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. DPerrie

    Hmm, what does $40 mean to me; food, gas, electric; just to mention a few. It's not much to our "Government" making decisions, they typically "throw" $40 plus away daily; but the working class cannot afford that. The Feds receive no cost of living, yet the cost of living is up, and now they want to reduce our checks.......they only think of their pockets, who's in it, and what they can get, they don't care about WE THE PEOPLE. Has anyone ever really sat down and talk to the people that put them in office....It's my opinion that once they're elected; the conversation goes out the door!! The only people they listen to are those giving them the cash to run for office, bet those promises are kept!!

    December 22, 2011 at 5:03 am | Report abuse |
    • Gina Conti

      40 is my Vytorin medication for high cholestrol, I am barely making it now, This is ridiculous, tax the;rich

      December 22, 2011 at 6:43 am | Report abuse |
  2. Bill

    Merry Christmas Congress (all congressmen!) I am sure you will sleep well this evening knowing that you have done your civic duty! Really?

    December 22, 2011 at 5:35 am | Report abuse |
  3. Rambleon

    "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."

    Here's an idea...if you can't afford to pay for five kids, maybe you shouldn't have five kids! Please don't ask me to pay for your children when I work hard to support my own family. If $40 makes a significant difference in your life and you have five kids, you alone have made some very poor choices that you alone should be responsible for.

    December 22, 2011 at 5:49 am | Report abuse |
    • Ed

      11 years ago the economy was far better (2000) plus it sounds like this person had planned for 3 children (15 year old, 12 year old) but ended up with triplets (3 – 11 year olds) for the third.

      It also sounds like they are doing what they can with what they have – Sams membership and stretching their money. No mention of food stamps or other assisstance so they're contributing, not draining.

      December 22, 2011 at 6:41 am | Report abuse |
    • TexasSky

      ! the person who insulted Rambleon – Your comment to the person with 5 children shows a serious lack of intelligence. To begin with, if they are NOT working, they are NOT paying payroll taxes, ergo, they MUST be working if they object to having to pay MORE in payroll taxes next year, than they paid this year. As for the rest of your ridibulous comment – For all you know this family was making a lot of money when they increased their family, then were victimized by Enron, or laid off by Detroit, or injured fighting for our country. Or maybe inflation reduced the overall value of their income, just as it has reduced the overall value of everyone else's.

      December 22, 2011 at 7:54 am | Report abuse |
  4. Boris

    $40? I can fart $40! Might mean a round of shots for my friends at the bar, but it's more like a flash in the pan.

    December 22, 2011 at 6:13 am | Report abuse |
  5. alberts456

    40 $? Fortunately just peanuts for me. I'd spend more than that for a dinner in a restorant.

    December 22, 2011 at 6:29 am | Report abuse |
    • unowhoitsme

      Lucky person in today's economy. Obviously, no compassion for those less unfortunate.

      December 22, 2011 at 7:33 am | Report abuse |
    • Daniel Kearney

      Or perhaps spelling lessons...

      December 22, 2011 at 7:41 am | Report abuse |
    • John

      $40 is my normal tip for my 3 times a week outing..

      December 22, 2011 at 7:43 am | Report abuse |
  6. mentalray

    Fullsail University cost upwards of $40,000 for a 14 month program. That fact that they can't pay poor Selena is they real story here.

    December 22, 2011 at 6:34 am | Report abuse |
    • AWaB

      No, she's a secretary or file clerk. People are paid relative to their value to a company.

      December 22, 2011 at 7:07 am | Report abuse |
  7. Ed

    $40 =

    6 cases of Ramen noodles (in a bowl, 8 pack cases form Amazon.com) – that's 48 work lunches (water to drink).

    More than what I spent on Thanksgiving dinner for my wife and I – the same for Christmas dinner.

    2 month supply of medication for my wife's service dog.

    2 week supply of medications for my wife

    $40 more I can afford to put into my 401K or other savings (if I can)

    A tank of gas for my car (yes, it's a small car)

    December 22, 2011 at 6:38 am | Report abuse |
    • TAJ

      Don't forget $40 less in your Social Security benefit.

      December 22, 2011 at 8:00 am | Report abuse |
  8. peedoffamerican

    40 dollars is a lot of money. Can't wait til these morons in Congress and the Senate wake up jobless!!!

    December 22, 2011 at 6:44 am | Report abuse |
  9. K. S.

    OK, so we are in debt as a nation and don't know how the tax cut extension will be paid for...$40 means a lot, but am I the only one that wants to pay our bills? Please let the tax cuts expire!

    December 22, 2011 at 7:23 am | Report abuse |
    • Lola

      It's not even a tax cut. If you don't put it in your 401(k), then it is taxed as ordinary income. If you put it in your 401(k) though, it defeats the stated purpose of "putting more money in your pay to spur spending and economic growth."

      December 22, 2011 at 7:30 am | Report abuse |
  10. Nate

    The disgusting thing is I work full time and part time with another job to keep a roof over my head my power on and my phone working, after bills each week I have $15 left over. I applied for food stamps and got $46 for a month. Thats Ramen noodles and 2 gallons of milk for a month. The cost of everything goes up but our pay still stays crappy and as you can see a whole whopping $46.mo for food help from the government.

    While the rich just get lower taxes when they can actually afford to pay more then those of use that can't.

    My license was taken in 2000 on a seven year suspension with a $7,000 fine (no damage, no accident, nothing) I dont even make enough money with 2 jobs to pay bills, pay off my license and pay for 3 years of SR22 insurance and still keep a roof over my head and pay bills too.

    December 22, 2011 at 7:25 am | Report abuse |
    • Lola

      Drunk driving has consequences. You're lucky no one was killed.

      December 22, 2011 at 7:27 am | Report abuse |
    • Maximus

      Well, maybe you are learning from your bad decisions

      December 22, 2011 at 7:53 am | Report abuse |
  11. Lola

    So the payroll taxcut was not temporary, like it was first piteched. When is Social Security running out of funds? We have a debt of approx $16 trillion and unfunded obligations of around $62 trillion. But, it's election year and Papa Obama needs to buy some votes. Obama is spending at rate 2x higher than Bush.

    December 22, 2011 at 7:26 am | Report abuse |
  12. unowhoitsme

    We were told "NO additional taxes". Another lie.

    December 22, 2011 at 7:34 am | Report abuse |
    • Daniel Kearney

      Yeah, Bush Sr stated that first with his speech "Read my lips, NO new taxes"...They all lie....

      December 22, 2011 at 7:47 am | Report abuse |
    • douglas

      This is not an additional tax. It would simply be a return to normalcy – what everyone was paying for many years. If $40 means that much to you, perhaps you should take an inventory of the decision you made to get you to this point. Everyone points fingers at everyone but themselves.

      December 22, 2011 at 8:02 am | Report abuse |
  13. pv

    who is the idiot who did the math for this article? $1000/yr is $20/wk NOT $40/wk.

    December 22, 2011 at 7:50 am | Report abuse |
    • Mel

      I'm pretty sure they were averaging that the normal person (well, everyone I have always known) gets paid bi-weekly (every other week) rather than weekly.

      December 22, 2011 at 7:55 am | Report abuse |
  14. Mel

    $40 is a tank of gas for me to get to work and back. Our health/dental insurance is also going up $40 so really we are almost loosing $100 starting in January. We can manage but having that buffer is always a nice thing.

    December 22, 2011 at 7:54 am | Report abuse |
    • pv

      you might be right Mel, but $40 per bi-weekly pay check is still not $40/week. actually $1000/yr divided by 52 weeks is $19.23 /wk.

      December 22, 2011 at 8:09 am | Report abuse |
  15. TAJ

    $40 stolen from Social Security? Dems making a big deal about this while we alI spent $4,000 more this year for gasoline....thanks to Obama...is just plain stupid. The sad thing is, voters swallow this nonsense w/o making any effort to learn what the facts are.

    December 22, 2011 at 7:56 am | Report abuse |
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