In-Depth: Sponsoring Rep. Suzan DelBene (D-WA) reintroduced this bill from the 115th Congress to help community newspapers fulfill their pension obligations.
Last Congress, Rep. Erik Paulsen (R-MN) introduced this bill to “provide targeted relief to community newspaper pension plans” as they struggle to fulfill their pension obligations amid decreased employment in the industry. At a committee markup for his bill, Paulsen said:
“During a time of sweeping industry consolidation and change where newspapers are bought by larger groups and online platforms are competing with traditional print, these organizations are committed to investing in the business and ushering the business model into the 21st century. By changing the pension funding mechanism, these newspapers will have the certainty they need to make payments to fund their plan.”
The newspaper industry has experienced challenges in recent years that have made fulfilling pension obligations difficult for some companies, as explained by the Minneapolis StarTribune:
“Newspaper companies face a challenge in generating enough money from current operations to keep up with pension obligations that accumulated when the industry employed more people. Total employment in the industry dropped from about 400,000 in 2008 to just under 175,000 in 2018, according to the News Media Alliance, which represents 2,000 U.S. news organizations.”
The News Media Alliance expressed its support for this bill when it was introduced in the 115th Congress:
"This bill will provide relief to community newspapers with sponsored pensions by allowing for contributions at an alternative minimum funding standard. This is a wonderful step forward in providing stability for family-owned newspapers. These smaller newspapers provide an important community service and we applaud [this bill] for working to protect that service."
Rachel Greszler, a Research Fellow in Economics, Budget and Entitlements at the Heritage Foundation, criticized this bill when it was introduced in the 115th Congress. She argued that it would allow Congress to "prop up some newspaper companies at the expense of employee pensions":
"In the name of “saving” community newspapers, Congress could allow a small group of newspaper companies to shortchange their workers out of at least $62 million in contributions to their promised pensions... Under the Save Community Newspaper Act of 2018 being considered in both the House and Senate, a select group of community newspapers would be allowed to use an excessively high discount rate of 8 percent as a means of lowering their pension contributions... Changing discount rates may seem like an insignificant accounting shift, but what these troubled newspaper companies really are asking for is to shortchange their workers out of at least $62 million in otherwise required pension contributions... Imagine if other private companies wanted Congress to let them borrow against their workers’ 401(k) accounts? This bill is no different. Allowing private pension plans to shortchange their otherwise required pension contributions may prolong the life of a small group of community newspapers. But it would do so at the expense of those newspapers’ employees, the government’s Pension Benefit Guaranty Corp., and all other private pension plans that aren’t afforded such special breaks in contributions... Rather than allowing select businesses to shortchange their employees’ promised retirement benefits, lawmakers should make it easier for workers to save on their own so that their retirement security does not depend on the success or failure of their employer."
This bill has three bipartisan cosponsors, including two Republicans and one Democrat, in the 116th Congress. Last Congress, this legislation passed the House Ways and Means Committee on a voice vote and has the support of six bipartisan cosponsors, including four Republicans and two Democrats.
Summary by Eric Revell(Photo Credit: iStock.com / Zerbor)