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. TexasTeacher

    To that 36 yr old history teacher in the story: I am a 33 yr old high school history teacher here in TX and because our paycheck deduction is paid into STATE Teacher Retirement System (which simply an investment fund that has lost it's @ss the last few years) instead of FEDERAL Social Security, we don't get that $1000 a year anyway! Since we get paid once a month, that would amount to $83 per paycheck. As a divorced mother with little to no support from her father or my family, having managed my finances very well, paid for 3 years of college for my 11 yr old already, have very little debt, NEVER did crazy stuff with my mortgage and built a home I could afford, I cringe at some of you guys' comments that people like us are just money-wasters, poor managers of our finances, id10ts or nonchalant. Ummmmmm......are you sure you aren't talking about the 1% of CEOs who've scr-wed things up for the American economy??? Come on now!

    December 22, 2011 at 8:44 am | Report abuse |
    • Taioseach7

      Well said.

      I'd love to know how much these jack holes who are bashing the Americans who need that extra money per paycheck make annually. By their comments, we already know what party they are affiliated with.

      December 22, 2011 at 8:53 am | Report abuse |
    • April

      I absolutely agree with TexasTeacher. I don't see how people can make a judgment call on all of those out their wondering where at least $160 a month is not going to be able to go. We have no land line, no internet, no cable, two old vehicles, and a house of our own. Work two jobs less then a 1/2 a mile away from one another, drive a total of 14 miles a day round trip from home, to the baby sitters, to work and back in the evening. We don't have any "wants." We have all of our needs and still find in difficult to meet our obligations every month. It also depends on where you are in your life. Right now we have a 4 1/2 year old who is still at a baby sitters instead of pre school because it's too expensive, and a 2 year old still in diapers. $160 a month for us is equal to 2 boxes of 136 count diapers, 1 refill bag of wipes at 184 ct., 6 gallons of milk, and two full tanks of gas. Those are not wants, they are not excess, they are things our family needs to survive. Sure we could buy cheaper wipes and cheaper diapers that would be used twice as quickly do to quality. We could car pool but we leave at an hours difference for work. Those of you who complain that everyone out their griping about where this $40 a week can be cut obviously are on a different playing field then a lot of us who depend on that extra money. Please take a look at the person inside of you and get outside of that box. Not everyone is on assistance because they are gluttonous fools who want to feed from the governments available milk. Not everyone who needs that $40 dollars a week is using is to pay for cable and internet and cell phones. Get real. People do manage their money correctly and are doing everything asked of them to survive. Don't group everyone into one pig pen, it's discriminatory and I for one as a hard working mother don't appreciate the negativity.

      December 22, 2011 at 9:15 am | Report abuse |
    • April

      *there*

      December 22, 2011 at 9:16 am | Report abuse |
    • Doug

      April, if you are going to lose $160/month, that means your combined gross income as a family is $96,000. if you can't make that work, something is wrong.

      December 22, 2011 at 9:20 am | Report abuse |
  2. Megan

    Does anyone know more about this? I make $11,000 a year, I am sure they don't mean to take $40 from my paycheck a week, do they?? If anyone has any more info on this that would be helpful, thank you and happy holidays.

    December 22, 2011 at 8:48 am | Report abuse |
    • NapoleonDynamite

      Congress orignally reduced the social security tax, which is withheld from your check, by 2%. Now, if they do not extend the cut, the social security tax which is withheld, will increase by 2%. If you look at your most recent check stub and add 2% to the amount of SS tax which was withheld, that will tell you how much less you will take home.
      For example, if $50 is currently withheld per paycheck, it will now increase to $51.

      December 22, 2011 at 8:51 am | Report abuse |
    • Jippetto

      The 1st response is incorrect. It is 2% of your income, not 2% of your SS withholdings. Your 11k a year means you will get taxed for SS $220 more for the year than last year. So $4.23 a week, or adjust for how often you get paid.

      By the way, get a better job.

      December 22, 2011 at 8:55 am | Report abuse |
    • NapoleonDynamite

      My apologies.....my last post was incorrect. If you curretly make $11,000 per year, you will have to pay an additional $220 in social security tax, spread-out over the year. So, if you get paid 2x per month...$220 / 24 paychecks = $9.17 per paycheck increase

      December 22, 2011 at 8:57 am | Report abuse |
    • Donny

      For me this is $183.50 per month gone from my pay. Granted it wasn't there a year ago, and it was nice to have it for 2011, but that doesn't mean I couldn't get used to it. 🙂 That paid for a couple really nice bottles of scotch each month.

      December 22, 2011 at 9:02 am | Report abuse |
  3. Megan

    Thank for making that more clear, NapoleonDynamite. In that case, I don't mind it. Don't get me wrong, I don't like handing away money I have worked for, but that small about to dig out the government would be ok

    December 22, 2011 at 8:54 am | Report abuse |
  4. Deb

    Says $1000 a year or $40 a paycheck? So we are really talking $20 a week (unless you're paid every other week then it would be $40) – right? Why does everything have to be so misleading?

    December 22, 2011 at 8:56 am | Report abuse |
    • CPU

      The White House is intentionally misleading with the numbers they're using. $40 per paycheck would be if you made $50k/year and got paid twice a month.

      December 22, 2011 at 9:02 am | Report abuse |
  5. mtsujones

    Give yourself a $300-500 a month raise! Stop smoking cigarettes. Stop abusing alcohol. Stop going through fast food drive thru lanes. Don't let people control your money. Control your own money.

    December 22, 2011 at 8:57 am | Report abuse |
    • anonmeto

      Its called the news. it isn't meant to be anything but misleading. Telling the real truth doesn't help the ratings so you have to take it in stride.

      December 22, 2011 at 9:03 am | Report abuse |
    • TexasTeacher

      I like your perspective! There is one problem though.....the average American pays over 33 different taxes. Heaven forbid you are a small business owner! The # of taxes you pay goes up to 56! Uncle Sam has its' tentacles in every aspect of your life, including the air you breathe. So, it is virtually impossible to take control of your money. For every $1.00 that an American earns, they actually get to control only .52 cents of it. Food for thought.

      December 22, 2011 at 9:04 am | Report abuse |
  6. anon

    Yeah seriously if 40 dollars is the difference between making rent and car payments then you obviously a. are living beyond your means to begin with. or b. Need to learn money management skills. Selena Adams you could start by going on a diet as from your picture we can tell you are both overweight. Maybe loosing that 40 dollars towards your groceries will be a good thing. Besides I for one don't want to pay (for me it will be an increase of 100+ dollars) that extra bit of tax to address yours and others fat expenses through our new public medical care. Yes I know I am insensitive I believe PC is destroying not helping us and I would rather see a bunch of fat overweight people die of a heart attack because they couldn't afford medicine then to pay for their irresponsibility when it comes to staying healthy. Ok maybe that is for another topic but seriously 40 bucks wont break the bank. If it was so all important and worth that much then why didn't that extra 40 dollars benefit the economy? It didn't The 40 bucks is what it cost politicians to buy your souls or at least your votes anyway. The real story here shouldn't be about the 40 bucks but more about the fact that once again both republicans and democrats are acting like babies and can't get anything done. Instead they will blame each other and even get some of you mindless sheep to blame the other side and showing how successful they were in manipulating your hand at the voting booth. They are all at fault and need to be physically removed from office.

    December 22, 2011 at 8:59 am | Report abuse |
    • Sad

      Consider anon, that the food afforded the lower to lower middle class is not healthy. What is inexpensive provides malnutrition on top of loads of cheap sugar and fat. Compound that with the understanding that these people do not have time to go to the gym. To make a healthy meal is 10 dollars plus time, energy, and water. To go to mconalds is 4 dollars. These problems aren't pc.... It draws from a lack of understanding. On top of that... I doubt they are on public healthcare, since they are not on food stamps. The poverty line is very very low. Several years ago it was 20 thousand for a family of four. Tell me how a family of 25 thousand is supposed to make ends meet?

      December 22, 2011 at 9:30 am | Report abuse |
  7. Taco

    For me, $40 a day is what I spend on gas, lunch, dinner, rent, cable, and my iPhone. That is pretty much all of my daily expenses. Don't take it away from me, bros.

    December 22, 2011 at 9:07 am | Report abuse |
  8. Jamie

    How do we pay this if we are unemployed? Do we have to mail a $40 check somewhere?

    December 22, 2011 at 9:08 am | Report abuse |
  9. lovethedifferentcommentsystemsCNN

    less crack

    December 22, 2011 at 9:10 am | Report abuse |
  10. Itulu

    It means few buckets of KFC fried chicken for black folks 🙂

    December 22, 2011 at 9:13 am | Report abuse |
    • Ironman

      They are not cutting welfare so I'm sure KFC will be fine

      December 22, 2011 at 9:21 am | Report abuse |
    • Ituluisanidoit

      You are a true loser my friend. Let us pray you don't have kids.

      December 22, 2011 at 9:40 am | Report abuse |
  11. Doug

    That's about what my cleaning person costs. I guess I could clean my own house but that kind of sucks.

    December 22, 2011 at 9:14 am | Report abuse |
  12. brandon

    Imagine the loot people would save if they quit procreating so much. There's the hole in your coin purse.

    December 22, 2011 at 9:17 am | Report abuse |
  13. steve

    40 dollars is a slap in the face to the american people if our government really cared they would help out more there a bunch of over paid suits who dont care about anything but them selves and there needs

    December 22, 2011 at 9:18 am | Report abuse |
  14. Jill

    Thank you Melissa Matthews for pointing out a very left behind fact, that the GOP attached a very provoctive rider called the Keystone Pipeline that they were trying to slip under the radar. I'm not even against the pipeline necessarily but I do NOT appreciate huge, potentially environmentally impactful decisions coming in on a completely different debate. Payroll taxes and Pipelines have only one thing in common; the letter P.

    December 22, 2011 at 9:19 am | Report abuse |
  15. C.Hawkins

    If I had to pay an additional $40 because that is what is best for the Nation as a whole, then so be it. To have to pay $0.01 more because those chuckleheads elected into office can't see past their own egos, or the ego of his/her party, IS WHERE I HAVE A PROBLEM!!! McCain goes on TV and says that their actions are hurting the GOP. What about the NATION? He can't see past the bipartisan BS that they create in Washington and I'm sure he isn't the only one. We hired them, we need to fire them! Congress, both the Senate and the House, needs new blood because these professional politicians have forgotten what they are there for and forgotten how to work together for the greater good. I'm tired of listening to them point the finger at Obama and each other. We need adults who will take responsibility for their own action(s); adults who know what teamwork is (not just the dictionary definition); adults who will lead when necessary and follow when it is not (humility). I'm sick to my stomach hearing about, watching or even thinking about Daycare... I mean Congress!

    December 22, 2011 at 9:19 am | Report abuse |
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