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An Unexpected Primer: The Origination Clause and the Senate's Sanctions Bill

Ed Stein
Friday, June 23, 2017, 9:30 AM

It's hard to imagine a legal topic further afield from national security law than the Origination Clause.

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It's hard to imagine a legal topic further afield from national security law than the Origination Clause. Article 1, Section 7, Clause 1 of the Constitution states: "All Bills for raising Revenue shall originate in the House of Representatives." This clause--despite no immediately visible connect to national security, is the alleged reason for the House of Representatives’ delay in considering the Iran and Russia sanctions bill the Senate passed last week (summarized here). The significance of that delay on national security depends on who you ask.

According to Politico, at least one high-ranking but unnamed member of Congress believes this means that a sanctions bill that could result in additional revenue for the federal government has to start in the lower chamber:

The trigger for the delay of the Senate’s Iran and Russia sanctions package, according to a source familiar with the holdup, is one provision in the vast bill that empowers Congress to prevent Trump from easing or ending sanctions on Russia. Altering sanctions could affect the amount revenue collected by the government, and any bill affecting revenue is constitutionally required to start off in the House.

If this is accurate, the allegation is that the Iran and Russia sanctions bill that the Senate passed last is unconstitutional because it originated in the wrong chamber. Some have suggested there may be alternative (read: political) motivations behind the sudden discovery of this “blue-slip” objection. Nevertheless, apparently the bill was “flagged” by the House Parliamentarian who concluded it was unconstitutional.

The Supreme Court, however—the branch of government that usually has the last word on these sorts of things—has held otherwise. Writing for the Court in United States v. Munoz-Flores, Justice Thurgood Marshall made clear that "Bills for raising Revenue" does not simply include anything that brings in more money than it costs:

Both parties agree that “revenue 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.” . . . The Court has interpreted this general rule to mean that a statute that creates a particular governmental program and that raises revenue to support that program, as opposed to a statute that raises revenue to support Government generally, is not a “Bil[l] for raising Revenue” within the meaning of the Origination Clause. For example, the Court in Nebeker rejected an Origination Clause challenge to what the statute denominated a “tax” on the circulating notes of banking associations. Despite its label, “[t]he tax was a means for effectually accomplishing the great object of giving to the people a currency . . . . There was no purpose by the act or by any of its provisions to raise revenue to be applied in meeting the expenses or obligations of the Government.” . . . The Court reiterated the point in [Millard v. Roberts], where it upheld a statute that levied property taxes in the District of Columbia to support railroad projects. The Court rejected an Origination Clause claim, concluding that “[w]hatever taxes are imposed are but means to the purposes provided by the act.”

The Supreme Court’s reasoning explains why the sanctions bill poses no origination problems. Similarly, the Foreign Corrupt Practices Act originated in the Senate, and it has generated quite a bit of revenue for the federal government.

Nevertheless, some may argue—as the government apparently did in Munoz-Flores—that policing the origination clause should be left to Congress, not the courts. But Justice Marshall disagreed:

Although the House certainly can refuse to pass a bill because it violates the Origination Clause, that ability does not absolve this Court of its responsibility to consider constitutional challenges to congressional enactments. . . . [T]he fact that one institution of Government has mechanisms available to guard against incursions into its power by other governmental institutions does not require that the Judiciary remove itself from the controversy by labeling the issue a political question.

Of course, there's also the other Justice Marshall and that whole Marbury v. Madison thing ("It is emphatically the province of the judicial department to say what the law is").

Justice(s) Marshall: 1

House Parliamentarian: 0

Ed Stein is a graduate of Harvard Law School and Yale University. He previously worked at the Treasury Department on sanctions policy and anti-money laundering/counter-terrorist financing regulation and enforcement. He has also worked for the House Foreign Affairs Subcommittee on the Middle East and South Asia and the Council on Foreign Relations.

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