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. DAVID L FANNON

    HOW DOES $ 1000.00 A YEAR TURN INTO $ 40.00 A WEEK ? BY MY MATH 1000.00 DIVIDED BY 52 IS LESS THAN $ 20.00. IT'S $ 40.00 A WEEK IF YOU MAKE 100,000 A YEAR, NOT EXACTLY YOUR AVERAGE SALARY.

    December 22, 2011 at 1:32 pm | Report abuse |
    • JP

      It's marketing spin. Most people get paid every 2 weeks, which with prices the way they are doesn't buy you much of anything.

      December 22, 2011 at 1:35 pm | Report abuse |
    • Colonel

      I guess that would be a hard math problem to solve with only a 3rd grade education. The article said 26 paychecks a year....yes, $20/week, $40/paycheck. Interesting that it is the Republicans that want to extend the tax break and it is the democrats who are objecting. ODUMA strikes again.........

      December 22, 2011 at 1:35 pm | Report abuse |
    • Moron Detector

      God, you're stupid. I won't even explain my reasoning here – just figure it out yourself.

      December 22, 2011 at 1:38 pm | Report abuse |
    • joerepublic

      david, welcome to the fuzzy math of the left! no one has ever accused them of being road scholar's have they? being a liberal is one big lie. so they have to keep the lie going. it's in their dna!

      December 22, 2011 at 1:43 pm | Report abuse |
    • Myles

      most people dont get paid bi-weekly it just sonds better to say $40 a paycheck than 20$ a paycheck.

      Its just funny because many of the twiter comments are incinuating that they will save $40 a week! like it was said earlier it was just marketing!

      December 22, 2011 at 1:43 pm | Report abuse |
  2. joerepublic

    what are people gonna do when 2013 gets here and they start seeing their taxes rise because of this regime in the white house. and all the hidden taxes that are about to be imposed on the american people. it will make this $40 seem like nothing in comparison. and yet this regime wont tell you that will they? it's all about playing politic's. but don't think for one minute obama is a tax cutter. name me one democrat that's ever been in favor of a tax cut? it's in their dna to tax & spend to feed their out of control addiction in d.c.!

    December 22, 2011 at 1:32 pm | Report abuse |
  3. clark

    Definitely voting all dem next year.

    December 22, 2011 at 1:36 pm | Report abuse |
    • Myles

      simply voting along party lines is what creates the deadlock in congress and gives power to poloticians to do unfavarble things! If all you want is a Dempublican than thats all you will get.

      It time to wake up and see that a two party system is a system of divide and conquer.

      December 22, 2011 at 1:48 pm | Report abuse |
  4. Common Cents

    Thanks, Mr. President, for causing such an uproar during the Holiday Season! Now, explain to us all how the 1 year tax cut extension offered by the House is worse than the two month deal passed by the Senate. I seem to recall your asking for a one-year extension your self.

    Please stop trying to divide Americans. Most of the post I've read make me believe that people are expecting to receive an additional $40 per paycheck or will have to give up some creature comfort like...cable. The horror of such sacrifice is, well, horrible. People who do not receive a payroll check will receive no benefit from the extension whatsoever, so stop giving them the impression that they will. Moreover, with the Senate bill, we will have to go through this all over again in two months. We need stability, not Politics. The House gave you what you wanted, now call Harry and tell him to bring the Senate back to work out a compromise. That is called Leadership. What your are doing is rabble-rousing.

    December 22, 2011 at 1:36 pm | Report abuse |
    • Common Cents

      P.S. I'm all in for just letting the extension expire anyway. What it did was subtract from funding Social Security which will make it more difficult to pay for obligations in the future.

      December 22, 2011 at 1:43 pm | Report abuse |
    • Myles

      i agree we should let it expire, this is further depleting our social security trust fund right when the baby boomers are coming into the system! Mark my words this tax cut will be blamed for why social security needs to be cut later down the line and Obama should be doing whatever he can to keep the system solvant not cutting its funding in half!

      December 22, 2011 at 1:54 pm | Report abuse |
    • ciabella

      First - Boehner and Cantor broker the "Contract with America" they signed in 2010 by adding the riders for Keystone after the President specifically requested not to be done....They the GOP/Conservatives - thought they could again hold the American Middle Class hostage; also added to this bill was the unemployment, medicaid, epa regulations....It then went to the Senate - who had issues with Keystone, but agreed to review within 60 days, but had issues with how this was to be paid - Senate – Increased taxes on wealthy. The GOP should not have broke the contract with America - excluded the Keystone, medicaid - The GOP has finally got stop at the Bullying it has been doing since Obama took office;...

      December 22, 2011 at 3:10 pm | Report abuse |
    • Common Cents

      Ciabella- Obama asked for a 1 year extension. House gives Obama 1 year extension (I'm opposed too) AND and opportunity to add 20,000 jobs. Senate doesn't take up bill. Senate proposes own bill and leaves town knowing full well that the process requires a conference between the House version and the Senate one. Seems to me that your blame is misplaced.

      December 22, 2011 at 3:33 pm | Report abuse |
  5. Fred

    If that $40.00 is badly needed by the peolple of the United States then why not make permanent.... On the other hand, the United States is broke according to reports so let's give it back to the US Treasury. End of story.

    December 22, 2011 at 1:36 pm | Report abuse |
  6. joerepublic

    people complain about the gridlock in d.c. our forfather's set it up for that reason. otherwise, we would end up with what we've had the last 3 year's of democratic control and out of control loonacy of the left. and all this babble about making deals. really? if they are trying to tell you how to get to california when you are trying to get to florida. is that compromise you can agree on? there is a philosophical difference between the two parties. and election's have consequences as we've seen with this inept man/child in the white house. but we have got to make him one and done next november! or our republic will be permanately damaged by this radical idiot!

    December 22, 2011 at 1:36 pm | Report abuse |
  7. Raphael W.

    The Republicans are hypocrites because it is not about the American people it is about that pipeline. There are lobbyist that are paying them big money to include that pipeline into that bill. President Obama wanted to give us this tax break along with helping the unemployed but he has to also consider the environmental impact the pipeline may cause. He compromised with the Republicans by allowing the 2 month extension so he can evaluate the impact. I feel that he made the right decision. Many Americans fail to see that the Republicans are just trying to buy time till the elections and do not care what impact it has on the American people. To the average citizen $40.00 means a lot and for some it may be all that they have left to take care of gas, food, or medicine. President Obama has done this country great in dealing with such GREEDY politicians and is working very hard to keep us above water. I salute our great President and hope that my fellow Americans can see what he is dealing with and help him in his battle with these evil people that want to see our great nation fall due to greed and division. "VOTE 2012"

    December 22, 2011 at 1:36 pm | Report abuse |
    • joerepublic

      hey raphael, your comment is typical of the braindead left. obama and the left have already agreed to the pipeline cause it will produce 20,000 job's. and obama would be commiting suicide by turning down that job creator. this is about putting a bandaid over a large cut. repub's want a whole year tax cut. while the dem's are always trying to window dress as usual. or kicking the can down the road which is in their dna!

      December 22, 2011 at 1:40 pm | Report abuse |
  8. Gary

    The $40 dollars that I pay is $40 that my grandkids don't have to pay. I want to pay my bills so they an enjoy a little better life and then tey can look back and say, thank you grandpa!

    December 22, 2011 at 1:37 pm | Report abuse |
  9. R.Schultz

    Can I have the option of keeping all of my own money and giving up my right to take from Social Security or Medicare in the future? We're bankrupting it anyways and they won't exist in the way I'm paying for it now in 30 years when I'm ready to retire. I'd rather just get out of the whole mess honestly.

    December 22, 2011 at 1:37 pm | Report abuse |
  10. Dude

    maybe people who can't afford kids shouldn't have them in the first place

    December 22, 2011 at 1:38 pm | Report abuse |
  11. JKR

    I CAN GIVE THAT $40 TO OUR DAUGHTER WHO LOST HER JOB AND SUPPORTS HER 2 DAUGHTERS BECAUSE OF HER CONVICTED ABUSIVE X DEAD BEAT DAD....SHE HAS A 4 YEAR COLLEGE DEGREE AND CAN NOT FIND A JOB...LET THE GOP GO WITHOUT HEALTH INSURANCE TAKE IT AWAY FROM ALL OF THEM. WHY SHOULD WE PAY FOR THEIR HEALTH INSURANCE.

    December 22, 2011 at 1:40 pm | Report abuse |
  12. Ron

    I've always said, when the Democrats are in the majority I always have more money in my pocket. I still say it and it holds true as everyone can see. I am not very proud that House Speaker John Boehner is from Ohio since I live in that state and have all my life. I don't think he has the best interest of the middle class at heart.

    December 22, 2011 at 1:41 pm | Report abuse |
  13. merry

    I get paid once a month. The tax increase takes $80 from my barely adequate paycheck. Thanks Congress....
    PS – If I took as much time off from my job as you do, I'd get fired.

    December 22, 2011 at 1:44 pm | Report abuse |
  14. johnny popper

    Can we please just get an honest person to lead and call out congress when they try to scam the American public or if you think the President is honest, can we then get someone else who is honest and has a head for economics to head up our nation? Unfortunately, this president is not getting what Congress is pushing. He's like an elderly American who's sitting at home lapping up the CNN BS running all day.

    Cut Income Taxes by 2% – not funding of social security;
    Offset the lost tax inflow with at least 120 billion in spending cuts in 2012; and
    Preferably cut spending by 240 billion in 2012 so the average family will in fact be saving $1,000 as you keep falsely claiming.

    It is just embarassing and sad at this point.

    December 22, 2011 at 1:45 pm | Report abuse |
  15. Stand Fast

    Stand Fast GOP House, I'll pay the $40 additional to get a year vs 2 months and to see that wanna be dictator obama lose. Stand Fast GOP Stand Fast HOORAH!

    December 22, 2011 at 1:46 pm | Report abuse |
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