The fight over the controversial phone subsidy initiative known as Lifeline is heating up, with Republican lawmakers trying to kill the program and TracFone, a prepaid service provider led by Mexican billionaire Carlos Slim, waging a campaign to save it.
Lifeline started in the 1980s to ensure low-income households had access to landlines, but the program earned the name "Obama phone" in 2012 when critics accused the White House of handing out cell phones under the program.
Sen. David Vitter of Louisiana is one of the program's most vocal Republican critics, arguing that it has become too bloated and wasteful.
"Now it's an out-of-control, fraud-ridden, entitlement program that spoils what should be a worthwhile helping hand," he told Politico
, adding "TracFone is upset because I'm fighting to end this program, which would also end their corporate welfare."
TracFone, a subsidiary of Slim's telecom giant America Movil, receives federal funds for its Lifeline, operations, with each provider collecting $9.25 a month per customer.
TracFone reportedly receives up to a quarter of the federal program's funds. The company got $451.7 million in support payments in 2011
The company, which reportedly spent $640,000 on lobbying efforts last year, has repeatedly pointed to the fact that Lifeline started under President Ronald Regan and expanded to wireless service under President George W. Bush. It is not an Obama program, as some Republicans and other critics have suggested.
"We had enough," Jose Fuentes, a TracFone spokesman, told Politico. "A lot of this misinformation was generated by Washington lawmakers themselves. And a few members have picked up on this issue and made it a political one to score points back in their districts."
But Vitter, who is trying to get rid of Lifeline through amendments to existing bills as well as new legislation, is not alone in his criticism.
"Their cash cow is under scrutiny and is at risk," Arkansas Republican Rep. Tim Griffin told Politico, referring to TracFone.
Oregon Republican Rep. Greg Walden, head of the House Energy and Commerce technology subcommittee, has also recommended a cap on a fund that includes the $2.2 billion program. Democratic Sen. Claire McCaskill of Missouri, meanwhile, has raised objections to the program and has asked the Federal Communications Commission to transfer funds from Lifeline to a new broadband initiative in schools.
The lawmakers maintain they are responding to concerns expressed by constituents about the overall costs of the program.
"I don't give a rip who started it," Griffin told Politico. "Whoever started it and whether you call it an 'Obama phone,' I'd like it be known as ending in 2013."
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