The Consumer Product Safety Commission has completed another regulation dealing with the process of testing children’s products: the manner in which companies select the samples they test. Thanks to Congress, the result is better than it could have been. Thanks to my colleagues, it is not as good as it should have been.
Originally, the Consumer Product Safety Improvement Act (CPSIA), required manufacturers and importers to test “random samples” of their products. We were poised to read the word random with its most pedantic statistical meaning, creating an employment boom for mathematicians.
Many commenters deplored this uber-technical reading of the term, urging that we read it more plainly. Congress agreed, amending the statute to require “representative”—instead of “random”—samples. So we started our work again, coming up with a rule to tell companies what representative means. The definition we came up with – a selection process that “provide[s] a basis for inferring compliance” even among untested products – seems reasonable enough on its face. What is unreasonable about this rule is that, when read in the context of the periodic testing rule it is amending, at best it is redundant, adding dead weight to the already-unwieldy testing rule. But more likely, it adds new requirements to what is already in the testing rule, although to extent of those requirements will only be fleshed out when we start to bring compliance actions.
What the new rule does add is another peak among the mountains of documentation the testing rule requires. We’re demanding separate recordkeeping for the representative sampling procedure on top of the documentation mandate that already exists for testing. Just two years of this recordkeeping could cost nearly $46 million, in addition to the costs for the rest of the testing rule’s paperwork. And remember, this price tag isn’t for either setting up the testing plan or doing the testing; it’s just for showing the math on the selection process for testing. Did we pause for one second to consider how to reduce the recordkeeping burden? Of course not. Did we give even a passing head nod to the direction the White House gave us this past summer to find ways to reduce recordkeeping burdens? Again, of course not.
At this rate, I expect our rule to require the documentation of the process used to document the selection processes for the documented testing plan will hit the Federal Register shortly. And a tip to traders who follow our regulatory hit parade: It’s a good time to be in the hard drive and paper businesses.
You can read my statement giving further detail to the problems of this rule here.
Published November 15, 2012
Today, I’m treading the scholarly sidewalks of Cambridge, Mass., speaking to students and faculty in the Regulatory Policy Program at Harvard’s Kennedy School of Government. It’s exciting for me to get a chance to engage with some of the best and the brightest in the field of regulatory policy. My topic: Based on CPSC’s experience, do multi-member commissions give a better bang for the regulatory buck than a single administrator if that administrator uses smart regulatory tools like cost-benefit analysis and rule review? What do you think? Read the Kennedy School’s story
Published November 2, 2012
CPSC , Jobs
Is the American economy ready to face an onslaught of new regulations? Here at the CPSC, we’ve been regulating non-stop for quite some time now. And although we’ve heard a message from the White House that we need to be careful about how we regulate—minimizing the negative effects on consumers and small businesses—we haven’t really listened to this message. And now that the Commission is down to a two-to-one partisan split, are we going to ramp up regulating even more? As Richard Rahn explains here, if our small agency can and will continue to crank out costly regulations, imagine what the big ones will do.
Few images in life are more innocently adorable than a toddler scampering about in the buff, enjoying life at its simplest and freest. The good news from the CPSC is that you might be seeing that image a lot more. The bad news is that parents might not have much choice in the matter. (A bit of overstatement I will admit, but the principle holds. See below.)
As I mentioned last week, at least some apparel manufacturers are opting to exit the children’s market rather than brave our labyrinthine minefield of children’s product rules. These requirements, which are arcane to trained lawyers and incomprehensible to most other people, have also forced micro-businesses focused on children’s clothing to cut back or to shut down completely. Thanks to our staff, we knew this sort of thing was coming, and with little if any benefit, but my colleagues decided to forge ahead anyway.
No one should be surprised when business slows or even stops under a regime in which a company must send out even the safest product for round after round of testing, destroying stacks of samples in the process, to make sure each product complies with rules that may have no real bearing on safety, then fell entire electronic forests to document the process. After all this a company must still live with the risk that our own post hoc judgment is the final arbiter of whether you tested enough.
The entrepreneurial spirit will keep some business owners searching for a solution. We’ve heard of some small businesses that are banding into buying cooperatives to spread the cost of testing. While it is encouraging that the fierce perseverance of American entrepreneurs will seek to overcome the challenges we throw at them, we should not forget that every dollar these companies spend trying to meet our demands is a dollar they can’t spend on any other part of their business, including research to improve product safety. This is a solution to a problem we caused with our testing rule that, in many respects, was its own solution in search of a problem. We required far more than was necessary to ensure compliance with our safety rules, and we left it to the businesses we regulate to figure out how to make it work.
We’ve already missed several opportunities to fix this. We paid lip service (if even that) to the President’s suggestion that we look in our universe of rules for ones we could stand to lose, and we were too modest in our congressionally-mandated examination of our testing rule, the 300-pound gorilla in our regulations. I hope we’ll heed the cries from the market before they turn to silence and kids’ clothes racks—and kids themselves—are bare.
Published October 31, 2012
While Sandy has come and gone, her devastation remains. As the East Coast begins the slow process of recovery, widespread problems like power outages will continue for days or weeks. Some of the interim solutions people may turn to—things like grills or portable generators—come with their own hazards that may not be obvious. The CPSC has issued a press release with some good safety tips that can help keep Sandy from causing any more suffering. You can find it here.
Yesterday, I had the pleasure of speaking at the 13th Annual Legal Reform Summit, hosted by U.S. Chamber of Commerce’s Institute for Legal Reform. I discussed regulatory review, cost-benefit analysis, and how little of each is happening at the CPSC.
Given the organization’s long and illustrious history, naturally, I wasn’t the first public official to speak to a Chamber audience about the administrative state. Here’s what one visitor had to say about 18 months ago: “[I]f there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them.”
That speaker was President Obama, outlining an executive order on regulatory review. The order tells agencies like the CPSC to look at our rules and shed whatever wasn’t working or necessary. It envisions a regulatory system that “promot[es] economic growth, innovation, competitiveness, and job creation.” The order urges regulation “based on the best available science” that can “promote predictability and reduce uncertainty,” using “the best, most innovative, and least burdensome tools,” and taking “into account benefits and costs.”
The CPSC has failed every aspect of that order. Key recent rules stifle growth and discourage innovation. They also stifle competition and slant the playing field toward the biggest businesses. About the only jobs they create are for lawyers.
Here’s hoping that, regardless of what happens November 6th, we’ll see a renewed effort from the White House to bring CPSC into compliance with prudent government. Here is an article about my presentation at this meeting.