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. bdawg

    Honestly I think that everyone that is taking part in this debacle should lose their upcoming elections. Doesn't matter which side they are on. If they can't compromise, they should lose our votes. A compromise is better than nothing. Wipe the slate clean and start with newly elected folks and see how they do. If the same standstill happens later on, they lose their re-election bids – eventually Washington will get the message – they need to work together. This is complete BS what is going on now.

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

    Here is an idea.....why dont we take that $40 per week (or $1000 per year) and use it to pay off the National debt. I really dont care about 40 a week, and the govt can keep it, but only if they use it to pay off the debt and not use it for another pork barrel waste of money. Pay off the debt and stop spending my taxes on robots that tell jokes

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

      You might want to think about how long that would take Donny.

      December 21, 2011 at 4:30 pm | Report abuse |
  3. DumbLiberals

    I'd forgo my $40 if Obama wouldn't spend $4 million on his Hawaii vacation.

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

      I am absolutely certain that you were precisely as outraged when George W. Bush took every opportunity he could to go down to his ranch in Crawford, Texas, and "clear brush" for a week or two.

      December 21, 2011 at 4:28 pm | Report abuse |
    • JFWilder

      Obama took less vacation in three years than Bush did in just one. Dumb teabaggers.

      December 21, 2011 at 4:29 pm | Report abuse |
  4. Joel

    One thing I notice about many people who complain about living on the financial edge...they all have families and children. If you don't make decent money, why are you f****ng and having children?

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

      Accidents happen, mistakes occur, and sometimes, the job you have when the kid is born isn't the job you had when the kid was conceived. A little compassion towards your fellow man wouldn't hurt.

      December 21, 2011 at 4:26 pm | Report abuse |
    • JFWilder

      Should have taken that $40 and invested in some Trojans...oh...except that if you're Catholic, that's not allowed, and the teabaggers want to take the other options away.

      December 21, 2011 at 4:31 pm | Report abuse |
    • Flummoxed

      So now only the wealthy should be allowed to procreate? Really??

      December 21, 2011 at 4:35 pm | Report abuse |
    • Marmar

      Wouldn't that be great if people had to get a license to reproduce? If you are too poor / dumb / uneducated / unstable / mentally ill = no kids. ahhh utopia

      December 21, 2011 at 4:46 pm | Report abuse |
    • Realistic

      Flummoxed

      So now only the wealthy should be allowed to procreate? Really??

      I wouldn't say wealthy, but only the ones who have their finances in enough order that $40 a pay period doesn't break the bank. If $40 breaks the bank, you are slip in the bathtub, car accident, sports accident from welfare. Once your personal budget is balanced and you have an emergency fund, then you can consider children.

      Procreation is not a fricken right, it's a privilege.

      December 21, 2011 at 4:46 pm | Report abuse |
  5. aCCT

    To add on to what Vicki is saying about the $40 per paycheck being misleading. You also have to be making $50,000 to get the full $1000 ( approx 20 per WEEK) .

    December 21, 2011 at 4:22 pm | Report abuse |
    • Krista

      A large percentage of middle class families bring home 50k in income a year.

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

      THANK YOU!! I'm glad that someone else picked up on this major detail.

      December 21, 2011 at 4:26 pm | Report abuse |
  6. Krista

    For me $40 is a full tank of gas in my honda insight. I find it fascinating that the Republicans only seem to be against higher taxes for the rich, not for the millions of individuals who actually _spend_ their paychecks at millions of retailer locations around the country, driving the economy.

    December 21, 2011 at 4:23 pm | Report abuse |
    • DumbLiberals

      I find it fascinating that 47% of the country doesn't even pay taxes. Care to comment?

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

      They can't afford to pay more taxes unless you want them homeless, and how would _that_ help the economy? They may not pay income taxes but they certainly pay sales tax, property taxes etc.

      December 21, 2011 at 4:26 pm | Report abuse |
    • DumbLiberals

      And your argument is morally correct, how?

      December 21, 2011 at 4:48 pm | Report abuse |
    • Lilo

      I love my honda insight. So glad I too bought one and cut back drastically on gas prices. Move one for financial control.

      December 21, 2011 at 10:01 pm | Report abuse |
  7. Richard

    Is it just me, or were most of the people interviewed not going to be paying $40 more in payroll taxes per paycheck? Have we forgotten that the $1,000 per year is an average (or maybe median?) figure. Every family is not paying exactly $40 more per paycheck. Some are paying less, some are paying more. Some right on the dot.

    If you're only pulling in $20K per year, you'd only see a difference of $400/year ($16/biweekly paycheck, or ~$1.60/workday, assuming 5/week). If you're pulling in $100K per year, you'd see a difference of $2,000/year ($80/biweeely paycheck, or ~$8/workday).

    December 21, 2011 at 4:23 pm | Report abuse |
    • Krista

      The pain is still equivalent. $16 biweekly for someone only making 20k and trying to support a family is a lot of money. $32 can mostly fill my tank of gas, for instance. It can buy a week's worth of groceries for a careful individual.

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

      I don't disagree. But that scenario is not what this article is representing. This article is looking at the impacts of $40 where it might only be $16 or $20, which is misleading. It is a scenario that is not at risk of occuring due to the present discussions.

      December 21, 2011 at 4:44 pm | Report abuse |
  8. Doug

    The $40 per paycheck wouldn't really make much difference to me and my family, but we're lucky. Since I don't need the cut, I'd rather see the government give a $50 tax cut to people who do need it. Rather than another $40 in my pocket, I'd like to see my community thriving.

    December 21, 2011 at 4:23 pm | Report abuse |
    • Tom

      Then why not donate that money to your community instead of giving it to the federal government to waste on foreign wars, ineffective social programs, and bridges to nowhere?

      December 21, 2011 at 4:28 pm | Report abuse |
  9. April W.

    What does $40.00 a month mean to me? Well it either means pay a bill or put food in my fridge. The government needs to walk in the shoes of the middle working class and see how we have to struggle to make ends meet. There is no need to go and "kill" yourself over working 2 jobs because the government wants to be stingy.

    December 21, 2011 at 4:23 pm | Report abuse |
    • John

      Its actually $40 taken out of every bi weekly paycheck that you are now getting so that means $80 less a month than you have been getting and more if you make more than $50,000 a year

      December 21, 2011 at 4:41 pm | Report abuse |
  10. bart

    I am a Republican so if this costs me money but makes Obama look bad I am all for it, but then again I am an idiot.

    December 21, 2011 at 4:23 pm | Report abuse |
    • JFWilder

      Yes, you are an idiot. Thanks for pointing that out there, Captain Obvious.

      December 21, 2011 at 4:33 pm | Report abuse |
  11. John

    At our income level it means the cost of a new 65" Sony 3D LED TV! "Are there no prisons? Are there no workhouses? They had better go then, and if they would rather die let them do it and decrease the surplus population." – BoehnerScrooge Christmas 2011

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

    $40 means nothing. Total smoke screen as far as I am concerned.

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

      Maybe you should read things that $40 out of every bi weekly paycheck or $80 a month every month for the average american more if you make more affecting over 150 million americans. Now $80 a month will buy alot of groceries or gas that they will now NOT have to spend.

      December 21, 2011 at 4:39 pm | Report abuse |
  13. Sophisticated Idiot

    $40 means nothing to the people we currently have in congress... another example of our representation not doing their job. Why worry about over/under taxing when excessive spending needs to be put under control first? It isn't a taxation issue that's killing the American way, but the mis-management of money by our government.

    I just feel so frustrated with how things are. There's nothing I can do about it myself so it gives me a sense of hopelessness. Things aren't going to change unless something extreme happens and you every day American finally stands up and clean house up top to make way for people who will actually represent.

    December 21, 2011 at 4:27 pm | Report abuse |
  14. Joel

    As others have pointed out, this isn't a $40/week matter for everybody. The poor families that are saying how much they need this money will not see anywhere near that much (for example, a family making $20,000/year would see a $7.69/week difference in taxes). While every penny counts for everybody, this is hardly the stuff that will change lives for these paycheck to paycheck families that are being dramatized.

    CNN is doing a terrible job of presenting this story, and running dangerously close to sensationalism. The 2% cut will be continued, it's just a matter of Republicans in the House and Democrats in the Senate who are very comfortable in their majorities refusing to give in to the other side. Each side is also able to point to a bill that they have passed which has no chance to pass the other body. To blame one group over the other is just cheerleading for one party or the other.

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

      You've obviously never been poor. $32 a month can mean the difference between having gas in your car, or not. It could mean the difference between getting fresh fruits and vegetables, and buying pasta and canned tomatoes for dinner. Republicans who throw a fit over idea of raising taxes on the rich by 1% because it would supposedly hurt them, but somehow raising it a good bit more than that won't hurt the average low income/middle class individual?

      December 21, 2011 at 4:31 pm | Report abuse |
    • Joel

      Krista, you're drinking the Kool-Aid. Both the Republicans and Democrats have passed bills to extend the tax cut, but the two bills don't agree so they are not being passed. The Republican bill actually extends the cut for a longer period, so you could argue the Republicans care more about the average person if you were so inclined. People who blame one side more than the other in this dispute are just trying to prove their preconceptions.

      Regarding the $7.69/week, I specifically said that I realize that every penny counts, but a responsible news carrier can't write an article asking people scraping by what they would do with $40/pay that they wouldn't have no matter what. It's sensationalism. If they want to ask people what they'd do with $8/week, they can, but I suspect it would attract nearly the same level of drama.

      December 21, 2011 at 4:39 pm | Report abuse |
  15. Michelle

    I have lupus. $40 used to be my co-pay to see my rheumatologist, but even THAT went up to $45. And I'm one of the lucky ones with decent insurance. Without medical help, I wouldn't be able to work, and I'd be a drain on society. Instead, my $45 co-pay lets me keep my health at a functional level. No doctors visits = no medication. No medication would mean that my condition would slowly (or rapidly) deteriorate. But I CAN afford that doctor visit... barely. I work full time in an essential job at a biomedical research facility, which drives the local economy and supports the largest hospital in the region. So... that $40 ALMOST pays for one doctor visit. Or a couple of months of prescriptions. Either way, it keeps me alive and productive. What's that worth to the government?

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