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. jorge washinsen

    Pass the thing so we can get some rest ,but do not let a Democrat Senate get anywhere near it in an election year.

    December 22, 2011 at 4:49 pm | Report abuse |
  2. nomorebeer

    That's about 1/2 of what gas costs me to get to work every week.

    December 22, 2011 at 4:58 pm | Report abuse |
  3. Kepler

    I don't really have any expenses since I own my places outright and walk to work. I do without cable or a phone as my entertainment is reading. I exchange voluenteer time at the Food Co-Op in exchange for food. The only money I have to pay is my electric bill and taxes. I don't mind paying $40 more if it really helps things because I just let my money pile up. The issue is I don't think this really helps anything. This is all just games of moving money around.

    December 22, 2011 at 5:04 pm | Report abuse |
  4. MollyIrelane

    It's the economy stupid! Amazing, the symbolism here. We are told and told and told that cash flowing into the system, via spending helps to get the economy going. And yet we have people grandstanding over two months or twelve months, or if you listen to Candidate Santorum – 0 months. The problem is revealed in Republican's inability to get along even with one another – who will you fight with next? It doesn't matter who much money your talking about, whether it will go to pay your rent or pay for a Vente Mocha. It's that there is no compromising, not with the Administration and now, not even with their own party. THROW THEM OUT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    December 22, 2011 at 5:04 pm | Report abuse |
  5. Gnar

    Not that long ago people were screaming about the government's debt. 2 ways to fix that... Cut spending or raise taxes. Both require everyone to suffer a little bit.

    Now, everyone starts whining when one of these things happens.

    December 22, 2011 at 5:05 pm | Report abuse |
  6. Sharenm

    Less $40 to me means trying to stay a step ahead when we're behind.

    December 22, 2011 at 5:10 pm | Report abuse |
  7. Taxman

    Just another way to refill the goverment bank account so they can go blow it somemore......pathetic.....

    December 22, 2011 at 5:10 pm | Report abuse |
  8. Pat

    What other crud are they trying to pass along with it. Not a dem or repub issue. Its a broken process issue.

    December 22, 2011 at 5:11 pm | Report abuse |
  9. proudkafir

    Where is all the shared sacrifice? This is monies not going to the social security trust fund. Social security will just head for bankrupcy sooner.

    December 22, 2011 at 5:12 pm | Report abuse |
  10. Hello H20

    I spend about $40 a week at Starbucks because I love Coffee!!!! It is my guilty pleasure I enjoy every morning and on the walk back to work from lunch. This evil tax increase will make an already tight budget even tighter and I will be forced to eliminate either this or my Friday Sushi dinners. I'm really angry to be hearing about this right before the holidays as it is going to ruin my mood and I'm gonna be a grump around my family now. Boo to the government for stripping us of our unalienable rights!

    December 22, 2011 at 5:13 pm | Report abuse |
  11. frannk

    Without the forty dollars my two children will have to share their fast food meal, minus the sodas. I will have to cook one or two meals at home each week. My children will no longer get the things they deserve. No new video games.

    December 22, 2011 at 5:25 pm | Report abuse |
  12. J.D.

    One thing I'm not seeing much mention of, when the payroll tax was lowered it was for 2011. PEROID. So my husband and I have been expecting our paychecks to go back down (BACK DOWN–to what they were before!!). We made our budget and forecasted out our expenses / cash flow for 2012 accordingly. The fact that the government is considering extending it at all is an unexpected bonus. I would love to continue to have that extra money in my budget next year so money is not quite so tight, but eventually this payroll tax holiday is going to end and our paychecks are going to go back down to what they used to be. It is all a question of when. Maybe we'll get some REAL tax reform at some point, wouldn't that be great??

    December 22, 2011 at 5:36 pm | Report abuse |
  13. Matt

    $40 means I can make the minimum payment on my credit card!

    December 22, 2011 at 5:56 pm | Report abuse |
  14. Miguel

    People whine about $40 affecting them because they have 4-8 children to feed, and all they survive on is mac&cheese and hotdogs.... Don't cry and complain because you and your husband chose to have so many kids that you cannot afford to feed! The more educated people in America have on average 2 kids at the most. I've met people who are unemployed and decide to not look for jobs, and they have more babies so that they get more welfare money from the government. I make 45k a year, and I can afford to lose $40 a paycheck if it means getting this country back in shape; however, I don't want our tax dollars being taken advantage of by lazy people who made wrong decisions. Nor do I want our tax money being invested to fight an 8 year war that had no positive results (we're now concerned that Iraq will enter a civil war... wow all those billions of dollars paid off)

    December 22, 2011 at 6:07 pm | Report abuse |
  15. Marie Burdoin

    I really have a problem with one readers comment. They make 30,000 a year and aren't struggling?? They said people need to learn how to budget if they are complaining about $40?? What state do you live in? Because I am positive it isnt California. This all boils down to the people in power not the public not knowing how not to budget. What is the guareentee that the increase will stop at $40? There is no guarenntee. How can we learn how to budget if the income tax is increasing without any real justification? Plus $40 taken away from a single individual is less money they can spend in retail store, resturants and the local economy. Lets look at the bigger picture here people. The more money taken away from us means the less money we can spend to stengthen our economy. I am a college graduate and can barely support myself. That's with a job I work 40 plus hours at that only hires college graduateds!! $40 does mean the difference between a roof over my head and not having a place to live. And yes I know how to budget thank you very much!!! Politicians need to take a step back and look at what kind of impact this increase will do to the average americans moral and work ethic. Honeslty if they are going to continue to take and take without seeing the effects whats the incentive to work? To strive for more? To be better than the next guy? We might as well join the protestors on Wall Street and all the financial districts around the contry and say no we wont take it. We work hard for our money and as politicans continue to take they are killing the american dream. If that ideology even exists anymore. These are all honest words from a disgruntled college grad who was promised this dream, who continues to work hard to barely get by and I am lucky to even have a job.

    December 22, 2011 at 6:39 pm | Report abuse |
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