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McCaskill Amendment Targets Elimination of Wasteful Phone Subsidy Program

Senator continues work to cut waste and abuse with proposal aimed at program that has grown 250 percent in five years

March 22, 2013

WASHINGTON - As part of an ongoing effort to root out waste in a government-run phone subsidy program, U.S. Senator Claire McCaskill has introduced an amendment to a Senate Budget Resolution currently under consideration that targets the federal Lifeline program.

"As we grapple with shrinking federal budgets, there's just no reason this program should continue, given its history of extensive waste and abuse," McCaskill said. "This amendment will set us on a path to bring an end to these subsidies and better protect taxpayer dollars."

In 2011, McCaskill urged the Federal Communications Commission (FCC) to provide stronger oversight of the little-scrutinized federal program-which provides subsidies to phone companies-after she received a solicitation at her home for a free cell phone from a participating provider in the Lifeline program. The mailer did not require documentation for proof of eligibility. McCaskill is not eligible for the program.

Following those demands, the FCC issued new orders aimed at addressing waste, fraud, and abuse in the program.

Last year, in a letter to the FCC, McCaskill requested detailed information on the program's contracts, including documents related to the agreement between the FCC and the companies responsible for managing Lifeline and the number, value and scope of contracts. Recent reports have shown that despite reforms implemented by the FCC to address waste, fraud and abuse in the program, spending on Lifeline increased 26 percent last year, costing $1.75 billion in 2011 and rising to a cost of $2.2 billion in 2012. Data collected from the FCC from five of the largest companies participating in the program also shows that last year 41 percent of subscribers were unable or unwilling to prove eligibility as required.

The Lifeline program is funded by the Universal Service Fund (USF), which receives its resources from a fee telephone users pay on their phone bills. The FCC oversees the USF and, accordingly, the Lifeline program.

Read more about McCaskill's fight for stronger accountability in Washington, HERE.

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