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. Ron

    Republican Agenda: To keep the working class desperate and uneducated thus providing corporations with cheap labor (WalMart, Best Buy, etc). Raise college tuition so only the rich/white can advance, Republican Governors have already raised tuition by almost 20% this past year alone. It's disgusting how the GOP wants to take control of education and make it a privatized overpriced elitist privilege that only the rich could afford, those families making $40-70k/yr would get the crap schools.

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

      Yawn... you sound like an MSM commercial.

      December 21, 2011 at 4:17 pm | Report abuse |
    • ProperVillain

      I totally agree. I think this is why changing the education system to make it affordable to everyone (like the rest of the civilized world) and having free or near free government health care for everyone (again, like the rest of the civilized world) scares these band of arrogant nitwits so much...

      December 21, 2011 at 4:19 pm | Report abuse |
  2. katie

    $40 means a lot to me I am a college student that works a full-time and part-time job. $40 is just a little bit less than what i have to spend on groceries for myself for 2 weeks. it is gas in my car, it is a cell phone bill, There isnt much more I can cut out to "live within my means" It is very hard to make ends meet before long people will be waiting in the line at the food bank because employers dont adjust our pay to keep up with rising costs of everything, with both of my jobs I bring home about 18,000 a year thats with 2 jobs! its just not enough but the only thing I can do is go to school and keep trying hopefully congress will decide to work together at the last minute, if not I guess i will become very skinny in the near future along with the rest of working americans!

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

      Katie, there are 2 ways (at least) to adjust your income: blame evil employers who do not adjust becuase everything is :so expensive" or gain more skills and become able to get a better income. Is this why people are getting skills in college?

      December 21, 2011 at 4:17 pm | Report abuse |
    • beatlepoet

      Clearly, Elena, you missed the part where she said she was a college student. I applaud her for going to school and working two jobs. That is really a lot to take on, and in this economy, there is no promise that her new skill will provide her with a better paying job.

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

      Elena, Are you employed yourself and do you realize there isnt any jobs? Did you know most college grads cant find jobs in their field as well. What planet are you from. Obviously 40 bucks isnt anything to you and you seem to have all the answers. The average college student makes $8.50 and hour. Why should people have to live less than rich people? $40 for bucks from every working person only to be sent overseas or to fund some bankrupt bank or auto maker. Maybe with all your money you should open a business and employ a 1000 people and pay them 8 bucks an hour. What dont you get that the average person has no money to make adjustments. Rob Peter to pay Paul with your own money doesnt work. You make me laugh!

      December 21, 2011 at 6:40 pm | Report abuse |
  3. TJ

    $40 per pay period is the amount of my one raise, that I didn't get over the last 3 years. Thanks very little.

    December 21, 2011 at 4:13 pm | Report abuse |
  4. GeneK

    CNN just aired this. It's not $40 a week OR $40 a month, but $40 out of a biweekly paycheck.

    $20 per week.

    December 21, 2011 at 4:13 pm | Report abuse |
    • Pips

      Can't believe Republicans are raising taxes on all of us. I thought they took an oath to not do this.

      December 21, 2011 at 4:20 pm | Report abuse |
  5. Elena

    There are many ways to make extra $40 without hurting much (selling on eBay, offering services to other people, freelancing). If people are so desperate to loose $40, their finances are in big trouble, and $40 will not solve their problem. It is not how much you make, it is what your cashflow is.

    December 21, 2011 at 4:13 pm | Report abuse |
    • Brent

      I guess she could sell her old clothes, go through dumpsters to find stuff to sell on ebay. That is the America way isnt it? In between 2 jobs people have plenty of time to dumpster dive. Your ideas keep people poor. Our country is suppose to take care of its people. Not send food aid to North Korea when people here in the good old USA are starving to death because all our jobs are in India.

      December 21, 2011 at 6:50 pm | Report abuse |
  6. anon420

    2 friday night sushi dinners for 2, without the sake

    December 21, 2011 at 4:14 pm | Report abuse |
  7. gggg

    Between my wife and myself, all the $40 add up to a car payment. A car purchase that is on hold until I know what is happening. I need the car; mine is 12 years old (not bad) and it has 180000 (yes, one hundred eighty thousand miles) on it. I could use a new one. I bought the car new and promised to drive it till it was nearly dust. I think we've done a pretty good job of that. It's time to start over; if the government ever makes up it's mind.

    December 21, 2011 at 4:15 pm | Report abuse |
    • Tom

      You're not going to get much for $80 a month.

      December 21, 2011 at 4:20 pm | Report abuse |
    • Brent

      I dont know about you but 80 bucks pays my light bill. You people are all whacked.

      December 21, 2011 at 6:53 pm | Report abuse |
    • bill

      GGGG. It's because of the democrats that you still won't be able to buy a car because their plan is for only two months. You'll be in the same boat two months from now. The republicans just want to make this same bill for 12 months. A WHOLE YEAR. Why is this so difficult for the democrats to agree on?

      December 22, 2011 at 11:07 am | Report abuse |
  8. STLgirl

    $40 a paycheck puts food in my family's mouth or gas in my car. It's basically the amount of my raise, so I guess I won't be getting one this year and I was counting on it. I lowered my car insurance cvg, my health ins cvg and other things I will be doing w/o already next year to try and compensate for my current lack of funds to make ends meet. $40 just makes it that much worse and I have no more areas where I can cut my budget. I already live paycheck to paycheck and in most cases come up short each month. So yeah, $40 means a lot to me and to most people. It's ludicrous to think that it doesn't make a difference.

    December 21, 2011 at 4:16 pm | Report abuse |
  9. fistface

    "Stop blaming the government for not helping you and look at what you can do to help yourself." -– How about stopping the Government from being so BIG, BLOATED, and NEEDY of OUR MONEY WE EARN? How about cutting Middle-Class taxes to 50% of what they are currently taxed ... just to get started... and the BIG AND BLOATED Federal Government be the ones to actually define MEANS... as to which they ""LIVE"".

    December 21, 2011 at 4:17 pm | Report abuse |
    • Clare

      Awesome response!

      December 21, 2011 at 4:20 pm | Report abuse |
  10. Don

    It could mean contributions to campaigns to get the Republicans out of office.

    December 21, 2011 at 4:17 pm | Report abuse |
    • Tom

      The democrats already use taxpayer money for that.

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

      Absolutely!!!

      December 21, 2011 at 4:37 pm | Report abuse |
  11. sobugly

    I'm pretty lucky I guess; I live below my means, and earn above the median income, but I'll still feel a loss of $40 a paycheck. Part of living below my means is driving a small, fuel efficient car ... and $40 will just about fill my gas tank. This basically takes 26 tanks of gas out of my pocket yearly. The only thing this has shown me is that our Government cannot and will not make the tough decisions to manage our budget, which means I'm going to hide as much of my paycheck, in the form of a pre-tax 401k, as possible – $17,000 a year is the limit for 2012. Doing that will drop me to a lower tax bracket where I won't be subject to the same rate anyway.

    December 21, 2011 at 4:17 pm | Report abuse |
  12. Vicki

    $40 per paycheck is somewhat misleading, as $1000 per year comes out to a bit over $19 per week. it sounds like more than it is, when you say "per paycheck." The $40 assumes a pay every two weeks. Frankly, few people would miss it. I spend about $40 per week for gas, so the $19 or so would give me half a tank. if this measly amount makes a difference in what will happen to Medicare, I say forget the tax break.

    December 21, 2011 at 4:17 pm | Report abuse |
  13. DumbLiberals

    I'd forgo my $40 per paycheck, if Obama would stop adding $90 to my share of the deficit.

    December 21, 2011 at 4:18 pm | Report abuse |
  14. Dan

    IT'S MY MONEY, WHY SHOULD THE US GOVERNMENT GET MORE OF IT! $40 a paycheck is not a lot, at least not for me, but for many it is!! But, really is that the point? No, the point is that it is my hard earned money, why should I have to give more of it up to government who cant seem to do their own job (budget the US spending). For example, one tax flaw – those who earn overtime get hit with a higher tax rate than regular earnings. Smart right, tax those who work harder for their money.

    As for those who say this money is going to a great cause, SSI; how many of you are in your twenties or thirties? I am in my twenties, but will I ever see a penny of this? Probably not. SSI was a failed idea and is something I probably will not see when I set to retire. All I am doing now is funding accounts for those who are currently retired.

    However, I dont blame Republicans or Democrats, I blame Washington. Every group is as bad as the other. They want to point fingers and blame one side while the other does the same thing. Sad thing is, is that no one will ever step up and help correct the problems we have in this great country. Reason: too many people with too much power are getting rich off of all of this. It's not the $40 dollars that bothers me, it's the fact that if they can't spend the money they have now wisely, how are they going to spend this extra $40??

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

      I'm in my fourties and am convinced I won't see a dime of my SSI contribution either. I wish I could opt out and put the money in an IRA of my own instead of having it all disappear down a rabbit hole.

      December 21, 2011 at 4:21 pm | Report abuse |
  15. Jacob A

    The House passed an extension (for a full year) last week (on dec 13th)... The Senate decided to go a different route. How is this impasse the House's fault? They passed one for a year, and the Senate couldn't get the deal done.

    Mainstream media out to "skew" information when things don't go a certain way. Sheep-like Americans are willing to follow...

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

      Actually, Harry Reid wouldn't even let it come to a vote – so really, this impasse is all HIS fault.

      December 21, 2011 at 4:24 pm | Report abuse |
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