Tax Analysts Blog

The Origination Clause? Let It Go

Posted on Aug 5, 2014

Last week, a federal appeals court put another nail in the coffin of the origination clause. For those not up to date on legal anachronisms, that’s the section of the Constitution requiring that “all Bills for raising Revenue shall originate in the House of Representatives.”

In theory, the origination clause locates the taxing power closer to the people by investing the House with special prerogatives in the development of revenue legislation. In practice, however, the clause has been rendered a nullity by its concluding words: “but the Senate may propose or concur with Amendments as on other Bills.”

That second half of the origination clause gives the Senate free rein to do whatever it wants. When senators want to originate a tax bill, they strip the content from an existing House bill and replace it with their own language. Presto: a House bill with Senate language. Insiders call this a “shell bill.”

Some people call it a sneaky subterfuge, but the courts have generally called it legal. On July 29 the U.S. Court of Appeals for the District of Columbia added its voice to the chorus, rejecting a challenge to Obamacare based (in part) on the origination clause.

In a lawsuit filed against the Department of Health and Human Services, Matt Sissel – described by the court as “an artist and small-business owner who serves from time to time on active duty with the National Guard” – claimed that the Affordable Care Act violated the origination clause since the Senate wrote the legislation but used a shell bill from the House (originally focused on tax credits for first-time home buyers) to move the legislation. The appeals court found this argument unconvincing and affirmed a district court dismissal of Sissel’s complaint.

Most scholars agree that the origination clause is more or less defunct. In fact, it’s often treated as little more than a curiosity. A few experts take it seriously, including several who testified at a House hearing in late April. But even those inclined to preserve the clause consider it nearly a lost cause. “Regrettably, this clause has had little effect in practice as the Senate has construed its power to amend so broadly as to replace the entire text of revenue bills that had originated in the House,” wrote Erik M. Jensen, a law professor at Case Western Reserve University.” Jensen held out the possibility that the Supreme Court might yet curb this practice. But so far, the Court has refused to end the shell game.

In other words, the origination clause is very nearly dead. And I say good riddance. At one time, there may have been some substance behind it, in the sense that House members were directly elected by the people while senators were installed by state legislatures. Under that system, the House really was closer to the people.

But the 17th Amendment largely eliminated that distinction by providing for the direct election of senators, too. (Notably, the amendment was ratified in April 1913, just two months after the 16th Amendment gave income taxes a constitutional sanction.)

It’s arguable that House members are still closer to their constituents, since most come from relatively small districts while senators are elected at large within their states. But direct election is direct election: For good or bad, most senators seem exquisitely attuned to the opinions of their constituents. The chamber has certainly played host to any number of pandering politicians over the last hundred years.

By most accounts, the origination clause was important to the Founders – or at least some of them. But if it ever had real meaning, that all changed when Americans changed the Constitution.

Whether or not the origination clause is actually defunct, it certainly should be.

Read Comments (2)

AMT buffAug 5, 2014

Why bother amending the Constitution when the courts can do it for us?
Amendments are just so time-consuming and difficult. Court decisions are fast
and easy.

In the words of Homer Simpson: "If something's hard to do, then it's not worth

edmund dantesAug 5, 2014

AMT buff: LOL!

Brightens my day to see a Simpsons quote in Tax Analysts.

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