Payroll tax cut standoff's impact: What $40 a paycheck means to you
December 22nd, 2011
09:53 AM ET

Payroll tax cut standoff's impact: What $40 a paycheck means to you

House Republicans on Tuesday rejected a Senate deal to temporarily extend the payroll tax holiday, leaving the White House and Congress at an impasse and creating a showdown between President Barack Obama and House Speaker John Boehner.

The tax cut is set to expire on December 31. Ending the tax break would cost the typical family about $1,000 a year, or $40 per bi-weekly paycheck for those who earn about $50,000 a year.

With frustration on both sides of the aisle, President Obama and the White House took to social media, hoping to get the public on their side in a public relations showdown with the Republican Party. The White House asked Americans what $40 means to them in an attempt to help put pressure on Republicans to pass the measure.

You responded in force on Twitter using the hashtag #40dollars.  President Obama said that the White House received more than 30,000 responses to their query.

That's perhaps why President Obama is expected to make a statement Thursday on the partisan standoff over how best to extend the expiring payroll tax cut, according to the White House. Obama will be joined by "Americans who would see their taxes go up if the House Republicans fail to act," the White House said. Some of those people have participated in Obama's social media campaign.

There was one surprise user of the hashtag: Speaker Boehner. But he used it to put things in his perspective, trying to explain why Republicans were right to try to work out a longer term deal.

So, with all of the bickering and the debating, we wanted to know if you agreed that $40 is a significant amount of money. We asked you if the end of the tax cut affect your family or if it would have little difference in your daily life. Here's what you said:

Selena Campbell is a 21-year-old from Orlando, Florida, who works in Admissions Control at Full Sail University. She said that the money she may be losing each paycheck would help buy new shoes for her husband. He has to walk to work every day because they can't afford a second car. But Campbell said that isn't the only thing it would help out with.

"For me and my family, $40 is $10 less than what we pay for groceries every week," she said. "There have been weeks, where we have only been able to spend $10 on groceries and have lived off of mac 'n' cheese and hot dogs."

Selena Campbell said the lost money would have helped with grocery and medical costs.

That money would also determine whether they could fully pay for their rent or car payments. It would also impact their healthcare, she said.

"$40 is what it costs for my medication so I can be a healthy wife, sister, daughter, mother," Campbell said. "$40 a month, in the economy we are in right now, is everything."

Tiffanie Young, a supervisor at a small rural hospital in Seaside, Oregon, says she saves $50 per paycheck for emergencies. The end to the payroll tax break would mean "I would probably have to stop doing that." She said that for a lot of people $40 could help pay for groceries, gas and other necessary bills.

But not everyone thought the delay would really impact them. And some people said they agreed with Republicans that a two-month extension wouldn't help.

Ryan Stoddard responded on Facebook that he felt just $40 a paycheck would mean "not much" to him and also agreed with House Speaker John Boehner that a short solution wouldn't help.

"Two months is a band-aid, not a solution," he said. "The Speaker is correct in his decision to call for more action."

Joel Jamison Bliss said on Facebook he was tired of seeing the story portrayed as "Republicans doing this to hurt the American people."

"A two-month extension does nothing and you know it ... this is another political ploy by Obama and more campaigning, which is all he has done for four years anyway," he said.

But Denise Mooren, a 36-year-old senior account who lives in Athens, Alabama, said her family would feel the hurt from the loss. Though it may seem like a small amount of money, Mooren said it is a "magical amount" in her household as she tries to make ends meet for her family of eight people.

"I pay $40 every two weeks for all the kids to buy their lunch, and I make them pack it the rest of the time," she said. "I had to purchase a Sam's Club membership just to make lunch items affordable for 15 lunches per week for three 11-year-olds, one 12-year old, and one 15-year-old."

She also said she needs that money for one of her children who has Attention Deficit Hyperactivity Disorder (ADHD)

"I pay $400 per month for insurance," she said. "The co-pays all went up double to $40 per visit. My daughter has to go at least 6 times per year."

One CNN reader, Jaimie, commented at how surprising it was to see people's bad finances and thought they were placing the blame on politicians.

"People need to learn how to budget, if you're seriously hurting for this $40 a month, you need to look at your finances," Jaimie said. "Don't blame the politicians for a lousy $40 a month. I support my wife and 2 kids off of one income and I make $30,000 a year, and we are never hurting. I set a budget and I keep it. Start a savings account for emergencies like these. Wake up people!!

Jennifer Alvich, a 36-year-old high school history teacher in Weehawken, New Jersey, said she is fed up with how politicians have handled many situations regarding her economic situation. The extra money she may not be getting each paycheck could pay for her bills, gas and groceries, Alvich told CNN

“I’m tired of reading about politicians who make decisions about the little money I have,” she said.

She said politicians are too focused on party lines and need to work together and stop hurting the middle class.

“This is about Americans getting through the year,” she said.

Melissa Matthews, a 32-year-old a stay-at-home-mom from Leander, Texas, said she works a job from home at night while her children are sleeping and her husband works two jobs.

Melissa Matthews is frustrated that the House has not passed an extension.

She said her husband just found out from his employer that he will be out $80 in January because of the standstill in Congress.

"They are messing with my family who can barely make ends meet," she said. "I am just very upset at the way the Republicans in the House are trying to manipulate this bill and get their way on other issues by threatening to take the payroll tax cut away. The extension needs to be passed and the other issues need to be worked out later. There is no more time to argue the issue. I appreciate the Senate passing the two-month extension and I want the House to do the same."

One commenter on our story, Gary, echoed a statement that many others made in response to some of the frustrations of possibly losing out on $40 a paycheck. He questioned whether everyone who was complaining was doing enough to live within their means.

"If this is a lot of money for you, cancel your cable bill and ditch your internet service. Get TV through the Air and internet at the library. I just saved you 120 bucks a month," he said. "Stop blaming the government for not helping you and look at what you can do to help yourself."

Frequent iReport contributor Egberto Willies says the payroll tax cut wouldn’t affect him personally because he works for himself as a software developer in Kingwood, Texas.

But he said everyone getting $40 could mean the difference between the “economy surviving or going back into a recession.”

Frequent iReporter Matt Sky, fromNew York, said the money would help in opening up the economy a little by allowing middle class American to pay off debt, car payments or buy groceries.

“The $40 bi-weekly would mean a lot for working class Americans," he said. "Wealthy folks, the tax breaks don’t really mean as much because they basically already have a lot money to meet their expenses."

Cindy Riley is a 54-year-old homemaker living in Center Point, Alabama. She said that $40 a paycheck for her family would help pay for several utilities or bills.

"$40 pays for our car insurance for a month. I can't cut that out, the law requires it. $40 pays for our water and sewer for two weeks. I can't cut that out either unless I want to start hauling water from the creek and build an outhouse," she said. "$40 will buy my vegetable garden seed for next spring. I suppose I could cut that out, but that would cost more in the long run, both in terms of health and just food.

"$40 pays for the Internet access for a month, and I suppose I could cut that out, but we have no other entertainment and I use it to pay all my bills and stay in touch with my family so that I can save the price of stamps. $40 pays for my pay-as-you-go phone for about four months. Can't cut that out, It's the only 'phone we have, we cancelled the landline long ago."

The money would also help with a new prescription she has to take, feeding her cats, health care for her family and the pets, or gas for her husband to get to work.

"We're about at the bottom of the barrel here," Riley said. "No, we've gone through the bottom of the barrel and it's really, really leaking."

We also put the question to our Twitter subscribers online, and you answered in force. Many of you said it could help with several small bills you had. Here's some of the responses you tweeted using the hashtag #40dollars about how much the money would or wouldn't help.

What do you think? Would $40 impact you and your family, or would it barely impact you. Let us know by sounding off in a video on CNN iReport here. We'll be adding your thoughts throughout the day.

soundoff (1,741 Responses)
  1. Thizz

    God damn democrats, all they do is raise taxes. I'm not even a republican.

    December 21, 2011 at 3:52 pm | Report abuse |
    • bob

      Get your facts straight Thizz (whatever that is supposed to mean). Boehner's actions are the reason why the taxes will increase and, er, ah....he's a Republican jack a**

      December 21, 2011 at 4:13 pm | Report abuse |
  2. James

    40 bucks per pay check – if its weekly that's 2080 , by weekly 1040, monthly 480 – get math straight folks. Hey the 40 bucks will help the 1 percent stay the 1 percent..

    December 21, 2011 at 3:52 pm | Report abuse |
    • mili

      It is only for 2 months

      December 21, 2011 at 4:03 pm | Report abuse |
    • Dont Say It

      Your smart buddy! Its a percentage

      December 21, 2011 at 4:03 pm | Report abuse |
  3. Jody

    If you don't need your $40, I'll take it! sure could use it too.

    December 21, 2011 at 3:53 pm | Report abuse |
  4. citizenUSA

    It means it will help pay all those monthly expenses that keep getting higher like trash collection, all my benefit premiums at work and so on.

    December 21, 2011 at 3:53 pm | Report abuse |
    • Tom

      Did you just start trash collection this year?

      December 21, 2011 at 4:06 pm | Report abuse |
  5. kat

    Bill, I have a job and student loans. Everybody I go to school with does. $40 would help millions of people a great amount.

    December 21, 2011 at 3:54 pm | Report abuse |
    • Michelle

      Amen. My friends and I all have good, decent paying jobs, and a lot of loans. I keep about $700 to live off every month (including car insurance, health insurance, phone, health club, food, etc... I don't have rent because I've chosen to stay home for a few years) and send the rest to my loans. To me $40 could mean a few extra meals out, or it could be put towards my loans, which total close to $100,000

      December 21, 2011 at 4:09 pm | Report abuse |
  6. FG

    2 Lap Dances!!

    December 21, 2011 at 3:56 pm | Report abuse |
  7. Barry

    Only CNN would cruise through facebook and compile a store of complaints from that website.

    December 21, 2011 at 3:56 pm | Report abuse |
    • Nadina

      Your comment made my day.......LOL!

      December 21, 2011 at 4:04 pm | Report abuse |
  8. Jeanne

    Simple solution : Cut the cable and get TV over the air. Cut the kids cell phone to an emergency one only to call parents. Kids don't need cell phones to text and yap on all the time. Pack the kids lunches like we did back in the day. And don't eat out every payday. You just savaed more than the $40 you're crying about.

    December 21, 2011 at 3:57 pm | Report abuse |
    • Michelle

      I've already cut cable. I don't have credit cards. I don't have kids. $40 is what it takes for me to make it to my job every week in gas. I've tried getting a 2nd job, to give myself a savings cushion, but that hasn't panned out yet. I do my grocery shopping carefully and deliberately because there isn't much in the budget for it. Getting to work and keeping a roof over my head is more important. $40 won't pay my insurance premiums – I can't afford them anyway. Paying for my car insurance, rent, electric bill and car payment eats up 95% of my check. What else should I cut out? Public transportation is too convoluted for me to make it to my job from my apartment. I live in Minnesota. Electricity is a necessity for heat. Yes, $40 is an enormous amount for me a month. I wish it wasn't the case.

      December 21, 2011 at 4:14 pm | Report abuse |
  9. Ridiculous

    $40 dollars may not be much to some but the difference between buying medications or eating or gas to get work for others. I personally think that this is a good example of the republicans not caring to raise taxes on the less fortunate but there is no way we can raise taxes on people who make millions each year. Totally ridiculous!!!!!!!

    December 21, 2011 at 3:57 pm | Report abuse |
    • Tom

      Were these people not taking medication until this year?

      December 21, 2011 at 4:04 pm | Report abuse |
    • bob

      Agree totally

      December 21, 2011 at 4:20 pm | Report abuse |
  10. Dont Say It

    Are you kidding me? I see bunch of invalid complaints. "I will lose my business because I wouldnt be able to pay the internet or phone bill." really? Is that the only place you can remove $40 from your budget? Eat out one less night a month. Drop a luxury, and do the work yourself. $40 means one less LUXURY, not a detriment to my entire way of living. Think, plan, react.

    December 21, 2011 at 3:57 pm | Report abuse |
  11. Jorge (Running Springs,CA)

    I can't spend money that I don't have. So, you are not really taking it away from me. I'll do without. You are taking it away from the economy. I've put all my other money to good use. So, those $40 I've been keeping extra throughout the year; I've purchased multiple useful household items with coupons. What do those $40 mean? It means that I will buy more stuff online to avoid paying taxes on certain items and continue to buy certain goods in Tijuana Mexico. I'll continue to shop thrift stores, rent a room from a friend, and continue to save even more money. I KNOW, how to do without. My lifestyle has not changed much from when I made $4.25 an hour. So, when all is set and done; I might only make $8.50 an hour but it's still twice as much as I made in 1994. So, I'll continue to save the difference and when I'm good and ready, I'll move back to Mexico (with my money) and spend it there. Where the cost of living is so much less. So, who really loses in the long run? Me or the government that will no longer be collecting state or federal taxes? See, the government is obligated to do something. Why? Because the government makes NO MONEY if people don't work and pay taxes! So, it's to the governments best interest to put people back to work. So, putting a few billion into the economy is worth a lot more to them in the long run. At the end of the day, We are not asking the government for anything extra. We are just asking them to stop stealing from the people's pockets. So, I'll find somewhere else to save an extra $40.00 Pretty easy taking into consideration that I save about $300 on coupons per month. So, they can keep the miserable $40 and I can keep doing what I do. After all, I can get twice as much for my money in Mexico. Bye bye to the American dollar. Let another reap the benefits of this great country. I love America to death and not to broke.

    December 21, 2011 at 3:58 pm | Report abuse |
  12. Brent

    Maybe they {Government} should start posting online where and what our tax money is actually going. Show us the figures.So "We the People" for once actually know where its going. I want transparency for me not congress or the senate who can hide and mislead us anymore. Our tax money is being spent foolishly by our government and we all know this. Its a known fact our money consistantly leave the country. Half the country is now poor and were the richest country in the world and we are crying over 40 bucks. The United States in ten to twenty years from now isnt going to be a nice place. Three quarters of the population will be poor if this keeps going on. The government is positioning itself so "We the People" cant revolt without being labled a terrorist to the United States. This is why all these new laws are being past. When the US finally becomes bankrupt then they will learn that our money is a priveledge for to the goverment to manage. We dont work, they get nothing.

    December 21, 2011 at 3:59 pm | Report abuse |
  13. Tom

    Consider that before this year, the "40 dollars" was going to the government. Most people cannot remember how they shifted their budget when they started getting the extra $40. Little meaningless anecdotes like "that forty dollars will pay for my medicine" or "my husbands shoes" or whatever do not speak to the fact that almost all Americans can shift their expenses to buy what is most important to them. If it goes away, you'll do what you did last year.

    December 21, 2011 at 4:01 pm | Report abuse |
  14. TomFoolery

    Some of these people are saying things that are just ridiculous. If you are down to buying Mac and Cheese and hot dogs to eat, feeding a whole family on $10, then you have bungled your finances beyond belief, with or without being allowed to temporarily quit contributing to your retirement through payroll taxes. This contribution holiday might help, but you have big troubles anyway. We are talking about $40 every two weeks.

    Not to mention that this is an average. To save $40 every 2 weeks, you have to be be earning more than $50K per year. If you are making that much, and are down to eating hot dogs and Mac and Cheese, where is your money going?

    December 21, 2011 at 4:02 pm | Report abuse |
  15. Martin

    Hey Sten: Go and take a poop for yourself!

    December 21, 2011 at 4:03 pm | Report abuse |
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