Sign Up For Our Mailing Lists

InsiderOnline Blog: May 2014

ObamaCare Has a Real Constitutional Problem

One of the bad arguments peddled in defense of ObamaCare these days has to do with the lawsuit claiming that the Senate violated the constitutional requirement for revenue raising bills to start out as House bills (the Origination Clause). For example, according to the editors of the New York Times in the paper’s May 18 edition, there’s no problem on that front because: (1) ObamaCare was not primarily a revenue-raising measure; and (2) even if it was, the bill that became ObamaCare satisfies the Origination Clause because it “started out as a House bill to modify tax credits for certain first-time home buyers and increase the estimated tax payments owed by corporations.”

Would you believe that the facts are exactly contrary to the New York Times on both points—i.e., ObamaCare was a revenue-raising measure but the House “shell bill” was not? Randy Barnett explains:

[T]he House bill raised no revenue at all. It increased tax credits (thereby lowering revenue) and changed the timing and amount of certain estimated tax payments and penalties for nonpayment, which the courts have ruled are not the same thing as the underlying taxes themselves. So like most everything else surrounding the adoption and implementation of the ACA, the Senate messed up and chose a non-revenue raising House bill to “amend” so as to comply with the Origination Clause. […]

The very fact that the Senate went to the trouble of “amending” this House bill shows that the Democrats in the Senate believed — correctly — that the ACA was indeed a revenue bill. Of course it was, as it contained 20 or so new taxes, on a variety of things and activities, the revenue from which goes into the treasury’s general coffers. […]

If a gigantic bill containing numerous taxes raising revenue to pay for other measures is not a “bill for raising revenue” because it also includes many other non revenue provisions, then the Origination Clause is a mere drafting rule, rather than a constitutional requirement that taxes be originated in the House of Representatives and not in the Senate. [Washington Post, May 19]

Among the taxes in ObamaCare as originally passed were surtaxes on investment income, a hike in the Medicare payroll tax, an excise tax on so-called “Cadillac” health insurance plans, and taxes on both medical device manufacturers and innovator drug companies. Those taxes, at least when passed, were expected to raise $500 billion over the first 10 years of the law. Now that the 10-year estimating window includes more years in which the tax provisions are actually in effect, the tax take is more like $1 trillion and rising. [See, for example, the Congressional Budget Office’s estimate for the 2013-2022 period. Also see: “Full List of Obamacare Tax Hikes: Listed by Size of Tax Hike,” Americans for Tax Reform, June 29, 2012.]

Posted on 05/20/14 04:49 PM by Alex Adrianson

Heritage FoundationInsiderOnline is a product of The Heritage Foundation.
214 Massachusetts Avenue NE | Washington DC 20002-4999
ph 202.546.4400 | fax 202.546.8328
© 1995 - 2015 The Heritage Foundation