AÂ three-judge panel of the D.C. Circuit Court of Appeals on Tuesday ruled against a challenge to Obamacareâ€™s individual mandate based on the origination clause of the Constitution.
The Supreme Court held inÂ NFIB v. SebeliusÂ (2012) that Obamacareâ€™s individual mandate was constitutional because it was a tax. The Constitution also says tax legislation must originate in the House.
But the Obamacare individual mandate tax did not originate in the House.Â Senate Democrats took a House bill that provided tax credits to veterans purchasing new homes, gutted its language and â€œamendedâ€ it with the language that would become Obamacare.
Todd Gaziano,Â one of the lawyers for Matt Sissel, likened this amendment to â€œthe complete destruction of a house and the erection of a massive skyscraper on the same street address.â€
In a unanimous rulingÂ in Tuesdayâ€™s case,Â Sissel v. U.S. Department of Health and Human Services, the D.C. Circuit panel held that since the individual mandateâ€™s purpose was to require people to buy health insurance, not to raise revenue, the law did not need to comply with the origination clause.
CitingÂ Twin City Bank v. NebekerÂ (1897), the court pointed out the Supreme Court has long held that â€œrevenue 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.â€ The D.C. Circuit panel citedÂ NFIB v. Sebelius, noting:
[I]t is beyond dispute that the paramount aim of the Affordable Care Act is to increase the number of Americans covered by health insurance and decrease the cost of health careâ€¦not to raise revenue by means of the shared responsibility payment [of the individual mandate].
Thus, one of the Â largest tax increases in our nationâ€™s history (an estimated $4 billionÂ in only 2016) was not a revenue bill because any revenue is â€œa byproduct of the Affordable Care Actâ€™s primary aim to induce participation in health insurance plans.â€
This sole focus on the â€œaimâ€ of Obamacare ignores the means by which itÂ was enactedâ€”the gutting of a House bill and its replacement with completely unrelated provisions.
â€œIf any act violates the Origination Clause, it would seem to be the Affordable Care Act,â€ saidÂ constitutional scholar Randy Barnett. â€œThe Supreme Court has never approved the â€œstrike-and-replaceâ€ procedure the Congress employed here.â€
The Founders knew all too well the dangers of an unchecked taxing power. They placed this power in the House of Representatives because, asMassachusetts delegate Elbridge GerryÂ described, â€œTaxation 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.â€
The Founders also intended the â€œpower of the purseâ€ to protect the separation of powers since it would be â€œthe most complete and effectual weapon with which any constitution can arm the immediate representatives of the people,â€ asÂ James Madison wrote inÂ The FederalistÂ No. 58.