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New Health Care Overhaul Challenge Hinges on Origination Clause Test

A lawsuit pending in federal district court seeks to throw out the 2010 health care overhaul, contending the “tax” at the center of the law’s requirement that most Americans obtain health insurance did not originate in the House as the Constitution requires.

The lawsuit opens a new front in the conservative legal assault on the law, which the Supreme Court upheld in a 5-4 ruling June 28. At the same time, it raises broader questions about the Senate’s common practice of using unrelated House bills as vehicles for raising revenue.

The lawsuit was filed in September in U.S. District Court for the District of Columbia by Matt Sissel, an Iowa artist who opposes the insurance mandate. The Justice Department must respond to the lawsuit by Oct. 9, a lawyer for Sissel said.

Sissel, with support from the conservative Pacific Legal Foundation, argues that because the Supreme Court upheld the individual mandate as a “tax” — rather than as a legitimate exercise of government authority under the Commerce Clause — that tax now must be subject to the Constitution’s Origination Clause. The clause states that “all bills for raising revenue shall originate in the House of Representatives.”

The tax language of the health care overhaul did not originate in the House, so the entire statute should be struck down as unconstitutional, the lawsuit argues.

The high court’s ruling “raises new issues that the parties did not argue or brief, and that the Supreme Court had no occasion to consider,” according to the lawsuit, which has been assigned to Judge Beryl A. Howell, a 2010 appointee of President Obama.

The legislation that eventually became the heath care law (PL 111-148, PL 111-152) began as a House bill that would have changed a first-time home buyer tax credit for members of the armed services. The Senate took up the House bill, which was sponsored by New York Democrat Charles B. Rangel, stripped it of the tax credit language and inserted the health care overhaul language, including the financial penalty for not purchasing health insurance that formed the basis of the insurance mandate.

That parliamentary maneuver — the amendment of “shell” revenue bills that originate in the House — is regularly employed in the Senate as a way to advance a measure with a revenue provision while abiding by the Origination Clause. It is seen by the Senate as constitutional because of the clause’s second part, which says that “the Senate may propose or concur with amendments” to House revenue bills.

In this case, however, challengers say the Senate overstepped its constitutional authority by taking an unrelated, six-page bill on homeowner tax credits, removing its language and substituting it with a 2,700-page health care bill that raises an estimated $4 billion a year.

“We’re unaware of any instance in which the Senate went this far in abusing its prerogatives under the Origination Clause,” said Paul J. Beard II, the attorney handling the case for the Pacific Legal Foundation.

Uphill Battle

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