But what I am going to ask is that you read your statement. Since time is limited today the hearing will continue with your presentation tomorrow morning at 10 o'clock. You may now present your statement. Mr. HESS. That is all right.

Mr. EILBERG. Would you care to identify your associates?

Mr. HESS. Thank you, Mr. Chairman and members of the subcommittee.

I have with me Mr. Hugh McKenna on my left, Director of the Bureau of Retirement and Survivors Insurance.

On my right, Mr. Walter Rubinstein, the Program Policy Officer in that same bureau.

I am sorry about the unavailability of my testimony.

I will not only, as you requested, read my statement, but I would like to interpolate in a few places to elaborate or clarify on it . TESTIMONY OF ARTHUR E. HESS, DEPUTY COMMISSIONER, SOCIAL SECURITY ADMINISTRATION; ACCOMPANIED BY HUGH F. MCKENNA, DIRECTOR, BUREAU OF RETIREMENT AND SURVIVORS INSURANCE, AND WALTER RUBINSTEIN, PROGRAM POLICY OFFICER, BUREAU OF RETIREMENT AND SURVIVORS INSURANCE

Mr. HESS. Mr. Chairman and members of the subcommittee, I am pleased to have been invited here today to give testimony about what actions have been or will be taken by the Social Security Administration to implement section 137 of Public Law 92-603, the Social Security Amendments of 1972, which was enacted on October 30, 1972. I have with me Mr. Hugh F. McKenna, Director of the Bureau of Retirement and Survivors Insurance, Social Security Administration. Historically, the Social Security Administration issued a social security number to anyone who applied for it. However, the applicant had always been required to furnish identifying information which helped assure that only one social security number would be issued to any one person. The only information requested of an applicant, was that which was needed for the administration of the social security program. It has been our longstanding policy to screen against our files the applications of people over age 16 and any other application when we had reason to believe that the applicant previously had a number. In addition, we had a procedure requiring that individuals over age 54 provide evidence to establish their identity in order to assure that they had not previously been assigned social security numbers. These steps are intended to deter improper attempts to obtain numbers and reduce problems that the Internal Revenue Service, the Immigration and Naturalization Service, and other agencies must deal with. Prior to 1972, applications for social security numbers were taken and social security numbers were issued at all of our 1.000 field offices. A year ago, we began implementation of a process which will eventually promote automated screening of all applicants before social security numbers are issued from our central office. Pending the mas

sive data entry and tape preparation that will enable us to get all social security numbers ever issued on tape, we are continuing to have manual screening of all applications of persons over 13 years of age against our national records. While social security numbers may still be applied for at our field offices, all new social security numbers are assigned centrally by computers after the applications of all persons over 13 years of age have been manually screened against our national records. This tigthening up of procedures has cut down the likelihood of issuing multiple social security numbers to any one person.

Section 137 of the Social Security Amendments of 1972 developed out of congressional concern over the fact that the social security number had over the years become an almost universal national identifier. The Internal Revenue Service, for example, requires that a social security number be shown in connection with income tax returns; a social security number is generally required to open a bank account and to purchase securities; and many public agencies and private business enterprises use the social security number for all sorts of purposes of their own. For example, in a few areas a child cannot register in school, and a person cannot receive a driver's license, without having a social security number. The 1972 amendments, as you noted, require the Secretary of Health, Education, and Welfare to take certain administrative measures in order to further tighten the procedures for issuances of social security numbers; to assign social security numbers to aliens at the time of their lawful admission either for permanent residence or under authority of the law which permits employment; and to assign social security numbers to individuals who apply for, or receive cash benefits under any program financed in whole or in part from Federal funds. The amendments further authorize the Secretary to assign social security numbers to children of preschool age, upon the request by a parent or guardian, and to all children of school age at the time of first enrollment in school. I might add that it will be sometime before we can exercise the authority under this authorization, because we have a tremendous work load to get through first, in order to complete the welfare enumeration and all the other things that we feel have priority, and that are required. The provisions require all applicants to submit sufficient evidence to establish age, identity, and citizenship or alien status.

In addition to tightening up the procedures for issuance of social security numbers, the amendments expand the penalties for making false statements for the purpose of obtaining a social security number, and for misusing a social security number, or misrepresenting a number to be a valid social security number.

We are in the process of finalizing the implementation of these 1972 amendments. We have had to establish, and we are getting final agreement, or cooperative procedures with the Department of State, the Immigration and Naturalization Service, and State public assistance agencies. We have been working with representatives of these agencies and have reached general agreement about policy, procedure, and direction. We are continuing to work with them at a high level to resolve any remaining problems.

Let me at this point, indicate in some detail where we stand with regard to implementing the new legislation and give you a general view of the direction in which we expect to travel in the near future. I spoke earlier about our procedure requiring persons over age 54 to provide documentary evidence to establish their identity. We are currently in the process of implementing this procedure for applicants aged 18 to 54, as well, on the basis of the experience we have had with the older groups. I might add that, because of very heavy workloads and a much lesser risk in the case of younger children, we will have an interim procedure for them which relies on screening rather than full documentation, except where we are dealing with recipients of benefits, where special checking is done.

In the case of immigrants, the consular offices of the State Department will have the alien complete our application form for a social security number at the same time he applies for his visa, and the Department of State will check evidence of age, identity, and alien status as part of the visa process. Approximately 400,000 persons a year will be involved in this process, which we expect to be fully operative by July 1 of this year. As a result, social security numbers will be issued to this large number of aliens when they enter the United States based upon good evidence of their age and identity secured at the time they applied for a visa.

In the future, when an individual who is foreign born alleges U.S. citizenship, or alien status, in applying for a social security number, he will be asked to present corroborating evidence and where none is available we will verify the allegation with the Immigration and Naturalization Service. And I should add, if a negative reply is received from the Service, the applicant will be told that a social security number cannot be issued to him until his status is established.

Mr. EILBERG. May I interrupt and ask, do you plan to require some corroboration by applicants who are in the country. Will you require some corroboration of their claim of citizenship or legal status here?

Mr. HESS. Yes, if the individual is now applying for a number in the country, and he is foreign born, then he will be required to state whether he has citizenship, or whether he has alien status, and to present corroborating evidence. Now, if he indicates that he can't present corroborating evidence, if he indicates that it is impossible, or difficult to get, we will check with INS. And as I say, in case of a negative reply, we will tell him that he cannot have his number until the status is established.

Mr. EILBERG. When will this be operative in your opinion?

Mr. HESS. This will be operative July 1, in our opinion.

Mr. EILBERG. Go ahead.

Mr. HESS. If he is an alien

Mr. RUBINSTEIN. This, I think, has been agreed between the representative of INS and us, and the question of routing procedure, getting them out to our district offices, having the INS

Mr. HESS. I would say no later than July 1, possibly before.

If he is an alien, we will require him to produce his alien registration receipt card or his arrival-departure record before processing his application. In other words, these are people in the country who now appear at the district office.

Mr. DENNIS. May I ask a question right there?

If it shows that he is not eligible for work, why issue him a number or card at all?

Mr. HESS. He might have need for a card for other purposes. For example, under the Internal Revenue and Treasury regulations, if he wants to have a bank account, or if he is visiting in this country legally he may be legally here, but he is not eligible for work-he may need a number in order simply to be able to respond to a number of requirements that he may have in order to live in this country. And what we are proposing to do is to study this very carefully with INS, to annotate our records, and to let them know immediately if such a person does work and who he is working for. And this might give us a clue, and INS a clue, as to whether there is any prevailing pattern or concentration of this kind of employment with a particular employer. It will be the first time that we could tie this kind of employment down to an employer.

Mr. FLOWERS. Could I ask a question there?

Mr. Dennis stimulated this.

It would seem to me that whatever requirement might be served by giving these people a social security number and card is not worth the problem that it creates when those illegal aliens end up with one. I would like to see some statistics on what kind of people need it for bank accounts, or numbers, and whatnot, who are legal.

Mr. HESS. We will be able to get that. I am going to mention in a moment at the end of my testimony that we are starting a study in some of the border offices in which we are going to be gathering a lot of data, and making cross-checks against not only our records and State and local records but against INS records, so that we will have

some

Mr. FLOWERS. The primary rationale behind your social security numbers for bank accounts is so that you can keep up with it ultimately for tax purposes?

Mr. HESS. Yes; and also banking systems sometimes really can't operate now unless they have a number for computer purposes.

Mr. FLOWERS. But if they are unable to work legally, they ought not to have any income that would be taxable, for the Government to collect taxes on.

Mr. EILBERG. May I suggest that we are going to be finishing in a few minutes, but I would like for you, when you come back to help us tomorrow, on the questions Mr. Flowers is suggesting. All of us are concerned with what those other possibilities might be. And I think we should have that information.

Mr. HESS. We would be glad to do that.

Mr. EILBERG. That would be one thing you could bring back tomorrow.

Please proceed.

Mr. HESS. Going back to the case where the documentation shows that he is not able to work in this country, and where we said, we will annotate our records, we will also furnish this information immediately to the Immigration and Naturalization Service concerning aliens without proper documentation of their status. And in that case we would not issue a card to such a person, in other words, if he had no proper documentation at all. In those cases in which the documentation shows that he is not eligible to work in this country we will annotate our records so that upon an indication that wages have been reported for him we would promptly notify the Immigration and Naturalization Service. We intend to maintain a close liaison with the Immigration and Naturalization Service in order to further refine our processes.

The approach I have outlined does not close all of the gaps-it will not, in every case, preclude the issuance of social security numbers to an alien who is not permitted to work-and therefore no reliance can be placed on the social security number as a valid work permit. There are two reasons why such a result cannot be attained. I have already mentioned the first, which is the present Internal Revenue statute which requires social security numbers in connection with tax-related reports. Some immigrants whose immigration status does not authorize them to work will nevertheless need numbers. And we will give you some further examples of this tomorrow. And we have no assurance that at least a few of these may not attempt to work. But as I said before, we will flag their records and, if any earnings show up, this will help INS to determine whether these earnings are taking place.

The second fact and this, Mr. Flowers, I think is something of great concern to us-is that, no matter how stringently the social security number issuance processes are controlled, unless an employer insists on seeing evidence of identity and citizenship in addition to the social security number, there is no way for the employer to know that the social security number that he is shown is the number assigned to the person presenting it and is not a bogus, borrowed, or stolen one.

The social security number is not a reliable mechanism to use as a work permit or identification card, nor was it ever so intended, and therefore its possession should not be relied on as an indication that the job applicant is employable under Federal and State law.

I should note here that, aside from this new legislation that we are now implementing, we have, since 1952, under section 290 (c) of the Immigration and Nationality Act, upon request, provided information to the Attorney General about aliens who have been issued social security numbers. Mr. Chairman, from here on out my testimony duplicates pretty much what we put in the record last year. If you want me to read it I will, or if you would like me to get back to it in detail tomorrow, I will do so. This is an explanation of prior and existing relationships.

Mr. EILBERG. If it merely duplicates what you have put in before you may wish to summarize it.

Mr. HESS. I would like to summarize two important parts which

may come up.