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. drama llama

    Maybe if we can't afford $40 a paycheck now, we should put this off longer, as $50 a paycheck next year sounds better. In fact, can we all just stop paying our bills? It works for the government.
    Tighten your belts, you wusses.

    December 21, 2011 at 5:30 pm | Report abuse |
  2. skarphace

    You people who are supporting this Payroll 'tax' cut should ask yourselves one question: what is more important, $40 now or Social Security benefits when I retire?

    Because you cannot have both.

    December 21, 2011 at 5:30 pm | Report abuse |
    • Dust

      With the Gov't you take your money NOW, it will be gone later....

      December 21, 2011 at 5:38 pm | Report abuse |
    • KLB

      I'll take $40 now, Social Security won't be around when I retire

      December 21, 2011 at 5:50 pm | Report abuse |
  3. RUFFNUTT (pit bull trainer)

    THAT'S A BAG OF WEED... 🙁

    December 21, 2011 at 5:32 pm | Report abuse |
  4. Thatstoobad

    What? I make $100,000 a year and the government isn't giving me my money back? Ridiculous. I need that to go out for a fun partying night. I've got plenty of cash for everything else within my means. I guess going to college and being educated paid off in the long run. You deadbeats could learn something instead of Occupying a park.

    December 21, 2011 at 5:34 pm | Report abuse |
  5. Realistic

    nrog

    Do you seriously think those who are saying $40 every two weeks would be a big help are the ones sitting in a BMW next to you? I really don't think so. Also, your comment about student loans implying that the need for loans points to a failure of parents, is equally off base. College is a near necessity in today's world, but it is not affordable for most people without at least student loans (if not other forms of financial aid as well). I would estimate that 75% of the population does not earn enough, even with frugal spending, to save up to pay for even a modest college. You have to be realistic, and your extreme example is not very realistic.

    Yes, yes I really do. Several of my coworkers drive very nice cars, and they are the same guys I hear at the coffee pot complaining about how broke they are.

    December 21, 2011 at 5:35 pm | Report abuse |
  6. George

    Yet another article that blows the sob stories well out of proportion. While I have no doubt that money can (and will) affect a ton of people, I would guess that most of the people who are upset about it easily spend more than $40 a week on luxury items including cell phones, television, Netflix or one or more of many other (very) luxurious items.

    Secondly, in order to be losing $40/week, you need to be earing $2000/week - $52000 a year. If the people in this article will really lose $40 a week from this inaction, then only very bad financial decisions would have made them that hard up for the $40 a week. I make less than the $52000 but am still able to feed my family and pay the bills.

    December 21, 2011 at 5:35 pm | Report abuse |
  7. Army54

    Have folks forgot that this supposed tax break is coming from the Social Security taxes?? The SS system is already going broke and we keep robbing it to provide folks with a lousy $40 a paycheck. IF there is a SS program later we're going to miss that $40 that 160 million people aren't paying into it each payday.

    December 21, 2011 at 5:36 pm | Report abuse |
    • skarphace

      Don't forget that that $40 in savings per employee is actually a cut of $80 into OASDI revenue because both the employee and employer contributions are being cut.

      December 21, 2011 at 5:39 pm | Report abuse |
    • Coflyboy

      Do you REALLY think SS will still be around when you are old enough to collect?

      I'd rather take the $40 and invest it for retirement.

      December 21, 2011 at 5:45 pm | Report abuse |
  8. Beyond Fed Up

    Ahhhhh $40......sounds like so little to those out there who didn't hit bottom during the recession. I'm really glad there are so many of you out there who are clueless what happen to those of us who nearly lost everything. I'm so glad you are doing well. Now, how about showing some compassion beyond throwing a little money in the collection plate every Sunday while you pat yourself on the back. There are too many of us out here who are one paycheck, $40 away from disaster. I know it's hard for all the GOP supporters to realize, but the majority of us in the "REAL" world are doing the best we can and SURPRISE!!!!! doing it without welfare, food stamps, Medicaid, unemployment. Oh, and for all of those who are dropping the "luxury" suggestions- seriously!!!! Please try applying for a job these days without Internet access. Oh, I can use Internet at the library-NOT!!!!! My city recently cut that little bonus because it was costing too much. Cut the cell phone- I pay less for my pay as you go plan than I paid AT&T for a landline by the time you added on all the taxes and fees. Before you make these snarky comments, come away from the gaming system and walk out in the sun for awhile. You might be surprised what you learn.

    December 21, 2011 at 5:36 pm | Report abuse |
    • skarphace

      If you are making $52,000 per year and therefore saving $40 from this Payroll 'tax' cut, and you are $40 away from a disaster, then you need to do some serious budgeting, buddy.

      December 21, 2011 at 5:41 pm | Report abuse |
    • Beyond Fed Up

      Thanks for the raise Skarphace!!!!!! I WISH I WAS MAKING THIS MUCH EACH YEAR!!!!!!!! Then I wouldn't be following this story so closely because I would be at my favorite restaurant eating a good meal!!!!! No, I USED to make this much. Following a layoff, downsizing then a just outright kick in the butt out of a job, I'm scraping by a little above the poverty line. I really wish everyone would seek out the facts before just making smartass comments on something you know little about.

      December 21, 2011 at 6:01 pm | Report abuse |
    • skarphace

      I wasn't being smart @ss, Beyond. I was speaking math. $52000/26 = $2000. $200 * 2.1% = 42. Therefore, you would only save $42 a paycheck (biweekly) if you make around $52,000. Make sense now?

      December 21, 2011 at 6:11 pm | Report abuse |
    • skarphace

      *2,000 * 2.1% = 42* .. sorry for the typo.

      December 21, 2011 at 6:12 pm | Report abuse |
  9. Lee

    $40 is $40, no matter what the person may need if for. Don't let it go to our worthless government that doesn't deserve a dime until they pull their heads out of their *sses and actually run this country. They should all be fired for not performing. Everyone else in this country has to worry about losing their jobs if they don't perform to the level their employer expects, yet we let our government officials take holidays when they should be working and figuring out a solution to this problem. These people aren't worth the paper they wipe their *sses with.

    December 21, 2011 at 5:37 pm | Report abuse |
  10. Coflyboy

    Since $40 bucks is neither here nor there to our corrupt politician friends, what is the problem?

    December 21, 2011 at 5:37 pm | Report abuse |
  11. joey

    sandusky can buy a couple more cases of KY

    December 21, 2011 at 5:37 pm | Report abuse |
  12. Mark

    The ONLY way I am okay with the government taking ANOTHER $40 out of each paycheck is if mine and everybody else's $40 went straight against our dept. Maybe pouring it into some of our crumbling infrastructure would be fair too. Using it to repaint Wall Street is not an option!

    December 21, 2011 at 5:39 pm | Report abuse |
    • skarphace

      You were already paying it. This was supposed to be a temporary cut.

      December 21, 2011 at 5:43 pm | Report abuse |
  13. Ashlee

    I understand that $40 isn't that much to some but it is huge in my house. And no I don't have the extras like cable and stuff like that. I had to cut that out of my expenses years ago.
    As a single mother of two every little bit counts. $40 is gas in my car to take my children to school and myself to work. $40 also is less then my power and gas bill each! Groceries are incredibly over priced and I spend about $200 a month on that. And health care I spend around $300 monthly and still have to deal with co-pays and left over bills.
    Again, $40 may not be a big deal to some but for people like me Who live paycheck to paycheck it can mean an extra couple vegetables, gas in the car or a doctor bill. It means the world to us

    December 21, 2011 at 5:39 pm | Report abuse |
  14. Cory

    One question that should be asked and answered honestly is how much money the American families unnecessarily spend each month on items that they truly can live without. However on the flip side I have seen ignorant bickering and decisions that politicians could avoid if they grew up and starting working for the people and not for special interests.

    December 21, 2011 at 5:41 pm | Report abuse |
  15. mmars

    Hey CNN, just climb right on the Obama re-election committee! You are doing a great job so far!

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