- - Wednesday, June 3, 2015


America’s welfare state keeps growing because Congress allows bureaucrats to expand programs, immune from accountability to voters.

A fresh example is the proposal to give free Internet service to tens of millions of people, to be granted by the five nonelected commissioners at the Federal Communications Commission. All were appointed by President Obama. Chairman Tom Wheeler announced his intent for the expansion; he likely expects to steamroller the FCC’s two Republican members again, just as he did in the fight over so-called net neutrality.

Millions of people already get free phones through a fraud-ridden FCC program infamously nicknamed “Obamaphones.” The correct title is “Lifeline.” Expanding this to the Internet (or should it be “Obamanet?”) could add tens of millions of people, according to FCC’s loose eligibility criteria.

The cost would be borne by the rest of us through surcharges on our cellphones, landlines and business lines. Amounts vary; $12 a year per phone line is typical. The U.S. has 700 million to 800 million phone numbers in use, so even small charges add up to big bucks.

But this “universal service” charge is collected in a sneaky Obamacare-style manner that hides the cost to consumers. The FCC labels it a “contribution” and not a tax, assessing it in a way to protect elected officials from accountability.

By letting the FCC do the dirty work, Congress avoids the accountability that other elected officials must face when they cast votes on taxes and fees for services such as water, sewer and trash collection. The FCC simply calculates how much it wants to spend on the service and notifies telephone service providers about how much of a “contribution” is required.

Phone companies typically pass along the charges to consumers and businesses. Telecom companies often line-item a universal service fee on customers’ bills, but the additional cost sometimes is rolled into the overall bill for services or for long-distance charges.

How big is the program now, and how big might it soon become?

According to an audit by the Government Accountability Office, “In 2014, over 12 million households participated in Lifeline, up from about 7 million in 2008. At its peak enrollment in 2012, Lifeline served about 18 million households.”

The growth coincided with Obama administration policies and the 2012 elections. The subsequent decline coincided with audits showing massive fraud, duplicate accounts and ineligibility in giving away the Obamaphones.

The Lifeline program began during the Reagan presidency, expanded some in the George H.W. Bush and Bill Clinton years, but exploded under Mr. Obama.

Phone carriers are supposed to verify eligibility of applicants, then apply to the FCC for reimbursement. The GAO notes, “Lifeline is unlike any other federal low-income support program in outsourcing eligibility verification.” That is significant because over 80 federal programs give away public assistance benefits. Collectively, these 80-plus programs constitute our welfare state.

Those who qualify for one benefit often get other benefits automatically. The FCC criteria say that households automatically get free phones if they are receiving certain other benefits. Those same guidelines would determine who would be eligible for free or partially free Internet service.

Eligible individuals would include the 70 million people covered by Medicaid, 21 million people on SSI disability, the 48 million Americans on food stamps, plus several million more who get housing subsidies or free school lunches. Plus anyone at 135 percent of the official poverty level. (In calculating income, government benefits that lift people above that threshold are disregarded.) That massive eligibility covers tens of millions of people.

The silver lining is that not everyone applies. The dark cloud is that multiple liberal advocacy groups actively promote the giveaways and push to expand participation. Their websites include FreeGovernmentCellPhones.net, CheapInternet.com, and, of course, Obamaphone.com.

Those advocacy groups recognize that the more people become dependent on government, the more they vote for Democrats. But the buzzwords they use are that we must close the “digital divide” between those who have Internet service and those who do not. Their remedy is to perpetuate a national divide between those who give and those who receive.

How long will the givers have these surcharges on their phone bills? If not forever, it will be close to it.

We once had another tax that added 3 percent to all telephone bills. It was created to pay for the Spanish-American War, which lasted only 3 months in 1898. Congress took 108 years — until 2006 — to end that tax. The universal service tax is 30 years old, but Mr. Obama’s FCC intends to keep that tax alive and well forever.

Former Rep. Ernest Istook is founder and president of Americans for Less Regulation (www.AmericansForLessRegulation.com). Subscribe to his free email newsletter at: eepurl.com/JPojD.

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