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.


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.



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.









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. jrky

    you know been thinking about this thing with the budget for a while now and think our congress and senate need a wake up call they do not live in the real world they set up there and do nothing when it comes to a problem they are like kids in a candy store fighting on what kind of candy to buy, I personally think they have forgotten what they were elected to do, and since they work for the people and were elected by the people shouldnt they be our employees. I think that each congressman or senator should make no more than the median income of the state they rep and their benefits should match those of the average voter, how caqn they decide on anything about us when they dont understand the average american worker, i relize their is a need for unempoyment to an extent but come on do they eally think people are gonna look for work when they can draw for 99 weeks and how about people living in government subsidised housing i have known generations growing up in these give them no option, mandatory drug testing which i have to do to work where i do, and mandatory education and a timeline to live there, and still if cant find employment mandatory community volunteering, get them involved this country has too many people out there looking or waiting for handouts. I realize that their are truly people out there that need help and think we should help them, I look at the paper everyday and see adds for employment and then i hear people say why do i need a jod i still have 50 weeks on unemployment left. Where has the pride gone in this country come on people stand up get some pride back to this country until then i guess we can do likje everyone else keep fighting in the candy store and get nowhere

    December 22, 2011 at 11:30 am | Report abuse |
  2. LM

    full tank of gas, which equals one week of driving...

    December 22, 2011 at 11:32 am | Report abuse |
  3. johnny popper

    Have the Republicans dropped the ball on this issue of cutting social security funding? Terribly. They have failed to highlight to the American people that this program to defund social security is not a savings at all, but just the latest lazy, sleazy intiative by a lame Congress which is and will cost Americans money. Savings? How can the Republicans allow anyone to call a program calling for people to spend their retirment savings now a savings program?!! You bet the Republicans have dropped the ball! Why don't they just tell the Dems to initiate a program where people can spend their §401k money now and not pay any taxes or penalties? It's essntially the same thing. Stupid. Congress and this naive President are just simply horrible at handling our money.

    December 22, 2011 at 11:33 am | Report abuse |
    • Nick S

      You are extremely uneducated. The entire government is corrupt and to blame Republicans for anything is ignorant. Both Democrats and Republicans are to blame. However, Obama and his group of clown Democrats were successful in accomplishing absolutely nothing at all during his term. They all need to enroll back in college and take Economics 101.

      December 22, 2011 at 11:50 am | Report abuse |
    • RoboKnuckle

      Hey johnny pooper,
      This "tax cut" was originally put in place by Obama as part of the stimulus. Your anger toward Republicans is not warranted for robbing Peter (retirement) to pay Paul (now).

      December 22, 2011 at 12:54 pm | Report abuse |
  4. jC in Western U.S.

    I will survive without the $80 (because I'm paid once a month, not twice) but I'll miss it and blame Republicans:

    Every time I put $40 in my car for gas (1 x week)
    Every time I buy groceries for my family.
    Every time I make a co-pay on medication (and my family was out-of-pocket $8,000 last year despite having health insurance).
    Every time my disabled husband goes to one of his four physicians.
    Every time I get a bill on the $3,000 I still owe for last year's hospital bills.

    I'm a teacher. I've worked since I was 16 and I'm 58. I work two jobs. I support a family of four. I've never received unemployment or any form of government assistance. I've never missed a mortgage payment. I don't have a car loan and never have – we buy used cars. The last time I went out for dinner was Feb. 17th, 2011 – my 35th Wedding Anniversary.

    I will survive without $80, but I will remember that Republicans in Congress thought that it was no big deal to play politics with my paycheck. For them, it's chump change. It isn't for me. They could have given all of us two months to work out a compromise. They didn't. They could have kept their oil pipeline out of a payroll tax bill. They didn't. They could have voted on the Senate Bill. They didn't. They think I'll forget this by next November. I won't.

    December 22, 2011 at 11:34 am | Report abuse |
    • RoboKnuckle

      "Every time I make a co-pay on medication (and my family was out-of-pocket $8,000 last year despite having health insurance).
      Every time my disabled husband goes to one of his four physicians.
      Every time I get a bill on the $3,000 I still owe for last year's hospital bills."
      How's Obama care working out for you? Will you remember that too? Also, please remember that the Republicans in the House are not willing to agree to current deal because they want to expand the $40 for the ENTIRE YEAR, not just two months as the Democratic Senate bill states.

      December 22, 2011 at 12:58 pm | Report abuse |
  5. Glades2

    Oops – I misread the byline – $40 a paycheck for me = $80 a month, and that's my electric bill (guess I'll buy candles). I'm a single person with a single income (non-professional) so that would mean a lot to me, but even if they don't work it out and we lose that amount, pray that God will make up the difference...

    December 22, 2011 at 11:35 am | Report abuse |
    • Dennis

      You should ask to get paid once a month instead of twice so you only lose $40 a month

      December 22, 2011 at 12:02 pm | Report abuse |
  6. Loretta

    I never realized that grown men could be so childish. My son has no one to look up to in Washington. These men and I use the term very loosely – act like 5 year olds on the playground. Grow up for God's sake and act like you have some sense. All of you! Stop all of this – if nothing else is working then just take all that other stuff out of the bill and just pass the tax bill alone – fight about that other stuff later – THINK about the American people for ONCE!!!

    December 22, 2011 at 11:36 am | Report abuse |
    • Powerlifter165

      Your son should be looking up to his father an not someone else.

      December 22, 2011 at 11:57 am | Report abuse |
  7. down with liberal spending

    It means NOTHING. Two months is BS. I didnt even notice the cut for the last several months. My pay check is always about 50% from what I grossed. Taxes and other deductions are HUGE. No one is upset because they dont see how much a bite they take out they only look at the net pay from week to week. This tax cut is a joke. Go ahead bankrupt Social security even faster. That will lead to a quicker default-which we need desperately. We need austerity here. Now.

    December 22, 2011 at 11:38 am | Report abuse |
  8. L.S.D.

    Those of you who are commenting that "it means nothing" perhaps don't have issues like some of us. Not only do we lose the amount, but other expenses are increasing. It becomes harder and harder to keep up. Savings are being eaten up, and work hours are increasing. Any amount "taken away" is a hardship, and that is the way many people look at it – as "taken away".....

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

    This stupidity of not passing the tax cut extension is exactly that...stupidity. How about these highly educated, learned individuals just introduce a bill that has nothing in it but one thing....the tax extension language. Nothing more, nothing less. Both sides not giving because their little attachments to the bill for their pet projects is the epitome of arrogant, self-serving, partisanship that does not help the American public one iota. Idiots All.

    December 22, 2011 at 11:43 am | Report abuse |
  10. RealGlaird

    What that $40/check means is you either get social security or you get cash. You can't have it both ways.

    December 22, 2011 at 11:43 am | Report abuse |
  11. Nick S

    Here is a great idea we stop taking so much money from hard working Americans. How about we stop giving unemployment benefits to those bums that pump out 10 kids who don't want to get off their asses and apply at McDonalds or other terribly funding government programs (Such as paying these morons in D.C. who get paid 10x more than I do). Put that money and much more than this 2% tax break back in the pockets of American people. The more money American people have the more money we spend. Did we every think that maybe the problem with the economy has to do with this idiots on Capital Hill stealing half our money? I'm not saying lets not pay taxes at all because that is unrealistic. I'm saying to cut these terribly funded programs and put a ton more money back in the American's pockets. That is your solution you morons in D.C.

    December 22, 2011 at 11:45 am | Report abuse |

    Fire all of them another 11th hour issue, pointing fingers etc, time to move elsewhere

    December 22, 2011 at 11:49 am | Report abuse |
  13. Frank

    Don't have $40 and need a new game? Use one of these promo codes for a free game download on itunes.


    December 22, 2011 at 11:49 am | Report abuse |
  14. Eric

    It's not just 40 dollars. It's 80 dollars a month based on the article stating 40 per pay check and most people get paid two times a month.

    December 22, 2011 at 11:49 am | Report abuse |
  15. Raemarie

    Stop with the sob stories and the gimmicks, white house. If you think this is going to help you "win" you are crazy. It shows what you really are, nothing but a petulant child throwing a tantrum. Why did the Senate dems pass the bill and run? Because they are cowards. Why is the president doing this now? Because he thinks it will score him political points. He doesn't give a rip about anyone but himself and his $4 million dollar taxpayer funded vacation. At least our speaker has some guts and is thinking about longer term solutions.

    December 22, 2011 at 11:53 am | Report abuse |
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