[Senate Hearing 110-113] [From the U.S. Government Publishing Office] S. Hrg. 110-113 WILL REAL ID ACTUALLY MAKE US SAFER? AN EXAMINATION OF PRIVACY AND CIVIL LIBERTIES CONCERNS ======================================================================= HEARING before the COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED TENTH CONGRESS FIRST SESSION __________ MAY 8, 2007 __________ Serial No. J-110-33 __________ Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 37-167 PDF WASHINGTON DC: 2007 --------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866)512-1800 DC area (202)512-1800 Fax: (202) 512-2250 Mail Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman EDWARD M. KENNEDY, Massachusetts ARLEN SPECTER, Pennsylvania JOSEPH R. BIDEN, Jr., Delaware ORRIN G. HATCH, Utah HERB KOHL, Wisconsin CHARLES E. GRASSLEY, Iowa DIANNE FEINSTEIN, California JON KYL, Arizona RUSSELL D. FEINGOLD, Wisconsin JEFF SESSIONS, Alabama CHARLES E. SCHUMER, New York LINDSEY O. GRAHAM, South Carolina RICHARD J. DURBIN, Illinois JOHN CORNYN, Texas BENJAMIN L. CARDIN, Maryland SAM BROWNBACK, Kansas SHELDON WHITEHOUSE, Rhode Island TOM COBURN, Oklahoma Bruce A. Cohen, Chief Counsel and Staff Director Michael O'Neill, Republican Chief Counsel and Staff Director C O N T E N T S ---------- STATEMENTS OF COMMITTEE MEMBERS Page Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont. 1 prepared statement........................................... 229 Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania................................................... 3 WITNESSES Carafano, James Jay, Assistant Director, Kathryn and Shelby Cullom Davis Institute for International Studies, and Senior Research Fellow, Douglas and Sarah Allison Center for Foreign Policy Studies, Heritage Foundation, Washington, D.C........... 10 Gilbert, Allen, Executive Director, American Civil Liberties Union of Vermont, Montpelier, Vermont.......................... 6 Harper, Jim, Director, Information Policy Studies, The Cato Institute, Washington, D.C..................................... 8 Kephart, Janice, President, 9/11 Security Solutions, LLC, Alexandria, Virginia........................................... 15 Schneier, Bruce, Founder and Chief Technology Officer, BT Counterpane, Minneapolis, Minnesota............................ 12 QUESTIONS AND ANSWERS Responses of James Carafano to questions submitted by Senator Leahy.......................................................... 31 Responses of Jim Harper to questions submitted by Senator Leahy.. 33 Responses of Janice Kephar to questions submitted by Senator Leahy.......................................................... 37 Responses of Bruce Schneier to questions submitted by Senator Leahy.......................................................... 43 SUBMISSIONS FOR THE RECORD American Association of Motor Vehicle Administrators, Michael R. Calvin, Interim President & CEO, Washington, D.C., statement... 46 Carafano, James Jay, Assistant Director, Kathryn and Shelby Cullom Davis Institute for International Studies, and Senior Research Fellow, Douglas and Sarah Allison Center for Foreign Policy Studies, Heritage Foundation, Washington, D.C., statement...................................................... 56 Center for Democracy and Technology, Ari Schwartz, Deputy Director, statement............................................ 63 Electronic Privacy Information Center, Washington, D.C., statement...................................................... 70 Gilbert, Allen, Executive Director, American Civil Liberties Union of Vermont, Montpelier, Vermont, statement and attachments.................................................... 131 Harper, Jim, Director, Information Policy Studies, The Cato Institute, Washington, D.C., statment and attachments.......... 167 Information Technology Association of America, Arlington, Virginia, statement............................................ 186 Kephart, Janice, President, 9/11 Security Solutions, LLC, Alexandria, Virginia........................................... 196 Minner, Hon. Ruth Ann, Governor, State of Delaware, Wilmington, Delaware, letter............................................... 231 Schneier, Bruce, Founder and Chief Technology Officer, BT Counterpane, Minneapolis, Minnesota, statement................. 234 Vermont Department of Motor Vehicles, Bonnie L. Rutledge, Commissioner, letter........................................... 238 Wall Street Journal: National ID Party, February 17, 2005......................... 241 Immigration Reality Check, May 4, 2005....................... 243 Deputizing the DMV, July 25, 2005............................ 245 Real ID Revolt, May 8, 2007.................................. 246 WILL REAL ID ACTUALLY MAKE US SAFER? AN EXAMINATION OF PRIVACY AND CIVIL LIBERTIES CONCERNS ---------- TUESDAY, MAY 8, 2007 U.S. Senate, Committee on the Judiciary, Washington, D.C. The Committee met, pursuant to notice, at 10:12 a.m., in room SD-226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, Chairman of the Committee, presiding. Present: Senators Leahy, Feingold, and Specter. OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE STATE OF VERMONT Chairman Leahy. Good morning. I apologize to Senator Specter and to the witnesses for being late. We sometimes, as the late Senator Moynihan used to say, act like a Third World nation around here, with closing off streets for motorcades, usually for somebody who, if they would simply drive up in an ordinary car, nobody would even know who they are or care, but we have to have motorcades to attract attention. Unfortunately, we do it with a lot of our own officials more and more. This one stopped traffic for about 20 minutes. If I could have just left my car, I could have easily walked to the Capitol. I recall when I was a law student here at Georgetown, one time up in the Capitol, I got on an elevator and stopped, and there was then-Vice President Lyndon Johnson and one agent with him. I stopped. He said, ``Boy, are you getting on or off?'' I said, ``Well, I was getting on, Mr. Vice President.'' He grabbed me by the lapel and pulled me on, and he said, ``Well, get on.'' I watched as he drove off. He was in a car with a driver, one agent, and that was it. The other day I noticed the Vice President came up to lobby some of our colleagues, and between the motorcycles and all the others, I counted 38 vehicles. Somewhere we have gotten out of control. I also recall--well, that is another story. I won't expand. [Laughter.] Chairman Leahy. We are turning our attention to an issue of great concern to States and to those Americans who value their privacy in the face of the Federal Government's expanding role in their daily lives, and I thank our witnesses for being here. I especially thank Allen Gilbert from Vermont, who told me he drove by early this morning the road to my own farm in Vermont and all looked peaceful. I look forward to gaining a better understanding of the impact of the so-called REAL ID Act. Actually, that is something we should have done, the Congress should have done before they passed the Act. But too often we will pass acts and then find out afterward whether or not they make any sense. I do not think this does. It was legislation forced through by the last Congress as an add-on to an emergency supplemental bill. I do not recall hearing objections to this sweeping substantive legislation being jammed into an emergency supplemental from those who this year were so critical of the important aspects of the U.S. Troop Readiness, or Veterans' Care, Katrina Recovery, or Iraq Accountability Appropriations Act. This bill would have provided for veterans care and Katrina relief and other needs in the emergency supplemental legislation that we passed last week and the President vetoed last week. The REAL ID Act was attached to an emergency supplemental, with no hearings, no votes, but what it is, the Federal Government will be dictating how the States go about the business of licensing residents to operate motor vehicles. State motor vehicle officials will be required to verify the legal status of applicants, adding to the responsibilities of already heavily burdened State offices. And if anybody thinks it is going to be a walk in the park standing in line at your local motor vehicle department, if you think you wait there a long time just for routine things, you can imagine what this is going to be like. While the Federal Government dictates responsibilities for what has traditionally been a State function--and adds layers of bureaucracy and regulation to effectively create a national ID card, and that is what it is--there is no help in footing these hefty bills. It is an unfunded mandate passed by the last Congress to add to the taxpayers of the States $23 billion in costs. The Wall Street Journal noted in an editorial--and I might note that the Wall Street Journal is not one of my biggest fans, but they noted in an approving editorial today that ``REAL ID was always more about harassing Mexican illegals than stopping Islamic terrorists.'' It was put in ``in an effort to placate noisy anti-immigration conservatives amid the GOP's poll-driven election panic.'' And it was attached to a ``must- pass military spending bill'' without hearings or debates, and the President ``made the mistake of signing it.'' Given my own concerns, I have joined with Senators Akaka, Sununu, and Tester to introduce a bill that would repeal this law. We could have had negotiations, which would have been completed, and would have rested in stronger requirements for identification documents by now had the REAL ID Act not been forced through. You know, we were trying to actually work out something that made some sense. That all came to a halt when we did this, Oh, well, just pass $23 billion of extra taxes onto our States and let them do it. We all know the critical importance of national security. But security measures have to be smart as well as tough. Any one of us who flies often knows that there are some security measures taken that make sense, and others that look like window dressing for the sake of window dressing. The reaction to the unfunded mandates of the REAL ID Act is a pretty good example of what happens when the Federal Government imposes itself rather than creating a partnership with the States. In addition to the numerous stakeholders that I understand have made substantial comments, I hope that the DHS--a Department which has very real difficulties in just running itself and keeping itself secure--will pay close attention to the sentiments expressed by members of this Committee and by the Homeland Security and Governmental Affairs Committee, which held an oversight hearing on REAL ID in March. I think the days of Congress rubberstamping any and every idea cooked up by the administration are over. Let's see real solutions with demonstrable results before we throw away billions of dollars-- or more accurately, push those costs onto the States--in the name of some vague claims of enhanced security. I want to understand better the implications for individual privacy rights and national security of this law. I will put into the record the editorial from this morning's Wall Street Journal, Review and Outlook, ``REAL ID Revolt.'' [The prepared statement of Senator Leahy appears as a submission for the record.] Senator Specter, again, I apologize to you. You were here on time. I was not. STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM THE STATE OF PENNSYLVANIA Senator Specter. Thank you, Mr. Chairman. This hearing is part of the continuing efforts of the Judiciary Committee to strike an appropriate balance between national security and individual liberty and privacy. We all know the terrorist threat, and it is important to be able to identify people, to know who is doing what, including flying on airplanes, which posed the 9/11 catastrophe. But even the 9/11 hijackers had multiple identifications, so the question is: How do we have identification which can be checked? REAL ID, for anybody who has not heard the expression, is real identification, that is, accurate identification. There have been tremendous objections raised already about this REAL ID from very diverse groups such as the American Conservative Union, at one end of the political spectrum; the American Civil Liberties Union, at the other end of the spectrum; and the National Organization for Women. These groups have a lot of people who are objecting to it. And it has quite a number of proponents in trying to deal with the issue of finding out who is who and what the problems may be. The Department of Homeland Security has asked for comments as part of the rulemaking process and got thousands of comments. The Department of Homeland Security estimates it will cost 23--I want to be sure we have the zeros right, $23 billion. As I thought about it, I wanted to check my notes to see that this was accurate. It is going to cost a lot of money for the States. Eleven States have filed resolutions in opposition, two States have opted out, 33 States have moved ahead to comply. So there is a checkerboard of responses. We are wrestling with the issue of immigration legislation. A prodigious amount of work has been put into that by many Senators sitting down for hours on end. Hard to believe you can find as may as 10 or 12 Senators who will sit for 2 hours to work on immigration, and one of the issues that we are struggling with there is, beyond securing borders, to have employers know who is legal and who is not legal. And we are wrestling with the costs of foolproof identification. Then we have the issue about the citizens who are applying for a job. How can the employer be sure even citizens are what they claim to be--citizens? So that is a matter of enormous concern. You come on a very busy day. You only see customarily the Chairman and the Ranking here because there are so many collateral duties, and I am going to have to excuse myself in a few minutes. We are trying to put together an immigration bill because the Majority Leader has given notice that it is going to be on the floor next Monday, and he is going to employ what is called Rule XIV to bypass the Committee. I am not sure that, Mr. Chairman, Senator Leahy, has been wise, because we have been doing a lot of wheel spinning on the meetings we have had. Last year, when I was Chairman and Senator Leahy--this is role reversal--we had in this room elongated meetings, but we hammered out a bill without going into all the details. And we met the deadline which we had, and the bill which we produced in the Senate may be our starting point under this Rule XIV procedure where the Committee does not act. But that decision was made thinking we could craft a bill which would be agreeable to all parties, and that may turn out to be wishful thinking to find anything that is agreeable to all parties in the U.S. Senate. So we are wrestling with a tough issue with this REAL ID, and I appreciate the presence of the witnesses. We are going to try to find another Republican to come to participate in the hearing, but we will be watching your testimony very closely. We appreciate your inputs as we wrestle with this issue about how we identify people and still protect privacy. One item that I noted of special concern is that REAL ID does not respect the rights of the Amish and the Mennonites, who wish not to have their pictures taken. They have the right not to have their photographs taken, rights recognized by the U.S. Supreme Court precedent and State law. And we need to respect people's rights, and that is another issue. Pennsylvania has quite a number, but we need to respect rights of Americans wherever they may reside. So we have got some weighty issues here, Mr. Chairman. Senator Leahy has just shown me some identification, but I am prepared to vouch for him without even seeing identification. [Laughter.] Senator Specter. I have known him for 27 years in the United States, and our friendship goes back to 1970 when we were prosecuting attorneys, when we had real jobs. Thank you, Mr. Chairman. Chairman Leahy. Thank you. I was showing Senator Specter my Vermont driver's license, which does not have a picture on it. And I might say, which has nothing to do with this hearing-- Senator Specter. It is one of the few documents in the world which does not have Senator Leahy's picture. [Laughter.] Chairman Leahy. We will invite them to the Leahy Center in Burlington. But, you know, all these things--the Amish and the Mennonites--all that should have been thought about before. This was just rammed down with no hearings or anything else, actually by the other body. I may have mentioned what--Senator Specter spoke of immigration. He deserves the thanks of both Republicans and Democrats in the Senate for the enormous work he put into this in the past 2 years. I was privileged to work with him on that and helped us keep our quorums and get things moving, and Senator Specter--I am glad that the Democratic leader has made sure that he is involved in these meetings. I think we did get a good piece of legislation out here that can be our starting point, and I would hope that we would move forward on this. I agree with President Bush--this will stop the presses, but I agree with him when he says he wants a comprehensive immigration bill. But I think that is what Senator Specter, under his leadership, put through last year. Well, let us try again. Senator Specter. Thank you, Pat. Chairman Leahy. Lady and gentlemen, would you please stand and raise your right hand? Do you solemnly swear that the testimony you will give in this matter will be the truth, the whole truth, and nothing but the truth, so help you God? Mr. Gilbert. I do. Mr. Harper. I do. Mr. Carafano. I do. Mr. Schneier. I do. Ms. Kephart. I do. Chairman Leahy. We will hear from each of you. We will begin with Allen Gilbert from Vermont. He is the Executive Director of the American Civil Liberties Union of Vermont. He has been a leading voice in our State about the REAL ID's impact on our State and our way of life. He also served as President of the Vermont School Board Association. He lives not far from me in Vermont and traverses the dirt roads that go near my home. Allen, you would be interested in knowing that years ago, when our oldest son, Kevin Leahy, who is now a lawyer in Montpelier, when he was in his early teens, he was asked by a reporter what kind of vehicle his father prefers during mud seasons on a dirt road. He said, ``Dad prefers a rental vehicle for mud season.'' He was a reporter, then city editor of the Vermont Herald, later served as assistant editor of the Sunday Rutland Herald Times, was a free-lance writer, taught writing at several Vermont colleges and American studies at a German university; a bachelor's degree in history from Harvard, a master's degree in education from the College of William and Mary. Thank you very much for coming down. Please go ahead with your testimony. STATEMENT OF ALLEN GILBERT, EXECUTIVE DIRECTOR, THE AMERICAN CIVIL LIBERTIES UNION OF VERMONT, MONTPELIER, VERMONT Mr. Gilbert. My name is Allen Gilbert. I live in Worcester, Vermont--which is the next town over from Senator Leahy's town, Middlesex--and I want to thank Chairman Leahy for having us here to testify. People in Vermont have a lot of unanswered questions about REAL ID. Seldom have I encountered an issue that raises concerns among such a wide range of people. I can talk with a legislator about REAL ID, and she will point out that the National Conference of State Legislatures expresses misgivings about the program. I can talk with a member of the National Gun Owners in Vermont, and he will worry about Government intrusion. A member of an advocacy group for victims of domestic and sexual violence worries that REAL ID threatens protection programs for women and children. The Ancient Order of Hibernians does not like REAL ID, and neither does the American Friends Service Committee. Earlier this year, the Government Operations Committee of the Vermont House of Representatives passed, unanimously, a resolution opposing REAL ID. The resolution was subsequently approved, also unanimously, by the full Vermont House. The longest- serving member in the Vermont House sits on the Government Operations Committee. Rep. Cola Hudson was born when a fellow Vermont Republican, Calvin Coolidge, was in the White House. Representative Hudson simply shook his head ``No'' when REAL ID was described in his committee. Our Motor Vehicles Commissioner testified in another legislative committee about the ``re-enrollment process'' required by REAL ID. Everyone will have to visit a DMV office with proper documents. For some people in Vermont, that means a long trip. And when they get to the DMV office, our commissioner said, ``The jokes about waiting in line at DMV are no longer going to be jokes but reality.'' Long-time residents are going to feel like suspects when they are required to report and show their papers. Our commissioner noted that her father is 82 years old. He has had a driver's license for years. It is going to be hard to tell him, she said, that he has to prove his identity before he can get his license renewed. People in Vermont pride themselves on being part of tightly knit communities. Questioning who someone is, is seen as a sign of unfriendliness. Birth records in Vermont are kept by town clerks. The clerks--some of whom are part-time--are already in a frenzy over the thought of complying with the myriad requests for records they are going to get because of REAL ID. A State senator, who in his other life runs a construction company and races stock cars, said, ``I am not sure if it is the budgetary concern or the privacy concern or the nightmare it is going to create that concerns me most about this.'' A series of data breaches this winter in Vermont led people to wonder about the security of stored data anywhere. DMV officials acknowledge that there are hundreds of unauthorized attempts daily to get at the department's information data base. Increasingly, Vermonters are worried that too much data is being collected about too many things. It is not just a sense that privacy is eroding. Vermonters are worried that their identities will be stolen by identity thieves. Vermonters are pretty responsible people. We generally step up to the plate when asked to do the right thing. But many people are not so sure that REAL ID is the right thing. It seems too big, too expensive, and too centralized. Mr. Bruce Schneier, who is going to speak a bit later, is here. I heard him speak last year, and one of the things that he said has really stuck with me. He said that security is an equation, with one side being what you are giving up and the other side what you are getting in return. I am afraid that with REAL ID we are giving up too much and not getting much, if anything, in return. REAL ID is going to cost the States a lot of money. The cost in Vermont is now estimated at around $8 million. That is a pretty substantial expenditure for us. Some of our State senators want to raise license fees and to call the increase a ``congressional REAL ID tax.'' The cost, the implementation, the risk of identity theft-- these things worry Vermonters. Vermonters are not convinced that REAL ID is a program that will make Americans safer. On behalf of the ACLU, its 53 affiliates and half a million members, I urge you to mark up and move S. 717, the Akaka- Sununu-Leahy-Tester bill. That bill would replace REAL ID with sensible, cost-effective driver's license standards. The problems with REAL ID would be fixed, and the standards could be achieved in a cooperative fashion with State officials, Federal Government agencies, and privacy and civil liberties experts. Thank you for the opportunity to testify this morning. [The prepared statement of Mr. Gilbert appears as a submission for the record.] Chairman Leahy. Thank you very much. Mr. Gilbert describes the Vermont attitude. I know a couple of the people he referred to. I would consider them among our most conservative folks back home. But about the only thing I ever kept from the press written about me and actually framed was a sidebar to a profile in one of our major publications. And as I said, I live on a dirt road. This summer we will have had this old tree farm in the family for about 50 years, a great deal of acreage and fields that have to be hayed, and there is an adjoining farm family through successive generations who watch over the place. The whole thing went like this: It was a Saturday morning. A New York Times reporter in an out-of-State car sees a farmer sitting on the porch. He says, ``Does Senator Leahy live up this road?'' The farmer replied, ``Are you a relative of his?'' He said, ``No.'' ``Well, are you a friend of his?'' ``Well, not really.'' ``Is he expecting you?'' ``No.'' ``Never heard of him.'' [Laughter.] Chairman Leahy. That is the kind of attitude we have. Now, Jim Harper is the Director of Information Policy Studies at the Cato Institute. As Director of Information Policy Studies, he focuses on the unique problems of adapting law and policy to the problems of the Information Age. He is a member of the Department of Homeland Security's Data Privacy and Integrity Advisory Committee. He is the editor of Privacilla.org, a web-based think tank devoted exclusively to privacy, and he maintains online Federal spending resource WashingtonWatch.com. He holds a J.D. from Hastings College of the Law. Mr. Harper, thank you for taking the time to be here today. STATEMENT OF JIM HARPER, DIRECTOR, INFORMATION POLICY STUDIES, THE CATO INSTITUTE, WASHINGTON, D.C. Mr. Harper. Thank you, Mr. Chairman. Thank you for having this hearing, and thank you for having me here to testify on REAL ID. In my opinion, the REAL ID Act is a dead letter. All that remains is for Congress to declare it so. At this point, my understanding is that eight States will not implement REAL ID. That means that States that do will not even get the benefits alleged from REAL ID. States that implement it at this point will be throwing good money after bad. The proposed regulations issued by the Department of Homeland Security on March 9th, on which comments close today, help to reveal that REAL ID is a loser. It costs more to implement than it would add to our Nation's security protections. In my written testimony, I have submitted a risk-based analysis of REAL ID, something DHS did not do, but I used DHS estimates to show that REAL ID's returns, its security returns, at best are 88 cents on the security dollar that we ask the States to spend on this. It is important to understand that an identity system does not apply a fixed identity to everyone. It causes our attackers, it causes opponents, to change their behavior, to engage in fraud, to avoid identity systems entirely. It is rather trivial, frankly, for a committed attacker of any kind to work around or to break an identity system like we are talking about in REAL ID. So the security benefits are not there. Because they are here to defend themselves, I will talk a little bit about the arguments made by proponents of REAL ID. I do so in the spirit of friendship, and I do not think anybody puts forward their arguments in bad faith. But the proponents of REAL ID essentially hew to two schools. One is the ``just do it'' school. It is a law. If we just spend a lot more money on it, we will have this thing, and we will get whatever we are supposed to get from it. In a paper issued last week, my colleague, Jim Carafano, said, ``Identity is one of the cornerstones of a free society.'' And I dropped my spoon into my Cheerios when I read that, because identity is also one of the cornerstones of a totalitarian society. The important question is who controls it, and I think it is much more important to decide whether Government should control identity or whether individuals in the United States should control identity. So I think it was an unthoughtful assertion in that case. It also caused me some regret to see that the Heritage Foundation is supporting the expenditure of $23 billion in a funded or unfunded mandate on the States. It is an organization that I have an affinity for and a past affiliation with. The other school is the ``do over'' school: If we could just go back and do it over again, maybe we could have done something using REAL ID to stop the terrorists. I know I sound a little glib in calling this the ``do over'' school, and we would all like to be able to go back and change the outcome on that day. But the ``do over'' school, if we could just go back and do it again, is not serious security argumentation. We are trying to design systems to secure our country going forward in the future, and the ability to go back and change things so that everyone would like it we do not have. So we have to think in terms of identity systems and how future attackers would avoid them or break them. You have heard from Allen Gilbert the privacy and convenience and expenditure concerns that are shared throughout the country. The regulations issued by the Department of Homeland Security essentially punted on the most important technology, security, and privacy problems. Of utmost importance, in my opinion, the DHS proposal also lays the groundwork for systematic tracking of Americans, law--abiding Americans, based on their race. Though the Department of Homeland Security failed to fix it in the regs, I do not think this is the agency's fault. And, again, people at DHS are working on these problems in good faith. Regulations cannot make this law work, and neither can delay. The real problem is the REAL ID law itself. As you mentioned, Mr. Chairman, there are meritorious bills pending in the Senate and House to repeal REAL ID and restore the identification security provisions that were passed in the 9/11 Commission-inspired Intelligence Reform and Terrorism Prevention Act. Congratulations to you, Mr. Chairman, for being an original cosponsor of this legislation. These bills would be improved on the margin if they were to chart a path to Government use of emerging digital credentialing systems--systems that are diverse, competitive, and privacy protective. You can get security without surveillance. It is a couple generations down the road using very advanced technologies, but it is possible to do. We can have these identification and credentialing systems. Governments can be users of them. REAL ID is the ugly alternative to getting it right. Thank you very much. [The prepared statement of Mr. Harper appears as a submission for the record.] Chairman Leahy. Well, thank you, and I could not help but think, in listening to your testimony on the costs, I could think of some ways we could spend that $22 billion that would actually improve our security. And I understand Dr. Carafano will disagree with me, although I must say that I consider it a privilege to have Dr. Carafano testify before us. He is the Assistant Director for the Kathryn and Shelby Cullom Davis Institute for International Studies and Senior Research Fellow at the Douglas and Sarah Allison Center for Foreign Policy Studies. Dr. Carafano is an accomplished and recognized historian and teacher. He is an assistant professor at the U.S. Military Academy at West Point. He also taught at Mount St. Mary College. He served as a fleet professor at the U.S. Naval War College. He is a visiting professor at the National Defense University, I would also note with pride, at Georgetown. He graduated from West Point, has a master's degree and a doctorate from Georgetown, as well as a master's degree in strategy from the U.S. Army War College. Doctor, as I mentioned to you privately, I appreciate you taking the time to be here, as you have every time we have asked you to come before this Committee. STATEMENT OF JAMES JAY CARAFANO, ASSISTANT DIRECTOR, KATHRYN AND SHELBY CULLOM DAVIS INSTITUTE FOR INTERNATIONAL STUDIES, AND SENIOR RESEARCH FELLOW, DOUGLAS AND SARAH ALLISON CENTER FOR FOREIGN POLICY STUDIES, HERITAGE FOUNDATION, WASHINGTON, D.C. Mr. Carafano. Thank you, Mr. Chairman. I appreciate this opportunity, and I have submitted a statement for the record. I just want to make three points very quickly: why this is an incredibly important issue, what are the options, and then what should be done. I do believe that identity is the cornerstone of a free society because we make a presumption in a free society that our citizens are acting lawfully and they should be left to go on their way. And we all know democracy works best in small communities because we have the trust and confidence of knowing each other. That is why Vermont is such an outstanding State. But we live in a large, diverse society, and a verified identity is critical to having that freedom of movement, and that is why criminals so assiduously go after these documents and try to undermine them. And that is why it is so important to retain the credibility of identity documents in a free society. So we have three options. One is we can do nothing. We can continue in the Wild West that we have had over the last decades where we have seen billions of dollars be lost every year to identity theft through fraud, theft, counterfeiting, and other types of criminal and malicious activities. The alternative is we can do a national ID. We could try to create a single document that everybody in the country has to have. I think that is a wildly impractical, a wildly unnecessary, and, quite frankly, a wildly unachievable goal. And I think it is a ridiculous notion to think that we want to take authority and power away from the States, that federalism is not the right solution to making this society safe, free, and prosperous. And the third alternative is we can do something reasonable, and I think what is implied by the REAL ID Act is something reasonable. It is voluntary programs for States that want to have their citizens have the privilege of presenting a credential for a Federal purpose. It is not a national identity card. It does not create new data bases. It does not give the Federal Government more information about our citizens than it has now. It does not put the Federal Government in charge of issuing or managing these programs. And it does not have to be an unfunded mandate and an unfair burden on the State. So what should we do? And just let me kind of briefly click off my to-do list. One is I do not think there is a legitimate constitutional issue here that needs to be adjudicated. Second is I do not think that there is any kind of congressional legislative remedy required to fix the law. Third is I think that rules can be fairly articulated and adjudicated under the system and that reasonable practices can be negotiated between the States and the Federal Government. Fourth is I certainly think that adequate privacy protections can be implemented in the system and to meet the national standards required under the REAL ID Act. And, fifth, I think we can fairly institute this system in a reasonable timeline. I think it is certainly appropriate that the Federal Government pay its fair share. I think it is a terrible idea that moneys to implement REAL ID come out of homeland security grants. It is simply robbing Peter to pay Paul. We have national requirements out there to raise our disaster and response preparedness systems in this country. If REAL ID is going to become a reality and a serious thing, it should have its own separate appropriations. And I think we should have a targeted strategy here. I think there are many States that are already virtually compliant with REAL ID, and I think we should focus our resources and our attention on the States that are closest to complying, also border States that want to use the REAL ID credential as a border-crossing card. Because I think once we have demonstrated the advantages of REAL ID, quite frankly, there will be a land rush for States to rush to implement this thing. We should be very clear, and I will just say this in conclusion. This is obviously not a panacea. There is no identity credentialing system in the universe that is going to provide you 100 percent security. Every identity system at some point is going to be undermined or compromised. It is not a silver-bullet solution to fraud, theft, or counterfeiting. But there obviously is some security value in having national standards to which credentials that are presented for a Federal purpose all meet. And I do think--and I would dispute the economic analysis. I do think at the end of the day the value of national standards, the economic benefits and the reduction in threat and common security threats justifies the costs, and I think, quite frankly, the implementation costs have been severely overinflated and are unrealistic. With that, Mr. Chairman, I thank you for the opportunity to be here today. [The prepared statement of Mr. Carafano appears as a submission for the record.] Chairman Leahy. I would note that on the cost still it is an unfunded mandate to the States, and I think you would agree with that at this point. Yes or no? Mr. Carafano. Mr. Chairman, I would agree that at this point there is not a reasonable agreement between the States and the Federal Government as to what the Federal Government's fair share is and how that should be implemented. So I do think that-- Chairman Leahy. Well, no reasonable agreement insofar as the President has put zero in his budget for it. One would tend to think that, he being the decider, it is the position of the Federal Government that you are going to get zero. Mr. Carafano. I agree, and I think that is just flat wrong. There should be a separate appropriation to implement REAL ID, and the Federal Government should pay its fair share. Chairman Leahy. We will go to Mr. Schneier in a second, but, you know, I worry. I see in the press today that Dulles Airport where I fly out almost every week to Vermont and go through the usual search--shoes off, belt off. I saw a woman who was berated for having a tiny little thing of hand purifier in her bag because she did not have it in a larger plastic bag, even though it was well within the amount, but she was berated for doing anything so foolish and threatening to the security of the United States. You see a 90-plus-year-old woman, having taken her shoes off, and then being told she can put them back on, and she explained she cannot put them on. The nurse usually does it at the home, and they say, ``Well, it is your problem.'' On more than one occasion, I have gone over and put the shoes back on. I see TSA losing so much of our identity, and today in the paper they said you can buy for $100 a year some special ID to zip you through once you give them all kinds of background on yourself and fingerprints and everything else. I have no intention of buying one of those. I will stand in line, go through the same things that others do, because I cannot trust them to keep the information they get on me. DHS, which is a dysfunctional agency in many, many ways, at least some who are waiting for the recovery from Katrina a couple years later might say, ``Why should we trust you with it?'' But I am going to give you plenty of time to answer that, and also, we will keep the record open for all the statements and also keep the record open, as you know, afterwards, if you have heard something somebody has said and you have not had a chance to respond to it, you will be given a chance for the record. Mr. Schneier is an American cryptographer, computer security specialist, and a writer. He is the author of several books on computer security and cryptography. He is the founding chief technology officer at BT Counterpane. He has a master's degree in computer science from American University, a bachelor of science degree in physics from the University of Rochester. Before Counterpane, he worked at the United States Department of Defense and then AT&T Bell Labs. Mr. Schneier, thank you very much for taking the time to come here this morning. STATEMENT OF BRUCE SCHNEIER, FOUNDER AND CHIEF TECHNOLOGY OFFICER, BT COUNTERPANE, MINNEAPOLIS, MINNESOTA Mr. Schneier. Thank you, Senator Leahy. I want to say that I am here as a security technologist and expert and not under the auspices of BT Counterpane. I have a statement from the Electronic Privacy Information Center for the rulemaking for the DHS, signed by 21 security experts. I would like to add that to the record. Chairman Leahy. Without objection, it will be part of the record. Mr. Schneier. My problem with REAL ID is it does not do what it claims to do. Most people think of ID cards basically as small, rectangular pieces of plastic that include our name and our picture. But an ID card is part of the very complex security system, and once you start looking at the entire system, you realize that REAL ID is much more complicated and much less secure and much less valuable than its proponents say. What really matters is not how it is used by the hundreds of millions of people who have it, but how it fails, how it can be abused by those who want to subvert it and want to get things that the ID should prevent. First off, REAL ID will be forged. Every ID card ever invented has been forged. The new $20 bill was forged even before it hit the streets. Money has a limit. You are not going to spend more than $20 to forge a $20 bill. A REAL ID card is an incredibly valuable piece of ID, so the value to forge it is much greater. And, paradoxically, by making a REAL ID, by making a single ID card, you increase the likelihood of forgery by making it more likely that the bad guys will spend more money to forge it. REAL ID has problems in the sign-up process. You can never produce an ID card that is more secure than the breeder documents needed to get one. So if you look at the ways you would get a REAL ID, if those documents are easier to forge than a REAL ID, people will do that. REAL ID will not prevent people from getting legitimate cards by bribing DMV clerks. This happens regularly. Some of the 9/11 terrorists did that. A hard-to-forge REAL ID, more stringent standards to get one will not protect us from someone basically being bribed to erroneously issue one. But the biggest security risk is the data base. REAL ID requires a massive Government data base. DHS says that it is not one Government data base; it is 53 small ones. I think that is a red herring. Interconnected separate data bases are the same as one data base. You know this when you go on the Internet, when you look at Google. That is one data base. This is a grave security risk. Senator Leahy, you just mentioned that last week the TSA lost 100,000 identities--not of us--of TSA employees, and this demonstrates how difficult it is for us to secure data bases. This I think is a bigger deal than the press is making it out. The identities of sky marshals are on this list. I think there are some grave security concerns here. It was mentioned, I think by Mr. Gilbert, the problem of the identity requirements and address requirements for domestic abuse survivors. I think this is a big risk also for judges. My father is a judge in New York, and having his address on his ID is a security concern for him. REAL ID also increases the risk of identity theft. There is a lot of talk about how it will decrease the risk. It actually will increase the risk. First off, most identity theft is not based on people forging a piece of plastic. Identity theft is done electronically, and a single credential is a one-stop shop for identity thieves. We are more secure from identity thieves when we have multiple different credentials, when stealing one does not get you everything. The more things a single ID is used for, the greater at risk we are; the more value it is for someone to try to steal it and the more he can do with it once he steals it. And if you think it is no fun when some criminal impersonates you to your bank, wait until some terrorist impersonates you to the TSA. That is going to be so much less fun. Again, even if you can magically solve all these problems, even if you can make the ID work, REAL ID will not help us against terrorism. There is a myth in this country that if we could just identify people, we would know who they are, we know what they do. That is wrong. Identity does not map to intentionality. And if you want an idea of how identity-based security does not work, look at the no-fly list. The no-fly list is the one example of identity-based security that most of us come into contact with, and we know it does not work. It does not catch anybody, and it just harasses innocent people. I was on the Diane Rehm show a couple of years ago, and there was a DHS person and we were debating this. And he said, you know, ``When you are sitting on a plane, you want to know the identity of the person sitting next to you.'' And I said, ``Well, that is not true. I want to know if he is going to blow up the aircraft. If he is not going to blow up the aircraft, I do not care who he is. And, honestly, if he is going to blow up the aircraft, I do not care who he is either.'' It is not the identity. It is the intentionality. If you look at what we have done to help airport security, it is reinforcing the cockpit door, and it is teaching passengers how to fight back. It is not identifying who they are. So I think REAL ID is a waste. As a taxpayer, I think $23 billion is too much. Thank you. [The prepared statement of Mr. Schneier appears as a submission for the record.] Chairman Leahy. Thank you. You were talking about TSA making mistakes. Normally, the most senior member of this Committee is Senator Kennedy, and he was stopped about nine or ten times getting on a flight he has been taking for 40 years back to Boston because he is on a no-fly list. Now, I have kidded Senator Kennedy about these Irish terrorists, they all look alike. [Laughter.] Chairman Leahy. Dr. Carafano is chuckling because he knows of my Italian heritage. But, I mean, that is how ridiculous it is. He even had the President call him and apologize. He said, ``Look, I do not want an apology. Just get me off the darn list.'' We have had a year-old child have to get a passport to prove they are not a 40-year-old suspected terrorist. Catholic nuns. I have to be careful when I recount some of my days in Catholic grade schools and high schools about whether some of them probably qualified as terrorists, but I do not think that it would be fair to lump them into this terrorist thing. So, you know, you see mistakes being made there all the time. I do not feel any safer when I see Colin Powell in line in an airport and taking his shoes off and his belt off and being wanded and searched, especially when the person who is going to be cleaning the airplane while it is there is not getting anywhere near that kind of search, and the person who is alone in the airplane for about 20 minutes before you board and could put any kind of a bomb on board that plane does not get the kind of security that General Powell or former Vice President Mondale, former Vice President Quayle, former Vice President Gore, and others do. But I digress, and our next witness will be Janice Kephart. She is the President of 9/11 Security Solutions. She served as a counsel to the National Commission on Terrorist Attacks upon America, otherwise known as the 9/11 Commission. She is a key author of the 9/11 Commission staff report, ``9/11 Terrorist Travel.'' She continues to work with the Canadian Embassy, international organizations, and top administration officials in an effort to pursue the implementation recommendations sought by both the 9/11 Commission and born of her own work. Prior to her work on the Commission, she served as counsel to the Senate Judiciary Subcommittee on Terrorism, Technology, and Government Information, worked extremely hard on this Committee and knows the Committee well. And she is a graduate of Duke University and Villanova School of Law. Ms. Kephart, thank you for taking the time to be here. STATEMENT OF JANICE KEPHART, PRESIDENT, 9/11 SECURITY SOLUTIONS, LLC, ALEXANDRIA, VIRGINIA Ms. Kephart. Thank you, Chairman Leahy. It is an honor to be before you as an alum of the Committee that prepared me so well for my work on the 9/11 Commission. I appreciate very much this Committee's continued interest and effort in the 9/11 Commission recommendations, including the issue of identity document security that REAL ID addresses head-on. I am here in my own capacity today, but I would like to remind you that the 9/11 Commission gave high marks for passing REAL ID legislation, and former Commissioner and Secretary of the Navy John Lehman had an op-ed in this morning's Washington Post in support of REAL ID. I am also happy to be one who speaks with the 70 percent of Americans who, in a very recent Zogby poll, are in favor of REAL ID driver's licenses. To summarize where REAL ID stands today, every State DMV has taken at least a couple of steps toward REAL ID implementation. Forty-eight States and D.C. are checking Social Security numbers. Twenty check legal status. Three States are sharing vital events digitized records, and four more are about to come online. Alabama, New York, and Texas are considered innovators in REAL ID compliance. In addition, at least 23 State legislatures have bills supporting REAL ID in some manner. And there are passed bills in favor of REAL ID as well in States like Kansas and Michigan. The REAL ID law is based on the States' own exceptionally detailed post 9/11 work in establishing best practices to fix the State driver's license system that was known to generate neither secure IDs in content or production. The critical question of this hearing--Will REAL ID actually make us safer?--is absolutely the correct question to ask. And the answer, in my opinion, an unequivocal yes, by assuring greater national and economic security, public safety, and privacy. If REAL ID is implemented, individual Americans' identities are less likely to be stolen, their children safer from underage drinking and driving, and as the Fraternal Order of Police has stated, a cop on the beat is more likely to know who is being encountered. Last Wednesday, Subcommittee Chairwoman Feinstein held an excellent hearing on terrorist travel in this room whose theme was that secure IDs are essential for assuring people are who they say they are at our borders. REAL ID helps us do this within our borders. By looking at all the ways yesterday, today, and in the future as to how terrorists, counterfeiters, and criminals do their work. The 9/11 hijackers, we need to remember, assimilated into the U.S. by attaining 17 driver's licenses from Arizona, California, and Florida and 13 State-issued IDs, including the 7 they fraudulently acquired in Virginia. Like other criminals and terrorists, the 9/11 hijackers then used those IDs for the purpose of renting cars, obtaining living quarters, and opening bank accounts. At least six hijackers total presented State- issued IDs on the morning of 9/11 to help look like Americans and board aircraft. The pilot who flew into the Pentagon had four IDs from four different States, and the Pennsylvania pilot had three IDs and an unverifiable ID when stopped for speeding 2 days prior to 9/11. The officer that stopped him needed an identity to associate with information, but he could not verify the ID, he could not verify the identity, and thus had no information to associate with it. The 9/11 final report terrorist travel recommendations called for ``setting standards for issuance of State IDs and designing a comprehensive screening system that sets common standards.'' The 9/11 Commissioners' 2005 final report gave Congress a really good mark for passing REAL ID, but cautioned ``States' compliance needs to be closely monitored.'' What has become unfortunate, in my opinion, is that myths and misinformation continue to abound about REAL ID, and let me address the most critical ones. First, REAL ID is not a mandate. It preserves States' rights, letting States choose whether to comply or not. States are making that decision now. A mandate is a requirement, and REAL ID is not that. Chairman Leahy. Ms. Kephart, I will give you added time for this. Would you add that if it says that you are not going to be able to go into Federal buildings, citizens of your State cannot go into Federal buildings or board airplanes without it, do you still feel that is not a mandate? Ms. Kephart. It is not a mandate, sir, when you do not actually require the State to do it. Chairman Leahy. You just cannot fly or go into Federal buildings. Ms. Kephart. Well, what DHS has said is that they will just require--they will work with the States to provide another set of requirements. But DHS could answer that question. Chairman Leahy. Which they have not done. Ms. Kephart. I believe that will come out in the rules, sir. The ending date is today. Second, REAL ID does not create a national data base. It does actually just the opposite. It keeps data flows to defined fields of information regarding Social Security information, birth and driving records, and other checks, with only the originator of the data capable of holding it and keeping it. Third, REAL ID does not invade privacy. The current REAL ID Notice of Proposed Rulemaking makes recommendations for best practices States should employ to protect privacy, and they have put a lot of effort into that. These best practices are hefty. They build on the Commercial Driver's License Information System and the National Driver Register---data bases created in 1986 and serving 45 States. In 20 years of operations, there have been no complaints at all about intrusions on privacy or identity theft from either of those data bases. One reason why is the 1994 Driver's Privacy Protection Act which protects driver data. Also worth mentioning is that the ITAA, the Information Technology Association of America, yesterday issued a report stating that REAL ID protects privacy beyond what exists now. They represent the folks who do this work for a living. Fourth, REAL ID does not create a national ID card. It avoids a national ID card. States use and control their own issuance processes, including meeting or exceeding REAL ID minimum standards. In conclusion, to make REAL ID a reality requires more than just the Federal Government or the States can do alone. It requires a partnership. It also requires recognition that securing U.S. physical and economic integrity is not just a Federal responsibility. It is everyone's responsibility. Not implementing REAL ID simply keeps us right where we are, which is vulnerable. What we need now is to deal with what we have, make it work, and provide the real seed money necessary to help States comply with REAL ID. It is resolution of this issue that gets us closer to secure IDs sooner rather than perhaps never. Thank you, Mr. Chairman. [The prepared statement of Ms. Kephart appears as a submission for the record.] Chairman Leahy. Would you feel that he Federal Government should pick up the tab on this? Ms. Kephart. The Federal Government needs to do its share, sir, absolutely. Chairman Leahy. And what is its share? Ms. Kephart. Its share is the seed money to get the States started. Chairman Leahy. What is seed money--5 percent, 2 percent of the total-- Ms. Kephart. Sir, I am not an economist to figure that out, but it is whatever the combination of DHS and OMB says the States need to get started. States have to maintain their own DMVs anyway, so what REAL ID needs to do is help them do what they--beyond what they would do anyway for achieving best practices to what REAL ID requires. And whatever that difference is is what the Federal Government should supply. Chairman Leahy. What State do you live in? Ms. Kephart. I am from Pennsylvania originally. I live in Virginia now. Chairman Leahy. Good luck when you are standing in line. Ms. Kephart. I would be happy to for my country, sir. Chairman Leahy. All of us would, if it really made our country safer, just as I am sure I would feel that we were doing a great deal for the country when we watch former Vice Presidents and former Secretaries of State and former Chairmen of the Joint Chiefs of Staff having to take their shoes off and everything else, knowing that that is making us safer. Senator Feingold? Senator Feingold. Thank you, Mr. Chairman, very much for your great courtesy in letting me go ahead of you in the questions, and thanks to all the witnesses for their testimony on this important topic. Mr. Harper and Mr. Gilbert, there has been a lot of discussion about the immense cost to State DMVs of implementing the REAL ID Act, but I have heard less about the burden on other types of record keepers which will be expected to verify identity documents as a part of the driver's license issuance process. Take birth certificates, which for most Americans who do not have passports are going to be the only proof of identity they can provide under the DHS regulations. Birth certificates are issued by any of a number of local and State entities, and many birth certificate records are not electronic. Yet somehow all the State DMVs are going to have to verify with the issuing entity every birth certificate that is presented as proof of identity. I know this is going to be an issue in Wisconsin, where it is apparently going to cost approximately $25 million to digitize and match all the birth, marriage, and death records in the State. Can you expand on what vital records offices are going to need to do in order to comply with REAL ID and what sort of costs they can be expected to incur? And can you comment on whether this is a good idea to begin with? Mr. Gilbert? Mr. Gilbert. Senator, Vermont has no vital records office in the sense that most States do. Birth certificates are kept in town clerks' offices, which are literally sometimes part of a person's home. So there often is not even security for these kinds of documents, and the authenticity of a birth certificate, I have been told, from Vermont is being questioned by more and more States because of the lack of security. But that is the way it has been done in Vermont for many, many years. One of my sons was born in Vermont, and his birth certificate is kept by the town clerk of Berlin, Vermont. That is where the hospital where he was born is located. My other son was born in Germany. His birth certificate is on file with the U.S. Department of State. And for us to get a copy of his birth certificate, or for him to get a copy of it, I think he has to make application and wait--I do not know how long--until he gets a copy of the birth certificate. But those are two examples of procedures that I think are going to be difficult for some people to be able to carry through on when they go to a DMV, and then the DMV is going to have to certify that the birth certificate from the Berlin, Vermont, town clerk's office as well as the U.S. Department of State birth certificate are accurate. That is going to require a lot of verification. Senator Feingold. Mr. Harper? Mr. Harper. Well, it is a foresighted question that I do not think has a good answer yet, because the local public records offices have yet to really get together and figure out what this problem is. The first wave of debate about REAL ID has been when State legislators recognized the cost to them of doing this. The next wave comes when the local offices, like Mr. Gilbert talked about, are asked to digitize or put online records that they have kept in drawers in their basements and hidden away. In addition to the costs of doing that, the huge logistical problems with doing that, there are the security concerns with doing that. It is quite secure and quite private to have a paper document in a remote office somewhere. It is inefficient, but that inefficiency gives you security. When these documents are scanned, when they are put online, when the scanned images and the information from them are in data bases, that is much more efficient, but it is much less secure. And I think people have yet to think about that dimension of the problem. It is rather easy to put forward a pilot program and say, well, this pilot has suffered no breaches, there have been no complaints about this pilot program. The commercial driver's license system is an example where there are approximately 13 million commercial driver's licenses out there in the system. There is a difference in kind, not degree, from going to 13 million to going to 250 million, which include not just truck drivers but Senators, judges, officials of all kinds, and, for that matter, Paris Hilton. That is a system that is not secure the way a small system dealing with a relatively different class of people would be. I have a shoebox in my apartment with business cards in it. It has never been breached. But if I put gold in it, it might be breached, and that is the kind of difference we are talking about. Senator Feingold. In that vein, REAL ID appears to be on its face simply a new system for issuing identification cards and driver's licenses. But I, too, am concerned that REAL ID will ultimately create a system used for a variety of other purposes that many people would find troubling, such as tracking Americans' movements and activities. And I see nothing in the proposed regulations limiting this type of use of the REAL ID cards and associated data bases. Am I right to be concerned about that? And what other potential consequences might arise? Mr. Harper? Mr. Harper. I do serve on the Department of Homeland Security's Data Privacy and Integrity Advisory Committee. We had a meeting recently where Ann Collins, the Registrar of Motor Vehicles from the State of Massachusetts, spoke, and she said, ``If you build it, they will come.'' What she meant by that is that if you compile deep data bases of information about every driver, uses for it will be found. The Department of Homeland Security will find uses for it. Every agency that wants to control, manipulate, and affect people's lives will say, ``There is our easiest place to go. That is our path of least resistance.'' So mission creep is the quick summary to this problem. If you build it, they will come. So I think it is very important to keep that in mind. I will note, by the way, that the Department of Homeland Security's Privacy Committee is submitting comments to the DHS in its rulemaking, and the most important part of it to me--I think they took great care to offer helpful, constructive comments--but the most important part is at the outset the DHS Privacy Committee declined to endorse REAL ID as being an effective or appropriate program to put in place. Senator Feingold. Mr. Schneier, I understand that there have been numerous incidents in recent years of DMVs being broken into or DMV employees taking bribes to issue fraudulent licenses. Do those kinds of incidents remain a problem? And what do they suggest about the success of the REAL ID Act in securing driver's licenses? Mr. Schneier. Well, what it says is that secure identity systems are much more complicated than REAL ID, and certainly when you look at the system, you have to look at the mechanisms to get the card, what happens when you lose a card. And, you know, it is the breeder documents. You talk about the expense and convenience, but it is also the security. That would look at the ethics and how well trusted the people who issue the licenses are. You also have to look at the verification procedures. We were talking about the data bases and who has access to them. You do not have to worry about the data base itself, which should be accessible from police cars, airline check-in stations, schools, from wherever it is being used. Also, you have to think about the shadow data bases. Whenever you build a credential like this that is so valuable and so useful, there will be a shadow data base collected by the data brokers, that when you present your card at a hotel or at a bar, it will be scanned, and that data will go in the shadow data bases. Suddenly, what starts out as a simple data base becomes even bigger. So, yes, I would worry about not only the clerks issuing them, I would worry about the clerks who are putting those birth certificates online. If it is cheaper to bribe them than it is to bribe a DMV clerk, you are going to do that. If you want to subvert the system, you have to look at the weakest link, and just REAL ID is so incredibly complicated. There are so many links. I put a diagram in my written testimony, which unfortunately I could not really put up on a screen, to try to lay out all the different ways there are security vulnerabilities in the system. And I think it is much more complicated than really a lot of people are thinking. Senator Feingold. OK. Mr. Gilbert and Mr. Schneier, identity theft is obviously a growing problem. Many people are concerned about the many recent security breaches of private and Government data bases containing sensitive personal information. Wouldn't the information gathered as part of REAL ID implementation also be vulnerable to these types of breaches? Mr. Gilbert? Mr. Gilbert. This has been a big concern to people in Vermont because there has been a series of data breaches of Government data bases in our State just this past winter, and there were some legislative hearings held on this. Our Department of Motor Vehicles commissioner was asked the same question in testimony before one of the legislative committees, and she acknowledged that there are over--there are several hundred attacks daily on their data base trying to get at the information in the DMV system. She feels that their system is secure, but I think what Mr. Schneier is pointing out is true, that when you up the ante of the value of the information, the people who want that information are going to try harder and harder and do more and more to try and get at it. And I have become convinced that building a secure system is just very, very difficult, that there has got to be another way to do this. And I do not think we have found that quite yet. Senator Feingold. Mr. Schneier? Mr. Schneier. Mr. Harper has already said that there is security in keeping records offline, that there is inherent security of making them hard to get to. They are hard to look at, and they are hard to change. Putting records online as part of REAL ID I think will make us less secure against identity theft because now data is more accessible, and it is also easier for someone to change. In a lot of ways, REAL ID does not affect identity theft because identity theft is not based on a piece of plastic. It is based on electronically impersonating you via a website to a bank. What it does affect is it centralized credentials, and we are safer because an identity thief can go after only one thing--one bank account, one broker age account--and attacking one does not get you the other. And if REAL ID moves to its logical conclusion, where it becomes the single ID used for all sorts of things, if you read the DHS rulemaking, that is what they are looking for. Then we are at increased risk of identity theft because now there is one document that can be stolen, which is the keys to everything. It is really paradoxical. We are more secure from criminals through distributed identity. The fact that you could open up your wallet and you have a dozen different cards and each one does one thing and not just one card, that is what makes us safer. Senator Feingold. Thank you for your answers. I have to leave now, so I am just going to very briefly recess--I do not need to. The Chairman arrives. Thank you, Mr. Chairman. Chairman Leahy. Speaking of Vermont, we had a group of Vermonters who stopped by, and I stepped out for a moment for that. Mr. Gilbert, let us start with you. I have expressed--and I understand and I appreciate Dr. Carafano's and Ms. Kephart's views to the contrary, but I am concerned about the Federal Government basically taking over State DMVs. In fact, we have to protect our personal information. We also have to have national security. I am not sure they have to be exclusive by any means. We know from what we have seen that had there been better use of the information we had, 9/11 could have been avoided. But I worry that the steps, those things that could make us vulnerable, are steps that are not being taken. When you talk to other Vermonters about this, from your testimony--and I know you refer to the construction business. I know the others you are talking about. You have gone through a cross-section of Republicans, Democrats, across the political spectrum. Is there any one aspect more than others that people object to? Mr. Gilbert. I think it is the privacy aspect that people are most concerned about. The money aspect is important to a legislator who is trying to find a couple million dollars to fix a bridge in his or her town. But I think the privacy aspect is something that just simply rankles Vermonters. And I think it rankles people in many other States around the country. There have been numerous resolutions and some binding legislation passed opposing REAL ID, and a good deal of that is based on a sense that REAL ID is going to violate privacy in a way that is not going to give us the security that has been promised. And I think when people look at that kind of equation, they say it is simply not the way to go; we need another way to get at this problem of standards for driver's licenses. Chairman Leahy. You know, it is interesting on privacy. I have always had a listed home phone number. I had it when I was a prosecutor. I have it now. Most people will not call me at home. They figure that if I get a chance to be at home with my family, they are going to give me privacy, and it is kind of the way we are. But I worry more than just kind of the feelings we have in our State. I also worry that the information given can get lost. We have seen the VA in a colossal act of incompetence lose material with our personal information, the Department of Agriculture do the same thing. TSA has had material with backgrounds on people stolen out of their headquarters. Most recently, the Department of Agriculture posted people's Social Security numbers online. It has been almost mind-boggling, the data losses in this administration. But a lot of big companies have done it, too. T.J. Maxx is an example. We had one major bank who just simply shipped by commercial airline all of the personal information of their customers to go off to a storage thing, and it got lost. They cannot find where it went. Now, I assume that their executives probably fly in private planes, and they are not used to having luggage lost. Any one of us who flies commercially, as I do and you do, knows that that actually happens. And it got lost, and they said, ``Oops, sorry.'' Let me ask also, you mentioned domestic violence groups. Tell me why the concern there. Mr. Gilbert. The concern is that the victim of domestic sexual violence often wants to protect her residence, her identity in the sense of where she lives. She has a fear of physical attack. And Vermont is one of, I think it is about 20 States that currently offers a program where victims can use a post office box that actually is run by our Secretary of State's office, and mail, for example, can be delivered there, and the person can pick her mail up that way. One of the problems with even the Department of Homeland Security's recognition of this problem is they have a fix in place for States like Vermont that already have a program, but for all the other States that do not have a program, it is not clear how identity could be protected in this way. And the victim advocates that I talk to in Vermont are really concerned about this. Chairman Leahy. Thank you. Let me ask this--Dr. Carafano? Mr. Carafano. Sir, I think it is a perfect example of a fixable problem, why the rulemaking process is so important. Of course, the easiest fix on this is for someone that has been a victim of domestic violence abuse or a judge or a Federal prosecutor or anyone that does not want their legal residence on the front face of their identity credential is to have a post office box. And I think that within the rulemaking process, that is an easy fix. The law enforcement community does not need to see your address on the front of your identity credential. What they want to know is that you are you, that is primarily your full legal name, your date of birth, and your driver's license number. If they need to get your legal address, they can obtain that from other means. So I do think that this is one that is not a show stopper in any way, shape, or form. It is an absolutely totally legitimate concern that can be addressed intelligently through the rulemaking process. Chairman Leahy. Well, I do note that I have a listed home phone number, both here in the Washington area and in Vermont, and it does not have a street address on it. Mr. Carafano. And I do not think there is anything in REAL ID that should preclude people from wishing to have their post office box on the front of their credential. Chairman Leahy. I do not want my post office box on there. After all, I received one of the two deadly anthrax letters that I was supposed to open. It was sent to me. It was so deadly that two people who touched the outside of the envelope I was supposed to open died. I am not too eager to have my post office box there, which I do have. I get all my mail in a post office box. I am not too eager to have that known. Mr. Carafano. There is no way it precludes somebody from getting your address and mailing you an evil thing, so that-- Chairman Leahy. Nothing gets mailed to my home. Ever since they tried to kill me with a letter, it goes through a specialized screening area. Let me ask you this, and I am going to ask this of each one of you. The Washington Post ran an editorial this morning by former Navy Secretary John Lehman supporting the law. Mr. Lehman argued that the REAL ID law will not result in a Federal data base. A simple question of each of you: Do you agree with that? Mr. Gilbert. I do not agree with that for the same reason when I go online and type in something in Google, I am essentially tapping into one integrated data base made up of thousands of other data bases around the world. Chairman Leahy. Mr. Harper? Mr. Harper. I do not agree with that. Chairman Leahy. Dr. Carafano? Mr. Carafano. I absolutely agree with that. There is a significant distinction between a single centralized data base that does not have any firewalls, any intrusion protections, any kind of protocols, and integrated data bases where you can put in firewalls, you can put in intrusion detection devices, you can set up screening and all kinds of protocols to make sure of that. That is what we do with--because we live in a world of integrated data bases. If your argument is let us not have any integrated data bases because that is an unacceptable privacy concern, then this economy and this society is simply going to cease to function. It is a distinction with a significant difference. Chairman Leahy. So you agree this will not result in a Federal data base. Mr. Carafano. This simply does not create a new national data base. Absolutely. There is no question about that. Chairman Leahy. Mr. Schneier? Mr. Schneier. I think it is a semantic dodge. There are lots of single data bases that have firewalls and IDSs. There are lots of single data bases that look like distributed data bases. There are distributed data bases that look like single data bases. How you implement it and how it is presented are completely orthogonal. This will result in a large Government data base, Federal or State. It will be accessed by both, so I am not convinced that is a difference that makes a difference. What it does is it makes a single--it is a one-stop shop for the data, and that is what is important. And who writes the check I think is secondary, and exactly how the computer scientists build the computers and the networks is also secondary. Chairman Leahy. Ms. Kephart? Ms. Kephart. Well, I think it is a slam dunk, probably, what I will answer on that. Of course, I agree with former 9/11 Commissioner Lehman. In my testimony I have a chart. It is part of a paper that I released in April, and that chart shows the differentiated data bases that are checked. Chairman Leahy. So you agree that this would not be-- Ms. Kephart. This is not a Federal-- Chairman Leahy. This would not result in-- Ms. Kephart.--data base. The data-- Chairman Leahy.--a Federal data base. That-- Ms. Kephart. OK. The data goes through-- Chairman Leahy. That is a question--let me ask this next question. He asserts that the law is an unfunded mandate and that Congress should step up and fully fund the real costs that this essential program will impose on the States. Now, that is assuming that we do not change the program and it goes through as it was slipped into this appropriations bill. I am going to ask each one of you: Do you agree with Mr. Lehman's assertion that this is an unfunded mandate and that Congress should step up and fully fund the real costs that this essential program imposes on the States? Mr. Gilbert? Mr. Gilbert. I do not think Congress should fund any program that in the end is not going to be able to accomplish what the program is intended to do. If we could come up with a different program where we had cooperation with State and Federal officials, there was a chance for civil liberties and privacy experts to be involved, then I think it would be appropriate for the Federal Government to help the States pay for this. Chairman Leahy. Mr. Harper? Mr. Harper. It is an unfunded mandate, and it should not be funded because it should not be implemented. Mr. Carafano. I do believe Congress should pay its fair share of implementation of the system. I think people in States have a right--many of these States have antiquated systems which are providing no protections. We talked a lot about commercial data. There is more data on us in the commercial sector than the Government has, and there are many best practices and excellent practices in the commercial sector to safeguard data, and the notion that we should expect--not hold our Government up to at least the standards of best practices in the commercial sector is just wrong. Chairman Leahy. Did T.J. Maxx follow those best practices? Mr. Carafano. Again, sir, I did not say everybody in the commercial sector, but there are best practices out there that are in the commercial sector that are protecting data, and the notion that we should give our Governments a bye and not then at least safeguard our data as good as the people in the commercial sector is simply wrong. Chairman Leahy. Did the United States Department of Veterans Affairs follow that best practice? Mr. Carafano. Again, sir, we should expect Government to do the right thing, and we should expect value for service. I mean, I think--I do not think-- Chairman Leahy. We expected the Government to respond to Katrina and-- Mr. Carafano. I do not think that is a unreasonable requirement to expect our Government to do what the commercial sector can do in legitimately protecting data if they do the right thing. I mean, this is ridiculous to think-- Chairman Leahy. Yes, I-- Mr. Carafano.--that we should have State that should be allowed-- Chairman Leahy. I agree with-- Mr. Carafano.--to have 19th century systems that make their citizens incredibly vulnerable and that they do not provide a minimum level of protection. I think that is unreasonable. I think it is unconscionable. Chairman Leahy. I was not aware that in the 19th century we were issuing too many driver's licenses. But, Dr. Carafano, you know, we expect them to do that. But until they can prove they can do it, that worries me. When they-- Mr. Carafano. And-- Chairman Leahy. May I finish, please? Mr. Carafano. Yes, sir. Chairman Leahy. If it is OK with you. If the Department of Agriculture posts online people's Social Security numbers, sure, we can say we expect that it is part of the administration--the administration is strong on security, applaud them for saying the right things. But when they start releasing that online, that is not doing the right thing. When you cannot even secure computers inside TSA, it kind of makes you wonder. That is what I am saying. We may well agree if we are going to have this, of course, there should be best practices. You and I agree on that. But so far, this administration, just like a lot of our major corporations and banks, has not demonstrated the best practices. We know it is best practices to be able to set up ATM machines where they cannot steal your ID. They are showing on television how easy it is because they have not set up such best practices to prevent the theft of your identification at ATM machines. Mr. Carafano. Senator, every one of the criticisms that was mentioned here today exists in the systems as they currently exist today. So if we do nothing, all the vulnerabilities that were mentioned here still exist there and persist. The notion is that if we do not create national standards, if we do not demand more from our Governments, they are never going to perform that. And I just think it is--the notion that somehow we are going to make progress by saying do nothing I think is just--it just does not make any sense. And that is why-- Chairman Leahy. Just so we do not-- Mr. Carafano.--I think it is important for the Federal Government to pay its fair share to do the right thing. Chairman Leahy. OK. Just so we do not forget my yes-or-no question 15 minutes ago, Mr. Schneier, do you agree with Mr. Lehman's assertion that this is an unfunded mandate and that Congress should step up and fully fund the real costs? Mr. Schneier. I definitely think this an unfunded mandate. As a taxpayer, though, I do not want you to step up and pay the real costs because I am not getting the real benefit. Now, I think you have been a little unfair to T.J. Maxx and the VA and the DHS because those are the ones that have made the news recently, but these breaches happen every single day. Chairman Leahy. Oh, I understand that, and in mentioning that, I just mention that because I think people understand, having seen it, that breaches happen every day, absolutely. Mr. Schneier. But the lesson in that is that this is hard to do. I mean, we can talk about best practices, but in reality, it is very, very hard to keep this data secure. And when you look at the system, the problem is not how do we make the IDs better, but the problem is we are relying on ID-based security. There was a notion in the beginning, privacy versus security. That is a false dichotomy. It is not a matter of identity. We need to get security. And you think of a door lock or a burglar alarm or a tall wall or a reinforced cockpit door. There are lot of security measures that have nothing to do with privacy. Chairman Leahy. Well, but DHS and the other supporters of REAL ID keep saying that we must do all we can to protect ourselves and cost is no object. I would point out the Oklahoma City bomber had a valid driver's license. Nothing would have-- if he had been stopped while he was driving that truckload of explosive in a routine check, he had a valid driver's license. The 9/11 hijackers had valid State driver's licenses. Now, the REAL ID costs, I think DHS is the one that came up with the $23 billion cost estimate in its draft regulations. They also said they have to update their security standards in 3 to 5 years, adding billions more in administrative costs. Are we in a ``security at any cost'' situation? Mr. Schneier. Clearly we are not. Security is always a tradeoff. Of course, there are always things we can do more. The question is: What has the value? Chairman Leahy. Ms. Kephart? Ms. Kephart. Well, I have to answer the 9/11 hijacker statement. The 9/11 hijackers had valid driver's licenses and IDs that at least seven of them obtained fraudulently. So the rest of that sentence needs to be there. Also, the REAL ID-- Chairman Leahy. Well, thank you for telling me what I should say, Ms. Kephart. That is an amazing help, and I cannot thank you enough because I do not have the experience that you have after 32 years here in the Senate dealing with these matters. But let me add to this. They also could have not had to have any kind of an ID like that, and they had a passport. Is that correct? Ms. Kephart. They had passports that had much fraud in them as well. That was not detected. Chairman Leahy. And that is my point. We have a lot of people who come to this country that have passports, we look at them, and they appear totally valid on their face. You know and I know that both of us could within a matter of hours get passports that could pass scrutiny, and they would be fake passports--the point being if you are going to just rely on what ID you want, you can get fake IDs. Am I correct? Ms. Kephart. Absolutely you are correct-- Chairman Leahy. Could you go to-- Ms. Kephart.--and REAL ID is set out to address that based on the States' own best practices that they set out in a security document framework in AAMVA. And that is the basis of the REAL ID language. To answer your original question-- Chairman Leahy. What in the REAL ID Act is superior to the driver's license provisions in the 2004 Intelligence Reform Act, which was passed after actual negotiation and discussion in a bipartisan way? What is superior in this to the driver's license provisions of the 2004 Intelligence Reform Act? Ms. Kephart. It sets out a more detailed set of language that is based on the 13 task force work that was done in AAMVA through the States, and it specifically draws on language that had been done by the States on their own. So it is more specifically geared to what the States wanted to begin with. Chairman Leahy. Does it bother you at all that this was passed with absolutely no input, debate, or anything else, just added in? Ms. Kephart. Sir, I would have always appreciated that my old Committee that it had gone through, but from what I understand, when Tom Davis drafted this and it went through Mr. Sensenbrenner's Committee, REAL ID was actually put on as a rider to get more votes because at the time it was very popular. Of course, the Senate should have had a chance to view it-- Chairman Leahy. Would you-- Ms. Kephart.--but that is kind of water under the bridge now-- Chairman Leahy. Do you think this is what-- Ms. Kephart.--and we are dealing with-- Chairman Leahy. No, it is not water under the bridge. I mean, you have the Nation's Governors, Republicans and Democrats, who are saying they want to have a voice in this. Should they just be ignored? Ms. Kephart. They have a voice-- Chairman Leahy. Or is this a case-- Ms. Kephart.--in the proposed rules, sir. Chairman Leahy. Is this a case where the Federal Government knows better than the States? Ms. Kephart. Absolutely not, which is why-- Chairman Leahy. Thank you. Ms. Kephart.--the comment period has been what it is. Thank you. Chairman Leahy. Thank you. I have other questions concerning what happens if these IDs are lost or stolen, whether they should be an acceptable credential for coming in from Canada. We are now talking about requiring passports to come in from Canada, an interesting thought when you have the largest unguarded frontier in the world. It will actually cut down very substantially the amount of traffic and commerce between two great nations. Any of us who live within a few miles of the U.S.-Canadian border know this will not stop somebody who wants to get across. And if you think it is easy in the eastern part of our country, go out in the western part. As somebody pointed out at one of the border crossings, one in the western part, the security is an orange cone sitting in the middle of the road. So do we look for substantive changes or do we accept what Ms. Kephart seems to be saying, that we have comment time and basically--and I do not want to put words in your mouth, Ms. Kephart, nor to finish your sentences for you, because I think now how offensive I would find that. But is this a case where we should just let DHS go forward with this? Or should we be seeking legislative changes? Ms. Kephart. Sir, I think the appropriate thing to do at this point, because a lot of time, effort, and money has been put into the proposed rules--the comment period ends today--is to see where those comments are. I am sure that the States and many others, including the folks at this table, have issued incredibly helpful comments to DHS. They have taken the privacy aspect of this very seriously. And I think as the comments come in, at the end of that period when it is reviewed and they issue their final rules, I think then is the appropriate time to decide whether to go back to the Intel Reform Act language or to proceed with REAL ID. But I think it is premature at this point, sir. Chairman Leahy. Thank you. Mr. Schneier? Mr. Schneier. I think that DHS has showed very little respect for the States and the people here. The comments are due today on the draft regulations. DHS has testified that we will get the final regulations by August or September. It is just not possible for DHS to read, review, and consider the thousands of comments they are getting, which tells me they do not intend to make any changes at all. If I could add one thing about the orange cone, I think the orange cone is a very good analogy to what we are trying to do here. That orange cone works if the Canadian drives right into and fails if he drives around it. And that is what we are doing here with REAL ID. Yes, if the bad guys do the exact thing we want them not to do that the REAL ID will prevent, we will prevent bad things from happening. But it is so easy for the bad guys to drive around it. Chairman Leahy. Dr. Carafano? Mr. Carafano. Mr. Chairman, I think there is a bigger problem for the Committee to focus on, and this is, I think, an incredibly unrealistic requirement in draft legislation for 100 percent electronic verification on everyone in the United States before they get a job. To me, that is truly a national system, unworkable, unachievable, impractical, and that is a much, much bigger drag on our economy and a much, much bigger threat to our privacies and to this country as a whole than REAL ID. Chairman Leahy. Mr. Harper? Mr. Harper. You have a range of options open to you, of course. Restoring the 9/11 Commission-inspired identity security provisions in the Intelligence Reform and Terrorism Prevention Act is one. I think just as important, part of what you started here, is to have a national discussion on whether identity-based security gets you anything. I think that is most important. It is my opinion that it gets you very little. There are going to be identification systems going forward, and we should talk about the kinds of systems that can get you maximal security within that area without the surveillance. We are nowhere near that with REAL ID. We are going in the wrong direction. But there are systems we can put together that will solve these problems to the extent they can be solved. Direct security like Bruce Schneier talked about: cockpit doors, tall walls, That is real security. It does not rely on identity, and it does not have any privacy consequences at all. Chairman Leahy. Mr. Gilbert? Mr. Gilbert. If we do anything, I think we should go back to where we were in 2004 when the Intelligence Reform and Terrorism Prevention Act was being discussed. The ACLU and other groups were involved in the rulemaking. There was cooperation. There was discussion among officials on the State level and the Federal level, and then that sort of all got derailed with the REAL ID Act. And now we are sort of 2 years further along, and I think we might be further behind. But I want to underline what Mr. Harper just said. We in this country have really got to at some point face up to the fact that some things we think are making us safer and more secure might be having the opposite effect, and some things that we could be doing we are simply not doing because we are going for the jazzy things that sound as though they might be making us safer, and I am afraid they are really not. And I really worry that we as a country do not seem to have a level of awareness of the intrusion of electronic data and aggregated data bases in our lives. Chairman Leahy. Thank you very much. With that, all of you feel free, if you did not think you had enough time to answer any question, of course, I will provide room in the transcript to note that you wanted to add to that. Or if you find that you wanted to correct something, we will have room for that, and also questions or statements from other Senators. I think this is an extremely important issue. We want to be secure, but we also want our privacy. One of the great things about democracy is that you can usually guarantee both security and privacy. And in this debate it has become almost a cliche, but to make reference to--and I will paraphrase--what Benjamin Franklin said about those who would give up their liberties for some security: You usually end up with neither. Thank you. [Whereupon, at 11:46 a.m., the Committee was adjourned.] [Questions and answers and submissions for the record follow.] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]