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.How, then, did this week's bailout ("rescue"), which originated in the Senate (having first failed in the House of Representatives) become law? Note that this is not the first time a major tax bill originated in the Senate, but I never could figure out how such laws never came to the attention of the Supreme Court. Now I know, thanks to this article by John E. Mulligan of the Providence (Rhode Island) Journal. (Hat tip to Dr. Jerry Pournelle's View from Chaos Manor and the Wall Street Journal's James Taranto.)
...[I]t has to do with the U.S. Constitution. Article 7, Section 1 says tax bills must originate in the House of Representatives.And that is how the "Paul Wellstone Mental Health and Addiction Equity Act of 2007" was turned into the Emergency Economic Stabilization Act of 2008.
In order to improve chances that the bailout bill, which the House defeated on Monday, would be approved this time around, the Senate tacked on several popular provisions, such as extending the life of business tax cuts that were set to expire and changing the alternative minimum tax, a much-loathed part of the tax code intended to ensure that the well-to-do pay their fair share but that in recent years has increasingly affected the middle class.
And an element of the tax package was legislation advanced by [Rhode Island Rep. Patrick] Kennedy that requires health-insurance companies to offer coverage of mental illness on a par with that of physical illness.
Once the Senate added those provisions to the rescue bill, it qualified as a tax bill, which the upper chamber is constitutionally prohibited from originating.
In order to get around the Constitution, the leaders turned to the time-honored stratagem of finding a live but dormant House bill — Kennedy’s mental-health parity bill — to use as a shell.
“They take out the entire text” of Kennedy’s old bill, “and then, by amendment, they substitute the other bill,” said Don Ritchie, an assistant Senate historian. Two bills, in this instance: the emergency rescue bill and the tax provisions and the final version of Kennedy’s mental-health parity wrapped inside.
That other sound you hear (besides the one of the US Dollar's printing press in overdrive) is the Founding Fathers spinning in their graves.