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. Creaturz

    Enjoy the show, but the end result has already been determined. you'll get more taxes, and like it. THX 1138

    December 21, 2011 at 3:42 pm | Report abuse |
    • cirilo esparza

      This idiotic moronic Boehner totally reverses to kiss political butt. How can you vote for a flip flopper who kisses rich pockets' butt?AMERICA KICK BOEHNER OUT ALONG WITH THE GOP. THEY'RE SCREWING AMERICA GET THEM OUT!!

      December 21, 2011 at 3:57 pm | Report abuse |
  2. Enjoy UR Life

    What would everyone paying $40 a paycheck mean to our country? Would it help a greater good helping improve the lives of all??? No one wants to "give away" money, but if it means an overall improvement for the common good, who cares about $40???

    December 21, 2011 at 3:42 pm | Report abuse |
  3. Paradise

    I would gladly pay 40.oo a paycheck if it were spent wisely!

    December 21, 2011 at 3:45 pm | Report abuse |
    • Charlie

      But it's not. Its spent by buracrats that are not affected by any of the laws being passed. They have a golden retirement, the best of health care and only have to serve a minimum term....I've worked for 40+ years and still will be expected to retire on less than $1500 a month...out of that, I will have to pay for a suppliment for health care, taxes plus support myself. Providing for Washington's golden years should not be taxpayers responsibility.

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

      I agree. you can't trust the GOV. so why can't the house and the rest of congress cut their salaries a little bit and not tax us the $40??? I'm sure $40 dollars doesn't hurt them like it does us.

      December 22, 2011 at 3:31 pm | Report abuse |
  4. heyheyhey69

    Im glad that there are a few of us who wouldn't miss $40 dollars a week.

    December 21, 2011 at 3:46 pm | Report abuse |
    • Thizz

      well lucky you. to most of us, thats food for a few days.

      December 21, 2011 at 3:53 pm | Report abuse |
  5. kat

    I'm a college student and my father just lost his job so my parents can no longer afford to help me with my bills. $40 means groceries for the week or gas to get to and from school and work. It means textbooks. It means I might be able to afford my medication, which just increased dramatically now that my health insurance is gone.

    December 21, 2011 at 3:46 pm | Report abuse |
    • bill

      kat. Your college education is a privilege not a right. Get a job or another job or student loans and work to pay for it yourself. It's what I had to do.

      December 21, 2011 at 3:47 pm | Report abuse |
    • Dan Renner

      Kat, don't pay attetion to Bill. Bill, not too many people want suffer through college like you supposedly did.
      i wonder if you embellished your story. I know that there aren't many people whe can work TWO jobs and be able to have the hours to study also and get good grades. Plus, it seems that she has a few other problems like high priced medications. It looks like maybe she has a health problem which just makes things worse. This was for people to give their opinions on the loss of forty dollars, not for you to make it hard for others. I know that it will make it hard for me to make it losing that money. I get my pay every two weeks so that means I lose $80. Not for somebody who works at Denny's and has other low paying jobs because the economy has made it that way. My wife is disabled and has no disability and I have a four year old so all of you who have "quick fixes" like giving up our cable and internet, my phone depends on my internet to work and I'm not paying a high price for our service. And people like Tom seem to think that nothing ever changes so we can do whatever we did last year. It never ceases to amaze me how ignorant some people are and therefore end up being very callous. if or when the situation changes for some of these thoughtless people, then their tune will change also.

      December 21, 2011 at 4:34 pm | Report abuse |
    • bill

      Dan. I did not embelish. I joined them military for 4 years, I worked two jobs while in the military just to afford my car payment on a ford escort and the insurance. After I got out, the GI Bill covered some of the cost of school, but not all of it. I worked as a computer tech PLUS I worked a part time job waiting on tables PLUS I took online courses that I had to pay for out of pocket. It is ridiculous that MOST people can't work a little more or a little harder to get the things they WANT. Not the things they need, but the things they want. Cable television is something that can be given up. I agree that it's difficult to go without internet because some people rely on it for their jobs. If they don't rely on it for their jobs, a landline is cheaper than renting the internet service and running your VOIP solution.

      December 22, 2011 at 10:53 am | Report abuse |
  6. Myles

    you know i think fewer people get paid bi-weekly than people who get weekly checks! so in reality its $20 a week (per paycheck) and since when did we expect our income taxes (aka loans from china) to pay for our social security!

    No one likes taxes but at least this one comes back to you directly! This game is sickning just political games... again. This is no way to create change!

    December 21, 2011 at 3:46 pm | Report abuse |
  7. tiredoftheright

    This whole situation is a mess and congress should be ashamed of themselves. People need this $40 a week or less in most cases just to get buy and I do not need someone I do not know to question how my money is spent. It is spent paycheck to paycheck a term unfamilar to republicans. Give us all the gift of full belly, or a tank of gas this coming year. For the republicans if you do not need the $40 a week donate it someone who does there is pleanty of poverty in Texas.

    December 21, 2011 at 3:46 pm | Report abuse |
  8. romney for president

    I am poor but tax money doesn't just go into a big paper shredder in Washington. (at least most of it doesn't). It is used to make this country better – everything from stronger military, to better traffic lights. We have taxes for a reason. $40 is not a lot even for someone in my miserable financial state.

    December 21, 2011 at 3:47 pm | Report abuse |
  9. Larry Green

    Look at it this way, this money is coming from Social Security. Do you want it now or later? I also believe part of this tax cut is a lower amount business have to pay into our SS. We need to think long term and not just say give me, give me.' I have to wonder if this is just a plan to make SS go broke faster.

    December 21, 2011 at 3:47 pm | Report abuse |
    • bill

      businesses are still paying the full 6.2%. There was no reduction for the business SS tax.

      December 21, 2011 at 3:49 pm | Report abuse |
  10. Charlie

    When will Washington bare the same burdens for taxes, insurance, retirement as the "little" people. Time to get a government that makes laws they are affected by just like the rest of us.

    December 21, 2011 at 3:48 pm | Report abuse |
  11. Sam

    Wow, last week it was $20 now this week it magically went up to $40. Don't you think you are blowing this a little out of proportion CNN? You didn’t ask us what $20 or $40 a paycheck meant to us when Obamacare was passing. That is about how much my health care costs have risen since that stupid law was passed. I didn’t hear you asking that question way back then. What does $40 a paycheck mean to me? Not a damn thing if it means defunding Social Security and adding to our already out of control national debt.

    December 21, 2011 at 3:48 pm | Report abuse |
  12. FinanciallySound

    "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

    Notice the reason why democracy is supposed to fail: "loose fiscal policy." That is exactly what Obama's financial policies are: loose.
    The only way to avoid the economic ruin of our country is to spend less than we make. Period. That's how it is with individuals, families, counties, states and countries. Why is it so hard for people to understand that the government can't, and SHOULDN'T take care of us? Plan accordingly.

    December 21, 2011 at 3:49 pm | Report abuse |
  13. Jeff Frank ( R - OHIO ) "Яight Wing Иutcase"

    What to do with $40 a week off every paycheck?
    Why not re-allocate an individual's federal tax credit towards his tax liability. Especially if there's a substantial amount owed when the person is supporting someone disabled.

    December 21, 2011 at 3:49 pm | Report abuse |
  14. Denman

    I'd pay the $40 to see all these numbskulls VOTED OUT OF OFFICE. Anybody with me?

    December 21, 2011 at 3:49 pm | Report abuse |
  15. dp2001

    To normal folks, $40 means meals for days. To the super-rich, $40 means a breakfast.

    December 21, 2011 at 3:50 pm | Report abuse |
    • pooli

      And that 40$ will go back to the food producers, the dishwasher. Me? I chose a high utility job in computers that can be done from just about anywhere. I'm no where near rich but to be an organism you need to adapt to survive. If that means going to Canada or Costa Rica, people will do it. Canada is going to gain some power in the next 30 years.

      December 22, 2011 at 1:20 am | Report abuse |
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