Tax Reconciliation: Scope of the Senate's Power Under the Constitution's Origination Clause to Amend Revenue Legislation
CRS Report for Congress
Tax Reconciliation: Scope of the Senate’s Power
Under the Constitution’s Origination Clause to
Amend Revenue Legislation
December 21, 2005
Thomas J. Nicola
American Law Division
Congressional Research Service ˜ The Library of Congress
Tax Reconciliation: Scope of the Senate’s Power Under
the Constitution’s Origination Clause to Amend
The Origination Clause of the Constitution, Article I, Section 7, clause 1, states
that, “All bills for raising revenue shall originate in the House of Representatives; but
the Senate may propose or concur with amendments as on other bills.” This report
discusses opinions of the Supreme Court and some lower federal courts that have
interpreted the text of the Clause and delineated the scope of the Senate’s power to
amend revenue legislation. It does not address parliamentary precedents of the House
and Senate, which generally have interpreted the Clause more restrictively than the
These cases have limited the phrase “bills for raising revenue” to those that levy
taxes for the support of the government generally and not to those that raise revenue
for specific programs. They have held that the Senate may attach amendments to
raise revenue only to House bills that raise it under this limited interpretation and not
to House bills that do not raise revenue. Lower courts have concluded that the Senate
may amend a House bill to reduce revenue with Senate text that increases revenue.
This report will be updated.
In troduction ......................................................1
Text and Purpose of the Origination Clause.............................1
Court Interpretations Generally.......................................2
Court Interpretations of the Senate’s Power to Amend Revenue Legislation....4
Tax Reconciliation: Scope of the Senate’s
Power Under the Constitution’s Origination
Clause to Amend Revenue Legislation
This report discusses opinions of the Supreme Court and some lower courts that
have elucidated the meaning of the Origination Clause of the Constitution and
delineated the Senate’s power to amend bills to raise revenue. It does not address
parliamentary precedents of the House and Senate, which generally have interpreted
the Clause more restrictively than the courts.1
Text and Purpose of the Origination Clause
Section 7, clause 1 of Article I of the United States Constitution, known as the
Origination Clause, provides that:
All bills for raising revenue shall originate in the House of Representatives;
but the Senate may propose or concur with amendments as on other bills.
The framers of the Constitution drafted this provision because they believed that
the Members of the House of Representatives, who are elected directly by the people
for two year terms rather than six year terms like Senators, should be granted power
to originate bills for raising revenue, but that the Senate should be able to amend
them as on other bills. James Madison wrote in The Federalist No. 58 that:
. . . one branch of the legislature is a representation of the citizens, the
other of the states: . . . The House of Representatives cannot only refuse, but they
alone can propose the supplies requisite for the support of the government. They
alone, in a word, hold the purse — that powerful instrument by which we behold,
in the history of the British Constitution, an infant and humble representation of
the people gradually enlarging the sphere of its activity and importance, and
1 See CRS Report RL31399, The Origination Clause of the U.S. Constitution:
Interpretations and Enforcement, by James V. Saturno, for a review of parliamentary
precedents and citations to sources of them, some Supreme Court interpretations, and
development of the Origination Clause in the constitutional convention. See also Michael
W. Evans, ‘A Source of Frequent and Obstinate Altercations’: The History and Application
of the Origination Clause, Tax History Project (2004), accessible at
[ h t t p : / / www.t a xhi s t or y.or g/ t hp/ r e a d i n gs .ns f ] .
finally reducing, as far as it seems to have wished, all the overgrown prerogatives
of the other branches of the government. The power over the purse may, in fact,
be regarded as the most complete and effectual weapon with which any
constitution can arm the immediate representatives of the people, for obtaining
a redress of every grievance, and for carrying into effect every just and salutary2
The Constitution as originally drafted did not provide for direct election of
Senators. Until the Seventeenth Amendment was ratified in 1913, Senators were
selected by state legislatures.
Court Interpretations Generally
The Supreme Court in United States v. Munoz-Flores 3 affirmed 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.’”4 The Court added that it has
interpreted this general rule to mean that a statute which creates a particular
governmental program and raises revenue to support that program, and not the
government generally, is not subject to the Origination Clause.5
Applying this rule, the Court held that a provision of the Victims of Crime Act
of 1984, section 3013 of title 18 of the United States Code, which mandates that
persons who are convicted of federal crimes should pay special assessments, was not
a revenue provision covered by the Origination Clause and, consequently, that the
Senate constitutionally could originate it.6 Although amounts collected in excess of
an annual cap were deposited in the general fund of the Treasury, the Court upheld
the constitutionality of the provision because most of these assessments were
deposited in the Crime Victims Fund to compensate and assist victims of crime.
The Court said that its conclusion was consistent with its earlier decisions which
held that a statute which imposed an assessment to be used to create a currency and
a statute which levied a property tax in the District of Columbia to support railroad
projects were not subject to the Origination Clause because they raised revenue for
specific programs as distinguished from general support of the government.7
2 James Madison, Alexander Hamilton, and John Jay, The Federalist Papers, 348, 350
(Penguin Classics, I. Kramnick ed. 1987).
3 495 U.S. 385 (1990). See Annotation: Supreme Court’s Construction and Application of
Federal Constitution’s Origination Clause (Art. I, § 7, cl. 1), United States Supreme Court
Reports, Lawyer’s Edition, 109 L.Ed. 2d 819 (1992).
4 Id. at 397 (1990), quoting from Twin City Bank v. Nebeker, 167 U.S. 196, 202 (1897),
citing Joseph Story, 1 Commentaries on the Constitution § 880 (3d ed. 1858).
5 Id. at 398.
7 Id. citing Twin City Bank v. Nebeker, 167 U.S. 196 (1897), and Millard v. Roberts, 202
In the Munoz-Flores case, the Court appears to have clarified some issues that
had been raised in other Origination Clause cases. The Court held that an
Origination Clause challenge of a statute is not a political question that should be
settled only by the political branches and not appropriate for judicial resolution, i.e.,
it is justiciable. Although the Court in earlier cases implicitly rejected this assertion
by virtue of reviewing these challenges, the Court in the Munoz-Flores case expressly
affirmed that Origination Clause challenges are justiciable and explained the reason
for rejecting it.
The United States argued that courts should decline to hear Origination Clause
challenges because the House possesses the power to protect its institutional interests
by refusing to pass a bill if it believes that the Clause has been violated. The Court
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. . . . Nor do the
House’s incentives to safeguard its origination prerogative obviate the need for
judicial review. . . . In short, the fact that one institution of government has
mechanisms available to guard against incursions into its power does not require
that the judiciary remove itself from the controversy by labeling the issue a8
The six member Court majority did not accept a theory espoused by Justice
Stevens in a concurring opinion joined by Justice O’Connor. Justice Stevens
expressed the view that a bill which originated unconstitutionally nevertheless may
become an enforceable law and should be upheld if it is passed by both Houses of
Congress and signed by the President. To support this view he noted that the Clause
does not specify what consequence should follow from an improper origination.9
The majority responded that to survive Supreme Court scrutiny, a law must comply
with all relevant constitutional limits. “A law passed in violation of the Origination
Clause would thus be no more immune from judicial scrutiny because it was passed
by both Houses and signed by the President than would be a law passed in violation
of the First Amendment.”10
The Court majority also appears to have rejected a view expressed by Justice
Scalia in an opinion concurring in the judgment of the Court.11 Justice Scalia argued
that courts should apply what has been termed the “enrolled bill rule” in which they
rely on the designation of origin, such as H.R. for a House bill or S. for a Senate bill,
that Congress chooses to give to an enrolled bill rather than undertake an independent
U.S. 429 (1906), respectively.
8 Munoz-Flores, 495 U.S. at 392 and 393.
9 Id. at 401.
10 Id. at 397.
11 Id. at 392, n. 4.
inquiry into which chamber originated a particular provision.12 In this case, although
the Senate originated the special assessment provision, it appeared in a House joint
resolution with the designation H.J.Res. If the Supreme Court had applied the
enrolled bill rule, the issue of where the provision originated would not have arisen;
the Court would have presumed that it had originated in the House. Instead, the
Court either looked behind the designation or accepted statements by the parties that
the Senate had originated the provision before addressing the merits of the case.
The Court did not accept an assertion raised by Mr. Munoz-Flores that any bill
which provides for collecting funds is a revenue bill within the meaning of the
Origination Clause unless it is designed to benefit the persons from whom the funds
are collected. The Court said that some of its earlier cases, Twin City Bank v.
Nebeker and Millard v. Roberts, did not state that a bill must benefit the payor to
avoid classification as a revenue bill. Consequently, in those cases the beneficiaries
of a bill were not relevant.13 Observing that the case before it involved special
assessments imposed on persons convicted of crime to be used to compensate and
assist victims of crime, the Court said that, “A different case might be presented if
the program funded were entirely unrelated to the persons paying for the program .
. . . Whether a bill would be ‘for raising revenue’ where the connection between the
payor and program is more attenuated is not now before us.”14
Court Interpretations of the Senate’s Power to
Amend Revenue Legislation
As noted above, the text of the Origination Clause provides that all bills for
raising revenue must originate in the House, “. . . but the Senate may propose or
concur with amendments as on other bills.” The Supreme Court and lower courts
have heard some cases that questioned whether Senate amendments were within the
scope of the Senate’s power under the Origination Clause to amend revenue bills.
These cases have held that the Origination Clause authorizes the Senate to attach an
amendment to raise revenue to a House bill that raises revenue, but not to one that
does not raise it. In Flint v. Stone Tracy Co.15 the Supreme Court held that a Senate
amendment which removed an inheritance tax that originated in the House and
replaced it with a corporation tax did not contravene the Origination Clause. The
Court said that, “The bill having properly originated in the House, we perceive no
reason in the constitutional provision relied upon why it may not be amended in the
12 Id. at 408.
13 Id. at 400.
14 Id. at 400, n. 7.
15 220 U.S. 107 (1911), overruled on other grounds, New York v. United States, 326 U.S.
Senate in the manner which it was in this case. The amendment was germane to the
subject-matter of the bill and not beyond the power of the Senate to propose.”16
In Rainey v. United States17 the Court rejected an assertion that a provision of
a tariff act which imposed an excise tax on use of foreign-built pleasure yachts was
invalid under the Clause because it had been proposed by the Senate as an
amendment to a tariff bill that originated in the House of Representatives. The Court
quoted with approval the following language from the lower court: “I am also
satisfied that the section in question is not void as a bill for raising revenue
originating in the Senate and not in the House of Representatives. It appears that the
section was proposed by the Senate as an amendment to a bill for raising revenue
which originated in the House. That is sufficient.”18
Lower courts also have considered challenges to a Senate amendment on the
ground that it violated the Origination Clause. In 1982 Congress enacted the Tax Equity
and Fiscal Responsibility Act (TEFRA), P.L. 97-248, 96 Stat. 324. As introduced in the
House, the bill that eventually was enacted as TEFRA would have reduced total tax
revenues by $1 billion between 1982 and 1986.19 The Senate replaced the entire text of
the House bill except for the enacting clause with a version that, as ultimately enacted,
increased total revenue by about $100 billion between 1983 and 1985.20
In over 50 cases,21 none of which was reviewed by the United States Supreme
Court, plaintiffs challenged the constitutionality of TEFRA, contending that the Senate
exceeded its authority under the Origination Clause to amend a House bill for raising
revenue when it struck the entire text of a House bill to reduce revenue and replaced it
with a Senate amendment that increased revenue. Under their interpretation of the
Clause, the Senate was restricted in its authority to amend House bills; it could amend
only House bills that increased revenue, not those that related to or collected revenue
but did not increase it.
The U.S. Court of Appeals for the Ninth Circuit rejected this contention and
elaborated on the reasons.
We cannot accept this restrictive and strained reading of the Origination
Clause. The term “bills for raising revenue” does not refer only to laws increasing
taxes, but instead refers in general to all laws relating to taxes. Wardell v. Unitedth
States, 757 F.2d 203, 205 (8 Cir. 1985) (per curiam): Black’s Law Dictionary (Rev.th
16 Id. at 143.
17 232 U.S. 310 (1914).
18 Id. at 317.
19 See Armstrong v. United States, 759 F.2d 1378, 1380-1381 (9th Cir. 1985), citing H.Rept.
No. 404, 97th Cong., 1st Sess. 38-41 (1981).
20 Id. citing H.Rept. 760, 97th Cong., 2d Sess. 414-415 (1982)(conference report) and S.Rept.
21 Thomas L. Jipping, Comment: TEFRA and the Origination Clause, 35 Buffalo Law
Review 633, 635 (1986).
to raise money by levying taxes”), see also, 2 A. Hinds, Precedents of the House of
Representatives of the United States § 1489 at 949-53 (1907) (recounting an 1872
debate between the House and Senate concerning the proper interpretation of the
Under Armstrong’s interpretation, bills or amendments raising taxes would
have to originate in the House, whereas bills or amendments lowering taxes could
presumably be initiated in either the Senate or House. This interpretation raises
several problems. First, it runs sharply contrary to past practice, since the Senate
has never regarded itself as being empowered to initiate any sort of revenue bill,
even one that lowers taxes. See, e.g., 2 A. Hinds Precedents of the House § 1489
at 949-53. Second, it may well be impossible to implement, since members of
Congress may differ over whether a proposed revenue bill or amendment will
“increase” or “decrease” taxes overall, and since the same revenue bill may have
varying effects upon the total taxes assessed in different years. Finally, Armstrong’s
interpretation would negate or sharply restrict the application of the final phrase of
the Origination Clause, which authorizes the Senate to “propose or concur with
amendments as on other bills,” since it would prohibit the Senate from proposing
amendments to revenue bills if their effect would be to transform revenue proposals
lowering taxes into measures raising taxes. The Senate is not constrained from
proposing amendments on any other types of legislation based upon the effect those
amendments would have; it would be inconsistent and therefore contrary to the
wording of the Origination Clause to limit the Senate’s flexibility to a greater extent
in the revenue context.
We therefore reject Armstrong’s proposed interpretation of the Origination
Clause, and conclude instead that in adopting that clause, the framers of the
Constitution intended that all legislation relating to taxes (and not just bills raising
taxes) must be initiated in the House. . . . However, we also conclude that once a
revenue bill has been initiated in the House, the Senate is fully empowered to
propose amendments, even if their effect will be to transform a proposal lowering
taxes into one raising taxes. We therefore conclude that the Senate did not exceed
its authority under the Origination Clause when it proposed the extensive22
amendment that ultimately became TEFRA.
In reaching its conclusion, the Court of Appeals for the Ninth Circuit added that
it joined courts in other judicial circuits that had rejected the contention of the23
plaintiffs and that its decision was “strongly influenced, if not controlled, by the
Supreme Court’s decision in Flint v. Stone Tracy Co., 220 U.S. 107 (1911).”24 The
court noted that the Supreme Court in the Flint case held that the Senate did not violate
the Origination Clause when it deleted an inheritance tax that the House had proposed
and substituted a corporate tax as a Senate amendment. The lower court also said that,
“The [Supreme] Court was not swayed by the fact that the amended tax plan increased
22 Id. at 1381-1382 (emphasis in original).
23 Id. citing Wardell v. United States, 757 F.2d 203 (8th Cir. 1985) (per curiam); Heitman v.
United States, 753 F2d 33 (6th Cir. 1984); and Rowe v. 583 F. Supp. 1516 (D. Del. 1984),
aff’d. mem., 749 F.2d 27 (3d Cir. 1984). See also Texas Association of Concernedth
Taxpayers, Inc. v. United States, 772 F.2d 163, 168 (5 Cir. 1985) , which stated that,
“‘Subject matter’ appears to merely require that both the amendment and the amended
portion address revenue collections.”
24 Id. at 1382.
taxes for corporations or that it might raise total taxes to a greater extent than the
proposed House bill.”25
In the portion of its opinion quoted above, the court cited a section from
Precedents of the House of Representatives. This section reprinted the following
language from an 1872 Senate committee report that addressed the meaning of the
phrase “raising revenue” as used in the Origination Clause.
Suppose the existing law lays a duty of 50 per cent upon iron. A bill repealing
such law, and providing that after a certain day the duty upon iron shall be only 40
per cent, is still a bill for raising revenue because that is the end in contemplation.
Less revenue will be raised than under the former law, still it is intended to raise
revenue, and such a bill could not constitutionally originate in the Senate, nor could
such provisions be ingrafted, by way of amendment upon any House bill which did26
not provide for raising — that is, collecting — revenue.
This report has discussed opinions of the United States Supreme Court and some
lower federal courts that have elucidated the meaning of the Origination Clause of the
Constitution and delineated the scope of the Senate’s power to amend revenue
legislation. The Clause provides that, “All bills for raising revenue shall originate in the
House of Representatives; but the Senate may propose or concur with amendments as
on other bills.” The framers of the Constitution believed that Members of the House of
Representatives, who are elected directly by the people for terms of two years, should
have the power to originate bills to raise revenue, but that the Senate should be able to
amend them as on other bills. Until the Seventeenth Amendment was ratified in 1913,
Senators, who serve six year terms, were not elected directly by the people; they were
selected by state legislatures.
The Supreme Court and lower courts have interpreted “bills for raising revenue”
to apply only to those that raise revenue to support the government generally and not to
those that incidentally may raise revenue to fund specific programs. They have held that
the Senate does not violate the Origination Clause when it originates a bill to raise
revenue for a specific program even if a portion of the proceeds is deposited in the
general fund of the Treasury. Moreover, the Senate does not contravene the Clause
when it amends a House bill for raising revenue under this restrictive interpretation with
Senate text that raises revenue. These courts also have concluded that the Origination
25 Id. See John L. Hoffer, Jr., The Origination Clause and Tax Legislation, 2 Boston
University Journal of Tax Law 1 (1984); and Thomas L. Jipping, Comment: TEFRA and the
Origination Clause: Taking the Oath Seriously, 35 Buffalo Law Rev. 633 (1986) for
background information on TEFRA, which indicate that during consideration of TEFRA,
the House tabled, i.e., rejected, a point of order charging that the Senate amendment
contravened the Origination Clause.
26 Asher Hinds, 2 Precedents of the House of Representatives § 1489 (1907), quoting from
S.Rept. 146, 42d Cong., 2d Sess. (1872),
Clause denies the Senate power to amend a House bill that does not raise revenue with
Senate text that raises revenue.
Some lower courts have expressly interpreted the phrase “bills for raising revenue”
— which must originate in the House and which the Senate may amend — to
encompass not only House bills that increase revenue, but also those that relate to or
collect revenue. Consequently, they have held that Senate does not violate the
Origination Clause if it amends a House bill to reduce revenue with Senate text to
increase revenue. The Supreme Court does not appear expressly to have addressed this
issue, but it has upheld the constitutionality of a Senate amendment that raised more
revenue than the House bill which it amended.