New bid to topple Obamacare in court: Did Harry Reid bend the rules?

Senate majority leader Harry Reid violated the Constitution in his maneuverings to pass Obamacare, a conservative legal fund argues. The case will go before a federal panel of judges Thursday.

The Affordable Care Act is back at center stage in the courts on Thursday with yet another legal challenge that aims to derail President Obama’s massive health care reform law.

Rather than attacking the individual mandate or the so-called contraceptive mandate, this lawsuit challenges a legislative maneuver used by Senate majority leader Harry Reid (D) of Nevada to pass the bill five years ago.

The little-noticed legal battle is being waged by a conservative public interest law group, the Pacific Legal Foundation (PLF). It seeks to enforce a constitutional command: “All bills for raising revenue shall originate in the House of Representatives.”

Lawyers for the group charge that the Affordable Care Act (ACA) was first passed by the Senate and only later approved by the House in violation of the Constitution’s Origination Clause.

The Obama administration rejects the challenge. “The Supreme Court has never invalidated an Act of Congress on the basis of the Origination Clause, and this suit presents no reason to break new ground,” Justice Department Attorney Alisa Klein wrote in her brief.

The case is set for argument on Thursday at 9:30 a.m. before three judges at the federal appeals court in Washington.

If the judges agree with the Pacific Legal Foundation, the decision would invalidate the Affordable Care Act and send health care reform back to Congress for a do-over.

If the judges agree with the Obama administration that the law was properly passed, the PLF lawyers are likely to petition the US Supreme Court to examine the issue.

It is unclear how receptive the appeals court panel will be to the PLF challenge. One of the three appeals court judges assigned to the case was appointed by Bill Clinton, the other two were appointed by President Obama.

The central issue in the case is whether in the scramble to assemble enough votes in the Senate to pass the Affordable Care Act, Democratic leaders in Congress took a shortcut that the Constitution does not permit.

The Origination Clause requires that bills seeking to raise revenue from the American people emerge first from the legislative body closest to the people themselves. The requirement is designed to maximize political accountability by forcing such measures to win initial approval among lawmakers in the House, where each member must seek reelection every two years.

Senators, with their six-year terms, are more insulated from popular pressure.

In addition to requiring that all revenue raising bills originate in the House, the Constitution permits the Senate to “propose or concur with amendments as on other bills.”

Government lawyers cite that portion of the Origination Clause as support for the Reid maneuver.   

In the runup to the vote on the ACA, Senator Reid used a “shell bill” to satisfy the technical requirement that the legislation arrive from the House.

He used the Service Members Home Ownership Tax Act of 2009 as a template for the maneuver. That law, HR 3590, offered tax credits to military members who were first-time homebuyers.

Reid eliminated the entire text of the six-page law and replaced it with the 2,000-plus page bill that became the Affordable Care Act. All that remained of the Home Ownership Tax Act was the bill number, HR 3590.

After winning Senate approval, the “amended” HR 3590 was sent to the House where the Democratic majority approved it. The bill was then sent to President Obama who signed it into law in March 2010.

In defending the procedure, Ms. Klein says HR 3590 was not a bill to raise revenue, it was a bill to reform health care, and, thus, does not trigger requirements of the Origination Clause.

She also argues that HR 3590 did, in fact, originate in the House of Representatives and that it doesn’t matter that the entire substance of that House-passed bill involving tax credits was deleted and substituted with the Senate-written ACA.

Klein says there is nothing improper or even unusual about the ACA’s passage.

Replacing the text of a House-passed bill with Senate-approved text as an amendment is permissible under the Origination Clause, Klein said.

The check against abuse of this procedure, she said, is that any bill amended by the Senate must also later be approved by the House.

Klein quotes an authority no less than James Madison, a Founding Father, for support of the government’s position.

“You may safely lodge this power of amending with the senate,” Madison told the Virginia ratifying convention in 1788. “When a bill is sent with proposed amendments to the House of Representatives, if they find the alternatives defective, they are not conclusive. The House of Representatives are the judges of their propriety.”

Lawyers with the PLF reject government claims that the ACA is a health reform measure unrelated to raising revenue.

The US Supreme Court in 2010 upheld the constitutionality of the ACA as a permissible use of Congress’s taxing power, they said. The tax penalty associated with the health care mandate is expected to raise $4 billion a year in general government revenue by 2017.

The PLF lawyers also argue that replacing the entire text of HR 3590 was not a legitimate way to amend a statute seeking to raise revenue from the people.

“This was not a lawful ‘amendment’ of HR 3590 as required by the Origination Clause, because the subject matter of the one had nothing whatsoever to do with the other,” the PLF brief says.

The lawyers said the Supreme Court has held that only Senate amendments that are germane to the subject matter of the underlying House bill can avoid scrutiny under the Origination Clause.

“If the Origination Clause has any meaning, it must be to bar the Senate from creating from scratch any bills for raising revenue,” the PLF brief says.

“While the Senate may in most cases have the power to ‘gut-and-amend’ a bill by striking and replacing its entire contents, no court has ever held that the Senate can use such a procedure to originate a bill for raising revenue,” the PLF lawyers say.

The case is Sissel v. US Department of Health and Human Services (13-5202).