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Forum Post: Taxpayers funding more than $1B in free cellphones

Posted 6 years ago on June 14, 2012, 8:44 a.m. EST by commonsensefolks (-55)
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Taxpayers funding more than $1B in free cellphones

BY: Washington Free Beacon Staff - June 12, 2012 10:45 am

ANCHOR: There are new questions tonight about a government program that’s given away millions of free cell phones and service to people with low incomes and those in rural areas. The cost and demand are skyrocketing. Who pays? Chances are you do.

ANCHOR: ABC7′s Ben Bradley is joining us tonight with what it’s costing you.

REPORTER: The money comes from the Federal Universal Service Charge on your phone bill. It has its roots all the way back in the 1930s. The goal was make sure people in rural areas and the poor had access to telephone service. In the 1980s and 90’s it expanded to include wireless phones. Since then the numbers have exploded. The cost of the program is now more than a billion dollars a year. The FCC, along with some democrats and republicans, are trying to rein it in.

REPORTER: On an abandoned West Side lot, a sign on a bright green tent advertises a deal too good for many to resist.

CITIZEN: My daughter told me about it.

REPORTER: What did she say?

CITIZEN: It’s a government phone.

REPORTER: So, you don’t have to pay anything for it?


REPORTER: She’s right. This is one case where free really means free, at least for the people receiving the phones.

REPORTER: Who pays for it?

CITIZEN: The government, the taxpayers, I don’t pay for it. Like I said, I can’t afford it, so it helps me.

REPORTER: The money actually comes from the extra dollar or two we all pay every month on our phone bills. To receive the “free phones” plus 100 minutes a month of talk time, people simply need to show a driver’s license and proof they live at the poverty line. A food assistance card will do. In 2008, 107,715 people in Illinois received the free wireless phones. Last year, the numbers soared to 569,000, a 429 percent increase. Nationally 13 million people signed up for the free cell phone program at a cost of $1.2 billion.

REP. JOE WALSH: There’s no need or no reason for the government to be doing this, and it just teaches the wrong lesson to folks that they don’t have to be responsible for things like this.

REPORTER: In recent months the FCC has started cracking down after the agency found 400,000 people received multiple phones. Now subscribers have to re-qualify every year. An FCC spokesperson said –

FCC SPOKESPERSON: Since 1985, [the wireless service program] has helped low-income consumers find jobs, contact friends and family, and call 911 in emergencies, and we will not allow fraud and abuse to destroy this valuable program for the nation’s most vulnerable citizens.

REPORTER: You have a phone around your neck. Why do you need a phone that I pay for?

CITIZEN: I can stop paying for it.

REPORTER: Wireless companies receive $9.25 per phone per month. Some people use their own money to add more minutes to the phone, so that’s the private company’s incentive to sign people up. An FCC spokesman says overhauling this program is a major focus of his agency. It’s also caught the attention of Congress.




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[-] 2 points by TrevorMnemonic (5827) 6 years ago

if jobs payed better this program wouldn't have anyone qualify because everyone would be above the poverty line. CEO's think they need it all though.

Also I do not support this free cell phone program. Cell phones are not a necessity. This money could go to a better use like food stamps and to assist local shelters for the homeless.

[-] -3 points by commonsensefolks (-55) 6 years ago

You can use the "if jobs paid better" line forever. To some, they'll never be paid enough. Others just choose to waste the money they earn on frivolous things or have never learned how to budget money. Why make their problems everyone's problems?

If the value of the U.S. dollar wasn't being ruined by endless government printing, we wouldn't have nearly the inflation we have and things would be more affordable. Food stamp usage is up fourfold with all the stimulus and incentives put into place over the last 3 1/2 years. Why? Seems the more taken from workers and given to dependents, the more the dependent group wants. Why is that? Why is it never enough?


[-] 2 points by TrevorMnemonic (5827) 6 years ago

Wasting money on frivolous things stimulates the economy. A person who spends their money instead of hoarding it is better for the economy.

Government printing? Do you mean Federal Reserve printing? Yeah the trillions they've created from nothing has ruined the value of the dollar and allowed the banks to commit record acts of corruption.

- Unlimited resources for the banks and nothing for the people. Does there exist a more graphic example of how thoroughly rotten this financial system is? We're bailing out banks while the banks are accelerating foreclosures on millions of American homes. The Federal Reserve creates money out of nothing, gives it to the banks, banks keep it on deposit, gain interest, pays high CEO bonuses, fat cat city... all while the rest of America falls apart.

Fed creates 7.7 trillion out of nothing for their own private interests - it doesn't get any clearer than this - http://www.youtube.com/watch?v=oUpXDZFtEHw

"There's another game going on way over our heads. The people are struggling... while the banks with the help of the federal reserve have captured control of our government. Could the threat to our nation's sovereignty be any clearer?"

[-] 2 points by jrhirsch (4714) from Sun City, CA 6 years ago

Here we go again with the same tired rant. They don't deserve a living wage, but when the safety net comes out to break their fall, you would pull that out as well.

If your figures are correct, the cost per phone per year is $92.31. Sounds like a bargain! Any body out there spending that little?

What you forget to include are the underlying economic reasons why people can't afford basic necessities such as a phone in the first place. Low wages that do not even keep up with inflation, layoffs, loss of housing, deep recession, high unemployment.

[-] -2 points by commonsensefolks (-55) 6 years ago

Why should taxpayers be on the hook to them? People have their own families to support? Why are you mandating part of their paychecks for cell phones for others?

How did one person become responsible for another person they don't even know and have never met in their life? Maybe the person having to pay for the cell phone for a stranger has their own problems and needs the money for their own economic reasons. Why this mentality of redistributing income?

[-] 3 points by DKAtoday (33639) from Coon Rapids, MN 6 years ago

Correct these phones and service should be donated by the communications industry.

[-] -2 points by commonsensefolks (-55) 6 years ago

No, because they would pass it on to their paying customers.

If someone wants a cell phone, they should PAY for it. What a novel idea! Pay for something YOU want, instead of asking anyone but you to pay for it.

[-] 2 points by DKAtoday (33639) from Coon Rapids, MN 6 years ago

Works great for the millions of out of work and even the homeless. Gee they must be tightwads not to be buying phones and service.

[-] 2 points by jrhirsch (4714) from Sun City, CA 6 years ago

The same argument could be used as to why we bail out banks, savings and loans, insurance companies, and auto manufacturers.

All of these companies took a risk, that is a fundamental part of any business enterprise. The shareholders are well aware.

The difference between people and business is without money and the essentials it buys, people suffer and starve, businesses don't.

[-] -1 points by commonsensefolks (-55) 6 years ago

More people are suffering than ever because of the policies being carried out. For every economic decision, there are opportunity costs and unintended consequences.

Don't you realize yet, that the more Washington DC does, the WORSE things get?

[-] 1 points by jrhirsch (4714) from Sun City, CA 6 years ago

When Washington and Wall Street are in collusion, they both win. Don't focus on a micro amounts like $1 billion.

Look at the overall picture.

There have been great increases in productivity in the last 30 years but the great wealth created is not going to all who helped produce it, but almost exclusively to the upper 20%, with the majority of that to the upper 1%.


[-] 1 points by geo (2638) from Concord, NC 6 years ago

What makes you think that taxpayers are paying for this?

[-] -1 points by commonsensefolks (-55) 6 years ago

Who do you think is going to pay the Chinese for the 40% of the money we borrow every day from them for gubment spending?

[-] 1 points by geo (2638) from Concord, NC 6 years ago

US dollars from the Treasury.

[-] -2 points by commonsensefolks (-55) 6 years ago

Which is backed by the U.S. tax payer.

The national debt is over $50,000 for each and every person in the United States. You could end up with an 80% tax rate in a few years just to pay that. What would you do if the government took 80% of everything you earned?

[-] 0 points by JoeTheFarmer (2654) 6 years ago

Is that what all those taxes on my phone bill are for. Sometime it seems there are more taxes than what I pay for service.