements to the paper card. We believe that SSA and the task force, as
stewards of the Social Security card, have a responsibility to ensure that
the most appropriate enhancements to the card are considered. Although the
law requires that the card be made of banknote paper, the Intelligence Act
does not prohibit SSA or the task force from recommending legislative
changes to better prevent tampering, alteration, and counterfeiting.

SSA characterized the report as having an overarching theme that suggests
the use of an enhanced card would address weaknesses in employment
eligibility and enforcement, which SSA cites as beyond the scope of its
mission and more in line with DHS's primary missions. SSA states that
attempting to make the card meet a purpose for which it was not crafted
would deflect valuable resources from the Social Security program.
According to SSA, the report should make the point that a new, more secure
card tailored to proving employment eligibility would do little good if
not accompanied by other significant changes in the workplace enforcement
arena. SSA stated that to expend considerable resources to develop a card
to confirm employment eligibility that is used by a few employers would
seem an injudicious use of government resources. We agree that these are
critical issues to consider.

SSA also noted that because the Real ID Act requires states to use a DHS
verification system for noncitizens, it would be an easy next step to
reflect work authorization on drivers' licenses if Congress wanted to do
so. We believe that SSA's suggestion for modifications to the Real ID Act
requirements for drivers' licenses and identification cards is important
to the broader discussion on safeguards and represents yet another example
of a critical issue that DHS and SSA should consider in the deliberation
on card enhancements. SSA states that our claim that SSA is not planning
to address card protection as part of employment verification or the
potential impact of changes required by the Real ID Act to drivers'
licenses is not true. SSA stated that it is working with DHS and the
American Association of Motor Vehicle Administrators on matters of joint
interest. We are encouraged by SSA's comments that the agency is working
with DHS and the American Association of Motor Vehicle Administrators.
However, we have asked SSA and DHS to provide information on the task
force initiative but they have not provided the information we requested.

SSA indicated that it found our report title misleading, stating that the
majority of the report focuses on one purpose of enhancement-employment
eligibility verification. We disagree; our report title accurately
reflects the need for SSA to coordinate with DHS in its card enhancement
efforts and our recommendation that the agencies do so. Besides employment
eligibility, our report describes SSA's efforts to implement the
Intelligence Act and outlines options for enhancing the Social Security
card.

Finally, because our report is concerned with counterfeiting, SSA stated
that it would be prudent to protect its content by limiting distribution.
We disagree. While our report describes examples involving counterfeit
cards, the information in our report is readily available publicly in
prior reports published by SSA and, most recently, in a November 2005
testimony by an SSA official before the House Committee on Ways and Means,
Subcommittee on Social Security. However, we have made changes to some
language in the report to address SSA's concerns. SSA's comments are
reprinted in appendix IV. SSA also provided technical comments, which we
incorporated where appropriate.

We are sending copies of this report to the Secretary of Homeland Security
and the Commissioner of the Social Security Administration and other
interested parties. Copies will also be made available to others upon
request. In addition, the report will be available at no charge on GAO's
Web site at http://www.gao.gov

Please contact me at (202) 512-7215 or [email protected] if you or your
staff have any questions about this report. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff that made major contributions to this
report are listed in appendix V.

Sincerely yours,

Barbara D. Bovbjerg Director, Education, Workforce, and Income Security
Issues

Appendix I: Scope and Methodology Appendix I: Scope and Methodology

The Chairman of the of the House Committee on the Judiciary asked us to
review the Social Security Administration's (SSA) efforts to implement
provisions of the Intelligence Reform and Terrorism Prevention Act of 2004
for safeguarding the Social Security number (SSN) and enhancing the Social
Security card. The Chairman also asked that we identify key issues to be
considered before enhancing the Social Security card and that we outline
the range of options available to SSA for enhancing Social Security cards.

To address the Chairman's request, we met with officials from SSA
headquarters in Baltimore, Maryland, to review the agency's progress in
implementing provisions of the Intelligence Act. We reviewed key
initiatives planned and undertaken to strengthen SSA's enumeration
processes and SSA's plans for enhancing the Social Security card. We also
reviewed SSA's schedule for implementing the card enhancement provision of
the act and documented SSA's progress in meeting other provisions
contained in the legislation. In order to gain an understanding of the
policies, procedures, and issues related to the current employment
verification process, we met with officials from the Department of
Homeland Security (DHS) in Washington, D.C. We discussed the current Form
I-9 procedures and the role of employers in reviewing employment
eligibility documents, as well as DHS's Basic Pilot system used to
determine the employment eligibility of certain prospective employees.

To identify key issues to be considered before enhancing the Social
Security card, we consulted the GAO body of work on the integrity of the
SSN, our work on immigration enforcement and problems reported in the
employment verification process, and work the SSA Office of the Inspector
General and selected law enforcement agencies had performed in these
areas. We contacted law enforcement officials involved in an alleged
document fraud case in Montgomery County, Maryland. We examined concerns
raised regarding the integrity of the SSN and card with respect to
counterfeiting, and reported document and identity fraud with the
requirements of the employment verification process. We also reviewed SSA
documents including agency testimonies before Congress and the 1997 SSA
report entitled Social Security Administration: Report To Congress On
Options for Enhancing the Social Security Card to document flaws in the
card and its ability to serve as proof of employment eligibility. We
studied the new federal legislative requirements for states' drivers'
licenses and identification cards included in the Real ID Act. We
contacted DHS, the American Association of Motor Vehicle Administrators in
Arlington, Virginia, and state motor vehicle administrations in Chicago,
Illinois; Charleston, West Virginia; and Cheyenne, Wyoming, to discuss
security features used in drivers' licenses and the implication of changes
to drivers' licenses as a result of the Real ID Act. We selected these
three states because they used various security features in their driver's
licensing or identification processes such as fingerprinting, advanced
optical printing and inks, or holograms and other features, which already
meet stated or anticipated requirements of the Real ID Act.

To identify the range of options available to SSA for enhancing the card,
we researched and analyzed technical literature and identified various
technology experts and industry associations. We held discussions with
technology experts in the metropolitan Washington, D.C., area at the
National Institute of Standards and Technology, International Biometrics
Industry Association, AC Technology, Mitretek Systems, and the Smart Card
Alliance to discuss the range of card options and available security
features, their feasibility for use on the Social Security card, and
privacy and other concerns. Through these discussions we developed a
framework of options available to enhance the security of the card.

Because the current legislation governing the Social Security card
requires that the card be made of banknote paper, we also obtained
information on card improvements suitable to a paper format. We met with
officials from the Government Printing Office, in Washington, D.C., who
administer the contract for printing Social Security cards and Banknote
Corporation of America in Browns Summit, North Carolina, the contractor
that prints Social Security cards, to discuss advances in security
printing techniques.

We reviewed identification initiatives using biometrics at the United
States Visitor and Immigrant Status Indicator Technology program and the
Transportation Security Administration Registered Traveler program in DHS
in Washington, D.C. Finally, we met with employer association groups
identified by the U.S. Chamber of Commerce in Washington, D.C., to discuss
the impact of potential changes to the Social Security card on the
business community.

We performed our work between April 2005 and January 2006 in accordance
with generally accepted government auditing standards.

Appendix II: Department of Homeland Security Form I-9 Appendix II:
Department of Homeland Security Form I-9

Note: While DHS has removed the Certificate of United States Citizenship
and Certification of Naturalization as acceptable List A documents that
establish both identity and employment eligibility, it has not updated the
Form I-9.

Appendix III: Comments from the Department of Homeland Security Appendix
III: Comments from the Department of Homeland Security

Appendix IV: Comments from the Social Security Administration Appendix IV:
Comments from the Social Security Administration

Appendix V: A Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Barbara D. Bovbjerg (202) 512-7215 or [email protected]

Staff Acknowledgments

In addition to the contact named above, Blake Ainsworth, Assistant
Director; Daniel Bertoni, Assistant Director; Jacqueline Harpp; Jeff
Bernstein; Jeremie Greer; Roger Thomas; and Tovah Rom made key
contributions to this report.

Related GAO Products Related GAO Products

Immigration Enforcement: Weaknesses Hinder Employment Verification and
Worksite Enforcement Efforts. GAO-05-813 . Washington, D.C.: August 31,
2005.

Aviation Security: Transportation Security Administration Did Not Fully
Disclose Uses of Personal Information during Secure Flight Program Testing
in Initial Privacy Notices, but Has Recently Taken Steps to More Fully
Inform the Public. GAO-05-864R . Washington, D.C.: July 22, 2005.

Immigration Enforcement: Preliminary Observations on Employment
Verification and Worksite Enforcement Efforts. GAO-05-822T . Washington,
D.C.: June 21, 2005.

Social Security: Better Coordination among Federal Agencies Could Reduce
Unidentified Earnings Reports. GAO-05-154 . Washington, D.C.: February 4,
2005.

Social Security Administration: Actions Needed to Strengthen Processes for
Issuing Social Security Numbers to Children. GAO-05-115 . Washington,
D.C.: January 31, 2005.

Electronic Government: Federal Agencies Continue to Invest in Smart Card
Technology. GAO-04-948 . Washington, D.C. September 8, 2004.

Social Security Administration: Actions Taken to Strengthen Procedures for
Issuing Social Security Numbers to Noncitizens, but Some Weaknesses
Remain. GAO-04-12 . Washington, D.C.: October 15, 2003.

Social Security Numbers: Improved SSN Verification and Exchange of States'
Driver Records Would Enhance Identity Verification. GAO-03-920 .
Washington, D.C.: September 15, 2003.

Electronic Government: Progress in Promoting Adoption of Smart Card
Technology. GAO-03-144 . Washington, D.C.: January 3, 2003.

Technology Assessment: Using Biometrics for Border Security. GAO-03-174 .
Washington, D.C.: November 15, 2002.

Social Security Numbers: Government Benefits from SSN Use but Could
Provide Better Safeguards. GAO-02-352 . Washington, D.C.: May 31, 2002.

Social Security: Government and Commercial Use of the Social Security
Number Is Widespread. GAO/HEHS-99-28 . Washington, D.C.: February 16, 999.

Social Security: Mass Issuance of Counterfeit-Resistant Cards Expensive,
but Alternatives Exist. GAO/HEHS-98-170 . Washington, D.C.: August 20,
1998.

Immigration Control: A New Role for the Social Security Card. GAO/HRD-88-4
. Washington, D.C.: March 16, 1988.

(130458)

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Highlights of GAO-06-303 , a report to the Chairman, Committee on the
Judiciary, House of Representatives

March 2006

SOCIAL SECURITY ADMINISTRATION

Improved Agency Coordination Needed for Social Security Card Enhancement
Efforts

The Social Security Administration (SSA) has issued more than 430 million
Social Security numbers (SSN) and cards since the Social Security program
began in 1935, of which an estimated 300 million belong to living number
holders. SSNs have a key role in verifying individuals' authorization to
work in the United States, but SSN cards are also vulnerable to theft and
counterfeiting. The Intelligence Reform and Terrorism Prevention Act of
2004 requires that SSA consult with the Department of Homeland Security
(DHS), form a task force, establish standards for safeguarding the SSN and
card, and provide for implementation by June 2006. Concerns about
unauthorized workers and the use of counterfeit documents led the Chairman
of the House Judiciary Committee to ask that GAO (1) review SSA's progress
to safeguard the SSN and enhance the card as required under the
Intelligence Act, (2) identify key issues to be considered before
enhancing the card, and (3) outline the range of options available to SSA
for enhancing the card.

What GAO Recommends

As the SSA-led task force works to protect the Social Security card, GAO
recommends that DHS and SSA work together to resolve the card's weaknesses
in proving employment eligibility. DHS agreed but SSA agreed in part,
stating that aspects of the recommendation are beyond the Intelligence Act
scope.

SSA has implemented several provisions of the Intelligence Act intended to
help safeguard the SSN and card, but slow action to form the interagency
task force may limit card enhancement efforts. SSA has implemented
measures to limit the number of replacement cards, verify birth
certificates for applicants under age 1, and improve the Enumeration at
Birth process. SSA has taken action to include death indicators and
initiated work on fraud indicators for Social Security accounts in its
database. SSA set specific tasks and timelines to address card enhancement
options and made a preliminary decision to improve the current paper card
and issue the improved cards only to new card applicants. Although the
card plays a significant role in verifying individuals' authorization to
work, SSA did not consult DHS about these initial tasks or the formation
of the interagency task force until November 2005 and did not convene the
task force until late January 2006. This allows less than 6 months for the
task force to consider critical issues that affect card enhancements
before establishing new safeguards.

The difficulty of counterfeit-proofing the card, the role the card has in
determining employment eligibility, and ongoing enhancements to state
drivers' licenses and identification cards are critical issues to consider
before enhancing the Social Security card. Counterfeit protections were
first added in 1983 but older versions of the card remain valid. Millions
of older cards never established employment eligibility because SSA did
not require that everyone present evidence of age, identity, or
citizenship status until 1978. Prior GAO work shows that the employment
verification process is jeopardized by document and identity fraud, the
wide array of documents that can be used, weak worksite enforcement, and
flaws in the voluntary electronic verification system. DHS is currently
considering reducing the number of acceptable documents used to verify
employment eligibility. Changes to drivers' licenses and identification
cards under the Real ID Act will improve verification of identity in the
employment process, since states must verify the SSN and legal presence
upon application. However, states are not required to check or note
employment eligibility.

Once these critical issues are considered, a variety of options exist for
enhancing the Social Security card, ranging from enhancing the paper card,
to adding machine-readable or biometric features such as photographs and
fingerprints, to eliminating the card entirely. Additionally, the costs of
implementing each option will vary. Each option provides different
alternatives for improving the ability to verify employment eligibility.
The type of card and distribution method chosen will have a significant
effect on costs and the agency's workload. For example, if cards require a
fingerprint or photograph, additional infrastructure will be required to
obtain these features; reissuing new cards to the estimated 300 million
living cardholders or staggering issuance to certain groups, such as those
who change jobs, would require a different investment of resources.
However, decisions about the card's role will be crucial in determining
costs.
*** End of document. ***