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. RedMoonProject

    What does $40 mean to me? It means that it will take 4807 years for Michelle Antoinette to pay back the $10 Million dollars she spent last year on her fabulous European vacations.

    December 22, 2011 at 2:48 pm | Report abuse |
  2. charlie

    Speaking of 40, our government will have us back to the year 40 BC by the end of next year.

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

      True. This is because the real answer to the ultimate question of the life, the unverse, and everything, is 42, not 40.

      December 22, 2011 at 2:53 pm | Report abuse |
    • Nancy

      Does that mean we'll have to kill another Jew in 40 years to save the world?

      December 22, 2011 at 3:10 pm | Report abuse |
  3. charlie

    nickle. dime. nickle. dime. nickle. dime. a few years later, we say.... oh my goodness, it appears I have no money. Wake the hell up America.

    December 22, 2011 at 2:52 pm | Report abuse |
    • skarphace

      You didn't have this cut in 2010. Why is it so important now?

      December 22, 2011 at 2:53 pm | Report abuse |
  4. sandone

    DONT BLAME THE PREZ. FOR THIS ITS ALLTHOSE REPLICAN JERKS/ CONGRESS. THEY WELL DO ANYTHING TO MAKE THE PREZ. LOOK BAD.they have been fighting him on everything from jobs to higher taxs for the rich. and i cant belive more ppl arent seeing this. the republican party are so bigoted they want to see Mr. Obama fail in everything he does so the ppl wont vote for him.and the ppl that r haters r pointing there fingers at the prez can we not see what the replicans r doing.they have wanted him to fail right from the start do u not think for a min it upsets them that a white/ black prez is in the house? the replican party is a joke to most american and now they want a mormon for the house so they can take even more of oour money it wont be higher taxs it well be give to the mormon cult and we well let you into our world.and sorry for u if u cant pay well take what we can steal from u. .if we think 4o.00 is alot how much do u think the replicans well take if one of them gets into office.they well be laughing harder than they already r all the way to the bank.can we really afford that i cant ? LISTEN TO WHAT THE REP r saying and then ask one another one question why are they lying. and pointing there crocked fingers at the pres. they r the ones who r denying you because they want all the money they dont care about you or your kids. there kids r ok on our money. they rep. dont care about the concept of our 40.00 dollors were a joke to them.

    December 22, 2011 at 2:52 pm | Report abuse |
    • skarphace

      Both sides are playing politics with this issue. In addition, when you figure that this cut represents $40 per worker per paycheck, you realize that Social Security is going to be defunded at an alarming rate.

      December 22, 2011 at 2:55 pm | Report abuse |
    • Annette

      I agree. The GOP hi-jacked Obama's presidency when they took over congress. Didn't America learn anything during the Bush years?

      December 22, 2011 at 3:01 pm | Report abuse |
  5. Mike

    This report and the $40 hype is rediculous. First of all it is not a tax cut, it is a deferred payment for Social Security. Even if you are deluded into thinking it is a cut, it is for only TWO months (Why, Mr. President??). This president and his congressional lackies are the epitome of gamesmenship. Hello, Mr. President: Make REAL cuts and reforms to this bloated government (start by cutting the funding to non-legistlated regulations which are strangling this econonmy), Stop the class warefare rhetoric (although we know that billionairs who are your supporters will be taken care of regardless), and work with Congress instead of campaigning against them. As for CNN: stop with the non-news stories and focus on some signficant stories: Solyndra, Fast & Furious, the "missing" drone aircraft, and tracking the billions of our dollars which have dissappeared at the hands of this administration.

    December 22, 2011 at 2:57 pm | Report abuse |
  6. Annette

    I'm tired of being pushed around by Speaker Boenher. The fix is simple. Keep the payroll tax cut for the 99%. Increase taxes for the 1%. They are begging you for it. Save billions of dollars by setting your wages back to the 2007 level, and pay your own health care premiums like the rest of us. Use THAT savings to pay the deficit. All government employees are civil servants, and that INCLUDES Congress and they should act like it. They are not royalty.

    December 22, 2011 at 2:57 pm | Report abuse |
  7. elpaggar

    Winter is very cold where I am from and utilities go up another $50 in January, insurance goes up $40. If $80 more is removed (per month) from our paycheck, we are down to eating less. For some of us, it's not a matter of budgeting. We already do that and have pinched every category down as far as it will go. We do not have cable/satellite to cancel and save. There is nothing more to take away from.

    December 22, 2011 at 2:58 pm | Report abuse |
    • Margaret

      Yet you have internet? Unplug it.

      December 22, 2011 at 3:08 pm | Report abuse |
    • elpaggar

      We have internet so that we can pay the bills and we use a budget system via internet to keep a budget highly organized and ins-inc with our bank. If we have to, we will get rid of 401K contributions rather than take off the internet, yet.

      December 22, 2011 at 3:15 pm | Report abuse |
  8. Lisa

    So cut back on Starbuck's to a couple of times/week instead of daily. For those of us who have already taken pay cuts just to have a job or get a job, we've already cut back.

    And while Speaker Boehner is correct to work on a long-term plan, here's a real easy thing to do to get the wheels in motion - remove the XL pipeline provision from this bill. In essence, he (House GOP) is holding the middle class hostage so that a few oil companies don't have to follow the rules.

    Imagine the outcry from the GOP if the Dems had tied any legislation not favorable to big business or the 1% to extending the Bush Tax cuts. They would have cried foul - and that's just what Obama is doing now. It's not fun when the other guys uses your game plan against you. So again, remove the XL pipeline and I have no doubt the Senate will be glad to go back and discuss the issue.

    December 22, 2011 at 3:01 pm | Report abuse |
  9. BRG

    I'll just have to lie on my taxes to pick up an extra $1,000 – no big deal – just a few minutes to figure it out at tax time!

    December 22, 2011 at 3:01 pm | Report abuse |
    • SpongeBob

      I agree 100%. The chance of an IRS audit is at an all-time low.

      December 22, 2011 at 3:06 pm | Report abuse |
  10. Richard

    This article misrepresents the impacts. The impact of extending/ending this break is about $40/paycheck on AVERAGE. Those cited in this article probably are making below the average income to begin with and thus would not be exposed to that impact.

    What is at stake is 2%, not $40. On average, the 2% is $40, but not for everyone.

    December 22, 2011 at 3:06 pm | Report abuse |
    • skarphace

      Very true. The minimum is $0 (if you don't have a job), and the maximum is around $85 (if you make over the OASDI cap of $106,800 currently but set to increase in 2012.)

      December 22, 2011 at 3:18 pm | Report abuse |
  11. Kevin O.

    Having $40 less in the pocket just means some help is not going to be tipped. It's not a bank breaker.

    December 22, 2011 at 3:06 pm | Report abuse |
    • Surfer George

      If you're the "help" in question, showing up for your job and doing it well, going home with empty pockets to your hungry family when the rent is due sure as HELL is a "Bank Breaker."

      I'm lucky, in that the $40.00 won't change my life much, but I'm LUCKY and smart enough to understand, that to a lot of people this money can make the difference for some and add a little joy for some in an otherwise dismal existence in this economic environment.

      Be cavalier about the wellbeing of others if you like, but don't expect to be respected for it.

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

    Why is this payroll tax holiday only for 2 months not a full year at least or better yet lets change this dinosaur tax system with the IRS. Also this President says he cares about jobs for americans but every time you look he is killing jobs all he ever talks about is extending unemployment people need jobs Mr. president get the pipeline going and quit telling Brazill that america will be there best customer for oil.

    December 22, 2011 at 3:10 pm | Report abuse |
  13. Grey

    $40 dollars buys us the understanding that the President runs on "confidence" while the GOP runs on "uncertainty".

    December 22, 2011 at 3:12 pm | Report abuse |
  14. Mary

    But in the meantime, some Russian gangster just paid $88 million for a NYC apartment. Thank you Mayor Bloomberg and all you have done to smash down the evil axis known as the middle class smoker. Nero fiddles while Rome burns.

    December 22, 2011 at 3:13 pm | Report abuse |
  15. BILL B.

    FOR ME, 40 DOLLARS MAY NOT BE THAT BIG OF A DEAL. BUT I CAN APPRECIATE THE FACT THAT IT DOES MEAN A LOT TO OTHERS. I AM FORTUNATE TO BE ABLE TO GET BY THIS, WHERE SOME PEOPLE CANNOT. CONGRESS, GET OFF YOU BUTTS AND GET IT DONE. TELL THE TEA PARTY TO POUND SAND FOR ONCE AND STAND UP FOR YOURSELVES, AND TAKE CARE OF THE PEOPLE AS THEY PROMISED TO DO.

    December 22, 2011 at 3:15 pm | Report abuse |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65