Archive for the 'HR 2715' Category

CPSC to Congress: Still Kicking the Can

Kick_The_Can

The government shutdown eclipsed an important letter that the agency received on October 1 from our congressional overseers asking us explain our failure to move forward on addressing the costs of CPSIA-mandated third-party testing. You will recall that Public Law 112-28 required us to address those costs and let the Congress know if we needed new authorities to do so. Congress asked for a response by October 21—today. No answer has yet gone back to the Hill, although the shutdown explains some brief delay.

But every day that we delay in reducing the costs of often-unnecessary testing we fail to perform our job to regulate rationally, opening the agency up to deserved criticism. And it is no wonder that Congress asks why we haven’t addressed this issue. To review: In November 2011, we asked the public for ideas on reducing testing costs and, based on some of those comments, our staff came up with a list of 16 recommendations. A year later, the Commissioners pared the list down to nine items, and then further shrunk it down to four ideas, none of which have been acted upon.

It has been said that there is a six-word formula for success: think things through, then follow through. Our regulations on third-party testing were not thought through, so Congress stepped in, asking  us to try again and this time follow through by either addressing the problem or asking for authorities to do so. Our response? We kicked the can down the road.  Maybe it’s wishful thinking, but I do hope this letter draws enough attention here to trigger real follow-through.

Like others, I will be most interested to read our response to the Congress, whenever it comes. One suspects we will point to the fact that we have gathered public comments on at three separate occasions. One further  suspects we will plead poverty, saying we have no resources for doing this important work. But asking stakeholders to comment over and over again on the same issues does not advance the ball. And claiming lack of resources as preventing solutions to problems of our own making rings pretty hollow.

Ben Franklin said, “Never confuse motion with action.”  We have had lots of motion.  We need some action before those who would benefit just give up.

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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.

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.

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.

Taking a Look Under the Hood

Today the House Subcommittee on Commerce, Manufacturing and Trade held a hearing to look at how the CPSC is carrying out its mandate.  What we didn’t say was more interesting than what we did say. You see, the Subcommittee is especially interested in our efforts to implement last year’s CPSIA reform bill, H.R. 2715. Since we have not done much in that regard, we did not have much to tell them.

Here’s a copy of the statement I filed with the Subcommittee, and you can watch the hearing here.

When Two Times Three Occasionally Equals Seven

Think back to when you took exams in school. Now imagine if your exam was sent to two different teachers of the same subject for grading and you ended up with a passing grade from one and a failing grade from the other. You would rightly wonder what is going on, wouldn’t you? This is the same situation that manufacturers and retailers have to deal with: the same children’s product is tested by two different testing labs and it produces two different test results. Since test results can mean the difference between whether you can legally sell your product or have to destroy it, this is not inconsequential.

The Consumer Products Safety Improvement Act (CPSIA) requires that children’s products be tested by a CPSC-accepted third-party laboratory to determine compliance with all applicable regulations.  Congress, concerned about the costs of this testing, asked that we come up with ways to reduce costs. Members of the public have given us comments for reducing the costs of third party testing, and according to studies submitted in several of these comments, it appears standardized testing is not the touted safety panacea due to test result variability.

Below are some problems mentioned in the public comments.

“This represents a major risk for the supply chain if testing in different parts of the world provides different results . . . . The industry experiences test result discrepancy due to different sample preparation methods in laboratories” –Global Apparel, Footwear and Textile Initiative

 “Eight different CPSC-firewalled laboratories found the samples’ lead content to range between less than 50 ppm to 262 ppm . . . .Each laboratory reported different results.
“. . . .
“[N]early 50% of FJATA’s members reported that when products failed, the test results were just over the target limit. In total, almost 90% reported that test results were within 10% of target limits.”
–Fashion Jewelry and Accessories Trade Association

“The Commission should take action to establish some statistical level of testing error.  This will help reduce retesting costs and avoid the need to destroy a batch or lot of consumer products that fails by a margin within the statistical level of error.”  –Society of the Plastics Industry, Inc.

These comments and others like them are troubling since they raise basic questions about the reliability of the testing that is a basis for much of our recent regulatory work. We need to recognize the existence of inter-laboratory testing variability and find a solution that is practicable in the marketplace. One way to get at this issue is to publicly recognize a margin of error. By staying silent on this issue, we force businesses to absorb the costs of borderline failed test results. This translates into destroyed product, lost sales, and, ultimately, price
increases for consumers.

I look forward to the staff evaluations on this issue, particularly because they themselves attest to the variability of test results. Staff found certain lead content results “represent the compliance dilemma surrounding any regulatory lead limit” [1]. I hope that we can reform these requirements to remove the confusion and burden our regulations have created.


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