As Washington has debated the sequester and the fake crisis of federal spending, some leading conservatives have revived a familiar meme about an old program called Lifeline, which is a longstanding federal subsidy created to make phone service accessible to people who are elderly, very low-income or living in rural areas. Like the furor surrounding Obamacare in 2009, the ongoing stir over “Obama phones,” as the program has been dubbed, is instructive. It illustrates just how bizarre the right can make reality look when it uses race to demonize government.

Conservatives such as talk show host Rush Limbaugh and Rep. Tim Griffin (R-Ark.) have cast the nearly 30-year-old Lifeline program as wasteful and targeted it for elimination. In a video on his congressional page, Griffin spends more than three minutes bashing what he calls the government’s “unchecked spending.” The ad rests on the image of a black man screaming, “Get your free government phone today!” from a car.

ObamaphoneThumb_190x378.jpgThe recent attack is actually nearly four years in the making. Early in Obama’s first term conservatives began characterizing the program as “phone stamps” and calling Lifeline pre-paid cellular units “Obama phones.” Trading on the welfare queen stereotype, they’ve also accused black people in low-income communities of voting for the president strictly because his administration doled out free cell phones.

As the narrative goes, the federal government is using taxpayers’ (translation: white people’s) hard-earned money to maintain an alleged welfare state and support the extravagant lifestyles of poor black folks in places like Cleveland, where video of an African-American woman singing the program’s praises went viral last year.

The resulting debate has finally put the program at risk: Some Democratic lawmakers have buckled under Republican pressure and agreed to make cuts.

FCC commissioner Mignon Clyburn, an Obama appointee, attempted to “set the record straight”] about Lifeline at a Consumer Federation of America assembly last month. “Without this program, 15 million low-income families would literally be choosing between feeding their children or going without a dial tone that potentially could save their lives and put them on a better economic path,” she said. But Clyburn’s fighting against years of powerful myth-making.

“The point of government assistance ought to be to remove people from it,” Limbaugh declared on his radio show last September. “But with the Democrat [sic] Party and Obama, the objective [of the Lifeline program] is to increase the number of people, and they use you,” he said, alluding to taxpayers.

Of course, the truth is much more nuanced.

The Truth About Lifeline

In 1985, President Ronald Reagan, the patron saint of the tea party, and his Republican-led FCC started Lifeline. The goal was straightforward: To make basic telephone service accessible to the vast majority of people living in the United States. Underpinning that goal was the fundamental idea that in 20th century having a telephone wasn’t a luxury but a necessity.

Lifeline was also simple in practice. If you couldn’t afford phone service—which back then meant a landline—you’d fill out an application. If you were approved, the phone company in your area would provide service at a discount and it would receive a federal subsidy to help make up the difference.

In 1996, a Democratic-led Congress made two key revisions to the Telecommunications Act in keeping with the FCC’s overall mission to provide universal telephone service. First, in a nod to the growing use of hand-held cell phones (rather than “car phones”), and the eventual decline of landlines, the law described “universal service” as something that would evolve. Between 1997 and 2007, the number of wireless subscribers in the United States grew from from 47 million to more than 243 million.

Second, Congress began requiring every company offering telephone service across state lines to contribute a portion of their annual profits to a newly established Universal Service Fund. Contributions to the fund would help underwrite telephone costs for low-income households.

With the 1996 law, the FCC created a federal subsidy that would, in effect, pay for itself. If telecom companies paid a portion of their profits to the Universal Service Fund and agreed to extend service to low-income and rural households, they’d see the money again in the form of a federal contribution.

Today 13.5 million households rely on Lifeline subsidies, a number that includes cell phone subscriptions.

Poverty Pays

The government has encouraged Lifeline providers to market their federally subsidized service to consumers more aggressively. One company in particular has made immense profits by doing so: TracFone, the Mexico-based subsidiary of Latin America’s largest telecom operator, América Móbil. TracFone is the company behind SafeLink Wireless, a widely advertised program targeting Lifeline enrollees. In 2009, TracFone received more than over $189 million in federal subsidies to serve low-income subscribers. Put another way, 20 percent of all Lifeline payments went to TracFone.

Due in large part to TracFone’s efforts, enrollment in the Lifeline wireless program grew from 7.1 million users in 2008 to 8.6 million users in 2009. This is what Republicans point to as some sort of Obama-led socialist expansion. “Lifeline (aka ‘phone stamps’) has been growing by leaps and bounds since 2008, at significant cost to taxpayers,” wrote John Sexton, a writer at Breitbart.com last June.

Neither TracFone nor the FCC is trying to hide the company’s growing market share. In a 2010 report the nonpartisan Government Accountability Office noted how the company “has always considered low-income consumers its customer base and, thus, has experience advertising and marketing to this population…TracFone’s participation in the Lifeline program is an integral part of the company’s business model and enrolling low-income customers is in the company’s interest.”

TracFone has become one of the nation’s most popular wireless carriers. Virgin Wireless is also trying to get a piece of the Lifeline pie.

Reality Bites

While TracFones are common, they’re not say, iPhones or Samsung Galaxies. They offer voice-to-voice service but no WiFi access. They also tend to be prepaid and only last 50 to 250 minutes a month. These are the phones under such intense scrutiny by conservatives.

“If you’re trying to deal with social services, you will not be able to take care of business [with 250 minutes a month],” says Ana Montes, the director of organizing at The Utility Reform Network (TURN) in California. Montes says that her group often works with people who are homeless.

Still, in response to some legitimate claims of Lifeline subscribers not being able to verify their eligibility for the program, the FCC last year introduced a series of so-called “reforms” meant to curb fraud. Now, in addition to living on an income at or below 135 percent of the poverty level or being currently enrolled in a federal assistance program, Lifeline applicants must provide their Social Security number and re-apply for the program every year. According to Montes, whose group works closely with people applying for Lifeline program, the reforms have done more harm than good.

“It has become extremely difficult for poor people to sign up for the program,” she says. “One of the things that’s being discussed at the FCC is that people now have to have ID to apply for the program. The people that need it the most can’t afford to replace that paperwork.”

A report from New Millenium Research Foundation called cell phones “an important economic tool” and found that for low-income customers, they generate an average of $259 a year by helping them find and retain income.

Reality has never stopped Republicans from vilifying federal programs for poor people and using racially charged images to do so. Clearly, even in the wonky space of telecommunications policy, race matters. “The Universal Service Fund exists because at some point we made a decision that people having phone service is essential, something everyone should have,” says Steven Renderos, a national organizer for the Oakland-based Center for Media Justice. “There’s this idea that telephone service is an essential service.”

* This story has been updated since publication.

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