Posted by: The Busy Post | June 14, 2012

Free Phones Costing Taxpayers $2.1 Billion Per Year-Wait till they Add Broadband


You’re probably familiar with the food stamp program which grew from $35 billion in 2008to $75 billion last year. But did you know that getting food stamps also makes you eligible for a free government cell phone?

A program called Lifeline provides free phones and free monthly minutes to anyone on food stamps, WIC, Medicaid, Head Start, and several other government programs. And just like food stamps, Lifeline (aka “phone stamps”) has been growing by leaps and bounds since 2008, at significant cost to taxpayers.

Lifeline was started in the mid-’80s to reduce the cost of phone service to rural and needy customers. The program’s costs are covered by a tax included on every monthly phone bill called the Universal Service Charge. The program eventually grew to include discounted cell service but took off in 2009, partly because TracFone announced a new program whereby eligible individuals could get a free phone and free monthly minutes. As a result, participation in the program (and costs) skyrocketed:

Program participation was stable from 2005 to 2008, from 6.9 million to 7.1 million participants, but increased to 8.6 million in 2009. Likewise, support payments were relatively stable from 2005 to 2008, from $802 million to $823 million annually, before increasing to approximately $1 billion in 2009.

The rapid growth of the program has continued since then. In 2011, the FCC estimated the cost(page 153) of the program would be $2.1 billion and said it would reach $3.3 billion by 2014 absent major reforms. The FCC also found that part of the problem with the program was rampant fraud:

[O]ur ongoing oversight has revealed that a substantial number of subscribers are receiving duplicative Lifeline support, which includes individuals receiving two or more Lifeline benefits from ETCs as well as two or more individuals in a household receiving benefits from multiple ETCs.

How bad is the fraud? A survey conducted by the FCC across 17 states and territories found that, on average, 9% of phone recipientswere ineligible (page 243). In some states like Alabama, New Hampshire, and West Virginia, the ineligibility rate was 18-19%. And all of that is based on a survey to which 27% of users refused to respond to questions.

In order to combat this problem, the FCC recommending the creation of a national database to keep track of multiple users. The project was expected to cost $7.5-$10 million to set up, though this is much less than the amount the government is expected to save by cutting duplicate lines.

And the freebies won’t end with basic calling service. As part of the effort to extend broadband, the FCC has been discussing making broadband service part of the Lifeline program. In other words, taxpayers could soon be paying for smartphone features on these free government phones.

The real question is why American consumers should be providing free cell phones and free monthly talk time to 10 million people in the first place. As you can see in this video reportfrom a Chicago ABC affiliate, some people signing up for these free phones are doing so to replace cell phones they already have (and have to pay for). If the goal is really to connect individuals to essential services such as fire and police, FCC rules already mandatethat carriers transmit those calls along with detailed location information regardless of whether an individual has service with a carrier or not. Given our debt and our deficits, it is time to consider hanging up on this booming, fraud-ridden Lifeline to taxpayer’s wallets.

via Spending Off the Hook: Free Phones Costing Taxpayers $2.1 Billion Per Year.

About these ads

What are your thoughts?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

lidsamy

when 140 characters is not enough

Political Alchemist's Blog

A conservative wizard's WordPress.com site

Can America Survive Obama, Harry Reid & Nancy Pelosi?

Never has a U.S. president & the Democrat Party been so wrong about so much at the expense of so many.

A Patriotic Nurse

God, Country, Constitution

sharia unveiled

illuminating minds

moralmatters.org

A website of news commentary, comments and articles, - highlighting moral, political and spiritual issues.

saneromeo

"In a time of universal deceit - telling the truth is a revolutionary act." George Orwell

Nonoy Manga

Manga, Hand Drawn, Animation, Drawing Lessons.

The Clockwork Conservative

All wound up about politics, history, culture... lots of stuff.

Conservative First

putting principles before party and technology into politics

divadoll123

Absolutely, positively, and unequivocally NOT an Obamamama!

Illuminutti

Where critical thinking is critical to thinking

The Busy Post

------ "Nowhere at present is there such a measureless loathing of their country by educated people as in America." ------ Eric Hoffer

22MOON.COM

You can see the whole Earth from the Moon!

All Mirth and No Matter

opinions on writing, reading and pretty much anything not 'rithmatic

The United States Patriot

A topnotch WordPress.com site

rodalena

"A fool also is full of words…" -Ecclesiastes 10:14a

A Reformed Thought

News from around the block, around the country, and around the world.

et cetera*

Asininities of the Human Kind

Oyia Brown

A WordPress site to give you a smile

AmeriKim Patriot

Extreme American and PROUD!

Texana's Kitchen

Yummy food. Pithy commentary. Pretty pictures.

STI News

Politics Music News Satire And Entertainment

We Moved > Go To:

WWW.THEMADJEWESS.NET

rope

people just need enough rope

Economists For Romney

Economists Supporting Mitt Romney for President

Just Cruisin 2

Where Intellectuals and Rednecks foregather.

Armor of God

Attempting to obey God and follow Jesus Christ our Lord

YouViewed/Editorial

News , Blues and Guns ... Not Necessarily In That Order

Douglas Ernst

Bareknuckled Commentary mixed with Pop Culture.

So I Married A Baseball Player...

Behind every married baseball player is a woman who didn't know what she was getting herself into.

living is a process

...so please be patient with me.

blogsense-by-barb

at the Re-Birth of America!

SOYLENT GREEN

Just What You Need When You're Freezing In The Dark

ahsbling

More Than Your Ordinary Bling

Real Life Dynamics User

Real Life Experiences With Microsoft Dynamics GP / CRM

Common Sense Newz

"The cause of America is in a great measure the cause of all mankind" Thomas Paine, Common Sense, 1776

Young, Republican, & Free

Politics; As Seen by an Eighteen Year Old Republican

The Steadfast Patriot

Where Common Sense Reigns Supreme

The Mad Jewess

Mirror Site For Reflection

Samaritans Scalawags Scoundrels Fleecing the Sheep

Skulking Down the Dirt Roads of Life

Common Sense

Life, liberty and property!

4ever21christina

A blog for the happy, modern, well-rounded woman

Clement Allen Photography

Updates about my gliding and photographic life will appear here.

southernstylemusings

An Amateur Economist's Perspective on the Political Battlefield

Without wax /

Andy Ritchie blog

The RAP Sheet

(opinions of that rarest of creatures: a Republican Atheist Professor)

Follow

Get every new post delivered to your Inbox.

Join 2,318 other followers

%d bloggers like this: