Archive for August, 2011

Keeping Equality in Business

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.

Bridge Over Troubled Water

In October, Thomas Moore, with whom I have had the pleasure of serving for six years, will end a 16-year tenure of stewardship as a CPSC Commissioner. Like many others, I hope the President nominates and the Senate confirms Commissioner Moore’s successor promptly.

There has been growing speculation as to how the Commission will function if our new colleague’s arrival is delayed. It’s no secret that many of our recent decisions have been contentious, with philosophical disagreements producing frequent 3-2 splits in either votes or opinions. Until another takes Commissioner Moore’s place, the three-Commissioner majority bloc will be down to two, and some worry a four-member CPSC will be immobilized by stalemates.

This dire prediction overlooks an option we’ve had all along: Cooperation. And for an example of how important that can be, we need look no further than Commissioner Moore.

From three years, I served as the acting Chairman of the CPSC. During that time, we had more seats empty than filled, as Commissioner Moore and I were the only members. With only two votes available, and since the law requires at least two votes for any official action, we had to work together if we wanted to get anything done. So we did.

During that time, with an under-funded and under-staffed CPSC, we took important strides to make, among others, portable generators, upholstered furniture, ATV’s and cribs safer, and we started climbing the mountain of work the CPSIA demanded. In the 9 months following the passage of the CPSIA, we issued more than two dozen rules and other decisions. We could not have done any of that work without a commitment to cooperation and civility.

But that collaboration wasn’t just a matter of necessity. Cooperation was—and remains—the most effective way for the CPSC to operate.  Cooperation and collaboration are hallmarks of genuine leadership. Leadership is recognizing that the best time to build a bridge is before the water is troubled. Commissioner Moore and I built such a bridge, but it seems to have been burned.

With the crutch of an absolute majority to lean on, it has not been necessary for the current Commission to collaborate or cooperate. Now, it looks like a seat will be empty and any action will require bi-partisan support.  We will again have a river to cross, but with no bridge to walk. My hope is that we still remember how to build a new one.

The talk about Commissioner Moore’s departure should be limited to how much we’ll miss him, but instead the rancor of the past two years stirs whispers of deep divides and stalemates.  This doesn’t have to be. Every Commissioner wants to protect consumers, as does every CPSC employee. We differ in our approach, in how we choose to balance the consequences of our choices, but we share that common goal.

 My vote will continue to go, as it always does, to the merits of each issue. If we can build another bridge and restore an atmosphere of collegiality and trust, I’m confident we can find enough common ground to allow the CPSC to effectively carry out its mission. The only remaining question is how many bridge builders we have left on the Commission.

Look Before You Leap

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.

Safety should never take a backseat to politics

Earlier this month, the Chairman of the CPSC, in an article that was posted in several on-line publications, took the inappropriate measure of personally attacking the two Republican CPSC Commissioners.  In addition to being an extraordinary breach of collegiality, the Chairman injected politics into the important on-going debate concerning the role and boundaries of health and safety regulations.  While I have responded to the specifics of the Chairman’s diatribe in earlier blog posts, let me close out this subject by reminding her that policy disagreements should not be confused with partisanship. 

I have raised questions about, and in some cases opposed, actions this agency has taken recently because I believe that they are not sound decisions.  I would have made the same decisions whether the majority of commissioners were republicans, democrats, independents, or Martians, for that matter. 

If a child is hurt by a product that poses an unreasonable risk, it doesn’t matter whether the parents of that child are Republican or Democrat.  If a business making perfectly safe products is forced to close because of excessive regulation and people lose their jobs and livelihoods, it doesn’t matter whether those workers are Republican or Democrat.  I believe that at times this agency has lost sight of its responsibility to regulate in a responsible manner.  I will continue to point this out regardless of how many partisan or personal attacks the Chairman tries to make.   Safety isn’t, and shouldn’t be, partisan.

Setting the Record Straight: the Crib Rule

The Chairman has recently made several pointedly hostile, but grossly inaccurate, statements that warrant correction. One of the most egregious is her accusation that with our new crib rule, I have sought to put the interest of “a few retailers” over the interests of children. What utter nonsense!

This agency has always viewed children as a special constituency and has a long history of working to assure a safe sleep environment for them. That work intensified in 2007 when, as acting chairman, I established a cross-cutting, multidisciplinary team to do a comprehensive look-back at incidents involving children’s sleep environment to better determine hazard patterns. In 2008, while I was still chairman, the agency issued an Advanced Notice of Proposed Rulemaking informing the public that we were developing a new mandatory crib standard and seeking information. We were doing this work at the same time that the American Society for Testing and Materials (ASTM) was working to develop its new voluntary crib standard, and CPSC staff joined in that effort as well. ASTM issued its standard in 2009, and that provided much of the basis for the 2010 CPSC mandatory standard. The agency proposed to adopt the ASTM standard with two changes in mid-2010 and finalized the mandatory standard in December, 2010, to go into effect 6 months later. All this work was done with the full support of all the Commissioners.

So where is the problem that the Chairman alludes to? While I support what is in the new crib standard, I am very troubled by the chaotic manner in which we implemented it. Because we did not do a cost-benefit analysis that looked at regulatory impacts and alternatives, we did not even know that this was a major rule – having an impact on the economy of over $100 million – until literally days before the Commission was about to vote on the final rule. (The crib rule is only the second major rule in the history of the agency.) Only at that point did it become apparent that this rule would do major damage to the child care industry, which would be required to replace every single crib in every single child care center in this country. The hotel industry also told us that they would have to stop making cribs available to guests because of this rule. In response, we delayed the effective date for these two industries for two years – a date that was arbitrarily chosen by the Commissioners with no data behind it. For everyone else, it would be illegal to make or sell a crib that did not comply with the new standard (even if that crib did meet the 2009 ASTM standard) after June 28, 2011.

During the spring of 2011, we began to hear rumblings of trouble with respect to this rule. CPSC began accrediting labs only in late spring because the labs were having trouble doing the tests we required. Supply issues were starting to pop up. Although the scant economic analysis we had done prior to issuing the rule told us that retailers would not be impacted by it, we started to hear from retailers that the assurances they had received from manufacturers about the availability of retrofit kits for current inventory were not being met. (By the way, CPSC rushed to put out its guidelines on accepting retrofit kits only 72 hours before the crib standard was to go into effect.) In the late spring, we did a “quick and dirty” survey of five retailers and found at least 100,000 non complying cribs in inventory. We then heard from an association representing smaller retailers requesting an additional three months before the crib standard went into effect for retailers. At the same time we heard from the leasing industry also asking for a delay in the effective date.

The reaction of the various Commissioners is instructive. Commissioner Northup and I believed that the modest additional time the small retailers requested was reasonable, if the cribs in inventory complied with the new 2009 standard and were not the drop-side cribs that had created much of the concern. Among other things, this short extension would allow for retailers to get the retrofit kits manufacturers had promised so that they did not have to “trash” perfectly good cribs. While the majority of my colleagues were fine with giving the leasing industry an 18-month extension, they refused to give a 90-day extension to small retailers. Apparently the majority thinks that children in child care, in hotels and in leased cribs (regardless of whether they are drop side cribs or what the crib’s condition of repair is) do not warrant the extra protection, but a short extension so that thousands of perfectly good cribs do not have to be destroyed is not warranted. That is reasoning that I do not agree with.

It is unfortunate that the Chairman believes that anyone who does not agree with her is automatically “anti-consumer.” It is unfortunate that the Chairman sees “obstructionism” when constructive dissenting views are offered. It is unfortunate that the Chairman selectively interprets both facts and words and unfairly impugns her colleagues. Mostly, it is unfortunate that the Chairman cannot work with us to fashion rules that protect American families without imposing job-killing requirements on those same American families.

Click here for more information on the Chairman’s false accusations.

It’s Time for a Fresh Start – Will we Take 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.

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