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. josephz2va

    $40 a paycheck means a lot for those with either low income or folks such as myself who are self-living medium income people. Those that have to watch their budget very carefully and cut back on several expenditures including constantly eating out, cut back on heating and electricity, buy $1 household items even though that's dangerous in some aspects, and many more.

    $80 a month to folks means a lot. To incorporate an $80 tax to the people would bring some people more hard burdening. It would take lots of sacrificing for any person.

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

      For a person's take-home pay to decrease $40 per paycheck, they have to be making $50,000 per year. That would not be a "low-income".

      December 22, 2011 at 9:31 am | Report abuse |
    • John

      "For a person's take-home pay to decrease $40 per paycheck, they have to be making $50,000 per year. That would not be a "low-income".

      Sure is on 50K you are not buying a house any time soon nore a new car or any thing extra in life thats pay check to pay check living!

      December 22, 2011 at 9:35 am | Report abuse |
  2. The46thPres

    So the first part of the story couple is upset about which part of the payroll tax cut extension, the fact that the democrats only want it for 2 months or that the GOP will not concede only 2 months but insist on a full year
    Who exactly is she upset with?

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

      The reason the two months came up was because Republicans put things in the bill they knew would never get Democratic support. Republicans are playing their usual game of turning something into a crisis then whining that the President isn't telling them what to do. This is their problem, they created it and if they were the least bit worried about the American people it would never had been a problem. Once again they are putting destroying President Obama ahead of helping the American people.

      December 22, 2011 at 9:41 am | Report abuse |
  3. Tekctrl

    One must first HAVE a paycheck before changes to it will make any difference. I haven't worked in over 18 months and still looking. On unemployment, there have been times when $5 meant the difference between having enough gas left in the tank or food on the table at the end of the week, or not. Forty dollars is less than pocket change to the 1% who set the rules, but it's a LOT to someone struggling to keep food on the table and a roof overhead.

    December 22, 2011 at 9:23 am | Report abuse |
  4. kc

    LMFAO ....$40.
    This is the decline of the USA....becoz in china & india $40 is worth nothing in rupees and yen.

    December 22, 2011 at 9:25 am | Report abuse |
    • John

      That's actually not true. I just got back from a business trip to India and poor people over there earn less than $30 per MONTH. These are daytime laborers, people who work as personal servants in other people's homes, unskilled workers etc. I met a teacher at a public school in Calcutta who gets paid $60 a month.
      Poverty is not a function of GDP – there are poor people all over the world.

      December 22, 2011 at 9:43 am | Report abuse |
  5. TexasSky

    Well said! I work for a Texas University. I am required to pay both social security and TRS. TRS keeps uping the retirement limit. Insurance keeps going up. Salaries have pretty much been frozen for 15 years, with the occasionaly merit raise that is limited to something like 3%. TRS first assured us that they had not gone near ENRON, then they realized that a company they HAD dealt with was a subsidiary of Enron. The age + years of service requirements to draw retirement also keep going up. I've missed the grandfather clauses by just months twice now. I don't expect social security to last either, and I've been paying into it since I was 14 years old. I don't do credit cards. Sometimes I work extra jobs to make ends meet. I have a fixed rate mortgage that I got into 17 years ago. The housepayment never goes up, but the insurance on it and the taxes on it do. In fact, the payment has actually doubled in expense due to taxes alone as my city keeps increases property value. (And no one believes the house will sell for the value they give it). My oldest child is married, but I'm still putting a son through college. I would love to save, but just about the time I think I've got enough saved to feel like I won't have to live paycheck to paycheck a car breaks down or an appliance goes out, and I'm back at living in fear.

    December 22, 2011 at 9:25 am | Report abuse |
  6. Brandon

    As a single guy making just less than $130k a year, I'm already living paycheck-to-paycheck. Things are already tight enough we don't need anything more cut. Do you know how embarassing it is to fly out to Vegas to see friends for the weekend and have to ask them to buy you some drinks three weekends in a row? Congress better get their act together or I'm not going to vote for anyone next time around!!!

    December 22, 2011 at 9:26 am | Report abuse |
    • C.Hawkins

      NOT voting isn't going to help. That'll just keep the status quo going. Vote to get your Senator and House Rep OUT of office and put someone else in. Someone who will appreciate the vote that you gave them and will earn that $172k they earn!

      December 22, 2011 at 9:30 am | Report abuse |
    • Dave

      You should be shot.

      December 22, 2011 at 9:34 am | Report abuse |
    • Johnny

      How did you get to payckech to paycheck? What are you doing with your money? You must be leveraged to the hilt and/or you are living a lifestyle way above your paygrade.

      December 22, 2011 at 9:40 am | Report abuse |
    • John

      I feel sorry for you. In many ways.

      December 22, 2011 at 9:44 am | Report abuse |
  7. FSUKXAZ

    To put it in monthly terms that is $80 a month for 10 months of the year and $120 a month for 2 months (Becasue 2 months of the year it would be 3 paychecks). I make decent money and would still notice the difference. Make the tax cut permanent and be done with it.

    December 22, 2011 at 9:27 am | Report abuse |
    • Jimmy

      Your problem is that you are uneducated about the true metrics of the tax change. This article is misleading, but this is not a $40/week tax change unless you make exactly $48,000 per year and get paid bimonthly. For anyone else, the tax could be anywhere from $33/month to $183.50/month.

      December 22, 2011 at 9:30 am | Report abuse |
  8. Rob

    This wouldn't impact me and I undrstand it would have an impact for many people. However, this isn't a tax increase as the media portrays it, this is just a return to paying the full SS tax that we've always paid. A true tax increase would be a raise in the percentage we pay into the system. This was a temporary cut, that should never have been done in the first place. What happens 20-25 years from now when this impacts the SS system? These same people will be crying they're not getting enough SS to live and I hope they remember this moment. This is completely ridiculous.

    December 22, 2011 at 9:28 am | Report abuse |
    • Tom

      So therefore by that thought process. If we do not extend the Bush tax cuts then that would not really be a tax increase because the taxes were there previously?

      December 22, 2011 at 9:37 am | Report abuse |
  9. Bruce

    I am willingto do my part and sacrifice the tax relief, but I would expect that ALL the "Bush tax cuts" would be eliminated as an answer to this situation.

    December 22, 2011 at 9:28 am | Report abuse |
  10. trvsmart1

    Your Ethnic commments fit your ignorance and stupidity Itulu, Now lets move forward with intellegent conversations regarding this tax cut. If John Boehner would stop pretending that he is the president of the uniteed states and his followers stop acting as though they are his cabinet members perhaps they can end this who's the boss or I want to be president someday fight and get down to business. The point is, $40.00 out of the mouths of American's paychecks will hurt many families who are already fighting to get their unemployment benefits extended. But keep it up republicans, come Nov 2012 most of you will be on the unemployement line because trust you me, you will be voted out of office and here's a prediction for you, YOU WILL NOT TAKE BACK THE WHITED HOUSE IN 2012. Obama will be a 2 term president and you can thank yourselves for it, and that circus of candidates you have running, racists, wife cheaters, liers, theives, even a women who's poll numbers match her IQ, NOT ONE OF THEM WILL WIN. So, sit back, relax, and watch the fun begin because No Republican will be re-elected because of this nasty game your playing with the AMERICAN PPLS LIVES.

    December 22, 2011 at 9:29 am | Report abuse |
    • Don

      This comment is more ignorant than the one you spoke out against. At least that one was done in jest, where yours was serious. 1) This is not a $40/check tax increase. 2) People on unemployment do not pay this. 3) This is not a dictatorship and Congress is 1/3 of the government. They have a responsibility to the people that voted them in. Since this obviously wasn't you, I don't expect them to take your needs into consideration. That is your president's job.

      December 22, 2011 at 9:33 am | Report abuse |
  11. The46thPres

    All the sob stories are the same. I cant afford my car, I cant afford day care, I cant afford food.

    Sure Obama and the democrats gave you $40.00 extra month, and then they raised taxes on everything from gasoline to cigarettes costing you more than your $40.00 a month. So I ask you whiners, how did you manage all this time with having more than your $40.00 social security tax break being stolen from you by the government?

    December 22, 2011 at 9:30 am | Report abuse |
  12. Todd

    Power to the people and free paychecks to all!!!

    December 22, 2011 at 9:31 am | Report abuse |
  13. Johnny

    This is what it really means: The people who would like to receive this now are complicit in underfunding their own SS retirement funds. This isn't really surprising since most people are, apparently, financially illiterate.

    December 22, 2011 at 9:31 am | Report abuse |
  14. SB

    Give up the culture of living on these little peanuts thrown by Government. Face the reality.

    December 22, 2011 at 9:33 am | Report abuse |
  15. Coffeefreak

    I am a mother of 2 kids and wife to a husband who is struggling to find steady work in an economy that sits right outside DC limits. $40 a paycheck will break my bank. I have a hard enough time paying for childcare while we work, pay rent, utilities, rising gas and food costs and everything else that comes along with an HMO healthcare my employer offers. I DONT qualify for state assistance, state healthcare or any other state programs because my GROSS income is too high. Regarding the comments about the people struggling are overweight and need to lose it – yeah its hard to lose weight when the cheapest food in the grocery store is the worst for you. Thank you American government for making our food supply poisoned and inedible, our cost of living exponential and for helping the banks out when they needed it after they helped to F-up the economy for the common people. whoever still thinks this is a democracy is blinded by the poo they threw in our eyes.
    – I say we ovethrow the officials in government now and demand new senators and new congressman – how would they like an extra $40 – $150 out of their check every paycheck to help balance the economy? they don't pay into Social Security anyhow so maybe that money coming out of their pay will help the country benefit as a whole. Gosh that would mean sacrificing and fighting for the good of the masses. gee sounds like democracy. don't want that!

    December 22, 2011 at 9:33 am | Report abuse |
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