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. Nisha

    For people who are well-off or just not living paycheck-to-paycheck, $40 may not be that much. But if you are living paycheck-to-paycheck and budgeting to see what necessity you may not be able to afford this month, $40 is everything. Put things into perspective please.

    FYI – not everyone having financial problems are in their situation because of 8 kids and bad decisions... Please don't take the unnecessary plight of a few to undermine the difficulties of others. Some people do in fact work hard only to have politicians play with their lives for $40 dollars and then go on holiday recess. Live is definitely rough up there, huh?

    December 22, 2011 at 6:39 pm | Report abuse |
    • James70094

      How did these people get by before the tax was reduced? It is a temporary reduction and it is what funds Social Security.

      December 23, 2011 at 12:16 am | Report abuse |
  2. kane

    GOP= Grinchs Old Party.

    December 22, 2011 at 7:14 pm | Report abuse |
  3. Ben

    Must be nice to have a job

    December 22, 2011 at 7:30 pm | Report abuse |
  4. Barack-a-buddy

    $40 per check means $80 per month to me. $80 per month is a nice dinner out with my wife & kids.

    December 22, 2011 at 7:45 pm | Report abuse |
    • James70094

      So before the tax cut you didn't have nice dinner out with your family?

      December 23, 2011 at 12:18 am | Report abuse |
    • don

      @James: Before the taxcut, we were all having one less dinner out (if you must put everyone in the same bag)... which meant a restaurant raked in a lot less...and paid hours to fewer employees ... and those employees got fewer tips. A large part of our economy is based on consumerism – whether we like it or not. Is that so bad? TGIF

      December 23, 2011 at 8:03 am | Report abuse |
  5. spacecadet

    how can i lose forty per check? that's what i spend at the dispensary getting weed for my bad back from sitting too long and head aches from watchin too much tv. i need that money so i can keep on getting my meds that let me sit and watch tv in comfort

    December 22, 2011 at 7:53 pm | Report abuse |
  6. Cricket

    I understand how some people get made for us blaming the government and we should learn how to budget.
    I think that they should cut the darn politicans pay and give us poor folks some of there luxurious salary.
    For people who work blue collar jobs, $40.00 is alot. We budget very wisely in our house. We do have internet and cell phones but my husband and I both do school 100% online to save in gas, we have 3 kids and makes our ends meet but dont have a lot of extra, and NOW they want to take away what little extra if any people are trying to save, to be able to do family things together. I mean DAMN tax the darn rich people who dont have a worry in the world. Make them hurt and struggle to get buy in the million dollar homes.
    I also live in NC where they are jacking up gas tax January 1st, so bump this crap, the government sucks. They need to stop donating to there own pockets and start helping out people who actually deserve it. Not movie stars but the military the LEO and Fire Fighters along with all the blue collar workers who help build their homes and work on their cars.
    OK my two cents just got said

    December 22, 2011 at 9:07 pm | Report abuse |
  7. WalmartRamen

    Most people in my town makes $17,000 a year. What would the taxes for that be?
    Then the Koch-funded ALEC group making model laws to keep the pay low & get rid of Collective bargaining.
    More people with no money is not a job maker! You can make it but they can't afford it!

    December 22, 2011 at 9:16 pm | Report abuse |
  8. DEEJ

    Way too many poor in America (half the population). Way too many people in America having to live paycheck to paycheck (some of it their own fault). Way too much of a gap in American between the rich and poor. Congress should really focus on these things.

    December 22, 2011 at 10:39 pm | Report abuse |
    • bc

      Why does someone else need to fix the fact that you cant budget a missing 40.00 I dont understand this way thinking. If you cant afford something (cable cell phone) you do away with that expense. Thats called living within your means. The problem in this country is that some people expect the govt to take care of everything thing! Learn to take care of yourself!

      December 22, 2011 at 11:37 pm | Report abuse |
  9. bc

    Its sad that 40.00 makes that much of a difference in peoples lives. I could live just fine without it, but 40.00 is 40.00 and I would welcome the extra money each pay period. I think folks need to learn to budget if missing 40.00 would ruin you as many have mentioned on here.

    December 22, 2011 at 11:24 pm | Report abuse |
    • TR

      It's not just $40 it's $80 per month for a total of $1000 per year. How about Washington DC learning to budget instead? I live alone, on a budget and work very hard for my money. I don't agree with a bunch of already rich fat cats telling me to tighten my belt while they continue to bleed me dry.

      December 23, 2011 at 12:32 am | Report abuse |
  10. TR

    A $4 MILLION vacation: Separate flights, luxury hotels and plenty of golf... the price of Obama’s annual Hawaiian holiday soars

    Obama's Air Force One flight estimated at $3,271,611
    Total travel costs for Hawaii holiday are $3,629,622
    Housing comes to $151,200 and hotels at $72,216
    Hawaii Reporter estimates total cost at $4,113,038

    Read more:

    Yet congress wants me to give up $80.00 per month of my hard earned money? How about the Obama's spend the holiday at home like the rest of us and Michelle can cook their family dinner and save taxpayers the money? Please note that they are using Air Force One for their trip at a cost of over 3 million dollars, you really don't think that expense is coming out of his own pocket do you?

    December 23, 2011 at 12:38 am | Report abuse |
    • Gary

      Hold on slick... let us also tabulate how much Bush spent on all his vacations. If I remember correctly he took more vacation days his first year in office than any other president.

      So stop trying to act like Obama is spending money just to spend. He didn't get us into a multi-trillion dollar war.

      Everytime I hear someone complain about Obama's vacation time... or an internation trip to make sure we stabilize and keep good relations with our allies, it ticks me off. Because you people didn't complain one iota when Bush was doing.

      So to me it seems you're just racist and truly have an issue with Obama because of skin color... nothing more nothing less.

      You can say you don't but if you didn't you posted numbers for every president, not just single out the BLACK guy.

      December 23, 2011 at 7:24 am | Report abuse |
  11. Gary

    For those thinking $40,000 is a lot of money... try living in a larger Metro area on $40,000/yr.

    If Gas is over $3.00 a gallon and you want to cut down on fuel consumption and your job is in say, Philly, NY, or DC (examples) you would want to live as close as possible if you drive. You can take the Metro but that is still about $8.00 a day so $40.00 a week.

    a one bedroom apartment in a decent, not great... decent area is going to run you about $800-$1000 a month if not more.

    Just to give you an example of extra expensive items are... For example, a black ink cartridge at staples in Rockville, MD is $16.99min Frederick, MD that same cartridge... $15.49, but you have to drive 20 miles to save $1.50

    Groceries are the same way... sure I can save a bundle if I want to drive 20+ miles north, but who wants to waste $3.00 in gas to save a $1.50

    If you live in the south, yeah things are much cheaper... and you can get by on $30,000 a year, but in the Northeast.... Pbbbbbt, good luck with that. You would need roomates or have to live w/ mom & dad the rest of your life.

    I am thankful I make a good living, just shy of 6 figures, but I also know how to budgetso I can save my own money for my own needs. I don't use 401k's. What are the chances I will live to even collect the money? I would rather put it away and into stocks I can trade out daily or weekly and make a bigger profit.

    I save about $6,000 every 3 months, and have been doing that for 10 years now, do the math... it's 240k. However, I just make shy of 100K a year, have no kids, not married, and not wasteful.... but a family of 3-4 would not be able to put away that kind of money, and a family of 4 on $30k... they would be lucky if they can save $500 a year... People need to take into consideration more populated areas are more costly to reside in, and if someone wants to make a decent living... you need to be where the industry is and thrives.

    So while $40.00 every two weeks may be nothing to you... it is a lot to others, and to any family struggling to make ends meet. I sympathize with them and can see their anger, but anyone who thinks 30-40k a year makes you rich... come to my world and try to live on that money. I bet you're homeless within a 6 month period.

    December 23, 2011 at 7:20 am | Report abuse |
  12. WhataJoke

    CNN is a left wing Obama kissing rag. If you read this BS propaganda, you would think obama wants tax cuts and republicnas dont. It needs to be extended for a year not 2 months, as Obama wants BECAUSE HE IS A DEOMCRAT AND DEMOCRATS LOVE TAXES. It's amazing how this sherade can fool so many. I never seen a group of people that, whine and cry all they're loves about wanting an antiamreican agenda, then at the drop of a hat, snap of a finger- take credit for being pro american. It's a Media BS tactic and it's not gonna work, Everything comes out in the wash, leftys- and that's why conservatism will ultimately win. Good luck

    December 23, 2011 at 7:58 am | Report abuse |
  13. IrsKgb

    Odummer is a total failure incarnate. Lose man, Lose!!!

    December 23, 2011 at 9:03 am | Report abuse |
  14. adam

    a bag of weed every 2 weeks

    December 23, 2011 at 9:45 am | Report abuse |
  15. flynnsef

    It means more debt for my grandchildren to repay. Bad move by a Congress and a President who cannot seen to stop spending what they do not have and a stupid public that can only see their wants and not their needs.

    December 23, 2011 at 10:17 am | Report abuse |
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