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. Bob

    About 10 gallons of premium petrol for my Maserati Granturismo.
    Sincerely,
    The 1%

    December 21, 2011 at 10:49 pm | Report abuse |
  2. Nema

    I work for CVS pharmacy they keep make money and cut pur hours, with 30 hours a week for a full timer and now governments wanna take $40.00 aweek pay check how we can live?

    December 21, 2011 at 10:51 pm | Report abuse |
    • andy

      If the government is taking $40 a week from your paycheck because of the tax break expiring, then you are making $100,000 a year

      December 21, 2011 at 11:20 pm | Report abuse |
    • Old-skool conservative

      Well played, Andy.

      December 21, 2011 at 11:51 pm | Report abuse |
  3. Reality

    $40 is a big difference to me. I save for retirement, I am paying off my student loans, I pay rent, I live within my means and this extra $40 gives me the freedom to go out to lunch during the week or out to dinner on the weekends. $40 might not be a lot to some people but it makes a difference to me.

    December 21, 2011 at 10:54 pm | Report abuse |
    • Jim

      You're making $50K/year and can't make ends meet? If you don't fund your SS benefit, who is?

      December 21, 2011 at 11:43 pm | Report abuse |
  4. Sun

    $40 can buy the politicians and the govt officials donuts, bagels and cofee (remember the news on excessive $ spent by some govt dept to buy food @ overinflated price – somebody made a lot of money) Ask not what $40 a paycheck means to the wage earner but what it means to politicians!!!

    December 21, 2011 at 11:04 pm | Report abuse |
  5. Why

    With this extra 2% I gave more to charities this past year. I am happy that I can do that next it year it would be less if the $40 goes away. I have very little faith that the government would use this money well if it were in their hands. If the government cleans house, removes the dead weight, cut some of their own bills and learn how to live within thier means then I might start thinking this is a good idea.

    December 21, 2011 at 11:08 pm | Report abuse |
  6. Dixie Independent voter

    I hope some members of the the House of Reps are reading these comments. Most members of congress are well off and have lost all touch with what goes on in the real world. Living paycheck-to-paycheck is a common thing these days. The middle class working people have paid for two wars that congress and President Bush ok'd. When the middle class is in trouble the congress – especially the GOP could care less. They are already warming up to attack Iran. A pipeline that could be ok'd down the road, is more important to them now.

    December 21, 2011 at 11:15 pm | Report abuse |
    • Thats a lot

      You know they wont read it. They dont even know what they are voting for 99% of the time

      December 21, 2011 at 11:20 pm | Report abuse |
    • Jim

      Sorry, but the middle class pays very little Federal Income taxes that have paid for (and willl continue to pay for) Defense along with everything else the gov't spends money on. The top quintile pays virtually all Federal Income Taxes the gov't collects.

      December 21, 2011 at 11:31 pm | Report abuse |
    • Mike

      Jim, please step awah from the kool-aid bowl. I am not usre if you have been drinking the red kool-aid or the blue kool-aid, or even the worst kind, the purple kool-aid (a mixture of both the red and blue).

      If everyone paid the same percentage of their income, it would be fair. To even imply that lower 99% do not pay federal income taxes tells me you have been brainwashed beyond hope. Please stop drinking the kool-aid and start thinking for yourself.

      December 22, 2011 at 12:06 am | Report abuse |
  7. Thats a lot

    $40 is more then I allow myself to spend on everything else after bills. I love the people that say its not much. Well they must be living somewhere that doesnt cost a ton to live and make enough money as it is. And dont use the excuse to move if it cost too much here either when you read this. I have a job that doesnt pay much but I live where people spend more in a week to be here then I make in a year. I own a car but it sits in the parking lot because I cant afford the gas to drive to work so I take the free bus. But its required by law that I have insurance on it. I cant sell it because I need to have it if I want to go somewhere thats not on a bus route. So yes $40 is a lot of money and hell if its only 2 months extension its 2 months. Thats over $300 or an extra paycheck. It might not be much to people in congress since they get practically everything for free but for someone making $10 an hour its a lot

    December 21, 2011 at 11:18 pm | Report abuse |
    • Jim

      The amount of savings per week for someone making $10/hour full time is $8, not $40. (2% of $400= $8) Over the course of two months, that amounts to $64, not the $300 you've indicated. You do realized that reducing your contribution also reduces your benefit, right?

      December 21, 2011 at 11:39 pm | Report abuse |
    • David

      A lot of you think it is $40 a week you will be missing out on. For you to save $40 per week in your paycheck you have to make $2000. I don't think this is happening to many of you. If you are making $2000 per week then you are making $104,000 per year. If we take the National Average Wage for 2010 the saving per week would be $16.03. I don't know where the President got the $40 a paycheck from but I think it not a realist amount.

      December 22, 2011 at 12:07 am | Report abuse |
  8. question

    I never question people on spending until they need more. I hate driving by a shelter and seeing people with more children than they can pay for and a satellite dish on their roof. Don't make = don't have, I've been in college for 5 of the last 7 years and payed my way the whole time. Maybe I've seen reality early, wish the rest would.

    December 21, 2011 at 11:21 pm | Report abuse |
  9. Jeff Frank ( R - OHIO ) "Яight Wing Иutcase"

    Yes...give me a $40.00 (value $20.00) tax reduction, then next April, stab me in the back.

    December 21, 2011 at 11:37 pm | Report abuse |
  10. Electroguy

    40 WHOLE dollars!?!? Wooo hooo! Were SAVED! - not!

    December 21, 2011 at 11:40 pm | Report abuse |
  11. isThisTaxforSocialSecurity

    isn't this something that is going into our retirments (aka, social security) ? If so, why is everyone so worried about losing it...if you look at in the long run, it's not that bad. Most of the people who will pay it, will get it back anyway on their tax return (well, the amount anyway), and it still goes to their Social Security. Also, it won't break down the country if it isn't passed....why is it put off as such a burden and the end of America as we know it...if you guys were so concerned about our costs, why did you raise the cost of health care so much...if you had spent this much time considering that, we might have a better health care situation...just a thought...

    December 21, 2011 at 11:41 pm | Report abuse |
  12. Gary Dahl

    $40 per week is $320 per month for my wife and myself. I just dropped cable to save the $120 to make ends meet, now another shot in the shorts! They want the middle class to fail!!!!!

    December 21, 2011 at 11:41 pm | Report abuse |
    • Gary Dahl

      Merry Christmas America....

      December 21, 2011 at 11:42 pm | Report abuse |
    • Jim

      Your household income is $100,000 and you can't afford to fund your SS retirement benefit?

      December 21, 2011 at 11:46 pm | Report abuse |
    • Old-skool conservative

      If you're in the "$40 a week" bracket, then you should still be able to afford cable. Jeez, I know subsidized-housing people that have DirecTV.

      December 21, 2011 at 11:57 pm | Report abuse |
  13. chuck wagon

    Know anyone that paid almost $20,000 in taxes yet made less than $58,000 this year. How is that possible? Good question to ask our nations politicians.

    December 21, 2011 at 11:42 pm | Report abuse |
  14. Jim

    $40 is significant – $1000 per year a really big deal. I will have to find ways of spending less that have minimal effect on my local economy. But If we're going to get back where we belong, we're all going to have to make sacrifices.

    December 21, 2011 at 11:43 pm | Report abuse |
    • andy

      $1000 a year is less of a big deal if you are making the $50,000 to actually see that $1000.

      If we want to get back to normal, why not start with our normal taxes?

      December 22, 2011 at 12:28 am | Report abuse |
  15. andy

    If the $40 is vitally important to you, then you are not making the $50,000 a year to get the $40 every 2 weeks. If you make $20,000 a year, you will only benefit about $15 a paycheck(every 2 weeks).

    Think for yourself, learn simple math.

    December 21, 2011 at 11:50 pm | Report abuse |
    • Old-skool conservative

      Nice try, Andy, but the lack of simple math skills is why so many posters don't understand the derivation of the $40 figure.

      December 21, 2011 at 11:55 pm | Report abuse |
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