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. adrian

    Someone far more famous, and smarter, than I said something to the effect of "taxing a nation to prosperity is like standing in a bucket and trying to pick yourself up by the handle." Or something close to that. The point is that we are doing something rather dumb. How about shrinking the federal government? How about cutting aid to other nations, or cutting back on the money that is shoveled over to politician cronies companies?

    December 22, 2011 at 4:26 pm | Report abuse |
    • skarphace

      It is weird that most of my comments containg the words R o n P a u l do not go through.

      December 22, 2011 at 4:30 pm | Report abuse |
    • skarphace

      It went through that time. I guess I just have to space the letters. What I tried and failed to say was this:

      I agree completely. There is only one candidate that will support this type of fiscal policy and he is the candidate that I am going to vote for in the primaries. R o n P a u l 2012.

      December 22, 2011 at 4:32 pm | Report abuse |
    • Frank

      Adrian, you are right!

      For this Baby Boomer eligible for social security I was promised since 1950 in 2012 it is a sad day as the "Payroll Tax Cut" targets FICA which is the social security tax. For those loving getting a larger pay check on the backs of use retirees today remember this day when it is your turn to retire. Social Security will not be there for you. I will be dead bi then, but may manage a grin wondering how it feels for you to have lived for today and possibly have a difficult time financialy when you retire. President Rosevelt, the first socialist democrat, may be turning over in his grave. HIs Social Security being drained by his own party. Wow.

      December 22, 2011 at 4:49 pm | Report abuse |
    • markishere

      FYI, your R o n P a u l buddy will be bought & sold by lobbyists like every other politician.

      December 22, 2011 at 4:52 pm | Report abuse |
    • jorge washinsen

      winston churchhill made that statement and a very wise one.

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

    It is not $40. It is 2% of gross payroll. $ 20,000 times 2% is $400. This would be 33.33 per month not per paycheck. This 2% was not available in 2010. The middle class and lower received a 400 credit for single people and a 800 credit for a married couple in 2010 which is not available in 2011. The upper earners did not receive the 400 or 800. In 2011 everyone with a wage gets the 2% reduction. I received zero credit in 2010 and in 2011 I will receive a $2,136 reduction in social security taxes. This law should have never been put into place in 2010. Reduces social security funds.

    December 22, 2011 at 4:29 pm | Report abuse |
    • swood

      good point

      the value of this is just in the rhetoric the politicians want to throw about.

      Is a very short term extension really going to help anyone? And to all of he folks that twitter that this seems to be the solution to your problems and to make ends meet, REALLY? How did you fill up the car before, how did you buy groceries before, etc., etc.??? Sure, it's nice to have an extra 10 or 20 or 40, but it wasn't there before and we survived – live within your means – we all really don't need government handouts – we need government to live within their means – then we may not mind the taxes we actually pay.

      December 22, 2011 at 4:52 pm | Report abuse |
  3. Nate

    40.00 might not seem like much to the CEOs of corporations and the politicians who are bought by them, or those running media articles that are one sided and only seek to further the ambitions of the 1%, but I assure you the 99% that are out there slaving away trying to keep their families fed and stay in their homes value that 40.00 very much. Especially since bad political decisions and greedy corporations have helped draw up inflation on necessities like food, now that 40.00 is even more important when it means barely getting the same amount of groceries that 'consumers' once could obtain with half the amount. But of course there was also a day when we produced products in America which led to many people being able to find honest work, and our leaders looked out for the people and a little thing called freedom. It was back before media was owned by corporations, back before corporations bought politicians, back when their was a real sense of liberty, freedom, and justice in this country. Oh those were the days... now the country is overran with ignorance and people only vote for who they are told to vote for through subliminal gestures and rhetoric which the media plays on to level up or level down candidates that best suit their corporate interests. Look at this recent article on CNN, or any of the coverage for that matter, about Ron Paul regarding letters found on his desk from years ago. You can plainly see they are trying to persuade people opinion away from Ron Paul. They (CNN) are trying to make Ron Paul look bad because he is against their greedy dishonest ways. Disgusting.

    December 22, 2011 at 4:29 pm | Report abuse |
  4. Ordnry1

    Hi! Skarphace: Would it surprise you if I say that I make more than double the amount you said?

    December 22, 2011 at 4:29 pm | Report abuse |
    • skarphace

      Well, I don't remember what you said, but you still only pay up to the cap, which is currently 106,800. This means that you are saving around $190 per month with this cut.

      December 22, 2011 at 4:34 pm | Report abuse |
  5. jorge washinsen

    40.00 would be enough for one meal for a family of 4 at Macs or half the cable biil for watching loud commericials and listening to boring sounds like telephones ringing to be sure you are wide awake. You can also watch a clint movie for the hundredth time.

    December 22, 2011 at 4:30 pm | Report abuse |
  6. jorge washinsen

    When you say it fast it is not enough to pay the beer bill for a week.

    December 22, 2011 at 4:32 pm | Report abuse |
  7. julio

    $40.00 dollars for me a week,is alot money my god know how is that everyweek am behind,$40.00 no being able to buy the right formula milk for kids,wish i dont Qualified for for goverment help because and only make 33,000 a year. me,my wife and my two kids we have to survive,on this matter,thanks very much waschignton for your service...

    December 22, 2011 at 4:35 pm | Report abuse |
  8. Dissapointed

    This is a no win situation, as a large portion of the individuals who will be devastated by 2.1 % today are going to be the ones who will rely most heavily on Social Security in their later years. But it is the nature of the beast to scream now and later, their tweets 5 to 10 years from now will be, how dare you abolish Social Security. I paid into it for 10 years and I will not be able to survive in my twilight years without it. On and on and on….

    December 22, 2011 at 4:35 pm | Report abuse |
  9. jorge washinsen

    If you are one of the ones who are willing to work I do have sympathy becasue you are helping to keep up those who never worked when times were good.

    December 22, 2011 at 4:35 pm | Report abuse |
  10. rlr

    The differeance between bankruptcy chapter 7 or not

    December 22, 2011 at 4:39 pm | Report abuse |
  11. jorge washinsen

    If you think that jobs are scarce, or non existant ,try to get someone to help trim bushes or do things that need doing.We can't even find enough people to pick our fruit ,although there have been plenty sitting in our parks, fouling the place up and gripeing.

    December 22, 2011 at 4:39 pm | Report abuse |
  12. Linda

    This is crazy. You pay payroll tax but don't get health care coverage and have to send your children to private school because your public schools are a disgrace. What do you pay taxes at all for? I pay about $650 per check to taxes, that is $1300 per month but I get accessible health care with no "co-pays." My children get a great, free education, in fact our private school system is looked down upon as the exeption, not the norm. What do you get for the taxes you pay?

    December 22, 2011 at 4:40 pm | Report abuse |
  13. carlos

    People is $80 a month... $40 per bi-weekly pay check.. I can fill up my tank twice with that money!

    December 22, 2011 at 4:40 pm | Report abuse |
    • Eric

      $40 dollars is less than a tank of gas, one which the government will take right back @ .50 cents a gallon with the federal gas tax. This country clearly needs new leadership.

      December 22, 2011 at 4:49 pm | Report abuse |
  14. asdf

    ..

    December 22, 2011 at 4:44 pm | Report abuse |
  15. jorge washinsen

    It is amusing that we are hearing about the forty dollars when we also hear that unemployment is at an all time high.Which had you rather do,not have a job or have one, and pay forty dollars.It is not going to be easy to get out of this mess and it stresses how important it is to vote smartly.A Democrat will never bring you out of a hole even though we have been led to believe one got us out of the big one when in reality WW2 got us out of it. Working people who produce and sell the goods they make get you out of a hole,not more government jobs.Governmnet produces nothing nor do they sell anything at a profit which is a necessity.

    December 22, 2011 at 4:47 pm | Report abuse |
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