Conservatives stirred up outrage this summer over the “Obama phone,” which they claimed was a free cell phone handed out by President Obama to low-income people in exchange for their votes. In fact, the Lifeline phone program was first conceived in 1985 by President Ronald Reagan as a way to help Americans below the poverty line connect to jobs, family and emergency services. Nor are the phones free; Lifeline provides low-income Americans with a monthly subsidy of $9.25 for cell phones or land lines.
Nevertheless, one Republican congressman, Rep. Tim Griffin (R-AR) is taking advantage of the renewed political firestorm to push stalled legislation that would gut the program. Griffin wants to take away the prepaid cell phones that were introduced to the Lifeline plan in 2005 under George W. Bush. In a video promoting his bill, Griffin points to the Universal Service charges on phone bills as evidence of the “wasteful program.”
Though Griffin is trying to convince consumers they are paying for a “cell phone giveaway” for poor people, the Lifeline program is actually only one part of this fee. The Universal Service fee also covers the cost of providing “reasonable rates for those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries.” The companies with a Universal Service charge have chosen to pass on the cost to the consumer. The fee is usually around $2.50 to $2.75 a month per family. In 2011, Universal Services programs cost $8.1 billion, with $1.75 billion going to the Lifeline phone program for 13.7 million households.
Griffin’s proposal to restrict the program to landlines is also impractical, as people living in poverty are very unlikely to own a permanent residence they could install a landline. A CDC survey in 2010 found that adults living in poverty are far more likely to depend on a cell phone than higher income people who also have a landline.
Moreover, Griffin’s bill ignores cost-saving reforms that the FCC already began implementing at the beginning of 2012. The Lifeline program now has databases that prevent multiple subsidized phones per person and more efficiently tracks people who are eligible for the phones. There is also a new rule that restricts phones to one per household. These reforms are projected to save $2 billion in 3 years.