With the recent change in administrations in Washington, D.C., we have received many calls regarding expectations for changes in the law. Making and enforcing laws is a complicated process with many nuances.
Additionally, we also are governed by regulations, rules and executive orders. Understanding the process to make — and the differences in — laws, regulations and rules may help to better understand expectations for changes out of Washington.
A law may only be put into effect if both houses of Congress pass the legislation and the president signs the bill, or if both houses of Congress pass the legislation by a two-thirds majority without the approval of the president.
Some people seem to think that a president has the ability to change laws, but that is not correct. The House and Senate are responsible for passing laws, not the president.
For example, the president cannot change tax laws. Any changes to tax law must be first passed by the House and Senate, and only then can the president decide to sign the bill or veto it. If a president were to try to change tax law without Congress, the courts would almost for sure find the change beyond the president’s powers and declare it unconstitutional.
The House has always passed legislation with a simple majority. The Senate has traditionally required 60 votes to pass new legislation with some exceptions. In limited circumstances, the Senate can pass legislation with a simple majority. The 60-vote requirement is not law and is an agreed-to custom by the Senate. At any time, the Senate could agree to vote with a simple majority on all matters.
Regulations are not the same as laws, but they have the effect of law. After a new law goes into effect, the agency affected by the law often will develop regulations to help interpret the law. The regulations provide additional details that allow the agency to effectively implement the law.
Lastly, rules are created by the agency to provide guidance to employees as to how to administer the laws and regulations. Rules do not have the same weight as laws or regulations, but they are very important as they are the primary guidance used by employees and staff to make decisions.
Consider the following example: The farm bill provides that a person having an average adjusted gross income (AGI) over $900,000 is in ineligible for most program payments. That is all the law says. To implement this law, USDA needed more detail.
So, USDA implemented a regulation that says it is a 3-year average of the AGI of the three years immediately preceding the program year. Neither the law nor regulations address the situation of a jointly filed return that shows AGI greater than $900,000, but one or both spouses individually is under $900,000.
To assist USDA staff in addressing this situation, USDA developed a handbook with a rule that says the AGI of a jointly filed tax return may be split between the spouses with a letter from an accountant or attorney. This is an example of how we start with a broad law ($900,000 AGI limitation), then define the law a bit more with a regulation (three-year average), then use rules to help USDA staff address specific situations (joint returns).
Executive orders are entirely different. An executive order is a directive by the president that manages the operations of the federal government. The modern era of executive orders started with Franklin Roosevelt and has been used by every president since.
Executive orders have become more important as Congress has ceded more power to the executive branch, and presidents have used the opportunity to implement some of their policies by executive order. Executive orders are still subject to judicial review and can be invalidated by the courts.
A famous example of an executive order being overturned took place when the court invalided President Harry Truman’s executive order to take control of the country’s steel mills. The court ruled the executive order exceeded the president’s power and could only be implemented by a law passed by Congress.
As stated above, laws, regulations, rules and executive orders are complicated and can get messy. However, having even a basic understanding of these federal government tools can help you better understand the impact of these actions and who has authority to implement them.
Moore is an attorney with Wright & Moore Law Co. LPA. Contact him at 740-990-0751 or firstname.lastname@example.org.