To Save Our Infrastructure, Make Every Road a Toll Road

Few things exemplify the United States’ disconnect between personal freedom and collective responsibility like our automobile habit. Drivers travel at will, as long as they have money for gas and road snacks. But what they pay for that privilege, in the form of gas and other taxes, doesn’t come close to covering the costs of maintaining the roads on which they travel—let alone recoup all the productivity lost in congestion and the damage that tailpipe emissions do to our health. Compared to what society pays, driving is practically a free ride.

Transportation economists have long sought to make drivers pay their fair share without raising the federal gas tax—a political nonstarter. In recent decades, a broad swath of experts has settled on an idea with the potential to fix the three big problems that come with cars: road damage, congestion, and pollution. The answer? Charge ‘em by the mile.

It’s not too crazy to think some version of this might happen. The Highway Fund, meant to provide for road maintenance, is perpetually broke, because its current funding mechanisms are broken. Many states have studied, and some have even tried, what are known as Vehicle Miles Traveled taxes. It just sounds fair. But if the feds ever take the idea national, you can bet it won’t be as ideal as the one I’m about to describe.

Where Has All the Money Gone?

In 2017, the American Society of Civil Engineers gave US road infrastructure a D grade, noting that one out of every five highway miles is in poor condition—potholed, pitted, poorly painted lines, the full catastrophe. This is because there’s no money to fix them. Federal gas taxes were supposed to keep the Highway Trust Fund afloat, but politicians have refused to raise them since 1993.

“Funding for highways has basically gotten worse since then,” says Robert Atkinson, a longtime transportation policy wonk and current president of the Information Technology and Innovation Foundation. Unlike politicians, inflation doesn’t worry about reelection, and the 73 percent increase since 1993 means the 18.4 cents Americans pay per gallon is worth less than ever. As cars get more efficient, drivers are pumping less gas, exacerbating the problem.

Things are so bad that, since 2008, Congress has had to periodically cover the Highway Fund’s shortfall through (potentially illegal) transfers from the general fund—that is, tax money paid by everyone, no matter how much (or how little) they drive.

That’s just at the federal level. In a majority of states, direct user fees (gas taxes, tire taxes, registration fees, and so on) cover less than half of road spending, according to research done by the Tax Foundation. The perceived unpopularity of gas taxes leads many states to draw from their general funds to pay maintenance. So even if you spend the next year on your couch, exploring every inch of PlayStation 4’s Shadow of the Colossus rerelease, some portion of the taxes you paid for the console and game will go toward improving those real life roads you never use.

It gets worse, because shoddy roads slow cars down, worsening traffic—traffic that already costs American drivers an annual $75.5 billion in fuel and time that they could have spent working instead of listening to podcasts, according to a 2014 study by the Center for Economics and Business. Congestion adds to the cost for businesses providing goods and services via those roads. You better believe the price of your Sunday pork chop includes the overtime and excess fuel the driver of that delivery truck (whose CB handle is probably Porkchop) wasted sputtering through your city’s clogged beltway. These indirect costs from congestion add up to a staggering $45.6 billion. And that’s in 2013 dollars. Inflation is unforgiving here too.

Finally, let’s talk about health care costs. Numerous studies have linked tailpipe emissions and tire wear—which include both particulates and volatile gases—to a variety of health problems. An abridged list includes asthma, heart attacks, childhood leukemia, low birth weight, immune system damage, and lower fertility rates. The cost to the health care system and lost productivity comes to billions or trillions of dollars, depending on the study.

If your appetite for doom and gloom left you with some room for dessert, remember that personal automobiles account for about 17 percent of US greenhouse gas emissions. Depending on the county you live in, the effects of, and adaptations to, climate change could eat up as much as 30 percent of your local GDP.

A Fair and Balanced Remedy

More than a decade ago, Congress realized the funding problem was becoming intractable, so they recruited a bipartisan, independent commission of experts to find solutions. “We dug into the analysis on gas taxes, looked at electric vehicle adoption rates, and sort of came to the Vehicle Miles Traveled tax as the obvious conclusion,” says Atkinson, who led the National Surface Transportation Infrastructure Financing Commission.

A Vehicle Miles Traveled tax is what it sounds like: a toll that applies wherever you go. Drivers pay by the mile, at a rate that reflects the actual cost of driving. The idea is popular. More than half of states have looked into taxing VMT. The most prominent has been Oregon. In 2006 the state recruited 300 drivers for a pilot program, and outfitted their cars with GPS. For each mile, they pay 1.5 cents. (They are also exempt from paying the state gas tax.)

Oregon’s ruling class considered the program a success and enshrined it in law, capping participants at 5,000—presumably to limit any potential negative effects of having everyone suddenly opt out of the gas tax.

Your Car the Smartphone

Such limited trials have been fairly successful, but a simple price per mile doesn’t come close to tapping the VMT tax’s full potential. “This is a broad tool that allows you to adjust the price of driving based on a number of different factors,” Atkinson says. Consider the VMT framework a platform on top of which other fee structures could be layered.

In 2011, the RAND Corporation released a research brief that outlined how “rates could be structured to help reduce congestion and harmful emissions, metering devices could provide value-added services (e.g., safety alerts, real-time traffic information and routing assistance, and the ability to save money with pay-as-you-drive insurance), and the system could generate rich travel data for improved transportation planning.”

A VMT tax could tamp down on congestion by adding a few pennies to the per-mile fee during rush hour or when drivers enter city centers. (That second bit is also known as a congestion charge.) To control emissions, gas guzzlers could pay a higher per-mile rate.

The technological challenges are minimal. “Modern cars are essentially giant smartphones,” Atkinson says. It’s not difficult to imagine coupling a financial framework (like those used by extant tolling agencies) to a mapping application on your car. Older cars would be gas tax laggards—the fleet takes 10 to 15 years to fully change over. Even there, you could rig up a dashboard GPS unit capable of calculating vehicle miles traveled.

In any case, these mapping systems would need additional data. “Every road segment can be annotated by who owns it, prices by time of day, and notes saying who gets the money,” Atkinson says. At the end of the month, your car aggregates the various fees and sends your payment off to the relevant agencies—local, state, and federal.

How granular can this sort of externality-tracking get? Take tailpipe emissions. Particulates and volatile gases disproportionately impact children and the elderly. Municipalities with a heart could code a buffer around schools, hospitals, or retirement communities and charge a premium for people driving nearby. A city below sea level might implement a surcharge for greenhouse gas emissions, filling the coffers in preparation for battling rising seas. (Though the punitive attention would probably be better spent on big polluters like coal plants and the oil industry.) Hyperconscious mapping software might even be programmed to detect cars that spend too long idling in one place—more wasteful emissions. And real-time congestion mapping à la Waze has obvious implications for easing traffic.

While this sort of nuanced and dynamic system might seem excessive, something like it will be essential going forward. “If we do get to point where fewer cars are fueled by gasoline, we need to think of alternatives to gasoline tax,” says Jessika Trancik, an energy systems engineer at MIT. The gasoline tax now responsible for funding our roads.

No Panacea

All of this potential for equitably charging drivers is super exciting—unless you drive. The sense of revulsion you feel in response is partly why VMT taxes are more policy wonk fantasy than reality. Maybe you understand that the direct fees you pay for road use will actually lower the overall cost of living, as you spend less time driving, on better roads, through cleaner air. You probably still have reservations.

Like privacy. Government-installed tracking hardware in every car sounds like a rejected Black Mirror plot device. Such concerns are understandable, but not totally warranted. GPS systems can be rigged to only collect location information; no transmitting. That data would be stored in your car’s brain, then aggregated at the end of the month, with mileage totals organized by road type, time of day, and proximity to any pertinent landmarks. That total would ping your account, which would dispense the dollars—this is how multiagency toll networks like E-ZPass work. The cofounder of the libertarian Reason Foundation has even testified before Congress that GPS-based VMT collection systems could be designed such that they pose no significant privacy concerns.

And if you (or your elected representatives) still aren’t comfortable with that, the RAND Corporation outlined eight different technological categories capable of taking down Vehicle Miles Traveled information—ranging in sophistication from self-reporting odometer readings to toll-like transponders to GPS (which would be the most versatile and effective).

Other critiques concern equity. Poor, disadvantaged, and rural people tend to commute farther than the affluent, and drive less efficient cars. The gas tax already charges them disproportionately. A straightforward VMT would too. Any lawmakers crafting a Vehicle Miles Traveled framework would need to consider such concerns. Again, technology could come to the rescue, identifying drivers who merit discounts or subsidies.

For now, any arguments for or against VMT taxes are stuck in political gridlock. But Atkinson sees a glimmer of hope for road payment reform—Trump’s $1 trillion infrastructure promise might put Congress in a fund-raising full Nelson. And who knows—state-level interest in VMT taxes might foment into a national schema. The only sure thing is that freewheeling personal travel is running out of road.

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Infrastructure Emergency: Experts Say That America Is Dangerously Underprepared For 60 Million Tons Of Sunscreen Falling From The Sky

It’s no secret that this country’s infrastructure is crumbling, but this latest news shows just how bad politicians have let things get: In a new report out this morning, experts say that America is dangerously underprepared for 60 million tons of sunscreen falling from the sky.

Ugh. This is just shameful.

“In the event of 60 million tons of sunscreen falling from the sky, large portions of the U.S. would be left utterly devastated as existing building codes, waterways and sewer systems are not adequate to absorb such a downpour of sunblock,” reads the extremely sobering report from the Environmental Protection Agency. “In almost every major metropolitan area in the country, a 60 million-ton deluge of sunscreen would level homes to the ground, flood city streets, and overflow existing dams and reservoirs.”

Just wow. America is the wealthiest country in the world, and yet we are absolute sitting ducks if 120 billion pounds of sunscreen suddenly falls from the heavens.

Imagine even a 5 million-ton downfall of sunscreen on New York City, where no system is in place to pump such a catastrophic amount of sunblock out of the subway system. Whether the downpour is a thick SPF 60 or a lighter tanning oil, the health consequences when sewer systems flood and fill city streets and homes will be disastrous. And for all the big game President Trump has talked about infrastructure, it’s unfathomable that no major city in the country has adequate shelters with specially-made water jets that can rinse sunscreen out of the stinging eyes of the millions of displaced Americans in the event that an unfathomable amount of sunscreen splatters all over the country.

The U.S. may be in a precarious situation, but hopefully this report spurs leaders across the country to take serious action to ensure we’re prepared should the unthinkable happen. And we don’t have a second to lose.

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Trump Proposes to Cut Medicare and Spend Big on Wall, Defense

President Donald Trump will propose cutting entitlement programs by $1.7 trillion, including Medicare, in a fiscal 2019 budget that seeks billions of dollars to build a border wall, improve veterans’ health care and combat opioid abuse and that is likely to be all but ignored by Congress.

The entitlement cuts over a decade are included in a White House summary of the budget obtained by Bloomberg News. The document says that the budget will propose cutting spending on Medicare, the health program for the elderly and disabled, by $237 billion but doesn’t specify other mandatory programs that would face reductions, a category that also includes Social Security, Medicaid, food stamps, welfare and agricultural subsidies.

The Medicare cut wouldn’t affect the program’s coverage or benefits, according to the document. The budget will also call for annual 2 percent cuts to non-defense domestic spending beginning “after 2019.’

At a time when the prospect of rising annual budget shortfalls has spooked financial markets, the White House said in a statement — without explanation — that its plan would cut the federal deficit by $3 trillion over 10 years and reduce debt as a percentage of gross domestic product. Yet, in a break from a longstanding Republican goal, the plan won’t balance the budget in 10 years, according to a person familiar with the proposal.

The budget, to be released later on Monday, is unlikely to gain traction on Capitol Hill. Lawmakers routinely ignore the spending requests required annually from the executive branch. And Congress passed its own spending bill on Friday, including a two-year budget deal, which the president signed into law.

According to the summary, Trump will urge an increase in defense spending to $716 billion and a 2.6 percent pay raise for troops. He will request $18 billion to build a wall on the Mexican border, the summary indicates.

The White House also seeks $200 billion for the infrastructure proposal the administration plans to unveil alongside the fiscal year 2019 budget, as well as new regulatory cuts.

“This will be a big week for Infrastructure,” Trump said in a Twitter message Monday. “After so stupidly spending $7 trillion in the Middle East, it is now time to start investing in OUR Country!”

Monday’s document will outline proposed spending reforms the administration says would, if enacted, cut deficits over the next decade — even as recently passed tax legislation and spending caps threaten to drive future annual deficits above $1 trillion.

Trump May Struggle on $1 Trillion Pledge to Fix Crumbling U.S.

“Just like every American family, the budget makes hard choices: fund what we must, cut where we can, and reduce what we borrow,” Office of Management and Budget Director Mick Mulvaney said in a statement. “It’s with respect for the hard work of the American people that we spend their tax dollars efficiently, effectively, and with accountability.”

A year ago, Trump asked lawmakers to cut $3.6 trillion in federal spending over the next ten years, and identified deep cuts to domestic spending programs. Instead, lawmakers last week passed a two-year government funding deal that would boost military and non-defense spending by $300 billion over the next two years and add more than $80 billion in disaster relief.

But administration officials argue their proposals, dead on arrival though they may be, is still an important marker of the president’s legislative priorities.

Immigration Enforcement

The plan includes a heavy emphasis on immigration enforcement. Trump is requesting $782 million to hire 2,750 new border and immigration officers, and $2.7 billion to detain people in the country illegally. Trump is also asking for $18 billion over the next two fiscal years toward the goal of constructing a wall on the U.S. border with Mexico. That’s a key point of contention in the ongoing legislative battle over the fate of young people, known as “Dreamers,” who were brought to the country illegally as children.

The proposal also includes $13 billion in new funding to combat the opioid epidemic, which Trump has frequently cited as among his top domestic priorities. The administration would provide a $3 billion boost to the Department of Health and Human Services in the next fiscal year, and $10 billion in 2019.

The proposal takes “money that the Democrats want to put to these social programs and move it to things like infrastructure, move it to things like opioid relief, move it to things that are in line with the president’s priorities so that if it does get spent, at least it get spent to the right places,” Mulvaney said Sunday during an appearance on Fox News Sunday.

Boost for Veterans

Other elements include $85.5 billion in discretionary funding for veterans health services, education, and vocational rehabilitation, the OMB said on Sunday. It is not clear how much of that funding would represent an increase from current spending levels.

The budget also includes $200 billion in federal funds over the next decade that the White House says would spur $1.5 trillion in infrastructure spending through partnerships with state and local governments and private developers. That includes $21 billion over the next two years that the White House says would “jump start key elements of the infrastructure initiative.”

Trump will discuss the public works proposal on Monday with governors, mayors, state legislators and other officials, and he expects to meet with Congressional leaders from both parties at the White House on Feb. 14. The president plans to visit Orlando, Florida, on Feb. 16 for an infrastructure event, and he and cabinet members will also promote the plan at events around the U.S., officials said.

The White House said its initial approach is to offset the $200 billion in the budget for its infrastructure plan with spending cuts elsewhere, including from some transit and transportation programs the administration doesn’t think have been spent effectively. But Trump is open to new sources of funding, a senior White House official told reporters.

‘Robust’ Defense

The White House also didn’t detail how much money it wanted to devote to new spending on the military, but OMB said the proposal would provide “for a robust and rebuilt national defense.” In last year’s budget proposal, Trump called for a $52.3 billion boost for the Defense Department, while asking for deep cuts to the Environmental Protection Agency, State Department, and Department of Health and Human Services.

Mulvaney said this year’s documents — theoretical though they may be — would see those agencies targeted again for budget cuts.

“There’s still going to be the president’s priorities as we seek to spend the money consistently with our priorities, not with the priorities that were reflected most by the Democrats in Congress,” he told Fox News.

Trump on Friday complained on Twitter that in order to boost military spending, “we were forced to increase spending on things we do not like or want.”

The budget proposal assumes that the U.S. economy will ramp up over the next decade to his goal of 3 percent growth, according to an administration official on Friday who confirmed figures to be contained in Monday’s budget proposal. Economic growth is projected at 3.2 percent in 2019 and 2020.

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    Banks Pine for Loan Growth as Clients Wait on Trumps Promises

    President Donald Trump’s pledges to overhaul taxes, trade, infrastructure and health care may thrill some corporate leaders, but it’s causing many to delay expansions. That’s bad for banks.

    Lending growth probably decelerated for a fourth straight quarter in the three months ended Sept. 30 across more than a dozen of the biggest U.S. banks, according to Royal Bank of Canada analysts and Bloomberg calculations. Their total loans may have ticked up just 1.8 percent, the smallest increase in more than two years, as commercial and industrial customers held off on buying equipment and building plants.

    Executives are “hesitant to borrow in the face of uncertainty,” said Jason Goldberg, an analyst at Barclays Plc. “Whether it’s potential tax reform, health-care uncertainties, or they’re unclear what infrastructure spending is going to look like, you’ve definitely seen corporates take a pause.”

    Washington’s inaction has been frustrating bankers for months, a sentiment that may surface anew when they start posting quarterly results this week. During the last round in July, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon lashed out, saying, “There would be much stronger growth if there were more intelligent decisions and less gridlock.” In June, Bank of America Corp. Chief Operating Officer Thomas Montag said corporate clients need clarity to make big investment decisions.

    Trump and his top economic adviser, Gary Cohn, have said they expect the financial industry to help fund growth. But instead, a dearth of progress on big legislation has stymied that business.

    Congressional Republicans spent much of September trying to resurrect a failed health-care bill. Then Trump told lawmakers his $1 trillion infrastructure plan may not rely on public-private partnerships, potentially throwing a wrench into a key priority. The president also released a tax plan that many analysts consider unlikely to win support until designers can prove it won’t balloon the federal deficit.

    For banks, the uncertainties are compounding challenges in lending, which also is being constrained by tighter regulation and slower-than-expected interest-rate hikes — factors that have crimped trading revenue too. Low yields have encouraged firms to issue bonds and use the proceeds to repay bank loans, said Alison Williams, an analyst at Bloomberg Intelligence. U.S. Bancorp CEO Andrew Cecere addressed the challenges at an investor conference last month.

    “With the low yield curve, there was a lot of debt issuance, and that debt issuance was used to pay down some bank lending,” he said. In addition, “there was some more uncertainty that entered the market because of some of the slowdown in the perceived timing of tax policy and trade policy and regulation,” slowing companies’ capital expenditures.

    ‘Mental Signal’

    Corporate executives’ outlook for the next six to 12 months deteriorated in July and August, with some respondents citing heightened policy uncertainty, the Federal Reserve Bank of Chicago said last month. The number of workers on U.S. payrolls declined in September for the first time since 2010, reflecting major disruptions from hurricanes Harvey and Irma.

    For now, bank investors are willing to look beyond that. The 24-company KBW Bank Index surged more than 30 percent from the November election to early March on optimism that Trump’s administration will eventually ease bank regulation, reignite inflation and drive up interest rates. The rally resumed in September as attention shifted to taxes.

    “People were underweight financials for a long time,” said Chris Whalen, an independent analyst and consultant. “When Trump got elected that was a mental signal for these guys that we should increase our allocation.”

    Investors continue to see reasons for optimism. Trump’s plan to cut corporate tax rates would be particularly beneficial for banks, whose burdens are often elevated by a lack of deductions. The six largest U.S. banks could see net income rise $6.4 billion under the administration’s proposal. And lenders still produce big profits. JPMorgan generated $26.5 billion in the 12 months through June, a record for any U.S. bank.

    Mortgage, Autos

    Yet expectations for the third quarter are measured. JPMorgan, the nation’s largest bank, may say Oct. 12 that adjusted profit rose 2 percent to $5.89 billion, according to analysts surveyed by Bloomberg. At Citigroup Inc., set to report the same day, profit probably slipped 1 percent to $3.57 billion.

    Wells Fargo & Co. and Bank of America report the following day and Goldman Sachs Group Inc. and Morgan Stanley release earnings next week.

    There are other reasons for concern. While consumers are still borrowing more, there’s mounting evidence they’re becoming less reliable, potentially ending a period in which losses were low. Credit cards face heightened competition, while an overheated auto market has led some lenders like Wells Fargo to pull back.

    And for mortgage lending, a big driver for banks in the run-up to the 2008 financial crisis, new rules have made it more difficult to make money. Survivors have been buying loans from smaller “correspondent” lenders, a strategy that’s started to run out of room.

    “You will see some pain this quarter,” Whalen said. “JPMorgan and Wells Fargo have been bidding aggressively.”

    Trading Declines

    Trading also is expected to be down, in part because the lack of congressional action has left clients with few reasons to buy or sell. Executives from JPMorgan, Citigroup and Bank of America told investors last month to expect declines ranging from 15 percent to 20 percent in the third quarter from the same period a year ago.

    That may leave investors and analysts looking past this quarter’s results to the end of the year, when lawmakers may have more progress to show on tax policy and other priorities.

    “Banks tend to be more optimistic looking out than they are in the current quarter, so we’ll see,” Barclays’s Goldberg said. “Pipelines are good. At the end of the day though, loan growth is a reflection of the economy and economic growth has been a little bit more subdued than desired.”

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      The White House and Equifax Agree: Social Security Numbers Should Go

      The Trump administration is exploring ways to replace the use of Social Security numbers as the main method of assuring people’s identities in the wake of consumer credit agency Equifax Inc.’s massive data breach.

      The administration has called on federal departments and agencies to look into the vulnerabilities of employing the identifier tied to retirement benefits, as well as how to replace the existing system, according to Rob Joyce, special assistant to the president and White House cybersecurity coordinator.

      “I feel very strongly that the Social Security number has outlived its usefulness,” Joyce said Tuesday at a cyber conference in Washington organized by the Washington Post. “Every time we use the Social Security number, you put it at risk.”

      Joyce’s comments came as former Equifax CEO Richard Smith testified before the House Energy and Commerce Committee, the first of four hearings this week on Capitol Hill. Lawmakers from both parties expressed outrage over the size of the breach as well as the company’s response and grilled Smith on the timeline of the incident, including when top executives learned about it.

      Smith said the rising number of hacks involving Social Security numbers have eroded its security value.

      “The concept of a Social Security number in this environment being private and secure — I think it’s time as a country to think beyond that,” Smith said. “What is a better way to identify consumers in our country in a very secure way? I think that way is something different than an SSN, a date of birth and a name.”

      Joyce said officials are looking into “what would be a better system” that utilizes the latest technologies, including a “modern cryptographic identifier,” such as public and private keys.

      Read more: Five Data-Security Ideas Brought Up During the Equifax Hearing

      ‘Flawed System’

      “It’s a flawed system that we can’t roll back that risk after we know we’ve had a compromise,” he said. “I personally know my Social Security number has been compromised at least four times in my lifetime. That’s just untenable.”

      Joseph Lorenzo Hall, chief technologist at the Center for Democracy and Technology in Washington, said one possibility could be giving individuals a private key, essentially a long cryptographic number that’s embedded in a “physical token” that then requires users to verify that the number belongs to them. It could work like the chip in a credit card that requires the owner to enter a pin allowing use. He pointed to Estonia where they have deployed such cards that people use to validate their identity.

      “Your pin unlocks your ability to use that big number,” he said. The challenge is how to create the identifiers and how to distribute the keys. “It’s very promising” and “it’s possible to technically design something like this” but it could be expensive to design and disseminate such material to each American, he said. “This is a pretty big endeavor.”

      The administration is also participating in discussions Congress is having about the requirements of protecting personal data and breach notifications for companies.

      Avoiding Balkanization

      “It’s really clear, there needs to be a change, but we’ll have to look at the details of what’s being proposed,” Joyce said. In the response to the Equifax hack, though, he said, “we need to be careful of Balkanizing the regulations. It’s really hard on companies today” facing local, state and federal regulators as well as international rules, he added.

      The U.S. government began issuing Social Security numbers in 1936. Nearly 454 million different numbers have been issued, according to the Social Security Administration. Supplanting such an ingrained apparatus would not happen over night. The original intent was to track U.S. workers’ earning to determine their Social Security benefits. But the rise of computers, government agencies and companies found new uses for the number, which gradually grew into a national identifier.

      Over the decades, the Social Security number became valuable for what could be gained by stealing it, said Bruce Schneier, a fellow at Harvard’s Kennedy School of Government. It was the only number available to identify a person and became the standard used for everything from confirming someone at the doctor’s office to school.

      Akin to Infrastructure

      “They appeared at an age when we didn’t have other numbers,” Schneier said in an interview. “Think of this as part of our aging infrastructure” from roads and bridges to communications. “Sooner or later we as a society need to fix our aging infrastructure.” 

      He pointed to India’s wide-scale rollout of the Aadhaar card, a unique number provided to citizens after collecting their biometric information — fingerprints and an iris scan — along with demographic details, to almost 1.2 billion people. In the U.S., a more secure system could be designed, “but magic math costs money,” he said.

      Making any changes to the current system, including replacing numbers entirely or restricting who can use them, would likely require an act of Congress, according to Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington, which advocates for limiting the use of Social Security numbers. 

      Rewriting Laws

      “You’d need to change a lot of existing public law," Rotenberg said. “There would need to be extensive hearings and study about the consequences. It’s a complicated issue." 

      The government’s own record of protecting Social Security numbers has its blemishes. Medicare, the federal health-care program for senior citizens, has long used the numbers on identification cards recipients must carry. After years of criticism by the agency’s inspector general for the risks that creates, new cards with different numbers are currently being rolled out.

      The failure of the Social Security number is that there’s only one for each person, “once it’s compromised one time, you’re done,” Bob Stasio, a fellow at the Truman National Security Project and former chief of operations at the National Security Agency’s Cyber Operations Center.

      Public and private keys — long strings of code — could help validate identities. For instance, the government could issue each person a public key and private key. If people were to open a bank account, for instance, they could provide their public key — instead of a Social Security number — and the bank would send a message that could only be decrypted using their private key. If the private key gets compromised, the government could easily issue another one.

      Saved by Math

      Stasio also cited emerging blockchain technology as another potential tool. It could create a kind of digital DNA fingerprint that’s “mathematically impossible” to duplicate. In place of a Social Security number, each person could receive a blockchain hash — a kind of algorithm unique to an individual — that is stamped on every digital transaction or action.

      That type of technology “could be used as a much more efficient and mathematically sound method of transaction, identification and validation,” Stasio said.

      While lawmakers were unanimous in criticizing Equifax’s response to a breach that compromised information on 145.5 million U.S. consumers, they were divided on how to fix the underlying issue. Democrats on the panel have reintroduced legislation imposing requirements for when companies have to report data breaches, while Oregon Republican Greg Walden noted the company’s human errors, saying “you can’t fix stupid.”

      Smith said the Equifax employee responsible for communicating that the vulnerable software needed to be patched didn’t do so. That failure was compounded when a scan of the company’s systems didn’t find that the vulnerability still existed, the former CEO said.

      Joyce’s comments helped take some of the focus off Equifax’s blunders, analysts at Cowen Inc. said in a note Tuesday.

      The “White House may be indirectly coming to Equifax’s rescue,” they wrote. “This reduces the risk of business-model-busting legislation such as a requirement that consumers opt-in to a credit bureau collecting their data.”

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