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