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. CmonNow11

    Sorry to be the one to break the news to you, lady, but your kid doesnt have ADHD – its an invented "condition" to sell drugs. Try stopping the drugs, dont park her in front of the tv for hours each day, and give her a little human interaction/attention and see what happens.

    December 21, 2011 at 7:52 pm | Report abuse |
  2. Dave

    the 40$ would go right in my gas tank for my $$$$$ commute. The GOP should LOVE that. I'm handing it right to their buddies.

    December 21, 2011 at 7:52 pm | Report abuse |
    • John h.

      Then ride a bicycle to work. No one is saying you HAVE to drive.

      December 21, 2011 at 8:13 pm | Report abuse |
    • Jereme

      John Try living in the midwest this time of year say ride your bike to work. You are basically saying as that they are irrelevant people that would be better off freezing to death.

      December 21, 2011 at 8:34 pm | Report abuse |
  3. Stevel

    A year ago I thought this was stupid, I would rather have it go to Social Security. Of course a year ago I was making 80k a year. In April I got laid off after 19 years on the job, a job that I never got written up, always got great reviews and raises that I never asked for. It took me 6 weeks to get a job, unfortunately that job paid only $15 an hour, but I still took it even though it paid the same as unemployment. I have a wife and a kid and the $20 a week makes a difference to us.
    oh yeah I am a Democrat ..... I

    December 21, 2011 at 7:54 pm | Report abuse |
  4. Fred

    In 2011 I gave $100 per month to an employee sponsored charity, local united way and local food bank.
    For 2012 I cut it to $50 in anticipation of higher federal and state (that actually already happened) taxes.

    December 21, 2011 at 7:55 pm | Report abuse |
  5. Really

    I can no longer afford my DIME bag and will now have to sacarfice to a NICKLE bag......bummer.....

    December 21, 2011 at 7:55 pm | Report abuse |
  6. senateVsHouse

    its nothing but politics highlighting $40 .

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

    For me, it will be an extra $150 a month ($75 per paycheck). This amount will not break us. We more than doubled our income since July of this year, but are still living the same lifestyle as before (plus a $620 and an upgrade to smart phone technology for my husband's work). We still don't and will never have cable and we live very modestly. So we are some of the lucky ones. I feel for the people who are in a tough position because of this. With expenses increasing all over the place and salaries freezing or dropping, it isn't easy!

    December 21, 2011 at 7:57 pm | Report abuse |
    • Laura

      That is supposed to say $620 monthly student loan payment.

      December 21, 2011 at 7:59 pm | Report abuse |
  8. carol woodruff

    40$$$ 2 life maintaining prescriptions a month yes i need 40$ just making it on amy paycheck

    December 21, 2011 at 7:58 pm | Report abuse |
  9. Diacam

    I've been reading some comments and I think that when people say don't pay your cable, don't pay your cell phones, don't pay your internet is the akin to "Let them eat cake". I do believe in self reliance but seriously people. Cell phones have replaced the old analog phones. The internet or streaming is so common place now that even kids in school are using the tablets to do their homework and teachers have students research the internet for their homework. We don't have free tv anymore since the FCC had everyone change over to digital. Gone are the days when you could watch a black and white tv with wire hanger antennas. Even the poor have the right to some happiness and equality in terms of being on the same technological page as everyone else.

    December 21, 2011 at 7:58 pm | Report abuse |
    • JDub

      I agree Diacam, but we're not talking about the poor in an archaic, ancient French monarchy..we are talking about the hard working people in a democratic republic with elected officials and a bill of rights supporting them. WE are saying to ourselves...let us eat cake!!!!

      December 21, 2011 at 8:13 pm | Report abuse |
  10. carol

    And when we try to tighten any more...they say they have to raise prices on things like utilities as we are not using enough!!! This Is about way more than just 40 bucks!!!It has a big domino effect.And there are SO many that already have cut beyond being able to even barely survive,which then costs more also.Cut the ridiculous spending on th politicians behalf's..things like 2 grand for a faucet in the MUCH of our tax dollars wasted that we never have a say on or get to see that even happens....THAT adds up big time.This is about much more at the worst time possible! That money IS the food or the gas or the heat.And when we cut more usage,we will get stung with even higher prices because we cut back.Where Im at ...not using electric has set what cost for more usage was 70 a month...1/2 that usage is now 200 a month....and when you are going to sleep at dusk and up to not use anything light wise not have anything plugged in and your getting prices like that...we cant afford for them to again say..we have to raise the price because usage has been cut back again!! This is a tumbling dominoing effect that has to stop!!!Plus all the rest of the and work...chekc what you spend and how much else goes to other types of taxes for a years time...It will blow your mind what you actually have gotten from your wages and what has gone to state and federal taxes in SO many forms!!!!

    December 21, 2011 at 8:00 pm | Report abuse |
  11. LiberalNN

    Biased much CNN? You're a disgrace to journalism. Just as bad as FOX.

    December 21, 2011 at 8:01 pm | Report abuse |
  12. ObamaMedia

    So where was CNN when the Bush tax cuts were about to be revoked???? An even bigger loss of wages......

    December 21, 2011 at 8:02 pm | Report abuse |
  13. Anony

    Instead of debating whether or not this tax cut should be extended or not (it should), how about debating how much money politicians should cut from their paychecks, how much health care should be cut from their jobs, and how retirement should get cut from politicians in general. Most politicians seems quick to cut spending on those that don't affect them, but will block every cut to their own salaries, health care and retirement. Until THAT changes, I don't see things getting any better.

    December 21, 2011 at 8:08 pm | Report abuse |
  14. JDub

    $40 dollar per check / $80 per month / $960 a year is a LOT of money, especially in the time of a weak economy. Many I know struggle to make it month-to-month. $80 is an electric bill, a gas bill, an internet/phone bill that is already hard to come by. Beyond the direct impact on the families that are already struggling to pay bills without this extra burden, this is money that won't be returned to the economy. Most people affected are those that spend their entire paycheck. They will no longer have the money to spend. Businesses will suffer...further Jobs will be cut...further. It makes me sick. This is the same congress that refused to let the experimental tax cuts to the uber-rich expire, even though it was proven that these cuts did nothing to create jobs. The super rich will spend the same amount of money they did last year. The majority will have less to spend. Please...KNOW that your Representative and Senator are owned by corporate money. KNOW that they are not answerable to you. Whether Democrat or Republican...ACT to protect our rights. EDUCATE yourself. SHOP local. PROTEST this increase. REJECT big banks and business whenever possible. LOVE your country and your neighbors. FIND a local business that is failing and shop there.

    December 21, 2011 at 8:08 pm | Report abuse |
  15. Joel

    It'll just go in the bank for me. I'm not quite in the 1%. But I'm up there. Don't need the money. Wouldn't notice if it went away. I do well in a bad economy, but even better in a good economy. How about you raise my taxes, cut taxes for the middle class and working poor? It would be better overall for them, and even for me.

    Trickle down didn't work. Let's try trickle up.

    December 21, 2011 at 8:09 pm | Report abuse |
    • JDub

      Thanks, Joel.

      December 21, 2011 at 8:18 pm | Report abuse |
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