It isn't just Social Security benefits that Americans are worried about - it's the Social Security number itself. The widespread misuse of Social Security numbers is a growing political issue.
The inspector general of the Social Security Administration, John G. Huse Jr., testified on May 22 before a House Ways and Means subcommittee. His frank statement is a wake-up call to Americans who value their freedom from other people monitoring our daily activities and from criminals who steal our money, our credit and even our identity.
Huse called misuse of Social Security numbers "a national crisis," and he pleaded that the time has come to put the Social Security number "back into its box." Since the government created the Social Security number and permitted it to assume such great power, he said, "it's the government's job to control it."
When Social Security was created in 1935, the Social Security number's sole purpose was to track the earnings of employed Americans so their wages would be properly credited, and we were promised it would never be used for anything else. Chalk that up to another promise broken by government; the Social Security number has become a de facto personal identifier.
The temptation to use Social Security numbers for other purposes was apparently irresistible. The Department of Defense uses them for armed forces personnel and draft registration, and the Internal Revenue Service requires them for income tax returns and for our bank deposits to make sure all our income is declared.
Social Security numbers are used by federal, state and local governments for everything from food stamps to drivers' licenses to marriage licenses to water and sewer bills. Huse warns that this is "a convenience that we can no longer afford."
He thanked Congress for enactment of the Identity Theft and Assumption Deterrence Act of 1998, which enables the feds to prosecute those who misappropriate someone else's identity. It's important to punish identity theft, but Huse says it is more critical to prevent it.
The problem is the everyday and pervasive use of Social Security numbers by those other than the Social Security Administration. This includes not only government agencies but schools, colleges, hospitals, banks, insurance companies, credit card companies and merchants, even for such transactions as joining a health club or buying a refrigerator.
Subcommittee Chairman Clay Shaw remarked, "More and more people are being told their Social Security number is required for reasons that just don't make sense, like renting a video, making funeral arrangements or even picking up Girl Scout cookies."
Huse called for legislation that limits the use of Social Security numbers to "purposes that benefit the holder of the Social Security number." It should not be used for the benefit of "the company that sells an appliance or the state that issues a driver's license."
Huse said that last year his office received 46,840 allegations of Social Security number misuse and another 43,456 of allegations of program fraud that includes Social Security number misuse. Identity thieves used to steal credit card numbers one by one from mailboxes and restaurant receipts. Now they steal wholesale on the Internet. A thief can buy someone's Social Security number on the Internet for $39.95, use it within minutes to get a credit card, then buy big-ticket items such as cars and jewelry.
Commercial online data brokers collect and sell personal information for legitimate purposes, and their customers include banks, insurance companies, journalists and law enforcement agencies. The data come from public records or information provided by consumers on credit applications.
But when sold online, the brokers have no way of checking the identity or legitimacy of buyers. The majority of applications for credit are made over the phone with the Social Security number as the only identifier.
The Ways and Means Committee subcommittee heard sad cases of individuals who were victims of identity theft. One criminal got $36,000 worth of goods in a three-month period, impacting the victim's ability to refinance her home, get a line of credit at her bank, and get cellular phone service, not to speak of the countless hours spent in phone calls talking with creditors and police.
A restaurant busboy named Abraham Abdallah was able to penetrate the banking and brokerage accounts of several very wealthy and prominent Americans through the use of online providers and Internet-based databases. When arrested, he was on the verge of stealing millions of dollars.
The states are beginning to react to public resentment against governmental misuse of Social Security numbers. The Nevada state Legislature recently passed a resolution calling on Congress to repeal the law that requires each state to record the Social Security number on all applications for a driver's license; and the Michigan secretary of state has filed suit to enjoin the enforcement of this law.
The best solution to the privacy crisis caused by the universal use of Social Security numbers by government and business comes from Rep. Ron Paul, R-Texas. He proposes assigning every American a new Social Security number and banning the use of Social Security numbers as identifying tools.