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. Sammy

    As with every prior year, these items are STILL on my wish list for the holidays:
    1. No lobbyists
    2. No special interest groups
    3. Single item bills, no apples and oranges bunched into a single bill, keep the bill specific on a single item only!
    4. Politicians will be paid for work performed, you miss voting on a bill you get docked of your pay
    5. No automatic pay increases for the politicians, in fact there should be a pay freeze for them
    6. Keep the taxpayers money in the United States and for the benefit for all those legally in our great country
    7. Politicians, learn how to do videoconferencing! A vast majority of U.S. Corporations are doing it to save money, you should too!
    8. Stop "talking the talk" and start "walking the walk" with alternative energies. I find it strange that televisions, telephones, computers and so forth can evolve over time but yet the internal combustable engine has basically been untouched for over 100 years??? Come on already, time to look at the patents that Big Oil has been sitting on that would let us evolve beyond oil.

    December 22, 2011 at 12:49 pm | Report abuse |
    • Bayliner2655

      Here Here, well stated!!!

      December 22, 2011 at 12:58 pm | Report abuse |
    • Dan Renner

      I coudn't have said it better myself. i am tired of the behavior of the majority of our politicians. I have to mention though that yes, the internal combustion engine hasn't changed "by internal design that much in 100 years, a lot has been done to improve it's efficiency. I'm a fanatic of anything with wheels, wings or propellers and watch the developments on a regular basis. As far as cars are concerned, cars like the chevy volt that are plug in but also have an on board generator are products that are heading in the right direction. But, remember, all the products you talked about, even though they get their energy from hydroelectric power and windmills, also still get it from coal, oil and natural gas. We can cut down, and, improve efficiency but we will never be able to cut out energy consumption. At least not in the next 20 years. The best technology I have seen so far is regenerative braking where the vehicle changes the drive motor to a generator to slow the vehicle and charge the batteries. Even train locomotives, which have been a form of hybrid for about seventy years have this type of braking. Just that now they use it to charge batteries installed below the walkways running down each side of the locomotive. Don't lose faith, we are working on it, but progress takes time.

      December 22, 2011 at 1:11 pm | Report abuse |
    • RoboKnuckle

      Hey there Sammy,
      You have a better chance of getting all of the gifts from the "12 Days of Christmas". (Traditional or McKenzie Brothers)

      December 22, 2011 at 1:28 pm | Report abuse |
  2. Nick26

    $40 will almost pay for a lift ticket at the local ski resort. Or it will pay for a day of gas for snowmobiling... well, for 1 snowmobile's gas.

    December 22, 2011 at 12:49 pm | Report abuse |
  3. lane

    Gop walks out on steny hoyer. This is why people dislike politics in Washington
    http://www.youtube.com/watch?v=wV71OKdEqRI

    December 22, 2011 at 12:50 pm | Report abuse |
  4. Jeff

    Thank you for taking the time to read my opinions and thoughts. For those of you who will be impacted by the cut, I am truly sorry and I hope that something in your life will change that will lessen the impact. For those of you who this will not impact, feel lucky that it doesn't and hope that at some time in the future you are not asked to give up this same Percentage of your take home pay. Remember we are not each others enemy, but need to work together to make America and it's people fairly treated on the same level playing field. Merry Christmas to all and I hope next year will improve for ALL of us.

    December 22, 2011 at 12:51 pm | Report abuse |
  5. Beni

    I've had a pay freeze for the last two years while other costs keep going up, gas, food, utilities, vehicle registrations, etc. But that's ok, I can adjust my spending, get rid of my phone land line and just use my cell phone, switch to a cheaper internet provider, cancel my cable and use online video streaming, eat out less and cook more at home, I'll survive.

    December 22, 2011 at 12:52 pm | Report abuse |
  6. johng

    Knowing that the average American pays 4000.00 for gas a year 40.00 means alot !!!

    December 22, 2011 at 12:53 pm | Report abuse |
  7. Bayliner2655

    40 bucks a pay check may keep the local tax man from evicting me from my paid for home for the good of the community!

    December 22, 2011 at 12:56 pm | Report abuse |
  8. Rich54

    Obama is a joke. he is worried about $40 for 2 months while he is taking a 4 million dollar vacation. Hahahhahahahaha

    December 22, 2011 at 12:56 pm | Report abuse |
    • MIchael

      You are an idiot

      December 22, 2011 at 1:03 pm | Report abuse |
    • Walter Rand

      Sad, isn't it Rich? But those are the facts.

      December 22, 2011 at 1:26 pm | Report abuse |
  9. Bob

    Its hard to say. Since its not a tax-cut, but rather a raiding of the SS fund. We have basically borrowing from ourselves.

    December 22, 2011 at 12:57 pm | Report abuse |
  10. G D

    These are tough times for many, but taking $$ out of Social Security funding & running up the debt further is irresponsible. The $40 going to people in need of it is the right thing, but it needs to be offset by other spending decreases or an increase in revenues from somewhere/someone else. That's the problem, we need to pay for what we choose.

    December 22, 2011 at 12:59 pm | Report abuse |
  11. Sheri Meckler

    This will mean that I will now have to use my credit card to purchase gas. So the banks win again.

    December 22, 2011 at 1:03 pm | Report abuse |
  12. RoboKnuckle

    Let's rephrase the question that Obama is asking... Instead of "What does $40 per month mean to you?" I would prefer it to be "What does $80 mean to you?" because this "tax break" will only be in effect for two months as the current bill is written by the Democratic Senate. The House Republicans want to extend the "tax break" for the entire year,that is why they are not agreeing to the terms. If this was such a needed "tax break" why didn't the Democratice Senate make it for the entire year? Because expiration in two months gives them another chance to go after the Republican party in an election year. So should the anger be directed towards? Those "money hungry Republicans" that are trying to get you $40 per month for the whole year, or the "looking out for the people Democrats" trying to put $80 in your pocket until March?

    December 22, 2011 at 1:07 pm | Report abuse |
  13. Philip S.

    If these Republicans don't quit obstructing EVERYTHING, I'm going to become a straight-ticket Democratic Party voter.

    December 22, 2011 at 1:07 pm | Report abuse |
  14. deyonce james

    40 dollars extra each paycheck makes a huge difference for me and my child.

    December 22, 2011 at 1:12 pm | Report abuse |
  15. Marilyn

    Isn't it nice that President O'bama has the power of the "bully pulpit" to speak to the citizens!! I am so sorry that things are really tough for some people but it has always been that way. I did not get a cost of living increase in my social security for 3 years and I did not hear the president asking for stories about that. Yes, I live well below the poverty level. My understanding is that these cuts were from the withholdings. When you get ready to retire. Sorry if I'm mistaken.

    December 22, 2011 at 1:14 pm | Report abuse |
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