First they were Reaganphones. Then they were Bubbaphones. Next they were Dubyaphones. Last year they became infamous as Obamaphones.
Hordes of critics attacked the president in 2012 for giving away free cellphones to the poor, with the tab covered by fees on every cell and landline user in the country.
But last week the truth came out: President Obama is actually helping dial down the federal program that’s created a $2.2 billion lesson in what happens when Washington’s good intentions go bad.
The feds created the Lifeline program in 1984 to provide landlines (and thus a connection of last resort to emergency services, job prospects and family members) in even the poorest homes.
Under Bill Clinton, the program was expanded, and in 2008 — at the behest of wireless carriers and on George W. Bush’s watch — the feds started offering free cellphones, too. The only requirement was that recipients be on Medicaid, food stamps or another state or federal welfare program.
All those minutes added up: Last year, the government funneled $2.2 billion to the phone cartels to cover the cost of Lifeline.
But the feds never required proof from cell carriers that their millions of Lifeline users were truly needy. No surprise, the program has nearly tripled in cost since 2008.
So give credit to Obama now: When his FCC last year forced the carriers to verify that Lifeline users needed aid, it found the program was riddled with fraud and waste.
Some 41% of Lifeline cell subscribers failed to show that they were eligible, which means the FCC will be cutting the Lifeline rolls and the cost of the program.
It’s easy to see why people want free cell phones. But it’s also clear why the big carriers were eager for their business.
So many Americans have cells that carriers have a hard time finding new clients. What better way to drum up easy business than having the government cover the costs for millions of new customers?
This is the real face of corporate welfare. Lifeline was supposed to help poor Americans, but companies like Sprint and AT&T ended up on the dole with them.
A system designed to help the poor has ended up slathering profits on a lucrative industry. Good for Obama for cracking down on the Obamaphone.