Social Security:

Mass Issuance of Counterfeit-Resistant Cards Expensive, but Alternatives Exist

HEHS-98-170: Published: Aug 20, 1998. Publicly Released: Aug 20, 1998.

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Pursuant to a congressional request, GAO reviewed the Social Security Administration's (SSA) and the Congressional Budget Office's (CBO) estimates of the costs of issuing a counterfeit-resistant card social security, focusing on: (1) the differences in CBO's and SSA's estimates for replacing the social security card; (2) SSA's estimates of the cost of issuing a more secure card; and (3) additional issuance options.

GAO noted that: (1) the wide variation between SSA's and CBO's estimates is due primarily to the different issuance assumptions used by each agency in its estimates; (2) CBO's estimate was an informal staff-level estimate of the cost to issue an enhanced card to 172 million number holders who it believed would request the new card; (3) SSA's estimate is based on issuing enhanced cards to 277 million number holders; (4) SSA's 1997 estimates of the cost for issuing an enhanced card generally appear to be reasonable if a new card were to be given to all 277 million current number holders; (5) regardless of the material from which the card is made or technology used for security purposes, issuing an enhanced card to all number holders using current procedures would cost a minimum of about $4 billion or more; (6) ultimately, SSA's costs will depend on how Congress decides to implement the issuance of a new card; (7) alternatives to the high cost associated with a mass issuance of new cards exist; (8) one alternative would be to issue a new enhanced social security card only to those who need it to verify work eligibility; (9) Bureau of Labor Statistics data suggest this approach could involve up to an estimated 118 million individuals--about 43 percent of the 277 million current number holders; (10) this option would help maximize control over illegal workers while significantly reducing SSA's costs; (11) in a second approach, SSA could issue the new card only to those applying for a new social security number and those who normally request replacement cards; (12) this option would also substantially reduce the cost of card issuance but provides no new employment authorization internal controls for many current number holders; (13) a third alternative could use state drivers' licenses and identity cards instead of social security cards for work eligibility verification purposes; (14) states renew these documents every few years and already include security features and a photograph; (15) the states could obtain current citizenship information from SSA for up to 87 million individuals for work authorization purposes; and (16) this option would avoid the enormous costs associated with reissuing the current social security card but would likely impose a significant burden on the states to make work eligibility determinations for the remaining 190 million individuals, and moreover, it would not necessarily enhance public confidence in the social security system.

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