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Labor Nominee Touts SECURE 2.0; Defends Record from Republican Attacks

Regulatory Agencies

President Biden’s nominee to lead the Department of Labor expressed support for the SECURE 2.0 Act, but the bigger issue during her confirmation hearing was the sharp questioning from Republican lawmakers about her record and whether she would be an impartial arbiter between labor unions and business groups.

Julie Su, who has been nominated to replace Marty Walsh as Secretary of Labor, appeared April 20 before the Senate Health, Education, Labor and Pensions (HELP) Committee for her nomination hearing. By and large, she attempted to tamp down those criticisms, noting that she would work to find common ground between employers and employees, and that she hoped to “finish the job that Secretary Walsh started.”

Overall, the hearing was heavy on discussions about who was to blame for widespread unemployment fraud that occurred in California during her time as California’s Labor Secretary. Another topic that Republican committee members repeatedly raised was Su’s overseeing the implementation of California’s Assembly Bill 5, which codified the state’s worker classification test making it harder to classify gig workers as independent contractors.

To preempt the line of questioning he presumably knew was coming, Senate HELP Committee Chairman Bernie Sanders (I-VT) in his opening statement came to Su’s defense, arguing that she has done an “outstanding job,” even as large, multinational corporations are spending millions of dollars on ads to defeat her nomination. “They know what I know, and that is she is prepared to take on powerful special interests on behalf of working Americans.”  

“We need a Labor Secretary who understands that half of older workers don’t have a retirement plan and that we need to expand, not cut, pensions in our country. I strongly believe that Julie Su will be that Labor Secretary,” Sen. Sanders further stated. 

Meanwhile, Sen. Bill Cassidy (R-LA), who serves as the Ranking Republican on the committee, right out of the gate stated that he does not think Su should be confirmed. “This committee's priority should be to ensure that the Department of Labor is fair and unbiased when enforcing our nation's labor laws. The Secretary of Labor should be a leader who is responsible, experienced, and skilled – not an activist. There are, unfortunately, serious concerns about Acting Secretary Julie Su’s record that call into question whether she has the ability to responsibly lead the Department,” Sen. Cassidy stated.  

When asked later by Sen. Cassidy about whether she would commit to not forcing the standards imposed under AB 5 on the rest of the country, Su responded that that would be Congress’ prerogative, adding that the proposed worker classification guidance by the Labor Department explicitly did not include the so-called three-part “ABC test” imposed under the California regime.

SECURE 2.0 Implementation

There was very little discussion in the retirement space. However, under questioning from the Committee’s former chair, Sen. Patty Murray (D-WA), Su did express support for SECURE 2.0 and committed to ensuring that the provisions will be implemented in a timely manner in accordance with the legislation.

In particular, Su singled out the legislation’s establishment of a lost and found database. “The law does require the department to establish a lost and found program to make sure Americans who have saved their entire lives for retirement are able to access those benefits when they retire,” she explained, adding that, “sometimes people change jobs and they lose track or maybe they forget and that's why a program like that is so important.” She further noted that the DOL, under a similar program launched in 2017, helped to recover $6 billion in lost retiree benefits.

The supposed rewrite of the fiduciary rule did come up briefly when Rep. Ted Budd (R-NC) expressed serious concerns with the department’s previous efforts in 2016, inquiring whether the DOL still had plans to move forward with a new rule. Su noted, however, that she wasn’t at the DOL during the Obama administration and added that she would engage with all stakeholders before implementing a new one.

Lack of Experience?

Other members, meanwhile, suggested that Su appears to favor labor unions and continued to raise concerns about her purported lack of experience with labor disputes, as well as in the private sector and making decisions about running a business.

Sen. Mitt Romney (R-UT), for example, observed that Su’s public calendar shows regular meetings with union leaders, but nothing with business associations until six weeks ago. He went on to state that his greater concern, however, was the $31 billion in unemployment fraud that took place in California. “I’m not sure how the president can nominate you to take over this job,” he stated, adding that the “buck stops at the top.”

“With 150 labor contracts expiring this year, the potential of replacing [Marty Walsh] with someone who has a history of bias and no direct experience handling labor disputes should be concerning to everyone,” Sen. Cassidy further added.

Similarly, Sen. Tommy Tuberville (R-AL) observed that Su has been a champion of unions and that he’s not convinced that her personal views won’t interfere with running the Labor Department.  

For their part, the committee’s Democrats, on several occasions, came to the defense of Su, pointing out, among other things, that widespread unemployment fraud took place throughout the entire country during the pandemic. Sen. Bob Casey (D-PA), for instance, contended that 98% of the fraud that occurred was from a special unemployment program created by Congress, not California, and that it was the self-certification provisions that helped lead to the fraud.

At the close of the hearing, Sen. Casey submitted for the record 68 letters of support from labor unions, advocacy organizations and other groups, while Sen. Cassidy submitted 50 letters in opposition.

Will the back-and-forth change any senator’s mind? We’ll have a better idea of where things stand with Su’s nomination, as the Senate HELP Committee has scheduled an April 26 vote on her nomination. While they do not sit on the Senate HELP Committee, the wildcards that could tip the full Senate vote remain Sens. Joe Manchin (D-WV), Jon Tester (D-MT) and Kyrsten Sinema (I-AZ).

A replay of the nomination hearing can be viewed here.

Acting Labor Secretary Su’s testimony can be viewed here.