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. DumbLiberals

    You liberals are always touting how conservatives want to kill granny and toss her off the cliff, but now you're OK with funding social security for 60 days and not 12 months? FAIL. HYPOCRITES!

    December 21, 2011 at 4:37 pm | Report abuse |
  2. palintwit

    $40 will buy 4 bj's from bristoltwit palin.

    December 21, 2011 at 4:37 pm | Report abuse |
  3. john

    easy fix morons. two month extension for now. with the tax fully coming back in increments. i hate politcians.

    December 21, 2011 at 4:37 pm | Report abuse |
    • Carrie

      You and me both!

      December 21, 2011 at 4:41 pm | Report abuse |
  4. Portland tony

    I don't know about your math....but the $40 a paycheck times 52 weeks is a little over $2K per year....not the $1K the article cites.So which is it? And if your income is not greater than $50K, you are not getting 40 bucks a week.....Is this hard math?

    December 21, 2011 at 4:37 pm | Report abuse |
    • DumbLiberals

      Math is hard. The extension is only for 60 days, so you can't run the math on 12 months or 52 weeks.

      December 21, 2011 at 4:38 pm | Report abuse |
    • David

      My guess is they are doing $40 times 26 paychecks....as quite a few people get paychecks every other week.

      December 21, 2011 at 4:45 pm | Report abuse |
    • Gordon

      I think most people get paid every two weeks, not weekly.

      December 21, 2011 at 4:51 pm | Report abuse |
  5. Tim

    What a joke- sure $40 might be nothing to Mitt Romney that is willing to bet $10k on a drop of a hat- but like many said $40 a paycheck is huge- just in the gas money part of everyones budget.

    Pathetic. I cant stand listening to "we care, we will cut taxes, blah blah blah" meanwhile we all work hard, can barely afford our homes, can barely afford to save for our childrens skyroacketing education costs, and cant ever save enough money for co comfy retirment because we are taxed so much!!

    December 21, 2011 at 4:38 pm | Report abuse |
    • DumbLiberals

      Tim you make no sense, on the one hand, you complain about Romney (conservative = lower spending, lower taxes) and on the other you complain about high taxes. Last I checked, taxes are going up because your homeboy in the white house is adding 1.5 trillion dollars a year to the deficit. Who do you think pays for that increase? Math is hard.

      December 21, 2011 at 4:40 pm | Report abuse |
    • Mike

      Look at how the media portrays politics.
      The democrats are the good guys because they're not taking away the money you shouldn't be getting, because it was only supposed to be a temporary stimulus check, but in the end they raise your taxes to 'save' the economy? Makes sense to me...

      December 21, 2011 at 4:58 pm | Report abuse |
  6. William Demuth

    This is gutter politics at work.

    The ONLY legitimate question is where the cost of government needs to land.

    The poor shall remain poor, but the middle class seems to be teetering, and if the rich think they will fall into poverty quietly, they are in for a violent surprise.

    Raise capital gains taxes and develop a financial transaction tax if you need to balance the budget, but do NOT underestimate the rage growing in the middle class.

    If they continue to be cheated, they may very well become a mob.

    Frankly, riots are not far off.

    December 21, 2011 at 4:39 pm | Report abuse |
    • MarkE

      I'm no millionaire and I work very hard for every dollar I'm paid but I don't understand your rath. You blame evrything on the "millionaires" while this administration is spending at twice the rate of their income. We now have over 50% of the country paying no taxes at all or actually getting back more money than they paid in... And you wonder why so many people don't want or don't believe that we can afford another $40 "tax rabate"... What a joke....

      December 21, 2011 at 4:44 pm | Report abuse |
    • William Demuth

      Mark

      Your indoctrinated.

      EVERYTHING is taxed. Gas, booze, cigareetes and other commodities are already taxed heavily, and everyone pays sales taxes.

      As I have said, the poor shall remain poor, but the wealthy pay a lower rate than ever in our history.

      Tax the financial class properly, and we wouldn't even need to tax income on labor at all.

      December 21, 2011 at 4:52 pm | Report abuse |
    • Mike

      That's just generic Occupy idiot talk. A lot of hard-working Americans became climbed their way up the ladder to become rich. That's why it's America, The American Dream, etc. If you want 50% tax move to California or Socialist Europe.

      December 21, 2011 at 5:00 pm | Report abuse |
  7. MarkE

    Get real folks! There is no such thing as a free lunch. Every dollar the Gov spends has to come from us. Just giving us back our own money doesn't make me happy. Don't give me some temporary tax cut; give me a PERMANENT tax cut! Every dollar you supposedly "give" us is many that you have already TAKEN FROM us! Stop the insanity. Cut Government spending. Live within your means, Uncle Sam.....

    December 21, 2011 at 4:39 pm | Report abuse |
    • Mike

      It's about time. They all should be hung. We need a revolution.

      December 21, 2011 at 5:01 pm | Report abuse |
  8. Crane

    A tank of gas every 2 weeks!

    December 21, 2011 at 4:40 pm | Report abuse |
  9. kevin

    Dang it too many people are NEEDING that $40 a biweek. If $40 is so important, then let's just cut the payroll tax completely. Let's just cut all taxes so everyone's tough life can be better. But we can't do that because there are more important things than how someone can spend the $40 now – namely, our future.

    Nothing in life is easy, but by spending $40 a biweek now, you are making our future $40 a biweek worse. Unless you invest or save or put that $40 a biweek to efficiency and cost reduction, there will be nothing to show for it 5 years from now, except a larger national debt. The reason things are bad now is because we didn't do what we should have done in the past. So is the answer is to keep doing the wrong thing, or to suck it up and do what's right? I say no to $1000 in 2012 because it won't make a bit of difference in 8 years for America unless we put the money to good use to help the future. And from the comments it seems EVERYONE will put that $40 to a bad use (i.e., consume it now with no benefit for the future).

    December 21, 2011 at 4:40 pm | Report abuse |
    • William Demuth

      Kevin

      Your logic would be fine as long as all Americans shared the burden when the bill came due.

      Alas that has NEVER been the case.

      Whatever taxes you pay today will be stolen tomorrow, as they ALWAYS have been.

      Unfunded mandates leave the US looking at shortfalls of around 60 TRILLION dollars.

      Our nation is a Ponzi scheme, and when we finally collapse, the whole world goes to hell in a hand basket.

      No fine tuning or tweaking of ANYTHING will stop the long term disaster in the making.

      December 21, 2011 at 4:48 pm | Report abuse |
  10. DumbLiberals

    Liberal logic: I'll take $206 now for 60 days, rather than PERMANENTLY. SIGH.

    December 21, 2011 at 4:42 pm | Report abuse |
  11. JohnQ

    Consider this: The money was yours to begin with, and now they're using it as a carrot to distract you.

    December 21, 2011 at 4:43 pm | Report abuse |
  12. angie

    $40 is a co-payment to my oncologist.

    December 21, 2011 at 4:45 pm | Report abuse |
  13. Tony

    CNN and it's liberal agenda. You know that this 'fix' was for only 2 months right? If it was so important to the white house, why did they stall so long?

    December 21, 2011 at 4:45 pm | Report abuse |
    • Tracy

      They didn't&it's obvious YOU&other so called "conservatives"DON'T do your homework!The Senate&Obama were the ones who ORIGINALLY put forth the whole year for the Tax break.Boehner&all the other TreasonousTeatards wholly rejected it&came back with a boatload of earmarks,from the Keystone down to the utterly absurd law that says you can't use your food stamps in a strip club.There is not ONE strip club out there that would take them&if there is,it's obvious the GOP boys club are the only ones that DO frequent such establishments!The only reason for the 2 month is to give time to negotiate for better terms.The Keystone has NOTHING to do with improving our economy,as Canada is the one that owns the oil&it will all be exported&NOT to US.The jobs they say it will create will be less than 2000 for US as a nation,are temporary&the US ends up assuming ALL the risk.The pipeline goes right on top of one of the largest Aquafiers in the World that supplies drinking water to the Midwest.ONE spill,&tens of millions of people will have NO water,rendering the whole place uninhabitable,crashing every local&State Economy for Decades&beyond.Talk about a band-aid fix on a long term problem,The Keystone is it.The House has done NOTHING but continually obstruct&bog down every single thing that could possibly help average Americans whilst ever promoting more cuts for the super wealthy.If the wealthy in this Country truly don't think they can live without that 1%increase in their taxes while raking in Billions from the very people that helped them get there?I&many others say get the H e l l Out,good riddance,we don't need people with that divisive mindset in this Country.Spare me the job-creator BS,they continually shed them,drive our wages down&are NOTHING but a Parasitic drain on our Country&it's Citizens.If it takes them making our Nation into a 3rd World Country to make a profit,then they are absolute JOKES of Businessmen.REAL Business people know how to make a profit without draining all the resources,WHY?because those resources run out&then so does their business.We the People still give a damn about Our Country&the Well Being of it's people financially&otherwise,it's The American way.Anyone that wants to go against that can pack their crap&STAY gone.They&their sweatshop mentality WON'T be missed&it will make room for someone with Capital AND Ethics(they don't have to be mutually exclusive) to move in to actually build a better Mousetrap that benefits all.How's THAT for Innovation&REAL Job Creation??We have had enough of being held hostage by these selfish pigs,who do NOTHING but enrich themselves&kill others along the way and we will not stand for it any longer.They can take the whole lot of the GOP with them&may the doorknob hit em where The Good Lord split 'em!

      December 21, 2011 at 9:45 pm | Report abuse |
  14. Jean Moise

    $40 mean the end of my 14 yrs old son lunch, money I gave him weekly for school lunch and guess what? I have no other ways to get it. I'm a single man parent living on an already unsufficient salary from a pay check and 1/2 to a pay check. Which means I spent my pay check and 1/2 credited the up coming one to be able to survive. Thanks guys.

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

      Then I would imagine that the impact of the ending of this tax cut wouldn't affect you $40/biweek.

      December 21, 2011 at 4:48 pm | Report abuse |
  15. Jeff

    While $40 is allot to allot of folks, I would not miss it much. They need to get a year long plan in place for the public. These politicians are not working for the people. They are working for themselves. Vote them all out.

    December 21, 2011 at 4:47 pm | Report abuse |
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