Tuesday, February 19, 2013

G Mobile

Rep. Jackson Lee warns against more spending cuts:

Rep. Sheila Jackson Lee (D-Texas) urged her colleagues to reach a compromise to prevent spending cuts through sequestration, arguing that government programs are already as lean as they can be.

"We're at the bone almost, and sequester, that is across-the-board cuts, will literally destroy us and put us in a recession," she said on the House floor Wednesday.

You remember the “Obamaphone” clip that garnered attention during last fall’s campaign?

It turns out that while the details are a bit different from what the enthusiastic Obama supporter described, there is indeed a government program to subsidize mobile phones for poor Americans. And the budget for that program has grown significantly under President Obama. And-prepare to be stunned-that program involves significant waste and fraud.

Abuse Concerns Grow on Phone Aid for Poor (WSJ):

Regulators looking into the burgeoning federal program to provide subsidized phone service for the poor are finding growing cause for concern.

Last year, the government spent an estimated $2.2 billion on the Lifeline program, up from $819 million four years earlier, as dozens of small companies were authorized to start providing the service.
Now, inquiries in states from Alaska to Florida are raising questions about the source of that growth, according to a review of documents in federal and state investigations.

Investigators say they have turned up some unorthodox tactics by companies participating in the program, such as signing up customers in hospital rooms and enrolling subscribers by mailing them unsolicited phones. In other cases they have uncovered more straightforward attempts to sign up ineligible customers, according to federal and state documents.

While the inquiries have touched only a small number of the dozens of companies that provide the wireless service, they reflect regulators' growing concern that a program aimed at ensuring people have the ability to call their families, jobs or for emergency help has got out of hand as the number of companies providing the service has exploded.

"Waste and fraud in this vital program are simply unacceptable," said Federal Communications Commission spokeswoman Tammy Sun.

And yet they are apparently rampant. Imagine that. When you read the details of the story of how this government program with the best intentions has gone awry (sound familiar?), a couple of things stand out:

1. The lack of accountability is astounding. Until last year, the FCC allowed customers to “self certify” that they qualified for the program and required no documentation. They basically let companied sign customers up for the program, submit bills to the government for the service provided, and paid them with little oversight or concern for where the money was going. This is just one small program (a mere $2.2B a year) and it’s not an isolated case. It’s just an example what takes place in government programs when it’s all too easy to spend someone else’s money.

2. The notions that government programs are “as lean as they can be” or that “we’ve already cut to the bone” appear ludicrous when considered alongside stories like this. Whether you believe that providing phones to its citizens is truly a proper function of government or not, it’s hard to argue given the facts of the this story that the program would be “destroyed” if it was subject to a 3% budget cut (as part of sequestration) or even a 10% budget cut as part of an across the board effort to reduce the deficit. There’s still a lot of layers of fat left before we start getting close to the bone.