GAO Confirms Login.gov Waste
It’s official. The Government Accountability Office (GAO) released a report confirming what I wrote two months ago: the federal government is pouring hundreds of millions of taxpayer dollars into government-created identity verification technology, and the technology has been proven to be rife with problems.
I previously expressed concern that the Biden administration was — and potentially still is — planning to issue an executive order requiring all federal agencies to offer the government-subsidized Login.gov as an identity verification option. The recent GAO report confirms that the Biden administration must pump the brakes on that misguided plan, and the incoming Trump Administration should consider jettisoning Login.gov entirely.
The GAO report, released last month, finds that more than 40% of the federal agencies using Login.gov have reported technical problems, including high failure rates and lack of fraud controls, among others. They also expressed concern about Login.gov’s security because Login.gov was only recently able to comply with the government’s own standards for identity verification — almost three years after the technology was implemented in a federal agency and seven years after the National Institute of Standards and Technology (NIST) issued those standards.
Moreover, the GSA charged federal agencies for services they claimed met the NIST standards for years – but that was wrong. In 2023, the General Services Administration Inspector General reported that they did not meet those standards. In contrast, private-sector companies have met those standards with demonstrable results for years. That may be why agencies like the IRS had refused to use Login.gov until recently in favor of those private-sector solutions.
The federal government should not promote its own services in markets where there are many private-sector options. The economic reasons are straightforward. Direct government-private competition short circuits the normal competitive “market test” that ensures only the most efficient, effective firms survive over time. A government firm receiving taxpayer subsidies in any form may allow that firm to dominate the market – even if it’s the least efficient. In 2021, GSA (in accordance with a recommendation from the Technology Modernization Fund Board), awarded Login.gov about $187 million in technology modernization funds. Private-sector competitors to Login.gov receive no such government largesse. In fact, many European nations have entire bodies of law to prevent such unfair government-private competition.
Inexplicably, the federal government continues to spend money developing its own system instead of encouraging private-sector companies to flourish in this space and compete on a level playing field. The best policy would be to reverse the Biden administration’s plan to focus on expanding Login.gov into the states.
Some may be concerned with private companies accessing too much private data, but Login.gov is not the solution. As the GAO explains, although Login.gov is a government-built interface, it has shared users’ information with private-sector companies, including data brokers whose business model is to sell personal data. It would be far better for competitive bidding to reveal which private companies have the proven competency and secure technology to serve both the federal and state governments as customers.
The incoming Trump Administration can chart a new policy course by opening the identity verification field to full and fair competition. For the sake of the security of all taxpayers and their data, let’s hope they take it and bring subsidy-free competition to this important emerging technological and market space.
R. Richard Geddes is a Nonresident Senior Fellow at the American Enterprise Institute, a professor in Cornell University’s Jeb E. Brooks School of Public Policy and the Founding Director of the Cornell Program in Infrastructure Policy. He is author of Competing with the Government: Anticompetitive Behavior and Public Enterprise (Stanford: Hoover Institution Press) 2004.
