Congress on Tuesday was wrapping up work on an intelligence reform bill that skirted the issue of whether states should issue driver's licenses to illegal immigrants (search), but outside the Capital Beltway, neither side is backing down.

Opponents of allowing illegals to obtain licenses say the issue is clearly one of security — a driver's license is a ticket to move freely around the country, and by offering the illusion of legal citizenship, it would allow terrorists to lay low and build networks until it's time to attack.

"It is common sense we need to control that," said California Republican state Rep. Mark Wyland. "The problem is there are those who want to be politically correct, or have an agenda and they are the ones who are pushing this. This is a crucial national security issue and fiscal issue for this country."

Immigration advocates say the warnings are merely fear-mongering. Up to 12 million illegal aliens live in the United States. Most work, many drive. In the interest of public safety, they should be licensed.

"Each state has to decide how it wants to go about the process of licensing people to drive motor vehicles on its roads. I do believe we have to make sure that states are not too lax," said U.S. Rep. Javier Becerra, D-Calif.

Critics warn that some states make almost no effort to confirm applicants' citizenship or visa status. They want mandatory federal standards stating the types of documents the states can accept.

Currently, 11 states do not require applicants show proof they live in the United States legally. Ten other states accept foreign birth certificates and ID cards, which critics say are easily forged.

Most other states accept a U.S. Social Security number, despite studies that show undocumented workers can easily get valid numbers belonging to U.S. citizens.

Rep. James Sensenbrenner (search) , R-Wis., chairman of the House Judiciary Committee, wanted to include immigrant licensing rules in the intelligence reform bill that has been debated in Congress for months. House leaders decided to leave out the issue and return to it at the start of the 109th congressional session.

Sensenbrenner argues that a license is only as good as the document used to obtain it, and states that accept foreign ID or matricula consular (search) cards, issued in Mexico, have no way of knowing if the cards are valid or if the person presenting it is legitimately in the country. A FOX News producer was recently able to obtain a matricula consular card on a street corner in Los Angeles.

Supporters of licensing contend that giving licenses to illegal immigrants actually enhances security. And, they add, Sensenbrenner's provision is so restrictive, it in effect creates a national ID system where states have the authority to issue licenses.

"Should the federal government, in essence, issue driver's licenses for 290 million people or should the 50 states be responsible as they have been?" Becerra asked.

Polls in California and Arizona show a majority opposes issuing licenses to illegal immigrants, arguing the permits legitimize and invite more illegal immigration.

Click in the box near the top of the story to watch a report by FOX News' William La Jeunesse.