Tags: Healthcare Reform | Obamacare | Origination | Clause | Court

Obamacare's Origination Clause Issues Deserve a Real Case

By Monday, 27 April 2015 04:55 PM Current | Bio | Archive

A federal appellate ruling last Friday, by the U.S. Court of Appeals for the 5th Circuit, declared that an Origination Clause challenge to the Affordable Care Act, aka Obamacare, is so important an issue that it may only be raised by a plaintiff who is personally affected. Suggesting a “split” with another court, the 5th Circuit decided that a Texas doctor didn’t have enough of a personal stake in his Origination Clause argument.

Obamacare supporters will try to spin this ruling as an endorsement of Obamacare. In declining to rule on the merits, however, the 5th Circuit suggested that Origination Clause issues are too important to be decided without a plaintiff who is personally affected. The court acknowledged: “we do not doubt that many have suffered an injury in fact at the hands of the individual mandate.”

In contrast to a recent decision by the D.C. Circuit, the 5th Circuit also acknowledged that, “Although the Origination Clause is rarely litigated, the principle it embodies — that ‘power over the purse’ should be held by the most ‘immediate representatives of the people,’ see The Federalist No. 58, at 350 (James Madison) — was critical to the framers and ratifiers of the Constitution.”

The Origination Clause provides that: “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.” Obamacare is projected to increase taxes by “nearly $800 billion over 10 years.”

The ongoing Origination Clause challenges to Obamacare are thus far from over. They continue both in the courts and in the U.S. House of Representatives. In the House, by last count upwards of 100 members are prepared formally to denounce Obamacare as having unconstitutionally originated in the Senate, to hold hearings, and to bring the matter to a floor vote.

The Supreme Court has never addressed an Origination Clause challenge to anything like Obamacare. The last case to overturn a revenue-raising bill originating in the Senate was a hundred years ago. In Hubbard v. Lowe, the judge began his opinion, “That an unconstitutional statute is not a law at all is a proposition no longer open to discussion,” and concluded: “The Cotton Futures Act is not, and never was, a law of the United States. It is one of those legislative projects which, in order to be a law, must originate in the lower house.”

In its April 24, 2015, opinion, the 5th Circuit described the legislative history of Obamacare: "In October 2009, the House of Representatives introduced H.R. 3590, called the 'Service Members Home Ownership Tax Act of 2009' ('SMHOTA'). The SMHOTA spanned only a few pages and primarily related to extending home-ownership-related tax credits to members of the military.

"The House unanimously passed the SMHOTA the day after it was introduced, and the bill went to the Senate.

"Once there, the Senate proposed Amendment No. 2786 to H.R. 3590. Amendment No. 2786 preserved H.R. 3590’s bill number and its enacting clause, which read: 'Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.'

"Otherwise, the Senate struck the language of the SMHOTA in its entirety and substituted the language of the ACA. The ACA was more than 2,000 pages long and constituted a reform of the nation’s health-insurance system that aimed to 'achieve near universal coverage,' 'strengthen the private employer-based health insurance system,' and 'lower health insurance premiums.' 42 U.S.C. § 18091(2)(D), (F).

"The Senate passed H.R. 3590 as amended and returned it to the House. No member of the House filed a 'blue slip,' the mechanism generally used by members to object to bills raising Origination Clause problems. The House passed the ACA on March 21, 2010, and the president signed it into law two days later."

That’s not exactly how Obamacare originated. According to a press release titled “Reid Unveils Senate Health Care Bill,” on Nov. 18, 2009, “Nevada Senator Harry Reid unveiled the Senate healthcare bill that makes healthcare more affordable while reducing the federal deficit.”

A month later, another press release titled “Reid Unveils Final Senate Health Care Bill” announced, “Nevada Senator Harry Reid today introduced the final Senate version of the Patient Protection and Affordable Care Act, moving us even closer to final passage of this historic legislation. This bill will reduce the deficit by $132 billion the first 10 years and roughly $1.3 billion in the second 10.”

Sen. Reid’s official description of “this bill” sounds a lot like one “for raising revenue.”

In its July 2014 opinion in Sissel v. HHS, however, the D.C. Circuit held that Obamacare was not a “bill for raising revenue” because its “primary purpose” was not to raise revenue.

As pointed out by 43 House Members in a friends of the court brief in Sissel, if that opinion is allowed to stand, the Senate could easily circumvent the Origination Clause by ascribing another “purpose” to any revenue-raising bill, “thereby rendering the Origination Clause a dead letter.”

Members of the House should formally object — by voting on what amounts to a retroactive “blue slip” that Judiciary Subcommittee on the Constitution Chairman Trent Franks is prepared to reintroduce — to Obamacare’s origins as the “Senate Health Care Bill.” As such, it is “one of those legislative projects which, in order to be a law, must originate in the lower house.”

Joseph E. Schmitz served as inspector general of the Dept. of Defense from 2002-2005 and is a Partner in the law firm of Schmitz & Socarras LLP. Read more reports from Joseph E. Schmitz — Click Here Now.

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A federal appellate ruling last Friday by the U.S. Court of Appeals for the 5th Circuit declared that an Origination Clause challenge to the Affordable Care Act, aka Obamacare, is so important an issue that it may only be raised by a plaintiff who is personally affected.
Obamacare, Origination, Clause, Court
Monday, 27 April 2015 04:55 PM
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