In recent weeks Americans have been rudely awakened by $3.00 per gallon gasoline and the hundreds of billions of dollars it will cost to rebuild the Gulf Coast.   Federal Reserve Chairman Alan Greenspan worries that the deficit is out of control and President George W. Bush has promised to work with Congress to cut spending to offset some of the unexpected costs of hurricane relief.

Given all these new budget strains, it is astonishing that the Department of Homeland Security (DHS) could be giving serious consideration to forcing state governments to issue millions of "gold-plated" ID cards with computer chips.  Costing taxpayers tens of billions of dollars, these cards would do little to improve real security but could pose a serious threat to every cardholder's personal privacy.

The Real ID Act, approved in May, 2005, for the first time authorizes the federal government to set uniform standards for state drivers' licenses.  A spokesman for the bill's primary author, House Judiciary Committee Chairman James Sensenbrenner, said Congress modeled many provisions in the Real ID Act after current standards in states including California, Florida, New York, and Virginia.  It is true that many states are making secure cards at a reasonable cost and improving application procedures.

While congressional intent to provide a reasonably priced, secure license is clear, the message may not be getting through to the young Department of Homeland Security (DHS), which was charged with the development of ID security standards but has no previous experience in making ID cards on a massive scale. DHS is consulting with state departments of motor vehicles (DMVs), which do have a great deal of expertise and produce more than 72 million cards each year.  The states are aware of the technologies that do and do not work.  Existing technologies include use of unique biometrics such as facial recognition, holograms, two-dimensional bar codes, and highly-secure machine readable codes.  Drivers' licenses with these features are currently produced in many states for less than $1.50 per card depending on volume.

DHS may ignore the existing technology and mandate that state-issued IDs include embedded computer chips in large part due to lobbying from a coalition of chip manufacturers, many of whom are based abroad.  Many states, on the other hand, have rejected this dubious scheme as unworkable due to the huge cost and lack of durability.  In the last year alone, New York, Virginia, and West Virginia have examined and rejected the chip idea as costing far too much for very little benefit.

Citizens Against Government Waste studied the chip idea and agreed with the conclusions of a recent London School of Economics report:  If the cost of building an entirely new infrastructure is factored in, embedded computer chips could push the cost past $90.00 per card and would pose significant privacy risks.  In fact the full cost of implementing this complex chip solution could be $17.4 billion in new, wasteful spending.

The basis for privacy concerns is that radio frequency chips can more easily be mined for personal information by unauthorized persons, even from some distance away.  The encryption for these chips has been successfully hacked even by high school students.

Several state DMVs are also concerned that brittle computer chips cannot survive the wear and tear of every day use.  Male drivers in particular tend to carry licenses in their back pockets and often bend cards beyond the breaking point of a chip.

DHS can achieve the security goals set by Real ID simply by following Congress's intent to keep the cost reasonable and, working more closely with governors and state DMVs to gain the maximum benefit from a mix of existing security features that have already proven to be practical on a large scale.

DHS Secretary Michael Chertoff promised such cooperation when he met with the National Governors Association in July.  On October 18, DHS held a meeting with state officials to discuss REAL ID regulations, which could be finalized at any time.  The secretary should make it clear that he opposes costly, unfunded, intrusive, and unnecessary mandates as part of any federal standard.  If the chips fall where they should, they will not be included in any American's ID card.

CAGW's complete report on federal ID standards is available at www.cagw.org.

Thomas A. Schatz is President of Citizens Against Government Waste.