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Obama May Consider Nonprofit Status for Newspapers

By Tuesday, 22 September 2009 03:01 PM Current | Bio | Archive

President Barack Obama says he would be “happy to look at” legislation to bail out, with juicy tax breaks, newspapers that restructure into “nonprofit” businesses.

Good journalism, Obama told editors of the Pittsburgh Post-Gazette and Toledo Blade in an interview, is “critical to the health of our democracy.”

But once-dominant newspapers — especially those whose news and editorials slant liberal and pro-Democrat — have been losing readers and advertising dollars to Internet sites with more diverse views. Since January 2008, 26,000 newspaper jobs have been eliminated, and several prominent newspapers have filed for bankruptcy.

Obama appears to be throwing this tax-exemption life preserver to save his party's old political allies from extinction. Would he do likewise if most newspapers promoted conservative or Republican views? Would all newspapers — or only politically favored ones — get secure tax-free status?

Maryland Democratic Sen. Benjamin Cardin's Newspaper Revitalization Act would allow newspapers “to operate as non-profits, if they choose, under 501(c)(3) status for educational purposes, similar to public broadcasting.”

Under this arrangement, writes Cardin, “newspapers would not be allowed to make political endorsements, but would be allowed to freely report on all issues, including political campaigns. Advertising and subscription revenue would be tax exempt and contributions to support coverage or operations could be tax deductible.”

Such a nonprofit newspaper would in theory be prohibited from publishing an editorial for or against a particular candidate or piece of legislation.

But what would prevent such a newspaper from slanting its coverage to present only good things about one candidate and only bad things about her opponent?

The only check on turning a newspaper into such a de facto daily “editorial” would be the intervention of a political Internal Revenue Service appointee with the partisan power to take away the nonprofit status of any newspaper that went “too far.”

Nonprofit entities have for decades felt such pressure to censor or tone down what they publish about candidates and legislation. The price of a tax-free press could thus quickly become the loss of a truly free press.

This could turn journalistic watchdogs into politician lapdogs, made docile and subservient by the choke collar that politicized government tax overseers have around their necks. Or it could be used by the ruling party to compel a newspaper to attack the opposition party, the price of retaining its tax-free status.

Does this seem implausible? In 1964 the Republican-leaning Saturday Evening Post magazine was expected to endorse GOP presidential candidate Sen. Barry Goldwater of Arizona. But out of nowhere, the U.S. Postal Service filed a lawsuit against the Post for the then-astronomical sum of $8 million, claiming that the magazine had for years paid too low a postal rate. The suit could easily have bankrupted the magazine.

The Post soon published an editorial endorsing Democratic President Lyndon Baines Johnson, an editorial that each editor of the Post denied writing when questioned privately. Shortly after the editorial appeared, the Johnson administration dropped its lawsuit against the magazine. This is what can happen when partisan politicians control the financial status of the media watchdogs we rely upon to keep them honest.

Cardin says that the non-profit status he would offer newspapers would be “similar to public broadcasting.” Does anyone in his or her right mind regard socialist National Public Radio (NPR) or the Public Broadcasting Service (PBS) as exemplars of fair and balanced journalism?

Ironically, they are supposed to be, because the “Fairness Doctrine” lifted from commercial broadcasting in 1986 during President Ronald Reagan's administration was never lifted from NPR and PBS.

The Charter of the Corporation for Public Broadcasting (CPB), the parent entity behind NPR and PBS, requires that its “programs of high quality, obtained from diverse sources, will be made . . . with strict adherence to objectivity and balance in all programs or series of programs of a controversial nature.”

Where has been the balance to all the hundreds of PBS hours of left-liberal partisan propaganda by Bill Moyers, who worked as White House media hatchet-man for Johnson and authorized the notorious anti-Goldwater “daisy” ad?

Obama has made no secret of his desire to reimpose political control on talk radio and likewise gag non-leftist voices on the Internet. Making newspapers dependent on an arbitrary non-profit tax status will give him control over them.

Frankly, NPR and PBS should be both be abolished, for the same reason that the Voice of America (VOA) is forbidden from beaming its programs into the United States. Imagine a future very close election and a president who could order VOA to beam propaganda favoring him into every American home. That is why VOA, which is politically controlled, is prohibited from aiming at American voters.

But, logically, NPR and PBS are also politically controlled broadcasting. They depend on big government for their budgets and — surprise — both relentlessly slant their programs in favor of bigger government and the big government party, the Democratic Party.

Two decades ago, when Republicans in Congress requested an objective study to see if this violated the fairness and balance required by CPB's charter, the Democrats refused. After PBS in the mid-1990s broadcast hate attacks against the GOP for attempting to rein in its bias, even then-Speaker of the House Newt Gingrich surrendered.

Newspapers generally would prefer to make money. More than 1,000 newspapers and magazines have considered joining Journalism Online LLC, an effort to charge for heretofore-free online Web site news content.

Some newspapers might prefer to become low-profit limited liability corporations (L3Cs), which could attract foundation money as well as for-profit investors. This media hybrid has yet fully to be defined by the IRS in practice.

Non-profit journalism is already here, from The Associated Press and St. Petersburg Times to magazines such as Mother Jones, Consumer Reports, and The American Prospect. The ultra-liberal The Nation has for-profit and non-profit entities operating in close harmony, if not legally, in tandem.

Under Obama, America's future could be non-profit.

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President Barack Obama says he would be “happy to look at” legislation to bail out, with juicy tax breaks, newspapers that restructure into “nonprofit” businesses.Good journalism, Obama told editors of the Pittsburgh Post-Gazette and Toledo Blade in an interview, is...
Tuesday, 22 September 2009 03:01 PM
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