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. Tough 75002

    $40 per check = my ability to drive to work each day*half of my grocery budget for a family of four*1/3 of my electric bill*a pair of shoes for my kids that have been walking with holes in their toes for months*my deductable for a cavity I have needed filled for a year.

    $40 per check = Our governments unwillingness to do their jobs. They are to represent the people of the United States of America. Instead, they are being paid to jockey for political position and go on vacation.

    I think every politician coming up for re-election in th next 6 years should lose their jobs.

    They supported the creation of financial disaster in this country. We the people, get to pay the price, again and again and again and again................

    December 22, 2011 at 10:23 am | Report abuse |
    • chatmandu002

      When it come time to retire how will you feel when your retirement was underfunded.

      December 22, 2011 at 10:43 am | Report abuse |
    • Burt

      Whose retirement is going to be underfunded? Smart money takes that savings and puts it into an IRA that will benefit them much more than SS ever will.

      December 22, 2011 at 10:50 am | Report abuse |
  2. Cliff

    I will take my $40.00 and donate it to anyone running against this incompetent President

    December 22, 2011 at 10:24 am | Report abuse |
  3. JJJPPP

    OMG these people act like the 40 dollars is all they have. I would stay keep my 40 so I can have a better future.

    December 22, 2011 at 10:24 am | Report abuse |
    • patrick

      I'd go for that too if it wasn't continually used to line the pockets of "Job creators" who don't create jobs. The Bush tax cut should only apply to people who actually directly create jobs with the money. Spend your own money on that second yacht.

      December 22, 2011 at 10:31 am | Report abuse |
  4. Really?

    Are we all serious here? Did anyone fail to realize that this is a payroll tax that we ALL were paying two years ago! Why is it that people expect lower taxes, but touch their benefits, and they freak out just the same. The money for those lovely benefits (SS, Medicare, Medicaid, Unemployment, subsidies, subsidies, subsidies) has to come from somewhere, and it can't all come from the top 40% of taxpayers forever. We can either go toward more capitalism (lower taxes, smaller gov't, LESS SUBSIDIES), or more along the lines of socialism (more subsidies, HIGHER TAXES, larger gov't), but NOT LOWER TAXES AND MORE SUBSIDIES! Policitians have been borrowing YOUR MONEY to buy your votes for years now, and it is time that people get educated and STOP THIS NONSENSE. You want the 1% to pay more in taxes, VOTE. You want the structure of your taxes to change, VOTE. And don't vote the same ***hole in that obviously don't think is doing a good job, just because he's "your party candidate". The party system in this country should be abolished. Frankly, it only serves to give stupid people their talking points, and an "enemy" for stupid people to hate.

    December 22, 2011 at 10:25 am | Report abuse |
    • glyder

      well said.unfortunately your words will go unheeded.actually the only permanent solution would be to divide this country.

      December 22, 2011 at 10:38 am | Report abuse |
  5. Jason

    #40dollars; it isn't the amount that is the issue for me, it's the principle. Who the hell are these fools in office? Who do they think they are that they can just deny us even ONE PENNY?!?!

    When will Americans quit letting these fools ruin lives and simply revolt. A nation of cowards is what we have become.

    December 22, 2011 at 10:26 am | Report abuse |
  6. John

    What $40 dollars means to me? If I don't get it in January 2012, as a life long Republican, I'll vote a straight Democratic ticket in November. My party has been taken over by a bunch of idiots, and has clearly lost touch with the core values this country was built on and the American people at large. It makes me feel ashamed.

    December 22, 2011 at 10:27 am | Report abuse |
    • glyder

      yeah,the other party has those core values.of a communist.we have no friends in washington unless we are filthy progressives.

      December 22, 2011 at 10:40 am | Report abuse |
  7. PATTY

    I DRIVE 98 MILES A DAY ( ROUND TRIP) TO WORK IN IL. IT TAKES ANY WHERE FROM $36.00 TO $45.00 EVERY TWO DAYS TO FILL MY TANK. THIS $40.00 LOSS PER PAY WOULD KILL MY BUDGET. FOR YOU PEOPLE IN CONGRESS THAT MAKE A LOT OF MONEY AND DON'T HAVE TO WORRY ABOUT A BUDGET , NEED TO STOP AND THINK OF THE EVERYDAY MIDDLE CLASS PEOPLE THAT COUNT ON EVERY PENNY WE MAKE TO LIVE ON. AND WE NEED EVERY PENNY.!!

    December 22, 2011 at 10:27 am | Report abuse |
    • Cameron

      You mad, bro?

      December 22, 2011 at 10:30 am | Report abuse |
    • JackStewart

      Sounds like your car is a piece of sh## if you have to refill the gas tank every 2 days after driving only 200 miles

      December 22, 2011 at 10:31 am | Report abuse |
    • PATTY

      TO Jack Stewart : I fill up every 2 days just so I don't have to spend $80.00 to $100.00 at one time. Every 2 days gives me just less then 1/2 tank. $40.00 is important to my Budjet!!!!

      December 22, 2011 at 12:03 pm | Report abuse |
  8. Dave Kaspersin

    CON Gress doesn't care about the Middle Class or the poor. Only a revolution will end the mess this Country is in!
    But its too late. the E CON O My is going to collapse, and that will only hurt We The People, not the rich!

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

    First , a tax holiday is NOT a tax CUT !!!! Therefore , letting the holiday expire will not result in a tax increase for anyone . Your tax will return to what it was before . If it is higher than it originally was , then we can discuss a tax increase occurring . The discussion at the present time concerning tax cuts , or increses , is disingenuous at best , and class warfare at worst .
    Second , in order to scare people , they throw around generalized ,averaged , dollar amounts intended to draw responses such as you see posted by some in this forum . That type of disinformation is nothing short of fearmongering .
    Third , these tactics are being used by both sides for political leverage , to garner votes for the upcoming election . Do not be fooled by these miscreants .

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

    I can only work part time at a grocery store because I have to take care of my child. I only take home about $120 per week, unless I work a little extra then I make about $130 a week. This $40 I will lose each week will make things really tough. I will probably have to sell my house to get by. Hopefully this does not come to be!

    December 22, 2011 at 10:29 am | Report abuse |
    • Andy

      Thanks for making my point Blanche. You are not losing $40 a week, you are losing $2.40 a week.

      December 22, 2011 at 10:32 am | Report abuse |
    • Blanche

      You didn't account for the weeks where I work a little extra!

      December 22, 2011 at 10:33 am | Report abuse |
    • JackStewart

      Blanche, learn the facts before you post comments. If you only take home $120 a week, you ARE NOT going to see a decrease of $40 from your take-home pay.

      December 22, 2011 at 10:33 am | Report abuse |
    • JackStewart

      Unless you make $50,000 per year, your take-home pay IS NOT going to go down $40. DO THE MATH!!!!!!!!!!!!!!!

      December 22, 2011 at 10:34 am | Report abuse |
    • Andy

      Sorry about that Blanche, well, you'll only lose $2.60 on your good weeks.

      December 22, 2011 at 10:39 am | Report abuse |
    • Really?

      Those weeks that you work "a little extra" are they paying you $500/hr? Please, before talking next time, get a calculator and figure out the numbers first. Think before you talk. 2% of your gross pay, up to roughly $108k. $40 is roughly 33% of your gross pay. If we were collecting SS contributions at 33% of gross pay, we wouldn't have a budget problem.

      December 22, 2011 at 10:43 am | Report abuse |
    • Emily

      Don't worry, it won't come to be. $40 is based on a bi-weekly paycheck and $50,000 income. Therefore it is mathematically impossible for you to lose $40/week with a significantly lower salary.

      December 22, 2011 at 10:48 am | Report abuse |
    • Blanche

      Really?, your statement is incorrect. It is up to $110,100 of your gross pay this year. That number typically increases every year.

      December 22, 2011 at 10:48 am | Report abuse |
    • Really?

      I apologize. That's why I said "roughly $108k." It honestly slipped my mind as to where it was this year. Either way, you're proving my point. And the cap on SS earnings is a regressive tax anyway. Let's remove the cap. If you make $200k, all 200k is subject to SS taxation.

      December 22, 2011 at 10:58 am | Report abuse |
    • RoboKnuckle

      "Blanche
      You didn't account for the weeks where I work a little extra!"
      +++++++++++++++++++++++++++++++++++
      I'm sorry but I am still LMAO about this comment. Thank you for that.

      December 22, 2011 at 1:24 pm | Report abuse |
  11. Andy

    This is so dishonest. I would be willing to be that most of the people responding don't make anywhere near $50k a year.

    December 22, 2011 at 10:29 am | Report abuse |
    • Really?

      Correct, but does telling people to think for themselves make for good headlines? This entire "tax hike" rhetoric is just garbage. it was a tax holiday, it's over, time to move on. Along with the "Bush/Obama" tax cuts. Holiday over, move on. Maxxing out the country's lines of credit isn't a sustainable fiscal path.

      December 22, 2011 at 10:54 am | Report abuse |
  12. Really?

    @Dave- The rich are part of "We the People" too. 1 person = 1 vote. Use yours wisely. Just be thankful all members of society can vote now, and there isn't a poll tax. Our Republic has come a long way, but has a long way to go.

    December 22, 2011 at 10:32 am | Report abuse |
  13. Ed Klein

    The $40 is confusing some folks. It's based on 26 paychecks per year. $20 per week is what it amounts to. Some folks, who get paid weekly, think they'll be tapped for $40 vs $20. In any case, it does have an affect, for the most part, on the lower wage earners. Truth is, it will not motivate employers to hire. It will go up in a year, if the President and the GOP get their way. So? The Dems want this win to save an second round for the dismal performance of Obama. Those who did vote for him...and...who will probably do it again, deserve the consequences! The country will suffer even more if he gets a second term.
    Who'll he blame from now on? Certainly not himself, his ego couldn't handle that!

    December 22, 2011 at 10:35 am | Report abuse |
  14. Sam

    Hilarious to suddenly see liberals argue for a tax cut, but I digress. Shouldn't the real question be "what affect does this political "tax holiday" have on the already troubled Social Security fund from which the funds are being stolen from. Where are the media watchdogs who usually jump and anyone who attempts to fix the very real Social Security funding issue? Are they too busy helping the president create a bogus political issue to try and look like the tax cutter he certainly is not? Should a tax holiday really come at the expense of Social Security funding?

    December 22, 2011 at 10:35 am | Report abuse |
  15. GHub

    This controversy over the payroll tax cut is BS! No. 1 Most of the benefit goes to the millionaires that make $106K per year or more. No 2 This is a rob "Peter to pay Paul" scenario! This accelerates the social security trust fund depletion! No 3 It was a stupid idea to begin with. Just fix the Federal Income tax code and reduce government spending!

    December 22, 2011 at 10:38 am | Report abuse |
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