Archive for the 'Congress' Category

Firing Blanks

While some of us may be old enough to remember playing with toy cap guns, this relic of another time has pretty much faded into the memories of kids, now long grown up, who counted the Lone Ranger, Matt Dillon or Dale Evans as a hero—except at the CPSC.  Today the Commissioners received a proposal to repeal longstanding regulations dealing with toy caps.

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This proposal is part (actually, the biggest part) of the agency’s “commitment” to undertake regulatory review.

I have written before of the agency’s disregard of the President’s direction to agencies to undertake rule review. He said that “if there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them.” Apparently we have combed our rules and the repeal of the toy cap rule is all we could come up with. Never mind that this rule was already subsumed by another regulation and that other than cleaning up the Code of Federal Regulations, our actions have no effect—no one claims that the toy cap rule is stifling economic growth. Never mind that it took well over a year to go through the process of repealing a rule that impacted no one.

Yet there are many rules on the books here at the CPSC that do needlessly stifle economic growth. The testing rule is a good example of where we went overboard in our enthusiasm to regulate. In 2011, Congress asked us to take another look at testing costs and to take action to reduce the costs and burdens of testing consistent with consumer safety. We have repeatedly asked for comment on the same issues and then slow-walked any effort to take action in response to those comments.

Rather than taking honest action to address real pressing problems presented by overly-broad rules, we have hidden behind a rule review fig leaf—toy caps. It would be funny if it were not so serious.

Marshall Dillon, where are you when we need you?  Load up your toy cap gun and come to the rescue.

CPSC to Congress: Still Kicking the Can

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The government shutdown eclipsed an important letter that the agency received on October 1 from our congressional overseers asking us explain our failure to move forward on addressing the costs of CPSIA-mandated third-party testing. You will recall that Public Law 112-28 required us to address those costs and let the Congress know if we needed new authorities to do so. Congress asked for a response by October 21—today. No answer has yet gone back to the Hill, although the shutdown explains some brief delay.

But every day that we delay in reducing the costs of often-unnecessary testing we fail to perform our job to regulate rationally, opening the agency up to deserved criticism. And it is no wonder that Congress asks why we haven’t addressed this issue. To review: In November 2011, we asked the public for ideas on reducing testing costs and, based on some of those comments, our staff came up with a list of 16 recommendations. A year later, the Commissioners pared the list down to nine items, and then further shrunk it down to four ideas, none of which have been acted upon.

It has been said that there is a six-word formula for success: think things through, then follow through. Our regulations on third-party testing were not thought through, so Congress stepped in, asking  us to try again and this time follow through by either addressing the problem or asking for authorities to do so. Our response? We kicked the can down the road.  Maybe it’s wishful thinking, but I do hope this letter draws enough attention here to trigger real follow-through.

Like others, I will be most interested to read our response to the Congress, whenever it comes. One suspects we will point to the fact that we have gathered public comments on at three separate occasions. One further  suspects we will plead poverty, saying we have no resources for doing this important work. But asking stakeholders to comment over and over again on the same issues does not advance the ball. And claiming lack of resources as preventing solutions to problems of our own making rings pretty hollow.

Ben Franklin said, “Never confuse motion with action.”  We have had lots of motion.  We need some action before those who would benefit just give up.

Unfinished Business

In Washington, sometimes repeating something often enough seems to make it true. We see this phenomenon working in the press stories and speeches marking the CPSIA’s fifth anniversary last month.

Although the law has its strengths and weaknesses, the real story is the unrealistic tack that the CPSC has taken in implementing the CPSIA, changing difficult circumstances into nearly impossible ones. Operating from the assumption that if some regulation is good, then more must be better, the agency embarked on a course that seeks to cover all risks—real, speculative, or imagined—rather than crafting regulations to address known unreasonable risks of injury. That our regulations go well beyond what the new law requires is not a fact that seems to concern us. 

One problem with this approach is how divorced it is from the real world. Our regulations are overly-broad and so ultra-complex that only companies with swarms of lawyers can hope to fully understand and comply with them. Thus questions necessarily arise as to how to truly comply with our regulations. And, of course, those questions have been pouring into the agency.

This issue is brought home by a new report from the Handmade Toy Alliance documenting the experiences of small toy manufacturers and importers under the CPSIA and CPSC’s implementation of it over the past five years. HTA members are those who bring excitement, creativity, and imagination to the world of play. None of the products they make presented the safety issues that prompted the CPSIA. Yet this group has felt the brunt of the law more severely than others. Here are some of their observations about the impact of the CPSC’s implementation of the law:

  • “The [testing] rule overwhelmingly favors large manufacturers at the expense of smaller ones. . . . A small business owner could develop what they believe is a reasonable testing program, but it is unlikely to meet the CPSC’s strict interpretation.” HTA points out that we have designed a rule that tilts to the benefit of the large company and which small companies cannot meet.
  • Due to the onerous nature of the requirements, many small businesses will choose “the path of least resistance—to continue doing what they have done for years to assure they produce a safe product [and] use their experience and wisdom to guide design and manufacture, and [to] form relationships with their customers. . . . [S]ome portions of the requirements are adhered to and others are ignored because of costs and complexity.” In other words, small producers will focus on safety and only selectively comply with those portions of our rules they can meet or understand. Creating rules that do not improve safety but contribute to an approach of selective noncompliance is dereliction of our duty as regulators and stands rational regulatory policy on its head.
  • Further, some “handmade toy makers have simply gone out of business or chosen to make products that are not designed for children because the CPSIA and subsequent relief efforts preserve a hurdle too high for small business to clear.” I wonder why those who are praising the passage of the CPSIA find this to be a good result.

Are these not serious flaws attributable to the CPSIA and the agency’s implementation of it? I believe so and they are compounded by this agency’s unwillingness—through over two years of procrastination—to address the unnecessary burdens of our rules as we were directed to do by the Congress. The public has identified ways to ease the burdens, our staff has identified ways to ease the burdens, and I have even added to the list—yet we have not taken any action to implement concrete suggestions, all the while ignoring congressional directions to take action. The HTA report contains a list of actions the agency could take that would ease the burdens of small producers while maintaining safety.

HTA concludes, “The missteps of a few very large toy companies precipitated regulations which damaged thousands of small and micro U.S. businesses and continues to encumber those that survive. . . . Congress and the CPSC must move forward with meaningful solutions that are funded and given priority.”

I have raised these issues with my colleagues repeatedly (and as recently as this month when we voted on our upcoming regulatory agenda). I have been repeatedly outvoted and told that reducing the burdens of our regulations is not a priority of the agency. Again, I ask, when will we turn our attention to correcting the problems we made?

More Than Just Listening

CPSC recently held a public hearing to get input from stakeholders about its agenda and priorities for FY 2014 and FY 2015. We heard from two panels of consumer advocates and manufacturers’ associations. Many thought-provoking subjects were discussed. I found the topic of child safety in low-income households, raised by the Consumer Federation of America, to be an important challenge to address, not just at CPSC, but across the federal government. (As I have written before in this blog, some of our current policies risk pricing low-income consumers out of safety.)

Two other topics were particularly noteworthy. The Handmade Toy Alliance (HTA) said that signing up for the “small batch manufacturer” registry—exempting them from certain third-party testing requirements—did not substantially ease their burden. Even though they were technically exempt from third-party testing, HTA’s members still must meet various statutory limits and, crucially, are often unable to do adequate testing without engaging third-party testing labs. Further, HTA pointed out the requirement added by the Commission to post on its website the name of every company that received this exemption was a deterrent to companies to participate and thereby have their business data posted. It is no surprise, then, that although we expected upwards of 30,000 companies to sign up, only about 500 are have so far.

Another issue raised by HTA, as well as the Toy Industry Association (TIA) and the American Apparel & Footwear Association (AAFA), was the need for CPSC to dedicate resources, pursuant to Congress’s direction in Public Law 112-28, to implement measures that reduce testing burdens while still ensuring compliance with safety standards. To date, the Commission has no specific commitment to action in FY 2014 and FY2015 to reduce testing costs. The Commission previously defeated my amendment which would have allowed for more action.

I hope that we will listen to our stakeholders’ pleas—and Congress’s direction—and do the hard work to improve safety for more Americans while minimizing the burden we place on the American economy.

Show Your Work

In this day and age, who gets to do their own work and not show it to anyone else before it sees the light of day? Surely there are few who let work product out without someone vetting it. That’s why businesses get third-party auditors. That’s why grade school students show their work, so their teachers can correct them. And that’s why, starting with President Reagan, every president has required executive agencies to submit major rules to the Office of Information and Regulatory Affairs (in the White House Office of Management and Budget) to ensure that the rules are supported by thorough, accurate regulatory impact analyses (of which cost-benefit analyses are a key element). So it shouldn’t be surprising that a bipartisan coalition has begun forming to require independent agencies to do the same thing, which is taking shape in the form of the Independent Agency Regulatory Analysis Act (S. 1173), co-sponsored by Sens. Rob Portman (R–Ohio), Susan Collins (R–Maine), and Mark Warner (D–Virginia). Unfortunately, it also isn’t surprising that some (including some of my colleagues here at the CPSC) see this review as an impediment to regulatory independence. Such was suggested in a recent New York Times editorial. Senator Portman and I responded to those misguided concerns here. In addition, I wrote an op-ed in The Hill newspaper arguing in favor of the bill, which you can read here.

The bill is now pending before the Senate Committee on Homeland Security and Governmental Affairs.  Should this idea become law, it would provide a measure of accountability to regulators to better justify the actions they take.

1110 Series: If We Wanted Your Opinion…

Over the past couple days, I’ve talked about how the Commission hid the ball on costs and actively avoided clarity for product bans when we proposed to amend our certificates of compliance rule, the 1110 rule. Today, the issue I wanted to highlight is not our failure to make the rule as intelligible as it should be; it’s my colleagues’ refusal to seek intelligibility in our own deliberative process, specifically in how the new rule will deal with products that are exempt from testing to any applicable safety standard.

Our staff originally proposed what I thought was an acceptable approach: If your product is subject to multiple rules and exempt from testing for only some of them, then you have to certify to the ones in force and claim your testing exemption(s) for the rest. But if your product is exempt from testing under any applicable standard—whether your product has one or more testing exceptions—you don’t need a certificate just to say that. To me, this seemed not only a reasonable opportunity to minimize unnecessary burdens but also more consistent with the law, which bases certificates on testing.  Requiring a certificate with no information other than an exemption is wasteful and contrary to the purpose of the testing regime.

My colleagues were uninterested in these benefits. Arguing that having more pieces of paper to shuffle would expedite work at the ports, they amended the proposed rule to require companies to create, provide, and maintain certificates that say nothing more than, “I’m exempt from testing to the standard.” Although I do not think such a certificate is necessary, I thought public input on the question could be helpful, so I proposed returning to the staff’s original language and asking for comment on the safety, efficiency, and cost implications of my colleagues’ approach. My colleagues were not interested in asking a question, and decided to plow ahead. (My colleagues did less-than-helpfully note that the public could still comment on the approach.)

The rule they insisted on might turn out to be the efficient one. We might hear from commenters that consistency in certificates is more useful than skipping hollow ones. What baffles me is my colleagues’ refusal to even solicit public input on the point, particularly when they are claiming benefits that, if real, the regulated community would likely endorse. Dogged refusal to invite any other perspectives is not the hallmark of reasoned decision-making.

Tomorrow, we’ll continue this discussion of the areas where the 1110 rule could use improvement before it’s final.

Confusing the Policy with the Personal

My last blog post discussed my concern that our Fiscal Year 2014 budget request did not commit to activity to reduce testing costs, as Congress told us to do back in 2011. It seems my statement on this issue caused a reaction from my other two commissioner colleagues, who enthusiastically defended their recent decision to omit this activity from the budget request. Because my positions were mischaracterized, I filed a supplemental statement to set the record straight on some of the points that they got wrong.

While I like spirited debate, I firmly believe that this debate should be limited to the issues and not devolve into personal attacks. Yet, in one colleague’s statement, she resorts to just that. I do believe that there must be room on the Commission for differing points of view and regulatory philosophies.  That, of course, is the point of a Commission. So, no matter how loud or petulant the protestations to the contrary, I will continue to fulfill my duty to evaluate our regulatory landscape, form my own opinions, and engage in the debate. After all, that’s what I was hired and sworn to do.

Actions, Not Just Words

Government is known for “taking action” by commissioning studies, and the CPSC apparently strives to live up to that reputation. This is well illustrated by the way the agency is pretending to follow congressional direction to figure out ways to reduce testing costs: we repeatedly are asking the public for ways to reduce costs but without the promise of taking any action. Perhaps we think that if we study the issue long enough, those suffering under the unwarranted costs we have imposed will be long out of business, consumers will just get used to overpaying for regulatory burdens, and the issue will go away.

Our testing and certification rule places enormous burdens on companies with too little benefit to consumers. In 2011, Congress and the President tried to focus the agency on the issue through Public Law 112-28, telling us to ask the public to help us find savings, fix what we could without weakening compliance, and ask for more authority if we needed it. We have been dragging our feet on that work, and the latest chapter—our Fiscal Year 2014 budget request—makes clear that we won’t pick up the pace anytime soon.

In this budget, the extent of our burden reduction effort is to acknowledge that P.L. 112-28 exists. I tried to get agreement on an amendment that would have added a statement that we “may undertake activity to reduce the burdens identified” and that our staff would, as appropriate, prepare briefing packages on specific proposals. Of course, I would have preferred stronger language, but I wanted my colleagues’ agreement to this small commitment to action and so I offered this as a compromise. My colleagues found that too bold, explaining instead that we had already fulfilled our obligations under the law, voluntarily followed up on some of the comments we received, and might do more in the future.

I do not concur with my colleagues’ cramped and nonsensical view that all the law requires is that we seek comments on how to reduce burdens. (Would Congress really have asked us to get public comments and not intend us to review, analyze, and act on them?) Once presented with real options for reducing burdens, we have an obligation to take some action. Since my colleagues were not willing to make even this small commitment I could not in good conscience support a budget that asks for more resources but ignores basic regulatory obligations, especially as other agencies expect cuts to their resources. (My official statement on the budget can be found here.)

In 2012, our staff suggested 16 (non-exclusive) ways to reduce testing burdens and in the FY13 operating plan, the Commission whittled its to-do list down to sending out further requests for more information on just four ideas. We’ve asked for comments upon comments. Information is good (and people should again respond to our request), but Congress wanted us to do something about costs, not just consider doing something at some future time.

In response to my objections, I’ve heard the “door is not closed” on reducing burdens. The tone underlying that statement is that we’ve already done what we need to do, but we might do more. As discussed, I don’t think we have done much at all, but let’s take the statement at face value. Is there any reason to believe the door isn’t closed? Agencies only do the work they budget for, and not designating any resources for testing burden reduction is a sign that we won’t be doing that work.

I’m also told the budget is not really the appropriate place for burden reduction, that our operating plan would be the better vehicle. If it’s like the FY13 operating plan, the next version won’t even be written until halfway through FY14, when most of our resources are already committed. That’s the regulatory equivalent of “when we get around to it.” It’s not consistent with either the law or our obligation as public servants to regulate with no heavier a hand than necessary to reduce unreasonable risks to consumers.

Taking a Look Under the Hood

Today the House Subcommittee on Commerce, Manufacturing and Trade held a hearing to look at how the CPSC is carrying out its mandate.  What we didn’t say was more interesting than what we did say. You see, the Subcommittee is especially interested in our efforts to implement last year’s CPSIA reform bill, H.R. 2715. Since we have not done much in that regard, we did not have much to tell them.

Here’s a copy of the statement I filed with the Subcommittee, and you can watch the hearing here.

When There’s No Bang for the Buck

Sometimes what seems like a good idea just doesn’t work out. When that happens, we should admit it and correct course.

As the CPSC and Congress have struggled to try to reduce the number of children drowning, one idea that has not worked is a grant program to spur states to pass particular water safety and swimming pool construction laws. For the past few years, Congress has set aside several million dollars for grants to states and localities that pass certain pool safety laws. Because the CPSC does not administer federal grants like this, we pay the Centers for Disease Control (CDC) to administer this program. As we try for the third year to make this grant program work, we should look at where we stand:

  • Since the beginning of the program, not one state has applied for a grant and not one dollar has been disbursed, despite changes made to improve the program.
  • We will soon have paid CDC almost half a million dollars to administer a grant program with no takers.

Drowning is a safety problem that must be dealt with as effectively as possible. The public resources that have been allocated to an unused grant program could have been, and should be, used to actually address the issue. Trying to encourage states to pass laws by offering them a small, one-time shot of cash does not seem to be the best way to achieve our safety objective.

I suggest that Congress can—and should—find better ways to spend scarce public resources. That means either allowing the Commission greater discretion in using the funds to further pool safety or directing the funds elsewhere.


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