Obamaphone in the Crosshairs

Here we go again. Some members of Congress are irate over the so-called “Obamaphone” program, initiated under President Bush, that provides poor people with subsidized mobile phones. They're making it out to be a Welfare Cadillac plan that provides the undeserving with fancy phones at taxpayer expense. Karen Tumulty explains the high points of the issue in today’s Washington Post:

In the 3¹/₂ years after false rumors started that the Obama administration was giving free cellphones to poor people — and six months after a racially charged video about it went viral — a once-obscure phone service subsidy is getting renewed scrutiny on Capitol Hill.

There are growing calls in Congress to end or drastically cut back Lifeline; later this month, the House Energy and Commerce Committee will hold a hearing that could help determine its fate.

“The program has nearly tripled in size from $800 million in 2009 to $2.2 billion per year in 2012,” the senior Republicans on the Energy and Commerce Committee wrote in a March 26 letter to the Democratic minority. “American taxpayers — and we as their elected representatives — need to know how much of this growth is because of waste, fraud and abuse.”

Lifeline was begun not by President Obama but under Ronald Reagan. It expanded to include cellphone service during the presidency of another Republican, George W. Bush.

The Lifeline program is a good and necessary thing. It was started under President Reagan because it’s necessary and reasonable to provide the poor and the infirm with basic telephone service even when they can't afford it for reasons of health and safety. Poor people need the ability to report crimes, sick people need the ability to call ambulances, the elderly and isolated need the ability to stay in touch with family, the unemployed need the ability to seek and gain employment, and all people of limited means need the ability to contact emergency services during weather-related crises and when power goes out. These abilities benefit society as a whole, and they're basic responsibilities we all share for those of our fellow citizens who are less well off than most of us.

There is no rational reason to limit Lifeline to wireline phones, and doing so will in fact delay the phaseout of Plain Old Telephone Service (POTS) and impair the transition to the Internet of the future.

All the rationales for Lifeline are enhanced if the program is shifted from wireline phones to mobile ones, especially those related to emergencies; the original Obamaphone was actually a Bush Katrinaphone, after all.

None of this is to say that that the program shouldn't be scrutinized for fraud; it should, and there’s every likelihood that mobile Lifeline is being gamed by unscrupulous parties of several types. But there should be no question that basic communication capability is vital to the health, safety, and economic development of the nation.

We shouldn't confuse Lifeline with the high-cost fund component of Universal Service, a program of rural subsidies that transfers money from telephone users in cities where living costs are high to rural areas where they're low, without regard for the incomes of the parties involved. The high cost fund literally transfers money from the urban poor to the rich owners of Aspen ski lodges, an inexcusable subsidy. It’s perfectly sensible to apply some form of means testing for high cost fund subsidies, if not to absorb it wholesale into the Lifeline program. Advances in technology make it cheaper to provide telecom services - however we define “telecom” these days - in rural areas, and subsidies should reflect these advances. There has been an understanding for some time now that Lifeline should grow as the High Cost Fund shrinks.

The growth of the “Obamaphone” fund is one example of of this transition. Let’s not confuse poor people who use use basic 21st century communications services with welfare queens. There is no shortage of genuinely poor and needy people in America who need a little help from the rest of us, and we have an obligation to help. So by all means, attack the fraud but don't turn America into a nation of insiders and outsiders in which the well-off spend their time abusing the needy.