In order for the federal government to function, it must be able to raise revenue, or money. A chief limitation of the Continental Congress and the Congress under the Articles of Confederation was their reliance on the states for all funds. Because the states were slow to act, Congress was always short of funds, even to pay troops during and after the revolutionary war. The Constitution (Article 1, Section 8) therefore gave Congress the power to “lay [set] and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.” The framers of the Constitution regarded the “power of the purse” to be so important that they decided that the House of Representatives— at that time the only members of Congress directly elected by the people—should be able to originate any revenue bill. However, according to the Constitution (Article 1, Section 7), the Senate could amend these bills just as it could any other legislation.
At first Congress raised revenues chiefly through tariffs, which are duties or taxes set on imported goods. During the Civil War, and after enactment of the 16th Amendment to the Constitution in 1913, Congress also levied income taxes on individuals and corporations. Revenue bills are handled by the House Ways and Means Committee and the Senate Finance Committee, a responsibility that has traditionally made them two of the most powerful committees of Congress. Not until 1944 did a President—Franklin D. Roosevelt— veto a revenue bill. Congress, always jealous of its power of the purse, immediately voted to override his veto.
See also Appropriations
