Obamacare Round 4? Round 5?

The Patient Protection and Affordable Care Act has come before the Supreme Court on three occasions for full briefing and argument. As we begin the run-up to the October 2015 Term of the Supreme Court, it is worth noting and watching for the possibility that the Court may take on at least two additional categories of cases involving Obamacare. Based on petitions already filed, or that will likely be filed near the beginning of the Court's next Term, the Court may have to confront further arguments for religious exemptions from Obamacare's contraceptives mandate, and may have to decide how a clause of the Constitution that requires tax legislation to be offered first in the House of Representatives plays into the Capitol Hill hi-jinx that preceded enactment of the law.

In Round One, in the case called National Federation of Independent Businesses v. Sebellius, Chief Justice Roberts, writing for a 5-4 majority, held that the "Shared Responsibility Payment" imposed on individuals that chose not to comply with the Individual Mandate to purchase health insurance was a tax. The decision conflicted with the claims and arguments of the Democrats who enacted Obamacare. While Roberts and the majority found the Shared Responsibility Payment to be a tax permissibly imposed by Congress, rather than a penalty.

In Round Two, in the case called Burwell v. Hobby Lobby, Justice Samuel Alito, writing for a 5-4 majority, held that small corporations could claim an accommodation under Obamacare from requirements of Obamacare that would have resulted in the corporation providing abortifacient contraceptive coverage as part of employer-provided health insurance. The accommodation protecting the corporations was required by another federal statute, the Religious Freedom Restoration Act ("RFRA"). RFRA imposes on the federal government an obligation to use the most narrowly crafted means of serving even compelling government purposes when the government's regulation limit or interfere with the free exercise of religion. The corporations, including Hobby Lobby, satisfied the Supreme Court that the obligation to fund abortion-inducing contraceptives violated their religious faith.

In Round Three, in King v. Burwell, writing for a 6-3 majority, Chief Justice Roberts rejected the obvious and plain meaning of a provision of Obamacare that provided federal tax subsidies to cover the cost individuals subscribing to health insurance through health insurance exchanges "established by the State[s.]" The IRS and the Obama administration had enacted rules by which individuals buying insurance through federally operated exchanges in the 34 States that refused to establish exchanges would still qualify for the tax subsidies to cover the costs of premiums. Roberts rejected the actual meaning of the plain words of the statute, essentially on the ground that, had the Court held Congress and the administration to the text of the statute, the purpose of Congress in adopting Obamacare would be frustrated by the resulting failure of the entire program.

Perhaps, though, the Court has had enough of Obamacare.

Perhaps the Court needs a break from the rancorous debate and the heat. Justice Scalia certainly did not pull any punches when he remarked the statute had been rescued enough times by the Court that it should now be known as SCOTUS-care, a result he concluded was obtained by a tortured process of "interpretative jiggery-pokery."

We should know, perhaps sometime in early October, or shortly thereafter, whether the Court will again revisit the crown jewel of the Obama crown. By then, the Justices will have had the opportunity to look at petitions involving another round of disputes over the Obama administration's efforts to force employers to fund health insurance coverage for services against which they maintain a religiously based, conscientious scruple. In addition, shortly after the Court resumes its work, another constitutional challenge, a systemic attack on the entire Act, will be presented to it, in a petition filed by the Pacific Legal Foundation.

In a series of cases involving religiously affiliated colleges and universities, the Supreme Court may have the opportunity to further refine its thinking on whether the federal government violated rights of religious freedom when it imposes obligations on private parties, in this case, Catholic and Baptist affiliated schools and colleges, to provide coverage for contraceptive services against which they hold a religious scruple of conscience. The first Obamacare contraceptives case involved, as noted above, small, closely held corporations. These cases, if the Court takes one or more of them for decision, involved religiously affiliated institutions of higher education but not religious societies as such.

In another case, about which I posted a series of blog entries a year ago, the Court will be asked to consider whether the entire Obamacare statutory framework was enacted in violation of a provision of the Constitution known as the Origination Clause. Under the Origination Clause, all bills that raise revenue must originate in the House of Representatives, although the Senate is permitted to offer amendments to such bills.

As I explained in the previous post introducing the Sissel case:

Litigation raising the Origination Clause argument against Obamacare has been pending in the Nation’s Capitol for some time now.  Matt Sissel, the plaintiff, claimed that, because the penalty for failing to purchase health insurance is a tax, the Origination Clause required that the House of Representatives originate the legislation. Obamacare, however, was an invention of the Senate.

In fact, the Democrat-controlled Senate took a pending House bill – one regarding tax credits for home ownership by members of the military -- stripped out every jot and every tittle of it including its title, and inserted the Affordable Care Act in place of its original text and title.  This, on Capitol Hill, is called an amendment in the nature of a substitute.

A decision on the Sissel case out of the US Court of Appeals in Washington, DC, on Friday, August 7, may provide the set-up for the Origination Clause challenge to Obamacare to be considered at the Supreme Court.

In a strange twist, as the most recent development in Sissel case, Democrat appointed appellate judges all rejected Matt Sissel's claim that Obamacare was a tax and therefore unconstitutional because it originated in the Senate. Republican appointed judges on the same court rejected the majority's view that Obamacare was not a bill for raising revenue. Nonetheless, they agreed with the outcome of the case because, while, in their view Obamacare, which will raise some 490 billion dollars in revenue for the general fund of the United States, was clearly a bill for raising revenue, the bill that became Obamacare actually did originate in the House.

Of course, the original legislation that became Obamacare was a proposal to provide relief on home financing to veterans and service personnel. After that bill passed in the House, the Senate took the bill and gutted everything to do with assisting veterans and service members. In place of the veterans' assistance language, the Senate substituted the text that became the health care insurance overhaul legislation. F

The Supreme Court grants review in fewer than 100 cases most years. The number is substantially lower than under Chief Justices that preceded William Rehnquist. Still today, the likelihood that a case will be reviewed is substantially greater where the federal appeals courts are of a divided view on the legal question at issue in the case.

In the contraceptives cases, the division of the Circuit Courts of Appeal make the likelihood of a further decision from the Court substantial. At the same time, the Court has the power to decide cases only on the papers -- without full briefing and argument -- this is what the Court calls summary disposition. The contraception cases require the Court's attention to resolve the division among the Courts of Appeal. The Court could, however, summarily dispose of the cases by invoking its earlier decision in Burwell v. Hobby Lobby. (That summary disposition is not highly likely, but is at least possible.)

In the Origination Clause case, the chances of review are substantially lower. I say that, not because the argument is wrong, or the case unworthy of consideration. It just reflects the reality of a limited resource -- the Court's time and attention -- and the need to accomplish such ends as maintaining a uniform application and understanding of federal law. At this point, the appeals court in Washington, DC, is the only one to have ruled on the Origination Clause. [In Hotze v. Burwell, a case from Texas and decided by the federal appeals court there, a physician offered the same Origination Clause argument as did Sissel. In Hotze's case, however, the Fifth Circuit dismissed the appeal and directed the trial court to dismissed the lawsuit. The appeals court did not decide the Origination Clause argument because the court concluded that Hotze was not a proper party to bring the lawsuit.]

While court watchers may wonder whether the justices wince when requests for review in highly contentious cases keep returning to the Court, Abraham Lincoln explained once that it was the Court's unavoidable duty to decide cases properly before it:

At the same time, the candid citizen must confess that if the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their Government into the hands of that eminent tribunal. Nor is there in this view any assault upon the court or the judges. It is a duty from which they may not shrink to decide cases properly brought before them, and it is no fault of theirs if others seek to turn their decisions to political purposes.

In like vein, though it might pain them to undertake the process so soon again, the duty of the justices is to decide these cases. It would be nice, however, if, from time to time, they would decide them correctly. Perhaps by next Spring we will have reason to congratulate the Court on doing so.

Finding the Origination Clause: History and Meaning

What follows is the third of three blog posts examining the origination clause of the United States Constitution and the recent decision of the United States this Court of Appeals for the District of Columbia analyzing a challenge to the Patient Protection And Affordable Care Act under the Origination Clause.  Part one consists of a review of the recent court decision holding that the Origination Clause requirement, namely that bills for raising revenue originate in the United States House of Representatives, was not a basis for concluding that the individual penalty for failing to purchase health insurance violated the Constitution. Part two challenges the presumption that policy for the entire nation may be created by decisions of judges in ordinary litigation. In this final part, I offer the reader the historical background for the Origination Clause so that they might, should they wish to do so, judge for themselves whether the United States Court of Appeals for the District of Columbia Circuit correctly concluded that the individual coverage penalty under Obama care did not violate the Origination Clause.

As previously noted, a federal appeals court in Washington, DC, held that one of the tax penalties imposed by Congress under the Patient Protection and Affordable Care Act does not violate the Constitution’s Origination Clause. Under Article I, section 7, of the Constitution, “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.”  Judge Judith Rogers, writing for herself and two colleagues, concluded that, although the tax penalty is, in fact, a tax, and did, in fact, originate in the United States Senate, the provision did not violate the Origination Clause.  Judge Rogers based her conclusion on her analysis of the motivation of Congress that prompted the enactment of Obamacare.  Because, in her view, the Act was not adopted “to raise revenue,” the Origination Clause’s mandatory requirement -- origination in the House -- was inapplicable to the Act.

Perhaps Judge Rogers was right.  Perhaps she was wrong.

In this final post on the decision, I offers reasons, independently verifiable, that powerfully suggest that, although clever and facile, Judge Rogers is, in fact, wrong on this point of history, of constitutional meaning, and of law.

To judge for yourself whether Judge Rogers has “dishonored the arts of the historian and degraded the talents of the lawyer” by her “superficial and purposive interpretations of the past,” I offer some insight into the Origination Clause, its predecessor in English law, its advent in the Constitutional Convention of 1787, its construction by those who debated its inclusion in the Constitution, by those who interpreted its meaning early after its enactment, and its construction by the Supreme Court over the history of our Nation.  Finally, I propose a common sense problem embodied in Rogers’ approach that deflates any wind in the sails of her approach.

The Origination Clause

The Constitution provided a framework for a strengthened central government for the States.  The basics of that framework are found in the first three Articles of the Constitution.  Article I outlines the Legislative Branch, Article II outlines the Executive Branch, and Article III outlines the Judicial Branch.  In keeping with our English forebears, and State Charters and Constitutions predating the US Constitution, the States and the People endowed on the Legislative Branch the power to enact laws, including the power to raise funds for the operation of the government.  To raise those funds, Congress, the House of Representatives specifically, may originate “bills for raising revenue.” While the language is, seemingly, straightforward, a question does exist exactly what would constitute a bill for raising revenue.

The language “bills for raising revenue” did not spring full-grown from the head of the Zeusian participants in the constitutional convention. Rather, precedence in the constitutions of the colonies, the new states, and in English history offered guidance on the justification for an origination clause and the language of one. What follows here is a brief review of that pre-existing material on which the founding fathers could justifiably rely in their consideration of, and proposal of, the origination clause.

The English Predecessor to the Origination Clause

The English Bill of Rights, 1689, limited the power of the Crown to tax the people without approval of parliament:

That levying money for or to the use of the crown, by pretence of prerogative, without grant of parliament, for longer time, or in other manner than the same is or shall be granted, is illegal.

This provision of the English Bill of Rights reflected a judgment that taxing or laying levies upon the English people could only be justified if the people themselves, through that legislative body which directly represented them, the House of Commons, originated such taxes or levies. Explaining, William Blackstone, in his Commentaries on the Law, wrote:

it is the an[c]ient indisputable privilege and right of the house of commons, that all grants of subsidies or parliamentary aids do begin in their house, and are first bestowed by them; although their grants are not effectual to all intents and purposes, until they have the assent of the other two branches of the legislature.

American Antecedents of the Origination Clause

Contemporaneously with Blackstone’s Commentaries, the English Parliament imposed the Stamp Act.  The Act, enacted without debate, assessed duties or taxes, on a variety of colonial goods, services, professions and activities. The parliament, however, did not include representatives elected to Parliament by the colonies. Consequently enactment of the Stamp Act constituted taxation without representation. Yet the principle of representation as a justification for taxation was the very reason for the enactment of English law requirement of origination of taxes in the House of Commons.

In response to the enactment of the Stamp Act, the Stamp Act Congress adopted a Declaration of Rights, expressing “with the warmest sentiments of affection and duty to his majesty's person and government. . . . ” That sentiment having been stated, the Stamp Act Congress then laid out arguments against the Stamp Act, and for the legitimacy of colonial legislatures.  They declared:

That his majesty's liege subjects in these colonies are entitled to all the inherent rights and privileges of his natural born subjects within the kingdom of Great Britain,

That it is inseparably essential to the freedom of a people, and the undoubted rights of Englishmen, that no taxes should be imposed on them, but with their own consent, given personally, or by their representatives.

That the people of these colonies are not, and from their local circumstances, cannot be represented in the house of commons in Great Britain.

That the only representatives of the people of these colonies, are persons chosen therein by themselves; and that no taxes ever have been, or can be constitutionally imposed on them, but by their respective legislatures.

…..

That the late act of parliament entitled, an act for granting and applying certain stamp duties, and other duties in the British colonies and plantations in America, &c., by imposing taxes on the inhabitants of these colonies, and the said act, and several other acts, by extending the jurisdiction of the courts of admiralty beyond its ancient limits, have a manifest tendency to subvert the rights and liberties of the colonists.

That the duties imposed by several late acts of parliament, from the peculiar circumstances of these colonies, will be extremely burthensome and grievous, and from the scarcity of specie, the payment of them absolutely impracticable.

That as the profits of the trade of these colonies ultimately centre in Great Britain, to pay for the manufactures which they are obliged to take from thence, they eventually contribute very largely to all supplies granted there to the crown.

That the restrictions imposed by several late acts of parliament, on the trade of these colonies, will render them unable to purchase the manufactures of Great Britain.

….

As a matter of expedience, Parliament repealed the Stamp Act the year following its enactment, although the repeal may not have been because of the American colonial arguments or the Declaration of Rights.  Still, the experience had its impact on the political sensibilities of the American colonists.  They became acutely aware of the differences between their situation and those of their fellow Englishmen at home. They had no voice in Parliament.  Their colonial legislatures were subject to suspension.

By the time of the Revolutionary War, the newly independent States had assayed the importance of choosing the legislative house most closely aligned with the voice of the people, as the chamber in which legislation raising revenues for the government should originate. In fact, each of the newly independent states, but one, included an origination clause or money bill clause in their state constitutions.  I offer here are a few examples of those provisions:

Delaware’s 1776 Constitution stated:

All money-bills for the support of government shall originate in the house of assembly, and may be altered, amended, or rejected by the legislative council. All other bills and ordinances may take rise in the house of assembly or legislative council, and may be altered, amended, or rejected by either.

Maryland’s 1776 Constitution stated:

That the House of Delegates may originate all money bills, propose bills to the Senate, or receive those offered by that body; and assent, dissent, or propose amendments; that they may inquire on the oath of witnesses, into all complaints, grievances, and offences, as the grand inquest of this State; and may commit any person, for any crime, to the public jail, there to remain till he be discharged by due course of law. They may expel any member, for a great misdemeanor, but not a second time for the same cause. They may examine and pass all accounts of the State, relating either to the collection or expenditure of the revenue, or appoint auditors, to state and adjust the same. They may call for all public or official papers and records, and send for persons, whom they may judge necessary in the course of their inquiries, concerning affairs relating to the public interest; and may direct all office bonds (which shall be made payable to the State) to be sued for any breach of duty.

The 1776 Constitution of New Hampshire provided:

That all bills, resolves, or votes for raising, levying and collecting money originate in the house of Representatives.

The 1776 New Jersey Constitution stated:

That the Council shall also have power to prepare bills to pass into laws, and have other like powers as the Assembly, and in all respects be a free and independent branch of the Legislature of this Colony; save only, that they shall not prepare or alter any money bill-which shall be the privilege of the Assembly; that the Council shall, from time to time, be convened by the Governor or Vice-President, but must be convened, at all times, when the Assembly sits; for which purpose the Speaker of the House of Assembly shall always, immediately after an adjournment, give notice to the Governor, or Vice-President, of the time and place to which the House is adjourned.

Likewise, the 1776 Constitution of South Carolina required:

All money-bills for the support of government shall originate in the general assembly, and shall not be altered or amended by the legislative council, but may be rejected by them. All other bills and ordinances may take rise in the general assembly or legislative council, and may be altered, amended, or rejected by either.

The 1776 Constitution of Virginia stated:

All laws shall originate in the House of Delegates, to be approved of or rejected by the Senate, or to be amended, with consent of the House of Delegates; except money-bills, which in no instance shall be altered by the Senate, but wholly approved or rejected.

Together with the English Bill of Rights, and these several state constitutional provisions, the reader should have a good sense from whence the expression “no taxation without representation” arose.

The Origination Clause and the Constitutional Convention of 1787

During the Constitutional Convention of 1787, in Philadelphia, the delegates heartily debated the proposed Origination Clause.  Elbridge Gerry, of Massachusetts, first proposed a clause requiring that bills raising revenue originate in the United States House of Representatives. In Gerry’s view, “Taxation and representation are strongly associated in the minds of the people, and they will not agree that any but their immediate representatives shall meddle with their purses.” More fully, Gerry stated, “He “moved to restrain the Senatorial branch from originating money bills. The other branch was more immediately the representatives of the people, and it was a maxim that the people ought to hold the purse-strings. If the Senate should be allowed to originate such bills, they wd. repeat the experiment, till chance should furnish a sett of representatives in the other branch who will fall into their snares.”

Virginia’s Edmund Randolph suggested that the problem of the Gerry’s language was that it could be interpreted so broadly that it could apply to legislation that only incidentally raised money, and proposed modifying it.

(This image is excerpted from Max Farrand’s Debates of the Federal Convention, available online here.)

In the excerpt shown here, note the language proposed by Edmund Randolph:  “Bills for raising money for the purpose of revenue....”  This express statement of limitation, namely that only the House could originate those bills that (a) raised money (b) for the purpose of revenue – was rejected by the Constitutional Convention.

James Madison’s thoughts, responding to Randolph’s proposal, were based on the Nation’s short and recent history with Great Britain, were precisely the issue of multipurpose actions were at stake.  There, the colonists conceded the authority of Parliament to regulate trade, he reminded the delegates, but rejected their power to raise revenues from the colonies without representation of the colonists.

The Convention referred Gerry’s proposal to the Compromise Committee on Representation. In turn, the Compromise Committee’s proposal included an Origination Clause. George Mason, of Virginia, explained why the Committee had proposed, when reporting back to the Convention, the Origination Clause:

The consideration which weighed with the Committee was that the 1st. branch would be the immediate representatives of the people, the 2d. would not. Should the latter have the power of giving away the peoples money, they might soon forget the Source from whence they received it. We might soon have an aristocracy. He had been much concerned at the principles which had been advanced by some gentlemen, but had the satisfaction to find they did not generally prevail. He was a friend to proportional representation in both branches; but supposed that some points must be yielded for the sake of accom[m]odation.

Benjamin Franklin supported the Origination Clause.  His views, expressed to the Convention, were summarized in convention notes as follows:

Docr. Franklin did not mean to go into a justification of the Report; but as it had been asked what would be the use of restraining the 2d. branch from med[d]ling with money bills, he could not but remark that it was always of importance that the people should know who had disposed of their money, & how it had been disposed of. It was a maxim that those who feel, can best judge. This end would, he thought, be best attained, if money affairs were to be confined to the immediate representatives of the people. This was his inducement to concur in the report. As to the danger or difficulty that might arise from a negative in the 2d. where the people wd. not be proportionally represented, it might easily be got over by declaring that there should be no such Negative: or if that will not do, by declaring that there shall be no such branch at all.

In a subsequent debate of the Convention on amending the Origination Clause, George Mason rejected attacks on the Origination Clause.

“Col. Mason was unwilling to travel over this ground again. To strike out the section, was to unhinge the compromise of which it made a part. The duration of the Senate made it improper. He does not object to that duration. On the Contrary he approved of it. But joined with the smallness of the number, it was an argument against adding this to the other great powers vested in that body. His idea of an Aristocracy was that it was the gover[me]nt. of the few over the many. An aristocratic body, like the screw in mechanics, worki[n]g. its way by slow degrees, and holding fast whatever it gains, should ever be suspected of an encroaching tendency--The purse strings should never be put into its hands.”

Luther Martin, in 1788, criticized the Origination Clause during the debates in the States on ratification.  In his “Genuine Information,” he reported to the Legislature of Maryland on the conduct and debates of the Philadelphia Convention.  His report corresponded to the proposals offered by a committee of the Convention, the seventh of which proposed to limit the power to originate bills for the raising of revenue by placing it solely in the House of Representatives, subject to amendment by the Senate and a veto power in the Chief Executive:

“The seventh section of this article was also the subject of contest--It was thought by many members of the convention, that it was very wrong to confine the origination of all revenue bills to the house of representatives, since the members of the senate will be chosen by the people as well as the members of the house of delegates, if not immediately, yet mediately, being chosen by the members of the State legislature, which members are elected by the people, and that it makes no real difference whether we do a thing in person, or by a deputy, or agent, appointed by us for that purpose.

That no argument can be drawn from the House of Lords in the British constitution, since they are neither mediately nor immediately the representatives of the people, but are one of the three estates, composing that kingdom, having hereditary right and privileges, distinct from, and independent of, the people.

That it may, and probably will be a future source of dispute and controversy between the two branches, what are, or are not revenue bills, and the more so, as they are not defined in the constitution; which controversies may be difficult to settle, and may become serious in their consequences, [there] being no power in the constitution to decide upon, or authorised in cases of absolute necessity to terminate them by a prorogation or dissolution of either of the branches; a remedy provided in the British constitution, where the King has that power, which has been found necessary at times to be exercised in case of violent dissentions between the Lords and Commons on the subject of money bills.

That every regulation of commerce; every law relative to excises, stamps, the post-office, the imposing of taxes, and their collection, the creation of courts and offices; in fine, every law for the union, if enforced by any pecuniary sanctions, as they would tend to bring money into the continental treasury, might and no doubt would be considered a revenue act--That consequently the senate, the members of whom will it may be presumed, be the most select in their choice, and consist of men the most enlightened, and of the greatest abilities, who from the duration of their appointment and the permanency of their body, will probably be best acquainted with the common concerns of the States, and with the means of providing for them, will be rendered almost useless as a part of the legislature; and that they will have but little to do in that capacity, except patiently to wait the proceedings of the house of representatives, and afterwards examine and approve, or propose amendments.”

Notice that Martin’s objections to the origination clause confirm the absence of a definition in the constitutional provision for bills raising revenue. Nonetheless, his argument strongly suggest a broad reading was accepted for bills raising revenue: “That every regulation of commerce; every law relative to excises, stamps, the post-office, the imposing of taxes, and their collection, the creation of courts and offices; in fine, every law for the union, if enforced by any pecuniary sanctions, as they would tend to bring money into the continental treasury, might and no doubt would be considered a revenue act.”

In 1788, Theophilus Parsons addressed the Origination Clause during an address to the Massachusetts Convention on the Ratification of the proposed Constitution:

“It is objected that it is dangerous to allow the Senate a right of proposing alterations or amendments in money bills; that the Senate may by this power increase the supplies, and establish profuse salaries; that for these reasons the lords in the British Parliament have not this power, which is a great security to the liberties of Englishmen. I was much surprised at hearing this objection, and the grounds upon which it was supported. The reason why the lords have not this power, is founded on a principle in the English constitution, that the commons alone represent the whole property of the nation; and as a money bill is a grant to the king, none can make the grant but those who represent the property of the nation; and the negative of the lords is introduced to check the profusion of the commons, and to guard their own property. The manner of passing a money bill is conclusive evidence of these principles; for, after the assent of the Lords, it does not remain with the clerk of the Parliament, but is returned to the commons, who, by their speaker, present it to the king as the gift of the commons. But every supposed control the Senate, by this power, may have over money bills, they can have without it; for, by private communications with the representatives, they may as well insist upon the increase of the supplies, or salaries, as by official communications. But had not the Senate this power, the representatives might take any foreign matter to a money bill, and compel the Senate to concur, or lose the supplies. This might be done in critical seasons, when the Senate might give way to the encroachments of the representatives, rather than sustain the odium of embarrassing the affairs of the nation; the balance between the two branches of the legislature would, in this way, be endangered, if not destroyed, and the Constitution materially injured. This subject was fully considered by the Convention for forming the constitution of Massachusetts, and the provision made by that body, after mature deliberation, is introduced into the federal Constitution.”

The Virginia Ratifying Convention included a debate on the Origination Clause. That debate, between James Madison and William Grayson, matched the wits of a leading Federalist, Madison, and a leading anti-Federalist, Grayson.  While the debate between the two is a fascinating read, and study on the division of representation and the division of power, at no point in the debate is the question addressed what constitutes a bill for the raising of revenue.

Early Constructions of the Origination Clause

As the First Congress under the Constitution took up its duties, a discussion of those duties by the House was necessary.  As to the Origination Clause, the following discussion between took place between two of Virginia’s representatives, Madison and White:

“Mr. White. The Constitution, having authorized the House of Representatives alone to originate money bills, places an important trust in our hands, which, as their protectors, we ought not to part with. I do not mean to imply that the Senate are less to be trusted than this house; but the Constitution, no doubt for wise purposes, has given the immediate representatives of the people a control over the whole government in this particular, which, for their interest, they ought not to let out of their hands.

Mr. Madison. The Constitution places the power in the House of originating money bills. The principal reason why the Constitution had made this distinction was, because they were chosen by the people, and supposed to be the best acquainted with their interest and ability. In order to make them more particularly acquainted with these objects, the democratic branch of the legislature consisted of a greater number, and were chosen for a shorter period; that so they might revert more frequently to the mass of the people.”

Again, note that this debate goes to the question of the value of assigning the Origination power to the House of Representatives, not to the meaning of bills for raising revenue.

Joseph Story, writing in his Commentaries on the Constitution, addressed the debate over the Origination Clause, and, in part, responded to the arguments made by Luther Martin, in his Genuine Information. Story wrote:

“What bills are properly ‘bills for raising revenue,’ in the sense of the constitution, has been matter of some discussion. A learned commentator supposes, that every bill, which indirectly or consequentially may raise revenue, is, within the sense of the constitution, a revenue bill. He therefore thinks, that the bills for establishing the post office, and the mint, and regulating the value of foreign coin, belong to this class, and ought not to have originated (as in fact they did) in the senate. But the practical construction of the constitution has been against his opinion. And, indeed, the history of the origin of the power, already suggested, abundantly proves, that it has been confined to bills to levy taxes in the strict sense of the words, and has not been understood to extend to bills for other purposes, which may incidentally create revenue. No one supposes, that a bill to sell any of the public lands, or to sell public stock, is a bill to raise revenue, in the sense of the constitution. Much less would a bill be so deemed, which merely regulated the value of foreign or domestic coins, or authorized a discharge of insolvent debtors upon assignments of their estates to the United States, giving a priority of payment to the United States in cases of insolvency, although all of them might incidentally bring revenue into the treasury.”

Supreme Court Interpretation and Application of the Origination Clause

Suppose you make a contract with a local builder for the construction of your new home.  The contract calls for “a deposit before construction commences, progress payments of one quarter of the total contract amount” at defined completion points, requires the general contractor to “regularly report on the progress of construction,” and conditions receipt of the final payment on “satisfaction of the buyer.” The contractor calls you as the project is nearing completion and invites you to inspect the home on a near future date.  The contractor has completed the house to specifications.  All elements are met in the construction.  You inspect the home, note that all specifications are as you stated. 

Nonetheless you withhold a statement of satisfaction and refuse final payment.  You do so, at least based on your statements to the contractor, because you are “not satisfied.”  You refuse to state a ground of satisfaction.  The contractor refuses to surrender the premises to you, refuses to transmit the certificate of occupancy he obtained for you, and demands payment.  You sue.  He sues.

The contract does not REQUIRE a buyer of services to falsely state satisfaction if he is unsatisfied.  The contract does not require the buyer to state expressly the grounds of dissatisfaction (a punch list, for example, of needed corrections to the project).  The contract does not expressly require that the buyer’s judgment be a reasonable one.  It is likely that in the trade of construction there are accepted practices related to conducting business, including in the formation of contracts.  The contractor’s attorney insists that “everyone knows” that the judgment regarding satisfaction has to be a “reasonable” one, and that, to be reasonable, a judgment has to be articulated, stating particular grounds for dissatisfaction.  More, he argues, because you do not do so, your refusal to state satisfaction is “unreasonable” and therefore, does not constitute a proper denial of satisfaction.  In the attorney’s view, you should be required to make the final payment on the contract.

What is a judge to do?

Does a judge hold the parties to the strict standard of their written agreement? That would favor the buyer of the home, whose refusal to state why they are not satisfied seems eminently unreasonable to the judge. Does the judge color his reading of the contract with the construction trade’s assumption that a requirement of “satisfaction” actually means “satisfied according to reasonable judgment?”  That would favor the contractor that may have failed to reasonably accomodated the concerns of the buyer?

You see, the business of judging actually involves these real world kinds of conflicts, commanding real world resolutions.

But do these principles apply to the governing of a Nation? To the construction and application of our National contract, the United States Constitution?  I think the reasonable answer is that courts, to do their jobs must be able to read and apply the Constitution.  How else can a dispute be resolved, for example, in the moment when an impeached and removed federal judge refuses to leave his bench, continues to hear cases, and impose judgments in those cases? Her superiors must have the ability to understand the constitutional power of Congress to impeach judicial officers. They must in order to protect litigants, both civil and criminal, from the now-unlawful actions of such a judge.

So, yes, I think it obvious that a federal judge, a federal court, must be able to apply the Constitution to the cases before it.

But what about the cases in which it is argued that the meaning of the Constitution is unclear?  Does a federal judge have the power to consider that question, and to resolve it?  Again, I think the obvious answer is that a judge does have that power.

These blog posts do not challenge that power.  Instead, they challenge the exclusivity of that power.  Do courts alone have such a prerogative?  Although the view that courts enjoy that prerogative is the accepted norm today, it certainly is far from clear that the Framers of our Constitution, or other well-regarded Americans thought so.  For more on this point, revisit the second post in this series.

Still, a thoughtful examination of the meaning of the Origination Clause, an examination that provides you, dear reader, with sufficient background to make your own, informed judgment about the meaning of that clause, and about the quality of Judge Rogers’ decision, should also provide you insight into how the Supreme Court has construed the Origination Clause.

The Commentaries on the Constitution, written by Joseph Story, mentioned above, embody the views of a Supreme Court justice, Justice Story.  During his tenure on the Court, in 1813, Story authored an opinion, United States v. Mayo, 26 Fed. Cas. 1230, 1231 (C. C. Mass. 1813)(No. 15,755), in which he concluded that laws subject to the Origination Clause are only those laws made for the direct and stated purpose of creating revenue for the government. In Story’s opinion, it was not an Origination Clause defect that a law originated in the Senate, rather than the House, where it indirectly or incidentally enhanced the treasury.

Three cases decided by the Supreme Court show that the Court has, thus far, aligned itself with Story’s construction of the Constitution.  In these cases, as direct holdings, or as statements of principle, the Court sets out the view of the Origination Clause that it is limited only to a class of laws enacted for the primary purpose of raising revenue and with the principal result that the funds raised thereby apply to the general obligations and expenses of the federal government, rather than a specific project or purpose. 

In Twin City Bank v. Nebeker, 167 U.S. 196 (1897), the Supreme Court decided the constitutionality of a federal statute creating a currency and charging banks a fee related to the currency circulating at any one time did not violate the Origination Clause.  The Court concluded that the prime motivation in Congress for the law was creating a national currency, not imposing a fee that generated income to the federal fisc.  In the Court’s view, income to the federal government was merely incidental to the creation of the currency.

Shortly after, in Millard v. Roberts, 202 U.S. 429 (1906), in a case considering an Origination Clause challenge to federal legislation imposing a property tax in the District of Columbia, the revenue from which was to be used for the construction of railroad terminals in the Nation’s Capitol, the Court concluded that the law was adopted to raise revenue for that specific purpose, not to meet the federal government’s general expenses or obligations.

Finally, in United States v. Munoz-Flores, 495 U.S. 385, 398 (1990), the Supreme Court rejected an Origination Clause challenge to a federal statute adopting a “special assessment” to be imposed on those convicted of misdemeanors in federal court.  The assessment imposed by Congress would help meet the expenses of crime victim compensation programs.  While the Court acknowledged that the assessment created a source of income for the federal government, that result was not determinative.  Instead, in the Court’s view, the assessment was indistinguishable from the fee in Nebeker and the tax in Millard.  In a footnote, the Supreme Court did offer, as a point of distinction, that some cases might arise if “the program funded were entirely unrelated to the persons paying for the program” or where “the connection between payor and program was more attenuated….”

Rogers’ Approach Disrespects the Common Sense of the Origination Clause’s Words and Purpose

Judge Rogers adopted the approach taken by the Supreme Court, namely the search for the intent of Congress that animated the enactment of the Patient Protection and Affordable Care Act.  Because she concluded that the purpose of the Congress was to remediate systemic issues with America’s health insurance policies, the fact that the Act raises revenue (a point she concedes) is irrelevant.  Is Rogers’ conclusion consistent with prior Supreme Court interpretations of the Origination Clause?  I think the obvious answer is yes, but read the cases cited above for yourself and see if you agree.

Does the fact the prior Supreme Court cases have taken a similar approach doom Matt Sissel’s challenge to the individual penalty?  Well, again, the answer is, it depends.

It depends on the Court’s own construction of the Clause.  Here, there is a substantial reason for the Court to reject Rogers’ decision and its prior rulings:  the history of the Origination Clause.  Remember Edmond Randolph?  He proposed a refinement to the language of the Origination Clause, as I mentioned above.  His proposal, rejected by the Convention, would have limited the prerogative of the House of Representatives regarding Origination of revenue legislation.  He proposed that the Clause be phrased, “bills for raising money for the purpose of revenue.”  For the purpose of raising revenue.  You see, Randolph looked down the road into the future lying ahead of this nascent nation and concluded that the Origination Clause, a clause he opposed, could be greatly limited by including an intentionality requirement.

The Convention rejected Randolph’s limiting language.  It does not return in further debates.  It does not appear in the proposed Constitution.  It is not ratified by the States.  It died, so to speak, in convention.

Justice Scalia once criticized a test the Court occasionally employs in religion cases, and his colleagues dilettante invocation of that test when it suited their needs but not otherwise, as being like a bad monster movie monster that, killed, rises again.  Much the same can be said of Randolph’s rejected refinement of the Clause.  Rejected at offering.  Refused in Committee.  Disappeared from Convention.  Excluded in ratification.

Yet the Federalist’s need for such a restraint on the House was evident and real.  Despite its rejection, refusal, disappearance and exclusion, it rises in the writing of Justice Joseph Story.  Yes, Story was a profoundly well-respected author on the Constitution. His views aught not be turned aside without appropriate consideration.  Yet, at the end of the day, a single, consistent and fixed rule for the construction of laws has guided the Supreme Court’s cases, has informed legislative bodies enacting laws, and has even advised those that enter into private contracts and agreements.  And the application of that principle leaves no doubt to me that Story is wrong, that Rogers is wrong, and that Matt Sissel is right.

The Supreme Court has stated that principle in this way:

“Congress does not intend sub silentio to enact statutory language that it has earlier discarded in favor of other language.”

Do not let “sub silentio” confuse or disturb you.  In its place, read these words “without saying so.”  “Congress does not intend without saying so to enact statutory language that it has earlier discarded in favor of other language.”

There are powerful institutional reasons why a judge would adopt the rule followed by Judge Rogers.  Such a rule emphasizes the role of judges in resolving such questions.  It enhances the lynchpin role of courts as mediating partners in the development of policy.  The problem is that, once you come to see judges as individuals that first decide outcomes then search for justifications, the bloom falls hard from the rose.

We may well be attached to the individual coverage penalty in a way that the Supreme Court will not see its way clear to sever.  To do so, would require to freshly appraise the Origination Clause, its own jurisprudence regarding the Clause, and the potential for future invalidations of other, previously sustained federal enactments.  Those reasons are not inconsiderable.  They are not, however, reasons to deform words, history or truth.

At the same time, if the current construction of the Origination Clause is retained by the Court, then the Origination Clause will, in fact, be a constitutional nullity.  The Clause seemingly puts solely in the hands of the House of Representatives the power to initiate bills raising revenue.  In this signal act of interpretation, however, the Clause suddenly would not apply to legislation initiated by the Senate (such as Obamacare) that clearly raises revenue (as Judge Rogers concluded Obamacare does) so long as raising revenue is not foremost in the intentions of Congress in enacting the legislation.

Consequently, the obvious and direct purpose of the Clause would be frustrated by the search for an artificial determination of intentionality, rather than an objective determination of effect.  Does the legislation raise revenue?  Then Congress must obey the Constitution and follow the Origination Clause. Instead, the artifice -- searching for some other purpose and assigning a level of intentionality to it -- moves from the easily dtermined objective examination to the question of motives, a highly subjective search indeed.

The commonsense reading of the Origination Clause lies entirely within your own grasp.  I have offered these blogs not simply to dictate an outcome to you. Instead, the greater value to be had here is the empowering of Americans to read, to know, to understand their history, including their documentary history.  A well-read, understanding grasp of those documents and that history is a powerful tonic to generations of governmental disregard for the same.

Origination Clause Challenge to Individual Mandate In Trouble ... For Now?

Among the stunning features of the Patient Protection and Affordable Care Act, “Obamacare,” is its requirement that every American purchase health care insurance. That requirement, the individual mandate, marked the first time in US history that Congress ordered the American people to purchase a product that, previously, they had been free to buy or to reject.  The outcry was immediate, and led to a turnover in Congress to Republican leadership in the House of Representatives.

Challenges to the individual mandate were immediate.  Multiple legal theories supported the challenges.  

Thus far, the Supreme Court has taken two turns at examining the Act, or parts thereof.  Last year, a bare majority held that the individual mandate under the Act, which could not be justified as an exercise of the Commerce Clause power, was, instead a tax.  Then, just weeks ago, as the 2013 Supreme Court ended, the Court held that the mandate for corporations to include prescription coverage for their employees for abortion-inducing birth control violated rights under the federal Religious Freedom Restoration Act.

Still other challenges to the Act are moving forward in other courts.

Among constitutionalists, much hope has been invested in legal challenges based on two separate strains of legal theory.  One approach seeks to bring about an implosion of the Affordable Care Act by stripping out federal tax credits to fund premiums for low income applicants; those credits are authorized in States that set up exchanges, but not in the 36 States that did not do so.  An IRS rule-making extended the credit in those States despite the lack of authorization for such an extension.  I have previously posted on two recent, conflicting decisions addressing this approach.  

An entirely separate approach, born of a search within the Constitution for the underpinnings of the power to impose a federal tax, has challenged the enactment of Obamacare because it originated in the Senate, rather than the House of Representatives. That, if true, may mean that when the Democratic Party-controlled Congress enacted Obamacare, it violated the Origination Clause the US Constitution.  The Origination Clause states:  “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.”  US Const. Art. I, sec. 7. 

Litigation raising the Origination Clause argument against Obamacare has been pending in the Nation’s Capitol for some time now.  Matt Sissel, the plaintiff, claimed that, because the penalty for failing to purchase health insurance is a tax, the Origination Clause required that the House of Representatives originate the legislation.

Obamacare, however, was an invention of the Senate.  In fact, the Democrat-controlled Senate took a pending House bill – one regarding tax credits for home ownership by members of the military -- stripped out every jot and every tittle of it including its title, and inserted the Affordable Care Act in place of its original text and title.  This, on Capitol Hill, is called an amendment in the nature of a substitute.

Neither a Nation nor its people, nor their hopes, aspirations, dreams, labors or relationships should be governed by the whim of gamesmanship.  Yet, with courts at the crux of decisions about the legality of laws like Obamacare, crucial decisions often resemble a group of judges arguing over number placement in Sudoku or attempting a “group solve” on the daily crossword.  Not to put too fine a point on it, attorneys whose careers depend on appearing before the Supreme Court and federal appellate courts understand how these word games are played and craft their arguments to the tune of such judicial gamesmanship.

Now, however, a decision from the US Court of Appeals in Washington, DC, spells trouble for those who have held the hope that a faithful application of the Origination Clause to the mandate would lead to a decision striking down that provision, and perhaps, the entire the Patient Protection and Affordable Care Act.  Because the meaning and application of the Constitution is the right of every citizen to discern and the duty of every federal official to respect, a decision that gives meaning to, or applies what it claims is the settled meaning of, a provision of the Constitution, the Court's decision should be thought important by every man.

Matt Sissel, an artist, small-business owner and National Guardsman, simply thought that such a signal shift in policy and law, if it were to be forced upon the people, ought to be accomplished within the bounds of the law and the Constitution. Sissel's view is, I suppose, perceived as unreasonable by those who pushed the Affordable Care Act through Congress.  Such denizens of social manipulation and control take affront when we, who prefer to do so, manage the affairs of our lives free of government mandates. For them, it was entirely reasonable to enact legislation, while candidly admitting that they had to pass the bill to know what was in it. That reasoning hardly inspires confidence that legislators are, in fact, comporting themselves within constitutional boundaries.

Judith Rogers, a Bill Clinton appointee to the DC federal appeals court, joined by two recent Obama appointees, evaluated Sissel's theory that Obamacare violated the Origination Clause.  Faultless, the court responded, was Sissel's assertion that the legislation had, in fact, originated in the Senate, rather than the House.  Faultless, the court responded, was Sissel's assertion that the individual mandate imposed a tax. Of course, Judge Rogers deserves no particular credit on that score given the Supreme Court's previous Obamacare decision by Chief Justice Roberts holding that the mandate was, in fact, a tax.

The appeals court concluded, however, that even though the BILL ORIGINATED IN THE SENATE and even though the BILL IMPOSED A TAX, it was not, as the Origination Clause language states, a "bill[] for raising Revenue."  The court concluded that, while it was true that the tax would, in fact, raise revenue for the federal government coffer, the purpose of the entire Act, and the purpose of the mandate's tax, was, rather than raising revenue, to address the policy and law on health care insurance in the United States. Thus, while revenues will flow in to the government under the Act, because that was not the motivation of the entire act, the court reasoned, the Origination Clause challenge to it failed. 

Clever and conclusive, the decision abides what it must, the Supreme Court's conclusion that the penalty for failing to purchase insurance is a tax, admits what it cannot deny, that the bill originated in the Senate rather than the House and that it imposes a tax rather than a penalty, and then claims a ground of construction of the Constitution allowing it to dispose of Sissel's claim.  

For now, it would seem the Origination Clause challenge to the individual mandate under Obamacare is in trouble.

This post is the first of three on the topic of the Origination Clause, the Sissel litigation, and Obamacare. Parts two and three will follow shortly.