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 'Congress' 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.
In honor of the 91st anniversary of the ratification of the 19th Amendment, guaranteeing women the right to vote, President Obama has proclaimed today “Women’s Equality Day.” As someone interested in seeing America continue to be a place of hope and prosperity, I applaud the message his proclamation sends.
In particular, I am grateful to know that President Obama shares my concern about the ability of women to pursue their dreams of self-reliance by owning their own businesses. Earlier this month, I wrote in The Hill about how the destructive effects of CPSCs most recent mandates (effects that come without demonstrable safety benefits) are disproportionately affecting women-owned businesses. I have also written in this blog about how the actions of this agency closed a small, woman-owned business making slings for no good reason.
Because they are frequently smaller, newer companies—sometimes just a mother who started making her own toys and kids clothing—women-owned businesses lack the resources larger companies have to absorb the substantial costs of our regulations, making it impossible for them to remain and compete in the marketplace. In his proclamation, President Obama writes that his administration is “working to ensure that women-owned businesses can compete in the marketplace.” I hope my colleagues at CPSC take this message to heart before issuing more costly regulations without real benefits.
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.
Today I was surprised to learn that our Chairman assumes any disagreement with her view of the world and rulemaking means, in her words, delay and distortion to circumvent the will of America.
I join with the Chairman and our talented, dedicated staff in seeking to remove genuine, unreasonable threats to consumer safety as our statute charges us to do. Life, unfortunately, doesn’t follow statutory rules, and always presents some risk. Falling off a bicycle will hurt even if it contains no lead whatsoever. As a mother, I would do anything in my power to change those realities. As a regulator, I know the CPSC does not have the power to change all those realities. That’s why I advocate using our limited resources to address the greatest risks to consumers, particularly children.
The Chairman states that our excellent staff are “made up of parents and grandparents who are also consumers.” I guess I need to remind the Chairman we Commissioners and our staff are also made up of parents and grandparents who are also consumers. What’s her point?
I was struck by the number of baseless allegations by the Chairman. Among these was her imagining a “coordinated campaign” against her regulatory agenda. Two or more Commissioners expressing their sincere concerns about a regulatory approach does not a conspiracy make.
What the Chairman characterizes as “vigorous resistance” is actually my principled insistence on collaborative, participatory, democratic government. What does that mean? That means the Chairman and the majority should not do what they just did on phthalates: withhold information from the public and foreclose public debate. One virtue the Chairman does not and cannot claim here is transparency.
The “tactics” she accuses me of using are those of needless delay. Let’s see. The Chairman has repeatedly joined in votes to stay enforcement of a variety of CPSC mandates, and she has touted several of these votes as expressions of a spirit of cooperation. Apparently, when she agrees with a delay, it is merely wise bi-partisan restraint, but when I advocate for prudent restraint, it is merely dilatory.
Additionally, the Chairman ignores the reality that I voted for many of the regulations she cites as CPSC’s latest achievements. In fact, she fails to mention that I took the lead in pursuing the new rules on drawstrings on children’s clothing, pressed the Chairman for months to bring it to a vote, and expanded the scope of that regulation to protect children more fully.
While the Chairman’s slogan “safety delayed is safety denied” may seem catchy, I prefer to focus on substantive language. For example, last week I tried to get regulatory language to focus our resources on our “particular consideration to the safety impacts on children.” I was voted down by the majority.
The message I get from the Chairman is clear: sit down, you’re rocking the boat. It is unlikely her wish will come true.