A policy under siege

With time running out to
make headway on implementing
the Real ID Act, the Bush
administration is preparing to
revise its approach to the driver's
license standardization
requirements to make it easier
for states to comply with the
law.

The current price tag for
states to implement the act is
$11 billion to $14 billion. Under
the new approach, the administration
plans to increase the federal
government's financial support
and remove certain technical
requirements for the licenses,
thereby reducing states' costs by
several billion dollars. States will
also have more time to comply
with the law, although the
Homeland Security Department
has not said how much time.

DHS will announce
details of the new rules
when it releases the final
regulations for the
law, most likely within
90 days. It is unclear
whether the changes will
be enough to move the program
forward.

"Without the regulations in
place, no one knows what DHS
is aiming for," said David Quam,
director of federal relations at
the National Governors
Association. "We have been
given a complicated game board
with no instructions."

Bumpy ride

States issue about 240 million
driver's licenses that now must
comply with federal requirements
outlined in the Real ID
Act of 2005. But deployment has
been a bumpy ride so far, and
industry and policy experts say
the latest round of developments
might not eliminate concerns
about costs and data privacy.

Under the law, states must
meet new guidelines for collecting,
verifying, storing and publishing
personal information
related to driver's licenses, and
they must share that information
with other states.

However, since Real ID
became law, 17 states have
passed legislation opposing
it. Furthermore, DHS' Data
Privacy and Integrity Advisory
Committee declined to endorse
it, and the Senate turned down
an amendment to supply
$300 million to fund it.

But DHS remains committed
to it. The department has publicized
its agreements with
Arizona, New York, Vermont
and Washington state to produce
hybrid identification cards
that incorporate Real ID features
into passports for use in
crossing U.S. borders.

DHS Secretary Michael
Chertoff confirmed reports that
DHS is planning to revise Real
ID requirements, but he dismissed
rumors that the legislation
is dying.

"For those who are singing
a funeral dirge, I think they're
singing the wrong tune,"
Chertoff said Nov. 6.

He said DHS will
reduce the cost of Real
ID compliance in part by
loosening technical requirements.
For example,
states will have more
flexibility in choosing card
materials, he said.

Furthermore, the federal government
will take more responsibility
for paying for the systems
and network connections that
will help states verify the authenticity
of federal documents.

For example, state motor
vehicle administration employees
should have a way to electronically
verify an applicant's
Social Security enrollment,
immigration status and visa
status.

We are looking at ways
to significantly decrease the
cost by having the federal government
pay for some of the back-office elements of the system,
Chertoff said.

He and other DHS officials
have said that older drivers
present a lower terrorism risk
and, therefore, might be allowed
more time to switch to Real ID
licenses. According to the
Washington Post, DHS might
extend the deadline to 2018 for
drivers older than 40 or 50.
Moreover, states will have
more time to implement the act,
Chertoff said.

DHS had previously extended
the statutory May 2008 deadline
for beginning implementation
to December 2009 and
recently set 2013 as the deadline
for full implementation.

However, the National
Governors Association has
asked for 10 years to implement
the legislation, and Chertoff did
not specify the newest deadline.

Fewer layers

While DHS awaits the Office
of Management and Budget's
review of its final regulations for
the act, policy analysts and
industry executives say it is
unclear whether the proposed
modifications will substantially
reduce costs and overcome
opposition to the cards.

"I think you will see DHS
require fewer layers of physical
security on the card and back off
from polycarbonate cards and
laser engraving," said Jeremy
Grant, a senior vice president at
Stanford Group Co., an investment
research firm in Miami.

He does not expect DHS to
loosen the requirements for
states to verify documents such
as birth certificates by making
digital copies and sharing them
electronically because that would
not serve the intent of the law.

However, if DHS lessens
security requirements, privacy
advocates say some states will
provide only minimal privacy
protections to further cut costs. In a notice of proposed rulemaking
released in March, the
department said it would mainly
allow states to determine the
level of privacy protections they
would offer.

Lee Tien, a senior staff attorney
at the Electronic Frontier
Foundation advocacy group,
said the electronic verification
of documents presents one of
the biggest challenges to implementation,
and states are
unlikely to be able to comply for
many years.

Many birth certificates exist
only as paper documents stored
at thousands of state and county
offices. Until those documents
are available online, officials
at motor vehicle departments
would have to request
printed copies of birth certificates
for people born in other
states.

"As a practical matter, there is
no system in place to digitize
those records," Tien said. "The
verifications will be extraordinarily
difficult to do."

To date, only one of the five
electronic verification systems
required under Real ID is up
and running, Quam said. State
officials can confirm Social
Security numbers electronically
but cannot authenticate birth
certificates, immigration documents,
foreign and domestic
passports, and driver's licenses
issued by other states.

It is nearly impossible to verify
paper records by phone,
Quam said. "Ultimately, the
e-systems will have to be in
place," he added.

Although Chertoff is pledging
financial support to pay
for those systems, Congress
might not go along with the
plan, said Timothy Sparapani,
senior legislative counsel at
the American Civil Liberties
Union.

Last summer, the Senate
rejected an amendment to provide
$300 million for the program,
and DHS' appropriations
bill for fiscal 2008 contains only
$50 million for Real ID.

With so much opposition, the
reconfigured regulations will
likely be less ambitious than
DHS intended. And time is running
out to make progress
before the presidential election
in November 2008.

"DHS realizes it is under
attack on Real ID," Grant said.
"I think they will try to do something
passable and claim a
victory."

Staff writer Alice Lipowicz
can be reached at alipowicz@1105govinfo.com.