Let’s start this article out with a caveat: We respect the Wall Street Journal and consider it to be one of the most fair-minded, even-handed publications in the world. Nevertheless, we think it completely missed the mark in today’s editorial.
The editorial begins on a sour note (“Income redistribution plans are always sold as vital assistance to address otherwise unmet needs. But it turns out that most recipients of a popular government telephone subsidy would buy the service on their own.”) and goes rapidly downhill from there.
Here’s the crux of the Journal’s argument: Some egghead professors at Georgetown University did some research and that study was noted in a report by the U.S. Government Accountability Office. (Being the sort of people we are, we have decided to ignore the incongruity of any wasteful, over-staffed government agency having the word “accountability” in its name.) That study claims that “in the absence of the subsidy only one in eight Lifeline households would not have phone service. And only one of 20 households benefiting from a Lifeline subsidy specifically for wireless telephony would not have service absent the government benefit.”
These questionable statistics cause critics of the popular Lifeline Assistance free government cell phone plan to wonder “how low the incomes really are in many Lifeline households”.
Enemies of the program are sharpening their swords in preparation to do battle against a program that we and millions of needy Americans wholeheartedly support.
Here’s another line from the WSJ’s article that annoys us:
“Concerns about eligibility, amid a surging population of beneficiaries, already prompted the FCC to reform the program in 2012. But even post-reform, last year more than 12 million households participated in Lifeline, up from about seven million in 2008, according to GAO.”
Perhaps the writer of this editorial is new to the world of economic reporting and is unaware that there is a very good reason the number of Lifeline Assistance participants swelled between 2008 and 2014 — the world experienced what is known as the Global Economic Crisis beginning in December, 2007. It was the worst recession since our grandparents and great grandparents lived through the Great Depression in the 1920s and 1930s. As heritage.com notes, “The post-recession economy has undergone the slowest recovery in 70 years.”
Since unemployment peaked at 10.8% in 2008, it has gradually ebbed to today’s “official” rate of 5.3%. In other words, 8.5 million Americans still don’t have jobs. In addition to that staggering statistic, we put the word “official” in quotes because most economists agree that the unemployment rate has come down only because so many unemployed Americans have completely given up looking for jobs and are, therefore, not included in the official rate.
CNSnews.com said, “A record 93,626,000 Americans 16 or older did not participate in the nation’s labor force in June, as the labor force participation rate dropped to 62.6 percent, a 38-year low, according to the Bureau of Labor Statistics.”
The Bureau of Labor Statistics reported on July 2, 2015 that:
The number of persons employed part-time for economic reasons (sometimes referred to as the involuntary part-time workers) at 6.5 million, changed little in June. These individuals, who would have preferred full-time employment, were working part-time because their hours had been cut back or because they had been unable to find a full-time job.
In June, 1.9 million persons were marginally attached to the labor force, little
changed from a year earlier. (The data are not seasonally adjusted.) These individuals
were not in the labor force, wanted and were available for work, and had looked for
a job sometime in the prior 12 months. They were not counted as unemployed because
they had not searched for work in the 4 weeks preceding the survey.
CNBC.com talked to Bob Funk, CEO of Employment Express, who said, “Over the last year, we have seen the unemployment rate go down, but we too easily forget that there are people still hurting, still wanting to work, but on the verge of giving up. I believe everyone who wants to work should have a job, so we must not overlook those who have been left behind and left out of the job market.”
Funk is 100% correct when he says “we must not overlook those who have been left behind, but that’s exactly what some recommend. For example, the Wall Street Journal editorial ends with this oh-so-incorrect comment:
Many of President Obama’s predecessors also helped build the telephone subsidy machine. And even now most of Washington wants to ignore the inconvenient truth about a federal benefit that almost nobody seems to need. Fortunately for taxpayers, Rep. Marsha Blackburn (R., Tenn.) and FCC Commissioner Mike O’Rielly are shining a light on this boondoggle. They’re urging a cap on its roughly $1.6 billion in annual spending and a careful targeting to make sure subsidies don’t go to people who would buy phone service anyway.
FCC Chairman Tom Wheeler recently proposed an expansion of the Lifeline program into broadband Internet services, so the Blackburn-O’Rielly campaign for reform could not come at a better time.
FreeGovernmentCellPhones.net is the nation’s leading authority on the Lifeline Assistance program. Thousands of our needy readers send us their tales of economic woe every week. Many of them reveal the depths of their economic desperation.
Consider this one from Charles: “I am checking to see if I would qualify for a unlimited minutes phone. I do not text, all I need from a phone is caller ID and all I do is talk. I am 82 years old and my wife is 69, together our house hold income is 1746.00 but with medical bills and prices of everything going up we are forced to cut out something to try to make ends meet. we are on medi cade.”
Or this one from Jean: “I am just checking to see f I would qualify for one of you unlimited minute cell phones. I am 73 and live alone … I would be proud to have even a flip phone as long has a Little Rock, Arkansas phone number. if its unlimited I could call my kids. I live alone and my check each month is one thousand Forty nine dollars a month.. thanks Jean.”
Or this one from Michael: “I have a cell phone, but am recently on MEDICAID and can not afford it. Do I qualify for the LifeLine service? I live in a skilled nursing facility.”
If Representative Blackburn and FCC Commissioner O’Rielly really want to know who needs a program that they believe “almost nobody seems to need”, we urge them to spend a few minutes reviewing other comments left by our readers. Even a quick scan of the comments is sure to break the hearts of the Lifeline Assistance’s most ardent foes. And just as surely, it will quickly show them who needs it.