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.