Billion Dollar Phones

One of the negative aspects of aging is a sense of loss – loss of muscle tone, loss of memory, loss of hearing, etc. So, I thought that I hadn’t heard the news anchor correctly when he talked about a government program that gave away free cell phones – not only one, but sometimes several.

I tuned in more earnestly because I was so amazed at what I was hearing. Still not totally convinced that this was true, I started to do some investigating on my own.

I discovered that the name of this government program is Lifeline. It started with the intent of providing low-income Americans with phone service. Last year, our government paid out $1.6 billion for free basic phones which included 250 minutes per month.[1]

This program was instituted as a result of the Telecommunications Act of 1996. The FCC then created the “Universal Service Fund” to provide quality services at reasonable rates to help offer a Lifeline cell phone to those without phone service. All telecommunications carriers are required to pay into this fund, and many of them pass on this charge to you.[2] Check out your bill the next time it arrives!

The phone carriers are actually in favor of this program because they benefit from it. The government gives them money for each phone they give out.[3] Naturally, they would want to give out as many as possible. What an easy way for them to get free money!

There are many companies profiting from this phone give-away, the three largest are Safelink Wireless (Tracfone), Assurance Wireless (Sprint Nextel) and ReachOut Wireless.[4]

Senator Clair McCaskill (D-MO) started an investigation after she personally got an invitation in the mail to apply for a free, government-subsidized cell phone. As a result of the FCC’s inquiry into this program, they discovered there wasn’t even a user database established.[5] In other words, there were no records of people who were participating in the program. Consequently, many people were taking phones from more than one carrier.

According to a Fox News Report, this cell phone program is the fastest growing welfare/entitlement program in the country.[6] The government phones program is abused due to lack of accountability in both the recipients and the individuals running the program.

As with many programs, they start out with good intentions, but they get bogged down with fraud and abuse. Not only are there the people who are receiving more than one phone, but participants in the program are apparently not monitored properly for eligibility.[7] Perhaps that is why this is such a popular program!

Rep. Tim Griffin (R- AR) introduced a bill on Nov 18, 2011 to stop this practice. The bill is called the “Stop Taxpayer Funded Cell Phones Act of 2011,” and has three co-sponsors: Rep. Rodney Alexander (R-LA), Rep. Bill Posey (R-FL) and Rep. Dennis Ross (R-FL). This bill currently sits in the House Committee on Energy and Commerce.[8]

Our deficit is growing astronomically, and our federal government is spending over $1 billion each year on free cell phones for this entitlement program. And you, the taxpayer, are helping to pick up the tab by paying a fee on your phone bill with the charge that says ‘universal service fund.’ The Universal Service Fund that provides welfare cell phones is one of too many government entitlement programs that need to get under control – both financially and to hold people accountable for the service it provides.

We must stop this type of reckless spending in Washington! It is imperative to elect a President and Congress whose agenda is to cut entitlement/welfare programs like this one. Fiscal responsibility is our only hope of rebuilding our Nation. Do your part to make this happen! Help drive out the vote for candidates who share our passion for rebuilding our economy.