Even if the Obamaphones program was being run with every letter dotted and crossed, you could argue that it was and is a complete waste of taxpayer funds. But according to a new federal audit conducted by the FCC’s Inspector General, the program may have wasted $336 million of its total 2017 budget.
The FCC has released a new report that shows that improper or fraudulent payments through the program increased by EIGHT TIMES their amount in the previous year. The investigation came as a result of a Government Accountability Office report that found the Lifeline Telecom Subsidy program was at extraordinary risk for fraud and abuse.
In 2016, the Lifeline program only lost approximately 3% of their budget to waste and fraud. In 2017, that percentage jumped to 22%. The GAO reported that some 69% of Obamaphone beneficiaries had not had their eligibility for the program properly verified by federal authorities.
Last year, FCC Chairman Ajit Pai proposed some new restrictions for the Lifeline program that would help the federal government excise some of the waste and fraud that has characterized the system. Specifically, he wanted to remove most of the wireless resell providers who make up the bulk of the network. Critics say that if such a proposal was implemented, more than 70% of the 10.7 million Americans who rely on the program for text, voice, and data plans would have to find a new wireless provider, throwing the system into chaos. Proponents, however, say that it is a necessary step if the FCC is to ever get control of the widespread waste.
Though the Lifeline program is highly correlated with President Obama, it has actually existed since 1985. It was modernized in 2008, under President Bush, which is when resellers were allowed to enter the marketplace. They began to do so in earnest when Obama took office, which immediately led to a proliferation of programs; this is why the system became so instantly associated with Obama and the phrase “Obamaphones” was born. Chairman Pai has been a vocal opponent of the program for quite some time; he voted against the plan to add a national verification system last year and has said that limiting reseller plans would reduce the need for such a system.
Liberals and Democrats say Pai’s attempts at reform amount to a “war on the poor.”