A Joint Letter from American Civil Liberties Union Electronic Privacy Information Center U.S. Public Interest Research Group --------- November 15, 1995 Subject: Stopping the Assault on Privacy in the Welfare Reform Bills Dear Welfare Reform Conferee: We are writing to register our strong opposition to provisions in both the House and Senate welfare reform bills that threaten to unravel the privacy protections in current law, mandate the creation of a new national identification system, and solidify the Social Security Number (SSN) as the de facto national identifier. The House version is H.R. 4, and the Senate version is H.R. 4 as amended by S. 2280. As the legislative situation continues to unfold, we urge you to keep these considerations in mind. OVERVIEW We support efforts to enforce child support obligations and are sympathetic to the legitimate information needs of those responsible for establishing and enforcing such obligations. In working towards this goal, we must be careful not to sacrifice crucial privacy protections for program participants and all Americans. However, both House and Senate welfare reform proposals: I) mandate expansive information sharing among government agencies, in some cases unnecessarily, and in all cases without establishing clear limits on information disclosure and strong penalties for inappropriate disclosure; 2) create over fifty new data bases containing personal information on every employee; and 3) abolish the traditional Fourth Amendment protections, which balance the protection of individual privacy with the legitimate access needs of government by establishing procedures that control government access to personal credit and financial information. Current law protects personal privacy in a number of ways. Section 602(a)(9) of the Social Security Act limits the use of information collected from individuals to purposes directly connected to the administration of the program, and related proceedings, for which it was collected. The Fair Credit Reporting Act (FCRA) and the Right to Financial Privacy Act (RFPA) embody traditional Fourth Amendment procedures that protect individuals from government overreaching and abuse. Lastly, all attempts to create a national system of identification or national identifier have been met with vehement opposition from the public and both Democratic and Republican members of Congress. (See attachments.) While both House and Senate version of H.R. 4 pose many privacy concerns, we would like to draw your attention to the following provisions: 1. The single greatest move toward an Orwellian national ID system in recent years -- mandating the creation of over fifty new data bases, one in each State and one federal Ñcontaining personal information on every job applicant. House ¤413; Senate ¤913. 2. Accelerating the creation of a de facto national identifier by requiring the inclusion of the social security number on applications for nearly all State issued documents. House ¤417; Senate ¤917. 3. Mandating additional information collection and sharing without establishing privacy safeguards. 4. Elimination of the Fourth Amendment protections in the Fair Credit Reporting Act. House ¤453; Senate ¤953. 5. Elimination of the Fourth Amendment protections in the Right to Financial Privacy Act. House ¤454; Senate ¤954. 6. Opening up program records to provide addresses to law enforcement officers, upon a mere claim that the participant involved has information necessary for the officer's official duties. Subsection (b) of House ¤304 and Senate ¤204; subsection (b)(printed incorrectly as "(2)") of House ¤583 and proposed new paragraphs (C) and (D) in Senate ¤328. I. Creating a National Identification System We are alarmed by House ¤413 and Senate ¤913 that mandate the creation of New Hires Directories by each State, and the creation of a National New Hire Directory. Each directory will contain information supplied by employers, including each employee's name, address and SSN, and each employer's name and tax identification number. Under the current proposal the information reported to these data bases will be maintained permanently, creating a de facto national identification system. Similar proposals in immigration reform proposals have met with vocal opposition from conservative/free market organizations, civil liberties and civil rights organizations and the business community, as well as bi-partisan congressional opposition. (See attached.) These organizations strenuously object to the imposition of a multi-billion dollar system of increased government surveillance, intrusion and bureaucracy into the daily lives of Americans, at a time when less federal power is the slogan of the day. Under the guise of reforming welfare policy, this proposal mandates the creation of a broad worker registry containing information on every American employee. In addition, business groups object to the huge administrative burden and costs they will be called upon to bear. (See attached fact sheet from the National Federation of Independent Businesses). Moreover, even Federal government officials have conceded that the cost of implementing and maintaining this database will be astronomical. Although both House and Senate bills contain limits on the use of the database, it is inevitable that political pressure will lead to expanded use of this database for a multitude of unforeseen purposes. The massive data collection mandated by the New Hires Data Base threatens the civil rights and liberties of every person in the United States by compelling each to participate in an intrusive government system and suffer unwanted and unnecessary invasions of privacy. This is truly an Orwellian nightmare. The rationale put forth for creating these new data systems, containing information on every individual hired -- not just those who are delinquent in child support payments or who are receiving public benefits -- is facilitating the identification and location of individuals who either owe child support, or are receiving welfare funds to which they are not entitled. However, these goals can be met without the creation of new data bases containing vast store houses of personal information on, ultimately, every American citizen and resident. The legitimate goals of identifying those who owe child support and eliminating fraud in government welfare programs can be met by comparing information received from employers against the State Case Registries, the Federal Case Registry of Child Support Orders and the Federal Parent Locator Service. Such comparisons must be governed by strong provisions that safeguard individual privacy and provide enforcement and remedies where privacy is breached. This would allow child support orders to be enforced, and provide a mechanism for identifying those who are involved in fraud. While such a system of verification raises substantial privacy concerns itself, it is far less intrusive on privacy, and less likely to result in additional privacy abuses than the current proposal. II. Move to Create a National ID We are deeply concerned with House ¤417 and Senate ¤917 that accelerate the creation of a de facto national ID by mandating that each State require the inclusion of the SSN on every application for a professional license, commercial driver's license, occupational license, marriage license, and on any divorce decree, support order, paternity determination or acknowledgment, and on death certificates. Currently, States can opt to use the SSN or another identifier. 42 U.S.C. ¤405 (c)(2). Mandating the inclusion of the SSN on every individual record maintained by the State runs counter to public sentiment and congressional action opposing the creation of a system of national identification. Many Americans are concerned with the trend to create a de facto national identifier out of the SSN. The breadth of documents on which the SSN would be included under this proposal would cement the SSN as a national identifier. Combined with the New Hires Directories, this proposal provides the blueprint and the green-light for the creation of a national identification system and id card. This concern is not new; it was voiced at the creation of the SSN and has since been raised repeatedly. The SSN was created in 1935 for the sole purpose of accurately recording individual worker's contributions to the social security fund. The public and legislators were immediately suspicious and distrustful of this tracking system fearing that the SSN would quickly become a system containing vast amounts of personal information, such as race, religion and family history, that could be used by the government to track down and control the action of citizens. Public concern over the potential for abuse inherent in the SSN tracking system was so high, that in an effort to dispel public concern the first regulation issued by the Social Security Board declared that the SSN was for the exclusive use of the Social Security system. The use of the SSN as the means of tracking every encounter between an individual and the government will expand the treasure trove of information accessible to the unscrupulous individual who has gotten hold of another's SSN. The use of the SSN as the mandatory national identifier will facilitate linkage between various systems of governmental and private sector records further eroding individual privacy and heightening surveillance of each American's life. III. Elimination of Fair Information Practice Principles We oppose ¤101 of both House and Senate bills, that eliminates existing limitations on the disclosure of information collected under the Social Security Act. Under current law States must provide safeguards which restrict the use or disclosure of information concerning applicants or recipients to purposes "directly connected with" the program and related activities. 42 U.S.C. ¤602(a)(9). The proposed language is vague and fails to identify specific limitations on the use and disclosure of information. In conjunction with other sections of the proposal, which mandates massive exchanges of information between federal and State agencies, this section undermines the core fair information practice principle -- that information collected for one purpose not be used or disclosed for additional purposes without the consent of the record subject. (See the Privacy Act of 1974.) IV. Weakening the Fair Credit Reporting Act We oppose ¤453 of the House bill and ¤953 of the Senate bill, that weaken the court order and subpoena requirements of the Fair Credit Reporting Act (FCRA). <1> The FCRA provides privacy safeguards for consumer information by limiting government and private sector access to information maintained by consumer reporting agencies. The proposed bill would eliminate the FCRA's current court order requirement for law enforcement access to records, allowing a consumer reporting agency to furnish a consumer report upon the mere request of the head of a State or local child support enforcement agency, or a State or local official authorization by the agency. These proposals represent a severe departure from the traditional Fourth Amendment framework that limits government access to consumer reports. The Fourth Amendment privacy protections embodied in the FCRA are the product of a long and thorough debate in which the concerns of law enforcement and the rights of citizens were aired and carefully ---- <1> 15 U.S.C. ¤ 1681 (1970). ---- balanced. The proposed amendment would unravel this delicate balance without the deliberate process necessary to carve out any exception to standard Fourth Amendment protections. The proposed amendment suggests that the available mechanisms offered in the FCRA are inadequate to address the problem of child support enforcement. However, there has been no opportunity to create a record of any problem or the necessity of amending existing law. We are unaware of child support enforcement personnel armed with enforcement orders being unable to obtain court orders. We adamantly oppose the weakening of court order requirements of the FCRA, and we do not believe that this instance justifies opening the door on eliminating the current Fourth Amendment privacy protections -- rendering other future "exceptions" to these privacy protections a virtual certainty. V. Weakening of the Right to Financial Privacy Act<2> Similarly, we oppose House ¤454 and Senate ¤945 that strip away the Fourth Amendment protections controlling government access to financial records. Under current law, government access to financial records is prohibited unless a court order, warrant or subpoena is presented. The amendment would allow depository institutions to disclose financial records to State child support enforcement agencies without any of the procedural safeguards that currently govern access. As stated above, the Fourth Amendment standards controlling access to personal information contained by third parties, such as depository institutions and credit reporting agencies, were crafted after much thought and deliberation. They attempt to strike a fair balance between the legitimate access needs of government agencies responsible for enforcing laws, and the privacy interests of the individual. The current proposal is an unprecedented break with the Fourth Amendment protections in the Right to Financial Privacy Act. VI. Opening Program Records to Law Enforcement We strongly oppose subsection (b) of ¤304 of the House bill and subsection (b) ¤204 of the Senate bill that require State programs to provide the addresses of program participants to law enforcement officers. The subsection would require disclosure of this information if the law enforcement officer claims merely that the participant has some "information that is necessary for the officer to conduct the officer's official duties." Under this proposal, a person registering to receive benefits to which they are legally entitled would in effect be registering their address with all the law enforcement offices in the country. The breadth of this disclosure requirement is truly sweeping. This subsection violates the most essential principle of fair information practices -- namely, that information gathered for one purpose should not be used or available for use for another purpose without the freely given consent of the individual. Subsection (b) of House ¤583 and Senate ¤328, dealing with the food stamp programs, contain similar disclosure requirements and should also be deleted. ------ <2> 12 U.S.C. ¤ 3401 (1978). ----- Every State has laws against the disclosure of criminal justice information. Nonetheless, the disclosure of such information is virtually routine. Stories of law enforcement personnel inappropriately using and disclosing sensitive criminal justice information abound. Program participants who are fleeing domestic abuse from estranged or former spouses are especially at risk under this provision. Individuals who are fleeing abuse will be deterred from seeking services if information about their location may end up in the hands of their abuser. The combination of these two factors -- program participants whose location must be kept confidential for their safety, and law enforcement with a history of misusing and illegally disclosing confidential information -- is especially deadly. While the Senate Committee added a provision making disclosure in such situations illegal, the inability of current prohibitions on information disclosure to deter law enforcement officers and others from misusing information gives privacy advocates and more importantly, program participants little reason to have faith in this provision's effectiveness. Privacy protection and the physical safety of program participants demands that program information not be disclosed for non-program purposes. RECOMMENDATIONS 1. Use existing information and systems to identify those who owe child support and are defrauding government programs. Compare information that employers must report to State agencies, under the Deficit Reduction Act of 1984, known as "contribution notices", or "wage reports", against the existing State Case Registries and Federal Parent Locator Service. This will meet the needs of child support and welfare oversight without creating expensive, massive, new government data bases. Amend House ¤413 and Senate ¤913 to prohibit the creation of a massive database on all Americans, require this use of information already submitted by employers, and establish privacy safeguards to govern the use of the existing information and data systems. 2. Retain current law which allows States to maintain the option of using the SSN or choosing another identifier. Remove House ¤417 and Senate ¤917. 3. Add specific language limiting the use of information to purposes directly connected with the administration of the plan to ¤101 of both House and Senate bills. Set out penalties for inappropriate use and disclosure of information, and establish remedies for those harmed by information privacy violations. 4. Allow the Banking Committee to examine and address the particular needs of child support enforcement personnel as part of a larger review of the Fair Credit Reporting Act and maintain the current standard governing access pending such comprehensive review. Remove House ¤453 and Senate ¤953. 5. Maintain the current standard for access to financial records set out in the Right to Financial Privacy Act pending hearings on this issue. Remove House ¤4S4 and Senate ¤954. 6. Strike subsection (b) of House ¤304 and Senate ¤203, as well as subsection (b)(printed incorrectly as "(2)") of House ¤583 and proposed new paragraphs (C) and (D) of Senate ¤328, which endanger programs participants' safety and erodes privacy by allowing non-program access to program information. We urge you to oppose any welfare reform proposal that fails to include basic privacy protections. If the House or Senate bill is enacted with attention to these privacy concerns, this Congress will be remembered not as authors of welfare reform, but as the Dr. Frankenstein who spawned a big government "Big Brother" and set it loose upon the American people. The privacy community cares deeply about these issues and we look forward to any opportunity way may have to work together. We are available to discuss these issues further and can be reached at --Don Haines, ACLU, 675-2322; David Banisar, EPIC, 544-9240, Edmund Mierwinski, USPIRG, 546-9707. Thank you again. Sincerely, American Civil Liberties Union Washington National Office Electronic Privacy Information Center US Public Interest Research Group Attachments