Biden bill aims to revive local news
WASHINGTON — President Biden’s $1.85-trillion social spending bill includes a provision that would, for the first time, offer targeted federal support in response to the decline of local news.
The help would come in the form of a payroll tax credit for companies that employ eligible local journalists. Newspapers, digital news outlets and radio and television stations could claim tax credits of $25,000 the first year and $15,000 the next four years for up to 1,500 journalists.
The provision comes in response to growing alarm over the elimination of newsroom jobs, which is leaving communities without access to critical local information.
Such concerns grew when a hedge fund with a reputation for ruthless costcutting acquired Tribune, one of the nation’s largest newspaper chains, in May.
About one-fourth of the country’s newspapers have closed and half of local journalism jobs have evaporated in the last 15 years, according to University of North Carolina research. That leaves about 1,800 communities with no local newspaper.
But the tax credit, which would cost an estimated $1.67 billion over the next five years, creates some tension for the industry.
Some top Republicans deride it as a handout, and leading journalists acknowledge it can be problematic to receive financial assistance from a government they cover.
Still, given the sense of crisis in the industry, many journalists say the risk is worth it.
“This is only a reluctant response to this fear of the collapse of local news and their business models,” said Steven Waldman, president and co-founder of Report for America, an organization that places journalists in local newsrooms. “Most journalists start off with a healthy skepticism about the government getting involved and helping journalism. And that’s appropriate.
“But,” he added, “the reason why this is happening now is just the severity of the crisis.”
Government support for media, direct and indirect, is not new. In the earliest days of the country, Congress subsidized periodicals’ postal rates. More recently, a small-business loan program provided millions to news organizations amid the COVID-19 pandemic.
The provision is supported by more than a dozen House Republicans, though the second-ranking GOP leader, Rep. Steve Scalise of Louisiana, recently tweeted: “Make no mistake — this is Biden and Dems in Congress helping pay the reporters’ salaries who cover for them.”
The proposal’s fate ultimately hinges on how Congress proceeds with the broader legislation when they resume debate this week. The package has attracted only Democratic support and has become bogged down by divisions in the House and Senate. The news tax credit is one of the few provisions House and Senate Democrats have already agreed on.
Though the proposal’s objective initially was to rescue small papers that were hit hard as ad dollars evaporated at the start of the pandemic, it would also help some larger companies. Gannett, one of the nation’s largest remaining newspaper chains, could gain as much as $127.5 million over five years, according to an AP analysis.
The provision includes guardrails to try to keep money from going to fakenews operations or partisan sites that masquerade as local news, while casting a broad net about which organizations are considered legitimate local news outlets, whether they are hedgefund-owned chains, nonprofit, print, digital, radio or TV.