Julie Su's Record of Failure

Floor Speech

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Mr. KILEY. Mr. Speaker, with the departure of Marty Walsh from the Labor Department, President Biden has nominated Deputy Secretary Julie Su to succeed him.

For those of us in California, this decision was very hard to understand. Ms. Su's record as our State's labor secretary under Governor Gavin Newsom is well known because it had such negative consequences for so many people.

Having seen my constituents suffer at the hands of Ms. Su's mismanagement and antiworker agenda, I have felt compelled to make sure the facts come to light in the confirmation process.

As chair of the House Subcommittee on Workforce Protections, I held a hearing last week highlighting the countless livelihoods she destroyed as secretary of labor in California.

Mr. Speaker, I don't want the rest of the country to suffer the way California has. Our State had the highest unemployment rate for much of the COVID era. We had the Nation's highest poverty rate. In recent years, we have been last in the country in income growth and first in the country in U-Haul rentals.

I am joined today by several colleagues who don't want this for their States or for the rest of the country. They have joined us here for this Special Order to discuss what a Julie Su-led Labor Department would mean for their constituents and to urge President Biden to withdraw this nomination.

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Mr. KILEY. Mr. Speaker, I thank Mr. Moran for his comments.

He really hit the nail on the head, that if this nomination goes through, it is hardworking Americans--millions of American workers--who will pay the price.

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Mr. KILEY. Mr. Speaker, I thank Mr. Good for his remarks. His point about making the rest of the country like California is explicitly what they are trying to do here.

President Biden has cited the labor law that Julie Su was in charge of enforcing in California as his model for labor relations nationwide. In fact, the Labor Department is now trying to emulate it in order to cause the same harm to all American workers that California workers have already suffered.

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Mr. KILEY. Mr. Speaker, I thank Representative Miller for her remarks. She brings up a very important point. With everything that has been going on with the economy and everything that happened during COVID, it really is stunning that we had people in positions of power like Julie Su who are looking for reasons to deny people the opportunity to work.

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Mr. KILEY. Mr. Speaker, I thank Representative Owens for those very on-point remarks. He said it very well, that this nominee is antibusiness, antigrowth, and antiworker, as well.

I think it is important for us to have a sense of perspective here that this is such a vital moment and a moment of vital importance for the American workforce. We are coming out of an era of unprecedented upheaval, and we are heading toward an era of, in many ways, unpredictable transformation.

For the top labor position in America, we need a Secretary who is competent and qualified, who is proworker and pro-small businesses, who will work with Democrats and Republicans alike, who is fair, and who understands what has made the American workforce the greatest engine for human progress the world has ever known.

Simply put, Julie Su is not that person. Her record in California makes that all too clear. Indeed, during the pandemic, Julie Su and her Employment Development Department, known as the EDD, became the national poster child for government failure.

I saw this firsthand as a State representative. Millions of Californians had their legitimate unemployment claims wrongfully withheld for weeks, months, or sometimes indefinitely under Su's mismanagement.

You don't need to take my word for that. In July of 2020, 61 of the 80 members of the California Assembly, mostly Democrats, wrote the following:

``In our fifth month of the pandemic, with so many constituents yet to receive a single unemployment payment, it's clear that EDD is failing California:

``Millions of our constituents have had no income for months. As Californians wait for answers from EDD, they have depleted their life savings, have gone into extreme debt, and are in deep panic as they figure out how to put food on the table and a roof over their heads.''

The lawmakers went on to explain how the EDD, under Su's management time and again, failed to take responsibility and failed to correct its mistakes. They wrote that they had been met with long-winded excuses, fumbling answers, or unclear and inconsistent data, along with a lack of transparency and accountability, obfuscation and dishonesty in their dealings with Su's agency.

We have exhausted all avenues at our disposal, they said, as the agency has addressed only a few of the many issues we have highlighted for months and was only scratching the surface of the disaster that is EDD.

``The disaster'' is how the California Democrat supermajority characterized Julie Su's agency.

The frustrated legislators lamented how little has improved at EDD over the course of the pandemic. Independent reports confirmed the extent of mismanagement and deception from Su's agency. While the EDD had said in July of 2020 that its claims backlog would be cleared by September, a report found 1.5 million claims remained unresolved and the backlog was increasing by 10,000 each week.

The Independent Legislative Analyst office likewise found the EDD mischaracterized the crisis. Even allies of the Governor and Secretary Su concluded that she was responsible for this. Democrat Assemblymember Cottie Petrie-Norris, who is the chairwoman of the Assembly Accountability and Administrative Review Committee responsible for overseeing the EDD said that Su `` . . . has not done a good job at running the Employment Development Department,'' saying Su's mismanagement ``caused heartache for millions of Californians.''

That is the top Democrat on the committee that oversaw her work in California, saying she did not do a good job at running the Employment Development Department.

What reason is there to think she is going to do a good job then running the U.S. Labor Department?

It gets much worse. As so many hardworking citizens waited in vain for their checks in California after they were told they weren't allowed to work during the COVID shutdowns, as these folks who were entitled to their checks waited for them, one group seemed to have no trouble at all getting benefits and those were people who were not entitled to them, those who perpetrated a massive fraud against the State government of California.

In fact, it was the largest fraud of taxpayer dollars in history. An estimated $32 billion was wrongfully paid out from the EDD to State prison inmates, international crime syndicates, and other criminals. Payments were made to murderers, rapists, child molesters. 133 death row inmates received over $400,000 alone. These hardened criminals didn't have to try hard. They used names like Dianne Feinstein and John Doe.

The district attorney of Sacramento County called the scheme ``relatively easy.'' The individual most responsible, once again, was Secretary Julie Su. She made the inexplicable decision to forego a basic fraud prevention system. She ignored the Federal Government's guidance that claims are to be cross-checked against the prison rolls, which was standard practice in other States.

The agency sent hundreds of benefit cards to the same address, sent cards directly to correctional facilities, issued benefits to infants and centenarians. A January 2021 report from the California State auditor notes that the EDD fraud occurred for three main reasons: First, EDD waited about 4 months to automate a key antifraud measure; second, EDD allowed claimants to collect benefits, even though they were using suspicious addresses; and third, EDD removed a key safeguard against improper payments without fully understanding the significance of the safeguard.

Yet, perhaps worst of all is that Julie Su has refused to accept responsibility.

Just last week at her Senate confirmation hearing, she said, ``As soon as we saw that there was fraud happening, I shut the front door to that fraud.'' That is her testimony just last week. ``As soon as we saw that there was fraud happening, I shut the front door to that fraud.''

However, California's independent State auditor has found that ``despite repeated warnings, EDD did not bolster its fraud detection efforts until months into the pandemic.''

There is no predicting what will happen to our country, to our workforce if that level of mismanagement is brought to the U.S. Department of Labor.

Mr. Speaker, I would like to discuss one more facet of Ms. Su's tenure in California, but before doing so, I yield to the gentleman from Georgia (Mr. McCormick).

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Mr. KILEY. Mr. Speaker, I thank Mr. McCormick for his words. Indeed, the President should pick someone else. Almost anyone else.

What is so really puzzling, mind-boggling about this nomination is that the President has chosen to elevate the one person in the country who presided over a fraud on this scale, the single worst performing Secretary of Labor of any State in the country.

Why would he do that?

That brings us to the final facet of Ms. Su's tenure that I wish to discuss and that Mr. McCormick touched upon as well, which is her ruthless enforcement of the labor law known as AB 5, which President Biden has cited as his model for the Nation.

Su's historic failure to deliver unemployment checks to millions of Californians along with her allowance of this massive fraud is disqualifying in its own right, but I actually think it is her mistreatment of California workers that is most concerning of all.

AB 5 was a law passed in California in 2019. It rendered countless independent professionals unable to earn a living in our State. Writers, interpreters, court reporters, musicians, language pathologists, photographers, forensic nurses, people in literally hundreds of other professions were told they were no longer allowed to practice their profession and serve their clients as they had been doing their whole careers.

Instead, their only option was to find a single hiring entity to monopolize their services and make them a W-2 employee. For many, that simply was not possible, and so they lost everything.

Take, for example, a woman named Jodie, who said: I worked years to gain my skills as an American Sign Language interpreter. It was my goal since I was 9 years old. After AB 5, I lost all three of my agencies. The dream I worked for is lost. I can't provide for my family, and thousands of California deaf won't be serviced.

Andy said: I work with underserved artists of color. None of my career as an artist, technician, designer, and producer would have been possible under AB 5. Artists of color will be less able to create their own work in a field that doesn't favor them.

Jared said: AB 5 forced me to shut down my business. I went from making $80,000 a year in home services to a minimum wage employee. My family trade is gone. I have gone from working 4 days a week to spend time with my kids to not knowing if I can make ends meet working 7 days.

Kathy said: I am a 71-year-old transcriber. I raised six kids and went to work in my 40s, but I had to retire at 62 due to health issues. I depend on my at-home transcription pay to survive and pay my bills. For 8 years, I did okay, until AB 5.

Julie Su has been called an architect of this law, and she is supporting a Federal version that is estimated to cost millions of American workers their livelihoods. After her enactment in California-- and this is the important thing, given that this is now percolating up into Federal law--she used her position as labor secretary to broaden the destructive impact of the law by enforcing it as aggressively as possible.

In fact--and I think this is maybe the most concerning thing--she exploited the COVID-19 shutdowns to hammer the law in even more. She continued with harassing audits, trying to find businesses to hit with fines and penalties. I personally asked the EDD to stop doing this during the COVID shutdowns, and they refused to do so, continuing to target small businesses.

She even defied the will of Congress in the process. Congress had provided benefits to independent contractors through the CARES Act, but put States in charge of distributing those benefits. Under Julie Su, the EDD wrongfully withheld those benefits, as she aimed to exploit the sudden need that independent contractors had to interface with her department. She wanted them to go through the regular unemployment channel, which they weren't supposed to go through, so that she could get access to information that could be used then to conduct more audits and go after more small businesses and to put more people out of work.

You don't need to take my word for this, either. California Congressman Adam Schiff wrote a letter to Secretary Su in April of 2020 rebuking her for failing to release the benefits independent contractors were owed under the CARES Act and requesting urgently that she do so.

Now, tellingly, with Julie Su's confirmation for Secretary of Labor now appearing to be in doubt, her backers are making a last-ditch attempt to save her nomination by absurdly trying to dissociate her from AB 5. None other than the author of AB 5 itself, a major Su backer who now leads the California Labor Federation, told the L.A. Times that Su ``was not involved with the bill at all.''

Yet Su, in her own words, after the law was passed, described in detail her plans for enforcing AB 5 as California labor secretary: ``So we will be doing investigations and audits,'' she said, threatening fines and penalties, ``so that those who want to comply with the need to reclassify can do so and those who don't will understand that's not the kind of economy we want in California.''

``Not the kind of economy we want in California,'' those are her words. Julie Su didn't want an economy in California where you can pursue your own calling, support your family on your own terms, and thrive. She doesn't want that for America, either. That is why Joe Biden has selected her for Labor Secretary, to wage his war on independent contractors, and we simply cannot let that happen.

In closing, there are many, many organizations across the country who have expressed their opposition to the nomination and confirmation of Julie Su for Labor Secretary. I will just list some of them: there is the Air Conditioning Contractors of America; American Hotel and Lodging Association; American Trucking Associations; Americans for Tax Reform; Associated Builders and Contractors; Association of Bi-State Motor Carriers; Center for the Defense of Free Enterprise; Coalition of Franchisee Associations; Consumer Technology Association; Franchise Business Services; Flex Association; Heating, Air-Conditioning & Refrigeration Distributors International; Independent Bakers Association; Independent Electrical Contractors; Institute for the American Worker; International Franchise Association; International Warehouse Logistics Association; Association of Independent Professionals and the Self-Employed; Leading Builders of America; National Armored Car Association; National Association of Home Builders; National Association of Wholesaler-Distributors; National Council of Chain Restaurants; National Federation of Independent Business; National Franchisee Association; International Franchise Association; National Grocers Association; National Ready Mixed Concrete Association; National Restaurant Association; Owner-Operator Independent Drivers Association; DoorDash; Lyft; Competitive Enterprise Institute; TechNet; Fight for Freelancers; Freelancers Against AB5; California Business and Industrial Alliance; Workplace Policy Institute; Job Creators Network; Institute for the American Worker.

You have also had State-level associations weigh in in opposition: for example, in Arizona, the Builders Alliance; Construction Trades; Franchise Action Network; Lodging and Tourism Association; Restaurant Association; Small Business Association; Transportation Builders Association; Trucking Association; and the Independent Electrical Contractors.

In West Virginia, you have the Associated Builders and Contractors; Independent Electrical Contractors Chesapeake; the Franchise Action Network; the Hospitality and Travel Association; the Manufacturers Association; Oil Marketers and Grocers Association; Retailers Association; and Trucking Association.

I encourage Members of the United States Senate to join this broad coalition of small businesses and workers across the country who know that we deserve and need better than the Secretary of Labor.

I urge Members of the United States Senate to reject this nomination, and I urge the President to appoint a Secretary of Labor who will be on the side of American workers.

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Mr. KILEY.

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