This issue comes up from time to time. And, with all the changes in jurisdiction, it can be more than a little confusing. So rather than listen to rumors, or reports of the way it's always been in the past, I thought I'd (again) present the most recent policy:
If you are traveling in the Western Hemisphere (Canada, Mexico, Caribbean, Central and South America):
Air Travel: All U.S. citizens departing from or entering the United States from within the Western Hemisphere by air are required to present a valid passport, NEXUS card (if utilizing a NEXUS kiosk when departing from a designated Canadian airport). Merchant Mariner Document (for members of the U.S. armed forces traveling on official orders.) Note that children are also required to present their own passport when traveling by air.
Land or Sea Travel: U.S. citizens entering the United States by land or sea are required to present a valid WHTI-compliant document, which include:
U.S. Passport Cards
Enhanced Driver's Licenses
Trusted Traveler Cards (NEXUS, SENTRI, or FAST)
Military Identification Cards (for members of the U.S. armed forces on official orders)
U.S. Merchant Mariner Document (for U.S. citizens on official maritime business)
Now, before you jump to the conclusion that since you're traveling by cruise ship, you can get away with using an Enhanced (not regular) Driver's License or Trusted Traveler Card; consider this ...
If, for any reason, you must leave the ship and return to the US via air ... You will have to have a US Passport or US Pass Card. The EDL or TTC are not valid for re-entry to the United States via air travel !
Birth certificates are totally irrelevant. The only thing they will do is help your nephew and his wife if they need to get a passport issued at a US embassy in some other country, so they can then re-enter by air ...
And, If you are thinking of taking any shorex which cross into Canada (there are quite a few and they are really worth it), again ... you will need a passport or pass card.
I assume that since you live near Canada that you do cross over once in awhile and have some means of doing that. The issue is flying back to US if you must. A cruise to Alaska from a US port will take you into Canada at sometime or other due to Ships complying with US Law and this is not an issue if you have proper ID..
Of course a lot of Alaska Cruises leave from Vancouver so you'd have to get here also.
You've already received excellent replies. Let me add that your U.S. passport is the best identification you can have. If you consider that it's valid for ten years, the cost annually is minimal - less than the price of a couple of drinks.
If you take a cruise from Seattle to Alaska and back, it is very unlikely that you will be traveling on a US Flag ship.
As soon as your ship is outside the 12 mile limit from Seattle, you are legally in the country the ship is flagged to. If it is HAL, you are in Holland. If it is Princess, you are in the Bahamas.
Several times during an Alaska cruise, your ship is sailing in Canadian waters; you are in Canada.
At least once in a Seattle to Seattle cruise on a non-US flag ship, you are required by US Law to visit a foreign port. Time constraints will most likely force you to go to Canada to satisfy that law.
The Us only requires you to have your photo I.D. and a copy of your Birth Certificate if you are sailing and returning from a U.S. port. Check with your cruise line because they sometimes strongly require you to have a passport. Some are more flexible than others.
I know this post is a little old, but I want to add my thoughts.
Why would you want to travel without a passport? The cost of applying for a passport is low when you compare it to the cost of your cruise. The time to get a passport is minimal in the USA.
Once you return from Alaska, you are going to be addicted to cruises and ready to plan your next adventure. You need a passport for almost every other cruise, so just go ahead and do it now.
If anyone reading this thread is even thinking about going on cruises, the time to apply for your passport is today. Just drop by your local post office, pickup an application, and follow the directions.
Bit of an update: Recently read that an Enhanced Drivers Lic. from BC was Ok to travel into Alaska also.
BC and Washington State have an agreement that works at borders xings between our State and Province and now AK is in on it too.
But I do agree that in the long run Passport is the best.