For Drafters of the Constitution, a vexing problem was to establish a government that would give life to the philosophies of the Declaration of Independence and meet the practical political considerations of merging diverse states of differing size and traditions into a nation.
Among the solutions was the Constitution’s Origination Clause in Article I, Section 7, clause 1:
“All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.”
Constitution’s “Origination Clause”: Why Revenue Bills Start in the House, Part 1 discusses the melding of philosophy and politics in 1787 that resulted in the Origination Clause. Part 2 touches upon operation of this element of the Great Compromise. The simple language of clause seems to require any laws having to do with taxes begin in the House of Representatives, with the Senate either proposing a change or agreeing. Over time operation of The Origination Clause has been less than straightforward. Part 3 discusses how the Senate’s use of a process called “gut and replace” to avoid the Origination Clause violates the Constitution.
The Courts and The Origination Clause
Since the Constitution’s ratification few court cases have involved the Origination Clause. Leading Supreme Court cases have addressed the phrase “bills for raising revenue” and whether a Senate amendment is “germane” to a House-originated bill. In no case has the Supreme Court declared a law unconstitutional for violating the Origination Clause.
In 1915 one United States district court declared a law unconstitutional because it clearly originated in the Senate and imposed a tax. The United States Cotton Futures Act was originally Senate Bill 110 and the Secretary of the Senate had certified that: “this act originated in the Senate.” An appeal of Judge Charles Merrill Hough’s finding a violation of the Origination Clause was dismissed by the Supreme Court. The case of Hubbard v. Lowe is the only court decision finding Congress violated the Origination Clause.
Although Lowe is the only case to find a violation of the Origination Clause, the Supreme Court has clearly stated Congress must comply with the clause:
“A law passed in violation of the Origination Clause would thus be no more immune from judicial scrutiny because it was passed by both Houses and signed by the President than would be a law passed in violation of the First Amendment.”
House of Representatives Rules to Enforce the Origination Clause
Perhaps the Supreme Court has had few Origination Clause cases because of House of Representatives rules to enforce the clause. The Constitution’s Article I, sec. 5, The Rulemaking Clause, provides: “Each House may determine the Rules of its Proceedings…”
House rules formally provide for Origination Clause enforcement by a House resolution to return a bill to the Senate. Informal enforcement by the House may take place when it ignores a Senate Bill, sends it to a House committee or originates a new House bill on the subject. The House itself has been the primary enforcer of the Origination Clause.
Senate Power to Amend, Origination Clause Avoidance & a Legal Fiction
The Origination Clause’s second part, “…but the Senate may propose or concur with amendments as on other Bills” permits Senate changes to House originated revenue bills. The House and the courts have generally accepted Senate revenue generating amendments to House originated revenue bills. It is quite clear, however, that the Senate may not make revenue generating amendments to generate to House bills unrelated to revenue.
The Senate has developed a process to avoid the Origination Clause. By this process, as a practical matter, the Senate originates “bills to raise revenue”. If the Senate desires revenue legislation that was not originated by the House, the Senate takes a House originated bill, removes all of the House language, keeps the House designated bill number and replaces the language with the Senate’s language.
The uncomplimentary term for this practice is “gut and replace”. The process in truth just pretends that the House originated a revenue bill which really began in the Senate. A legal fiction is created to avoid the commands of the Origination Clause. Most people, outside the world of lawyers and legislators, would believe a law passed after being “gutted and amended” by the Senate would have “originated” in the Senate.
A Straightforward Reading of the Origination Clause
The language of the Origination Clause appears clear. While courts have limited the meaning of “bills for raising revenue”, a common understanding of that term would be “taxes”. The phrase “originate in the House of Representatives” also seems straightforward in meaning that laws to raise taxes must begin the House of Representatives. The qualifying phrase, “…but the Senate may propose or concur with amendments…” met the needs of small states to have the body with equal representation be able to propose changes or agree to taxes passed by the House.
The final phrase, “as on other Bills” seems to have a plain meaning. As the Senate cannot amend any non-revenue bill to add language involving revenue, then it makes sense the Senate should not have the constitutional power to alter House revenue bills in a way that affects revenue, whether by increase or decrease. This common sense limitation has not been congressional practice or the position of the courts.
The Origination Clause became part of the Constitution to address specific issues. If the Senate can amend a House revenue bill without limits, the Origination Clause is without effect and “it cannot be presumed that any clause in the constitution is intended to be without effect…”
Convenience of the Government Is Not a Constitutional Consideration
The practices of “gut and replace” and sweeping Senate amendments of House-originated “bills for raising revenue” may be convenient for legislators. These procedures allow a Senate majority made up of Senators that may be more than three years away from an election introduce or “originate” revenue bills when they will not be soon facing voters. For some House members, allowing the practices lets them vote yes on House-originated revenue bills that decrease taxes. Campaign literature and advertising can tout the anti-tax votes that were never in danger of becoming law. Other House members properly oppose the practices as unconstitutional.
“Gut and replace” and Senate revenue generating amendments benefit Congress from a work load as well as a political standpoint. Congressional Origination Clause shortcuts may lessen Congress’ work, because the Senate can get directly to its agenda without having to wait for a “bill to raise revenue” meeting the Senate’s wishes to originate in the House.
As Judge Richard Leon responded to arguments of government burdens while finding the National Security Agency’s telephone data collection program unconstitutional: “… the public has no interest in saving the Government from the burdens of complying with the Constitution.”
The Origination Clause: Its Goals and Congressional Self-Policing
The Founding goal of protecting citizens from onerous taxation by committing the “origination” of revenue bills to the government department closest to the people was a noble one. Meeting the practical political considerations of the large states v. small states was crucial to forming a nation. The manner in which Congress “polices” its compliance with The Origination Clause through broad amendments and legal fictions protects neither the citizens nor state interests. Such congressional practices benefit only a single group, the legislators who engage in them.
The Origination Clause and the Affordable Care Act (Obamacare) on Constitutionally Speaking
Paul Kamenar, an attorney who represents 40 Members of the House in supporting an Origination Clause challenge to the Affordable Care Act in one of the three cases that should doom Obamacare discussed the clause and the case on Constitutionally Speaking.
The “Great Compromise” in the drafting of the Constitution refers to the document’s elements that directly addressed the divergent interests of large v. small states. Elements of the compromise include the ways that government functions and sovereignty were separated, checked and limited by applying principles of federalism, separation of powers and fiduciary government. These components were intertwined with the most critical element of the Compromise, two houses of the legislature, one with representation based upon population and one with equal representation for each state.
United States v. Munoz-Flores. The Supreme Court and lower courts have determined that laws which generate revenue to pay for a specific program and not to support the government generally are not “bills for raising revenue” within the meaning of the Origination Clause.
Flint v. Stone Tracy Co. “Germane” is typically understood as “relevant or related”. In practice, the courts have accepted Senate amendments that raise revenue to House bills that were designed to reduce taxes. “Germane” has been found to have a much broader application than most people would understand.
Munoz-Flores, 495 U.S. at 392 and 393.
This process is referred to as blue-slipping as the resolution is printed on blue paper.
A detailed 2011 discussion of the practices of the House and Senate related to the Origination Clause by the Congressional Research Service is The Origination Clause of the U.S. Constitution: Interpretation and Enforcement.
From the CRS report on page 2: “As generally understood in both the House and Senate, this clause carries two kinds of prohibitions. First, the Senate may not originate any measure that includes a provision for raising revenue, and second, the Senate may not propose any amendment that would raise revenue to a non-revenue measure.”
This practice is at the heart of a legal challenge to the Affordable Care Act (Obamacare) that is pending before the District of Colombia Court of Appeals, Sissel v. Health and Human Services. Forty members of the House of Representatives have lent their support to the plaintiff in this case as friends of the court (amici curiae). The brief of the House members points out that Obamacare raises more than $500 billion in taxes by the “gut and amend” process.
Courts have excluded from the term revenues that are “incidental” to a specific government program. Most people believe when government collects money, that money is a tax, regardless if it’s called a user fee, fine or penalty. Again, lawyers and legislators don’t always talk like everyone else.
While legal language often bears little relation to a word’s common understanding, “amend” in the 18th Century seemed plain: “to correct; to change any thing that is wrong.” and an “amendment” was “a change from bad for the better…[i]n law, the correction of an errour committed in a process…” SAMUEL JOHNSON, A DICTIONARY OF THE ENGLISH LANGUAGE (3d ed. 1768). The terms would be understood much the same way in the 21st Century.
Courts that have considered the issue have confined themselves to if a Senate amendment is “germane” or “related” to the original House bill. Courts have not found violations of the Origination Clause even when the Senate increased taxes by amending a House bill that had decreased taxes.
Only 33 or 34 Senate seats are up for election at each national election. This means that at any given moment, at least 66 of the 100 Senators will not be facing voters for more than two years. This distance in time removes the accountability factor that was the intent of the Origination Clause.
These practices also create a circumstance that allows Senators that have an upcoming election to vote against a tax increase with knowledge that it will likely be passed by colleagues who are not facing voters any time soon.
The ultimate vote by a House member on a Bill with Senate originated taxes is likely on a complex bill with Senate taxes scattered throughout that has a title unrelated to taxes, for instance: The Patient Protection and Affordable Care Act (Obamacare).