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. David

    Ok blame the Republicans who are trying to extend it for a year, instead of the Demacrates who only want two months so they can use it during the elections. Everyone is after the Republicans what about Obama who says his way or no way, then blames the GOP because they dont cave. That is not working together Obama is dividing this county more than any other president ever has. I think we need to do away with both parties and start over.

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

      What we see here is a bunch of monkey circuit.
      The author of this article may be fit by WH and Reid? The $40 per paycheck is for the people make over 110K year. Other folks is less.
      We all agree that: we can effort to have $40 tax (which we will get back in the SS when we are older?). So White House , Obama, Reid .....please stop bar k and shut your mou th and move to STOP SPENDING THE DEBTS of TRILLION is the matter to American. You have wasted billion of dollars and some of those go to your campaign contribution while we are all suffering from the mess.
      While a 2 months delay. WHY and WHY. If you are running this country on the basic of 2 months planning then please go home and help your wife cleanup the toilette.

      December 21, 2011 at 2:43 pm | Report abuse |
  2. Mr Pig

    $40 a paycheck? Well, I guess the skid row h00kers are going to be out of luck.

    December 21, 2011 at 2:29 pm | Report abuse |
    • Joshua the Agnostic

      We all know they cost $60.

      December 21, 2011 at 2:34 pm | Report abuse |
  3. Mike Talley

    ok, lets get real here. $80 per month is really not that much to cry about. I bet most of teh people who responded here are paying for the internet, buying cigarettes, or alcohol or other nonessential items. If we really thought about this the way they are then maybe we should not pay any taxes, we would have alot more money to spend! And by the way it was not $40 per paycheck for me, it was more like $15. This is rediculous to make such a big deal out of this. This is just a political move. Grow up washington and America!

    December 21, 2011 at 2:30 pm | Report abuse |
    • AC

      Mike, you are clueless. $40 is a lot of money for people, period. Be thankful that $40 doesn't mean anything to you and you don't need it. Not everyone is as lucky as you. Remember, luck will run out eventually.

      December 21, 2011 at 2:37 pm | Report abuse |
    • Joel

      Good point Mike, most of these people on this list probably don't pay taxes so this specific issue won't cost them $40. $40 does mean a lot to these people but most used in this story aren't losing out on the full $40.

      December 21, 2011 at 2:38 pm | Report abuse |
  4. dgaus

    While getting an extra $40 is nice perhaps I am lucky but $40 to me is just $40 less I will be putting into savings and could do without to avoid the run up of govt debt. I have 4 children, 3 of whom are 5 years old so with multiples know plenty about having current and future expenses but you manage. I'm thinking about what this debt will mean to all of us in the long run.

    December 21, 2011 at 2:31 pm | Report abuse |
  5. Joshua the Agnostic

    $40 is less than your cable bill. $40 is one out to eat. I guess we should tax the Rich $40,000 a pay check thought right?

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

      Lucky you. We eat out four times a month – places like Taco Bell, Burger King and small delis. $40 is what three of us can afford to spend on eating out four times in an entire month.

      December 21, 2011 at 2:51 pm | Report abuse |
  6. adrian castaneda

    $ 40 dollars a month to us means the world. we recently got my daughter added to our family from a custody battle. she has asthma and requires a lot of medication to prevent her from ending up in the intensive care. if our taxes go up it means that we would have to give up eating some of the already rationed meals that have had to adapt to because of the economy. i strongly believe it is a bad idea for them to impose these taxes with out it affecting the food stamps that people are already getting denied for.

    December 21, 2011 at 2:33 pm | Report abuse |
  7. AC

    $40 means food on my table, but if I were a rich politician, then $40 would pay for lunch at a nice DC area restaurant for a lobbyist. I need to run for office, maybe I would have a better life than working to make ends meet and pay for my college education. Happy Holidays from Congress

    December 21, 2011 at 2:34 pm | Report abuse |
    • Let them eat CAKE

      AC–$40 would be their TIP for lunch at a DC restaurant. I am appalled at how obscene it is that people who think $40 is nothing are the ones voting on it.......Rich making decisions for the poor, again. All the while claiming that the poor just want a handout.

      December 21, 2011 at 2:38 pm | Report abuse |
  8. Johnmac

    How in the heck do they figure $40 a paycheck - are they paid monthly???

    December 21, 2011 at 2:34 pm | Report abuse |
  9. Change

    @ C Tran

    Yes! The Solyndra investment may have been risky but the reality is that when as President you inherit the worst economic crisis in America since the Great Depression, any efforts to improve and strenghten the economy would be risky. Was the Solyndra deal done to hurt Americans? Of course not! Did it go bad? Unfortunately it did! But again, when you are an incoming president who has to improve an ailing economy right away, you have to take chances.

    Likewise, the economic stimulus package was not wasteful spending as the GOP/teabags have alleged from the start simply because this legislation was passed out of NECESSITY to stabilize the American economy and prevent it from slipping into a catastrophic depression. And with passage of the economic stimulus package, millions of American jobs in local, state and federal government were rescued and saved. And that includes quarter of a million American jobs in our Auto industry. Furthermore, this bill is personally important to me because I'm a state employee and my job has been rescued as a result of this legislation.

    Therefore your comments are baseless and plain stupidity especially when people like you continue to support the republican policies that led to our economic downfall at home and failures in Iraq and Afghanistan. And say what you want about President Obama but the reality is that no Americans have died from the policies of this administration whether at home or abroad. But in contrast, thousands of Americans have died as a result of the failed, misguided and ineffective domestic and foreign policies of the rightwing leadership. And ten years later, Americans are still dying in Afghanistan as a result of these failed and pointless Republican policies.

    December 21, 2011 at 2:34 pm | Report abuse |
  10. David

    It does not affetct me personally but I am so upset about it. So many families struggling to make end meet every week and these guys in washington have one thing in mind: keep the economy the way it is for their own political gain, regardless of the impact on the middle class and the american people. Voters in America suffer from amnesia and the politicians know it......

    December 21, 2011 at 2:35 pm | Report abuse |
  11. Mike

    If people are this irate about $40 every 2 weeks, I wonder when they are going to get irate about the rest of the money stolen from our paychecks. $40 is just a drop in the bucket compared to how much money they are plundering from each paycheck. Oh and BTW, this is NOT going to affect social security. The current proposal is to add $17/month to your mortgage payment for 10 years. I'd personally rather take my 6% and the company match and put it into an account I have control over.

    December 21, 2011 at 2:37 pm | Report abuse |
    • bill

      lol @ mike. I agree. LOL

      December 21, 2011 at 2:44 pm | Report abuse |
  12. Goodstuff

    40$ a paycheck? Pshh, means nothing. Then again, it's awesome being rich.

    December 21, 2011 at 2:37 pm | Report abuse |
    • alleycat

      you are an ass

      December 22, 2011 at 12:08 pm | Report abuse |
  13. Lmpeters

    $40 a paycheck would mean deciding what to skip payment on each month. Do I pay student and car loan first and protect my credit and prevent an increase in penalties? Or do I pay rent first and ensure I have a place to stay? I could potentially move back home, but that's three times the distance to work and $40 doesn't cover a tank of gas.

    I'm from Ohio and just ashamed of Boehner. Everyone agrees to extend the cut, but to sneak up and attach all this extra to force a vote during the Christmas break, to try and say "Look, we're still here!" and be heroes is disgusting. Stop paying politics with the little I have!

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

      LM What did you do last year before the temporary tax relief? Do you have a cell phone? Do you have a second job? Do you have a BMW sitting in your driveway that you shouldn't have bought?

      December 21, 2011 at 2:46 pm | Report abuse |
    • Lmpeters

      Thanks but I am not stupid. Last year I was working 50 some hours a week and doing well for myself and putting extra money aside each paycheck. Then my job was cut to only 40 hours a week and used my savings to pay for rent and bills. I drive a used car I bought out of college, I use minimum services on my cell, and I have moved to a not so nice area to afford rent. Before this I was a senior in college working two jobs and attending full time to pay tuition and live. I have worked my butt off which is why I am seeking a second job, applying for better jobs, and preparing to get my masters so I am more qualified for the jobs I want/need.
      I have no time for people who whine about having too little and in the same breath telling me what new toys they bought.

      December 21, 2011 at 5:40 pm | Report abuse |
  14. webgod

    There goes my hard-earned 1% raise next year.

    December 21, 2011 at 2:39 pm | Report abuse |
  15. Kleo

    Its $40 that will go to social security which is already having problems making ends meet. Why did Obama even begin this cut? Its like me saying I am $100 short on money this month so I am going call in sick to work for 4 days.

    Sometimes we need to give up something today, so I can have something tomorrow. The $40 will go to social security so when my parents retire in 2 years the fund has enough money. And hopefully (but realistically not) social security will be around when I retire.

    I understand not having money at the end of the month, I work full time and make $25,000 a year but I have to leave within my means and do not expect govenment to take care of me.

    December 21, 2011 at 2:40 pm | Report abuse |
    • bill

      Since you make 25K a year, you are only going to lose 41.66 per month. (25K / .02 = 500. 500/12 = 41.60.

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