Yes, you can get a free cell phone with government assistance. If you make very little money, or you're part of other federal programs such as public housing, food stamps, SSI, or Medicaid, you can get a free mobile phone paid for by a fee on everyone else's phone bills.
This program has been around for years. According to the FCC, the government has been subsidizing landlines since 1984; the program, now called LifeLine, added mobile phones in 1997. LifeLine was enhanced in 2005 during the Bush administration, and TracFone's SafeLink, the first purely free LifeLine phone brand, started disbursing free phones in 2008.
"The telecoms haven't done a very good job promoting LifeLine, and the penetration rates have been dismal," said Jose Fuentes, Tracfone's director of government relations. TracFone operates SafeLink.
LifeLine is funded by the Universal Service Fund, which you see as a surcharge on your phone bill. Established by a 1996 law, the USF makes sure that people who live in rural and low-income areas, as well as schools and libraries can get phone service. It doesn't make a distinction between wired and wireless phones; you can get a subsidy for either, but you have to choose one.