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Why Congress Won’t Fix the CPSIA
April 1, 2009 by Dawn
Filed under BLOG, Rally Archive
The post below is by Mark Riffey who is the author of Business is Personal (http://www.businessispersonalblog.com) where he blogs for small business owners about marketing, strategy, customer service, operations, technology and public relations. His new blog, http://www.SmallBusinessPolitics.com , delves into political and regulatory issues (like the CPSIA) that threaten small business owners on a daily basis.
There are many reasons why Congress should repeal, retrofit and reissue a “fixed” Child Product Safety Improvement Act.
A simple one that everyone can understand is to eliminate the CPSIA’s ability to destroy or bankrupt entire segments of several industries that produce products for children.
Grandma can’t make sock puppets anymore because she can’t afford to test and label them according to the law’s requirements. Work at home moms who started their businesses because they (ironically) wanted to provide kids with safer products are now forced to terminate lines for kids 12 and under.
If they are large enough and structured just so, they can work the testing and labeling costs into their product line. Higher prices are the norm for most handmade goods – and we expect that. Pushing them higher with testing and complex labeling puts even more competitive pressure on these vendors, as well as additional paperwork time and expense.
As GM (and small business) goes, so goes the nation
A not quite so obvious impact of these changes is the ripple effect.
Let’s look at it from an easy to understand perspective first. President Obama and GM (much less the rest of the auto industry) are battling to keep the industry alive.
It’s obvious that a company as large as GM causes ripples throughout the economy. If they stop making pickup trucks, every vendor who makes components of that truck are affected. Every employee in those truck plants AND in each of the component supplier plants are also impacted.
Because GM (and thus, the numbers) are so big, the wave of closures across the economy is easy to see even for those who aren’t financial experts.
It’s no different for businesses impacted by the CPSIA.
In their case, the ripple effect starts when a business impacted by the CPSIA is forced to slow down their business, eliminate product lines and cut back on their use of local businesses for things like childcare, office cleaning, web design, marketing help, printing, shipping, product raw materials and so on.
It might not seem like much until you think about 1000 businesses in your state who suddenly don’t need these products and services. Or 10000 businesses across the U.S.
And then you consider that these slowdowns probably cause them to layoff employees. Those employees buy food, day care, clothing, automobiles, iPods, TVs and so on.
Each of those businesses using local (and not so local) businesses for products and services they need to make their business run.
Suddenly, the business world starts to spin out of control. Inertia and momentum simply do what Sir Isaac Newton said they would. In simpler terms, the problem snowballs.
Meanwhile, Congress and our President are trying to figure out why unemployment is up, why large multi-nationals are filing 10-K statements showing millions in write offs for thing thing called CPSIA and why they continue to lay off people and cut manufacturing orders.
Those businesses snowball even faster because their manufacturing orders are larger, their staffs are bigger and the supplier list is longer. Because of the CPSIA, big retail and small retail are “suddenly” spinning together toward the same undesirable place, and they take real estate and small business with them.
It might sound like a far-fetched doomsday scenario, but the evidence is there. Look at the SEC’s EDGAR site and search for CPSIA. You’ll find large companies with big financial writedowns because of CPSIA.
Treating the Symptom, not the Disease
Obviously, CPSIA is yet another example of treating the symptom instead of curing the disease. That’s standard operating procedure for Congress and probably for all representative governments.
They try something, and later they fix it once feedback tells them what they really should have done. Mostly.
It’s almost the same thing I teach my clients (small business owners) to do. Instead of doing nothing until its perfect, do something, then tweak it based on feedback and results.
The symptom was millions of recalled childrens’ products, most but not all of which were imported. Yes, some products made right here in the US have lead and phthalate problems, but they are in the minority.
Still, every product needs to be safe. Rather than writing hundreds of pages of exemptions, we got the CPSIA, which brought with it a mandate to test anything and everything as a finished product.
Not a completely bad idea on the surface, but the devil is in the details. Those details are what cripple small businesses and particularly vendors of handmade products.
Congress’ treatment of these symptoms appears designed (perhaps unintentionally) to cripple small businesses because the testing legislation left made no distinction between large businesses and small.
A small business who makes 10 to 100 items at a time (ie: a lot of 10 to 100) was now even more threatened by the per unit costs of testing, since their large multi-national competitors could bury the testing cost across a lot of 100,000 toys, books or pieces of clothing.
From a product testing perspective, the cure appears to be manufacturer-based component testing, which spreads the cost of testing across all vendors equally, based on the amount of raw materials they purchase to create their products.
At the moment, manufacturer-based component testing is not an option according to the law.
The real disease attacks the foundation
Before you think that the CPSIA is all about products and testing and so on, you should be aware that the real disease requiring treatment has 3 prongs: a lack of effort and accountability by the CPSC, a lack of funding from Congress, and a lack of cooperation between the Bush administration and Congress regarding CPSC commissioner appointees.
I imagine that it’s no surprise that the implementation of the CPSIA is a political issue. Hold that thought.
The foundation of business in America and across the globe is small business. We hire more people than Fortune 500 businesses do and we impact every community on this planet.
The politicians appear to know how important small business is.
If you catch them in an interview, in a stump speech and on the floor of the Congress, you will hear them talk about how important the jobs and tax revenue are which small business creates.
In fact, Congress figured it out well enough that they realized that small businesses needed a law to protect them from Congress itself and thus created the Regulatory Flexibility Act. Unfortunately the act allows agency heads to exempt their agency from the Act (more politics), but it was a good idea.
Actions are stronger than words.
Home field advantage
Neither Congress nor the press hears a growing and substantial storm of protest from a broad base of their constituents.
It’s that simple.
Remember that Congress and the press are kept quite busy dealing with things like Wall Street, AIG bonuses, the bailout, digital tv converters, Iraq, Afghanistan, DVDs for the UK Prime Minister, TOTUS, Octomom, Tea Parties and so on.
When the press and Congress can more or less ignore tens of thousands at tea parties across the US, what in the world makes us think they’ll listen to a few thousand emails? What makes us thing that having a few thousand people at a rally will suddenly focus their attention and keep it there long enough to get the CPSIA changed?
In addition, the elongation of election seasons has made our ability to seek a fix even more difficult. Fundraising has already started for campaigns across the nation.
Getting sustained traction with a media focused on Octomom and the Hollywood red carpet is difficult at best. Likewise, getting focused attention from Congress in a non-partisan atmosphere is just about impossible. Doing so when they are focused on reelection is just about impossible, so time is of the essence.
Meanwhile, we continue to blog, tweet and email as if anyone inside the Beltway is really, truly paying attention.
When you look at the big picture, you’re left with no doubt that we simply have to get serious if we are going to play their game on their home field.
Splinters
First, we have to get the various splintered groups together with one message, spending valuable time and money to create one solution that works for everyone.
Right now, everyone is worried about their little corner of town, their little sliver of the industry and the ways they can get Congress to write one piece of legislation that exempts their little corner of paradise.
The motorcycle industry, libraries, apparel makers, handmade toys manufacturers, you name it. Each has their own faction working towards a solution with a lawmaker they’ve managed to gain access to.
While this may be how Congress functions, this is exactly the wrong approach. Why? It fractures the power of small business owners into a handful of little factions, none of whom are strong enough on their own to make a serious long-lasting impact.
Rallying as One
Until the Amend the CPSIA rally was conceived, these groups were all working in parallel. Often, this meant wasting time and money performing the same duties. It meant different messages from different groups, when in fact, everyone really wants the same thing: Equitable testing and label rules across all sizes of business.
The rally has helped bring the groups together and has garnered a fair amount of media attention, but we have to be smarter as we move forward. We have to be more efficient. We have to be better.
We have to come to Congress as one. A sustained effort that grows stronger with each day is the only way to resolve this.
With the success of the Amend the CPSIA rally today, it should be clear that our various factions working individually simply don’t wield enough clout to make things happen, but that as one, we have a shot.
Living in Rome
August 2009 is right around the corner. It has been almost 2 months since the CPSIA took effect.
What has happened? Congress and Commissioner Nord are in a political letter writing battle. Meanwhile numerous amendments languish in committee, weighed down by partisan politics.
As entertaining as that might be for political junkies, it is nothing more than Nero fiddling while Rome burns.
Folks, we live in Rome. They do not.
We need a single cohesive effort that not only keeps dangerous products off the market, but also provides equitable commercial opportunities for large, multinational corporations, grandmas knitting on the front porch and everyone in between.
No one wants a blanket exemption. They just want the law to be equitable and fair across all sizes and types of businesses.
Unfortunately, this important issue has been transformed into “socialist Democrats against business” vs. “evil Republicans for nothing but profit”. You can see it in the politicians who are lined up to participate, and sometimes in the media that covers the story.
Enough.
The us vs. them mentality not only splinters the group by industry, but not does so by political party. Before long, the message, cause and effort is so diluted that our ability to <buzzword alert> make change is substantially weakened.
We must work together as one group with one voice and one message that grows louder and stronger with each day.
To that end, our other challenge is the media. While we have had some successes, it isn’t enough without the same single voice whose message grows louder and stronger each day.
I am very frustrated that Congress just doesn’t listen. So many people agree the law is void of common sense, but they assume it just won’t be enforced or it won’t affect them. What else can we do but keep writing them and calling our representatives? I can’t vote against Henry Waxman because he’s not my Congressman. I hope the group that organized the rally will give us a way to keep working together until the law is amended. I hope that Senator DeMint’s amendment will pass, but I have my doubts that it will. I’m sure neither of my senators in California will support it.
The Government has lost all touch with the people. They rule over us, not for us. We were once a country that had a government, now it is a government that has a country. They ignore the will of the citizens or override the will of the people by way of judicial tyranny and the people have been anesthetized.
We are waking up from our slumber and growing ever more angered as we realize our situation brought on by corrupt, greedy and power-hungry politicians.
Have to say that Kathleen Fasanella (www.fashion-incubator.com) was right on when she said that we should not cheer the stay of testing and certification. It took all pressure off. Now, nothing is happening for the most part, and not only is August coming up quickly but also next February is fast approaching. While I appreciate the XRF testing business the CPSIA has given me, I know that some people are doing absolutely nothing. But when February comes around and testing and certification is required, those people will be caught unprepared, and will have Congress and others saying . . . it has been 18 months since the law was enacted, why didn’t you do anything?
Here is a bill that has come up. it is in committee. Contact those on the committee and urge them to let it get to the floor.
HR 1692 IH
111th CONGRESS
1st Session
H. R. 1692
To amend the Consumer Product Safety Improvement Act to exempt ordinary books from the lead limit in such Act.
IN THE HOUSE OF REPRESENTATIVES
March 24, 2009
Mr. FORTENBERRY introduced the following bill; which was referred to the Committee on Energy and Commerce
A BILL
To amend the Consumer Product Safety Improvement Act to exempt ordinary books from the lead limit in such Act.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. FINDINGS.
Congress finds that–
(1) the Consumer Product Safety Improvement Act of 2008 (CPSIA) sought to protect children from the dangers associated with products containing unreasonable levels of lead, by imposing lead standards and testing requirements;
(2) the Consumer Product Safety Commission has interpreted the Act to apply to all children’s books;
(3) the Act was not intended to apply to ordinary books–those books that are published on paper or cardboard, printed by conventional publishing methods, intended to be read, and lacking inherent play value;
(4) comprehensive testing by accredited laboratories of finished books and their component materials has found total lead content at levels considered non-detectable, or 10 ppm, well below the thresholds in CPSIA;
(5) the book manufacturing process is now standardized across the United States and much of the world, does not add lead to the component materials, and is specialized such that the book manufacturing equipment is not generally used for other types of manufacturing, avoiding the potential for cross-contamination;
(6) the largest publishers in the United States do not use lead-based chemicals or other materials in the manufacturing of ordinary books, in accordance with standards promulgated by the Coalition of Northeastern Governors;
(7) the Centers for Disease Control and Prevention have determined there is minimal risk to children from lead in ordinary books;
(8) reading books is critical to child development and education and schools and libraries operating under limited budgets provide millions of children with free access to ordinary books, and yet despite the lack of evidence that their books contain harmful levels of lead, libraries and other organizations have to restrict access to children’s books due to the burdens and uncertainties associated with CPSIA’s new lead levels and testing requirements.
SEC. 2. EXEMPTION FOR ORDINARY BOOKS.
Section 101 of the Consumer Product Safety Improvement Act (15 U.S.C. 1278a) is amended by adding at the end the following:
‘(h) Exclusion for Ordinary Books-
‘(1) IN GENERAL- The limits established under subsection (a) shall not apply to ordinary books.
‘(2) DEFINITION OF ORDINARY BOOKS- As used in this subsection, the term ‘ordinary books’ means books published on paper or cardboard, printed by conventional publishing methods, intended to be read, and lacking inherent play value.’.
Well, we thought it might take a kid having an accident on an adult sized ATV but the reality is that it’s babies and toddlers who are at risk.
This might get the attention of congress. Children (babies and toddlers) are actually being harmed by this law. The CPSC has issued a recall notice for high chairs. Two children broke bones while several hundred chairs fell apart. I responded but my post has not yet gotten through moderation or they chose not to publish it.
http://blogs.consumerreports.org/safety/2009/04/evenflo-recall-high-chairs-majestic-envision-cpsc.html
Paragraph 2 reads:
Remarkably, there were 320 reports of the seat backs failing on the Envision high chair and 140 for the Majestic (not including 16 from the earlier recall) before this recall took place. We wonder what took so long to recall these high chairs. Delays in recalling defective products leave unsuspecting consumers at risk — in this case, babies and toddlers. There have been well over 1,000 reports of screws, caps or fasteners falling out.
“We wonder what took so long”? My response was that we know exactly why it “took so long” for the recall to be issued.
The CPSC is swamped with questions and exemption petitions about the CPSIA and this got buried. They can’t do their job in processing accident reports. This is exactly the scenario that Ms Nord predicted would happen–Real problems being masked by poor legislation. Consumer’s Union should be on top of reforming this law and petitioning the president to appoint a third commissioner so they can do their job.
From a New York Times article October 2007:
She [Ms Nord] was critical, for instance, of a provision to ban lead from all toys, saying it was not practical. She said that the proposal to raise the potential penalty to $100 million “may have the undesired consequence of firms, as a precautionary measure, flooding the agency with virtually every consumer complaint and incident.” Her concern, she said, was that the increase in complaints would so overwhelm the commission that, “true safety issues would go unrecognized in the process.”
In January 2009 The Portland Press Herald confirmed that the agency was overwhelmed:
Martyak at the Safety Commission said the uproar over the new law has overwhelmed the agency.
“I cannot tell you how serious this is. The agency doesn’t have the resources to implement this on the timeline we’ve been given,” said Martyak, who had just stepped out of a meeting with apparel industry representatives, who were making the case that cloth products should be exempt.
http://pressherald.mainetoday.com/story.php?id=234882&ac=PHnws
quote is from page 2 of the article.
I, as a parent, rely on the publicity that the CU gives recall notices. This bad law needs to be fixed NOW. Children are being injured because congress gave the CPSC an impossible job in forcing the implementation the CPSIA and it is now masking real problems, just as Ms Nord predicted.
This will be one of my talking points with my senator for why we need to fix this NOW.
Barb
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