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. Me

    While I am not in a situation that I "need" the added money in my paycheck I feel some people need to realize that internet can be necessary for some people. I for example am going to school via online courses at an accredited university so that I can work enough to pay my bills. So yes it does bother me when people rant about how internet is a privilege not a right. I get that not everyone needs internet service, however some of us have had to make the choice to spend that extra money which actually results in an increase in our monthly income.

    The thing that really annoys me though is that I am actually likely going to have LESS money after I graduate because of student loans so I am in a race to pay off my mobile home before I graduate so I have that extra money to put toward student loans. Forget about saving for retirement there is literally NO MONEY for that and everything I am paying in to SS might as well get burned because I am not going to see it. I will be lucky of my parents even get to see it. There is a real possibility I will end up helping support them as they age.

    Now I don't want to be Debbie Downer but it seems that some people need to realize that not all of the "poor" are living beyond their means and that some people with multiple children are the victims of the economy. Just because someone is struggling now does not mean that 7-14 years ago when they had the children they were "poor." Life happens you just have to make the best of it and remember it could always be worse.

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

      I'm unemployed so every dollar I can get from the government is needed. It will buy me the essential groceries...milk, eggs, butter, maybe a couple of salads or frozen dinners to tie me over. It will buy me five days worth of take out at my favorite Chinese restaurant.

      December 21, 2011 at 4:58 pm | Report abuse |
    • Tracy

      WELL SAID!In todays technology driven World,to not have Internet is to not be able to even FIND a job,as over 90%of all Companies require your resume that way.I hear go to the Library,but what they don't realize is that in most of them,maximum time on a computer is 1/2 an hour.Job Centers it's an hour max.As with you,many college courses are now online&ALL papers&the Majority of tests,quizzes&the like MUST be turned in that way.The days of writing a term paper,homework ,even at a junior high level by hand are LONG Gone&these dinosaurs need to come into the 21st Century to see that.As I've said before,if those so called "job-creators"can't figure out how to make a living without completely draining an economy dry,then they not only don't deserve to be in business,they don't deserve ANYTHING but a shove out the door of the US.They are a Parasite that leeches every ounce of lifeblood from it's host&when it's all gone they move on leaving the Host dead.Eventually they will turn every economy into 3rd World&worse,if not stopped&then there will be nothing left.One can only hope they leave this Country&allow those with finances&some sense of Ethics to take their place as job creators.I wish you the best of luck in your endeavors,never give up.I'm already to the point of having my mom&me bunk in the same House as neither one of us can afford otherwise.Social Security is already a joke,as there's NOTHING Secure about it!I hope you fare better than me,I was in Engineering.So much for that Math&Science huh?

      December 21, 2011 at 10:00 pm | Report abuse |
  2. Jerseygirl

    Two months is RIDICULOUS
    Congress isn,t doing their job if they pass tax relief for only 60 days at a time
    Agree that tax relief should be one year NOT only two months that the democrats want
    I want the one year from republicans

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

      The Repubs don't want the year, either, unless they can wring some major concessions on unrelated issues from the Democrats. It's a hostage deal, or, like one Republican said today, "a high-stakes poker game." As many reacted, it's NOT a game, and anyone in office who treats it so should step out.

      December 21, 2011 at 5:00 pm | Report abuse |
    • HMM

      Girl, the president wanted one year extension payroll tax cut, so did the democrats. So the republican squabbled about how to pay for it and started attaching other stuff to the bill. So the democrats had to comprise for two month (before it expires) so it can pass. So its the republican who don't want the 1 year or the 2 months. Them saying we want 1 year instead is just political grandstanding. If they had their way, they would rather gives tax break to the millionaires and non for the middle class at all. Because the $40 is a socialist agenda of handouts and not a tax break because it was Obama who proposed it.
      II am sick and tired of the republicans playing games. It's in their interest to make the president/democrats look bad and score political point rather than look at the interest of its people or country.
      Mostly I blame the citizen of this country think governing is spitting "slogans" of some commercial to sell a product rather than investigating the facts to make decisions.

      December 21, 2011 at 5:10 pm | Report abuse |
  3. bob

    AHHHHHH!!! MY MONTHLY ALCOHOL BUDGET!!! NOOOOO!!!

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

      Change that to chocolate milk, Bobby. And don't forget ice cream has calcium too.

      December 21, 2011 at 5:00 pm | Report abuse |
    • I love beer I really really do

      Monthly!?! More like weekly!!! What kind of backwords, godless society will this be if we don't have $40 every two weeks to spend on beer my brother, what!?!

      December 21, 2011 at 5:05 pm | Report abuse |
  4. tr82567

    The author of this article missed a very big point. It's 2%, not $40. It's $40 if you are making 50K. If you are making 50K then you shouldn't be struggling to pay $50 for groceries. It sounds like most of the people in this article are making closer to 25K...or less. That means it's only a $20 savings per paycheck.

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

      I make about 50K and between student loans, mortgage for a house I can't sell and the cost of a child, I do find it difficult to still pay for everything and we do not have a lot of income for luxuries. While I am not struggling to make ends meet like I was when I was at half the pay, I would still want to save $40.

      December 21, 2011 at 4:54 pm | Report abuse |
    • jeremy

      excellent point. You can't make it a blanket amount for everyone.

      December 21, 2011 at 4:54 pm | Report abuse |
    • hawkechik

      Um, no. 50k per annum approximately. Of course that's gross, not net so that doesn't take into account insurance or tax withholdings. Net is $750 a week or thereabouts. Which sounds like a lot until you start paying mortgages, utilities, gas, insurance, property taxes, fire dues . . . . oh, and eating I s'pose. Here's something else, in this particular state (Alabama) we have to pay sales tax (a total of 9-10%) on food. I understand most states don't.

      December 21, 2011 at 5:00 pm | Report abuse |
    • hawkechik

      Oops, I'm sorry, didn't use a calculator. It's actually $686 weekly.

      December 21, 2011 at 5:03 pm | Report abuse |
  5. ClearAndPresentThinking

    This isn't about $ per paycheck, it's about sanity in Congress. So far, the GOP House seem to support insanity.

    December 21, 2011 at 4:49 pm | Report abuse |
    • DumbLiberals

      Because spending $1.5 trillion/year is sane? MATH IS HARD.

      December 21, 2011 at 4:53 pm | Report abuse |
    • Darko

      Because a 2 month "Social Security payment reduction holiday" is sane legislation? It's a pathetic attempt at political gamesmanship preceding an election year.

      Give a 2% income tax reduction for 3 years and you'd get 100% approval from the GOP and it wouldn't hurt Social Security solvency.

      December 21, 2011 at 4:59 pm | Report abuse |
  6. RyanZ

    $40 means different things to different people. I graduated college 2 years ago with a heavy load of debt from student loans, along with the other costs of living. I work my life away to pay this debt off, along with rent, a car, and countless other bills. I have never missed a bill to this point, but if the cost of living continues to rise (gas,food,utilities) at such a fast rate while earnings do not, cutting my paycheck down could be the straw that breaks my back. There are many others in my shoes

    December 21, 2011 at 4:50 pm | Report abuse |
    • lroy

      People-yes, you can have luxuries and still be poor. I am reminded that my parents grew up during the Great Depression and they STILL went to the movies (okay it was only 10 cents back then and you got a movie, a cartoon, newsreel, and more, all day long at no additional charge).

      December 21, 2011 at 5:03 pm | Report abuse |
    • Heh

      I'm headed straight for that... I went back to school in my 40s to try to get a better job. Now that I'm near the end of my degree, I'm told I'll owe about $500/mo to repay the loans. I'm already looking, though I'm not finished with school yet, in the hopes of getting a toehold with some company that might move me up the ladder after the degree is complete. But if I don't manage to get a job? I'll lose a lot, despite my best efforts to get out there and do what needs doing, and despite my constant economizing. There are a LOT of people who live at this uncertain point.

      December 21, 2011 at 5:04 pm | Report abuse |
  7. DumbLiberals

    Congress can't even roll it out in 60 days, what a deplorable argument! And all you liberals are drinking the $40 cool aid! Sure would like that half-billion back from Solyndra he gambled on. 500 billion divided by 300 million (U.S. population) = 1, 666.66667 per individual. MATH IS HARD.

    December 21, 2011 at 4:51 pm | Report abuse |
    • RyanZ

      that half billion is nothing compared to what we are spending on bombs and bullets thanks to the war that you know who started. Clue: It was not a liberal.

      December 21, 2011 at 4:54 pm | Report abuse |
    • uk

      The Solyndra loan was $500million NOT $500Billion. Thus, $500million divided by 313million [US population] = $1.59c for each US citizen. I guess math is hard for you.

      December 21, 2011 at 9:06 pm | Report abuse |
  8. tiredofgames

    Unreal! People with money making decisions that impact people with no money! Don’t forget to vote! Stop letting those with little to no understanding of what it is to walk in your shoes, make policies that will only affect you and never them. Again, don’t forget to vote. These so called “people’s representatives” are playing dangerous games with the people they represent. Vote!

    December 21, 2011 at 4:53 pm | Report abuse |
    • njreader

      Thank you. That is world history in a nutshell: people with money deciding how people without money will live, or die.

      December 21, 2011 at 5:39 pm | Report abuse |
  9. Daniel

    I make $43,000.00/yr. Please do not extend this tax cut. I know it seems impossible to tax the rich, but maybe the middle class need to lead the way. Somehow, we were making it before this tax cut and will continue to do so.

    December 21, 2011 at 4:55 pm | Report abuse |
    • hawkechik

      We were making it before this tax cut because we were getting oodles of overtime and an annual cost of living raise. We're not getting that anymore.

      December 21, 2011 at 5:09 pm | Report abuse |
  10. tiredofgames

    It's extremely easy to make cuts to programs that directly impact low income communities and people of color when you are neither a person of low income or a person of color. Once again people...please vote. This madness has got to stop!

    December 21, 2011 at 4:56 pm | Report abuse |
  11. MarkE

    I am opposed to getting the extra $40 every two weeks. The tax cut will be funded by money that was supposed to go to the Social security Fund. I would rather give up $19 a week now in the hopes that my Social Security will be there when I retire. Obama is just throwing pennies fron his limo while burning dollars in Congress... Stop the insanity! Balance the budget. Don't give us $40 gimmicks; give us permanent solutions. We're not that stupid. At least I didn't think we were.....

    December 21, 2011 at 4:57 pm | Report abuse |
    • lroy

      That's fine if you're going to collect SS pretty soon. I myself am going to try for SSD, but failing that I have to wait at least 11 more years before I can tap into it.

      December 21, 2011 at 5:05 pm | Report abuse |
  12. phil-N-NE

    I can't believe how ignorant people are being about this so called tax break. It is the same as the government telling you that you can put $40 less in your 401K each paycheck. At the end it’s still your money. You either get a higher SS benefit if the tax break expires or you get a lower SS benefit if you get the reduced tax. The same people that are crying about paying the extra $40 now will be crying when they can't afford to retire.

    December 21, 2011 at 4:58 pm | Report abuse |
  13. Gravitate

    The govt disgusts me.... They don't want to help the American people...not with choices of "Do you want it with or without lubricant" meaning they are going to F*** you eitherway...

    December 21, 2011 at 4:59 pm | Report abuse |
  14. jeremy

    I strongly dislike the media’s general approach to this payroll tax issue - WORKERS TO FACE HIGHER TAXES!!!!! Yes, taxes would be higher than in 2011, but 2011 was the aberration, not the standard to measure by. This was planned as a TEMPORARY tax holiday. Almost every story I’ve read about this only says that it's a tax increase if an extension doesn’t happen. Actually, we would be returning to the same tax rate we paid for the previous 20 years (with little complaint) – both in the boom years of the 1990s and the lean years post 9-11. The real danger? After years of allegedly caring about deficits and social security sustainability, this temporary tax holiday seeks a short-term benefit by cutting funding to social security without a corresponding cut in benefits … thereby further weakening the long-term future of social security and increasing the amount of borrowing our already debt-ridden government has to do. Tell me how that approach has worked in other parts of the world the past two years.

    December 21, 2011 at 5:00 pm | Report abuse |
  15. STUART

    It seems that some people fail to realize that all of the political maneuvering with regards to, as cnn describees it, $40 is not the least of what is needed to truly fix the debt situation. 2% or 20%, if we spent the money we will have to pay either in money or in reduction in services (many of which people like to falsely construe as rights). Typical of how americans think we want to spend the money on credit and then when it comes to paying up we like to find every excuse in the book why it shouldn't happen....Washington is just using this, and have been, to continue to manipulate us through promises and then overspending in order to stay in office and reap the true rewards (think conggressional insider trading). whine about 2% or pay the debt and get rid of the leaches!!

    December 21, 2011 at 5:01 pm | Report abuse |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65