Archive for the 'Burden Reduction' Category



More Than Just Listening

CPSC recently held a public hearing to get input from stakeholders about its agenda and priorities for FY 2014 and FY 2015. We heard from two panels of consumer advocates and manufacturers’ associations. Many thought-provoking subjects were discussed. I found the topic of child safety in low-income households, raised by the Consumer Federation of America, to be an important challenge to address, not just at CPSC, but across the federal government. (As I have written before in this blog, some of our current policies risk pricing low-income consumers out of safety.)

Two other topics were particularly noteworthy. The Handmade Toy Alliance (HTA) said that signing up for the “small batch manufacturer” registry—exempting them from certain third-party testing requirements—did not substantially ease their burden. Even though they were technically exempt from third-party testing, HTA’s members still must meet various statutory limits and, crucially, are often unable to do adequate testing without engaging third-party testing labs. Further, HTA pointed out the requirement added by the Commission to post on its website the name of every company that received this exemption was a deterrent to companies to participate and thereby have their business data posted. It is no surprise, then, that although we expected upwards of 30,000 companies to sign up, only about 500 are have so far.

Another issue raised by HTA, as well as the Toy Industry Association (TIA) and the American Apparel & Footwear Association (AAFA), was the need for CPSC to dedicate resources, pursuant to Congress’s direction in Public Law 112-28, to implement measures that reduce testing burdens while still ensuring compliance with safety standards. To date, the Commission has no specific commitment to action in FY 2014 and FY2015 to reduce testing costs. The Commission previously defeated my amendment which would have allowed for more action.

I hope that we will listen to our stakeholders’ pleas—and Congress’s direction—and do the hard work to improve safety for more Americans while minimizing the burden we place on the American economy.

1110 Series: Recordkeeping Harmony or Agony?

I’ve been talking about some of the shortcomings of the Commission’s proposed update to our rule on certificates of compliance, Part 1110. I’ve looked at our unwillingness to present all the costs, our inability to provide clarity on certifying to bans, and our refusal to engage the public on how to handle testing exemptions. Today, my concern is with my colleagues’ break with our staff on recordkeeping for the certificates.

The 1110 rule requires manufacturers and importers to include certificates with their products attesting to the products’ tested compliance with all applicable CPSC safety standards. These can be Children’s Product Certificates or General Certificates of Conformity, depending on the product. Most CPC requirements are already covered in Parts 1107 and 1109, leaving GCCs to 1110. As proposed, this revision contains a one-size-fits-all requirement to keep GCCs for five years. On its own, this might not be a problem; we have to set a mark, and five years might be as good as three or seven. But we cannot look at this rule on its own, as my colleagues are unfortunately doing, because doing so creates unnecessary confusion.

This rule rests on the testing rules, and those rest on safety standards. These other rules frequently contain their own recordkeeping provisions. Our rule on flammability standards for mattresses, for example, requires manufacturers to test prototypes and then keep the records for as long as the product is on the market, plus three years. Those test records, then, could be discarded after four years or hang around for decades. Even within one product, the requirements that already exist vary with circumstance, and that variation exists throughout our regulatory arena.

Recognizing the differences in the standards’ requirements and my colleagues’ preferences for keeping records for longer, I proposed a compromise tying the retention requirement for GCCs to their underlying standards, defaulting to five years for any certificate based on a standard with no recordkeeping mandate. My colleagues did not agree, and insisted on a universal five-year mandate. Since CPCs all have a five-year minimum, they argued, imposing the same requirement for GCCs would “harmonize” our certificate rules.

“Harmonizing” requires that the notes be in the same key. Imposing one regulatory scheme’s parameters on another simply for the virtue of nominal similarity while ignoring their underlying differences is as unsound as “harmonizing” your children’s closets by giving them all the same size pants, no matter their ages. Yes, they’re in harmony, but someone’s going to wind up with a bad fit.

In this instance, the more valuable harmonization would have been matching the certificate’s retention time to that of the rule that creates the standard and the test on which that certificate is based. I was pleased my colleagues were at least willing to include a request for the public to comment on the recordkeeping retirement, and I hope they read those comments with open minds.

1110 Series: If We Wanted Your Opinion…

Over the past couple days, I’ve talked about how the Commission hid the ball on costs and actively avoided clarity for product bans when we proposed to amend our certificates of compliance rule, the 1110 rule. Today, the issue I wanted to highlight is not our failure to make the rule as intelligible as it should be; it’s my colleagues’ refusal to seek intelligibility in our own deliberative process, specifically in how the new rule will deal with products that are exempt from testing to any applicable safety standard.

Our staff originally proposed what I thought was an acceptable approach: If your product is subject to multiple rules and exempt from testing for only some of them, then you have to certify to the ones in force and claim your testing exemption(s) for the rest. But if your product is exempt from testing under any applicable standard—whether your product has one or more testing exceptions—you don’t need a certificate just to say that. To me, this seemed not only a reasonable opportunity to minimize unnecessary burdens but also more consistent with the law, which bases certificates on testing.  Requiring a certificate with no information other than an exemption is wasteful and contrary to the purpose of the testing regime.

My colleagues were uninterested in these benefits. Arguing that having more pieces of paper to shuffle would expedite work at the ports, they amended the proposed rule to require companies to create, provide, and maintain certificates that say nothing more than, “I’m exempt from testing to the standard.” Although I do not think such a certificate is necessary, I thought public input on the question could be helpful, so I proposed returning to the staff’s original language and asking for comment on the safety, efficiency, and cost implications of my colleagues’ approach. My colleagues were not interested in asking a question, and decided to plow ahead. (My colleagues did less-than-helpfully note that the public could still comment on the approach.)

The rule they insisted on might turn out to be the efficient one. We might hear from commenters that consistency in certificates is more useful than skipping hollow ones. What baffles me is my colleagues’ refusal to even solicit public input on the point, particularly when they are claiming benefits that, if real, the regulated community would likely endorse. Dogged refusal to invite any other perspectives is not the hallmark of reasoned decision-making.

Tomorrow, we’ll continue this discussion of the areas where the 1110 rule could use improvement before it’s final.

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.

It’s He-ere . . .

Today, the CPSC’s children’s product periodic testing and certification rule goes into effect. Perhaps the most sweeping rule in the agency’s history, it was spurred by 2008’s Consumer Product Safety Improvement Act. Even before becoming effective, it has substantially affected the agency, the regulated community, and consumers. Starting today, those effects will grow.

After much debate about its details (more on that shortly), the rule is now the law. It sets massive new requirements for the CPSC’s regulated community. To comply with it, companies and labs should have developed systems and procedures to comply with the new requirements and these should all now largely be in place.

Even so, tweaks to those systems will, of course, be necessary. Some of those changes are things that manufacturers and labs can take care of on their own. Others, however, will probably require attention from agency staff and from the Commission. As you encounter problems with this rule, make sure that the agency and I hear about them. Your voice can make a difference. Already, based on pre-implementation concerns, both Congress and the CPSC have made changes to the rule. And as the rule now goes into effect, we can only expect more concerns to be revealed. When they arise, let us know about them.

Of course, as readers of this blog already know, this rule is not my ideal rule. During the many debates leading up to today, I have already filled enough of this space discussing my disagreements with the Commission’s decisions to belabor them here in any detail. To sum it up, I believe we overstated the necessity for third-party testing, ignored opportunities to make the rule more effective, created “gotcha” traps for companies, and paid lip-service to Congress’s demands that we look to make it less expensive. The result is an unwieldy rule that (because of its name) might make consumers feel safer, but holds only speculative hopes of actually making them safer. All the while, they now have the certainty of fewer choices at higher prices.

Yet, though I remain concerned about the unnecessary damage this rule threatens—and as I continue to work to improve it—make no mistake: It is the law. Companies must heed it even where they disagree with it, and violators should expect a visit from our compliance staff. We have lots of resources for helping businesses understand this rule and how to meet its demands, especially for small businesses. If you have not already figured out your plans for complying with the rule, hurry up and fix that. We surely will all learn a lot along the way, but there is no more time for waiting.

CPSC: NOT a Representative Sample of Good Regulating

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 samplesPaperwork-mountain 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.

CPSC & Birthday Suits

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.

Voices from Outside the Echo Chamber

A regulator’s job description should include a requirement to get out of the Washington echo chamber, from time to time, to visit and talk with folks who have to live with our mandates. That is one of the best ways we have to gauge if regulations make sense out in the real world and if there are any issues surfacing as companies work to comply with the law. Last week I was on the road, having just those kinds of conversations.

The ABC Kids Expo was a wonderful opportunity to talk one-on-one with smaller companies who make a wide variety of infant and children’s furniture and other products. Without exception, these companies expressed a strong commitment to safety. This makes sense because many of the companies represented were started by entrepreneurial parents who saw either a need going unmet or a way to improve a product. While these companies were very pleased and eager to get whatever information we can offer on how to comply with our rules, I also heard concerns about both the process of writing the rules and the substance of the rules themselves. For example, the agency, working with the voluntary standards bodies, has been issuing the Congressionally-directed durable infant and toddler products regulations at a rapid pace.  Yet there is growing concern, which I heard expressed again last week, that this is resulting in a process that is less rigorous, at times more arbitrary and more error-prone than it used to be. Certainly, this is something that warrants greater attention at the CPSC.

I also spent time at the Specialty Graphic Imaging Association Expo, talking with the association’s Board of Directors, conducting a safety seminar and walking the show floor talking with individual members of this very complex and dynamic industry. Here are some of the key points I took home:

  • Overall, component testing is not working as the cost saver we hoped for this industry;
  • CPSIA-required testing is posing challenges in terms of expense and frustration as companies test for substances that are not present but do not fit into the exemptions; and
  • Testing variability among labs, in particular with respect to phthalates testing, is adding time and expense to the process, and is consuming resources in an unproductive manner.

While there are some very large players, the bulk of the industry is made up of small, domestic companies. Because of the nature of the business, the small batch testing exemption does not apply. One small business owner, with fewer than 10 employees, told me of needing to add an employee to do nothing but administer and document his testing and regulatory compliance program. Another told me that since children’s garments were not a major part of his business, he has decided just to get out of that aspect of the business altogether rather than have to hassle with all the rules.

I am concerned when I hear reports like that. Congress directed us to look at ways to cut costs. I suspect that, if and when we get serious with a commitment to action, taking that directive seriously, rather than just playing charades with that directive, we will find that there is ample opportunity to provide some real relief. In the meantime, with no boost to safety, the clock is ticking on the existence of numerous U.S. based low-volume businesses and their employees’ livelihoods.

Competing Realities

In Washington, unlike the rest of the nation, competing realities are what we live with every day.  As I was doing my daily reading, this came home to me in two articles. One is a report of the extraordinary number of new regulations coming out of the federal government.  In the other, a former Administration official touts the feds’ record in reducing the regulatory burdens imposed by Washington.  I wish to could say that reducing regulatory burden was important but here at the CPSC, that is rarely the case.  Gosh, we couldn’t even agree on how to design a plan to look at the issue, much less do it.  Here is a statement I recently posted about our failed attempt to do regulatory review.

Too Far From the Flagpole?

The CPSC has continually ignored and otherwise shrugged off direction from the White House regarding good regulatory policy.  The questions I have: Are we standing so far from the flagpole that we cannot hear the bugle?  Or are we just marching to a different drummer?  Either way, IF the White House were really serious about regulatory reform, then the CPSC’s continual disregard of Presidential executive orders should be of concern.  That is a big IF—could it be that they are not serious?

Today, I wrote an op-ed about the CPSC’s repeated failures to take seriously the President’s regulatory reform directives.  As a result we are shirking our responsibility to write rules that minimize the burden on the economy and marketplace and, consequently, consumers pay the price. You can read the piece online at the Washington Times.


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