Acting Labor Secretary Julie Su faced scrutiny from the Senate Health, Education, Labor, and Pensions committee Thursday, bringing her one step closer to running the Labor Department officially in what is shaping up to be a tight confirmation battle.

What You Need To Know

  • Acting Labor Secretary Julie Su faced scrutiny from the Senate Health, Education, Labor, and Pensions committee Thursday, bringing her one step closer to running the labor department officially in what is shaping up to be a tight confirmation battle

  • Su has secured support from nearly every Democrat in the closely divided Senate and the backing of the largest unions in the country, but Republicans have pressed her on her tenure as California’s top labor official

  • Senate Republicans expressed concern about the unemployment insurance fraud rate under Su’s tenure as California’s top labor leader, but committee chair Sen. Bernie Sanders, I-Vt., compared California's 11% rate to other states where the rate was much higher during the peak months of the pandemic

  • Su’s confirmation will be heavily reliant on the support of three Senate lawmakers: Sens. Joe Manchin, D-W.Va., John Tester, D-Mont., and Kyrsten Sinema, I-Ariz.

President Joe Biden’s nominee has secured support from nearly every Democrat in the closely divided Senate and the backing of the largest unions in the country, but Republicans have pressed her on her tenure as California’s top labor official, including her handling of unemployment fraud and her support of a law that regulated the gig economy.

“Let us be honest, as we gather this morning, the debate over Ms. Su really has nothing to do with her qualifications,” Sen. Bernie Sanders, I-Vt., said Thursday as he presided over the hearing. “No one can tell us with a straight face that Ms. Su is unqualified for this position. In fact, she is extremely well qualified.”

“This debate really has everything to do with the fact that Julie Su is a champion of the working class of this country, who will stand up against the forces of corporate greed,” Sanders continued.

But the top Republican on the committee, Louisiana Sen. Bill Cassidy, strongly disagreed, characterizing Su as an activist who lacked competence and a “demonstrated record of successfully concluding labor negotiations.”

“As highly as I think of Ms. Su, as pleasantly as I regard you, I will disagree with Sen. Sanders and to say it with a straight face that I do not think you should be Secretary of Labor,” Cassidy said in his opening remarks. “President Biden promises to have the most pro-union administration in history. At her nomination announcement, Ms. Su responded saying, ‘sign me up for that, I want to help.’”

“The priority should not be whatever it makes it easier to forcibly and coercively unionize workers while undermining the business model that employs them,” Cassidy added.

Walking into the hearing room Thursday, Su hugged Sanders and smiled back at her family and friends who filled the seats behind her. 

Su argued her tenure as the second-in-command at the Labor Department under former Secretary Marty Walsh prepared her to mediate negotiations between labor and employers.

“When he announced my nomination for the U.S. Secretary of Labor, the president called me the American dream,” Su said. If confirmed, the daughter of Chinese immigrants would be Biden’s first AAPI Cabinet secretary.  “My parents believed it. I benefited from it. And I want to do my part to make sure it is a reality for workers across the nation.”

In his opening remarks, Sanders addressed Senate Republicans’ concerns about the unemployment insurance fraud rate under Su’s tenure as California’s top labor leader.

“I understand that some of my Republican colleagues have expressed concerns about the 11% unemployment insurance fraud rate that occurred in California during the height of the pandemic when Julie Su was California’s secretary of labor,” Sanders said, citing Department of Labor data that tracked unemployment insurance fraud between July 2020 and June 2021.

“Here is what my colleagues conveniently ignore. During that same period, the unemployment insurance fraud rate was 15.4% in Tennessee, 15.3% in Arizona, 14.3% in South Carolina, and over 14% In Massachusetts,” the Vermont senator continued. “All those states have Republican governors and Republican labor secretaries and all of those states experienced higher unemployment insurance fraud rates than California.”

But Cassidy, whose home state of Louisiana saw a 10.3% fraud rate during the same period, said it’s not the fraud but the lack of accountability, citing one case where a rapper illegally siphoned more than $700,000 from California’s unemployment insurance program in 2020.

“Nuke Bizzle was arrested, [pleaded] guilty and ordered to pay $705,000 in restitution after posting a music video bragging about how easy it was to defraud” California,” Cassidy said. “The lyrics include, quote ‘I done got rich off of EDD. Ain't hit no more licks 'cause of EDD. And just last night, I was sellin' Ps. And I just woke up to 300 Gs.’”

“A rapper was not held accountable because of Ms. Su’s oversight, but because he publicly admitted to his crime on a rap video,” Cassidy added.

Sanders on Thursday and California officials previously blamed the rushed nature of getting unemployment funds to people during the pandemic and a lack of oversight from the Trump administration for the high rate of fraud. California’s state auditor released a report in January 2021 concluding the state’s unemployment agency failed to act on fraud despite numerous warnings.

One of Republicans’ biggest concerns expressed during the hearing was Su’s lack of experience when it comes to negotiating labor disputes, particularly as hundreds of labor contracts representing millions of Americans will come up next year.

“You haven't had experience negotiating a major deal with trade unions and management, and your leadership of an enterprise resulted in $31 billion of fraudulent payments,” said Sen. Mitt Romney, R-Utah. “The buck stops at the top, you're the person running [unemployment insurance], you're the one that decided to waive the guardrails $31 billion. The idea of promoting a person who's had that experience to a position of leadership with the entire Department of Labor makes no sense at all.”

​​”As soon as we knew that there was fraud happening, I shut the front door to that, I made changes to the program,” pushed back Su. “California's unemployment insurance fraud rate, which was different from the medical assistance, was really comparable to what it's been for the high rates that you're talking about in a program that did not have the safeguards in its design.”

Republicans also expressed concerns about Su’s support of AB-5, a California law that aimed to regulate companies that hire massive amounts of gig workers such as Uber, Lyft, and DoorDash.

The law passed in 2019, reclassifying many gig workers as employees in a bid to give them greater protections and benefits, but Californians voted in favor of exempting ride hailing and delivery companies from the requirements in 2020 after the industry spent $200 million on a campaign in favor of the proposition. 

Su committed to not imposing similar rules on the federal level, but only, she said, because Congress has that authority and the Labor Department does not.

Su’s confirmation will be heavily reliant on the support of three Senate lawmakers: Sens. Joe Manchin, D-W.Va., John Tester, D-Mont., and Kyrsten Sinema, I-Ariz. 

With California Sen. Dianne Feinstein absent since February, Democrats can’t afford to lose another vote of their 51-seat majority if they want to confirm Su, who was nominated to be deputy secretary of labor by a 50-47 party line vote in 2021.

All three key Senators voted for Su in 2021.

Tester was supposed to meet with Su while she was at the Capitol Thursday, but was unable to for unspecified reasons, Punchbowl News reported.

As the nomination battle heats up, one lobbying group has launched a campaign called “Stand Against Su” in Tester, Manchin and Sinema’s home states, as well as Republican Sen. Susan Collins’ Maine. The group spent six figures on ads in those states, according to Fox News. Their efforts include billboards and Facebook ads.

The AFL-CIO has pushed heavily for Su, spending six figures on an ad campaign of their own.

AFL-CIO President Liz Shuler told Spectrum News ahead of the hearing that Su is “eminently qualified” to be the next labor secretary.

“This has been her life's work. She’s spent pretty much literally every waking hour of every day thinking about how to improve the lives of working people for decades,” said Shuler. “Whether it's wage theft, misclassification of workers, you speaking up for workers who have no voice, particularly her work with immigrant workers. And we know [with] the famed Thai garment workers case that she took on, she’s just not afraid to take on the big challenges, even when the odds are against her.”

Su rose to notoriety working on one of the most high-profile labor cases in California’s history back in the mid-1990s, when she fought for Thai garment workers who had been previously enslaved in a sweatshop near Los Angeles.

The HELP committee will vote on Su’s nomination next Wednesday before her nomination can advance to the full floor.