Biden Spending Bill Gives Special Tax Handout Media Organizations

President Biden’s massive social spending package includes a provision that, if passed, would be the first time the federal government has provided direct assistance to local news reporting. The Associated Press reports that companies that hire qualifying local journalists would get assistance in a payroll tax credit.

The bill would enable news sources to claim a tax credit of $25,000 in the first year and $15,000 over the next four years for up to 1,500 journalists. It was introduced last year by Representatives Ann Kirkpatrick (D-Arizona) and Dan Newhouse (R-Washington) and has gained support from House Speaker Nancy Pelosi.

The credit, which would cost an estimated $1.67 billion over five years, has caused concern in the industry, with some journalists admitting that receiving financial support from a government they cover independently would be cumbersome. Several leading Republicans have also slammed the measure as a handout.

Although some House Republicans support the measure, Minority Whip Leader Representative Steve Scalise of Louisiana called it a scam and stated, “Make no mistake — this is Biden and Dems in Congress helping pay the reporters’ salaries who cover for them.”

Co-founder of Report for America Steven Waldman said, “This is only a reluctant response to this fear of the collapse of local news and their business models. Most journalists start off with a healthy skepticism about the government getting involved and helping journalism. And that’s appropriate.”

Report for America places journalists in local newsrooms. On their website, they claim, “The collapse of local journalism has created a crisis for democracy. Residents no longer get the information they need to understand the critical issues facing their community, to make good decisions for their family, and hold elected officials accountable.”

The proposal’s fate will be determined by how Congress handles the broader legislation, which has only received Democratic backing and been mired down by House and Senate differences.  When lawmakers return to Washington this week, they will continue discussions on the proposal.

The Biden administration claims the proposal’s primary goal is to aid smaller publications affected when ad money dried up at the outset of the pandemic, but it will also benefit large corporations. According to an estimate by the AP, if the tax break becomes law, Gannett, one of the nation’s largest newspaper organizations, could collect as much as $127.5 million over five years.

According to Maribel Perez Wadsworth, who manages Gannett’s journalism division, employing over 4,000 writers at USA Today and smaller publications including The Arizona Republic and Detroit Free Press, the tax credit is a “good shot in the arm.” However, she did not say how the funds would be spent.

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