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. Fred

    I don't mind belt tightening, but when was the last time Congress or the President took a pay cut?

    I would be ok with the tax hike if Congress and the President take an equal pay cut percentage wise.

    Not sure what the average household in the US makes, but lets say its $40,000 per year and the average family is losing $1,000 per year. I believe a Congress person makes $180,000 per year so that would translate to a $4,500 pay cut, and the president makes about $450,000 per year so that's a $11,250 pay cut. That would save the US government about $3 million per year with 483 Congress people, 100 Senators, and a President and Vice President.

    No, not big money when they shell out billions and trillions, but its about shared sacrifice.

    Don't ask people to do something you're not willing to do yourself. Especially when its easier for you to do.

    Vote for an independent write-in candidate this election to show your disgust with both parties. Don't vote republican or democrat. We need to send a message, again.

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

      your nuts

      December 21, 2011 at 8:24 pm | Report abuse |
    • Clifford Thompson

      No this makes sense. Thanks

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

    $1000 a year transferred from those who earn to those who dont? Why?

    December 21, 2011 at 8:12 pm | Report abuse |
  3. john

    Widowed father with 12 year old son

    $2000 monthly income after withholding

    average monthly expenses
    -700 rent
    -200 average monthly utilities/fees
    -400 food
    – 65 car insurance
    -100 gas
    – 50 clothes
    – 35 phone
    – 400 medical insurance

    That leaves $50 a month to live it up.
    Unless the kid wants to partipate in a school activity.
    That leaves $0 a month to live it up.

    Cable TV, Xbox, toys, eating out????? Huh? What are those.
    And there are a lot of people worse off than this.

    December 21, 2011 at 8:19 pm | Report abuse |
  4. Jim

    $40 won't buy the average lawmakers lunch.

    December 21, 2011 at 8:19 pm | Report abuse |
    • trex

      ....$40 will be 40 MORE reasons every week, to vote Obama................

      December 21, 2011 at 8:37 pm | Report abuse |
  5. Jimh77

    irst off, The media is tooting this as a $40.00 / paycheck, I don't know where they are getting this figure from, It is WRONG. 2nd, You are shorting your SS monies, and if you look at your pay stub, you will see you are PAYING MORE IN YOUR FEDERAL TAXES! Take a look at last years pay stubs if you don't believe me. This tax break is NOT a tax break for you or me. It is just a way for the Governmant to SHORT FUND SS, MEDICARE and have more monies devoted to them in higher Federal Taxes. It is a Freakin SCAM. Don't buy into it! It is ALL BS!

    December 21, 2011 at 8:19 pm | Report abuse |
  6. Dumbbo

    The democrat plan is to provide you with $160 of tax reduction. Boehner's plan is to provide you with $1000 of tax reduction. Which do you think would benefit you more?

    December 21, 2011 at 8:20 pm | Report abuse |
    • JDub

      Suiting name. What facts are you referencing?

      December 21, 2011 at 8:29 pm | Report abuse |
  7. totalperspectives

    I say lets vote another round of republicans in the next election.
    so that the average american can pay more
    and the rich can maintain their loot so they can hire more of us idiots.

    December 21, 2011 at 8:22 pm | Report abuse |
  8. Brett

    I am not sure of your mathematics. How much will taxes really increase? Give me a percentage or at least some ranges. Example, $40k, $80k, $120k, $160k.........

    All government employees, especially congress, judicial and executive branches need to be included. They also need to be in the health care and social security programs with the rest of the citizens. Maybe then things will begin to happen in a positive direction.

    December 21, 2011 at 8:22 pm | Report abuse |
  9. goobes

    Considering you don't do anything, can I have your job? I would love to not have to do anything except copy other peoples thoughts and get paid for it. Give me the application. I love free money. I'll even do it for half the pay you get.

    December 21, 2011 at 8:25 pm | Report abuse |
  10. Brittany

    Why would they take what we dont have? This is a recession. HELLO! This will only make the economy worse. However, if you make $125,000 or more, what is a $40 dollar deduction? The low class and middle class are already suffering. Why dont they take from who's not suffering? Who will be the consumers if the consumers are broke. If your living pay check to pay check I hate to see how your going to get to work, pay bills, buy your kids clothes.

    December 21, 2011 at 8:26 pm | Report abuse |
  11. rachel

    instead of asking what $40 can buy (obviously many things), think about where can u save $40 instead.... hmm, i could cancel my basic internet service and live in oblivion. i could not buy fresh produce & greens ($10/week), and simply live on canned soup & cheap calorie laden process food. i could skip the car and spend 3.5 hours commuting instead of 50min roundtrip.

    December 21, 2011 at 8:30 pm | Report abuse |
  12. RUFFNUTT (pit bull trainer)

    40$ would be a big bag of weed... and a extra value meal and 10$ gas..

    December 21, 2011 at 8:30 pm | Report abuse |
  13. Brittany


    December 21, 2011 at 8:35 pm | Report abuse |
  14. Brittany


    December 21, 2011 at 8:36 pm | Report abuse |
  15. Brenda

    Why do Democrats believe EVERY new program or tax cut has to be paid for by RAISING TAXES either on "the rich" or people who "buy homes"....this is simply wealth transfer to the poor. How about the Democrats try CUTTING UNNECESSARY SPENDING for once... my God, these people just want to spend and tax and put fees on everyone. how about findings some WASTE in the gov't and stopping that for a change. DEMOCRATS ARE PIGS AT THE GOV"T TROUGH. Nothing less.

    December 21, 2011 at 8:37 pm | Report abuse |
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