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. Jim

    The same people whining about having to give up $40/pay check are the same people that will be whing about no money for their social security. You can't have it both ways. Pay more now, mmediately raise the minimum age required to collect social security, and maybe there will be social security benefits when you retire.

    December 21, 2011 at 2:18 pm | Report abuse |
    • Rose

      You are right. They just don't get it.

      December 21, 2011 at 2:21 pm | Report abuse |
    • OD

      Why is it the middle class that has to pay out........160 million people vs 365,000 millionaires, who's gettting creamed? The Republicans are taking 6.4 billion dollars away from hard working people. All the so called "Job Creators" are outsourcing their jobs. Do you actually think the guy on the other end of your telemarketing call is named Frank. The Republicans have brainwashed enough people into thinking that they care about them. The "American People" they are trying to help is not you "person" who makes between $0 and $999,999 per year.......it's everone else. WAKE UP!!

      December 21, 2011 at 2:33 pm | Report abuse |
    • rschier

      You are WRONG. Most prudent people aren't counting on Social Security. Give me the money NOW, so I can
      handle it appropriately, and see to it that I have something later on.

      December 21, 2011 at 2:41 pm | Report abuse |
  2. Steven

    It means that my fiance can now be eligible for medicaid as based on household income. So – more folks who are uninsured may be able to get on the dole and help worsen an existing problem. Way to go republicans. Helping in all the wrong ways.

    December 21, 2011 at 2:20 pm | Report abuse |
  3. Susan

    Sorry to everyone who is lucky enough to think this won't matter. My husband lost his job and was lucky enough to secure another position, but for a lot less. We've cut back on as much as we can. This $80 a month will buy gas, is half our food bill for a week, or helps to pay for the insurance co-pays and medications that just doubles with our new insurance. We planned as much as we can to help with the pay cut that he had to take, but we didn't count on the government to take more too. And we are lucky that we are both working. Thanks a lot Washington. We have lost faith.

    December 21, 2011 at 2:21 pm | Report abuse |
    • stevel

      susan really.....$80 is half of your food bill a week???? serious..... sounds like that may be one source of your spending problem.........I spend less and $100 a month on Groceries.....and hmmmm no issues making ends meet.....

      December 21, 2011 at 2:32 pm | Report abuse |
  4. Tel

    $40 more in taxes per pay period? We'd have to cut out cable. We've already cut out just about every other expense we can. Anything more than that, and we're choosing between rent, food, insurance, phone, internet, and getting to work. My wife and I both work; mother-in-law lives with us and takes care of our two-year-old daughter during the day. Can't increase income (good luck finding a better job in this climate), can't decrease expenses. One more hit, and we're in bankruptcy.

    December 21, 2011 at 2:22 pm | Report abuse |
    • bill

      Why do you need internet and cable? Those are privileges not rights.

      December 21, 2011 at 2:29 pm | Report abuse |
    • Bryce

      Heaven forbid you live without cable. Netflix is $8 and has many of the shows on cable tv. Our nation is in this shape because people do not know how to live without.

      December 21, 2011 at 2:33 pm | Report abuse |
    • stevel

      cut phone, Internet, and Cable....and look at all the money you all of a sudden have.....if it's that tight i suggest a second job.

      December 21, 2011 at 2:35 pm | Report abuse |
  5. DaleinRI

    It's really Sad. Go ahead keep taxing us little people. Someday your going to tax us so much, we just stop working. Then who are you going to tax? Oh the rich? How, if no one is working, and no one is spending then where are the rich going to get their money? BE SMART WASHINGTON. THIS IS GOING TO COME BACK AND BITE YOU BIG TIME!

    December 21, 2011 at 2:22 pm | Report abuse |
  6. Lisa

    $40 is $40 less for the people who every dollar matters! Along with all the absolute necessities and then what about the unexpected stuff like when your car breaks down....something is always breaking and we have no choice but to charge it than. We should be paying much less taxes and the rich people. As the saying goes; the rich get richer and the poor well you know! Merry Christimas to the cheapo Republicans!

    December 21, 2011 at 2:23 pm | Report abuse |
  7. Jeez

    @Petet and Jim:
    Exactly!
    Bloody EXACTLY!!

    December 21, 2011 at 2:24 pm | Report abuse |
  8. Ed

    $40 a paycheck should not be that big of a deal to most people. I read here about needing every penny to feed their 5 children. Maybe you should have considered your financial situation before having _5_ children. I also read about paying for gas or prescriptions, yet not one person has admitted they could make up $40 by buying less beer for their weekend party. Or making their own coffee instead of stopping by Starbucks every day. Or cooking dinner instead of eating fast food. There are a lot of solutions to your personal budget problems. If you're considering the nation as a whole and our out of control debt, they should be _raising_ taxes, not cutting them.

    December 21, 2011 at 2:25 pm | Report abuse |
  9. liz

    $40.00 a month is a lot for most of us regular people. It helps pay gas bills or electric bills-- perhaps buy food ,shoes for kids, some very needed clothing-some of the things that can keep our families going and gives us a little more hope that things will come together and work .

    December 21, 2011 at 2:25 pm | Report abuse |
  10. The Fume

    $40 dollars to me is huge. I took a pretty big paycut of $8,000 a year just so I could get a job after being unemployed. This government's lack of insight is astonishing. The government takes our tax money and gives it to the banks and then tries to actually take more money from us. This is unacceptable to me and most likely thousands of other hardworking Americans.

    $40 to me is this :
    Food for the week
    Gas for 2 days of my commute
    Insurance
    Petfood and anemities for a month

    I have no internet because that's a luxury I can't afford right now.
    I'm a single male and I am always just making ends meet somehow. It gets even harder on rent week since most of check goes into that. I can't save a dime since most of my check goes to my bills. I'm also a professional who works in the engineering field and I make less then 40k a year.

    December 21, 2011 at 2:25 pm | Report abuse |
    • stevel

      Fume,

      It shouldn't take long to figure out.....if you spend $40 to get to work for two days....you need to either move closer to work or get a more effient means of transportation.

      also the pet is a luxury, find it a good home or put it down and problem fixed.

      December 21, 2011 at 2:39 pm | Report abuse |
    • rschier

      "Stevel"

      You seem to be the kind of bend-down patsy they love. Why don't you just put a ball and chain to your foot, and slave away. Can't have a pet? Can't watch a bit of TV? Why work for this society at all? This, while speculating, game-playing paper movers are making $40 per second?

      It would take far less of my time out in the woods to provide basic sustinence. As I've said, they see YOU coming for sure....

      December 21, 2011 at 2:47 pm | Report abuse |
  11. Robert

    Too add. Its funny how everyone critisized this tax cut when Obama allowed it to happen. Basically saying $40 per check to nothing. Suddenly $40 per check is everything.

    December 21, 2011 at 2:25 pm | Report abuse |
  12. Peter N

    With $40, I could buy a round of shots.

    December 21, 2011 at 2:27 pm | Report abuse |
  13. Mark

    $40.00 a month to me means my 2% work merit increase and my $40 a month medical increase a long with the cost of living increase means that I will be taking home less money this year while the cost of living is increasing. Money from Groceries, Gas and other expense involved in raising 3 children. Can't wait for other local taxes to increase as well as fuel prices too. Happy New Year 2012!

    December 21, 2011 at 2:27 pm | Report abuse |
  14. Lynn

    I'm definitiely not in the wealthy 1%, but, If in some small way the $40 helps keep Social Security afloat, then I don't mind giving up the money.

    December 21, 2011 at 2:27 pm | Report abuse |
  15. Mike

    Yes, to some $40 is a lot, to others it is a dent into their habit of a morning coffee. My problem is not the loss of $40 but rather the misuse of the money by a government which wastes money at the expense of its citizens.

    December 21, 2011 at 2:28 pm | Report abuse |
    • rschier

      No, it's more like the undertaxation of totally non-productive income (i.e finance industry/wall st), that could and should be used to replenish are steadily deteriorating infrastructure, and provide jobs for many. I'm beyond caring at this point, as the citizens of this country themselves, are their own worst enemies.

      December 21, 2011 at 2:50 pm | Report abuse |
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