Financial Focus: Congressional law vs Executive orders?

By Professor Anthony Rivieccio MBA PFA

Well, we knew that Congress has been at a stalemale — long way before this pandemic. Some would even say, even before Donald Trump became president.

We have been living with “divided” government for several years now. Democracy is supposed to allow the will of our people to speak. So what happens when too many people speak and have different opinions — to the point where nothing gets done?.

Enter Congressional COVID-19 stalemale. This means nothing has gotten done. No help for unemployment insurance. No more help to small businesses. No help for State Governments. No help for eviction or stimulas assistance.

Enter President Trump’s executive order extending certain unemployment insurance benefits and directing states to contribute to a portion of those enhanced benefits. The Presidemnt’s latest executive order has proved to be his most controversial.

But what is an exective order? An executive order is a signed, written and published directive from the President of the United States that manages operations of the federal government. Executive Orders state mandatory requirements for the Executive Branch, and have the effect of law. They are issued in relation to a law passed by Congress or based on powers granted to the President in the Constitution and must be consistent with those authorities.

So, what is the difference between a Congressional law and an executive order? An Executive Order is issued by the nation’s chief executive, the President.

Traditional laws are voted on and passed by majority vote in the House of Representatives and the Senate. The “law” is then either signed by the President, or vetoed by him.

So, can an “executive order” legislate policy, like say, “health care?” Yes and no.

DACA or Deferred Action for Childhood Arrivals is an executive order that was announced by President Barack Obama on June 15, 2012. DACA allows some individuals illegally in the United States after being brought to the country as children to receive a renewable two-year period of deferred action from deportation and to become eligible for a work permit. U.S. Citizenship and Immigration Services began accepting applications for the program on August 15, 2012. The Trump adminstration has tried unsuccessfully to kill DACA. Last month, by a narrow 5-4 decision the US Supreme Court thwarted Trump’s latest effort.

Now can executive orders overrule state law? The simple answer is no as executive orders only apply to federal actions, not state actions.

And while I would not bet the ranch on the US Supreme Court tilting in the favor of President Trump, the federal Department of LAbor issued a rule clarifying the Presidemt’s executive order as not mandating the states to contribute to the enhanced UI benefit.

What could be the saddest is that while 2020 and the problems herein have our county at its brink — our Congressional leaders, who are supposed to create the law, would rather allow their constituents to be placed in limbo.

And with the struggles our citizens have been going through in 2020, being in limbo would be an understatement.

Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr.  Rivieccio is an Adjunct Professor of Business, Finance & Accounting at the City University of New York and Monroe College. You can reach Anthony at 347.575.5045.

Print Friendly, PDF & Email