Citing several data breaches at agencies like the Department of Veteran Affairs, the presidentially appointed panel recommended that the government "take steps to eliminate, restrict or conceal" the use of Social Security numbers.
The nine-digit numbers are meant to be used for Social Security benefits and taxpayer identification purposes but are also often used to verify the financial credit of an individual.
The panel, known as the Identity Theft Task Force, said in a news release that are "the most valuable pieces of consumer information for identity thieves."
The panel was appointed by President George W. Bush in May and is scheduled to issue a final report in November.
In an interim report made public on Tuesday, the task force said the federal Office of Personnel Management should issue guidance to other agencies on how to restrict or hide Social Security numbers in employee records and information systems.
Creation of the task force followed revelations in May that a computer with thefrom the home of an employee of the Department of Veterans Affairs.
The department laptop was recovered in June, and officials said they did not believe information was taken. But the theft raised fears that nearly all military personnel were at risk of identity theft.
Other data breaches have cropped up since then. In August, the U.S. Department of Transportation said a government computer loaded with approximately.
Also among its recommendations, the task force said the Office of Personnel Management should speed up a review of how Social Security numbers are used, and require other federal agencies to review their use of the numbers "to determine where such use can be eliminated, restricted or concealed."
The advisory panel also urged the government take steps to clarify procedures for dealing with a data breach, and that Congress pass legislation requiring identity thieves to compensate victims for the time they spend clearing up their identity.