Free Cellphones - our gubbinment at work

From The Daily Caller:

Ark. congressman wants to disconnect $1 billion free cell phone program
No one likes paying cell phone bills. What if you could get a free phone with a calling plan whose cost was paid by the federal government? What if you could have eight free cell phones? You can, and people do, Rep. Tim Griffin told The Daily Caller. The annual bill runs over $1 billion, and he�s trying to stop it.

The federal government started the Lifeline program to provide phones to low-income Americans. It originally provided only landlines, but cell phones were added several years ago.

�That�s when the program absolutely exploded and has become a nightmare,� Griffin said in a phone interview with TheDC. Calling it �Uncle Sam�s unlimited plan,� the Arkansas Republican has proposed a bill that would scale back the program to its original form: landlines only.

�People are not only getting [one free cell phone], they�re getting multiples. There are reports of people getting 10, 20, 30 � just routinely getting more than one, selling them, storing them up, whatever,� Griffin said.

�And they�re not just phones that are able to dial 911. They�re smartphones. They�re the type of phones that you and I pay hundreds of dollars a month to have contracts for.�

And it is coming right out of our own phone bill:

�And if you want to know where the money is coming from, just look at your cell phone bill: a line called the �universal service fund.� I�m sure you, like I, have often wondered how a simple phone bill has pages and pages of fees and charges and stuff that you have no idea what it�s for. Well, this is one of those lines.�

I looked at my most recent bill and my monthly is $57 and the Universal Service was $1.81 - 3.3% And there is no oversight:

The Federal Communications Commission, the government agency that is in charge of Lifeline, has also called for an overhaul of the program to deal with fraud and abuse. The FCC�s proposed changes call for a database to keep track of who already has phones, to prevent any one person from gaming the system. The proposed overhaul would also institute �a one-per-household rule applicable to all providers in the program.�

They did not do this initially? I recently got my Amateur Radio License (KF7VNY) and had to jump through all kinds of hoops. Here the FCC is just handing them out like candy... Brings to mind the 3% Federal Excise Tax on Cell Phone bills that was repealed in 2006. It was instituted to fund the 1898 Spanish-American War. In 2006 the IRS allowed people a partial refund:

Telephone Tax repealed
I had written about this tax last January: The 3% Federal Excise Tax on your telephone bill…

From the TaxProf Blog:

Can You Hear Me Now? IRS to Refund $15 Billion of Telephone Taxes to Consumers
The Treasury Department and IRS announced this morning that after losing in five circuit courts of appeals, the Government is throwing in the towel and will no longer seek to enforce the 3% excise tax on long-distance telephone calls enacted during the Spanish-American War of 1898 as a luxury tax on wealthy Americans who owned telephones. The IRS will will issue $15 billion in refunds to consumers for long-distance telephone service taxes paid over the past three years:

• No immediate action is required by taxpayers.
• Refunds will be a part of 2006 tax returns filed in 2007.
• Refund claims will cover all excise tax paid on long-distance service over the last three years (time allowed given statute of limitations).
• Interest will be paid on refunds.
• The IRS is working on a simplified method for individuals to use to claim a refund on their 2006 tax returns.
• Refunds will not include tax paid on local telephone service, which was not involved in the litigation.

Hat tip to Q and O for the initial link.