Does the ACA violate the Origination Clause?

Apart from the exchange litigation, there’s one legal challenge still pending that could threaten the Affordable Care Act as a whole. Nothing is likely to come of it, and nothing should come of it. But you never know.

The challenge concerns the Origination Clause, which provides that “[a]ll Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.” The original idea was to give control over the power to raise revenue to the House, which was thought to be more directly accountable to the people than the Senate, whose members were then selected by state legislatures.

Technically, the ACA adhered to this process. The bill that became the ACA was first introduced in the House as the “Service Members Home Ownership Tax Act of 2009.” Although the bill had nothing to do with health care, it did, among other things, increase corporate taxes by about $1 billion. After the bill passed in the House, the Senate amended it to strike out its substance and replace it with the bill that became the ACA.

At least two lawsuits have now been filed arguing that this “shell bill” procedure violates the Origination Clause. Sure, the challengers argue, it’s OK for the Senate to amend House bills that raise revenue. But the Senate replaced the House bill. The Constitution, they say, can’t be satisfied with that empty formalism.

So far, the challengers haven’t had much luck. A Washington, DC district court dismissed the lawsuit last June; a Texas district court did the same this January; and the case was argued to a decidedly unimpressed panel of the D.C. Circuit last month. Why have the challenges failed? And are they likely to fare any better down the line?

To begin with, the cases are justiciable—meaning that they do not present the sort of political question that the courts have no business deciding. The Supreme Court held as much in the 1990 decision of United States v. Munoz-Flores. Nonetheless, there are two main arguments for thinking that the Origination Clause has been satisfied here.

First, the Origination Clause only matters if the ACA is a bill for “raising Revenue.” It probably isn’t, even though it imposes a bunch of different taxes. The Supreme Court has long adhered to the principle that “revenue bills are those that levy taxes in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue.” In other words, a bill that just raises taxes is a revenue bill. A bill with a different “primary purpose”—say, extending health insurance coverage to tens of millions of people—is not a bill for “raising Revenue,” even if the bill also imposes some taxes.

Second, the bill that became the ACA both originated in the House and raised revenue—again, about $1 billion worth. Although the challengers argue that there must be a direct, substantive connection between the Senate bill and the House bill, there’s no “germaneness” requirement in the Origination Clause. Nor would such a requirement be judicially manageable. How would a court know when a Senate amendment differed “too much” from a House-originated bill?

The Origination Clause even provides that the Senate “may propose or concur with Amendments as on other Bills.” And the Senate has a longtime practice of striking out the language of House bills and replacing them with something quite different. The Supreme Court, in turn, has been pretty relaxed about Senate substitutions. In 1911, for example, it affirmed the constitutionality of a Senate amendment that replaced a House-originated inheritance tax with a corporate tax.

Both of these arguments look sound to me. Indeed, the conventional wisdom is that the Origination Clause argument is going nowhere fast. That said, there’s precious little case law in this area—just a handful of Supreme Court cases, some of them quite dated. Might the Supreme Court be tempted to make some new constitutional law? As with the litigation over the individual mandate, could the Origination Clause case move from off-the-wall to on-the-wall?

Probably not. The litigation over the individual mandate mobilized a broad social movement around widely shared and deeply personal objections to a purchase mandate that, to many, epitomized government overreach. The avid support of the Republican Party, as Jack Balkin has emphasized, gave an institutional imprimatur to that movement and made constitutional innovation at the Supreme Court much more likely.

In contrast, the Origination Clause challenge hasn’t mobilized the public at all. Maybe that’s because the purported constitutional violation seems like a technicality. Maybe it’s because the Seventeenth Amendment, which provides for the direct election of senators, makes both houses of Congress directly accountable to the public. Or maybe it’s because people are tired of the incessant wrangling over the supposed unconstitutionality of Obamacare.

Whatever the case may be, the Supreme Court isn’t likely to craft a novel constitutional holding to invalidate a statute that, just two years ago, it upheld against a more substantial constitutional challenge. Nor should it. Vigorous judicial enforcement of an expansive reading of the Origination Clause would only thwart the people’s representatives and make it harder for Congress to go about its business. That’s not an outcome anyone should welcome.


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