NCPA - National Center for Policy Analysis


December 14, 2005

The Department of Homeland Security (DHS) will soon decide whether to require all drivers' licenses to be embedded with computer chips, which will be more costly and less secure than upgrading the existing technology for licenses, says Human Events Online.

DHS has two options for licenses: Magnetic stripes or two-dimensional (2-D) bar codes; and contact-less integrated circuits such as Radio Frequency Identification (RFID) technology:

  • Whichever alternative is used, the new system will place a heavy burden on state and local governments, especially departments of motor vehicles, as well as on taxpayers and drivers.
  • States will now have to verify birth certificates, federal immigration documents and Social Security numbers with the appropriate federal departments, build a database to store and secure identification documents, and train personnel to use the new system.
  • Fees and taxes will have to be increased to cover whatever costs are not paid for by the federal government.

Computer chips are by far the more expensive of the two options:

  • The total cost of issuing new licenses with embedded computer chips to 196 million drivers could reach $17.4 billion, or $348 million per state.
  • The average cost of a license would shoot from between $10 to $25 to more than $93.
  • 3-D technology could be even more expensive than estimated because computer chips are flimsy and would need to be replaced more frequently than non-chip licenses.

Even more troubling than the financial cost is the potential invasion of privacy. RFID chips have the memory to store every detail about a person, including health records, family history, bank and credit card transactions. RFID chips can also be remotely accessed by a hand-held scanner, raising the risk of identity theft, notes Human Events.

Source: David Williams, "DHS Nears Decision on Embedded Chips in Drivers' Licenses," Human Events Online, December 12, 2005.

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