It wasn’t the best of times, but it was incrementally better than the worst. The Subcommittee on Commerce, Trade, and Consumer Protection of the House Committee on Energy and Commerce hearing yesterday recapped prior discussions in the legislature about a topic the members of Congress ignorantly call “the sale of social security numbers.”

Federal Trade Commissioner Jon Leibowitz.mentioned legitimate uses for retaining the national identifier. The FTC Web site posted a press release and Leibowitz’s comments.

In testimony for the FTC, Commissioner Jon Leibowitz said, “With 300 million American consumers, many of whom share the same name, the unique nine-digit SSN is a key identification tool for businesses, government, and others.” Leibowitz said that credit reporting agencies use SSNs to ensure that credit data ends up in the right files, and businesses use the reports to determine whether to extend credit, insurance, or employment to consumers. “Without the ability to use SSNs as a personal identifier and fraud prevention tool, the granting of credit and the provision of other financial services would become riskier and more expensive and inconvenient for consumers,” he said. Restricting the disclosure of SSNs also could impact public health initiatives, criminal law enforcement, and anti-fraud and anti-terrorism efforts.

The hearing entitled, Social Security Numbers in Commerce: Reconciling Beneficial Uses with Threats to Privacy was a warm up for HR 1745 Social Security Number Privacy and Identity Theft Prevention Act of 2005, which is in the Ways and Means Committee.

Several speakers addressed the essential uses of the SSN for commerce, fraud prevention, and even locating pension holders. The legislature is going to have a tough time carving out the exceptions to the commercial use of the SSN because the identifier has seeded itself into every fiber of the society, becoming essential to its operation. Outlawing the currrent uses of the SSN will not detour frausters, who are not primarily getting access through commercial sources. We have to find other means to reduce fraud that results from identity theft.