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. Lilo

    If people are so needy of this $40 now, I have a great fear of the future. Things are about to get a whole lot worse for us Americans. I suggest people start preparing for the worse case senerio now, because in the future our broke country/government won't be able to give tax breaks. All our tax revenues will be needed to pay our debtors.

    December 21, 2011 at 9:53 pm | Report abuse |
    • Tony Baloney

      I agree that $40 is nothing; a couple of beers and hamburgers and one is there, still I'D rather have it then give it to the n i ggers in D.c.

      December 21, 2011 at 10:24 pm | Report abuse |
    • George1234

      Nice to see that you are so wealthy that you can afford to give up $1,000 a year to the Government. Why don't you send the House Republicans a note and tell them that it is okay to mail the funds to the Karzai Government or Pakistan as well because you are feeling so generous.

      December 21, 2011 at 10:47 pm | Report abuse |
  2. Wally

    How many people spend more than that on beer and cigarettes every month? I am sure those could easily be cut. Don't complain when you have no social security to retire on. If 40 is breaking you I am sure your not saving for retirement.

    December 21, 2011 at 9:54 pm | Report abuse |
  3. Scott

    $40 bucks is nothing.

    Quit having kids then becoming single parents. Learn how to budget, have some commitment to your job, get an education. Create some savings.

    The only people I feel sorry for are those with health issues that affect their ability go work.

    Get some self respect, create a life plan and follow it.

    In case you are wondering both my wife and myself have jobs that are obtainable by anyone with half a brain. You need to work hard, save and not keep spending money on things that are not important.

    December 21, 2011 at 10:01 pm | Report abuse |
    • balls

      i hope you dont get injured at work, or have anything bad happen to you.

      December 21, 2011 at 10:14 pm | Report abuse |
  4. tif31

    Well Scott, I'm glad to see you admit you have half a brain. Your wife might not like that notion though.

    December 21, 2011 at 10:05 pm | Report abuse |
  5. wineyamericans

    This is a tax used to fund social security. Which is more important in the long run then any of these posted comments. Americans have lost the ability to think long term. Sadly social security will be needed most by these same people who refuse to fund it.

    December 21, 2011 at 10:08 pm | Report abuse |
    • Lilo

      exactly, but they've been looting these funds for years to pay for their pet projects they (congress) wanted to keep off the books. Is it even going to be there? Is funny (not really) that I am putting money into my retirement fund like a mad man, but logically I know that too will be looted by the time I retire. Our choices keep getting slimmer and slimmer.

      December 21, 2011 at 10:11 pm | Report abuse |
    • Accountant

      If that's what you believe then the Tea Party Kool Aid must taste pretty good. Social Security is doomed for anyone under the age of 40.

      December 21, 2011 at 10:11 pm | Report abuse |
    • Aaron

      Well Social Security wont me much to me if its funded if I cant get through today and tomorrow

      December 21, 2011 at 11:08 pm | Report abuse |
  6. Accountant

    Nowhere in this article does this say that the $1000 yr/$40 check calculates to earning $50000 per year. While the issue is relevant, I'm pretty sure the ones quoted here are not earning that much. They would be affected by less than $40/check. Regardless – Congress is stupid and selfish.

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

    Excuse Me Scott. and how much do you make to say 40 dollars a paycheck is nothing. Dont worry ill wait and a college degree now days dont mean sqat. There are plenty of people who are 10,000+ in the hole trying to pay for a college education debt and cant find a good job. Its nice to hear that some well a few have not been affected by the economy.

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

    Selena Campbell seems to count that "one $40" in multiple spots - shoes, groceries, medications, rent or car payments AND ealthcare..

    CNN I guess doesn't check their stories well...

    December 21, 2011 at 10:16 pm | Report abuse |
  9. MichiganMoon

    If you make minimum wage you will only save $5.80 per week. The majority of the $$$ will go to the top 10%. Social Security will lose $10 Billion to fund this. Don't the poor rely on Social Security more? Seems like Obama's plan hurts the poor – but hey...short-sighted instant gratification to win votes!

    December 21, 2011 at 10:22 pm | Report abuse |
  10. Brittany

    I would really like to know why are some commenting on the changes (budgeting) low and middle class people would have to make to make ends meets. WILL THE RICH HAVE TO BUDGET

    December 21, 2011 at 10:23 pm | Report abuse |
  11. MichiganMoon

    The top 15% will collect MORE THAN TWICE as much money as the bottom 85%...this Obama plan seems to favor the well-to-do while hurting Social Security.

    December 21, 2011 at 10:24 pm | Report abuse |
  12. Warren

    Not a Darn thing, $40 doesn't even fill my tank.

    December 21, 2011 at 10:37 pm | Report abuse |
  13. Jim

    An individual making $50,000/yr (or a working couple making $100,000/yr) can't live pretty darn well in most parts of the country? Really??? What are these same folks going to do when they get hit with the bill for Obamacare? Further, no one considered that what they're "saving" each week by not paying into SS will result in a commensurate reduction in their SS benefit. If reducing one's contribution by $40 per paycheck is good (along with the commesurate loss of benefits), wouldn't doing away with SS entirely and have an extra $248 in each paycheck be even better? The author of this article should ask the same people how $248 extra in each paycheck would affect their lives. Maybe the time is right to put SS on a national eferendum and get rid of it once and for all.

    December 21, 2011 at 10:42 pm | Report abuse |
  14. Jim8

    It's $160 for me as I get paid by the month. Add the $150 my medical co pay is going up, that's $300 right off the top.

    The problem is that Republicans have told us exactly how important this is to them, it's a couple of happy meals to Michelle Bachmann, and it's a dinner at Appleby's with the grandchildren to someone else.

    They are out of touch, but they keep getting elected by someone.

    December 21, 2011 at 10:46 pm | Report abuse |
  15. My2cents

    This $40 allows me to buy american made products and shop locally which both help with creating jobs in America. Taking this $40 away will make is harder for me to do this. Alteast I am making an effort to create jobs in the U.S. and I have little faith that if this money went back to the governmen that it would be used in an effective way and lead to any job creation in the U.S.

    December 21, 2011 at 10:47 pm | Report abuse |
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