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. Dan

    People are responding like they expected this money to continue? I don't get it, this tax cut was set to expire after a year, people should have known that and planned accordingly. The tax cut was covered extensively by the media when it happened, and they clearly stated that this tax cut was for one year. Tax rates are just going back to what they were before. Be apprecative that you had an extra 2% in your paycheck for a year. And as others have pointed out, this 2% tax cut was for social security, which I'm betting you'll want around when you hit 62 to 67. Unless we pay into social security, we're likely to see significant reductions in benefits. You can't have it both ways.

    December 21, 2011 at 2:51 pm | Report abuse |
    • klynch67

      Vote all of these idiots OUT in 2012.

      December 21, 2011 at 2:56 pm | Report abuse |
    • rschier

      Yeah...be "appreciative" that we got this little crumb. People performing "real" and "tangible" work taxed at marginal 25%+, whilst "carried interest" hedge fund gamers pay about half that – If Gingrich had his way, they'd be paying zero. Many of us are not counting on Social Security at all. Halve the rate, and let us save the money for ourselves....

      December 21, 2011 at 2:58 pm | Report abuse |
    • TheNP

      The Bush Tax Cuts were supposed to expire too but now anytime they are supposed to expire they Repubs cry about raising taxes. Only difference here is that those with the money to buy votes get the benefits from those tax cuts.

      December 21, 2011 at 3:02 pm | Report abuse |
    • Nelag T

      Agreed Dan. The journalist should have been asking people how they squandered the $80 a month over the past year. Look on the bright side – if you don't have a job, this won't affect you!

      December 21, 2011 at 3:07 pm | Report abuse |
    • Jason

      Yeah, because $40 pays for my lunch everyday for 2 weeks, $40 can fill up an empty car with gas. $40 to a family living paycheck to paycheck is a lot of money. This whole mess with the pipeline in the same bill is nothing but Republican hogwash.

      December 21, 2011 at 3:09 pm | Report abuse |
    • Jake Beniflah

      $40 means a lot to a lot of people who count on every dollar to buy the basic necessities - food, shelter, medicines, etc. It may not mean much to those in the 1% or 2% ... Whether you agree the tax extension is nothing or something, Americans should replace their congressman or woman with someone new in 2012. We need collaboration and compassion for millions of Americans who live in a world where the glass is really half empty. It is a shame for Boehner to play politics with the president. It is clear no one in Congress cares about the American people. They only care about themselves and their political aspirations. My holiday wish: OCCUPY CONGRESS with new people in 2012 ...

      December 21, 2011 at 3:11 pm | Report abuse |
  2. eugene

    i haven't seen a raise in my social security benefits for 3 years and we are only getting a 3.6% increase. minimum wage has gone up by 2 bucks per hour in that same time period. we had to survive the increases with less money so every person working should share my burdens. i am tired of having to do without because the government doesn't want to make millionaires and billionaires pay their fair share of taxes

    December 21, 2011 at 2:52 pm | Report abuse |
    • Herbert

      And by fair Genie, you mean that other people should have to pay more than you, so you can get more stuff for free.

      December 21, 2011 at 2:57 pm | Report abuse |
    • Melinarockdj

      Eugene, you should not have seen a raise in Social Security. Those are cost of living raises, they have been in place for a long time and there is no inflation then there is no raise. I know it sucks, but that's actually the way it is supposed to work.

      December 21, 2011 at 8:13 pm | Report abuse |
  3. Realist

    The road to hell is paved with Republicans

    December 21, 2011 at 2:52 pm | Report abuse |
  4. Gary

    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 trhe library. I just saved you $120 bucks a month. Now cancel your cell phone. If 40 bucks is a lot you have no need to be reached everywhere you are. Use the old 20 dollar LAN line and borrow someones phone if it is an emergency since everyone around you has one. Another 100 bucks in your pocket. Your kid have an xbox or PS3. Sell it and all the games maybe they won't end up broke like you if they spent less time watching tv and playing games. DItch the smokes and the beer. Stop blaming the government for not helping you and look at what you can do to help yourself. Most people waste money on stupid crap they don't need. I will believe we need this the day I see children at the mall who don't have cell phones or no lines at apple every time they release a new product.

    December 21, 2011 at 2:52 pm | Report abuse |
    • Todd

      I like where your head is!!

      December 21, 2011 at 3:09 pm | Report abuse |
    • Kate

      You're kidding right? It's not $120 for cable and internet. I agree, cable can be a waste of money, but driving to and from the library? You'll end up spending more in gas if you live in a major city than you would just paying $30/month on internet. If $40 is a lot to someone, they just need to find a good deal. Oh and it's a "Land Line" not a "LAN line" for a phone at home and NO they are not $20. Time Warner charges over $40 for a land line, and $33 if you bundle it with cable and internet – and that's on sale. Is disconnecting ourselves from the world and our friends and family really the answer? No.

      Don't spend money on things you don't need – but I don't consider a phone to be a luxury to be discarded.

      December 21, 2011 at 3:13 pm | Report abuse |
    • TH3

      Kate...I think you missed the point of that post. If you're at a point where losing $40/paycheck might break you, then you probably need to take a step back and re-assess what a necessity really is. I think the poster was just trying to say that half of the people complaining about losing the $40 will probably be the first in line to buy the iPhone 5, or whatever the next tech gadget is. Our government should be preaching budgeting and prioritization instead of pitting its citizens against each other.

      December 21, 2011 at 3:23 pm | Report abuse |
  5. InvestorBull

    What I would like to see is these millionaire politicians give up a year's worth of their government funded salaries and allow the working class to keep all of the money they earn. We are taxed in every possible way as it stands, and our funds are constantly being drained anytime the word "recession" or "depression" gets uttered. It's easy for these well off people to play what is essentially real lif Monopoly with other peoples' money and lives.

    December 21, 2011 at 2:52 pm | Report abuse |
    • rschier

      "Monopoly" indeed...but what they are missing, is the fact that when one aquires all the real estate and wealth, and the other players are broke, the game is OVER.

      December 21, 2011 at 3:01 pm | Report abuse |
  6. Steve

    40 dollars would pay for a tank of gas (profits to the middle east) for my overpriced American made SUV that gets 12mpg to go to the unemployment office to get my check so I can go to the doctor's office, to pay the 40 dollar deductible I now pay for medical because I am a smoker and have an increase in out-of pocket costs and now I can't even pay for the 2 pack a day habit.

    December 21, 2011 at 2:53 pm | Report abuse |
  7. Change

    Let's face it, the issue here is not just about Americans losing $40 per week or per month. The issue here is about the principle in which the rightwing leadership continues to play games with struggling Americans in the middle of an economic crisis simply to score political points. Furthermore, what really bugs me about these so-called Americans who continue to support the rightwing leadership is the simple fact that you people continue to support wealthy American politicians who don't really care about the American people whatsoever.

    And how do you people really feel about yourselves when you continue to support a Republican Party that has murdered thousands of our troops in Iraq and Afghanistan over lies and created the worst economic crisis in America since the Great Depression, then turn around and laught at us all? Remember Dick Cheyney? He said a few months ago on CNN that he has "No Regrets Whatsoever." Just imagine that Dick Cheyney didn't have the nerve to say to the American people, I wished 9/11 didn't happen! Or I wished we had find WMD's in Iraq or I wished we didn't deliberately and recklessly abandoned and prolonged the Afghan war to start the illegitimate Iraqi war. And I may add that this blunder has created a "Domino Effect" simply because our relations with Pakistan is now strained because of continued efforts to try to speed up and end this prolonged Afghan war and that is a war that should have ended at least five years ago. Yea, it really bothers me how you so-called Americans can support politicians who really don't care about the welfare and progress of this nation.

    December 21, 2011 at 2:53 pm | Report abuse |
  8. Jim

    $40 would double what I currently have in my checking account.

    December 21, 2011 at 2:55 pm | Report abuse |
  9. DellStator

    Despite CNN's best effort to spin this story, saying $40 a payck instead of the more universally accurate $20 a week, and tieing to the req'd salary of 50G a year to get it, There is no good way to spin this story:
    It's an ineffective stimulous, since it's at best supporting subsistance living, not buying durable goods.
    the only people who get a nice chunk of money alrady earn over $100G, they get $2,500 a year from this,
    it's bankrupting SS,
    it's a distraction from SOLVING THE ECONOMIC PROBLEMS we face,
    and
    at BEST it HIGHLIGHTS how badly the system is broken, and how poor and desperate people are.

    Oh, that $50,000 a year salary we need to get this puny dribble of money (it is compared to the $100 per payck the rich get) . The MEDIAN salary, that 1/2 of all wage earners make is LESS THAN 50G! Many make half that, meaning $10 a week. If people are desperate for $10 a week, then THE SYSTEM IS BROKEN, WE ARE ALL SLAVES TO THE BOSS, the RICH, the CORPORATIONS, and the GOVERNMENT ie, CONGRESS, and it is time for a revolution.

    December 21, 2011 at 2:56 pm | Report abuse |
  10. Paul

    The gov inability to make decisions is why $40 a paycheck is so meaningfull to so many americans. So what if its not a long term fix, that money although it effects all americans differently still effects the majority of americans in a negative manner. Most people rely on that money just to get by on a week in and week out basis. Its easy for the people in gov to not extend it because it doesnt effect them as much as it does others...and until it does, situations like this wont change. How does $40 a pay check effect me, it doesnt, but if i was one of the less fortunate people in this economy it would in this manner... its the equivalent of the student loan payment i have to make every month, its my electric and gas bill, its fuel for the month for work...take your pick... i feel for the people whom this effects greatly because of selfish gov politicians. Putting more money in the pockets of the less fortunate is never a bad thing.

    December 21, 2011 at 2:56 pm | Report abuse |
  11. Donna

    This country is being run by a bunch of IDIOTS. How would a 2 month band-aid FIX ANYTHING?

    December 21, 2011 at 2:57 pm | Report abuse |
  12. Mark L.

    This isnt a tax cut. Payroll deduction are for unemployment insurance and Social Security. If these deductions are lowered then these programs will be bankrupt even sooner. Is everyone so williing to sacrifice thiers and their children's fiutures for a few measly bucks today?

    December 21, 2011 at 2:57 pm | Report abuse |
  13. m

    Not being able to pay for cable? Really??? That is the first thing to go – it is a LUXURY! There is no hope for humanity...

    December 21, 2011 at 2:59 pm | Report abuse |
    • Clare

      I do not have cable TV, the internet, a cell phone or a landline. I do not buy beer or cigarettes. I do not have children. You'd think I'd have all this extra money floating around, wouldn't you? Reality check: I don't – & I work 40 hours a week. So, that $40 means a lot to me. My point is that a person or family can cut down to the basic necessities & still struggle because the cost of food, medicine, transportation, etc., has skyrocketed.

      December 21, 2011 at 4:07 pm | Report abuse |
  14. Enoughisenough

    I think Washington is a joke!!! The entire system needs to be revamped from start to finish!! Enough is enough!! Ever since President Obama has been in the whitehouse - nothing but bickering and fighting amongst both sides mainly because they do not like him!! None of this has anything o do with the poor people of America or the middle class - just the wealthy, spoiled, greedy politicians fighting to block the Pres. on anything!! We need to all quit our jobs and go on welfare and get food stamps - then what would they do!!!! If you don't have a paycheck - they can't take out any taxes.

    December 21, 2011 at 2:59 pm | Report abuse |
  15. cristian

    for families like mine 40 dollars is a lot. I had got drop out of community college to help my parents pay the bills for my younger siblings. for the people who "$40" means nothing thats nice. However, you can not say that for everyone.

    December 21, 2011 at 3:00 pm | Report abuse |
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