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. Jeff

    $40 doesn't affect me much, but why are the Republicans always in the pockets of the middle class and the senior citizens, but never the rich. Come on 2012, less Republicans and more leaders who really care about the people of this country.

    December 21, 2011 at 3:01 pm | Report abuse |
  2. Jared

    Family of 8 (6 kids) worried about $40? Something tells me that this family was most likely never in the financial position to have kid #4, 5, or 6 if $40 bucks means that much to them now. These stories are all about people on the margin. It's sad, but there is still a margin with or without these tax breaks.

    December 21, 2011 at 3:01 pm | Report abuse |
    • hawkechik

      Sorry, I don't think we're on the margin. Where do you get that?

      December 21, 2011 at 3:07 pm | Report abuse |
  3. I can pay, can you?

    I have cable, cell phones for my kids, have Christmas lights hung up, smoke cigarettes, ocassionally buy a bottle of wine, drive 120 – 150 miles per day to/from work, and have lots of other things I don't really need and some that I do.

    I make, myself, about $50k a year. So, this would be $1k for me every year. I get paid once a month, so it's (exactly) $79.78 a month. I can easily budget that into my household expense by simply cutting back on my smoking - buy 1 pack every other day instead of smoking a pack a day. Or, that's the coffee I buy every morning - maybe I can make it myself instead for a nickel a cup.

    If you can't live without it, then you are living outside of your means because you didn’t have this reduction in 2010, so why do you need it now?

    December 21, 2011 at 3:03 pm | Report abuse |
    • cecilia

      ignorance is bliss – is it not

      December 21, 2011 at 3:11 pm | Report abuse |
    • DP

      I'm sure a lot of people can adjust, but that isn't the point at all. The point is that those who can easily afford to lose it (the top earners) won't miss and at all, and couldn't care less about those who are on the margins. And for those of you who are bashing the people on the edge, many of them might have taken pay cuts (I did, about $12,000 a year), or been laid off all together. The $40 is very important to them, yes, some are spending on things maybe they shouldn't, but others are just plain trying to feed themselves and their children, all so that the rich don't have to give up anything.

      December 21, 2011 at 3:12 pm | Report abuse |
    • Joe

      because for some people it means paying the electric bill, because the cost of living has gone up 2% a year and there salary has remain stagnent for the past 4. So they may have once been living in their means, but can't anymore.
      This may not describe everyone, but I'm sure it describes someone. Your situation is your own, for someone else this could be the little spark they need to help get over a hump.
      Also, increase money supply (even a small one) put into the economy should be a good thing.

      December 21, 2011 at 3:14 pm | Report abuse |
  4. JB

    $40 if you're paid every 2 weeks. Those paid weekly it is $20. You people amaze me at the lengths you go to create illusions. What they are talking about is $2,74 per day. If you can survive without that small sum, you aren't making $50,000 a year and are probably getting a near refund of all withholdings anyway.

    December 21, 2011 at 3:03 pm | Report abuse |
  5. J. Morales

    $40 a month is small potatoes. It hasn't significantly impacted my life this past year in any significant way. Any more money I can keep is great, but the GOP are right on the money with this one. Even Obama wanted a one-year extension and a two month extension is just a joke. The Senate should get off their vacation and head back to Washington to get a one-year extension.

    December 21, 2011 at 3:03 pm | Report abuse |
  6. danko

    You know what people... S$rew 1%, this country is for us the 99%, we know that they suck our blood and bought our government, but this is our country, so we need to stop looking at them and wait for them to pay their fair share, they won't. Those su$kers will be fine anywhere in the world, but if we keep waiting for them to act nice, this country will go down the drain. Time to get tough on ourselves.

    December 21, 2011 at 3:03 pm | Report abuse |
    • Tim

      Danko,

      You're fired.

      Your Boss (Part of the 1%)

      December 21, 2011 at 3:06 pm | Report abuse |
    • danko

      Tim
      Say it like Trump 🙂

      Actually, if the boss is 1% he wouldn't even know my name, he wouldn't even know if I been fired

      December 21, 2011 at 3:10 pm | Report abuse |
    • Jared

      Skip work and protest then, but then your paycheck may go down $40 a week for missed wages.

      December 21, 2011 at 3:13 pm | Report abuse |
  7. Jack

    This whole $40 spin is such a BS lie. Take your annual income (up to $110,100k) and multiply by .02. This is the amount your annual wages will go down. Divide by 52 for a week, 12 for a month, etc. For it to be $40 a week, you have to be making $98,000 per year or more.

    December 21, 2011 at 3:04 pm | Report abuse |
    • cecilia

      jack you are a jerk – most of us do not make 100,000 a year

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

      So by your calculation, I will lose $183.50 a month. Gotta love those rich Republicans

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

      Another one that didn't pay any attention. It's supposed to be $40 every two weeks. Federal employees are mostly paid bi-weekly so it's no wonder that's how they think.

      December 21, 2011 at 3:10 pm | Report abuse |
    • Jack

      Half the responses are talking about $40 a week and what they can do with it. I'm just letting you know that unless your income is $98,000 or more, you are not losing $40/week. That dollar amount is thrown out there carelessly to represent the paycheck difference for someone who makes $50,000 and gets paid twice a month.

      December 21, 2011 at 3:12 pm | Report abuse |
    • Big Russ

      I've already done 40 bucks worth of blow before I even pour my Monday morning cup of coffee at my Wall Steet office.

      December 21, 2011 at 3:20 pm | Report abuse |
  8. Matthew Smith

    $40 every two weeks may seem like a small, easily spent amount to many of us – lunch for two, a couple bottles of decent wine, a ticket to a baseball game and the list goes on – but consider that amount over the course of a year: $1,000. I believe the discussion takes on a completely different tone if we consider the annual amount we are poised to lose. When put in those terms, I believe many of us will see that as a call-to-action to review our family’s budget and perhaps make sacrifices to accommodate such a loss. $1,000 pays a few car payments. $1,000 makes some or all of a mortgage payment. $1,000 may make the difference in family decisions about charitable giving in 2012. $1,000 is a lot of money!

    Shame our elected officials for making this about them and their political gain.

    December 21, 2011 at 3:06 pm | Report abuse |
    • Tim

      How about that in 2011, you were given a $1000 tax cut you never had before. You should say thank you for the $1000 and move on.

      December 21, 2011 at 3:08 pm | Report abuse |
  9. cecilia

    it gives me a bit more money to help my daughter and her two teenagers. they have been financially strapped because of high medical bills due to breast cancer. Even with good insurance, they have had a difficult time. She had 6 surgeries, chemo, several hospital visits – it has taken the entire family to help out and several of us will lose if the tax break is not extended

    December 21, 2011 at 3:07 pm | Report abuse |
  10. ar

    The poor and middle class belong in slums.

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

      I'm already living in an area that's going downhill thankyewverymuch.

      December 21, 2011 at 3:12 pm | Report abuse |
  11. carrie

    I think that $40.00 is may not be a lot to me but it is food for a lot of other people, but the congress just looks out for themselves and we do not matter, that is what I am seeing right now what a shame.

    December 21, 2011 at 3:08 pm | Report abuse |
  12. Steve

    My wife likes a dozen fresh roses every Friday. $40 a week pays for that.

    December 21, 2011 at 3:09 pm | Report abuse |
  13. TW

    I get paid weekly, so I'm in the $20 per paycheck. Still, $20 per paycheck every month adds up. That's my expendable cash. And we've already seen what happens when Americans have no expendable cash to spend, haven't we? Get out of my pocket, and start looking at the ones that don't pay their fair share.

    December 21, 2011 at 3:10 pm | Report abuse |
  14. D W

    $40 almost pays for a week to gas my car to get to work/back home; means something has to go - cable, cell phone. Cutting back; making do.

    December 21, 2011 at 3:10 pm | Report abuse |
  15. bill

    40/week =160 a month.....half a payment on a vehicle....the ones spewing it wouldnt affect them need to get out from behind their desks and open their eyes.....the government doesnt need anymore money...i say tax the rich more....they can afford it...hell 160 /month doesnt seem to bother them...

    December 21, 2011 at 3:10 pm | Report abuse |
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