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Hearing of the House Committee on Ways and Means Subject: Social Security Number Theft

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Hearing of the House Committee on Ways and Means Subject: Social Security Number Theft

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REP. RON PAUL (R-TX): Thank you, Mr. Chairman. I would like permission to insert my printed statement.

REP. SHAW: Without objection, the full statement of all the witnesses will be entered in the record.

REP. PAUL: Along with a statement from the Liberty Study Committee, unanimous consent to put that in the record as well.

I too am grateful that you're holding these hearings because I think privacy is a very important issue and that we are going to hear more and more of it. I think it came to the attention of the public and to many in our regulatory bodies when "know-your-customer" regulations were proposed a year or so ago. And with a little bit of encouragement, there were over 500,000 comments sent to the Federal Reserve and the FDIC because these were regulations that were way over-stepping and ignoring the privacy of the individual.

I take a little different approach to the issue of privacy than others, but I think that there is a common thread among us that the solution is going to be found somewhere in dealing with the social security number, and for that reason, I am encouraged.

In 1974, the Privacy Act was written to combat some of the things the Bank Secrecy Act did in 1970. The Privacy Act was designed to say you cannot use the social security number as an identifier. But then, like so often in our legislation, later on in the bill it said that Congress can make use of the social security number any time they want; and we certainly have been doing that since then, and I think that is where the serious problem is.

But what I disagree with some of my friends who will write more legislation, I think there's a certain part of privacy that should be dealt with in the marketplace. For instance, I don't believe that Congress should write a law compelling the Sierra Club and the ACLU to deal with their memberships and have them fill out a form and get permission before they can rent lists or do anything because the more information they collect, the more likely it is that information will go to the government and then abused by possibly their political enemies. So I'm not in favor of more regulation. For instance, the bank bill that we passed last year said that the bank would have to ask questions about privacy -- again, accumulation of more material.

The real problem I see is the social security number -- the universal identifier. It is true. In the old days, medical privacy was taken care of much better, but now that we have government- mandated healthcare programs and health management, it's convenient for government to be more efficient. But the question is do we want to waive it. Can you always argue the case for efficient government and at the same time protect privacy? I think there's a conflict there, but our goal should be the privacy. The privacy should override the efficiency of government, and I think that sometimes is where we slip on this. And just providing new rules I think can be very damaging to us in that we shouldn't just ask these organizations to provide more forms to fill out because that invites abuse.

My bill, H.R. 220, addresses this, and this is where I'm hoping more of us can come together. And it does more or less state what the law in 1974 states, but it has the force of law that you cannot use the social security number as a universal identifier. It wasn't intended. We never even used social security numbers on our tax forms in the early 1960s, and there's no reason that we can't pass something like this.

If we're concerned about identity theft, the best thing we can do for those who steal identities is to have all our information brought together by a universal identifier. So the most important thing that we could do to stop identity theft is to make sure that there's a law on the books, that we live by it and that we do not have a universal identifier. It will be, and is, the social security number. It is universal.

I've delivered babies in my professional life; and it is true, in the last several years, we were required. Everybody was getting social security numbers before the baby left the hospital. Everybody wants to know everything about everything. And the most important way they accumulate this information and can find out information on us is the social security number.

So if it makes government a little less efficient, I think that might have to come about. I do not believe you can demand the efficiency that some people would like on government programs, at the same time say that we will protect our privacy. There will have to be a choice. Of course, my choice is for privacy, and my choice, of course, would be to pass H.R. 220, and there could be no universal identifier for any of our programs. And I thank the chairman.

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REP. SHAW: Okay. I thank you for that.

My next question is directed to Mr. Paul.

The American Association of Motor Vehicle Administrators will testify later that your bill, H.R. 220, will negatively impact on the ability of states to combat fraud and ensure public safety.

Would you like to respond to that criticism?

REP. PAUL: Well, I think the opposite would be true if you're interested in stopping the fraud of identity theft. Since the social security number being used as the universal identifier enhances the identity theft, I would say we would go a long way to stopping that.

I guess what they're referring to is the possibility of putting the social security number on our drivers licenses. That has been started, and that, of course, is what the individuals who like the national I.D. card would like. And even though I don't happen to believe it would impede the ability to combat fraud because it would stop the identity theft, I would be quite willing to say, even if there was the slightest benefit, it's still so dangerous to use a universal identifier, that our freedoms and our liberties and our privacies--I mean, if we had armed guards every place, of course, there may be less fraud and less theft, but we would be living in a police state; so there's an extreme there.

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REP. PAUL: And, of course, I think that's very important that states not use these numbers for the sale of state information. But my bill I think would go a long way to stopping this kind of a problem because it says that you can't use the social security number for anything other than to identify your social security account. So it doesn't deal with the sale so much as it deals with trying to prevent the set-up.

So when we talk about commercial interest, it's the fact that we have, just like our voting card--I mean, we're lackadaisical about it, and we accept it. The same way with corporations. They use it as a convenience. It's convenience for corporations, it's convenience for everybody. And my bill says you can't use it in any other government agency. We can't universalize it and require it. Certainly, we would never be able to write the proposed law that says the states will use the social security number and have it universal as a universal I.D. card.

So this is just the introduction of the heavy hand of government monitoring us. Therefore, even if there can be a slight justification, I don't think it should be accepted. I don't believe that is the case because I think it would be a tremendous benefit to stop the identity theft.

REP. TANNER: Am I correct then stating that your bill deals more with the gathering of the information, and Jerry's bill deals more with the dissemination?

REP. PAUL: I think so.

REP. TANNER: Is there a way to bring those two together? Because it seems to me both have appeal.

REP. PAUL: I think his problem would be lessened if my bill were passed, in that there would be no accumulation, and they would be less likely to have information to sell.

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REP. HAYWORTH: Yes, indeed. I concur. Thank you.

Now, I turn to my friend, Dr. Paul, from Texas.

Talking about the jurisdiction being shared, your bill has also been referred to the Committee on Government Reform. And I'd ask the same question. Have you got a reaction from the committee and has there been any action planned or taken by the Committee on Government Reform?

REP. PAUL: Well, I think Government Reform, if I'm not mistaken, has some hearings scheduled next week on it.

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