Nope, Reagan Phones.
http://www.wirelessforhope.org/#!about-lifeline
The federal "Lifeline" program was created during the Reagan Administration. Lifeline is a federal program created by the Reagan era Federal Communications Commission (FCC) in 1984. The program was enhanced under Telecommunications Act of 1996, which was supported on a broadly bipartisan basis in Congress. The FCC's Low Income Program of the Universal Service Fund, which is administered by the Universal Service Administrative Company (USAC), is designed to ensure that quality telecommunications services are available to low-income customers at just, reasonable, and affordable rates. Lifeline support reduces eligible low-income consumers' monthly charges for basic telephone service.
http://transition.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/Monitor/mr98-2.pdf
The free phone concept goes back way further than that too. I think even to 1935 when an Executive Order was used to try and get Telephone service spread to rural areas of the country.
Once the government starts paying for something, it NEVER stops. one thing leads to the next, like this, and now every person not working or saving enough to pay for a cell phone gets one of those too.