Balkinization  

Monday, September 17, 2012

A New Legal Challenge to Obamacare-- The Origination Clause

JB

Randy Barnett points to a new legal challenge to the Affordable Care Act by the Pacific Legal Foundation. The basic idea is that NFIB v. Sebelius held that the individual mandate is a tax. That means that it is a measure for raising revenue. The Origination Clause of Article I, section 7, requires 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." However, H.R. 3590, the Affordable Care Act, was not begun in the House of Representatives. It is the Senate version of health care reform.

But if it is the Senate version, why is it denominated H.R. 3590? The answer is that because of the requirements of the Origination Clause, the Senate took a recently passed tax measure dealing with the tax treatment of homes bought or sold by members of the Armed services, struck out the substance, and substituted the Senate's version of the health care reform bill. This procedure is called using a "shell bill," and it has been used on a number of occasions for major tax legislation, including the 1986 tax reform act.

Using a shell bill is formally consistent with Article I, section 7, because the Senate has added an amendment to a tax bill that began in the House. But the PLF argues that using a shell bill is an unconstitutional end-run that offends the purposes behind the Origination Clause. The point of the Origination Clause was to ensure that tax and tariff measures began in the chamber closest to the people. At the time of the founding, you may recall, Senators were not directly elected.

My reading of the history is that today's practice of using shell bills is not consistent with the original expected application of the Origination Clause. The House was quite jealous of its prerogatives for many years. Nevertheless, shell bills are consistent with the words of the Constitution: "the Senate may propose or concur with Amendments [to "Bills for raising Revenue"] as on other Bills." Shell bills are Senate amendments to House revenue measures, and in other bills the Senate may strike as much of a bill as it wants to when it amends it.

So the question is whether twentieth century practice-- and judicial precedents--have altered the best construction of the text so that it differs from the original expected application. If so, it would not be the first time this has happened.

One consequence of the PLF's position is that the 1986 tax reform act is unconstitutional, and probably a number of other recent measures as well. There is also the problem that the reconciliation bill, which began in the House, changes the individual mandate, so it's possible that the new version of the tax survives.

I discuss the merits of the legal challenge in this essay at the Atlantic. My bottom line is that PLF's arguments are likely to fail under existing law. But, I also point out, that is hardly the end of the matter. Most constitutional scholars thought that the Commerce Clause arguments in NFIB v. Sebelius were implausible, and they garnered five votes on the Supreme Court. The events of the last two years should have taught us that the considered judgments of legal academics and legal professionals mean far less than we would like to think they do when a major political party forcefully takes a stand on a key constitutional question.

The real question is not what legal academics think. It is whether the Republican Party, conservative media, and conservative intelligentsia are up for another all-out assault on Obamacare. If they are, then the PLF's arguments will probably move quickly from "off the wall" to "on the wall;" and if the PLF can find a single federal district court to agree with them, it will be--to quote the immortal philosopher Yogi Berra--like deja vu all over again.

On the other hand, if the Republican Party is uninterested in getting behind these new constitutional objections so soon after NFIB v. Sebelius, the chances that the PLF's theory will succeed are greatly reduced. I realize that this sounds as if the distinction between law and politics has been pretty thoroughly dissolved for high profile cases, but any doubts on this score should already have been laid to rest by the events leading up to NFIB v. Sebelius.


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