Section 2. Role of the Legislative Branch The vesting of "the power of the purse," or the control over public finance, in the hands of the elected representatives of the people lies at the very heart of the development of representative government in the Anglo-American tradition. The creation of the Committee on Ways and Means in the English House of Commons in 1641 was an important development in legislative efforts to restrain the financial prerogatives of the Crown. Later, the fact that the British were "imposing taxes on us, without our consent" was cited in the Declaration of Independence as one of the "repeated injuries and usurpations" which led the Colonies to declare themselves to be "Free and Independent States." Under the Articles of Confederation, Congress was empowered to borrow money, regulate coinage and emit bills of credit. However, Congress could only request that the States collect taxes and remit them to a common Treasury. Under this system, the fiscal situation of the Nation deteriorated. The first power granted to the Congress in Article I, Section 8 of the Constitution is the "Power To lay and collect Taxes, Duties, Imposts and Excises." A. REVENUE ORIGINATING PREROGATIVE OF THE HOUSE OF REPRESENTATIVES The Constitutional Convention debated adopting the British model in which the House of Lords could not amend revenue legislation sent to it from the House of Commons. Eventually, however, the Convention proposed and the States later ratified the Constitution providing 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." (Article I, Section 7, clause 1.) In order to pass constitutional scrutiny under this "origination clause," a tax bill must be passed first by the House of Representatives. After the House has completed action on a bill and approved it by a majority vote, the bill is transmitted to the Senate for formal action. The Senate may have already reviewed issues raised by the bill before its transmission. For example, the Senate Committee on Finance frequently holds hearings on tax legislative proposals before the legislation embodying those proposals is transmitted from the House of Representatives. On occasion, the Senate will consider a revenue bill in the form of a Senate or "S." bill, and then await passage of a revenue ("H.R.") bill from the House. The Senate then will add or substitute provisions of the "S." bill as an amendment to the "H.R." bill and send the "H.R." bill back to the House of Representatives for its concurrence or for conference on the differing provisions. B. HOUSE EXERCISE OF ITS CONSTITUTIONAL PREROGATIVE: "BLUE SLIPPING" When a Senate bill or amendment to a House bill infringes on the constitutional prerogative of the House to originate revenue measures, that infringement may be raised in the House as a matter of privilege. That privilege has also been asserted on a Senate amendment to a House amendment to a Senate bill (see 96th Congress, 1st Session, November 8, 1979, Congressional Record p. H10425). Note that the House in its sole discretion may determine that legislation passed by the Senate infringes on its prerogative to originate revenue legislation. In the absence of such determination by the House, the Federal courts are occasionally asked to rule a certain revenue measure to be unconstitutional as not having originated in the House (see U.S. v. Munoz-Flores, 495 U.S. 385 (1990).) Senate bills or amendments to nonrevenue bills infringe on the House's prerogative even if they do not raise or reduce revenue. Such infringements are referred to as "revenue affecting." Thus, any import ban which could result in lost customs tariffs must originate in the House (100th Congress, 1st Session, July 30, 1987; 100th Congress, 2d Session, June 16, 1988, Congressional Record p. H4356). Offending bills and amendments are returned to the Senate through the passage in the House of a House Resolution which states that the Senate provision: "in the opinion of the House, contravenes the first clause of the seventh section of the first article of the Constitution of the United States and is an infringement of the privilege of the House and that such bill be respectfully returned to the Senate with a message communicating this resolution" (e.g., 100th Congress, 1st Session, July 30, 1987, Congressional Record p. H6808) This practice is referred to as "blue slipping" because the resolution returning the offending bill to the Senate is printed on blue paper. In other cases, the Committee of the Whole House has passed a similar or identical House bill in lieu of a Senate bill or amendment (e.g., 91st Congress, 2d Congress, May 11, 1970, Congressional Record pp. H14951-14960). The Committee on Ways and Means has also reported bills to the House which were approved and sent to the Senate in lieu of Senate bills (e.g., 93d Congress, 1st Session, November 6, 1973, Congressional Record pp. 3600636008). In other cases, the Senate has substituted a House bill or delayed action on its own legislation to await a proper revenue affecting bill or amendment from the House (see 95th Congress, 2d Session, September 22, 1978, Congressional Record p. H30960; January 22, 1980, Congressional Record p. S107). A House Resolution seeking to invoke Article I, Section 7 has been tabled on just one occasion. Citing significant economic problems facing the nation during the height of the Vietnam War, a divided House tabled an objection to the Senate's infringement on House prerogatives (90th Congress, 2d Session, June 20, 1968, Congressional Record pp. H17977-17979). BLUE SLIP RESOLUTIONS—97TH CONGRESS THROUGH 102D CONGRESS [Resolutions passed by the House returning to the Senate bills passed violation of the origination clause of the United States Constitution (Clause 1, Section 7 of Article 1)] in H. Res., sponsor, and date of House passage 102d Congress H.Res. 373 Mr. Rostenkowski H.Res. 267 Mr. Rostenkowski H.Res. 251 October 22, 1991. Description of Senate action (and related House action, if any) On August 1, 1991, the Senate passed S. 884 amended, the Driftnet Moratorium Enforcement Act of 1991. This legislation would require the President to impose economic sanctions against countries that fail to eliminate large-scale driftnet fishing. Foremost among the sanction provisions are those which impose a ban on certain imports into the United States from countries which continue to engage in driftnet fishing on the high seas after a certain date. These changes in our tariff laws constitute a revenue measure in the constitutional sense, because they would have a direct effect on customs revenues. On February 20, 1991, the Senate passed S. 320, to reauthorize the Export Administration Act of 1979. This legislation contains several provisions which impose, or authorize the imposition of, a ban on imports into the United States. Among the provisions containing import sanctions are those relating to certain practices by Iraq, the proliferation and use of chemical and biological weapons, and the transfer of missile technology. These changes in our tariff laws constitute a revenue measure in the constitutional sense, because they would have a direct effect on customs revenues. On July 11, 1991, the Senate passed S. 1241, the Violent Crime Act of 1991. This legislation contains several amendments to the Internal Revenue Code. Sec. 812(f) provides that the police corps scholarships established under the bill would not be included in gross income for tax purposes. In addition, secs. 1228, 1231, and 1232 each make amendments to the Tax Code with respect to violations of certain firearms provisions. Finally, title VII amends sec. 922 of title VIII of the U.S. Code, making it illegal to transfer, import or possess assault weapons. These changes in our tariff and tax laws constitute revenue measures in the constitutional sense, because they would have an immediate impact on revenues anticipated by U.S. Customs and the Internal Revenue Services. BLUE SLIP RESOLUTIONS-97TH CONGRESS THROUGH 102D CONGRESS-Continued H. Res., sponsor, and date of House passage 101st Congress H. Res. 287 Mr. Cardin H. Res. 177 Mr. Rostenkowski 100th Congress H. Res. 235 Mr. Rostenkowski H. Res. 474 Mr. Rostenkowski June 16, 1988 (see also H.R. 3391). H. Res. 479 Mr. Rostenkowski Description of Senate action (and related House action, if any) On August 4, 1989, the Senate passed S. 686, the Oil Pollution Liability and Compensation Act of 1989. This legislation contained a provision which would have allowed a credit against the oil spill liability tax for amounts transferred from the Trans-Alaska Pipeline Trust Fund to the Oil Spill Liability Trust Fund. On Apr. 19, 1989, the Senate passed S. 774, the Financial Institution Reform, Recovery and Enforcement Act of 1989. This legislation would create two corporations to administer the financial assistance under the bill: the Resolution Trust Corporation and the Resolution Financing Corporation. S. 774 would have conferred tax-exempt status to these two corporations. Without these two tax provisions, these two corporations would be taxable entities under the Federal income tax. On Mar. 30, 1987, the Senate passed S. 829, legislation which would authorize appropriations for the U.S. International Trade Commission, the U.S. Customs Service, and the Office of the U.S. Trade Representative for fiscal year 1988, and for other purposes. In addition, the bill contained a provision relating to imports from the Soviet Union which amends provisions of the Tariff Act of 1930. On Oct. 6, 1987, the Senate passed S. 1748, legislation which would prohibit the importation into the United States of all products from Iran. (The House passed H.R. 3391, which included similar provisions, on Oct. 6, 1987.) On May 13, 1987, the Senate passed S. 727, legislation which would clarify Indian treaties and Executive orders with respect to fishing rights. This legislation dealt with the tax treatment of income derived from the exercise of Indian treaty fishing rights. (The House passed H.R. 2792, which included similar provisions, on June 20, 1988, under suspension of the rules and was enacted into law as part of Public Law 100-647, H.R. 4333.) BLUE SLIP RESOLUTIONS-97TH CONGRESS THROUGH 102D CONGRESS—Continued H. Res., sponsor, and date of House passage H. Res. 544 Mr. Rostenkowski Sept. 23, 1988 (see also H.R. 1154) H. Res. 552 Mr. Rostenkowski H. Res. 603 Mr. Rostenkowski H. Res. 604 Description of Senate action (and related House action, if any) On Sept. 9, 1988, the Senate passed S. 2662, the Textile and Apparel Trade Act of 1988. This legislation would impose global import quotas on textiles and footwear products. On Sept. 9, 1988, the Senate passed S. 2763, the Genocide Act of 1988. This legislation contained a ban on the importation of all oil and oil products from Iraq. On Mar. 30, 1988, the Senate passed S. 2097, the Uranium Mill Tailings Remedial Action Amendments of 1987. This legislation would establish a Federal fund to assist in the financing of reclamation and other remedial action at currently active uranium and thorium processing sites and would increase the demand for domestic uranium. The fund would be financed in part by what are called "mandatory fees" which are equal to $22 per kilogram for uranium contained in fuel assemblies initially loaded into civilian nuclear power reactors during calendar years 19891993. In addition, S. 2097 would impose charges on domestic utilities that use foreign-source uranium in new fuel assemblies loaded in their nuclear reactors. On Aug. 8, 1988, the Senate passed H.R. 1315, legislation which would authorize appropriations for the Nuclear Regulatory Commission for fiscal years 1988 and 1989. Title IV of the legislation would, among other things, establish a Federal fund to assist in the financing of reclamation and other remedial action at currently active uranium and thorium processing sites and would assist the domestic uranium industry by increasing the demand for domestic uranium. The fund would be financed in part by what are called "mandatory fees" equal to $72 per kilogram of uranium contained in fuel assemblies initially loaded into civilian nuclear power reactors on or after Jan. 1, 1988. These fees would be paid by licensees of civilian nuclear power reactors and would be in place until $1 billion had been raised. |