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. wimbly999

    40 dollars for 2 months is chicken feed. If it were for a year instead of waiting to debate again it makes more sense not to do at all. There is no promise it will be for 12 months. Why both bodies of congress cannot work together to do something meaningful is stupid and shows how childish our representatives are. I agree with the House that we cannot keep kicking the can down the road and the example of the Obama administration only sets the tone for kicking the can down the road. The pipeline from Canada is a blatant example.

    December 22, 2011 at 2:01 pm | Report abuse |
    • dkgirl0108

      If you would all read and do the math, this amounts to $80 per month or $40 per BI-WEEKLY paycheck. or $1,000 per year average equates to appx $83.00 per month. No wonder we are having so much trouble in our country, people can't read, don't listen, and don't do the math.

      December 22, 2011 at 2:30 pm | Report abuse |
  2. The Flamingo Kid

    I am willing to bet that AT LEAST 50% of these people who are whining about $40 spend more than that in cigarettes every month.

    December 22, 2011 at 2:02 pm | Report abuse |
    • Teresa

      I agree. I have been working part-time at Wal*Mart to help pay my way through school. I would say that at least 98% of my co-workers who are full-time Wal-mart employees smoke. They complain about not making enough money but they sure have it to spend on those cigarettes!

      December 22, 2011 at 2:08 pm | Report abuse |
  3. Lisa - VA

    $40.00 really doesn't mean that much to me..but to some people (which is really most people) who are living paycheck to paycheck, it could mean a whole lot. People shouldn't make light of the needs of others. Seeing how these idiots are acting, I guess people will now get off of the butts and VOTE.

    December 22, 2011 at 2:02 pm | Report abuse |
  4. Mike Lake Orion Michigan

    Obviously the OWS people don't need the $40 per week since I actually seen them burn $50 bills!

    December 22, 2011 at 2:02 pm | Report abuse |
  5. Al

    Just 250 of those 40 bucks will help me match Romney's 10K bet 🙂

    December 22, 2011 at 2:03 pm | Report abuse |
  6. dirty harry

    $40 is a lot of money for a household earning $50,000 already skimping to met basic living expenses. Price of food, medical, and basic necessities keeps going up. It is money that is desperately needed to limp by.

    Hello Congress? Are you there? So you want to take my money and force me to skimp even more on basic necessities so you can bailout a bunch of Europeans that just want to drink wine, smoke cigs, live the good life and don't give a crap about the US?

    December 22, 2011 at 2:03 pm | Report abuse |
  7. Lisa in Colo

    $40 dollars a pay check pays for my families prescription medicines. Should I just not take them? Get sicker and sicker and then go to an emergency room and have the taxpayers pay for it?

    BTW – We don't have extras at my home. My husband's job of 20 years was sent the the Phillipines last June. My daughter lost her job in Sept. and has had to move back into my house. I was threatened with being laid off of my 20 year job in November... and luckly was able to secure a sales job at the same company. I get to keep my health benefits, but my base salary was cut in half. ( I will receive commissions, but in this economy do you have any idea how hard it is to SELL anyone something? ) We don't have cable, we don't have mobile phones, we try very hard to stay within our (at this time) very limited means. We have parked our only car because we can't afford gas. We take public transportation almost everywhere (I'll admit, we drive the car to go to the grocery store, so we don't have to carry our groceries home on the bus, but that's it.) My college educated husband sends out 10 – 15 resume's a day, and not just in our city, all over the country, because we would move to secure another well paying job. The jobs are just not out there.

    As usual, some people on this thread blame the people for not budgeting, or having a plan. Well... guess what? Your sweeping generalizations of all people are wrong. We had a plan A and a B, and now plan C is to just survive.

    So, really, tell me? Should I just give up my medicine? Or should it be food, or electicity, or water? Maybe I should start defaulting on my mortgage. Would that be more to your liking?

    December 22, 2011 at 2:04 pm | Report abuse |
  8. Ludivina Mones


    December 22, 2011 at 2:06 pm | Report abuse |
  9. nic

    What paycheck? What $40 dollars a month... My unemployment ran out in December of 2010 i worked for a temp agency at the time. I got a call to go to work the day after i broke my leg so here i go with no insurance, no money or even a doctor to see. I have not been called back to work for what ever reason and have no income at all. I am diabetic and need meds roughly around 200 to 250 a month i manage some how. As for my bills like Electric,gas they haven't been paid because i have no income. I cannot get any help from any one because i have no income. How is this possible you say, they tell me in order for them to help i need income to pay future bills. I am 57 years old and can't get a job and they tell my i am to over qualified for certain positions, but my guess is that i am too old for them to hire me. So you tell me where am i going to get $40 dollars a month or even 1 dollar....

    December 22, 2011 at 2:08 pm | Report abuse |
    • skarphace

      Exazctly. the $40 per biweekly paycheck is only for those making $50k a year. If you are unemployed, you get no cut because you have no Paycheck to cut from.

      December 22, 2011 at 2:10 pm | Report abuse |
  10. skarphace

    Here I will expand on the argument in favor of this Payroll 'tax' cut in order to provide a counter argument.

    Why stop at $40 per biweekly paycheck (for someone making $50k a year)? Why not $119 per paycheck? Wouldn't that be even better? If so, then all we have to do is abolish Social Security alltogether. That would result in a 6.2% cut instead of a measly 2.1% cut (nearly three times as much).

    So we get our cash now, but we get no Social Security when we retire. Still like this Payroll 'tax' cut? If you do, then you should be all for it. If not, then you most definitely should not be.

    December 22, 2011 at 2:08 pm | Report abuse |
  11. zoundsman

    Means different things to different people, obviously. But if one has a 5th grade education, 40 bucks is much more
    important to struggling families ...noooo, there's not too many of those (sarcasm).

    December 22, 2011 at 2:11 pm | Report abuse |
  12. Myles

    the name of the link to this article is "what does $40 a week mean to you"

    40 x 52 = 2,080 but the avarage american making $50,000 will save approx. $1,000 so its more like what does $20 a week mean to you! Nice way to spin it though. I'm making the avarage amount according to this article and $20 a week doesn't even pay for a dinner date so i think this is way out of porportion. Lets talk about income taxes people. what does $100 a week mean to you?

    December 22, 2011 at 2:12 pm | Report abuse |
    • skarphace

      No, you are wrong. It says 'What $40 per paycheck means to you." I assume, here, that they are talking about biweekly or semimonthly paychecks, in which case their math is correct.

      December 22, 2011 at 2:16 pm | Report abuse |
  13. Donald in CA

    It means a lot to me, even right wingers are getting tired of the crazies on the right. The voters who put all these heartless tea party folks in office are responsible for this mess. They are determined to bring this country to its knees.

    December 22, 2011 at 2:16 pm | Report abuse |
    • skarphace

      So cash now is more valuable to you then Social Security when you retire?

      December 22, 2011 at 2:18 pm | Report abuse |
  14. Wilfred

    $40 means 2 less $20 bills to wipe my backside with.

    December 22, 2011 at 2:17 pm | Report abuse |
  15. Justshortofdrowning

    $40 a month, a week, a doesn't matter. We are all hurting financially and cannot stand to have more money taken from us. Washington needs to get the s**t together and quick!!

    December 22, 2011 at 2:18 pm | Report abuse |
    • skarphace

      It does indeed matter because those funds represent a cut in Social Security revenue. Otherwise, this lost revenue would have to be made up in the form of some other fees or taxes in which case we save no money in the long run and it is a wash.

      December 22, 2011 at 2:20 pm | Report abuse |
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