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. 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 11:52 pm | Report abuse |
    • pmvt

      I am not looking at it as $40 or whatever the amount is. I just wish our electect officials in Washington would try to at least work together. Their gridlock is doing more harm than good and maybe we should demand they give up their paychecks until they accomplish something for the good of our country.

      December 22, 2011 at 12:09 am | Report abuse |
    • Joshl

      idiot, tell that to a family of four living of 50k... or even a family of 2 who had to incur large medical bills for some sort of life threatening illness while having no insurance, on top of being swamped with student loan, and car loan, etc..

      December 22, 2011 at 12:25 am | Report abuse |
  2. Old-skool conservative

    I don't wanna lose my $40/wk, but ya know what? Miracle of miracles, Hallelujah... ...I somehow managed to survive 2010 without it.

    December 22, 2011 at 12:00 am | Report abuse |
  3. A.A

    I'm a college student and $40 is either Gas or Grocery money so that's pretty important to me and others

    December 22, 2011 at 12:00 am | Report abuse |
    • Old-skool conservative

      You're a college student with over $100,000 in annual income?!?!? Wow!

      December 22, 2011 at 12:03 am | Report abuse |
  4. Mark Maggard

    Stop popping out 20 kids and expecting the government and its people to feel sorry for you people. Close up your shop if you can't afford the expenses... Geeze!

    December 22, 2011 at 12:02 am | Report abuse |
  5. Seth Hill

    I count myself lucky that my wife and I both work full-time (I'm 69) and we could afford to pay an extra $40 / paycheck. I realize that the $40 is vital to many people. Sure, I'd love to get $40 more, but in the long run I want to to pay more, not less, into Social Security to keep it from going broke in a few decades. The politicians in Washington can't seem to look beyond a few months, or a year. They're all cowards.

    December 22, 2011 at 12:08 am | Report abuse |
  6. Mendoza

    Two take out meals. I should be cooking at home anyway.

    December 22, 2011 at 12:13 am | Report abuse |
  7. Jonathan Cowell

    Me being dietbetic and have high blood pressure loosing 40 dollars a week will hurt me. I spend a large amount of money on my meds. If I have to pay more out of my check how can I take care of my self with no meds cause I would have to stop paying for them. I thought the goverment is suppose to help the the americans not make them sicker. If they don't pass the bill I might just as well hang it up in life cause if goverment don't care about us why should we care about taxes. The goverment has the best medical coverage in the world cause you know why cause we pay for them to have it. Why don't the goverment work with our wages for a year and see how they like that. Whos with me on this? If so respond.

    December 22, 2011 at 12:17 am | Report abuse |
    • Bert Bigdongle

      You have given up your cell phone bill, right?

      December 22, 2011 at 12:26 am | Report abuse |
    • Old-skool conservative

      If you don't make $100K/yr, you won't lose $40/wk.

      December 22, 2011 at 12:35 am | Report abuse |
  8. Bert Bigdongle

    (Insert tale of woe) Without $40 for two months, I will fall into a pit of depravity! All due to Republicans of course, Obama's got my back! Obama's job killing policies and addition of Trillions to the debt are cool though, it's all about this short term $40!!!

    December 22, 2011 at 12:25 am | Report abuse |
  9. Sanders80

    I want to know what ever happened to the Social Security crisis the Demoncrates were shouting from the hilltops during the Bush years. An now we are cutting the funding that supports the Social Security checks for our seniors. What is worse, the missing $40 if you make enough or the missing bankrupt senior citizens monthly support. This is another fog of lies by our government on a path to socialism. Once the socialism is firmly entrenched the communist will come and kill the socialist to bring everyone into slavery to the government. We should look to Europe and see socialism does not work and never will. If you are like Whoopi and think communism is grand to move to a communist country.

    December 22, 2011 at 12:48 am | Report abuse |

      I concur. I thought socialism and communism ended with the fall of the Soviet Union.

      December 22, 2011 at 12:52 am | Report abuse |

    People, people, people, you keep forgetting one thing. This is a temporary social security tax cut. So, claiming Republicans are raising taxes is ridiculous to say the least. All that may happen is the tax cut expires. Besides, this social security tax cut is taking money out of the social security fund. Does anyone care about that? I don't make much personally, but $40 is hardly a make or break for me. If it is for you, then you should be finding better employment. Better yet, create a job. Become your own boss.

    December 22, 2011 at 12:50 am | Report abuse |
    • R.Williams

      Actually, the money from the General Fund is being used to shore up the amount lost by the cuts, so it's not hurting SS. And letting a tax cut expire is raising taxes, or so all the Republicans have been frothing for years.

      December 22, 2011 at 1:20 am | Report abuse |
  11. Sad day

    MISSING TRILLION DOLLARS and give citizens $40 dollar bills. Geeze.

    December 22, 2011 at 12:52 am | Report abuse |
  12. Common Sense

    Republicans represent corporations and billionaires. That should be obvious to any one who is observing the actions of those congressional cretins. Their rhetoric is so false it's hilarious that anyone would be believe it.
    On the other hand, I see lots of people saying that they can't afford things for their 3 or 4 kids. If someone has a child and their budget is rather tight, why have a second and a third child? I don't know, is that hard to understand for some people? Contraceptives are available. Do such folks act first and think later?
    To the woman who said she needs to buy "MacnCheese" and hotdogs. If you learn how to cook you can eat healthy food for the same price you pay for that garbage.

    December 22, 2011 at 1:07 am | Report abuse |
  13. ed. west

    do not tell anyone $40.00 is not a big deal unless you have walk in their shoes,your feet will hurt because he can,t buy any he need the $40.00 to buy food for his family, i know some of you never had to make a choice between food or a new pair of shoes, because he has holes in both shoes,"

    December 22, 2011 at 1:11 am | Report abuse |
  14. pooli

    Yo a lot of people here look awfully fat. Stop eating so damned much, food costs money.

    December 22, 2011 at 1:11 am | Report abuse |
  15. Robert

    It's only 2% of my first 100k or so of income. You want to make a difference, make it 2% of my entire paycheck and then we can talk.

    December 22, 2011 at 1:15 am | Report abuse |
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