In most organizations, when a leading official is responsible for tens of billions of dollars in fraudulent payments and spearheading unworkable employment policies, they are quickly sent packing.
But for the Biden Administration, such failures call for a promotion. That’s why Julie Su currently presides over the U.S. Department of Labor as Acting Secretary (acting because even the Democratic-run Senate lacks the confidence to make her position permanent). Her status comes even after numerous well-documented failures during her time overseeing California’s state labor agency.
Too little has been said about how the lead enforcer of labor policy in the world’s largest economy presided over $33 billion in fraudulent pandemic unemployment payments in America’s largest state. Such poor oversight came as Su refused to heed warnings from the state’s auditor that her programs were uniquely vulnerable to fraud.
But even worse, Su is trying to pull a fast one over taxpayers to cover her own tracks.
California was the recipient of a massive $23.8 billion federal loan in 2021 intended to support our state’s unemployment insurance program amid Covid-19. While many states received varying loan payments, only California and New York are still delinquent in their debt. California alone still owes over $18 billion.
But Julie Su isn’t pushing for a state government which had a $100 billion post-pandemic surplus to pay its debt to federal taxpayers. Governor Gavin Newsom even proclaimed in 2022 that “no other state in American history has ever experienced a surplus as large as this” – right before a massive spending binge.
Instead, Su is suggesting the possibility of waiving California’s bill (at the expense of U.S. taxpayers) and effectively clearing the deck on money stolen on her watch. This possibility was outlined in a December Department of Labor memo, as cited on page 186 of an official State of California financial report. California’s report noted that “once federal approval is received…federal liabilities will be removed from future financial statements.”
In other words, Julie Su appears to have told Sacramento politicians that she’s more than happy to use her new role to cover up a startling lack of oversight in her former position. She’s the fox guarding the hen house.
California apparently took Su up on the offer, noting in their financial report that the state Employment Development Department (EDD) formally requested the debt relief in a February 2024 letter to the Department of Labor. I joined House Ways & Means Committee Chairman Jason Smith in requesting a copy of this letter by May 30 - but heard nothing but crickets.
Julie Su’s attempt to hide her past failures at taxpayer’s expense is unbecoming of a public servant. But her poor oversight of California’s unemployment program also has other consequences.
For example, money improperly paid to fraudsters means that thousands of Californians forced out of work by government Covid mandates couldn’t receive unemployment benefits in a timely manner.
Additionally, the job creators responsible for supporting the state’s unemployment insurance program have been forced to pay higher taxes due to California’s unpaid federal debt. My Protecting Small Businesses from Imposed Tax Hikes legislation would provide relief for small business owners who will continue to see higher unemployment taxes so long as the state still carries this debt.
These hardships suffered by taxpayers come amid a cloud under Su’s tenure, marked by her failure to secure the requisite 50 votes required for the Senate-confirmed position.
While Su never should’ve been placed in charge of labor and workforce policy in the United States, this conflict of interest is the latest proof that new leadership is needed at the Department of Labor.