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. davek

    What does $40 mean to Americans? It means the GOP is out of there.

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

      i pray that the american people will see that the crisis is a chance to see the republican leadership for the horrific people they are. the used t baggers own the party along with that lobbyist norquist. if this travesty achieves this then the whole awful crisis will be worth it.
      i only hope the pres will be elected along with enough dems that we have the over 60 votes to be able to pass the legislation we need to pass and the judges we need to confirm. then american will begin to come back to being a country we can be proud of.

      December 21, 2011 at 4:19 pm | Report abuse |
    • Bill Nelson

      If all these people are convinced that $40 per week means so much for the first 8 weeks of the year, then why don't they want to get $40 per week for the whole 52 weeks of the year? Let Congress stop playing politics for a party advantage in the next election, and give workers the $40 per week for the full year. Don't politicians even begin to understand how business can not afford to really begin creating jobs if they have to redo their payroll and tax billing infrastructure every 8 weeks? Or is putting the other political party in a bad light just so much more important?

      December 21, 2011 at 4:28 pm | Report abuse |
  2. WhackyWaco

    The people in the pictures do not look like they are missing too many meals.

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

      Eating unhealthy and cheap food like Mac n Cheese and Hot dogs, will only lead to obesity. Where is the money to spend on healthier food options

      December 21, 2011 at 4:12 pm | Report abuse |
    • beckyc444

      Actually you gain more weight by eating less healthy, and what is some of the cheapest food around? McDonalds dollar menu, Ramón noodles, etc… typically the poorer you are the more fats, salts, and bad carbohydrates you consume. Trust me, I’ve been there, living out of other peoples living rooms while attending college and working a part time crap job. Just saying look at peoples income vs. diet before you judge.

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

    Well it is really not just republicans it is politicians in general. Unfortunately if we could get rid of the ones we have in congress there would be another corrupt set just waiting to get in there. What do you do?

    December 21, 2011 at 4:04 pm | Report abuse |
  4. CA23

    It's not $40/check, $1000 per year, it's 2%. If you make $30k a year, it's $600 for the year, $50 for the month, $25 per check if you're paid twice a month. If you make $100k a year, it's $2000 for the year, $167 for the month, $83 per check. The $40 per check is roughly on a $50k salary. – So the amount is different for everyone. And if you don't make much, you're only losing 2% of not-much.

    And this was just a temporary measure anyway. The tax was there in 2010 and all years prior to that.

    December 21, 2011 at 4:05 pm | Report abuse |
    • D.Oneill

      Thanks for the numbers I was wondering that without sifting through the garbage of what "average" meant.

      December 21, 2011 at 4:11 pm | Report abuse |
  5. wayne

    Means Social Security will go broke faster than projected. Obama loves to spend money that isn't his!

    December 21, 2011 at 4:05 pm | Report abuse |
    • Phoney McRingring

      Who paid for Iraq and Afghanistan?

      Did the American people get to vote on this?

      Who's STILL paying for the 2 phony wars?

      December 21, 2011 at 4:14 pm | Report abuse |
  6. Lee Poffinbarger

    What is this really about. It has nothing to do with the tax cut. It is all about what else they attached to the bill. Mainly the oil pipeline that they want to build. They can wring their hands and point fingers all they want, it's just business as usual no matter what party.
    Here's a solution, let a bill stand on its own and quit tacking on everyones special interests. Also term limits for all those who are suppose to be working for us and not their parties. While were at it how about outlawing lobbists.

    December 21, 2011 at 4:05 pm | Report abuse |
  7. J Mullins

    This entire situation is nothing but politics. Would $40.00 make a difference? You bet it would. Almost everything has gone up and next month my copays for insurance will go up as well as the cost of insurance. The raise in Social Security as of January 1012 will just about cancel out the $40.00. It means cutting one more time when the budget is already stretched to the limit. I just wish the politicians were in the situation of many people with little money and then they would know how important this is to all concerned.

    December 21, 2011 at 4:05 pm | Report abuse |
  8. coder

    I'd pay $40 – if the government actually spent its time governing and not campaigning

    December 21, 2011 at 4:05 pm | Report abuse |
  9. DJR

    As much as cutting taxes would be a great thing, has anyone stopped to realize that this IS NOT A TAX BREAK. It's nothing more than I.O.U. to Social Security. This break is basically causing us to take more out of a fund than what is going in. At the rate at which Social Security is being handled it's not even going to be around for people that are 18-25 years old. The $40 every paycheck is for someone who is making 50K a year. If you can't survive without that $40 than you need to look at yourself int eh mirror and realize what your true priorities are.

    December 21, 2011 at 4:05 pm | Report abuse |
  10. Jeff Lebowski

    an 1/8th of top shelf....:)

    December 21, 2011 at 4:06 pm | Report abuse |
    • Phoney McRingring

      Pure gold, Dude. Pure gold.

      "They're gonna kill that poor woman man!"

      December 21, 2011 at 4:16 pm | Report abuse |
  11. openminded19

    I think most people (like me) see all the government waste and fraud and see the 40 bucks as just another fund for government waste. I need it worse than the govt does. Stop giving away so much to foreign countries, work on the fraud that plagues Medicare, give Congress a pay CUT.

    December 21, 2011 at 4:06 pm | Report abuse |
  12. Jack

    I imagine for all folks living paycheck to paycheck in this wonderful economy it will prove an unpleasant kick in the pants.

    Thanks Boehner. Yeah raise the tax burden by 3% for the lower classes so the millionaires can be spared a 3% surtax. Your position in this matter will be noted in the next election cycle.

    December 21, 2011 at 4:07 pm | Report abuse |
    • Tom

      First of all, it's 2%. Second, most Americans (even those living paycheck to paycheck) can shift their budget, just as they did at the beginning of this year when they started getting the extra money.

      December 21, 2011 at 4:10 pm | Report abuse |
    • Jack

      Well, actually Obama was trying to cut that tax a bit more making it closer to 3%. So instead of an extra (on average) $20 bucks we are now losing $40.

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

      Secondly if one is truly living paycheck to paycheck, shifting priorities is not exactly practical advice. Unless you are suggesting they stop making 401k contributions or applying for student loan forebearance or something. Of course your kind seem to think we need to self fund our own retirements anyway so why should you care what happens to SS taxes. GOP has been using SS funds to run its wars and give tax breaks to the rich for decades, they broke the line so now general funds can finance SS just the same and they can go look in the mirror when they look for someone to blame for that happening.

      December 21, 2011 at 4:27 pm | Report abuse |
    • bob

      From your mouth Jack to the electorate's ears..let's hope. So sick of the reflubricans

      December 21, 2011 at 4:32 pm | Report abuse |
    • bill

      Jack. I'm so happy to see that you are happy with a negative return on your money. SS provides you with a negative return (guaranteed). You and I could make more on our 12.4% of our income than our government can. Heck. We could make more in a less than 1% savings account than the government gives us. What makes this a good idea?

      December 22, 2011 at 11:01 am | Report abuse |
  13. tiredoftaxes

    The $40 is not free, its a tax break for working individuals who are taxpayers. Then you the taxpayer will pay for it in another form. so you not really getting the money. Plus its costing you more because of the interest it cost the government to borrow the money. I am not rich but for those stating to tax the rich have to remember many make no earned income (hence steve jobs earned a salary of $1) its all capital gains. So basically you screw the hard working individuals when you say tax the rich.

    December 21, 2011 at 4:07 pm | Report abuse |
  14. Clare

    I do not have cable TV, the internet, a cell phone or a landline. I do not buy beer or cigarettes. I do not have children. You'd think I'd have all this extra money floating around, wouldn't you? Reality check: I don't – & I work 40 hours a week. So, that $40 means a lot to me. My point is that a person or family can cut down to the basic necessities & still struggle because the cost of food, medicine, transportation, etc., has skyrocketed.

    December 21, 2011 at 4:10 pm | Report abuse |
    • sgtsam2005

      hmmmm so you must be useing the internet at work .... better hope you dont, get caught lol

      December 21, 2011 at 11:24 pm | Report abuse |
  15. Stan

    What $40 is will become painfully obvious for politicians if the payroll tax is not extended. For the Bible toting conservatives who think it doesn't matter why don't you donate it to the poor like the man(Jesus) you proclaim to follow would do. But I bet you will have some kind of lame excuse as to why you shouldn't have to. Remember when the rich man asked Jesus what he should do to be saved and Jesus said take all you have and give it to the poor and follow me. The man left shaking his head. It is the same today. People in the conservative movement talk so much about God and Country but don't love their neighbor whom they see everyday. It leaves me wondering who is actually reading what and believing what the bible says among these people. Not turning a political matter into a spiritual matter, but spirituality is what so many republicans run and vote on, Supposedly. So it leads me to ask, WHAT'S REALLY GOING ON?

    December 21, 2011 at 4:11 pm | Report abuse |
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