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16T in debt and we're giving away free phones.

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Is this a federal expenditure?

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Where does the money come from to pay for them?

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You're paying for those phones though your phone bill, not through taxes.

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Where does the money come from to pay for them?

Your cellphone bill. Look for something called a "lifeline surcharge". You're paying for those phones though your phone bill, not through taxes.

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Who gets rich off 'free' government phones
The real story behind free 'Obama phones'

NEW YORK (CNNMoney) One of America's fastest-growing wireless carriers is a company you've probably never heard of: Tracfone Wireless. It's the U.S. arm of a telecom empire controlled by the world's richest man, Carlos Slim, and it's the biggest player in an increasingly lucrative market: subsidized mobile phones for low-income Americans.

The subsidy became a political flashpoint recently thanks to an incendiary YouTube video featuring a Cleveland resident praising her free "Obama phone." Hype from the Drudge Report and conservative ringleaders like Rush Limbaugh propelled the video to nearly 5 million pageviews.

The real story behind the phones is more nuanced than the 45-second clip.

The subsidy is from a government-created program called Lifeline, which is paid for by customer fees on most phone bills. The program is overseen by the Federal Communications Commission, and has its roots in a universal access initiative that began in 1985, during Ronald Reagan's administration.

Here's how it works: If you're eligible for other forms of government assistance like Medicaid or food stamps (the rules differ by state), then you qualify to receive a $9.25 per month phone subsidy.

Participating wireless companies will typically offer a free phone (paid for by the company), with an allotment of Lifeline minutes each month.
Lifeline subscribers can collect only one monthly subsidy, for either a landline or a wireless phone. Around 75% of them have chosen to go wireless.

Where does the money for Lifeline subsidy come from? You.

Take a look at your phone bill and you'll see a charge -- typically a few dollars a month -- for payments to the "Universal Service Fund." That's the umbrella program covering various ventures, including Lifeline, that are designed to make telephone communications universally available to all Americans.

The government requires most telecoms to pay into the fund. The carriers then typically pass the costs on to their customers as a monthly surcharge. Last year, Lifeline accounted for 20% of the $8.1 billion Universal Service Fund distributed to support connections for rural areas, schools, hospitals and low-income individuals.

There are 17 million households currently signed up for the program, up from under 7 million just four years ago.

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I just don't get why people were lined up at a grocery store to get them?

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What are the qualifications of getting these phones?

Because...frick paying $200 a month.

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I drive through the heart of darkness in NO just about every day and 2 or 3 times a week I see the tents set up around the neighborhoods. Generally next to a store to catch the foot traffic. You see the dysfunctionals talking on a phone waiting to sign up for another phone.

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Where does the money come from to pay for them?

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They are wedded to the phone. Remember the pay phone. shite you could'nt get to one for the minorities in line .

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Your cellphone bill. Look for something called a "lifeline surcharge". You're paying for those phones though your phone bill, not through taxes.

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