NCPA - National Center for Policy Analysis

CELL PHONES FOR THE POOR

January 25, 2010

Welfare recipients in approximately 20 states -- with more to follow -- are currently eligible to receive a free cell phone with a limited number of monthly minutes.  All individuals that qualify for state or federal welfare -- food stamps, Medicaid, etc. -- and have an income at or below 135 percent of the poverty level, are eligible.  

According to a Fox News report, the cell phone service is currently the fastest growing welfare program in the country: 

  • In 2008, the fund that foots the bill for this program contributed $819 million to subsidize low-income telephone services.
  • The fund is projected to grow to over $1 billion this year.
  • That is $1 billion of over $800 billion the United States will spend on welfare in 2010.

This particular program is covered by the federal Universal Service Fund. At first it received its money by essentially taxing telephone companies that provided long-distance service, with the money then being used to provide affordable rates for those living in less densely populated areas where phone service was more costly, says Heritage:

  • However, in 1996, Congress voted to extend the use of this fund to subsidize low-income households and subsequently expanded the list of those required to pay into the fund to include: local telephone companies, wireless companies, paging services and payphone providers.
  • In 2008, the Federal Communications Commission began subsidizing cell phones for low-income households.
  • Besides the $1 billion price tag, which is likely to increase as more states implement the service, not to mention the concern for growing entitlement created by this program, cell phone recipients are loosely monitored.  

According to Heritage welfare expert Robert Rector, this means that if an individual's income increases to where he or she is no longer eligible for the service, there is no one to make sure he or she stops receiving it. 

This is just another example of the ever-expanding welfare state and the increasing entitlement mentality.  At the very least, policymakers should require greater monitoring of the program to prevent misuse, says Heritage. 

Source: Rachel Sheffield, "Government Welfare: Cell Phones for the Poor" The Heritage Foundation, January 18, 2010.

For text:

http://blog.heritage.org/2010/01/18/government-welfare-cell-phones-for-the-poor/

 

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