A contentious congressional hearing that was billed as “examining the policies and priorities of the Department of Labor” ended with a member of Congress calling for the resignation of Acting Labor Secretary Julie Su. 
Appearing May 1 for a hearing before the House Education and the Workforce Committee, Su had noted in her testimony that the Department of Labor had requested $4.7 million for the Employee Benefits Security Administration (EBSA) to implement provisions of the SECURE 2.0 Act, contending that its budget has not increased proportionally with its increased responsibilities.
“With the requested resources, EBSA will implement a wide range of retirement-focused provisions and numerous new requirements established under the SECURE 2.0 Act, which includes amendments to existing law as well as new provisions focused on increasing retirement savings, improving rules governing the administration of retirement plans, and lowering the cost of setting up retirement plans,” she stated in her testimony.
Fiduciary Focus
But the hearing featured few, if any, questions about the SECURE 2.0 Act, and instead featured numerous questions and criticisms about the DOL’s recently finalized fiduciary rule, as well as Su’s service in an acting capacity.
Under questioning from Rep. Tim Walberg (R-MI) and other Republican members, Acting Secretary Su expressed confidence that the newly released retirement security rule, also known as the fiduciary rule, would pass muster with the courts.
In noting that the previous fiduciary rule was invalidated by the U.S. Court of Appeals for the 5th Circuit, which found, among other things, that the 2016 rule exceeded DOL's authority, Rep. Walberg asked how the recently finalized rule differs from the previous rule in that it covers the same sales practices. “Why do you expect that the courts will view the 2024 rules … differently than they ruled before when they threw them out?” Rep. Walberg inquired.[1]
“We are very confident that the rules are not only within our authority but that they take into account the existing case law,” Acting Secretary Su stated in response, further explaining that the DOL held listening sessions and took into account the various comments received.
Further pressed by Walberg on differences with sales practices, Su contended that the definition of a fiduciary is different from the previous rule.
“I don't read it that way at all and I don't know how the court will read it, so I guess we wait and see, but otherwise it's wasted time [and] it's concerning for the industries themselves,” Rep. Walberg stated in response.
Rep. Rick Allen (R-GA) had a similar line of questioning, suggesting that the comment period for the fiduciary rule was far too short and that the DOL had a pre-determined outcome in promulgating the rule. To that end, he pointed to a recent article that apparently quoted EBSA Assistant Secretary Lisa Gomez about how the rule hadn’t been watered down.
“The DOL has emphasized that changes were made to the proposal based on the input it received, however, Assistant Secretary Lisa Gomez said in The New York Times that there's nothing in these clarifications or changes that one should interpret as a watering down or a real change in the position of the proposal,” Rep. Allen observed, further inquiring, “Which is it—were changes made to reflect stakeholder input on the rule or was input ignored because DOL had already decided the desired outcome.”
Su contended that there was no pre-determined outcome with the rulemaking and, once again, argued that the DOL did consider the various comments received.
Further Observations
Additional lines of questioning came from Reps. Eric Burlison (R-MO) and Ron Estes (R-KS), who both expressed concern about the rollout of the rule and the 60-day comment period, as well as the substance of the rule.
Rep. Estes also noted that he took offense to the White House’s characterization of the rule as “getting rid of junk fees,” noting that there’s no reference to junk fees in the rule’s preamble and that he’s concerned about higher costs being passed on to people trying to save.
Meanwhile, Rep. Virginia Foxx (R-NC), who chairs the committee, kicked off the hearing by complaining that the Department of Labor has been slow to respond to congressional inquiries, and threatened to subpoena Su if the committee does not receive a response by May 6 on the department’s post-COVID back-to-work plans.
Chair Foxx also asked Su about the Employee Benefits Security Administration’s investigation timelines, requesting that she commit to providing the committee with reports on outstanding EBSA investigations. In response, Su maintained that the department always seeks to ensure that investigations are completed in a timely manner.
At the end of the hearing, Rep. Kevin Kiley (R-CA), who was chairing the nearly four-hour hearing at that point, called for Su to step down.
“This has gotten ridiculous; you've shattered all records as far as an unconfirmed nominee clinging to power and you know regardless of whether this is technically a legal arrangement, which is very much an open question, that's why everything the department does right now is under a legal cloud. …The Senate had ample opportunity to confirm you last year; they elected not to. In fact, they returned your nomination at the end of the year. The Senate has had ample opportunity to confirm you this year and they've chosen not to, so I would implore you to do the right thing—it's time for you to resign and we'll get a new secretary who can go through the process and be confirmed by the Senate.”
And with that, the hearing was adjourned.
Footnote
[1] As part of the same question, Rep. Walberg had also asked about the DOL’s overtime rule.
Finding out More
Acting Secretary Su’s testimony is available here, and a replay of the hearing can be viewed here.
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