Vance’s View: Overprotection From Regulations

If you’d like some light weekend reading, check out the post that I wrote for RegBlog, the University of Pennsylvania Law School’s blog on federal regulation. I write about something you should all be familiar with: the type of risk analysis that produces the best consumer product safety rules. It describes what I think is essential to how we operate effectively at the CPSC.

A quick recap: in spring 2010, we interpreted the Virginia Graeme Baker Pool & Spa Safety Act to allow public pool operators to comply with the law by putting an unblockable drain cover over a single main drain. But we reversed ourselves last fall over my strenuous objection that we weren’t following our own rules or federal law, and that the safety effects of the reversal were not backed up by any staff analysis (read more about it here, here, here, and here). In one small concession to responsible pool owners who relied on our interpretation, all of my colleagues joined me in voting to ask the public for comments about the effective date of the reversal.

Well, we got comments. And the vast majority of them said that the reversal was wrong and would be expensive to implement. Based on those comments, the staff recommended that we extend the compliance date by a year for pool operators who relied on the first interpretation. The Commission agreed with the staff (by a vote of 3 to 1), so responsible pool operators get at least a little respite from our haphazard regulations. I wish we hadn’t put them in such an awkward position in the first place. I hope the message gets out to them, especially since this extension happened less than two months before the effective date. In a better world, it would pay to be a conscientious planner.

You can learn more about this by reading my official statement on the vote here.

That’s a lot to say, but it says a lot.

Although last summer the agency said there was no technological reason not to impose a 100 ppm lead-content limit on children’s products, thanks to Public Law 112-28 (also known as H.R. 2715), we now have found a way to provide realistic exceptions to that rule. Why? Because in that law Congress emphasized that exposure to lead, not just the mere presence, is the key to determining the true risk of harm. If reducing lead content is not practicable or technologically feasible, if the product isn’t likely to be mouthed, and if using the product won’t measurably increase blood lead levels, then the product can be over 100 ppm—and be okay. There’s no health risk.

There are other components of children’s products, beyond those dealt with in the petition spurring this decision, which may similarly qualify. I hope the Commission continues to use this reasonable approach, albeit long overdue.

I’m pleased that on one significant issue voted on last week–the fiscal year 2012 operating plan– collaboration occurred and, as a result, consensus was reached. (I would note that the fiscal year began October 1, 2011 so this operating plan is six months delayed. I hope we can agree on the next one at the beginning of the fiscal year.) After much discussion among Commissioners and their staffs, the end result was a plan that we all agreed on. I hope that this new willingness of both sides to look for common ground and work together continues.

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.

Employers…say they would like to expand and add jobs, but the regulatory environment has become too uncertain and costly.  Over-regulation now tops the list of ‘most important problems’ faced by small businesses…now is the time to build a more job-friendly regulatory system. This bipartisan blueprint would do just that.

It is unfortunate that the CPSC did not think about minimizing regulatory cost as we busily churned out regulations over the past several years.  Maybe that will now change. 

Read their piece here.

But over the last two and a half years, the Commission hasn’t taken the time to make sensible rules. Instead, we crystal-balled benefits and ignored costs that we refuse to measure. And since our rules came into effect, costs for consumers have gone up needlessly as companies pass their costs on or leave markets entirely. These results are unnecessary and do not benefit consumers. We could have minimized them by performing cost-benefit analyses. Today, Politico posted my op-ed explaining in more detail why cost-benefit analysis makes for smart regulation and why the CPSC needs to get back to competent, sensible regulating. You can read it here.

And, if you’re a small-batch manufacturer, you should hurry up and sign up on the Commission’s Small Batch Manufacturers’ Registry here to give yourself peace of mind that you are exempt from certain testing requirements until the Commission takes further action.

Finally, and most importantly, in all of the regulations that the Commission has put out over the past two years, we have not given any serious consideration to the cost imposed on the economy. Congress, after hearing some loud complaints, decided to fix that with H.R. 2715, the law passed last summer that requires the Commission to consider ways to reduce the burden of third-party testing, among other things. The Commission published a series of questions on the issue in October, and we asked you for your ideas on the ways the Commission can reduce costs. We need your ideas by January 23rd. So submit your comments here!

I will be pushing internally to make sure that the staff and the Commission give serious, thoughtful consideration to the ways we can reduce costs, and your ideas in particular. But we can only be successful in reducing costs if we get serious—and perhaps out-of-the-box—ideas from you on how we can best achieve those reductions. So, please, help us ensure product safety in the most rational, cost-effective manner possible; send us your comments!

The debate is about where to draw the line. Hinkle writes, “if a . . . rule can prevent 1 million birth defects at a cost of only one dollar, then the regulation merits adoption—and if a regulation would prevent only one birth defect at a cost of $100 trillion, then it does not. In the real world regulations fall within narrower parameters.”

That is where our focus has to be at every Commission meeting. We need to take a regulatory Hippocratic Oath: “Do more good than harm.” Sometimes, that goal will rest on the broad question, to regulate or not to regulate. Most often, however, it will depend on how we choose to regulate and how carefully we draw the lines.

As an example, look at our debate back in July on whether to lower the lead standard for children’s products down to 100 parts-per-million—that is 99.99% lead free. Common sense and the language of the law that required that debate suggested we should look at different kinds of products differently and add a degree of practicality to our decision. Lead in a doorknob and lead in a pacifier are two very different things.

Instead of recognizing that and actually digging into the real problem, we treated the entire universe of children’s products with one heavy hand. We reached for our largest regulatory hammer instead of a scalpel, and we shifted even more costs to businesses when we glibly told them that, if they wanted an exemption, they should come beg us to do the compartmentalized analysis we should have done up front. The result will be more money—and maybe more jobs and companies, too—lost to nothing but process. We could have avoided that result by using our expertise and resources to do the legwork on our own.

I hope we’ll do the hard work in the future, rather than hiding clumsy solutions behind emotional strawmen and cute catchphrases. I hope we’ll listen to the voice of reason.