WSJ: Millions fraudulently claimed eligibility for federal phone subsidies

posted at 12:41 pm on February 12, 2013 by Erika Johnsen

Steel yourselves, because this egregious revelation may very well shock you: A well-meaning but perhaps overly ambitious federal assistance program that offers a taxpayer-subsidized benefit and does not have rigorous eligibility requirements, was fraudulently taken advantage of by millions of people. (I’ll pause here a moment to let you recover.)

The Wall Street Journal reports that, of the $2.2 billion the federal government spent to provide low-income Americans with phones in 2012 alone, more than 40 percent of the programs recipients never actually proved that they were eligible to receive the benefit.

The Lifeline program—begun in 1984 to ensure that poor people aren’t cut off from jobs, families and emergency services—is funded by charges that appear on the monthly bills of every landline and wireless-phone customer. Payouts under the program have shot up from $819 million in 2008, as more wireless carriers have persuaded regulators to let them offer the service.

Suspecting that many of the new subscribers were ineligible, the Federal Communications Commission tightened the rules last year and required carriers to verify that existing subscribers were eligible. The agency estimated 15% of users would be weeded out, but far more were dropped.

A review of five top recipients of Lifeline support conducted by the FCC for the Journal showed that 41% of their more than six million subscribers either couldn’t demonstrate their eligibility or didn’t respond to requests for certification. …

Until last year, FCC rules didn’t require carriers to certify to the FCC that subscribers were eligible. Consumers could self-certify, and in many states documentation wasn’t required.

Anyone who meets federal poverty guidelines or qualifies for food stamps, Medicaid, or other assistance programs, but when the government finally required carriers to verify their recipients’ eligibility and who were then asked to actually provide documentation to that effect, surprise: Over 40 percent of participants either could not or did not bother to do so. …I wonder why that might be.

The Obama administration has engendered a terrible and job-deprived economy, to which one of their proffered solutions is simply expanding the welfare state even further (just check out food stamp growth, good grief); but with more federal assistance and the accompanying bureaucratic expansions and administrative costs come more fraud and government waste, all at the taxpayers’ expense.


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