Last week I talked with Hugh Hewitt, a nationally syndicated radio show host, about government regulation run amok. Hugh asked me if I thought the CPSC’s new regulations were straining an already struggling economy. I wholeheartedly agreed, and discussed (again) how the agency is not doing the required leg work before issuing rules. I will continue to work to change the poorly-thought-through rules now being implemented at the Commission. Click on the link below to listen to my interview with Hugh.
Archive for the 'Certification' Category
Last week I discussed both substantive and process issues surrounding the periodic ongoing testing rule the majority shortly plans to ram through the commission. A majority of the commissioners proactively decided that, since they were not concerned about the costs of the rule, they did not need to do a cost-benefit analysis. This is true even though agency past practice and directions from the President would suggest that as the appropriate course of conduct.
Last week I sent a letter to the Administrator of the Office of Information and Regulatory Policy, who is the person designated by the President to assure that the costs of regulations do not outweigh their benefits. Here is a copy of that letter. Should I get a reply, I will be happy to share that as well.
The past three days in this blog I have discussed my disagreements with the three-member majority on the Commission about the pending testing and certification rule they plan to ram through in October.
- The proposed rule applies a one-size-fits-all approach to third-party testing that is guaranteed to be a misfit rather than requiring third-party testing where it is the most necessary (i.e., where the risk is highest);
- The proposal needlessly sets detailed definitions of a “reasonable testing program” in regulatory stone; and
- The voluntary component part testing rule—which holds the promise of actually lowering costs and for which work was completed some time ago—has been needlessly held back while we work on the testing rule.
I also question the insistence on rushing this flawed product through. H.R. 2715, passed just weeks ago, expressly instructed us to consider the costs of our testing rules and get public feedback on how to mitigate those costs while still ensuring the safety of children’s products. It would make sense to get that information before we issue the rule, but the three-member majority doesn’t want to do that. I have to ask: If we don’t have time to get it right the first time, when are we going to have time to fix it?
Congress addressed another problem that I had with our proposed testing rule. The CPSIA required companies to submit “random” samples of their products for testing, but didn’t define the term “random.” It would have been good for the Commission to interpret “random” to mean that manufacturers couldn’t rig the game by choosing “golden samples” they knew would comply.
Our proposal, however, did not take that plain-language approach. It read “random” in a much more technical, complicated sense that might have meant lots of money for statisticians but little or no safety benefits beyond those of a common-sense reading.
In H.R. 2715, Congress resolved this dispute. The new law makes clear that Congress intended to prevent the cherry picking of samples by striking the word “random” and replacing it with “representative.” We could have done this by interpretation, but we chose to let others clean up our mess after the fact. Sound familiar?
- Congress has expressly informed us that the majority was mistaken on at least one key aspect of the testing rule.
- The new law re-shapes the landscape to require us to look at ways to reduce costs.
- The proposed testing rule has serious flaws that will make it more burdensome than it has to be and less effective than it could be.
Given all this, prudence indicates the path forward. We should take a few moments to re-examine what we’re trying to accomplish and how we’re trying to accomplish it. If we do that openly and sincerely, we will arrive at a better product.
Instead, because three members of the Commission want to do all they can while they still have their majority, they are poised to foist a misguided, misconceived, and likely expensive regulation on an already fragile economy. All with the promise that sometime in the future it could be fixed. Man up and fix it now.
My last two blogs have discussed shortcomings in the soon-to-be-voted-on testing and certification rule. A third aspect of this testing and certification rule that concerns me is how it has mired another rule in an arbitrary process: our voluntary component testing rule.
The component testing rule clarifies that testing done by a component part manufacturer can be relied upon by the manufacturer of the final product. The rule would allow component part manufacturers (like the company that makes the plastic for the teddy bear’s nose) to test and certify those component parts themselves. The final manufacturers of consumer products (here, the teddy bears) could then pass through the compliance maze more quickly by relying entirely on components that were already tested and certified. The goal of the component testing rule is to mitigate the burden of testing by spreading those costs across the supply chain. It recognizes that, from a safety standpoint, the whole really is just the sum of its parts. And, it effectively pushes safety up the supply chain.
The component testing rule could have been issued months ago. Indeed, all year long I have been asking the majority why they were holding back this rule and have yet to receive a satisfactory answer. Apparently, their thinking is that if this is tied to the testing and certification rule, it will make the whole indigestible package more palatable. They are wrong in thinking this. And they are wrong, by holding the component parts rule hostage, to regulate with such disregard for how their actions impact those who have to live with them.
Yesterday, I talked about how the final rule for testing and certification will be up for Commission vote shortly. This, in spite of directions from President Obama and Congress, our staff’s opinion, and the common sense judgment that we should pause and consider the costs and benefits of the testing rule. This rushed timetable and the contents of the draft final rule were decided by the majority, in defiance of those express concerns.
I said that we should take a risk-differentiated approach, tailoring the requirements of the rule to risk so that it will make a difference in safety, not just increase cost. Today, I want to talk about another major piece of the testing rule that troubles me—the setting of “reasonable testing program” requirements for all products (not just children’s products). The law requires that manufacturers of non-children’s products use reasonable testing programs for their safety and compliance obligations. The law neither defines the features of a reasonable testing program, nor requires us to do so in rulemaking. This makes sense. The pending proposal would change that, issuing detailed requirements for a reasonable testing program and—similar to many of our recent actions—apply those requirements “one size fits all.” It’s a step we don’t have to and shouldn’t take, for several reasons.
- Including reasonable testing program requirements in the current testing rule is unnecessary and further complicates an already complicated regulation.
- It is irrational to suggest that a reasonable testing program is the same for every product and irresponsible to cement that program in regulations that have the force of law.
- Companies can tailor their compliance testing programs to be effective for particular products. There are plenty of best practices sources they can lean on, including guidance from our own talented employees.
- Companies always have the obligation to meet statutory requirements, whether that is for lead content, phthalates, flammability, or any other requirement.
Defining a reasonable testing program through regulation is unnecessary, ineffective, and an irresponsible use of our safety resources. The provisions defining a reasonable testing program should come out of the rule.
I recently wrote about my hope that the majority of the Commission would seek and receive public input on our pending periodic testing and certification rule and the costs it will impose before we hand that rule down. I now know that hope was in vain, and three Commissioners will insist on forcing the rule through on the promise that the Commission will fix it as needed over the next year. Perhaps I was naïve to hope that the country’s economic worries, Congress’s direction in H.R. 2715, President Obama’s urging in his Executive Order, our staff’s practical concerns, and just plain common sense might steer the majority away from a course that is both irresponsible government and inconsistent with the spirit of the new law.
It is now apparent that the final rule will be before us shortly, and the contents of that draft final rule have been predetermined by the majority. Without getting into the minutiae of the rule, I believe there are fundamental principles it needs to reflect to be effective in balancing consumers’ needs for reliably safe products and businesses’ needs for regulation that places only as much burden as is necessary to meet our duty to consumers.
When the proposed rule came to the Commission in April of 2010, I worried the language did not strike that balance and, actually, made very little attempt to do so. In fact, when three Commissioners voted down my suggestion that we consider the costs of the proposed rule and regulatory alternatives to meet the objectives of the statute, they declined even to ask about the consequences of the action they are so eager to take. In the 17 months since, we’ve had clear messages from both Congress and the President that we should consider the costs and benefits of our actions and work to minimize the former while maximizing the latter, but three Commissioners have decided to summarily ignore those calls for common sense.
The Consumer Product Safety Improvement Act of 2008 (CPSIA) requires that, before a company first introduces a children’s product to the market, it send the product to a third-party lab for compliance testing. It also requires the same third-party testing whenever there is a material change in a product.
The CPSIA further requires periodic testing for children’s products. This means that, as long as a company makes a particular product, it has to test that product at regular intervals to ensure it still complies with all relevant laws and regulations, even if nothing about the product has changed.
The CPSIA, however, gives CPSC the flexibility to decide, based on risk, how and when companies can do their periodic testing in-house and whether they are required to use a third-party lab. Our current proposal requires periodic third-party testing for every children’s product, continuing our recent trend of clumsy, one-size-fits-all regulation that imposes heavy burdens on businesses large and small while doggedly refusing to consider costs, risks, or benefits.
For some categories of children’s products, of course, third-party periodic testing makes sense. It makes sense where the risk is highest, such as for products that very young children are in close contact with for extended periods of time. However, when a child’s interaction with a product is more distant, intermittent, or incidental, third-party testing may not be necessary or may not need to be done with the same frequency.
Different treatment for different risks should be intuitive. Any mother would tell you she’s more concerned about the safety of her child’s pacifier than she is about the brass knob on the drawer of a dresser that happens to be in the child’s bedroom. However, three Commissioners are eager to ignore that wisdom and treat the pacifier and the brass knob identically for third-party periodic testing. Not only does this fly in the face of common sense, it also wastes CPSC’s limited resources.
Our new law (H.R. 2715) grasps this common sense. Under it, we can give small businesses exemptions or lower-cost testing alternatives unless they make any of six specific materials or products: lead paint, cribs, pacifiers, small parts, children’s metal jewelry, walkers, and durable infant/toddler products (like high chairs, bath seats, and play yards). In this new law, Congress recognizes that the products on that list are a greater risk and should face more scrutiny. Why shouldn’t we do the same? The CPSIA allows it, common sense suggests it, Congress’s most recent law mirrors it, and resource limitations urge it, so let’s focus the most attention on the biggest risks, rather than setting a bar for the highest risk product and then mandating every other product meet the same demands.
Regular readers of this blog will know that I am primarily concerned about two things: the safety of consumers, and the unnecessary costs of the regulations we impose. My concern for costs is at its lowest when risk is at its highest. If a company is making pacifiers, I want those pacifiers to go through the tests necessary to make sure they’re safe. I don’t want the tests to be any more expensive or burdensome than they need to be, but whatever costs are necessary are necessary. Conversely, where the risk is lower (if it exists at all), in-house production testing or other QA/QC techniques may be the appropriate way to make sure the products continue to comply.
This risk-differentiated approach is what I will be looking for in our periodic testing and certification rules. One-size-fits-all fits no one well. Let’s tailor the requirements to the risk and require third-party periodic testing where it will make a difference in safety, not just cost.
Much of CPSC’s work under 2008’s Consumer Product Safety Improvement Act (CPSIA) is done, but one giant piece remains: the periodic testing and certification rule. That rule will mandate periodic testing for manufacturers of children’s products, resulting in repeated testing against myriad standards and requirements. As it was proposed, the rule requires that this ongoing testing be done by third-party laboratories.
There are more than a few looming questions about how we will design and implement the rule. Perhaps the most fundamental is whether or not we will continue the majority’s approach of handing down needlessly expensive, one-size-fits-all regulations that treat the biggest international corporations, the mid-size companies, the niche businesses, and the one-person crafters the same.
There is reason to hope, however, that we will chart a new course. The CPSC reform law the President signed last Friday (176k PDF) requires us, within two months, to ask the public for information about the costs of third party testing requirements and ways to minimize those costs. A reasonable reading of our new law should lead us to give the public the chance to share their views with us and to give ourselves the chance to understand and consider those views as we develop the final rule. This would lead to a more thoughtful, more collaborative, and more transparent testing rule. As an added advantage, this would also help us develop a final rule that does not impose unnecessary costs on an already stressed economy.
My hope is that my colleagues will recognize how invaluable public input is, seek it now, and produce a testing and certification rule that utilizes that input. I’m hopeful the majority has understood the clear message from Congress and the President that we take the time to understand what it is we’re doing before we do it.
Last night Congress passed and sent to the President for signature legislation amending the 2008 Consumer Product Safety Improvement Act (CPSIA). While this Congressional action is long overdue, the question I have is will this agency implement the new law with more common sense than we used before Congress acted.
As I thought about how we will act in the future I recalled two notes that I recently received that moved me greatly. They each share themes—both letters relate how our CPSIA regulations are forcing small companies making perfectly safe products to shut their doors, and both authors are mothers.
Here is what one letter said:
…there are way too many casualties of this law—many of them women who are trying to enter the market place and compete.I am a mother of two daughters who was so thrilled to have found what I believe was my life path…this law and the chaos that has surrounded it for the past three years has left me and many others with their business-hungry hands financially tied…
And from another writer:
I am a business owner, mother and lifelong crafter and if anyone would have told me MY government would punish me because of the mistakes of multi-billion dollar toy companies I would never have believed it…I am closing my business…because of the CPSIA.
These business-owners and the many others I hear from who have been most impacted by the oppressive burdens of the CPSIA are women. While we cannot salvage the jobs we have cost and the livelihoods we have ruined, perhaps going forward with the new law, we can be more mindful of the potential damage we do.
It’s tough to put a face to lost jobs and failed businesses. And it’s easy to dismiss the concerns of a faceless entity, especially when the other image is the face of a child. But these companies are not faceless entities; they have real faces too, many of them female.
It is a simple economic reality that many small businesses are women-owned. It is a simple economic reality that the burdens of regulation fall more heavily on small businesses than they do on large corporations. Whether a 10-employee children’s clothing manufacturer or a stay-at-home mom who helps put food on the table by hand-making toys, our regulations, especially for testing, make the chances for survival virtually nil.
We’ve heard these warnings, but always in the abstract. “Some manufacturers may go out of business,” our economists tell us. It is tougher to dismiss that one line when you realize there is no “manufacturer.” There is Susan, who sews handmade dolls. There is Kathy, who makes little girls’ dresses.
The CPSC has been regulating as if it does not care what damage is done if it has the political victory of claiming (with scant evidence) to protect children. How does the majority of Commissioners make children healthier or safer by putting their mothers out of work with regulations of negligible benefit?
This agency has been voting to do whatever has the political appeal of appearing to protect consumers, regardless of how little it actually does to make anyone safer. But the letters I get show who really pays the price – small businesswomen. These aren’t the majority’s boogeymen – big, heartless corporations. These are mothers, who make toys and clothes for your children with all the love and care they have for their own. But we have been punishing them anyway and shutting down what the Small Business Administration has called a key job-creation engine.
The legislation on its way to the President clearly is a compromise and does not address all the problems in the CPSIA. However, it does give the agency the opportunity to take a fresh look at the costs and benefits of the rules we issue, especially as they relate to small business. And, importantly, it will allow us to put a face not only to those we are trying to protect but also to those we crush with overly-burdensome regulation.
It’s time to give up the coy euphemisms (such as “safety delayed is safety denied”), stop talking about the harm we are doing only in impersonal terms like “economic impact,” and give that harm its real face. It is time to think about who we are hurting when we enact stifling regulations that have little benefit. If we’re going to insist on these regulations, then we need to be willing to face the women whose companies we are shutting down and shutting out. We need to look these women in the face and tell them why a mere slogan is more important than their ability to provide for their families by making safe, enjoyable products.
The legislation the Congress just passed gives us the opportunity to regulate more carefully, intelligently, and compassionately; I hope we take it.
It’s a sad day when the Consumer Product Safety Commission (CPSC) – charged with keeping consumers, especially children, safe from harmful products – can’t even agree that it will demonstrate “particular concern for the safety impacts on children” when it enforces its rules. Yesterday was that sad day.
Two weeks ago, when a majority of the Commission decided to impose a heavy-handed, indiscriminate lead requirement when there were plenty of reasons not to, I suggested that we direct staff to draft an enforcement policy to let people know how we would seek to enforce that rule. What followed were two weeks of negotiations that resulted in a rather empty “statement” drafted at the Commission level that does little to help the community understand our goals.
I had hoped we could, at least, tell people we will enforce the limit with “particular concern for the safety impacts on children.” This would tell manufacturers of things kids actually use, touch, and mouth that they needed to be extra cautious. I was not able to reach agreement to include this phrase. Apparently, enforcement with “a particular concern for the safety impacts on children” isn’t a message we want getting out.
During yesterday’s debate, we heard that we can’t make our enforcement policy public or it will turn into a “How to” manual for getting around our rules. However, such a public policy is not an unusual idea. Other agencies do it, and, indeed, our own agency has done it before, and we’re still able to enforce our regulations especially when companies get either sloppy or cheap and endanger consumers.
During the debate we also heard that kind of public enforcement policy would be “backdoor rulemaking.” I fail to see how it is anything other than the kind of open, transparent governing we should be doing. We are, after all, supposed to govern in the sunshine, so why not put our policies out front so people know just what it is we’re trying to do? It seems odd to me that it would be “backdoor rulemaking” to talk publicly about what we’re doing privately. It seems to me that, if governing openly is “backdoor rulemaking,” then governing in secret is “trapdoor rulemaking”, and that’s a style of governing I can’t support.*
Instead of a clear, open policy that would put manufacturers of the products most likely to cause harm on notice that they needed to adhere to very tight safety programs, we wound up with the statement we approved yesterday. I agreed to the statement because it does acknowledge that lead testing at the level we’re requiring is, at best, an inexact science, and it assures that staff will consider that fact as appropriate when bringing enforcement actions.
Nonetheless, when we can’t even agree to let people know our enforcement decisions embody “particular concern for the safety impacts on children,” then perhaps it’s time to re-think how we approach regulating.
Here is the statement that we did agree to:
The Consumer Product Safety Commission is cognizant of the claims that some manufacturers have made regarding their difficulty in consistently meeting the 100 ppm requirements because of the inherent variability in testing methods and the variability in materials they use in the manufacturing process.
The Commission always attempts to apply good judgment, common sense and fair and reasonable approaches when it enforces its regulations. The Commission staff will always consider documented claims made by manufacturers regarding their difficulty in consistently meeting the 100 ppm lead content requirements.
*In addition to my concerns on the limited value of the statement we passed, I also believe the majority, in opposing a more substantive policy, is misusing the term “backdoor rulemaking.” In real backdoor rulemaking, agencies establish new rules through procedures other than the familiar (and open) notice-and-comment process the law provides for rulemaking. An example of this would be using enforcement powers to force companies into complying with an agency’s demands, thereby setting a de facto rule without having to go through actual rulemaking.
Today the Washington Times posted my latest Op Ed piece on overregulation and its costs on society. Let me know what you think. Has your company experienced hardships because of the regulating we’re doing? Have you had to exit the children’s market altogether? As a consumer, have you noticed the options for children’s products has decreased at the stores? I want to hear from you. Here’s the op ed in its entirety:
Regulatory Reform: All Talk, No Action at the CPSC
The Obama Administration has recognized that excessive and unnecessarily burdensome regulations are a drag on the economy. As the Administration has worked to promote job creation, it has publicized its efforts directing agencies to eliminate or revise unnecessarily burdensome and inefficient regulations. Apparently, the Consumer Product Safety Commission (CPSC) has not gotten the word.
The CPSC’s failure to get the word is no more apparent than in its efforts to implement the Consumer Product Safety Improvements Act (CPSIA). The CPSIA was passed after agency recalls of imported products shined a light on the issue of import safety. The goal of the law is to assure that products intended for children are safe, a goal for which there is universal agreement. The devil, of course, is in the details, and the details of implementing this laudable statutory goal are devilish for sure.
Under the law, permissible levels of lead in children’s products are to be reduced progressively, over time. Currently, children’s products must be 99.97% lead free, and in August, that level increases to 99.99% lead free, unless the agency finds that achieving that minute trace level is not technologically feasible. In an unfortunate example of politics driving science, the agency just voted along party lines, determining that there are no technological impediments to achieving that level. That decision was based on a record that is short on facts but long on speculation. Let’s look at what we do and do not know.
The most important issue is public health so let’s look at the risk of lead exposure. While it is a given that children should not be exposed to lead in their environment, it is also a given that consumer products are not a significant source of lead exposure. Elevated blood lead levels dropped dramatically from the mid-1970′s when lead paint and leaded gasoline were banned. According to the EPA, exposure to leaded paint in old houses and contaminated dirt and dust remain the biggest sources of lead exposure. Other sources of lead include drinking water (because of lead plumbing materials still found in some municipal water systems), certain dietary supplements, and certain kinds of pottery, ceramics and crystal, among other things. Even chocolate can have up to 10 times more lead than what we are mandating for various consumer products. CPSC staff has told us that the substantial health benefits from lowering lead in children’s products have already been achieved. The agency expects that further lowering the lead limits to pick up these trace amounts will result in minimal increased health benefits.
If the health benefits of this policy are not appreciable, what about the costs of moving from a 99.97% to a 99.99% lead free environment? Lead can be a trace contaminant in recycled plastics and metals. Therefore, our staff has advised manufacturers of children’s products that, to meet the new level, they may need to avoid the use of recycled metals and plastics. We do not know is the extent of the use of recycled materials in children’s products. We do know that virgin plastic is between 50 and 100 % more expensive than recycled options. Therefore, contrary to the efforts of other agencies trying to push the use of recyclables, the CPSC is pushing industry away from recyclables to more expensive materials without considering whether there is an appreciable health benefit.
With respect to metals, all of the screws, nuts, bolts, and other metal hardware used in children’s products will need to be 99.99 % lead free. We know that steel under the statutory limit–such as surgical stainless steel – is available but is substantially more expensive than general use steel. Lead-free brass alloys will cost manufacturers at least 10 % more than other brass alloys. Low lead tin is available at a 10 to 15 % price premium. There are, however, questions about availability and variability of these alloys. The availability of a low-lead alloy does not necessarily indicate that it is economically suitable for a particular application. There also is a concern that as we push manufacturers to use higher cost materials, they may use less durable materials, such as substituting plastic for metal. This result would present its own safety issues. In addition, the costs of testing to assure compliance with the 99.99 % lead free limit are expected to increase significantly.
These cost increases are likely to result in a combination of price increases and reductions in the types and quantities of children’s products made available to consumers. According to the excellent CPSC staff, some firms may reduce the selection of children’s products they manufacture, may exit the children’s market altogether, and in some cases, may even go out of business. The CPSC staff notes that these costs will have relatively greater consequences for smaller manufacturers and artisans who have less bargaining power, and more limited production runs over which to spread testing costs.
These are not speculative costs–they are real. The bicycle industry has told us that, as a result of the CPSIA, they have experienced a 50 % cost increase for their product components. They have told us that 10 out of 40 manufacturers – 25 %– have stopped producing children’s bicycles and that they expect even fewer manufacturers producing youth bicycles once the new lead limit goes into effect. Some all-terrain vehicle manufacturers have responded to the lower lead limits by no longer producing youth ATV’s, leaving children no option but to use the more dangerous adult ATV’s. The Handmade Toy Alliance, representing small toy makers, actually maintains a growing list of companies that have been driven out of business by this law; the list continues to grow. This is not just some theoretical exercise; these are real people who have lost real jobs and who are being forced to pay more for products with no real safety benefit.
In brief, this drive to a pure lead-free environment with respect to children’s consumer products, especially those that children cannot mouth or swallow, will not give us more appreciable public health benefits. No child has gotten lead poisoning from riding a bicycle. This effort will, however, drive up the costs of materials, drive some producers out of the market, cost jobs, and reduce consumer choice. All the talk about regulatory reform, if not backed up by action, will not change these results. Leadership and a sensible regulatory policy that is mindful of the real world consequences of government action perhaps could.