The California Lifeline Program http://www.cpuc.ca.gov/PUC/Telco/Public+Programs/ults.htm is a state and federally subsidized program that provides discounted, even free, phone services to low-income households. It started in the 1980s as a Congressional mandate that all Americans should have the availability and security to communicate and have access to telephone services essential for finding a job, connecting with family, getting help in an emergency, etc.
Recently, this was extended beyond landline services, and now applies for wireless services too. As of March, if you live under 175% federal poverty level you are eligible for a free phone, with a free 1000 minute a month plan, plus texting. Here is the eligibly criteria http://www.telscape.com/lifeline/index.html.