Executive Summary
The Privacy Act of 1974 was created to regulate how federal agencies collect, use, and disclose personal information. Nearly fifty years later, the law has not kept pace with the realities of a digital society where vast amounts of personally identifiable information (PII) are collected and stored by federal systems every day. Outdated definitions, weak consent processes, and insufficient oversight leave millions of Americans vulnerable to data mismanagement, misuse, and breaches. For a generation that has grown up entirely online, the risks are particularly acute. Surveys show that over 80 percent of younger Americans express concern about the exposure of sensitive data, such as medical records, photos, or financial information. Modernizing the Privacy Act is necessary to protect privacy, restore trust, and ensure government systems are accountable and resilient in the digital age.
Background
When Congress enacted the Privacy Act in 1974, government records were primarily paper-based, and its framework reflected that reality. Today, federal agencies manage complex digital databases containing health records, student loan files, tax information, military service histories, and more. Contextualizing this specifically to Gen-Z, we have multiple groups within our age demographic most susceptible to federal data collection still held to antiquated pre-digital privacy standards. Nearly half of active-duty service members, who are under the age of 26, are vulnerable to misuse of sensitive personal and medical records. More than seven million student loan borrowers are under the age of 30 and depend on federal systems to secure their financial data. Those seeking apprenticeship opportunities under new federal programs, which address workforce shortages in key tech industries, are also finding their data susceptible to excessive collection without privacy standards. At the same time, all Americans increasingly rely on federal digital platforms to access basic services, multiplying opportunities for mistakes or misuse. Advances in artificial intelligence and large-scale data sharing further complicate the landscape, as automated systems can amplify risks of bias, misclassification, and unauthorized disclosure. Without a modern legal framework, the federal government lacks the tools to both deliver services effectively and safeguard individual privacy.
Challenges
Several core weaknesses in the current Privacy Act highlight the urgency of reform. First, its definitions of terms such as “individual,” “record,” and “system of records” no longer align with modern information practices or with Office of Management and Budget standards for PII. Second, written consent requirements are often buried in complex legal language and provide little transparency on how information is used or shared. Third, mismanagement or breaches of sensitive information can cause lasting harm, from blocked financial access to negative impacts on healthcare or employment. The increasing use of artificial intelligence by federal agencies introduces risks of bias, inaccuracies, and lack of accountability. Finally, existing systems often fail to comply with modern accessibility standards, leaving individuals with disabilities more vulnerable to exclusion. Remedies for privacy violations are also weak, with courts historically limiting relief for victims of harm caused by government mismanagement of personal data.
Solutions
Updating the Privacy Act requires reforms that reflect today’s technological environment. Congress should begin by modernizing definitions of key terms to capture the full scope of federal information practices and harmonize with OMB’s guidance on personally identifiable information. The Act should also expand individual rights by allowing people to amend inaccurate or outdated records and request deletion of unnecessary information, while balancing legitimate government functions such as national security or fraud prevention. Written consent processes must be simplified through plain-language disclosures and made interoperable across agencies, while new identity verification methods—such as biometric or blockchain technologies—can strengthen accountability. To address risks posed by AI, agencies should be required to conduct regular audits of automated systems, implement bias detection protocols, and invest in explainable AI tools to ensure decisions are transparent. Privacy-enhancing technologies, including encryption, anonymization, and quantum-resistant algorithms, must be adopted to safeguard sensitive data. Finally, accessibility standards such as the Web Content Accessibility Guidelines should be embedded into all federal privacy tools, ensuring protections extend to all individuals.
Policy Recommendations
Congress should act decisively to modernize the Privacy Act by:
Updating definitions to align with current information management practices and OMB standards.
Codifying data minimization and purpose limitation principles to restrict agencies from over-collecting or misusing personal data.
Guaranteeing individual rights to access, amend, and, where appropriate, delete personal data.
Standardizing and simplifying consent mechanisms with plain language and interoperable systems across agencies.
Regulating AI use in federal systems through audits, transparency requirements, and explainable decision-making tools.
Expanding the use of PETs and requiring quantum-resistant encryption in federal systems.
Strengthening oversight and remedies by enhancing roles for OMB, NIST, and independent review boards, and by expanding individuals’ ability to seek relief when privacy rights are violated.
