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. Tom H.

    Keep in mind, the reduction in taxes has to be paid back to Social Security. So, as usual the government will borrow the money. Guess what? We'll have to pay back the entire amount plust interest in the near future.

    December 21, 2011 at 7:30 pm | Report abuse |
  2. Joe

    Most of the people that $40 a month matters to end up spending more than that on cigarettes and beer. No, that's not true for all . . . But its true for most that I've seen.

    December 21, 2011 at 7:32 pm | Report abuse |
    • George

      Or Lotto tickets

      December 21, 2011 at 7:42 pm | Report abuse |
    • Ebenezer

      Are there no workhouses? Are there no prisons? Perhaps they should die and decrease the surplus population! Gingrich 2012!

      December 21, 2011 at 7:42 pm | Report abuse |
    • TJ

      For most you've seen? Can you give some concrete statistics? No, didn't think so, so STFU.

      December 21, 2011 at 7:59 pm | Report abuse |
    • dan

      I think they said 40.00 per pay check that is a lot more then 40.00 a month that means 160.00 a month for most. As for what they do with that 40.00 or 160.00 a month has nothing to do with it. If Washington wanted to save money they could do away with all the extra cost. Take something simple like toilet paper. We put it on our shopping list and buy it. Our government sends memos to order it then you know they pay someone to deliver it. We know it has to be screened to make sure it is safe. Then we pay the man to take delivery and finally it gets to the janitor that puts it on the roller.
      Now is that roll of toliet paper worth that 40.00 dollars or 160.00 dollars a month. There is more then one way that government could save money and that is by starting at the bottom and working there way up.
      Untill they do that they will overspend. Most Americans budget from the bottom up so should our government.

      December 21, 2011 at 8:30 pm | Report abuse |
  3. Jammaster

    Regardless of how you budget your money $40 per paycheck means a lot to most Americans, To those who feel that this does not impact them that much, good for you. But it's odd that these are the VERY SAME people who complained that Obama would raise taxes, now that he s fighting to keep them low for the middle class, then suddenly higher taxes "don't mean that much".

    IMHO it's the "We disagree with everything Obama sez" mentality. If Obama said that the economy was doing poorly, they would claim that it's not that bad. If he said too many Americans are out of work, they would say, we don't need job.

    December 21, 2011 at 7:33 pm | Report abuse |
  4. Not the one percent.

    I'm certainly not the one percent but am probably at the top of the 99. I most likely pay more in taxes than a number of folks earn per year. However, I am fackin finished with paying higher taxes. I already pay 33%, and I think it's enough. If you guys won't start paying the $40 they will find a way to make me pay $400. Pay your share, I am.

    December 21, 2011 at 7:35 pm | Report abuse |
    • Kathy60

      The middle class has been taxed to the max and we all pay our share. Most however, can't afford an investment portfolio.

      December 21, 2011 at 7:53 pm | Report abuse |
    • Jason

      You're one of the 30% of Americans who think they're in the top 10%, huh? When someone doesn't understand how tax brackets work, and what their actual tax rate vs. marginal tax rate is, chances are they're nowhere near the top of the 99%.

      December 21, 2011 at 8:28 pm | Report abuse |
  5. tm

    i bet the payroll tax cut creates more jobs than the continuing bush tax cuts !!

    December 21, 2011 at 7:36 pm | Report abuse |
  6. Sarah

    $40 a paycheck to me is everything... I spent $80 a month on cable/net. Or $80 a month on medicine. Or $80 is my cell phone. $80 a month is that much less food. $80 is 2 weeks of gas. I don't think the Speaker of the House worries about $80 a month. I appreciate his idea of making it 1 year, but the Senate and the House cant agree on much anymore. So, if 2 months is it, then that's $320 over 8 weeks. That is real money for 160,000,000 people ( except the 435 Congress members, 100 Senators and the White House.

    December 21, 2011 at 7:37 pm | Report abuse |
    • Dumbbo

      Your numbers are off. The amount is $4

      December 21, 2011 at 7:55 pm | Report abuse |
    • Dumbbo

      Your numbers are off. The amount is $40 every two weeks. That is $160 over two months.

      December 21, 2011 at 7:57 pm | Report abuse |
  7. Lego

    $40 shouldn't break anyone. Get rid of the extras in your life: excessive cellphones, All the extra cable channels, High speed internet, etc.. Before you sound off complain about how your life is about to end over $40.

    December 21, 2011 at 7:38 pm | Report abuse |
    • Kathy60

      And air conditioners, and refrigerators. I happen to use my Internet service for part-time freelance writing to make "extra" money to make ends meet and have basic cable. I don't own a cell phone. It always seems to be those who have that make remarks like this.

      December 21, 2011 at 7:56 pm | Report abuse |
    • ron stevens

      I am conflicted on that comment. On one hand I was once a young kid living out of the house for the first time and 40 bucks was a lot to me. But what I notice is that lately I see a lot of obese people on the news complaining about money. It would appear that if they stopped eating for a few months they would be overall healthier and less of a drain on the medical system when they undoubtedly need healthcare earlier. I know that sounds harsh but I think its time people wake the heck up. We are a super sized lazy country. Not all of course but a good amount of us are. I think the food bill should be tweaked a bit before the complaining starts. I just cant feel sorry for a overly large person on TV complaining. I am not out to dog people here I know some people have problems but omg.

      December 21, 2011 at 8:01 pm | Report abuse |
    • TJ

      Only frill we have is 40 bucks a month for internet...no landline, no cable, and basic cell service (no smartphones or anything). Sometimes there isn't anything else to cut.

      December 21, 2011 at 8:01 pm | Report abuse |
    • Jason

      This is MY money, not the government's, remember? I'll invest it, spend it, or blow it on whatever I want to. Whether you or anyone else thinks it's a large amount is irrelevant. I guess "get the government's hands out of my pocket" only applies to some people in our society.

      December 21, 2011 at 8:31 pm | Report abuse |
  8. bob

    Don't click a photo of yourself with your computer or smartphone and then tell me you are hard up for money. Make better choices with the money you do have. People who feed their kids mac and cheese and hot dogs rather than sever their internet connection? Find more sympathetic people next time you do this story.

    December 21, 2011 at 7:39 pm | Report abuse |
  9. Kelly

    "She said politicians are too focused on party lines and need to work together and stop hurting the middle class." That is the truth. Frankly I am absolutely disgusted with both parties. Time once again folks to throw the bums out.

    December 21, 2011 at 7:44 pm | Report abuse |
  10. Sagebrush Shorty

    How about cutting $40.00 a month from welfare checks and SNAP benefits. Why should working Americans always have to be the ones who suffer?

    December 21, 2011 at 7:45 pm | Report abuse |
  11. LA LADY

    $40 a check is alot for me. I usually spend that to buy my kids lunch meals at school, but with a cut I will not be able to afford it. They brown bag lunch 3 out of 4 days a week. We don't live with excess as some people are stating here and don't have a lot o give up. Besides even if I did not spend it on my kids lunches, gas is expensive and I could easliy use that to fill up my car just to drive to work and home every day.

    December 21, 2011 at 7:46 pm | Report abuse |
  12. welfare

    How about we abolish welfare!! or at a minimum, not increase amounts paid to welfare reciepients for having more children. I have met far to many single mothers with no jobs who just pop out Ba$tard children for the increase in free welfare monies.

    Finally, limit the amount of time a person can recieve welfare. No more cradle to grave, 2 years max. Then when you start working again 1% of your income goes to the welfare fund until you have paid back all your recieved.

    December 21, 2011 at 7:49 pm | Report abuse |
  13. MMOMM

    We are the 99% that's gonna take it up the a** AGAIN!

    December 21, 2011 at 7:50 pm | Report abuse |
  14. Retired NCO

    $40/ week = (4) Days of Gas for my commute to work. Taking an additional 2% from my Paycheck WILL be devastating to my family.

    1% (and Tea Partiers), STOP being greedy and Pay your share !!

    The 70% of us that are NOT extremist Right or Left don't share your views!

    December 21, 2011 at 7:50 pm | Report abuse |
    • Dumbbo

      Keep in mind that the 2% is a portion of the taxes that the liberals forced on you to support the Ponzi scheme called Social Security. Any reduction in this tax will result in a more rapid insolvency of Social Security. Thanks for your concern for the senior citizens.

      December 21, 2011 at 8:16 pm | Report abuse |
  15. Irked

    For the insensitive jerk who said if $40 was that much money to you then yank the cable. What world are you living in? Forty dollars means that much to us and we don't have cable! The lady who said they lived on mac and cheese and hot dogs-I have been there and I am there now. Ramen noodles are my friend. I can't afford to eat healthy. It sucks but it is the truth. Stop playing God and realize that the working man needs every penny we can get! Boehner-walk a mile in my shoes before you take away the small amount of resources I have to feed my family!

    December 21, 2011 at 7:51 pm | Report abuse |
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