The Federal REAL ID Act of 2005

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Michigan is on the horns of a dilemma. The state is goingthrough difficult economic times, yet the federal governmentthreatens to make it even worse if the state does not go along withits national identification and border control mandates, the REALID Act and the Western Hemisphere Travel Initiative. It is wrong ofthe federal government to put you in this position, and you wouldbe right to resist.

You can reject the REAL ID Act's mandates with confidence. REALID is ineffective security. Indeed, resisting REAL ID will helpdrive the federal government toward sounder policies that securethe country consistent with freedom and economic growth. Toeffectively counter the terrorism strategy, we must secure thecountry against both the threat of attack and the threat fromoverreactions like REAL ID and WHTI.

The security value of REAL ID ranges from $2.24 billion to $13.1billion, but its cost to implement is $17 billion. REAL ID costsmore than it secures - even using generous assumptions. And thefederal government has put almost no money toward implementation.Indeed, the U.S. Senate recently rejected spending a paltry $300million on REAL ID compliance, signaling that its support for thelaw is weak.

Beyond dollars, there is the massive inconvenience toMichiganders, who would search in vain for paperwork, and wait inlong lines at Secretary of State branch offices, just to get adriver's license. The privacy and data security threats from REALID are probably insurmountable, but the Department of HomelandSecurity left states holding this bag.

The best way for Michigan to respond to REAL ID is to resist it.This national ID scheme is a net loser for the country's securityand for Michigan's economy.

Testimony

Chairman Clemente and Members of the Committee -

Thank you for the opportunity to testify before you today. Myname is Jim Harper, and I am director of information policy studiesat the Cato Institute, a non-profit research foundation dedicatedto preserving the traditional American principles of limitedgovernment, individual liberty, free markets, and peace. In thatrole, I study the unique problems in adapting law and policy to theinformation age. I also serve as a member of the Department ofHomeland Security's Data Privacy and Integrity Advisory Committee,which advises the DHS Privacy Office and the Secretary of HomelandSecurity on privacy issues.

My most recent book is entitled Identity Crisis: How Identification Is Overused andMisunderstood. I am also editor of Privacilla.org, aWeb-based think tank devoted exclusively to privacy, and I maintainan online resource about federal legislation and spending calledWashingtonWatch.com. I speak only for myself today and not for anyof the organizations with which I am affiliated or for anycolleague.

The REAL ID Act is quite nearly a dead letter. States across thecountry have rejected this unfunded federal surveillance mandatebecause of its costs, because it is nearly impossible to implement,and because of the damage it would do to the privacy of law-abidingcitizens. More and more, people are recognizing that the REAL IDAct would not add to the country's protections against terrorism,and it would not solve the problem of illegal immigration.

The Western Hemisphere Travel Initiative is a similarly flawedpolicy. At enormous cost to lawful trade and travel, it wouldprovide a tiny increment of security. Like REAL ID, it does notpass a cost-benefit test. Implementing WHTI, through a special"passport card" or otherwise, would do more to harm Michigan andthe country by sapping our economic strength than it would do toprevent any damage that a terrorist act could do.

Michigan is on the horns of a dilemma. The state is goingthrough difficult economic times, as you know so well. Yet thefederal government threatens to make it even worse if you do not goalong with their identification and border control mandates. Ithink it is wrong of the federal government to put you in thisposition, and you would be in the right to resist.

REAL ID is Mistaken Security Strategy

I start with security because it is of the utmost importance,and also because study of it reveals that you can resist the REALID Act's mandates with confidence. REAL ID is ineffective security.Indeed, resisting REAL ID and WHTI will help drive the federalgovernment toward sounder policies that secure the countryconsistent with freedom and economic growth.

Terrorism is a strategy used by the weak to goad a strongeropponent into self-injurious missteps. Al Qaeda's attacks onSeptember 11, 2001 worked very well against the U.S., as the BushAdministration and Congress initiated and acceded to numerousprograms that violate civil liberties and waste American blood andtreasure. We have spent much more money and killed as many peoplein reaction to the September 11 attacks as the direct damage theterrorists did on that day.

To counter terrorism, we must acknowledge the dual threat itpresents. Unanticipated attacks on an unprepared country may do usharm, but so will overreaction - such as the needless shedding ofcivil liberties and the wasting of our economic health through anational ID program, restricted trade and travel, andanti-immigrant policies. Federal authorities have yet to discoverwhat policymakers like you are now facing thanks to the REAL IDAct: we must secure the country against both the threat of attackand the threat of overreaction.

Rational, risk-based counterterrorism has been a priority of thefederal Department of Homeland Security in words, if not in deeds.Economic analysis of the REAL ID Act's proposed regulations showthat this national ID system is an irrational overreaction thatwill do more harm than good.

In testimony to the U.S. Senate's Homeland Security andGovernmental Affairs Committee1 and the Senate Judiciary Committee,2 I showed using Department of HomelandSecurity projections that REAL ID costs more to implement than itwould add to our country's protections. I won't burden you withevery detail, but evaluating the REAL ID Act on its ability todelay attacks or change their character - and assuming quitegenerously a future attack on the scale of a 9/11 - I found thatthe security value of REAL ID ranges from $2.24 billion to $13.1billion. This is after spending of $17 billion to implement it(also a DHS estimate). REAL ID offers more in costs than insecurity benefits - even using very generous assumptions.

And the DHS' analysis considered none of the counter-attacksthat a national ID system like REAL ID would suffer. If the law isimplemented, terrorists, criminal organizations, and illegal alienswill forge documents and corrupt DMV officials to acquire genuine,though inaccurate, ID cards. Terrorists already recruit peoplewithout histories of terror activity so that they can enter thecountry legally, acquire documents legally, and accessinfrastructure legally. We would be foolhardy to ever rely on anational ID for security against committed threats like terrorists,or to control people with nothing to lose like so many of theillegal aliens who come here from poverty, simply hoping towork.

The Western Hemisphere Travel Initiative is similarly flawed.While I am not aware of and detailed economic analyses, WHTIimplementation at land borders will be an ongoing attack on lawfultrade and travel - deeply threatening to Michigan's economy - thatdoes not materially advance our security.

We all want to see terrorists apprehended. But we must insist onintelligent, thought-through measures to achieve that goal. REAL IDand WHTI are not intelligent measures. They would be about aseffective at catching terrorists as a chainsaw would be at killingflies.

Swinging a chainsaw at flies won't just miss, of course. It willalso have costs and do collateral damage, just like implementationof REAL ID would do.

The Costs of REAL ID

I referred briefly above to the costs of REAL ID. They deservemore discussion.

Dollars

In the proposed regulation, the DHS estimated $17 billion incosts to implement REAL ID. This is the "net present value" of thespending that would happen in the future - the amount you wouldhave to put in the bank today to fund REAL ID's costs over the nextten years. That's over $50 for every man, woman, and child inMichigan and the United States.

About $11 billion of these costs would come directly from stategovernments. The federal government has appropriated almost nomoney for REAL ID implementation. Indeed, the Senate recentlydeclined to appropriate a paltry $300 million for state REAL IDgrants, leaving it squarely in the "unfunded mandate"category.3 If you spend moneyon REAL ID, you will have less for law enforcement and courts, fireprotection, and security measures that actually work.

I understand that Department of Homeland Security officials havebeen conducting off-the-record meetings with state DMV officials,telling them that the cost estimates for REAL ID will come downwhen the final regulations are issued. They may bend the law to thebreaking point to do so - and add yet more holes to REAL ID'ssecurity Swiss cheese - but the benefits of this national ID systemin any real-world implementation will be far less than they areunder the generous assumptions I cited above. And none of us haveever seen a federal program come in under budget.

Wasted Time

The other $6 billion will be borne by the public, in the costsof navigating the new bureaucracy and red tape needed just to get adriver's license. This means digging up birth certificates orgetting copies from public records' offices, a significantpercentage of which may not exist any more, such is in New Orleans.It means native-born American citizens, who may never have traveledoverseas, searching for proof of "legal presence" in the country.It means Michiganders standing in very long lines at Secretary ofState branch offices. They'll be calling you about that.

Alabama is a state the tried to get ahead of the REAL ID Act'smandates in 2006. Attempting simply to match up the names in SocialSecurity Act databases with motor vehicle bureau records, Alabamasent letters to individuals whose records were mismatched, askingthem to correct the "erroneous" information on their driver'slicenses. Thousands of panicked Alabama residents jammed Departmentof Public Safety offices thinking they would lose theirlicenses.

These types of problems will multiply when states try to complywith all the mandates of the REAL ID Act. Especially when they areasked to prove their legal right to be in the United States, expectmore than a few Michigan-born citizens to jump over the counter atthe Secretary of State's branch offices.

Privacy

The privacy and data security consequences arising from REAL IDare immense, increasingly well understood, and probablyinsurmountable.

The increased data collection and data retention required ofstates under REAL ID is very concerning. Requiring states tomaintain databases of foundational identity documents will createan incredibly attractive target to criminal organizations, hackers,and other wrongdoers. The breach of a state's entire database,containing copies of birth certificates and various other documentsand information, could topple the identity system we use in theUnited States today - in case you think we don't have enough of anidentity fraud problem now. The best data security is not creatinglarge databases of sensitive and valuable information in the firstplace.

The requirement that states transfer information from theirdatabases to each other is equally threatening. This exposes thesecurity weaknesses of each state to the security weaknesses of allthe others. There are ways to limit the consequences of having alogical national database of driver information, but there is noway to ameliorate all the consequences of the REAL ID Actrequirement that information about every American driver be madeavailable to every other state.

The security of back-end systems is far from the only problem.Creation of a nationally uniform identity system would bring amajor change in the way our society operates. It is not justanother in a series of small steps. It would promote tracking anddata collection about all citizens.

Economists know well that standards create efficiencies andeconomies of scale. When all the railroad tracks in the UnitedStates were converted to the same gauge, for example, rail became amore efficient method of transportation. The same train car couldtravel on tracks anywhere in the country, so more goods and peopletraveled by rail. Uniform ID cards would have the same influence onthe uses of ID cards.

There are machine-readable components like magnetic strips andbar codes on many licenses today. Their types, locations, anddesigns, and the information they carry differs from state tostate. For this reason, they are not used very often. But if allidentification cards and licenses were the same, there would beeconomies of scale in producing card readers, software, anddatabases to capture and use this information. Americans wouldinevitably be asked more and more often to produce a REAL ID card,and share the data from it, when they engaged in variousgovernmental and commercial transactions.

In turn, others will capitalize on the information collected instate databases and harvested using REAL ID cards. Speaking to arecent meeting of the Department of Homeland Security's DataPrivacy and Integrity Advisory Committee, Anne Collins, theRegistrar of Motor Vehicles for the Commonwealth of Massachusettssaid, "If you build it they will come." Massed personal informationwill be an irresistible attraction to the Department of HomelandSecurity and many other governmental entities, who will dip intodata about us for an endless variety of purposes.

Sure enough, the DHS' proposed regulations cite some other usesthat governments are likely to make of REAL ID, includingcontrolling gun ownership, "unlawful employment," drinking, andsmoking. Uniform ID systems are a powerful tool. REAL ID will beused for many purposes beyond what are contemplated today.

But the DHS' proposed regulations "punted" on even small stepsto control these privacy concerns. They say for example that REALID "does not create a national database, because it leaves thedecision of how to conduct the exchanges in the hands of theStates." My car didn't hit you - the bumper did!

As to security and privacy of the information in statedatabases, the regulations merely propose paperwork. Under theproposed rules, states must prepare a "comprehensive security plan"covering information collected, disseminated, or stored inconnection with the issuance of REAL ID licenses from unauthorizedaccess, misuse, fraud, and identity theft. A plan is notprotection. The DHS does not even propose to condition federalacceptance of state cards on meeting the low standards of thefederal Privacy Act or FISMA.

Where to Go From Here

You can be confident that rejecting REAL ID will not put thecountry at risk. Indeed, you can help steer the country towardwell-though-out counterterrorism policies and practices byresisting REAL ID.

These programs do not secure the country. Rather, they succumbto the terrorism strategy by wasting American economic power. Thecosts of REAL ID are very large, and they include huge amounts ofspending, the waste of Michiganders time on bureaucratic red tape,and the undoing of law-abiding citizens' privacy.

I understand the essential need for Michigan to maintain closeeconomic ties to Canada. The best way to do that is to fight thefederal restrictions on trade and travel created by the REAL ID Actand the Western Hemisphere Travel Initiative.

In my book Identity Crisis, I explore the future ofidentity and identification systems. Identification is an essentialeconomic and social tool, but it is also a powerful weapon ifmisused. Having a national ID card as envisioned by the REAL ID Actwould be a step in the wrong direction when we should be movingtoward a diverse, competitive identification and credentialingmarket that uses the latest technologies to deliver securitywithout surveillance. Were you to join other states inopposition to REAL ID, that would help us get there.

Thank you for letting my share my views with the committee.


1 See Testimony of JimHarper, Director of Information Policy Studies, The Cato Institute,to the Senate Committee on Homeland Security and GovernmentalAffairs, Subcommittee on Oversight of Government Management, theFederal Workforce, and the District of Columbia, Understandingthe Realities of REAL ID: A Review of Efforts to Secure Drivers'Licenses and Identification Cards (March 26, 2007).

2 See Testimony of JimHarper, Director of Information Policy Studies, The Cato Institute,to the Senate Committee on the Judiciary, Will REAL IDActually Make Us Safer? An Examination of Privacy and CivilLiberties Concerns (May 8, 2007).

3 This and other votesshow that the national ID law is not beloved in that body. TheSenate had no hearings on the REAL ID Act before it passed. Becausethe bill was attached to a must-pass military spending bill in theHouse, it did not even get an up-or-down vote in the Senate. Andthe current chairman of the Senate Homeland Security andGovernmental Affairs Committee called it "unworkable" when itpassed.

Jim Harper

New Economy and Quality of Life Committee
The Michigan House of Representatives