Introduction

In the wake of the September 11th terrorist attacks, increased airline security became a nightmare for passengers. The long lines at checkpoints have since shortened, but the system for selecting passengers for the most thorough screenings remains a major irritant to travelers. In response to the need for tight, yet efficient, airline security, the Transportation Security Agency (TSA) set out to develop a new Computer Assisted Passenger Prescreening System (CAPPS II) designed to automatically identify passengers who are high-risk while letting "trusted" travelers through to the gates with only the normal screening process. But throughout the process of developing CAPPS II, privacy advocates protested. The American Civil Liberties Union, for example, issued a press release calling CAPPS II "a secretive new system for conducting background checks on all airline passengers," and warning that the system threatened to create "a bureaucratic machine for destroying Americans' privacy and a government blacklist that will harm innocent Americans." In large part because of protests like this, the Bush administration announced in July that it was scrapping plans for CAPPS II.

This is but one of many examples of how concerns over privacy are slowing government use of new information technologies that promise to streamline public sector operations, increase productivity, improve service quality, and boost mission effectiveness. It is a trend that has important consequences because the public sector lags far behind the private sector in taking advantage of information technology (IT), even for practical applications unrelated to homeland security. Examples of those applications range from electronic tollbooths that can help keep traffic moving to websites that can offer 24-hour access to government services. The benefits that such innovations offer should be seen as welcome developments for citizens and taxpayers. They are emblematic of the sort of digital transformation that should be encouraged in the public sector.

It is certainly true that the loss of privacy is an increasingly common fear in the digital age. It can sometimes seem that we are being spied upon during every waking moment: There are security cameras at the convenience store where we get our coffee in the morning and "cookies" tracking our web surfing habits when we're at home in the evening. Government invasions of privacy are a potentially greater threat than those presented by businesses, because unlike advertisers and other private entities that collect information about us, government has the power to strip us of our property and our freedom. Particularly under the current administration, which has suggested in writing that some laws may not apply to the president during the war on terrorism, fear of the government is becoming less the province of the paranoid and more of a common thread in modern life.

But privacy fears are easily blown out of reasonable proportion. There are influential advocacy groups that regularly mount well organized and often misleading campaigns in the press, online, and in public hearings, against entirely appropriate government technology initiatives. Several case studies are detailed in this report, from resistance against red light cameras as "Orwellian," to protests against upgraded databases at state motor vehicle agencies. The most strident privacy advocates argue that potential harms to citizen privacy from such initiatives far outweigh the potential benefits.

The Progressive Policy Institute takes the opposite view. We believe that with the right rules and safeguards in place, government can increase its use of advanced information technology tools and realize significant benefits for society as a whole without causing unacceptable harms to the privacy of citizens. The PPI further believes that keeping government institutions mired in 20th century operating methods while the rest of the global economy advances is not an option.

The United States today is in a transition period: We are becoming a more digital society. In this transition period, it is essential that we properly balance privacy concerns with the societal interest in unleashing the benefits of new technologies.