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. JP

    Two lap dances at a strip club.

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

    People, you have got to be a little more creative. If you loose $40 somewhere, you make it up somewhere else. You gotta keep movin. Life goes on. It's easy to make a little extra money when you actually put forth the effort.

    December 22, 2011 at 1:48 pm | Report abuse |
  3. Maryann

    The Senate is on vacation. His Majesty Obama and family will be in Hawaii for Christmas. How much did that cost taxpayers? You however, get to pay more taxes, loose unemployment benefits and can’t afford to see a doctor. NONE of them cares about the American people or what is happening in this country.

    December 22, 2011 at 1:48 pm | Report abuse |
    • lol

      Actually House Democrats called for a vote on the plan, but Boehner rejected it because most of the House Republicans had already left for vacation. He knew that if the vote went down Democrats would have enough votes for it to pass, something Boehner does not want to happen.

      December 22, 2011 at 2:10 pm | Report abuse |
  4. morgan

    The problem is if the people keep an extra $40 per week, will they use it to good advantage or spend on goods made in China?
    Buying Chinese made goods will do NOTHING for the US economy. The Chinese will use it to upgrade their military so one day they can send it back to the US in the form of bullets and bombs.
    Support Communist military. Buy Chinese!!!!

    December 22, 2011 at 1:49 pm | Report abuse |
  5. ????

    OMG! Why do the posters on here crying have internet service!!!!! There's your 40 bucks! Jeesus Go to the Library!

    December 22, 2011 at 1:50 pm | Report abuse |
  6. Katie Mullins-Hall

    As a in home daycare provider for 28 years, this is a huge chunk of change for my clients. I charge $5.00 an hour, so that's an 8 day work day for me for one child alone. Do the math. The FDA requires I feel them from the food pyramid, it will be like asking Jesue to make that one loaf of bread stretch to feed the masses.

    December 22, 2011 at 1:50 pm | Report abuse |
  7. JohnDoe

    The $40 every two weeks is the difference between me being comfortable with my wireless data plan or not. This is life and death. If I can't afford my data plan for my $600 iPad I will just die!!! Yes, that was sarcasm. As an american, it saddens me that we have become so materialistic that we can't even understand what it means to be poor. There is a strong chance that anyone claiming to be poor is really "materialistically poor". Sure, there are people that are truly struggling to get by but if they are paying $110 a month for cell phone, plus $60 a month for cable then I have no sense of sadness for you. Another poster had already mentioned budgeting. I wish that personal finances was mandatory in all education. We wouldn't be in messes like this if people were financially responsible.

    December 22, 2011 at 1:51 pm | Report abuse |
    • neighbordoe

      $40 is a tank of tank, groceries, several outfits for my kids, or two haircuts for me. Every cent counts. But since you probably aren't looking for work and haven't had to cut back to bare bones you have no clue.

      I think you are way to generalistic because you assume everyone has an ipad or huge cell plan. Get real.

      December 22, 2011 at 2:16 pm | Report abuse |
  8. Jon

    Ineptocracy (in-ep-toc’-ra-cy) – a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

    December 22, 2011 at 1:51 pm | Report abuse |
  9. nonamerequired

    $40 gone per pay check means I don't get my meds, even though I have insurance, which goes up 1-2012. Please leave my personal finances alone, unless you want to help the working poor, which is a group I now belong to, although I never wanted to join.

    December 22, 2011 at 1:53 pm | Report abuse |
  10. ddaniels

    If everyone would listen to or read what is written, average of $40.00, a paycheck if you make 50.000.00 a year... I do not make 50.000.00 a year never have and will probably never will... It would devaste me to loose 40.00 a month.. I pay IRS, present and past, I pay state, present and past, property taxes, license taxes, lot rent, mortage, lights and fuel, and food. I make 12.55 per hour, I pay 162.00 mo for state medical insurance, well, I did, I got cut off, I make 200.00 a year too much.. so,I pay diabetic meds, high blood pressure meds, colesteral meds, asprin, and antibiotics, strips and needles with that monies now...and my cat has to eat dry cat food, and I eat at work... God, I am so glad I am on my way out and not coming into this disaster of a world, run by people whom think they are better than the majority of us... What a mess, they should all be ashamed and held accountable for this mess.

    December 22, 2011 at 1:54 pm | Report abuse |
  11. Dr Crunch

    Two fifths of kentucky bourbon (or one good fifth of scotch) per paycheck... I need that just to put up with all the spin and garbage coming from Washington...

    December 22, 2011 at 1:55 pm | Report abuse |
  12. Joh

    That is 80 dollars a month to the people who thinks it is 40 40 every bi weekly check is 80 a month Thanks

    December 22, 2011 at 1:56 pm | Report abuse |
  13. Greg

    Hello people. This change was intended to be for only ONE year and it is shortchanging SS. The politicians are using this and us to make their points, BUT the dems fought this last year tooth and nail and now are simply politicizing it. When is last time you heard Dems fight for lower taxes on anything? We need significant cuts to government spending. I consider myself lower middle class but am happy to 'contribute' by letting payroll taxes return to original levels, especially since it didn't result in mass hiring, but simply eased our finances for a year. Time to get real – cut government spending by $40B per month until budget is balanced...

    December 22, 2011 at 1:58 pm | Report abuse |
  14. puckles

    I bet not all but many of these people who are complaining are lazy people who work at places like Wal-mart. If they had gone to school and bettered themselves BEFORE having all these children then maybe they would not be in the predicament they are in. If you cannot afford children then you should not have them. If you are unhappy with the minimum wage job you are working at, go to school and better yourself.

    December 22, 2011 at 1:58 pm | Report abuse |
    • JOSE0311USMC

      FUNNY, I PERSONALLY KNOW COLLEGE KIDS WITH MASTERS-DEGREES THAT CAN'T GET A JOB..MY SON GRADUATED WITH A COMPUTER DEGREE AND CAN'T GET A JOB... HIGH TECH JOBS ARE TAKING BY H-1 VISA WORKERS FROM INDIA. WAKE UP KID.POLITICIANS SOLD OUT AMERICAS WORKERS.. H–1 HIGH TECH VISA WORKERS COME TO THE U.S. TO DO THE SAME JOBS THAT AMERICANS DO BUT FOR A LOT LESS MONEY.. WAKE UP KID. THERE ARE NO JOBS OUT THERE.- AMERICAN WORK FORCE IS BEING REPLACE WITH CHEAPER SLAVE LOBOR

      December 22, 2011 at 2:06 pm | Report abuse |
    • JP

      Unless you're becoming a doctor or engineer, higher education is a money-making scam. It's an excuse for kids to put off growing up for a couple more years. I have people with masters degrees applying for $10/hr jobs at the company I own all the time. I own a successful company and know more than any MBA grad about business and I only have a GED.

      December 22, 2011 at 2:28 pm | Report abuse |
  15. JOSE0311USMC

    $ 40 DOLLARS IS THAT THE BEST THAT DEMOCRATS CAN DO FOR THE MIDDLE CLASS ? AFTER 10 YEARS OF WAGES GOING DOWN.....HOW ABOUT A $ 3,000 PAYROLL TAX CUT ?

    December 22, 2011 at 2:00 pm | Report abuse |
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