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.


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.



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.









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. What?

    It is not $40 for everyone. People need to take a chill pill. Oh wait, you can't afford them with $20 less a week.

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

    Wake up folks. It's nothing more than theatrics. The intent is to reduce contributions to Social Security so it is underfunded. For you younger and even middle-age folks you'll have to rely on Wall St. That is the intent. Your future contributions will eventually be going to Wall St. Good like with that.

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

      Exactly, willko. Remember, that $40 in 'savings' is actually a $80 reduction in OASDI revenue because both the employee and employer contributions are cut equally.

      If you are 54 or younger, then supporting the Payroll 'tax' cut is supporting a policy that will leave you without Social Security when you retire.

      Both the Democrats and Republicans have decided to phase out OASDI over 10 years. After that, there will no longer be contributions into OASDI and anybody retiring after that point will not get Social Security benefits.

      December 21, 2011 at 5:15 pm | Report abuse |
  3. Mr President

    Remember it is Congress, not me. I'm on vacation.

    December 21, 2011 at 5:04 pm | Report abuse |
    • Heh

      Funny, I saw him step into the press conference this morning. Seems to be on-site and in-office to me.

      December 21, 2011 at 5:08 pm | Report abuse |
  4. Ron Paul 2012!

    Every single dollar that the parasite US Federal Government takes from me is one more case of theft by threat of violence and jail.

    END THE FED so we can ABOLISH THE IRS!!!!

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

    Liberals I'm want social program and higher taxes to pay for everyone who want handouts. Yet now you want this "tax" back in your pocket? You can't have both....either pay the tax and receive government assistance, or receive the tax cut, survive on your own and make your own success in life. It's really not that hard to comprehend.

    December 21, 2011 at 5:06 pm | Report abuse |
    • Niku

      Joe, recall that the Bush tax cut was unfunded.... Agree with you, but this is the kettle calling the pot black. If you want to cut taxes, step up and cut expenditures BEFORE you cut taxes and force us all to pay interest on a proverbial “tax cut”.

      December 21, 2011 at 5:16 pm | Report abuse |
    • skarphace

      Joe, you are right. You are confused. This is not a cut in FIT, it is a cut in OASDI. You do not file for OASDI taxes and therefore get no taxes back at the end of the year due to OASDI. In addition, if you do not have a job, your Social Security benefits are not increasing as a result of you not paying into OASDI.

      Therefore, OASDI only benefits the working class and cutting it only hurts the working class.

      December 21, 2011 at 5:19 pm | Report abuse |
    • Joe

      You cut taxes, then cut spending. Liberals want a large government, but now obviously based on these comments do not want to pay the taxes. It's not sustainable. I won't see SS in my lifetime due to it being drained by non-contributors. Good thing I have a plan in place to take care of myself and not rely on government handouts. I wish America would wake-up and motivate themselves to do the same.

      December 21, 2011 at 5:22 pm | Report abuse |
    • Joe

      Btw scarface, I'm a CPA who was worked numerous years in the Big 4 in the tax world. I don't think I can validate your comments as you are missing the big picture here. There are many more ramifications on this "tax" other than your technicality. Look into the SS, FIT, and OASDI plan more carefully....the GAO has the ability to reallocate and create surplus/deficits. We have alot of issues.

      December 21, 2011 at 5:26 pm | Report abuse |
  6. lroy

    Finally, let's worry about us getting the unemployment (those of us who are job searching) first. Even if it's only four hours a day, first thing in the morning and get it done and over with you're still ahead of the game.

    December 21, 2011 at 5:07 pm | Report abuse |
  7. Spencer

    I'm sure the republicans won't mind paying us that extra money out of their pockets. Maybe then they could understand just how much money they are screwing with.

    December 21, 2011 at 5:08 pm | Report abuse |
    • Joe

      Always looking for a handout, I see. GIMME GIMME GIMME.

      December 21, 2011 at 5:16 pm | Report abuse |
  8. DJ

    40 per paycheck? I just finally got a job I start tomorrow after MORE than 1 year of looking. I wasn't slacking off and not trying I was really busting my butt looking for work I have to drive 70 miles a day (round trip combined) and that 40 dollars per check means I have to save up for 2 to 4 more weeks longer to get my own car because it will cost me at the least 45 dollars a week just in gas to get back and forth. Please congress pass the tax break for the little guys who need every penny they earn just to make it week to week. We need this, I need this.

    December 21, 2011 at 5:08 pm | Report abuse |
  9. rikers

    This whole scenario is ridiculous. Okay take out the $40.00 dollars and give it back to me. So what am I going to do when social security is bankrupt? People are so stupid.

    December 21, 2011 at 5:08 pm | Report abuse |
  10. hawk

    $40 isn't a lot, but when our government is so wasteful, I'm not in any hurry to give them any more

    December 21, 2011 at 5:09 pm | Report abuse |
  11. Huntergrb

    term limits.

    December 21, 2011 at 5:10 pm | Report abuse |
  12. Niku

    It's only $40 now, but wait until we pay interest on it for several decades. It’s time to start paying our way, the US version of Greek austerity is rapidly approaching if we keep insisting on not funding how the bums vote. Time to vote the bums out, but we can't keep the free handouts going.

    December 21, 2011 at 5:11 pm | Report abuse |
    • Tracy

      Social Security has ALWAYS been funded,it's paid for by all of us who contribute over our working years.The GOP just likes to tantalize it isn't funded to those who don't understand how it works.What IS unfunded is the Wars we have for a decade now.Haliburton&the rest need to start pony-ing up all the gross overruns they racked a fortune up on.War profiteers have made more money on the blood of our good innocent Soldiers than our Country could ever burn through in 10 lifetimes.It's time ALL those who profitted from others misery done on purpose pay their dues.If they don't,the Piper will eventually come calling&take it by force,NOT something I&many others want to see.But we are getting EVER so close.Marie Antoinette lost her head with this insane type of thinking,hopefully History does not repeat itself.But I see&hear the blood boiling everyday where I am,there are many Veterans alone who feel the same.Add in the Middle&Lower Class Rage&you have Revolution just a stones throw away.The GOP would be wise to heed the siren.I pray it doesn't come to that,but until these idiots on the Hill get it,I fear that is EXACTLY what is going to take place.

      December 21, 2011 at 10:21 pm | Report abuse |
  13. Theo

    $40 every paycheck is my weed money. If I don't get this money back then I won't be able to get high that week. If I can't get my smoke on then I will blame Boehner for being such a buzz kill.

    December 21, 2011 at 5:12 pm | Report abuse |
  14. Pete/Ark

    My wifes Insulin...oh, sorry,the GOP doesn't like affordable health care.

    December 21, 2011 at 5:12 pm | Report abuse |
  15. Huntergrb

    I wish all you jobless A.Holes would go out and start working for a living instead of writing about your troubles here on a CNN board. I'm sick and tired of paying your way.

    December 21, 2011 at 5:12 pm | Report abuse |
    • Pete/Ark

      ?????? are YOU at work?????? oh sorry 1%ers don't need to work

      December 21, 2011 at 5:42 pm | Report abuse |
    • Tracy

      WELL,it seems even Trolls need a bit of Sunlight.Go back under your rock Hunter,the worms miss you..

      December 21, 2011 at 10:23 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