"All of those little things that we just take for granted, people are using them for," she said.

The consumer coalition and the CASH Campaign signed a letter this month pressing lawmakers to maintain the program.

To qualify for Lifeline, families must earn less than 135 percent of the federal poverty level — or less than about $31,790 for a family of four — or be eligible for other aid programs, such as Medicaid. Only one person in a household may sign up for the program.

Applicants apply to the phone companies, which receive up to $10 a month for each enrollee. The program does not directly subsidize the phone — only the service — but most carriers offer an inexpensive phone for free to entice customers.

The subsidy to cell carriers has been lucrative enough to fuel an explosion of providers offering the service — 29 companies have been approved by Maryland regulators.

New rules created in 2005 permitted pre-paid wireless companies such as TracFone and Cintex into the program. Rockville-based Cintex received $5.7 million in the first six months of 2012 to provide Lifeline to Maryland residents. TracFone, based in Florida, received $4.3 million during that period.

Messages for Cintex and Tracfone were not returned. CTIA, a trade association representing the wireless industry, declined to comment.

The 28-year-old program was at the center of an Internet controversy in 2009 that began with an anonymous e-mail that warned free "Obama phones" were being distributed to welfare recipients.

Then, shortly before last year's presidential election, a video from an Obama supporter went viral touting the program. "Keep Obama in president, you know," the woman in the video said. "He gave us a phone."

Lifeline faced a new round of scrutiny on conservative talk radio programs — and prompted legislation to eliminate it altogether — even though nonpartisan fact-checkers dismissed claims that the Obama administration had expanded the program and that Lifeline was subsidizing smart phones.

Lifeline was created by President Ronald Reagan and was expanded to include cell phone carriers under President George W. Bush.

Gregg's analysis found that twice as many people in Maryland are subscribed to the program than meet the income eligibility requirement — a finding that generated a heated discussion during a hearing in late April of the House Communications and Technology Subcommittee.

Advocates and FCC officials pushed back on the assessment. Gregg's findings rely only on the income eligibility requirement. People also may subscribe if they are eligible for other federal aid programs but earn more than 135 percent of the poverty line.

Mark Wigfield, an FCC spokesman, said the agency believes the participation rate in Maryland is less than 100 percent of those eligible.

Some lawmakers in Congress are looking at legislation to rein in the program. A bill in the House, sponsored by Republicans, would drop cell phones from the program. Sen. Claire McCaskill of Missouri is the only Democrat who supported a recent vote in the Senate that called for ending the program altogether.

McCaskill's opposition came after she received a solicitation at her home for the program in 2011, according to her office. The mailing promised a free cell phone without requiring proof of eligibility.

Sun reporter Yvonne Wenger contributed to this report.

john.fritze@baltsun.com

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