May 23, 2013
The Lifeline program was introduced under President Ronald Reagan and was originally intended to be used to subsidize landline phone service for poor Americans. According to the FCC, consumers who wish to participate must either have an income that is at or below 135 percent of the federal poverty limit or they must already participate in other assistance programs, like Medicaid, Head Start or foodstamps.
The program is government-run, but tax-payer funded. Anyone who has a landline or cellphone has an automatic universal service fee hidden in their bill – every month – that goes into the pot to cover the Lifeline program.
In 2008 the Lifeline program was extended to include cellphones and cellphone service because so many Americans were using these as their primary telephones. Ideally, the program was meant to provide low-income families with one cellphone and basic cellphone service to help while searching for jobs and in case of emergency.
In 2008 the cost of the Lifeline program was $143 million. Now, says Vitter, the cost has skyrocketed to more than $2 billion a year. According to Vitter, there are currently 270,000 Lifeline beneficiaries who have more than one free government cellphone, and the FCC found that only 41 percent of folks who are signed up for the program couldn’t even be confirmed as egible.
Vitter blames the “rampant waste and abuse” on the companies providing the free phones. Each time they hand out a free cellphone and turn it on they immediately start collecting $9.25 every month that phone is in service – and that money comes directly from taxpayers.
Vitter cited an example of a gentleman who wanted to test the free phone system. He walked into a store advertising the free phone service and answered their questions honestly, telling the associate how much money he made (which was above the poverty level) and that he was not participating in any other government programs. They simply asked to see his driver’s license and a pay stub, had him sign on the dotted line, and handed him a free, working cellphone.
Vitter says the store and kiosk owners who hand out the free phones couldn’t care less if you qualify because they’re not monitored, and the companies who provide the phones want you to take as many as you can carry because they make $9.25 per phone, per month, for as long as you use the phone.
“The biggest welfare abusers of the current program are rich owners of companies who milk the system to get richer, who I would call ‘Government Welfare Kings,’” said Vitter.