Reporter issued 3 free ‘Obamaphones,’ courtesy of U.S. taxpayers

“Confession: You’re paying my phone bill,” Jillian Kay Melchior reports for National Review. “In the past month, I have received three shiny new cell phones, courtesy of American taxpayers, that should never have fallen into my hands.”

“The Federal Communications Commission oversees the so-called Lifeline program, created in 1984 to make sure impoverished Americans had telephone service available to call their moms, bosses, and 911. In 2008, the FCC expanded the program to offer subsidized cell-phone service, and since then, the expenses of running the program have soared,” Melchior reports. “In 2012, the program’s costs had risen to $2.189 billion, up from $822 million before wireless carriers were included. As of June, there were 13.8 million active Lifeline subscriptions.”

“To be eligible for Lifeline, the applicant is supposed to be receiving some significant government benefit — food stamps, Medicaid, Supplemental Security Income, public housing assistance, etc. But because welfare eligibility has expanded under the Obama administration, more people than ever before are qualified to receive ‘free’ cell-phone service — part of the reason why Lifeline mobiles have become commonly known as Obamaphones. Alternatively, applicants can qualify if their household income is less than 136 percent of the federal poverty line,” Melchior reports. “But as with any federal program with too much funding, too little oversight, and perverse financial incentives, Lifeline has become infamous for rampant fraud and abuse. There have been news reports about recipients flaunting dozens of subsidized phones. And in February, the Wall Street Journal reported on an FCC audit of the top five Lifeline providers, which found that “41% of their more than six million subscribers either couldn’t demonstrate their eligibility or didn’t respond to requests for certification.””

Melchior reports, “Representative Tim Griffin (R., Ark.) has long opposed the Lifeline wireless subsidies, making it a pet cause. He reiterated the basic point I had learned from this experience: The problems began when the federal government got in the business of providing free cell phones, and the FCC’s recent reforms aren’t sufficient. ‘I saw all the horror stories of people getting 10, 20, 30, 40 phones,’ Griffin says, ‘the [wireless] companies not paying a lot of attention and in some cases no attention to who was getting them and whether they were getting duplicates.’ And if you’ve been wondering why the companies are so eager to hand out free phones, the incentive is built into the program. As Griffin explains, ‘Of course, the way the program was set up, [wireless companies] were getting money for every one they could give out, so they gave out as many as they could.’ And still do.”

Read more in the full article here.

MacDailyNews Take: “Too much funding, too little oversight, and perverse financial incentives” is the recipe for fraud, abuse, and waste.

Not just Apple, this affects every mobile phone maker, for those people who could afford to pay for their own phone/plan, yet choose instead to leech off the “system,” despicably defrauding their fellow citizens, are not participating in the open mobile phone market. For shame.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]


    1. Didn’t you start it first with your post? Oh wait, you must LOVE government fraud, waste and abuse on idiotic programs paid for with the taxes collected, don’tcha?!

      1. Appears 3l3c7ro is Canadian – what else would you expect? Maybe from Washington state but that’s about the same thing. Free cellphones = lots of votes. Buy your electorate, that’s the Democratic party’s way of doing things.

        1. Fred you must not have visited Canada lately. No free phones here not even your buy one, get one free Android program. In fact we pay more here probably because we’re more wired. And votes up here come by fear mongering these days. I don’t where our politicians learned that from? Our ruling party is considering adopting moose balls instead of tea bags as their unofficial logo.

        2. As opposed to buying the votes with all those $500 toilet seats or the $9B a month we got bilked out of during the bush years that went to bribe Halliburton?

    1. Read your link. The real issue remains:

      Millions of TAKERS being signed up for “Obamaphones” while the dwindling number of MAKERS foot the bill, as usual.

        1. It was originally “First 2010, Then 2012”, and he was POSITIVE that it was all going to work out for him – really, he KNEW – then he LOST and had to change his name. . . kind of like how there’s no one named “Hitler” anymore.

          I have a sneaking suspicion that F10T12 is actually Rush Limbaugh, but no proof.

        2. no proof, no facts, no problem for you and the rest of those
          who act as y’all do, where the first knee-jerk is to pull out
          the hate/race card.

          fuck off and happy trails

      1. There will always be an issue with Takers. It’s inevitable. However the article itself is highly suspect. It’s written by a ghost on a shoddy pro-conservitive website that it used primarily for spreading propaganda under the guise that it’s a reputable news source. The “reporter” makes a good number of claims and states zero sources. She doesn’t even vet her method for obtaining the phones. I’m not saying abuse doesn’t happen or any of this is ok. But consider that you might be spinning your wheels over an article that was purposefully designed to do nothing more than to pander.

        1. By Jillian Kay Melchoir is not a ghost. But @Bobnneal certainly qualifies. Obviously you have no clue how first-person investigative journalism works, particularly how to handle sources. Further, it is really dumb to shoot the messenger first and offer nothing to discredit the MESSAGE. Truth can be found in ALL publications, not just those with a Left or Right perspective.. I have to give you special credit on one thing — how to pander to your party.

      2. Yes, there are only “takers” and “makers” in the US. There is no overlap. By no overlap, I mean 100% overlap. Everyone in this country uses something that was funded by the federal, state, or local government. This type of categorization is such an oversimplification that you are either willfully ignorant or infantile to use it.

        Apparently you did not really read the article, which clearly indicates it comes from a service fund paid by landline, cell, and VOIP providers and, essentially, paid for by all users of those services. So unless your contention is that only “makers” use telephony, your statement is wrong. Of course, since the categorization does not stand up to even the slightest scrutiny, that was an obvious conclusion.

        If you have conservative values, fine by me. You just poorly represent such beliefs with pablum like makers/takers.

        1. While you pay for the current operation and maintenance of those infrastructures, none of us were around to pay for the initial tax-funded investments that brought them into existence. I think that’s the point.

        2. You truly are a simpleton. I don’t know why I even try with you. Every once in a while you seem to be coherent, but then you fall off the path again.

        3. botvinnik, I just knew you were a cantankerous old f**k. Posting from your all white nursing home? Good thing they have a computer club. Next up, how to forward nonsensical emails rants about the country going to shit to your entire family!

      3. You’re an idiot and a stooge for the 1 %. I pity you.
        Pop quiz ..who was president in 2008..I know you tea party asshats aren’t good at math and all but it was your boy George Bush.

      4. When you see “TAKERS” capitalized and used this way, it’s a handy clue that the writer has learned all they know about politics and economics from reading the shoddy, childish, oversimplified logic of Ayn Rand novels and Hollywood actor presidents. Luckily that makes their posts easy to identify and avoid.

        1. I doubt you would opine your nauseatingly condescending tripe regarding Ms. Rand if you had been forced to flee the October Revolution and its subsequent tyranny with only your life in your youth. Lots different than band camp.

        2. … fled the October Revolution? Dude, that was 1 9 1 7 ! ! ! My 90+ year old mom was just born. I knew some of the posters here were OLD, but you must be a centenarian if you could once remember doing that!
          I read Ayn Rand … a while back. I prefer the teachings of Christ. She was dismissive of those teachings. Are you?

        3. You haven’t read a page of Rand, your response is typical of the illiterate, liberal jackass regurgitating their CNN/academia vomit. No, dearie, YOU suck the tar out of the kitchen linoleum floor.

      5. … the handful of oil magnates who make billions from their industry yet insist they need further billions in subsidies for … I don’t know, you tell ME why they deserve, much less NEED subsidies to sell us their oil.
        Now … WHY is this thread on a (supposedly) Apple-related blog? Apple doesn’t compete in this market!

        1. Actually, it’s our oil. We just lease them the land for a next to nothing to pump it out. It’s called corporate welfare and it been going on since the days of the Robber barons.

      6. @First 20[this year, next year, sometime, never]: You say read the link. You mean the part that says the program was set up in 1984 under Reagan, and “the costs of administering the Lifeline program have increased greatly with the move towards cellular telephone services, leading the FCC to approve a comprehensive overhaul of the program in January 2012 intended to eliminate waste, fraud and abuse.”?? Or the part about the increasing number of fake websites set up to imitate the government one but that have no connection to the federal government or Obama administration??
        Just your use of the word “Obamaphones” kills the last shred of credibility you had left.

      1. I think all Republicans are racist.

        ::Cue video showing 20 Republicans holding racist signs::

        Therefore… ALL Republicans are racist.

        The ignorance in here is unbelievable…

        1. Nasty, racist Republica… Oops:

          U.S. Senator Claire McCaskill (D – Missouri) Requests Wasteful Lifeline Funds be Used for School Broadband Initiative

          June 13, 2013
          WASHINGTON – U.S. Senator Claire McCaskill, who has led the effort to reform the Lifeline government phone subsidy program, today called on the Federal Communications Commission (FCC) to shift Lifeline funds into the recently-announced “ConnectED” initiative, which aims to connect 99 percent of America’s students to the Internet through high-speed broadband in schools and libraries over the next five years.

          The Lifeline program is funded by the Universal Service Fund (USF), which receives its resources from a fee telephone users pay on their phone bills. The FCC oversees the USF and, accordingly, the Lifeline program. USF contributions have been identified as the likely source of funding for ConnectED.

          “The Lifeline program has been plagued by waste, fraud, and abuse for years-while the ConnectED initiative has incredible potential to improve the lives of young folks around the country-especially students in lower-income and rural areas,” said McCaskill, former Missouri State Auditor and Chairman of the Senate Subcommittee on Financial & Contracting Oversight. “It’s common sense that we concentrate existing money on the program with promise, and eliminate the one that’s proved to be obsolete and a target for fraud and abuse.”

          Lifeline, which provides a discount on phone service for qualifying low-income consumers, cost $2.2 billion in 2012. The program currently accounts for approximately 25 percent of total USF disbursements. In her letter to Acting FCC Chairwoman Mignon Clyburn, McCaskill argues that redirecting those funds to the ConnectED initiative could provide approximately $10 billion over the next five years to connect virtually every American school and library with high-speed broadband Internet access.

          In 2011, McCaskill urged the FCC to provide stronger oversight of the little-scrutinized federal program-which provides subsidies to phone companies-after she received a solicitation at her home for a free cell phone from a participating provider in the Lifeline program. The mailer did not require documentation for proof of eligibility. McCaskill is not eligible for the program.

          Following those demands, the FCC issued new orders aimed at addressing waste, fraud, and abuse in the program.

          “I have serious questions about the continued need for a federal program to subsidize basic phone service at a time when wireless and wireline service are more affordable than ever,” McCaskill’s letter to Clyburn reads.

          Last year, in a letter to the FCC, McCaskill requested detailed information on the program’s contracts, including documents related to the agreement between the FCC and the companies responsible for managing Lifeline and the number, value and scope of contracts. McCaskill also offered an amendment to the recent Senate Budget resolution aimed at ending the controversial program-in addition to recently requesting a forensic audit of the entire Lifeline program.

          A copy of McCaskill’s letter can be found on her website, HERE.

      1. Nope. It stops nothing – and it’s not nonsense, it’s typical nanny state government cronyism gone out-of-control.

        Follow the money:

        With Republican efforts to cut off “Obamaphones” gaining steam, the company that gets the lion’s share of the federal subsidy that pays for them is looking for a lifeline for its own.

        TracFone, the wireless service with the largest government contract for the program, wants the program to continue. And if TracFone, the pre-paid service provider controlled by Mexican billionaire Carlos Slim, has a CEO who was also a major fundraiser for Obama’s re-election campaign, well, that’s just business.

        Read More


      Why don’t we call these Reaganphones?

      False statements in the NR article…

      “But because welfare eligibility has expanded under the Obama administration” should say that because the number of people who are poor and therefore eligible for federal assistance, has increased in recent years, more people are eligible for Lifeline. I’m pretty sure the Obama administration didn’t make more people poor.

      And then “part of the reason why Lifeline mobiles have become commonly known as Obamaphones.” Really? What part is that? Since the first statement is false, the second cannot be true. The reason these phones are known as Obamaphones is because some conservative politicians and groups hate anything that involves the federal government helping poor people in principle. So they take every opportunity to tie any federal assistance program which helps the poor to Obama in a pejorative manner as part of their strategy to bring down these programs.

      Whether or not the federal government should be in the position of providing various types of assistance to the poor is a debate we can have. But don’t identify a program started under Reagan as Obamaphone and don’t blame the current administration for the fact that and ever increasing proportion of the total wealth in this county is held by an ever smaller fraction of super-rich people.

      1. “I’m pretty sure the Obama administration didn’t make more people poor.”

        Forget “pretty sure,” I know for a fact that you’re wrong.

        Obama’s policies did and do indeed make more people poor.

        Obamacare alone killed job creation and caused millions of full-time employees to be cut to part-time and we haven’t even seen anything yet.

        You want to get into the jobs lost due to Obama’s crazy energy policy? Keystone pipeline? Drilling bans? Killing the coal industry? Etc.

        Fifteen million more Americans have gone on food stamps since Obama took office in 2008. Fifteen million.

        You need to get educated or STFU.

      2. “I’m pretty sure the Obama administration didn’t make more people poor.”

        Your right, he made them RICH. Poverty is not at an all-time high either and people on welfare are dropping off rolls in record numbers. Unemployment has steadily dropped for the last five years and our national debt greatly reduced under the deft guidance of the current administration. Onward and upward!


      3. Jillian Kay Melchior lied and the National Review lies. The Lifeline program is funded by the Universal Service Fee that is included on every phone bill, mobile or landline. The program was initiated under Reagan, the first mobile phones were funded during the Bush administration.

        The legislation/ rules were poorly crafted (Surprise, surprise, surprise!) to allow mobile providers to tap into the UAF pot, simply on the basis of “If you provide a phone, you get paid for it”. The goldrush is on. Obama has little to do with the corporate rapaciousness of the mobile providers. He’s anti-business, dontcha know.

        1. I’d suggest you read F2014T2016’s:

          “TracFone, the wireless service with the largest government contract for the program, wants the program to continue. And if TracFone, the pre-paid service provider controlled by Mexican billionaire Carlos Slim, has a CEO who was also a major fundraiser for Obama’s re-election campaign, well, that’s just business.”

        2. Kind of makes you wonder why payment to TracFone started during the Bush administration, doesn’t it? I seldom read FwheneverTsomeothertimes posts. When you get past the talking points and general drivel, there’s nothing left.

        3. The point I failed to state earlier, when I pointed out that Jillian Kay Melchior and the National Review were liars is that the Lifeline funding does not come from taxes, it comes from the Universal Service Fee on our phone bills. It isn’t taxpayers providing the funding, it is telephone users.

          A fine point to be sure, but facts are facts. The issue for me is the fraud aspect of what is going on, and that seems to be rampant in all government programs. It seems to to only take crooks a matter of hours to circumvent processes and start siphoning money out of any program.

          But maybe crooks are just realists who recognize they’re never going to be able to steal on the scale of Wall Street or oil companies and they’ll just have to get it where they can. They know they’ll get away with it, because the agencies responsible for administering the program will be understaffed and always behind.

        4. Excuse me, but those ARE taxes. You have no choice about paying them. A mandatory ad valorum fee is indistinguishable from a tax. It matters NOT what its called. If it waddles, it quacks, it has feathers, it’s a duck, not a dog, no matter how much the Congress tries to convince the rubes different. Same here. The function is the same. It raises revenue, it’s mandatory on all persons utilizing the service but does not provide benefit to the user (the requirement for a fee), benefits third parties and their interests or the general welfare (the purposes of a tax), and funds the General Fund, and it’s assessed on the value paid (the total phone bill, i.e. it’s ad valorem). The funds are collected by the Federal Government through the IRS. . . and go into the General Fund. Ergo, it’s a tax. The phone users are being taxed. So what if it is not Income Taxes? It’s an Excise Tax. It is STILL A TAX.

          The amount collected does not total anywhere near the amount near the amount being paid out to fund the number of phones being supplied, or pay for the air time being consumed. That is being paid, like ALL government expenditures, from borrowed funds since the $2.1 billion plus yearly cost is far in excess of the few cents per phone line being collected from the paying subscribers.

        5. Do you type this out yourself, or just cut and paste? In either case I need to let you know that BS, no matter how deep you pile it, is still BS.

          I was going to try to respond to you, point by point, but find you are so far off the target that I might never finish. I’m providing links to the Snopes article and a Wikipedia article. Between the two of them the explain the depth of the pile of BS you are shoveling.

          Good luck reading so much factual information at one time. Moving your lips may help, please be sure to have a bucket of water nearby to stick your head in if it starts to overheat.

          Best of luck.

  1. those phones are the cheapest and dumbest phone you can find anywhere. i’ve seen them.

    the people getting multiple phones sell the minutes. i think the plan on it gives you a few hundred minutes per month

      1. It won’t prevent fraud (voter fraud being essentially nonexistent). It will keep people of color and people of limited means from voting. That will, in turn, allow the 1000-year Republican Reich to begin. It can’t win at the ballot box based on its merits, but it can be manipulated into existence. It’s all part of the plan, listen to Fox News for the details. They’re the media outlet for the Republican Party.

      2. Sorry, Bot. As soon as I saw “Yes We Can” calling — click, click, delete. Know we can vote, wondering if the rest of my cemetery buddies qualify for a free phone?

    1. BLN, you wouldn’t recognise a real communist if he walked up and kicked you squarely in the nuts. Obama might be a shade to the left of centre, but communist?
      Give me a break, and try getting a proper education.
      If you want real communists, then there’s one currently running a rigged election to keep him in power, and enjoying the appalling lifestyle he’s enjoyed for around thirty-five years.
      Use the search engine of your choice, and tap in ‘Robert Mugabe’, and ‘Zimbabwe’
      While you’re at it, look up ‘Venezuela’ and ‘North Korea’ while you’re at it.
      Then get the education you’re so obviously lacking.

  2. Program set up in 1984, expanded in 2008,
    Obama inaugurated in 2009, and yet it’s nickname isn’t the Reaganphone or Bushphone or GOPhone, but the Obamaphone.

    Rhetorical Question:
    How many bills to terminate this program have bern passed by Republican-controlled houses of Congress since its inception? What was that? I couldn’t quite hear your answer.

    1. You need more acquisition.

      Sen. David Vitter (R – Louisiana) is aiming to kill the program through amendments in the Senate’s budget resolution and farm bill. He also has introduced separate legislation.

      With Republican efforts to cut off “Obamaphones” gaining steam, the company that gets the lion’s share of the federal subsidy that pays for them is looking for a lifeline for its own.

      TracFone, the wireless service with the largest government contract for the program, wants the program to continue. And if TracFone, the pre-paid service provider controlled by Mexican billionaire Carlos Slim, has a CEO who was also a major fundraiser for Obama’s re-election campaign, well, that’s just business.

      Read More

  3. MDN if you’re struggling with the site here, you can always open up a contributor system and we can bear some responsibility to keep the place alive. I contribute to a few sites and forums that way and I’d be glad to do the same here.

        1. Hey bot. I’m glad you feel so tough behind you’re keyboard. GO YOU FUCKING TOUGH GUY! Now you’re a model grandparent! Trolling the internet all day posting your BS and belittling your fellow citizens must be a great lesson to teach the grandkids right? I bet they wanna grow up just like you and marginalize there brothers, sisters, and countrymen as well. Congrats on being a horrible person, and a horrible example for your family.

  4. The current administration has a great many strengths and a number of weaknesses…. However lying about its actions to gin up controversy with your readers is offensive enough for me to stop reading your blog for the first time in nearly 10 years. I take this stand to uphold my principles- the difference therein is your the one running a business.

  5. Welcome to Obamacare! That 40% waste/abuse/fraud number seems to be pretty consistent among gov’t programs- 40% also represents the amount of waste/fraud/abuse of Medicare.

    Tack on “Too much funding, too little oversight, and perverse financial incentives”, and you have a recipe for disaster, indeed!

  6. My son, who is disabled, was called for months by people offering a free Obama phone. He qualifies for one. After he finally said OK they said he was in the wrong area code. His area was too rich and too white to qualify.

  7. When you fraudulently claim welfare not only are you stealing from the tax payer, you are stealing from those who have a genuine need for assistance and put the whole system as risk. Such fraud should be dealt with in the harshest possible terms. Simple as that.

  8. As much as I hate to see good intentions turned into wasted taxpayer dollars, I fail to see how this is Apple-related news. Posts like this always degenerate into are idiots threads.

    Your site, your rules, just voicing an opinion…

  9. This posting by MDN is just another in a long line of MDN posts that have very little relevance to true Apple-related news stories but that:

    — fit MDNs decidly partisan, right-wing views
    — will stimulate tons of partisan political views and posts. In other words, MDN over the years has devolved into just what they so pointedly abhor on other “news” sites — hit-whoring.

    My solution? I read selective articles on this site, but am careful about taking any other actions that might reward MDN for their choice in what they post here.

    1. “My solution? I read selective articles on this site, but am careful about taking any other actions that might reward MDN for their choice in what they post here.”

      hypocrisy |hiˈpäkrisē|
      noun ( pl. hypocrisies )
      the practice of claiming to have moral standards or beliefs to which one’s own behavior does not conform; pretense.

  10. Several years ago when I first saw that the “Lifeline” program was now offering cell phones, I said to my wife I GUARANTEE this will result in rampant fraud and abuse at the tax payer’s expense. Like most government programs, it is in fact fraught with waste.

    I’ve read NUMEROUS articles regarding the abuse of this program!

  11. You would think after reading these posts the United states citizens are divided so much a civil war could sprout and people would be ready to pick up their guns.

    If you feel strongly about this subject and you want to comment. Think about what you want to say. Check up on the facts before just willy-nilly posting the first thing you find on google. And maybe put your grandmother in the position of the article (needing a free cellphone in this case) and see if your belief is still consistent…you know get at the heart of the situation.

    If this can happen, I think we could really improve the rhetoric spoken in the comments section.

  12. Ahh… 123 comments. Wonderful. I bet they are all filled with political rage.

    In my opinion the program should probably be closed down. Seems like a waste of money. And if someone really needs a phone for medical reasons, is that the federal governments problem?

  13. “Republicans have been calling Lifeline the “Obamaphone” program even though it was created under President Reagan and then expanded to cover prepaid cell phone service in 2005 under former President George W. Bush.”

    Should be called the Reaganphone!

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