GOP senators push to end 'offensive' cellphone subsidy for the poor

Three Republican senators introduced legislation on Tuesday to scrap a federal subsidy for cellphone service.

The bill, from Sens. David Vitter (R-La.), Jim Inhofe (R-Okla.) and Dan Coats (R-Ind.), would end the cellphone portion of the Federal Communications Commission's Lifeline program, which has been derisively referred to as the "Obama phone" program, although it began long before Obama took office.

“This phone program has expanded far beyond its original intent, and as so many middle class Americans struggle underneath this economy, it is really offensive for Washington to make taxpayers pay for free cell phones for others,” Vitter said in a statement.

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The program pays for phone service, not the phones themselves. But many companies that receive funding through the program offer free and low-cost phones to their subscribers. The program is funded through fees that the telephone companies pass on to consumers on their monthly bills, not taxes.

Congress first enacted Lifeline in 1985, and the FCC expanded the program to cover cellphone service in 2005.

Inhofe said the program has become so expansive that it "no longer addresses its primary mission to help those with the most dire needs." 

"Our legislation will restore Lifeline to its original intent and also protect taxpayers from further excessive government spending,” he said.

Rep. Tim Griffin (R-Ark.) has introduced similar legislation in the House.

Vitter pushed a non-binding measure to end the cellphone portion of Lifeline as an amendment to the budget resolution earlier this year. The amendment failed on a mostly partly-line 46-53 vote. 

FCC Chairman Julius Genachowski, who plans to step down in the coming days, defended the program in an emailed statement.

“The Lifeline program has helped some of our most vulnerable citizens connect to emergency services, doctors, and family in times of crisis," he said. "It has been a literal lifeline for these Americans — and in today’s era, with a third of Americans having cut the cord to wireline phone service, it’s appropriate that Lifeline supports wireless service."  

He noted that the commission enacted reforms last year aimed at cracking down on waste and abuse in the program. The FCC toughened eligibility standards and created a database to ensure that multiple companies were not receiving subsidies to provide service to the same customer.

"This FCC inherited a number of [universal service] programs that lacked proper controls, but we acted quickly and aggressively to correct course, saving more than $200 million last year in Lifeline and putting us on track to save $2 billion by the end of 2014," Genachowski said. "We took these steps precisely because Lifeline is so vital to millions of Americans in need."