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. TexasSky

    $40 to me is the gas to and from work. It is extra price for utilities now that everything has been inflated in this country except my salary. My merit raises are simply NOT keeping pace with inflation. The same grocery staples I always buy that used to cost me $15 before Thanksgiving cost me $28 this week, same store, same town, same brands.

    December 22, 2011 at 7:57 am | Report abuse |
    • you're kidding

      OK take my 40$ , Then the bad news is thats $40 i CANNOT spend buying goods/services that would create jobs and boost the economy . Note to genius's in washington , I can;t do both , I can't buy more to boost the economy when you KEEP taking MY money .

      December 22, 2011 at 8:31 am | Report abuse |
    • Dave

      Please stop calling it $40/paycheck. It is $20/WEEK, and those of us with WEEKLY checks will only see a $20 difference. That's a weekly trip to McDonnalds...I can survive just fine without that. Not such a big deal. If you make less then it is more important to you...but then again if you make less it is LESS THAT $20/week to you.

      December 22, 2011 at 8:41 am | Report abuse |
  2. MichiganMoon

    CNN needs to run a what will an increase in Fannie and Freddie home loans mean to you. It is the middle class and poor people that use fannie and freddie to pay their homes that will fund this Pay Roll Tax Cut so Social Security doesn't lose the tens of Billions.

    Isn't Obama proposing a Regressive Pay Roll Tax Cut...half goes to the employer...one fourth will be kept by the top 10%...and a minimum wage worker will keep just $5.80 per week while the middle class and poor homeowners foot the bill to pay for it. YES WE CAN – HOPE AND MORE OF THE SAME! At least it will buy Obama some votes as it has fooled the masses.

    December 22, 2011 at 7:58 am | Report abuse |
  3. dude

    For my wife & I, it's almost $150 from the combination of our checks every 2 weeks. In our case, it's less money for savings/retirement. I don't mind the tax break, but I'd rather it not be tied to social security. The government will pay it back to social security, just like they've paid back all the other social security loans. NOT.

    December 22, 2011 at 8:03 am | Report abuse |
  4. jww33

    If $40 a paycheck will provide the impetus to throw all those incompetents out of Congress, I would pay it gladly!

    December 22, 2011 at 8:11 am | Report abuse |
  5. Mark Simpson

    It means to me that the GOP is severely out of touch with the voters of today. Why you would vote against the tax cut and force that pipeline bill in the tax cut bill is beyond me. Very few are being fooled by this. We also know that the Dems tried to get the 1% to pay for this cut, but the GOP wouldn't hear of it. Why they think the 1% is going to save their asses in the election baffles me.

    DEAR GOP: You'd better get that whole 1% out to vote for you in November, because you're in HUGE trouble. (Or wake up. I guess you could still wake up and realize you're giving the election away !!!)

    December 22, 2011 at 8:11 am | Report abuse |
  6. Really?

    To everyone posting about how they will not be able to eat if their paychecks go down by 40 dollars a month I feel for except I wonder if those same people are in the malls buying Christmas presents for everyone? Is their income so low that they have not eaten at a restaurant in years? Have they turned off their TV and internet? Have they sold their car that has an average payment of $475/month? Are they giving up the luxuries in life to cover these life necessities they are claiming? If they are giving up the luxuries in life and still do not have the income to cover the necessities, there are plenty of ways in our country to make enough money for the essentials....fast food maybe (I see plenty of places hiring)? but many in that situation are too "proud" to take that job and do what is necessary to take car of them and their family. Many people in America expect to have luxury in their life regardless of the fact whether they can afford it or not. I find too often that these are the same people who plead to the government to "take care" of them and give them these luxuries. Attention to these people, The Government Does not have Anything! If the government gives you something, it has forcefully taken it away from someone else (called taxes). I will always believe in providing necessities to people in need but I will never support the government taking away from some people to give luxuries to others.
    Wow, what a rant but I believe all Americans should take it upon themselves to live within their means even if our elected officials will not do it for our country. If a culture of fiscal responsibility grew in our country, the government would be soon to follow.
    I know this was a long but if anyone made it through this thing I would love to see you comments..good or bad. God Bless.

    December 22, 2011 at 8:15 am | Report abuse |
    • Really?

      *$40 per pay check (my mistake)

      December 22, 2011 at 8:17 am | Report abuse |
    • Just my opinion

      I agree. I would guess that most, but not all, people posting comments have things which they can cut from their day-to-day budgets. As you stated, they are on-line and able to post comments, so they have internet access. Internet access is not a necessity. I would guess most have a cell phone as well. Contrary to popular belief, cell phones are not a necessity.
      If people would take a step back and honestly consider where and how they spend money, most could find $40 which they could cut from their spending

      December 22, 2011 at 8:27 am | Report abuse |
    • I Agree

      I absolutely agree with you. Some Americans just don't know how to manage their incomes. Honestly, why would you spend way more than what you earn...month after month? This is no rocket science. It is simple math.

      December 22, 2011 at 8:38 am | Report abuse |
    • Jony

      You are right? Some of us think its birth right to expect every thing from governament. It has to stop.

      December 22, 2011 at 8:44 am | Report abuse |
  7. uabssc

    My insurance goes up $160 a month starting in January and now another $160 a month gone to this tax expense. My raise last year was $180 a month. Every year we fall further and further behind. Insurance premium increases, utility increases, gas, and aging cars........we're never going to stay ahead of inflation and taxes.

    December 22, 2011 at 8:15 am | Report abuse |
  8. abby1

    The $40 a paycheck helps pay for groceries and gas.

    December 22, 2011 at 8:16 am | Report abuse |
  9. Derrick

    Finally, members of Congress stand firm on we need to figure out how to pay for a tax break before we give one. But the Media trys to Tar and Feather every member of the House who holds the Line. We need to wake up and figure out how to get people back to work. Keep on extending unemployment benefits and people will never have incentive to look for a job. What would you pick: $350 a week to sit at home and do nothing or $10 hour for a job that requires you to actually show up on time and work!

    December 22, 2011 at 8:17 am | Report abuse |
  10. Powerlifter165

    For me calculated per my salary it will mean about 120 per month hit. Since I live well below my means I'm not going to miss any important bills. However as someone that has been paying ahead on my car loan it will mean 120 per month less going toward that.

    December 22, 2011 at 8:20 am | Report abuse |
  11. DumbBO

    Why is this story misleading people into thinking that the senate passed plan provides $1000 in tax savings to each wage earner. The senate plan provides a total of $166 dollars of tax savings, not $1000. It also only applies if you earn $50,000 per year. If you earn $25,000 per year your savings are $84. How about some honesty in reporting.

    December 22, 2011 at 8:20 am | Report abuse |
    • Maximus

      The story is reporting what the tax effect would be on the average worker. They assumer, and probably incorrectly, that most people reading the story are smart enough to know that

      December 22, 2011 at 8:31 am | Report abuse |
  12. Stephanie

    This is ridiculous tax the rich make them pay $40 a pay check. I think everyone in Congress should have to switch financial means (paychecks) with someone in the average american economy before making a major decision about taking $40 which could mean food, medical and mortgages for a lot of people. Instead of "Wife Swap " do "MyCongressman/Congresswoman Swap" let them live in the real world of American people and maintain their life syles off the average paycheck that they're going to take $40 from weekly, bi-weekly and monthly. I don't think they'll survive.

    December 22, 2011 at 8:29 am | Report abuse |
  13. Inside-out

    I could use the $40 to get better h00kers. $40 makes a big difference when you're talking about these ladies.

    December 22, 2011 at 8:35 am | Report abuse |
  14. Michael Johnson

    I'd like to weigh in on what $40 a week means. I live hand to m outh and I have an ability to scrounge and generate the money I need for my bills, so for me it doesn't really mean much until I begin to think about the repressed area where I grew up and where much of my family still calls home. Growing up in South Central Missouri there isn't a poverty line seperating nearby cities like Springfeild from areas like Alton or Thayer. Its not a poverty line–Its a towering escarpment where jobs go from being hard to find to being nearly impossible and where paychecks for nearly every person living east of that line fall to minimum wage levels for families of three, four, five and more to live off of. What would $40.00 mean. It would mean the difference between eating and starving. It would be the difference between surviving and surrendering. It would mean no medicine, no food, no fuel, no clothes, and basically the end because it isn't $40 a week that is affecting us. In many of those households parents are having to work two jobs each. Thats $80 a week less for each household for two income homes and $160 less a week for households that require two jobs per parent. Its a huge amount in the end. Any pay cuts should be viewed on how they affect the lowest in our society. Not the average household. I"m just saying.

    December 22, 2011 at 8:35 am | Report abuse |
    • NapoleonDynamite

      Ok, you need to re-think your comment. If the people you are talking about are as dirt-poor as you are claiming, they probably are not making enough money and paying enough to social security that they will see a $40 decrease in their pay. Also, if they are working 2 jobs and will then see a $160 decrease in their pay, they are making good money. To see a $40 per check decrease in pay, you have to earn, on average, $50,000. If these people you have invented, are going to see a $160 decrease in their pay, that means they earn $100,000 per year.
      Seriously, step back and think before you post you end-of-the-world rants.

      December 22, 2011 at 8:42 am | Report abuse |
  15. Beth

    It is $40 x 2 = $80/month for most people, not $40 a month as this article implies. $80/month is significant for our family and most others. I was shocked to hear the CNN commentators discuss whether this was significant or not and express that it may or *may not be*. Um, for those making lots it isn't significant. For the majority of Americans it is. That's $20 a week for groceries. I am squeezing on groceries as it is. We drink water to save. I cook from scratch. We don't go out to eat almost ever and when we do we watch what we spend very carefully. I'm spending as little as possible on gifts for the holidays and many gifts are handmade. We don't go to movies. We don't travel. We can't take vacations elsewhere. Even something like a weekend trip to a local museum is a once in a great, great while thing because it costs money. We both work. $80/month will change our life and make us squeeze even more. Way to NOT stimulate the economy GOP. Way to be very, very out of touch and make it obvious you represent the very wealthy and not America as a whole.

    December 22, 2011 at 8:39 am | Report abuse |
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