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.

[tweet https://twitter.com/whitehouse/status/149237000522825729%5D

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.

[tweet https://twitter.com/SpeakerBoehner/status/149611555762343936%5D

[tweet https://twitter.com/SpeakerBoehner/status/149612691412107264%5D

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.

[tweet https://twitter.com/Krohn_DC/status/149857524248608769%5D

[tweet https://twitter.com/CAPRICECLASSIC5/status/149851340372320257%5D

[tweet https://twitter.com/AprilDlicious/status/149650391842304000%5D

[tweet https://twitter.com/SissonsTo/status/149257818250297344%5D

[tweet https://twitter.com/PtBrindley/status/149578268759175169%5D

[tweet https://twitter.com/WhySharksMatter/status/149856928653262849%5D

[tweet https://twitter.com/mattnocella/status/149240064432553984%5D

[tweet https://twitter.com/docstrangedub/status/149690011443412994%5D

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. Angie

    It means a tank of gas!!!!

    December 21, 2011 at 1:47 pm | Report abuse |
    • Marshall Tucker

      It means a case of beer and a pack of smokes for the average American... We can go without these items.

      December 21, 2011 at 1:59 pm | Report abuse |
  2. Jeez

    Isn't this $40 going towards a person's Social Security? Or am I completely misunderstanding this?
    God, I hate Republicans. And Democrats. And Congress.

    Bah, Humbug!

    December 21, 2011 at 1:48 pm | Report abuse |
    • Guest

      did you read any of the personal situations above? do you really think that some of those people will make it to their 70's to even get their social security? they need the help now rather than when they're senior citizens.

      December 21, 2011 at 2:00 pm | Report abuse |
    • Dumbbo

      Yes, you are correct. The dollars we are discussing are the result of a partial defunding of Social Security. I'm sure that the senior citizens of this country are happy to know that the democrats want to speed up the insolvency of Social Security. Why hasn't AARP made any statements regarding this defunding. Incidentally, the senior citizens will NOT get a $40 per paycheck ($20 per week) tax reduction.

      December 22, 2011 at 8:10 am | Report abuse |
    • James70094

      Yes, you are misunderstanding this. While it does reduce the amount of Social Security tax taken from payrolls, other measures are in the bill to collect additional money that is deposited into Social security to make up for the reduction. The net result is that Social Security is funded as if the reducton never happened.

      December 22, 2011 at 1:21 pm | Report abuse |
  3. $40means

    At least, $40 shows that Washington still works and worths $40. Now, it worth nothing.

    December 21, 2011 at 1:48 pm | Report abuse |
  4. Nikki

    A $40 tax cut is week in gas in the family vehicle.

    December 21, 2011 at 1:48 pm | Report abuse |
    • Marshall Tucker

      Most Americans waste money, 40$ can easily be lost through useless purchases.. No more beer and smokes and the average family will be just fine. Taxes should be increased substantially not decreased/.

      December 21, 2011 at 2:01 pm | Report abuse |
    • Farm Girl

      @Marshall Tucker By the time my husband and I pay our mortgage, student loan, health insurance, car insurance and bills, we have 300 dollars a month for food and gas. Our health insurance is $500 a month alone. I assure you, we're NOT wasting money. In fact, I plant a garden every year and plan our menu so we can keep groceries as cheap as possible. I haven't seen my family in 3 years because we can't afford a plane ticket, nor even the gasoline to drive 1500 miles. 80 dollars a month will devastate us. So much for the american dream. We've done everything right, everything we were 'told' to do, we don't have credit card debt, we got an education, and so on. If you can afford to blow 40 dollars, you're lucky. But there are millions of us who cannot.

      December 21, 2011 at 9:06 pm | Report abuse |
    • Jim

      @farm girl- You and your husband have college degrees and together are only making $50K/year working full time jobs? If you need more income and can't find jobs that pay more, you may want to consider working more than 40 hours/week.

      December 21, 2011 at 11:56 pm | Report abuse |
    • Dan Renner

      Jim, it seems that you know nothing about farming. It's a 100 hour a week job. You live on the the farm and your whole life is it. Think about that the next time you are sitting at the bar looking for the next girl to go out with, if that's what you do with your free time, which these people have non. Oh, and remember, some of the food you eat, no matter where you get it, came from them.

      December 22, 2011 at 1:20 pm | Report abuse |
  5. Mr President

    See, I told you I could cause chaos. 3 years and I have done nothing but create chaos. Wait till next year and the USA will be broke. God bless America. Power to big government. We know better,

    December 21, 2011 at 1:49 pm | Report abuse |
    • Speaker Boehner

      Please stop taking credit for my accomplishments. I've single handedly managed to get our country's credit rating lowered, costing us billions in added interest payments. And I've prevented democrats from balancing the budget by refusing to let temporary tax cuts on the rich expire.

      December 21, 2011 at 1:55 pm | Report abuse |
    • bobcat ( in a hat )

      So, Mr. President, i guess it's safe to assume that you are in favor of an extra thousand dollars coming out of your paycheck each year. It must be nice to be in a position to afford that.

      December 21, 2011 at 1:56 pm | Report abuse |
    • Joe

      Don't worry Mr. President, you didn't cause this chaos. This is the work of the Congress. I'd like to blame the Republican house but ultimately both sides are beyond repair.

      December 21, 2011 at 2:00 pm | Report abuse |
    • Natalie

      not your fault Mr. President. it is the republitards that fight you tooth and nail and said their soul purpose to to defeat everything you want to do for the american people

      December 21, 2011 at 2:04 pm | Report abuse |
  6. bobcat ( in a hat )

    Is 40 dollars a week a significant amount ? I can't believe that question was even asked. For the common person that is huge amount. To the members of congress who are playing with our lives, it's chump change.
    Who the hell do they think they are ? I wish just for a while, these snotty ass big shots had to feel the anguish that the rest of us do. Maybe they could find a little humanity.

    December 21, 2011 at 1:52 pm | Report abuse |
    • MikeG

      Here's an idea: make members of congress and the senate live on the average income. While in public office they should get audited and their personal expenditures (including perks from being in office like cars/planes back and forth to work) can't exceed average. Somehow I think that extra $20 a week would take on a new meaning for them.

      December 21, 2011 at 3:30 pm | Report abuse |
    • Jeff

      40 bucks a CHECK, not a week.

      December 21, 2011 at 6:03 pm | Report abuse |
    • andy

      If it is $40 a week for you, then you are already making $100,000 a year?

      Don't worry, simple math confuses most people posting here.

      December 21, 2011 at 11:26 pm | Report abuse |
  7. LazyCongress

    $40 dollars out of my paycheck is a tank of gas, food, or helping to keep the utilities paid. Congress needs to work everyday until they get their situation worked out. No more vacations, no more paychecks, no more days off. That will make them learn how to compromise.

    December 21, 2011 at 1:55 pm | Report abuse |
  8. M.S.C.E., P.E.

    If losing $80 a month creates a crisis for someone, they need to work harder, so that one day, losing $80 a month means nothing.

    December 21, 2011 at 1:56 pm | Report abuse |
    • Marshall Tucker

      Thats true, but we also have to realize that most people losing this money work for it, they dont get there money in the mail like yourself.

      December 21, 2011 at 2:02 pm | Report abuse |
    • andy

      Agreed. And if they are losing $80 a month, they are making $50,000 a year.

      December 21, 2011 at 11:28 pm | Report abuse |
  9. bill

    What did these people do a year ago when the economy was just as bad and this temporary tax relief wasn't there? Where did they get the $40 a month to cover all these costs before the cut was in place?

    December 21, 2011 at 1:56 pm | Report abuse |
    • Marshall Tucker

      They drank and smoked less.... Kids got what was left...Typical American parents.

      December 21, 2011 at 2:07 pm | Report abuse |
  10. HA!

    i work 25 hours a week max on 13$ an hour and pay 70$ a week in child support....im pretty sure 40$ would go a long way for me...

    December 21, 2011 at 1:57 pm | Report abuse |
    • Marshall Tucker

      Get back with the wife, $280 back in the pocket and you wont miss th e$80 they take. It will also be better for your kids who should be what matters. You and your wife need to grow up and keep th efamily together and strong.

      December 21, 2011 at 2:04 pm | Report abuse |
    • Marshall Tucker

      Get back with the wife...280 back in your pocket...put your kids first, you wont miss 80$ then.

      December 21, 2011 at 2:05 pm | Report abuse |
    • tfa8356

      Actually, the 2% social security tax cut would come to $6.50 a week for someone who works 25 hours a week at $13/hour. But I guess that's enough for a pack of smokes.

      December 21, 2011 at 2:10 pm | Report abuse |
    • Realisticdude

      If you earn $13 an hour, and only work 25 hours per week....... Why do you have a child?

      December 21, 2011 at 3:55 pm | Report abuse |
    • Frustrated with the lies

      Actually, the TEMPORARY cut in the Social Security tax is 2 percent of your income, not $40 per week or paycheck. $13 per hour for 25 hours equals $325. Two percent of $325 is $6.50. That money is supposed to pay for Social Security. Are you actively putting money away for retirement or are you counting on Social Security to be there for you? You must gross $2000 per check in order to get the $40 amount. How many of you posting about what you could do with $40 actually gross this amount?

      December 21, 2011 at 8:23 pm | Report abuse |
    • andy

      @Frustrated, Thank you for the simple math lesson and not taking the hype at face value.

      December 21, 2011 at 11:34 pm | Report abuse |
  11. joe

    40 dollars loses my vote

    December 21, 2011 at 1:57 pm | Report abuse |
    • Marshall Tucker

      Your insignificant and your vote is meaningless.

      December 21, 2011 at 2:06 pm | Report abuse |
  12. Gidget68

    $40.00 is what our family of 8 used to live on in the 60's, when my father was unemployed and that is what his unemployment check was. $40 might not be much to the Republicans and Democrats but there are still people who live on that much. What the hell is wrong with these people, get a grip and do what is right pass the bill. You can go home to your nice home and enjoy you don't have to worry where your next meal is coming from!

    December 21, 2011 at 1:58 pm | Report abuse |
  13. Melanie

    $40 to me means groceries for the week, or even gas to get to work so that I can continue to make money for the government who continues to steal from me. If you want to take $40 dollar a week, then I suggest you take away this amount that gets distributed to the people who continue to live on welfare who are driving around in nice, fancy cars and living it up in rich neighborhoods. Our government system is completely incompetent in just about every decision they make!

    December 21, 2011 at 1:58 pm | Report abuse |
    • Jeff

      People have got to stop perpetuating this BS myth. People on welfare don't drive fancy cars and live in rich neighborhoods. It simply doesn't happen.

      December 21, 2011 at 6:06 pm | Report abuse |
  14. Joan

    It isn't just the $40. What this shows is the public isn't willing to give up anything, and will always want more. The same people who gripe about lifting the tax cut, will gripe when their social security funds run out. This country is broke, and liberals want to keep on spending. A 2 month extension will result in 4 months of accounting nightmares for small businesses. This President needs to get real. He needs to lift regulations, allow drilling offshore, allow the pipeline, let America help itself, and get his overbearing government out of the way.

    December 21, 2011 at 1:59 pm | Report abuse |
    • Jeff

      Exactly. Your ideas will kill off half of the population in this country (deregulation of everything? really?) which will greatly ease the burden on Social Security and the services the government provides. We'll have to maintain much less land because the rest will become untenable from drilling and deregulation and people won't be able to live anywhere near those areas once the corporations are done dumping all over them. I think your idea has merit. Really I do.

      December 21, 2011 at 6:08 pm | Report abuse |
    • Thats a lot

      Yea deregulation is the answer. because if there was no regulation on the banks none of this would have happened. and sure build a pipeline though the great plains where we grow our food because i love my corn to be doused in oil. It seems that the only people that are giving up something are the poor.

      December 21, 2011 at 11:34 pm | Report abuse |
  15. MarineEngr

    Typical hypocrites that demand higher taxes on other people but go out of their minds when it's $ 40 bucks out of their own pocket.

    December 21, 2011 at 1:59 pm | Report abuse |
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