Budget legislation passed
On November 18, 2011, the first appropriations bill was enacted, the Consolidated and Further Continuing Appropriations Act, 2012
. It combined the three appropriations bills for Agriculture, Commerce/Justice/Science (CJS), and Transportation/Housing and Urban Development (THUD), and also contained a continuing resolution providing funding for other departments until December 16, 2011.
On December 15, 2011, a deal was reached on the remaining nine appropriations bills, which were combined into the Consolidated Appropriations Act, 2012
. One point of contention was that an earlier draft of the bill supported by Republicans contained new restrictions on travel to Cuba
, which had been relaxed by the Obama administration in 2009. These restrictions were removed in the enacted bill at the insistence of the Obama administration. A separate Disaster Relief Appropriations Act, 2012
was also included in the package, as well as a concurrent resolution
which offset the increased disaster funding by imposing a 1.83% across-the-board spending cut to all discretionary programs except Defense and Veterans Affairs.
Two more continuing resolutions were also passed, one extending the deadline by one day so that the Senate could vote on the package, and one until December 23, 2011. The two appropriations bills were enacted on December 23, 2011, but the concurrent resolution failed in the Senate.
On December 17, 2011, the Senate passed legislation to extend the Social Security payroll tax
cut which had been previously enacted
during the FY2011 budget negotiations. That legislation had reduced the rate from 6.2% to 4.2% for the 2011 calendar year only. The initial 2012 extension was for two months, rather than the full-year extension which had been sought; the legislation also extended unemployment benefits
as well as a measure preventing a drop in rates for Medicare reimbursement
; the spending for these was offset by enacting new fees on Fannie Mae
and Freddie Mac
. Points of contention included a Democratic plan to fund the tax cut with a new surtax on income over $1 million, which was dropped in later stages of negotiation, as well as attempts by Republicans to insert language which would speed the approval of the Keystone XL pipeline
, which had recently been delayed by the Obama administration.
The bill was initially rejected in the House, whose leaders insisted on a full-year extension, despite the fact that the Senate had already adjourned for the year. However, after criticism from other Republicans that the impasse would harm their prospects in the upcoming 2012 elections
, the House leadership on December 23, 2011 announced that it would pass the Senate bill in return for Democrats promptly beginning negotiations on a full-year extension. The bill, the Middle Class Tax Relief and Job Creation Act of 2011
, was passed by the House and signed by the President later that day.
The tax cut extension for the remainder of the year was passed as the Middle Class Tax Relief and Job Creation Act of 2012
on February 17, 2012, by a vote of 293–132 in the House and 60–36 in the Senate. The bill also contained a further extension of unemployment benefits and the Medicare reimbursement rates. The cost of the tax cut was not offset by spending cuts, but the other provisions were offset by cuts in federal healthcare and pension programs. Republican support for the bill was motivated by a desire to not oppose a tax cut in an election year. Some Democrats criticized the bill for directing spending cuts at federal employees rather than generating funds by increasing taxes on the wealthy or closing tax loopholes.