Taxes and laws could help U.S. newspapers: lawmaker

WASHINGTON (Reuters) - The U.S. Congress should focus on a mix of tax and regulatory remedies to help restore ailing newspapers suffering from declining advertising revenue and job cuts, a key House lawmaker said on Thursday.

A man reads a newspaper while sitting in a lawn chair in the center of Broadway in New York's Time's Square, May 26, 2009. REUTERS/Mike Segar

Besides a collapse in advertising revenue, the industry also faces debt that is getting harder to repay and the drift of print subscribers to free online news websites.

The issue has been the subject of several congressional hearings even though lawmakers are currently focused on reforming the U.S. health care system and the financial services industry.

Debate has centered on whether the newspaper industry -- which has shed reporting jobs considered critical to covering local politics, government and courts -- should get help through a government bailout or through legislative and regulatory fixes.

“We’re not talking about bailouts,” Representative Carolyn Maloney, a New York Democrat who chairs Congress’s Joint Economic Committee, said at a hearing to examine the future of U.S. newspapers.

“We are through with bailouts, but we should always talk about the best ways to have a tax and regulatory environment that will help businesses thrive and create jobs.”

As required by Congress every four years, the Federal Communications Commission is slated to launch a review in 2010 of the state of media ownership in the United States as newspapers struggle to stay alive and some broadcasters have consolidated.

FCC Chairman Julius Genachowski said in an interview with Reuters in July that the United States needed a “vibrant” media landscape while keeping in mind the economic challenges facing the industry.

In Congress, lawmakers are considering tax relief methods, including how and when publishers can classify operating losses, whether newspapers should be allowed to operate as nonprofit companies for educational purposes and if they should get antitrust exemptions.

John Sturm, president of the Newspaper Association of America, said at the hearing that the industry was not seeking a financial bailout or any kind of special subsidy.

“We don’t believe direct government financial assistance is appropriate for an industry whose core mission is news gathering, analysis and dissemination,” Sturm said.

“From a business perspective,” he said, “we are happy to be treated no differently than other businesses.”

Last week Maloney and Maryland Senator Ben Cardin, a Democrat, introduced similar legislation in their respective chambers that would allow community and metropolitan papers to become nonprofit organizations similar to public broadcasting.

Sturm said legislation was a step in the right direction and could help some organizations, but it would not be a comprehensive solution to the crisis.

Princeton University professor Paul Starr said at the hearing that he supported creating a nonprofit status for journalistic organizations, adding that Congress could broaden the existing status for public broadcasting to include print.

“Nonprofit support of journalism is already increasing,” he said.

Reporting by John Poirier; Editing by Lisa Von Ahn