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. hogan longfellow

    SIGHHHHH

    the same people worried about $40 are the ones w/ the $500 iPhone and the $110 monthly data package, cable tv, eat fast food every meal, drive a brand new car, in debt up to your eyeballs, pathetic typical american pig.

    If $40 is the difference between paying your bills or not paying you bills- you should have less bills OR make more money.

    This is America after-all....go make more money or stop whining.

    December 22, 2011 at 1:15 pm | Report abuse |
    • hogan longfellow

      and you can bet your bottom dollar this is the beginning, the taxes are going to keep going up, up, up when your boy Barry get's his 2nd term. Hope and Change!

      America....wayyyy past our prime. The decline of the empire is among us and it kills me. I'm glad I don't have kids 🙂

      December 22, 2011 at 1:26 pm | Report abuse |
    • frank

      I have to say and you may not believe me that $40.00 will very close feed my family for a week shopping at the dollar store were i have become a regular shopper since last year. It will buy us some veggies and soups, cans of spaghetti sauce, some power drinks, and even if we have enough some ice cream so if i can make it last that long and need it that bad, Please stop kicking the can in Washington and DO YOUR JOB ,If i walk away from my job 30 minutes I will be fired and it is staring to look like what you guys need over there a permanent vacation and i know you can afford it very well.

      December 22, 2011 at 1:37 pm | Report abuse |
    • Olivia

      Yes we do live in America, where jobs are scarce and people try to spread the money they get as far as they can. Forty dollars for me means gas money to get from my house to work and back for three days! Six years ago forty dollars from my dad’s paycheck meant that we did not have enough money to rent a motel room for the night, and nowhere else to go. Forty dollars to my brother and his new family now means that they have some money to save for when he gets laid off again. Forty dollars to my step-dad means help affording food. My father and step-father both suffer from horrible health issues. Forty dollars taken from their paycheck means less they have towards paying for health insurance as well as the medical bills that insurance companies don’t cover. Forty dollars for some people means nothing, for some it means situations like mine, and for some it means a lot more. Try stepping into someone else’s shoes.

      December 22, 2011 at 1:52 pm | Report abuse |
  2. Fujibob

    What 40 dollars. I am retired and already paid my whole life I never got a break nor did all the millions of retirees. We all paid in to the SS fund. Now there is no money. Yet you are letting these other people off and expect to pay them a SS check? Are you nuts or just plain ignorant. WE ARE BROKE AND DO NOT HAVE MONEY TO GIVE AWAY!!!!!!!!!!!!!!!!!!!!!!

    December 22, 2011 at 1:15 pm | Report abuse |
    • Lizzie43

      Wait, wait, you and all the senior citizens will be blamed for it. Vice pres.Biden already calls you the enemy. You tried to give your children everything you did without and now they are so used to it all they want is more and more.

      December 22, 2011 at 1:36 pm | Report abuse |
  3. joerepublic

    you gotta love the loonacy of the obama regime. in 2013 this regime is about to unleash the largest tax increase in american history. and yet, he wants to try to politicize his own failure in getting a tax break for the whole year, which is what he claims he originally wanted. but now he's playing semantic's with the american people by only doing a 2 month extention. but he doesn't tell the people that their taxes will increase come march. this clown in chief makes jimmy carter look brilliant. it's all about playing gamesmenship with the man/clown fool in the white house. and his lap dog's in the state controlled are all too willing accomplices of his warped agenda!

    December 22, 2011 at 1:16 pm | Report abuse |
  4. jack jenson

    THATS ALL FINE THE 40 DOLLARS BUT WHAT ABOUT THOSE OF US THAT MAKE UNDER 50,000 BUT OVER 30,000 DONT DO ALOT FOR US .SOME TAX BRACKETS JUST DONT GET REPRESENTED.

    December 22, 2011 at 1:16 pm | Report abuse |
    • Lizzie43

      Don't you know according to this administration everyone makes $50000.

      December 22, 2011 at 1:38 pm | Report abuse |
  5. Terry H

    My wife and I are providing shelter and heat for her homeless brother outside our home which costs right at $40.00 every two weeks out of pocket. This rise in taxes will make it that much more difficult to help him.

    December 22, 2011 at 1:16 pm | Report abuse |
    • Lizzie43

      Before you type your sad story, figure out first how much YOU would get. The $40 is for a gross incone of $50000

      December 22, 2011 at 1:24 pm | Report abuse |
    • Peggs

      Terry, the reps in the house want you to keep that $40 for all of 2012, not just 2 months.....

      December 22, 2011 at 1:25 pm | Report abuse |
    • Bruce

      Both the Dems and GOP want ou to have the tax break for the entire year. The only difference between the two is that the GOP wants to get "paid" for helping the american people in the form of a pipeline for the GOP masters... Big Oil. The GOP doesn't care about you. They care about the money that they get from Big Oil, period.

      December 22, 2011 at 1:34 pm | Report abuse |
    • RoboKnuckle

      As I think it is nice that you are helping out a sibling, why should you or he expect you to continue to pay that $40 every other week? If it's that bad, that's what goverment programs are for.

      December 22, 2011 at 1:34 pm | Report abuse |
  6. RICK

    HOW SOON YOU FORGET AFTER BEING ELECTED BY US, TO REPRESENT US, AND NOT THE SPECIAL INTEREST GROUPS. FORTY DOLLARS MIGHT NOT SEEM LIKE ALOT TO YOU BUT TO SOME PEOPLE IT MEANS THE DIFFERENCE WETHER THEY CAN BUY THEIR MEDICATIONS OR FOOD. SO WHILE YOUR HOME DURING THE HOLIDAYS WELL FED AND WARM, REMEMBER THERE WILL BE OTHER PEOPLE WORRYING ABOUT NEXT MONTHS BILLS AND WHERE THEY WILL HAVE TO DO WITH OUT. HAPPY HOLIDAYS

    December 22, 2011 at 1:19 pm | Report abuse |
    • Larry of Boston

      It is $20 a week. Let's get that straight. It only applies to people already having jobs, so it does nothing for the unemployed. It is only for the employee, not the employer who contines to pay the 6.2% employer social security tax so this does NOTHING to creat jobs. We are taking the money from the Social Security trust Fund which is going broke, so it is bad public policy. It is not a tax increase, it the normal expiration of a temporary payroll tax holiday that Obama and the Dems all agreed was to expire. What Obama is doing now – aided by sites like CNN – is making campaign speeches and seeking to promise more "goodies" to the Dems in exchange for their votes. This is pandering. This is bad public policy. And this demonstrtaes that Obama and the Dems have zero fiscal restraint. I for one hope that the GOP led House stands firm and simply lets the payroll tax holiday expire totally - Obama will make great hay from it, but that will not get him or other Dems reelected – I think Americans are a lot smarter than that.

      December 22, 2011 at 1:28 pm | Report abuse |
    • RoboKnuckle

      "I think Americans are a lot smarter than that."
      ++++++++++++++++++++++++++++++++++++++++
      Unfortunately Larry, by the looks of these posts, I fear you may be wrong.

      December 22, 2011 at 1:39 pm | Report abuse |
    • frank

      Well said, is time to start handing out pink slips in the senate they sure as hell are not working for me. I am broke not a dime in the bank and very few dollars in my pocket.

      December 22, 2011 at 1:41 pm | Report abuse |
  7. Peggs

    What would you do, with YOUR PORTION, of the money used in the Great American Bailouts ???
    What would you do, with YOUR PORTION, of the money spent on WAR ???
    What would you do, with YOUR PORTION, of the money used on Foreign Aid to Saudia Arabia ???
    Shall I continue ???

    December 22, 2011 at 1:21 pm | Report abuse |
    • Lizzie43

      How about all the money to bailout the car companies, or money to failing Solar companies, or bailout money to GE and then they send the jobs to China

      December 22, 2011 at 1:27 pm | Report abuse |
  8. Lizzie43

    Most of you decided that the $50 to $80 a month savings means the differance between life and death. Hello americans wake up, the democrats try to throw you a morsel while Jan. 1, 2012 your paycheck will be significantly smaller due to all the taxes Pres.Obama pushed through the house and senate last year and will become law after the election. Timing Baby is everthing.

    December 22, 2011 at 1:21 pm | Report abuse |
    • Lizzie43

      Should read 2013 not 2012

      December 22, 2011 at 1:22 pm | Report abuse |
  9. KY_Charlels22

    My wife is unemployed and cannot find a job. I am looking for a second job bc my paychecks don't cover our bills, gas and groceries. I haven't had a raise in 5 yrs. $80 less per month due to Washington is putting me really close to a breaking point.

    December 22, 2011 at 1:23 pm | Report abuse |
    • RoboKnuckle

      Take you annual income, multiply it by 2.1%, then divide that number by 52. This is what you will be out each week. I think you will find that $80 per month may not apply to you.

      December 22, 2011 at 1:43 pm | Report abuse |
    • KY_Charlels22

      Oh you are right RoboKnuckle, it's more like $70. It's no different for me.

      December 22, 2011 at 2:09 pm | Report abuse |
  10. the johnsons

    the $40 is the difference between paying my water bill or not.

    December 22, 2011 at 1:24 pm | Report abuse |
    • RoboKnuckle

      Good to see that your only expense is your water bill. Wish I had that problem.

      December 22, 2011 at 1:44 pm | Report abuse |
  11. mary land

    $40 is the difference between surviving in this economy or not !

    December 22, 2011 at 1:27 pm | Report abuse |
  12. Ron

    HAS ANYBODY REALLY FIGURED THIS OUT??? 40$ A WEEK, = $ 160 A MONTH = $ 1,920 DOLLARS A YEAR. IF THE AMERICAN PEOPLE ARE BEING ASKED TO GIVEUP THAT MUCH, THEN I THINK ITS FAIR TO ASK ALL ELECTED OFFICIALS TO GIVE 10% OF THIER YEARLY WAGE TO HELP AMERICA. IF EVERY TIME THE AMERICAN PEOPLE ARE ASKED TO GIVE UP SOMETHING, THE ELECTED OFFICIALS ARE ASKED TO GIVE THE SAME THING, I'M SURE YOU WILL FIND THAT THE SENATORS AND CONGRESSMEN WILL WORK HARDER TO WORK TOGETHER TO FIX THE PROBLEM AT HAND!!! I AS AN AMERICAN IS PRETTY FED UP WITH THE WAY OUR ELECTED OFFICIALS ARE SCREWING AMERICA!

    December 22, 2011 at 1:29 pm | Report abuse |
    • Kim M

      Ron the Officials have already given themselves raises. and honey 10% of $100,000.00 is a whole lot more than 10% on $50,000.00. I have not seen a raise in a while – gave up tracking how far behind the cost of living I was falling – cannot earn any overtime and have tried getting a second job... it is almost time to walk away from the house I have owned for 20+ years – and I will – if our govenment takes away my mortgage tax refund.

      December 22, 2011 at 1:38 pm | Report abuse |
    • Peggs

      Ron,
      it's $40 per pay check, biweekly, for those making $50,000 a yr..........its another political gimmick !!!.....being pushed along by the media.
      I'm not sure why the reps in the house aren't spinning their own version..........
      "What does YOUR PORTION of the money spent on the failed Solyndra Solar Panel Company mean to you ???"
      "What does YOUR PORTION of the money spent on the Bank Bailouts mean to you ???"

      December 22, 2011 at 1:39 pm | Report abuse |
  13. Andy

    $40 a paycheck means a lot to people in low income group and hardly anything for higher income group. The tax rates should be low(10 to 20%) for people earning less than $50,000 or $100,000 per year and it should be high( 30 to 40%) for people earning more than $100,000 per year, and it should be very high (50%) for people earning more than $250,000 per year.Warren Buffet needs to be congratulated for proposing additional tax on millionaires.

    December 22, 2011 at 1:30 pm | Report abuse |
    • RoboKnuckle

      If you are in a low income group it won't be $40 and if you are in a high income group it will be more. It's 2.1% up to about $110,000, not a flat $40.

      December 22, 2011 at 1:46 pm | Report abuse |
  14. Doug Truck

    I work 3 jobs so I get 3 paychecks a week. This means at $40 per paycheck, this plan will cost me $480 per month. That is a 1/3 of my rent. This is not good.

    December 22, 2011 at 1:30 pm | Report abuse |
    • RoboKnuckle

      Doug you are a great example of how rhetoric from the President and the media can cause undue stress on people. You will not lose $40/paycheck from each job. Take your total annual income from all three jobs, multiply that total by 2.1% (.0021), then divide that total by 52. The final number is what you will be out.

      December 22, 2011 at 1:49 pm | Report abuse |
  15. Kim M

    $40.00 a week ON TOP OF the $118.17 per pay period (2 weeks) the State of New York is taking out of my pay check. Nice. when do I get to balance my check book off of YOU??? and when I close yet another account (cable TV is next) whom should I blame? my government ? who does not seem to recognize you have less people earning a paycheck and thus less income to tax – but still spends money like you did not earn it. OH – You didn't!!!!!!!!! WAKE up America!!! as was said "A government big enough to give you everything you want – is big enough to take everything you have!"~ Thomas Jefferson ~

    a video?? that is a joke. in this single family household, I could not afford film for a camera.

    December 22, 2011 at 1:31 pm | Report abuse |
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