What is the Home Rule Act and how does it impact how Washington, D.C., is governed?

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Since 1973, Washington, D.C., has been governed a system known as “home rule” that allowed D.C. residents to elect a mayor and a city council. The council is empowered to set tax rates and the budget as well as organize or abolish any agency of the District’s government. Congress, however, retains the right to veto any actions by the District government that threaten “federal interest,” and the budgets that are passed by the council and approved by the mayor have to be reviewed and enacted by Congress.