How a bill becomes a law...
After I acquire a book, I call the author and have an initial conversation of the "I am here to help you and this will be fun and not scary and here's my phone number" variety. Assuming I made the offer based on a complete manuscript, my process is something like this:
I take some time to reread the manuscript, making lots of notes about how I think the book should be revised. This is structural revision, not the line-editing that will come later. Just because I thought it was perfect when I bought it doesn't mean I'm not going to try to make it more perfect now
. I type all my notes up into an editorial letter, which can range anywhere from a couple of pages to twenty, depending on the state of the manuscript and how detailed I wound up getting. (Some editors prefer to do this part in a phone call, but I like sending a letter first.)
I send the letter off to the author, give her some time to think about it, and then we have a call to make sure she feels comfortable with my suggestions and clear on how she's going to proceed. If she disagrees with some of my points, we talk about that, and look for other ways to address whatever the core issue was. Then she has a certain amount of time (depending on our publication schedule) to return to me a revised manuscript.
When I get the revisions back, if all's gone well, I don't need to have the author do another round. Now I reread the manuscript again, concentrating on line-editing issues; these can include cutting or inserting text, moving sections around so that they're more effective, or very basic things like word choice or spelling. Once that's done, I hand the marked-up manuscript over to our copyeditors.
(Some editors also send a copy of the line-edited ms. to the author at this point; others wait until the ms. comes back with the copyeditor's marks as well.) When the copyedited ms. is complete, it'll reflect my edits as well as the copyeditor's (whose job it is to correct grammar, etc., but also to watch for errors of continuity, check facts and proper names, and mark up the text for the compositor). This goes back to the author, so that she can review my line edit and answer any queries the copyeditor had.
When the author returns the ms., it's ready to be typeset--back to production it goes, and eventually I get two sets of page proofs, with the copyedited text all typed up and laid out more or less the way it will look in the finished book. One of these sets goes to the author, who has a chance to look it over and make any small corrections that didn't happen previously. The next things my author will see are bound galleys (made from the uncorrected page proofs) and then the finished book. (There's a "second pass" round of page proofs, but I don't generally send those to the author unless there were many corrections to the first pass--usually I just check them over myself.)
Whew! Sorry that was so long, but I hope it helps!