Obama phones Cost Taxpayers $1.6 Billion in 2011

A real "Obama Phone" sold in Kenya

Washington DC, Feb 9, 2012. Last year, the federal Lifeline program paid out $1.6 billion to cover free cell phones and the monthly bills of 12.5 million wireless accounts.

These are the free cell phones that you often hear called "Obama Phones." In fact, if you google "Obama Phone" you will be directed to the program's website.

The Lifeline program is administered by the FCC with the goal of helping low-income Americans have phone service. Participation has been rising steeply since 2008, when the government paid $772 million for phones and monthly bills.

But some complain that the program suffers from poor oversight, in which phones go to people who don't qualify, and hundreds of thousands of those who do qualify have more than one phone. Like all government benefits, if there is a way to abuse it, that way will be found.

The Lifeline program provides low-income Americans with free cell phones (basic ones such as those made by Tracfone, not smartphones) and covers up to 250 free minutes each month.

Bloomberg Businessweek reports how much the program pays out  and how quickly it's growing as more and more people find out about it. In 2011, Lifeline paid out $1.6 billion, more than double the amount paid in 2008 ($772 million). What's more, an FCC audit of the program last year showed that many participants in the program were taking more than their fair share.

"Can you hear me now?"

According to Businessweek:

"269,000 wireless Lifeline subscribers were receiving free phones and monthly service from two or more carriers."

Senator Claire McCaskill, D-MO, has personally received an invitation to apply for a free, government-subsidized cell phone in the mail.

McCaskill is a multi-millionaire, and shouldn't qualify for a free phone, yet she was offered one!