The U.S. Senate recently approved a $43 billion budget for the U.S. Department of Homeland Security for the federal government's 2010 fiscal year, which began Oct. 1. The appropriation called for substantial increases in DHS spending in several key technology areas but slashed Real ID funding by 40%, from $100 million to $60 million.

The budget cut suggests that Real ID is going nowhere, said Jim Harper, director of information policy studies at the libertarian Cato Institute. But Congress' hesitation to kill Real ID entirely highlights the touchy political nature of the program, he said.

"There isn't any love for Real ID on Capitol Hill," Harper said, but many lawmakers are reluctant to openly reject it for fear of being seen as too soft on national security.

The Real ID Act was signed into law by President George W. Bush in 2005 as part of the government's effort to combat terrorism. The law requires states to follow a single national standard for identifying and authenticating people who apply for driver's licenses. It spells out specific technical and process requirements, including the use of biometric identifiers, for issuing licenses.

But the law has evoked widespread criticism from privacy advocates who say it would create a de facto national ID card that's hard to manage and even harder to secure. A major concern is the requirement to link all state driver's license databases via a central hub for data sharing.

States, too, have railed against Real ID as an unfunded federal mandate, and most have refused to participate. DHS Secretary Janet Napolitano was one of the first state officials to reject Real ID when she was the governor of Arizona -- and that makes it hard for her to push it on other states now.

"For all intents and purposes, Real ID has been put on the back burner," said Pam Dixon, executive director of the World Privacy Forum. "But it isn't dead yet."