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. Ez

    If 40 dollars is really that big of a deal for you, GET A NEW JOB!

    December 22, 2011 at 12:14 pm | Report abuse |
    • Sue

      In a perfect world that would be a good solution, however we do not live in, nor have we ever lived in, a perfect world.

      December 22, 2011 at 12:18 pm | Report abuse |
    • J

      If it was that easy, moron, everyone would be working new jobs and be millionaires and there wouldn't be (9% unemployment. Let's see how fast you post a truly dumb comment when you're the one downsized out of a job, or get cancer but can't afford the escalating health care bills. Nice holiday spirit, toolbag.

      December 22, 2011 at 12:20 pm | Report abuse |
    • David

      Ez: You sound like one of the Republican congressmen. Completely out of touch with the reality of people's lives. You have no clue how people are suffering out in the real world or maybe you do and just don't give a darn, just like many politicians. As long as it's not YOU suffering you are fine with people loosing money. But you have no problem with your tax dollars going to Iraq and Halliburton for 9 yrs, Bush Tax cuts for the rich, and many other wasteful solutions that will not benefit the middle class.

      December 22, 2011 at 12:38 pm | Report abuse |
  2. Mary

    The middle class has already cut back as much as they can – we live within our means, eat crap food, watched our savings disappear, dealing with wage freezes competing with every credit card company and utiliity squeezing us until we bleed. We don't get the assistance that lower income people get. No financial aid, no food stamps, no low-cost housing, no help with the heating bill. That $40 is 3 weeks of commuting costs for me so I can take public transportation and save on gas money and put that for food instead. These weasels in DC, I have no words for them at this point, I'm just simply speechless. They yak and yak about how "we" all are sacrificing, not true. They are getting richer, they all have financial advisors to show them the loopholes, their kids are serving in the war THEY created so GW Bush could crow about being a "war president". The banks are hoarding their money so you can only get a mortgage with a perfect credit score and God knows how much down payment. I don't think we are ever getting out of this, I really don't. Very sad indeed.

    December 22, 2011 at 12:15 pm | Report abuse |
    • Powerlifter165

      If the banks didn't give out loans to people with no down payment and poor credit we would be in this mess in the first place. It's a good thing they have tightened up their lending practices.

      Prior to this mess a person generally needed a min of 10% down payment to get a home loan unless it was an FHA loan.

      December 22, 2011 at 12:23 pm | Report abuse |
  3. Mike D

    the question is not what $40 means to you – the question is what does $1,000 a year mean to you, and it means a lot to a lot of people. our government is unfortunately dysfunctional. both parties are a disgrace.

    December 22, 2011 at 12:16 pm | Report abuse |
  4. GHub

    It means you are robbing the SS Trust Fund! Stop it!
    It means the majority of the "tax holiday" goes to millionaires that make a $106,000 per year or more. Where's the fairness?
    The tax holiday at the expense of the SS trust fund without comprehensive tax code reform and spending reductions is plain stupid!

    December 22, 2011 at 12:16 pm | Report abuse |
  5. DumbBO

    I don't know about you, but for me, the Republican plan for a $1000 tax cut for next year is much better than the democrat plan for a $167 tax cut for next year. What makes the democrat plan even worse is funding it by additional fees/taxes on home mortgages that go thru Fannie Mae and Freddie Mac. The democrats completely destroyed the housing market and now want to make the recovery even more difficult.

    December 22, 2011 at 12:16 pm | Report abuse |
    • Ez

      The "dumb" in your name says enough about you that I understand why you would think this way. Moron.

      December 22, 2011 at 12:19 pm | Report abuse |
    • Mancee Grace

      Spelling alert; it should be dumba$$.

      December 22, 2011 at 12:22 pm | Report abuse |
    • ocean0927

      Wow, you really are a republican.

      December 22, 2011 at 12:23 pm | Report abuse |
    • MeIam33

      Beware...the Spendocrats are a sensitive tribe....

      December 22, 2011 at 12:24 pm | Report abuse |
    • ocean0927

      Melam33: At least the Democrats aren't trying to protect the rich. I'm so tired of hearling how we can't increase taxes on those making a million dollars. Really? You think they would notice??

      December 22, 2011 at 12:29 pm | Report abuse |
    • DumbBO

      I'l take the $1000 tax cut. You can have your $167 tax cut. I agree your fearless leader is a dumba$$.

      December 22, 2011 at 12:32 pm | Report abuse |
    • David

      Yes DumbBO, you got your screen name correct. You actually believe the Democrats destroyed the housing market?? WOW....This is what the Republicans count on. They count on people who don't pay attention to politics and have amnesia as to how things really happened. Was the housing market in trouble start before the President got in office or after...dumba$$

      December 22, 2011 at 12:43 pm | Report abuse |
    • David

      Also if you understood politics then you would know the short term extension is not the end of what the Democrats want to do. They want to get the extension so they can have more time to work out a long term solution because they know they are going to have a battle trying to work with Republicans who want that oil pipeline thrown into the mix.

      December 22, 2011 at 12:45 pm | Report abuse |
  6. Sue

    $40 for me means that as a kidney transplant recipient, I can afford another blood draw to check on my health a little more often.

    December 22, 2011 at 12:17 pm | Report abuse |
  7. MeIam33

    Regardless if they extend this or's still MY money. I am the one who worked for it and if I can keep it in my pocket awhile longer that's fine by me!

    December 22, 2011 at 12:19 pm | Report abuse |
  8. Rhonda

    $40 will affect one of my 4 tuition repayments; I've been searching for $15 to carry over from one check to the next now I'll need the entire $55 to help pay on the MBA I got to get a better paying job I can't seem to get because "things ain't what they used to be!" Now, I'll have to deplete my savings by $660 annually to pay for that one student loan! C'mon congress............ get it together.................

    December 22, 2011 at 12:20 pm | Report abuse |
  9. ocean0927

    Congress needs to get real. Stop worrying about getting re-elected and actually do something for us – the people that put you there. Stop the crap because we are sick of it. It's like watching a bunch of 4th graders on a playground that can't get along.

    December 22, 2011 at 12:20 pm | Report abuse |
  10. KB

    $40 is gas in my car for a week to a job 40 minutes from my house one way in which I already had to take a pay cut of $280 a month in addition to mandatory furlough days due to financial/program cuts.

    December 22, 2011 at 12:23 pm | Report abuse |
  11. skarphace

    Ok, let me expand the argument that this Payroll 'tax' cut is a good thing in order to try and discredit it.

    If $40 per biweekly paycheck is a good thing, how about $119 per biweekly paycheck? This is what you would get if you made $50k per year and Social Security was abolished alltogether. This would be a cut of 6.2%, not just 2.1% (just under three times $40).

    So you get your cash now, but get no Social Security benefits at all when you retire. Still sound like a good idea?

    December 22, 2011 at 12:24 pm | Report abuse |
    • Powerlifter165

      You mean I can have the money I earned, invest it as I see fit, an IRA or perhaps for needed problems and don't have to rely on the govt and be self sufficent later in life. H3ll yea sign me up.

      December 22, 2011 at 12:35 pm | Report abuse |
  12. Carol

    I think the real issues are how our society and our goverment needs to change and be FOR THE PEOPLE. Look at the 20 and 30 year olds. Not saying that we or our parents didn't have it tough, but look at the wages, minimum wage is at $7.50 per hour, a gallon of milk is $3.50 a pepper is $1.50 +, chicken that used to be the poor mans meal is now $8 to $10 bucks not including a startch and a vegetable. Anon commented that Slena Adams should go on a diet! If all she can afford for family is mac and cheese and hot dogs what do you expect. It's so very expensive to eat healthy any more. How can you eat healthy when a head of lettuce is 2 bucks or more? The cheap meal of home made taco's is now $20 bucks or more if you use real cheese, good hamburger, lettuce and tomato. That's more then 3 hours of labor at minimum wage to put one meal on the table. We the PEOPLE need to take back our goverment and make them work for US. This payroll tax cut is minut compared to all the other ways the goverment republican or democrate can dig themselves out and give back to us the greatest country that used to be ours not their's!

    December 22, 2011 at 12:25 pm | Report abuse |
  13. Jack Janski

    Obama is a friggin' dirtbag. He wanted a year extension. The House Repubs want to give him what he wanted and now he is dissing them, all for political reasons. Like a said, Obama is a dirtbag. The sooner he is gone the better off we will all be.

    December 22, 2011 at 12:25 pm | Report abuse |
    • skarphace

      The House Republicans are dirtbags. They wanted to couple this Payroll 'tax' cut with the Keystone Pipeline project, which is an absolutely horrible plan that only benefits big oil in the long run. The sooner they are gone the better off we will all be.

      December 22, 2011 at 12:27 pm | Report abuse |
  14. Jeff

    I was trying to put into perspective what someone making $50,000 a year having $80.00 per month out of their take home pay would be to someone making approx. $300,000 a year missing $500.00 per month take home pay.

    December 22, 2011 at 12:28 pm | Report abuse |
    • skarphace

      I see. I still don't think it is worth it to get the cash now and defund Social Security in the process.

      December 22, 2011 at 12:32 pm | Report abuse |
  15. Carlos

    $40 is a fat sack-o-weed

    December 22, 2011 at 12:28 pm | Report abuse |
    • skarphace

      Then you probably don't work and this Payroll 'tax' cut does not affect you.

      December 22, 2011 at 12:33 pm | Report abuse |
    • ocean0927

      Go back to playing your video games.

      December 22, 2011 at 12:33 pm | Report abuse |
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