Several states have taken formal action to stop chips from being used in driver’s licenses. In May 2005, the California state Senate passed legislation that would prohibit the use of chips in driver’s licenses and several other forms of identification. West Virginia and New York recently ruled out chip technology for their new driver’s license programs. Douglas Thompson, manager of driver licensing in West Virginia, told Card Technology magazine that the cost of computer chips for licenses "would have been astronomical." In the same article, the New York Department of Motor Vehicle’s director of investigations pointed to the ripple effect of costs on government and commercial establishments: For chip technology to be effective, police departments, airports and bars would have to install RFID readers

The Real ID Act is an example of an unfunded mandate; that is, it does not specify a precise amount to be allocated to the states to help meet the new federal standards. In other words, the entity making the policy is not responsible for its enforcement, cost and any unrelated consequences that result. Therefore, DHS has an incentive to accentuate the perceived positives of RFID chips and overlook the negatives. In the realm of technology, the dangers of unfunded mandates are magnified by the unpredictable nature of IT projects and shifting standards. Department of Homeland Security officials must avoid falling victim to technological "overreach."

RFID technology is useful and appropriate for applications such as cargo and automatic tolls. But requiring an embedded chip in every driver’s license is a terrible idea. With the government’s long history of technological ineptitude, the task is daunting and invites all manner of snooping, theft and abuse. DHS should keep costs and technology difficulties to a minimum by choosing cost-effective and proven methods that are being used in most states today.

Thomas A. Schatz is the president of Citizens Against Government Waste.