The Constitution provides (Article I, § 7): “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.” This provision is referred to as the Origination Clause.
The D.C. Circuit recently denied rehearing en banc in a case involving the Affordable Care Act which was drafted in the Senate and passed by the Senate as a substitute for a revenue raising bill that did originate in the House. Sissel v. U.S. Dept. of Health and Human Services, ___ F.3d ___, 2015 U.S. App. LEXIS _____ (D.C. Cir. 2015), here, denying petition for rehearing en banc from the earlier panel decision in Sissel v. U.S. Deparatment of Health and Human Services, 760 F.3d 1 (D.C. Cir. 2015), here.
In denying rehearing, concurring and dissenting opinions discussed the application of the Origination Clause. Both the concurring and dissenting opinions found that the Origination Clause was not violated. The dissenting opinion just thought that the issue was worthy of en banc review.
I have revised my text in the Federal Tax Crimes book to add the following after quoting the Origination Clause (I omit the footnotes citing the Sissel rehearing decisions and original panel decision, and include only footnote at the end):
This command in the Constitution appears clear. But, as we learn in this class, when words are involved, it is all about interpretation of the words. What do the Origination Clause’s words mean? The issue is not commonly presented seriously in mainstream tax legislation. But, in some outlier – albeit very important – cases it is presented. For example, it recently arose in litigation involved the attempts to defeat the Affordable Care Act (“ACA”) because some of its provisions do raise revenue. The House passed a revenue bill that was not the ACA and sent it to the Senate. The Senate substituted the ACA which was completely different from the revenue bill passed by – originated in, if you will – the House. The ACA provided for large amounts of revenue to fund much of the cost of the ACA. Did the ACA violate the Origination Clause? Facially, in a literal sense, yes. But by interpretation of the provision, it did not run afoul of the Origination Clause. It is not necessary for this class to enter into an extended discussion because the Origination Clause is not presented in most mainstream tax legislation. But, generally, the ACA was not deemed to violate the Origination Clause for one of the following reasons:
1. Under a purposive approach, the bill's primary purpose was to regulate health insurance and not to raise revenue. The revenue in question was to spur conduct (acquisition of health insurance) rather than raise revenue (although raising revenue was an incidental effect, the Origination Clause is not implicated by such incidental effects).
2. The Senate amendment adding the ACA was a bill that originated in the House and thus met the requirements of the Origination Clause.
3. The ACA raised revenue for specific program purposes and not for general revenue purposes and thus met the requirements of the Origination Clause.
These explanations may or may not be satisfying, but in the end it would be the rare revenue raising measure that proceeded to final enactment would not meet the requirements of the Origination Clause. n14
n14 Since the Senate amendments must be passed by the House, the House can has a procedure – called “blue-slipping” to reject and return to the Senate revenue bills that were not originated in the House. This process is described in the Wikipedia entry titled Blue slip at: https://en.wikipedia.org/wiki/Blue_slip. Of course, for bills that did originate in the House and were simply amended in the Senate (as the ACA), even by full substitution, the blue-slip process would not apply.
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