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. President Infant

    $40.00 pays for everything $40.00 and under and part of everything else. It's a really stupid question. Of course everyone needs the $40.00. They really need is two or three times that amount. Which they could do if there were real tax reforms. But President Disingenuous continues to lead people by the nose and mislead away from the real issue. Why don't you ask the 100,000.00 people who might get a job with the oil pipeline what a job would mean to them? This has become the most immature President I have ever seen.

    December 22, 2011 at 2:21 pm | Report abuse |
    • skarphace

      The Keystone Pipeline project is a horrible idea. It only creates short term jobs and increases big oil profits and in return it increases environmental damage, polutes fresh water aquifers, and violates private property rights. Not a good tradeoff unless you are a big oil exec (which I am assuming you are not).

      December 22, 2011 at 2:26 pm | Report abuse |
    • sqeptiq

      100,000 jobs? You need to lay off the Rush koolaid. Most experts think maybe 2,000 long term jobs at most.

      December 22, 2011 at 2:43 pm | Report abuse |
  2. Julie

    Those of you who think $40 is nothing have no concept of the value of money, and not one of you would turn it down if it was handed to you either.

    December 22, 2011 at 2:21 pm | Report abuse |
    • skarphace

      $40 per biweekly paycheck for somebody making $50k a year is definitely not worth defunding Social Security over.

      December 22, 2011 at 2:28 pm | Report abuse |
    • sqeptiq

      Suggestion: All of those who think $40 per paycheck is nothing...send $40 per paycheck to budget reduction or to the SS Trust Fund. The government will be glad to take it. If that's too remote for you, send it to me...I'll put it to use.

      December 22, 2011 at 2:46 pm | Report abuse |
  3. Mr President

    Looks like I caused another mess. Score another one for the Democrats. We need another vacation. Why work while millions of others don't have a job. We need weeks off at our million dollar vacation homes to party and collect contributions. See you next year..

    December 22, 2011 at 2:22 pm | Report abuse |
  4. vicortia in texas

    63.00 is what I have left each month and I get paid once a month as a single mom take away 40.00 lets see that leaves 23.00 a month for food things have got to get better and i'm in an area where times are suppose to be good

    December 22, 2011 at 2:24 pm | Report abuse |
  5. piratelady

    this is so sad for many americans, who want to speak for others, who doesn't need another 40.00 in their paycheck.
    Only the stupid and the rich don't need anything, oh I know they just want to defeat this President cause he black.

    December 22, 2011 at 2:24 pm | Report abuse |
    • Arrgggghhh!

      Madame Pirate: It is not because he is black. It is because he fancies himself a Robin Hood. I would dislike anyone with his policies. And to answer your question, do I really care if my paycheck is $5370 or $5330? No, but the principle of it angers me.

      December 22, 2011 at 2:26 pm | Report abuse |
    • skarphace

      Arrggghhh: the principle is that it is a concerted effort to phase out Social Security. With your paycheck, you probably don't need Social Security, but many Americans will.

      December 22, 2011 at 2:29 pm | Report abuse |
    • skarphace

      Aaarrgg: in addition, if you make 5370 per biweekly paycheck, then you make more than the OASDI cap of 106800 per year currently (set to increase in 2012), which means you actually get a cut of $85 per paycheck, not $40.

      December 22, 2011 at 2:42 pm | Report abuse |
    • sqeptiq

      Dear ARGHHHH.
      If your paycheck were $500 then $540 WOULD mean something....a lot.

      December 22, 2011 at 2:49 pm | Report abuse |
  6. Gary

    $40.00 means one less private dance at the strip club.

    I guess there is always tissue and Jergens

    December 22, 2011 at 2:27 pm | Report abuse |
    • sqeptiq

      Pervert!

      December 22, 2011 at 2:50 pm | Report abuse |
  7. skarphace

    The real question should be: Do we want our cash now, or do we want Social Security when we retire.

    Because we can't have both.

    December 22, 2011 at 2:32 pm | Report abuse |
    • Herbert

      I would like mine now because I can outperform SS on the ROI. However, I am conscious of the fact that we do not just let people starve and die in this country (regardless of how many like to feign it). This means that if SS were eliminated, the tens of millions of irresponsible Americans who have $0 in retirement savings will be living off me once they are too crippled to work. This will defeat the purpose of my increased ROI when I am paying 70% taxes, so I sadly say we need to keep SS.

      December 22, 2011 at 2:46 pm | Report abuse |
    • skarphace

      Well, when you figure that your employer matches your contributions into OASDI, you realize that you get a 100% ROI before it even gets put into the system. Can you still beat that ROI?

      December 22, 2011 at 2:51 pm | Report abuse |
  8. 40$?

    Oh no.. now Americans will only be able to drink and eat mcdonalds 4 times a week.

    December 22, 2011 at 2:32 pm | Report abuse |
    • Gary

      McDonalds? YUCK

      I am losing out on a 4 minute long private dance at my favorite adult club.

      Where is the compassion?

      December 22, 2011 at 2:33 pm | Report abuse |
  9. Jamie

    $40 a paycheck might not mean much, but it's almost a grand per year in our pockets if they fully extend the cuts.
    I'm 24 years old. I am doing everything I can to advance myself. I work multiple jobs, usually 7 days a week in some capacity. I have a degree. I really try to budget and stay within my means. I use coupons. I buy things as much as I can on sale. I use clothes and shoes until they have holes in them. I don't get my nails done, buy designer anything, have a smartphone or many of the other luxuries alot of people have nowdays but don't need.
    I am not relying on the government. I am asking to give back what's mine-what I EARNED-instead of handing it to someone else who may or may not need it more than me.

    December 22, 2011 at 2:32 pm | Report abuse |
    • skarphace

      Jamie: you are 24, so there is a good chance that Social Security will not be there for you when you retire regardless of if this Payroll 'tax' cut is extended or not. Therefore, I can see why you are for this extension. However, for those who are middle aged and have been paying into Social Security all their working lives, this Payroll 'tax' cut is a bad idea because it defunds Social Security even earlier than previously predicted.

      December 22, 2011 at 2:36 pm | Report abuse |
  10. edmundburkeson

    If $40 a week means so much ... why not extend them for the entire year Mr Obama?

    December 22, 2011 at 2:38 pm | Report abuse |
    • skarphace

      Were you not paying attention? The reason that the Senate Democrats voted down the bill to extend it for an entire year is because the House Republicans were tying it to the horrible Keystone Pipeline project.

      December 22, 2011 at 2:43 pm | Report abuse |
    • Rex T.

      That pipeline doesn't seem so bad to everyone now that they are faced with this loss in take home dollars. Perhaps it should have gone through.

      December 22, 2011 at 2:49 pm | Report abuse |
  11. JohnK

    I really don't care how much it costs me because I can get through it. But on principle it exposes the truth and dogma behind the GOP and Tea party philosophy which is to do anything it takes to champion legislation for wealthy contributors. Had it not been for the serious consequences this issue will place on real people who are unemployed and will be dropped from the rolls and into serious consequence of not providing the basics for their family, or the employed who are balancing their budgets and counting on their piece of the SS payroll tax cut, or seniors counting on the doc fix, or the overall detriment to the economy, I find sweet justice in allowing these benefits to expire and deliver a crushing blow to the charlatans and greedy who have conned rural Americans and hardworking citizens with their rhetoric. This is childish and embarrassing behavior. They don’t even have the class anymore to keep their “sausage making” antics behind closed doors. Yes indeed the GOP, the Tea party and their benefactors deserve a good whipping at the polls as a consequence of their reckless and cavalier treatment of middleclass America.

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

    Democrats and the state media are playing games. The house bill met all the standards but the Senate refuses to even vote on it. Now Dems are trying to blame the GOP for not going along with the game

    December 22, 2011 at 2:39 pm | Report abuse |
  13. Rich

    It means not getting the keyless entry in my new car

    December 22, 2011 at 2:40 pm | Report abuse |
  14. edmundburkeson

    Do the math! If the tax bill extends tax cuts for only 2 months ... it does not equal 40 dollars a month.

    December 22, 2011 at 2:41 pm | Report abuse |
    • skarphace

      $40 per biweekly paycheck is for those making $50k a year. If you do the math, you will see that it is pretty accurate.

      December 22, 2011 at 2:45 pm | Report abuse |
  15. victoria

    I CALL BS ON THIS:

    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!!

    REALLY?!?!! A FAMILY OF 4 LIVING OFF OF $30,000 A YEAR AND NEVER HURTING???? I MAKE ALMOST $40,000 A YEAR, A SINGLE PERSON WHO LIVES BY THEMSELF WITH MY TWO CATS AND I'M STRUGGLING.

    HE HAS TO HAVE ABSOLUTELY NO DEBT IN ORDER TO NEVER HAVE TO WORRY IF THERE WILL BE ENOUGH FOOD FOR GROCERIES OR IN THE DEAD MIDDLE OF SUMMER WHEN THE ELECTRIC BILL IS $100 +(AND THAT'S JUST 1 PERSON, YOU KNOW WITH MORE PEOPLE THE BILL IS MORE EXPENSIVE)

    On a bi-weekly basis his check is $1250 before taxes. Give me a break. Where does he live? Wyoming??

    AND JAIMIE– its around $40 per paycheck totaling $80 a month.

    December 22, 2011 at 2:43 pm | Report abuse |
    • skarphace

      First, if you make $30,000 a year (which is indeed the average income in America), you do not save $40 per biweekly paycheck with this cut. You only save $24.23 per paycheck ($48 per month). In addition, this cut will result in Social Security being defunded even earlier than projected. Not a good tradeoff for those making $30k a year because they will need Social Security when they retire.

      December 22, 2011 at 2:48 pm | Report abuse |
    • Gurgi

      @victoria, I call BS on what you said. Single and making almost 40K and you are struggling?!?!? I don't feel a bit sorry for you. That tells me you are spending money on a whole lot of things you don't need. For one thing, do you really need the cats if you are "struggling?" I'm sure you either live in a more expensive place than you need to, use more utilities than you need to, or probably buy the newest gadgets you don't need. If you are really struggling as you say, then you need to look at where you can cut back and make a budget.

      December 22, 2011 at 2:54 pm | Report abuse |
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