What Fresh Hell Is This?

February 27, 2013

Fact-Checking Keith Rothfus On The "Cell Phone Giveaway"

Today's Tribune-Review published this commentary on the upcoming sequester from the tea-party pen of the newly elected representative from Pennsylvania's 12th district,  Keith Rothfus.

And he gets just a few facts wrong on his list:
Our federal government will spend more than $3.7 trillion this year. Replacing the sequester requires finding $84 billion in smart cuts to that budget. Here are a few things we could eliminate to begin replacing the sequester:
  • $2.2 billion by ending the federal government's cellphone giveaway
What he's describing is something that's popped up recently (quite coincidentally, I am sure) on another of Richard Mellon Scaife's media holdings, Newsmax:
Nearly half of the 6 million people who received free cellphones and communications services through the government-funded Lifeline program last year apparently were ineligible or did not respond to certification requests, a new report shows.

The U.S. government spent about $2.2 billion on the program last year alone, reports The Wall Street Journal, which conducted a review of the program's funding.
The only problem with this is that eliminating the program won't save the gov'ment any money. Here's why (and this is from the WSJ piece referenced above):
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.
Factcheck already has something on this program:
Lifeline is funded by telecom customers who pay a universal service fee as part of their phone bills. The fee technically is not a tax but a cross subsidy, the rules of which are determined by the Federal Communications Commission.
As we explained [in 2009], the FCC requires phone companies to fund “universal service” programs such as Lifeline that improve telecommunications access to all Americans. The companies pass the cost along to consumers in the form of a universal service fee, which is listed on a monthly phone bill.

The fees go into the Universal Service Fund, which is administered by the Universal Service Administrative Company, an independent, not-for-profit corporation. USAC manages Lifeline and three other programs that provide telecommunications services to rural areas, schools, libraries and places where it’s more expensive to provide access.
Lifeline does not “give away” “government phones.” The program reimburses phone companies with a monthly subsidy of $9.25 for each low-income customer who uses a landline or a cell phone.
So however leaky the program is, eliminating it would not reduce guv'ment debt in anyway - it would only reduce everyone's cellphone bill by a little bit AND reduce access to the global telecommunications network  by poor people a lot.  But it won't reduce the debt.

That's something Keith Rothfus got wrong.


Ol' Froth said...

Amazing that an elected official could get such a basic fact wrong, and by perpetuating the lie, he only reenforces it.

Heir to the Throne said...

So the universal service fee is not a tax because it is imposed by the bureaucrats at the FCC and managed by a independent, not-for-profit corporation just like Freddie Mac and Fannie Mae.

reduce access to the global telecommunications network by poor people a lot.
Like my sister who keeps asking me to paid her cable bill so her phone does not get shut off because her Obama phone has too few minutes.

John Wright said...

This is just another example of how our politicians are so fixated on their beliefs, that they won't go deep enough to find the truth, before putting their ideas to the public.

Ol' Froth said...

Ummm, Heir, that would be her REAGAN phone, or have you not been paying attention again?