If the U.S. government were to completely transition to a federal digital ID for at least some public welfare and other benefits, hundreds of billions in federal assistance each year could reach their intended recipients, says a new white paper from the non-profit think tank FREOPP.
Indeed. A July 2023 Office of Management and Budget (OMB) report stated that “every year more than $140 billion in government benefits that Congress has authorized goes unclaimed—including tax credits for working families, health insurance coverage for low-income adults and children, unemployment benefits, and disability supports … in part due to the administrative burdens associated with applying for them.”
“Fully enrolling all eligible Americans in all of the main social welfare programs could move 15 million people, including five million children, out of poverty,” says the white paper, Improving Access to—and Integrity of—Federal Benefits Using Digital ID Technology.
“Modernizing America’s identity infrastructure will ensure that hundreds of billions in federal benefits reach their intended recipients,” the paper says, noting that “for decades, Congress and administrations of both parties have tried to improve federal program benefit delivery and management. However, reforms have proven insufficient to date.”
“But,” the paper posits, “a(n) option exists to potentially address both challenges: using digital technologies for the purpose of identity verification while providing more convenient access to federal benefits. Around the world, policymakers are establishing digital identities to facilitate citizen interactions with governments and to prevent fraud and identity theft. Several countries, most notably Estonia, have successfully addressed the problem of waste, fraud, and abuse by enacting a cryptographically secured digital identity system. Unlike Social Security numbers, which are effectively in the public domain and often subject to misuse, the modern digital approach makes it more difficult to misappropriate someone’s identity.”
The paper recognizes that “the United States has already made substantial progress establishing a secure way for Americans to securely access government federal and state websites and services through Login.gov, which includes more than 80 million users,” but that in “looking forward, the White House and Congress should establish a limited digital identity technology platform for certain public benefit programs” in order “to strengthen program integrity and to reduce the administrative burden that Americans encounter accessing federal benefits, including by building upon the services offered by Login.gov.”
But, the paper notes, “establishing a limited, voluntary federal digital identity platform would require carefully answering many legal, administrative, technical and acquisitions management issues.”
Indeed. Biometric Update reported that the Chief Financial Officers of 24 federal agencies that use Login.gov for identity proofing services have noted challenges with technical issues. The Government Accountability Office recently reported that nine federal agencies said they have had challenges involving technical issues such as not having visibility into authentications, high failure rates, and lack of fraud controls.
The General Services Administration established Login.gov in 2017 as a single-sign-on identity proofing service to access federal agencies’ websites.
Earlier this month sixteen federal agencies told the GAO that Login.gov “improved their operations by decreasing the workload for agency employees, addressing existing security issues, and employing new technology.” The portal’s new identity proofing service includes selfie biometric liveness detection, and is now compliant with Identity Assurance Level 2 (IAL2), the federal government’s standard for high assurance identity proofing.
Eleven agencies also reported that Login.gov improved customer service while seven agencies highlighted the cost savings that were achieved.
In August, the General Services Administration (GSA) began using Login.gov and its secure, identity verification tools to support federal and state efforts to reduce misspending. “To modernize and strengthen these systems against fraud, Login.gov partnered with the Department of Labor Unemployment Insurance (UI) to provide identity verification services to states administering UI benefits,” GSA said, emphasizing that a handful of “states were able to modernize their UI Systems to protect their programs against identity fraud while still ensuring access to Login.gov’s systems.
“This partnership should be a focus of congressional and nonpartisan oversight to identify how and whether the broader use of Login.gov to support states’ management of federal unemployment assistance reduces improper payments and achieves taxpayer spending,” the white paper said.
To widen the pool of Americans who use Login.gov though, the FREOPP white paper says, “policymakers will need to navigate Americans’ longstanding concerns about privacy; how the federal government uses information; and questions about the appropriate roles of the federal and state governments in identity management.”
However, “over time, a transition to a federal digital ID for certain public welfare benefits could ensure that hundreds of billions in federal benefits reach their intended beneficiaries, much in the way that TSA PreCheck – a voluntary program – speeds access and increases security at airports,” the paper states.
The paper presents several “recommendations for incremental reforms to establish a limited, privacy-focused, voluntary federal digital identity for specific means-tested federal welfare programs, and to study potential broader applications.” It “also describes best practices and guidelines that policymakers should consider when designing and implementing a federal digital ID.”
The recommendations include having the OMB, Office of Information and Regulatory Affairs, and the Joint Financial Management Improvement Program establish a voluntary digital ID that builds on the Login.gov environment; Congress directing GAO to evaluate alternatives to Login.gov for establishing a federal digital ID; and Congress directing relevant federal agencies to use Login.gov or an alternative digital ID system for securely administering means-tested federal benefits, and incorporating a default enrollment with voluntary opt-out.
The FEOPP white paper goes on to say that in lieu of having a federal digital ID that the “rapid technological innovations enabled by artificial intelligence may increase the threats to benefit payment integrity.”
The paper highlighted a 2024 report by the Treasury Department’s Financial Crimes Enforcement Network that “identified more than $200 billion in suspicious financial transactions in 2021 involving identity-related issues,” and that identity-related fraud will likely increase.
“The proliferation of data breaches compromising personally identifiable information, synthetic identities, and the rapid evolution of Artificial Intelligence may further enable bad actors to exploit identity processes more easily, quickly, and inexpensively to drive money laundering, fraud, and other cybercrime,” the paper says.
In concluding, the paper says “a promising strategy for modernizing government benefit delivery and improving program integrity involves updating the technologies that governments and people use to access public benefits.”
Article Topics
digital ID | digital inclusion | financial inclusion | identity management | identity verification | Login.gov | U.S. Government
