Archive for the 'Budget' Category

Are Many Better Than One?

CommitteeLast week I spoke at a meeting of the American Bar Association’s Science and Technology Committee.  While the topic was the use of cost benefit analysis in formulating regulatory policy, the question I put on the table for discussion is whether the benefits of multi-member independent agencies outweigh the costs.  This is an issue that I have been thinking about for some time.  Based on my experience at the CPSC, I question whether these agencies really deliver to the public any better results than those headed by a single administrator.

The theory behind multi-member independent commissions is that with bipartisan members serving a term of office and who can only be removed for cause, the rules coming out of such commissions will be qualitatively better and have bipartisan legitimacy.  The reality is that the work product is not necessarily bipartisan and indeed, at the CPSC, has been very partisan.  Nor, I would submit, are the rules from independent agencies substantively different or “better” than those coming out of agencies with single administrators, but those rules have substantial process-based costs.

What are those costs?  For starters, each commissioner’s office and staff consume approximately $1 million, adding up to almost $5 million annually.  While for some agencies that is insubstantial, for the CPSC, with a budget of $108 million, that means almost five per cent of the agency’s budget is spent on housing, staffing and paying for commissioners.  But beyond just that obvious cost, there are significant costs associated with a top heavy management system.  For example, senior staff spend hours each week briefing commissioners in repetitive one-on-one meetings.   Having multiple commissioners also generates controversy where it might not otherwise exist.  For example, we have seen the agency start down a path, only to have a commissioner change his mind and, hence, change policy direction of the agency with significant burdens being placed on those who relied on the earlier policy.  As another example, commissioners and staff spend hours grappling with whether an issue is administrative in nature, and can be decided solely by the chairman, or whether the issue presents policy questions and therefore must be presented to the commission for decision.

Given these and other costs, would not a single administrator do better?  A single administrator would be charged with following broader administration policy and there would be clear accountability for agency decisions.  Such a change would avoid the costs of “collegial” decision-making.  With respect to the quality of decisions, with good data, the regulatory results would likely be as good as, if not better than, those coming out of a commission.  And if they were not, it would be an easy task to fix responsibility.

Singing a Different Tune?

Why put off until tomorrow what you can do today?  With respect to reducing the unjustified costs of its testing rule, the Commission has followed the notion of why correct today the problems you have made when you can put them off until tomorrow . . . or maybe until never.

We all know the history:  in 2011, Congress told the agency to look for ways to reduce testing costs and if it needed new authorities to do that, then ask for those authorities.  Since 2011, the agency has asked the public repeatedly for comments on how to carry out that mandate.  In spite of good suggestions from the public and from the staff, the Commission has taken no real action to implement any of those suggestions for well over two years.  In the meantime, product sellers are having to pay for tests that do not necessarily enhance safety but cost consumers in terms of higher prices and fewer choices.

I have written about this over and over again until I sound like a broken record.  Indeed, perhaps the CPSC theme song should be “Maybe Tomorrow” by the Jackson Five.  How about Amy Winehouse’s “Procrastination”? Or is it better to stick with an old standard such as Sinatra’s “Call Me Irresponsible”?

Given all this, I was surprised and pleased to hear all four Commissioners at yesterday’s briefing on the agency’s FY’14 Operating Plan say how much they each supported moving ahead with efforts to reduce testing burdens.  The two new Commissioners are dealing with this issue for the first time, and so their reaction that this is an issue overdue for attention makes perfect sense.  But it was startling to hear Chairman Tenenbaum and Commissioner Adler join that particular chorus since they have been less than positive about moving this issue forward.

Why this change of tune?  Perhaps the need to respond to inquiries from the Congress about the agency’s inaction has triggered this sudden interest.  And perhaps hard questions from new Commissioners has jolted them out of their somnolence on this issue.  At the briefing, there seemed to be some acknowledgement that products made from manufactured woods were real candidates for relief.  It would be a pity if the agency stopped there.  As Commissioner Buerkle pointed out, there are plenty of other areas where relief seems to be warranted.

And hard questions need to be asked about why this is taking so long.  Comments were submitted months (years) ago and there has been plenty of time to read, analyze, come to some conclusions, and initiate some real actions by the agency—if only the Commission gave the signal to do so.  Unfortunately, for example when I, as a Commissioner, tried to include some action to bring this to conclusion in the FY’14 budget, my effort was summarily rejected by both Chairman Tenenbaum and Commissioner Adler.  So it was especially gratifying that both now appear to have joined their colleagues in singing about the need for some relief.

To continue the musical theme, the agency now has some New Kids on the Block.  I hope we will hear their hit song, “No More Games” start being played at the CPSC.

Crunch Time at the CPSC

We all know about crunch time—when it becomes apparent that projects are getting backed up and everyone is going to have to work like dogs to try to get the work done. Well, as summer fades and autumn beckons from around the corner, it’s crunch time at the CPSC. While no one can be certain (because deadlines can get pushed in any bureaucracy), based on our FY13 Operating Plan and the Mid-year Update, here are some of the issues I anticipate will soon be hitting our desks for decisions:

  • Final Rule on rare earth magnets;
  • Notice of Proposed Rulemaking on the CPSC staff’s role in voluntary standards committees;
  • Notice of Proposed Rulemaking on voluntary recalls;
  • Notice of Proposed Rulemaking for § 1101 with changes related to §6(b) of the Consumer Product Safety Act (CPSA) about public disclosure of information obtained under CPSA;
  • Final Rule for § 1110 Certificates of Conformity; and
  • Operating Plan for Fiscal Year 2014 (which begins October 1st).

We will have busy times ahead with important regulatory issues. Get ready to comment, participate, and track where appropriate.

Confusing the Policy with the Personal

My last blog post discussed my concern that our Fiscal Year 2014 budget request did not commit to activity to reduce testing costs, as Congress told us to do back in 2011. It seems my statement on this issue caused a reaction from my other two commissioner colleagues, who enthusiastically defended their recent decision to omit this activity from the budget request. Because my positions were mischaracterized, I filed a supplemental statement to set the record straight on some of the points that they got wrong.

While I like spirited debate, I firmly believe that this debate should be limited to the issues and not devolve into personal attacks. Yet, in one colleague’s statement, she resorts to just that. I do believe that there must be room on the Commission for differing points of view and regulatory philosophies.  That, of course, is the point of a Commission. So, no matter how loud or petulant the protestations to the contrary, I will continue to fulfill my duty to evaluate our regulatory landscape, form my own opinions, and engage in the debate. After all, that’s what I was hired and sworn to do.

Actions, Not Just Words

Government is known for “taking action” by commissioning studies, and the CPSC apparently strives to live up to that reputation. This is well illustrated by the way the agency is pretending to follow congressional direction to figure out ways to reduce testing costs: we repeatedly are asking the public for ways to reduce costs but without the promise of taking any action. Perhaps we think that if we study the issue long enough, those suffering under the unwarranted costs we have imposed will be long out of business, consumers will just get used to overpaying for regulatory burdens, and the issue will go away.

Our testing and certification rule places enormous burdens on companies with too little benefit to consumers. In 2011, Congress and the President tried to focus the agency on the issue through Public Law 112-28, telling us to ask the public to help us find savings, fix what we could without weakening compliance, and ask for more authority if we needed it. We have been dragging our feet on that work, and the latest chapter—our Fiscal Year 2014 budget request—makes clear that we won’t pick up the pace anytime soon.

In this budget, the extent of our burden reduction effort is to acknowledge that P.L. 112-28 exists. I tried to get agreement on an amendment that would have added a statement that we “may undertake activity to reduce the burdens identified” and that our staff would, as appropriate, prepare briefing packages on specific proposals. Of course, I would have preferred stronger language, but I wanted my colleagues’ agreement to this small commitment to action and so I offered this as a compromise. My colleagues found that too bold, explaining instead that we had already fulfilled our obligations under the law, voluntarily followed up on some of the comments we received, and might do more in the future.

I do not concur with my colleagues’ cramped and nonsensical view that all the law requires is that we seek comments on how to reduce burdens. (Would Congress really have asked us to get public comments and not intend us to review, analyze, and act on them?) Once presented with real options for reducing burdens, we have an obligation to take some action. Since my colleagues were not willing to make even this small commitment I could not in good conscience support a budget that asks for more resources but ignores basic regulatory obligations, especially as other agencies expect cuts to their resources. (My official statement on the budget can be found here.)

In 2012, our staff suggested 16 (non-exclusive) ways to reduce testing burdens and in the FY13 operating plan, the Commission whittled its to-do list down to sending out further requests for more information on just four ideas. We’ve asked for comments upon comments. Information is good (and people should again respond to our request), but Congress wanted us to do something about costs, not just consider doing something at some future time.

In response to my objections, I’ve heard the “door is not closed” on reducing burdens. The tone underlying that statement is that we’ve already done what we need to do, but we might do more. As discussed, I don’t think we have done much at all, but let’s take the statement at face value. Is there any reason to believe the door isn’t closed? Agencies only do the work they budget for, and not designating any resources for testing burden reduction is a sign that we won’t be doing that work.

I’m also told the budget is not really the appropriate place for burden reduction, that our operating plan would be the better vehicle. If it’s like the FY13 operating plan, the next version won’t even be written until halfway through FY14, when most of our resources are already committed. That’s the regulatory equivalent of “when we get around to it.” It’s not consistent with either the law or our obligation as public servants to regulate with no heavier a hand than necessary to reduce unreasonable risks to consumers.


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