Congress Should Return Toy Safety Regulation to the CPSC

By Rick Woldenberg
Special to Roll Call
June 1, 2009, 12:45 p.m.

I am a toymaker and I do not make “toxic toys.” I never thought I would have to make that statement, but unfortunately, all children’s products companies remain under assault by consumer groups capitalizing on a notorious series of toy recalls in 2007 and 2008 to propagate misconceptions about safety.

Having pushed Congress to pass the Consumer Product Safety Improvement Act last year, these same groups now refuse to acknowledge the flaws in this law. Despite an outcry over the overly broad reach of the new law, a misguided labeling policy and the devastating retroactive application of the new standards, Congress has refused to budge. Politics has taken over children’s product safety.

Toys and other children’s products have an enviable record of safety. While a few large recalls tarnished the reputation of the toy industry in 2007 and 2008, very few products and companies were involved in these recalls. For perspective, consider that Amazon.com alone offers more than 600,000 different toys and games today, an assortment likely to grow substantially as Christmas approaches. In 2007 and 2008, a total of 66 toys, equal to about 0.01 percent of Amazon’s current lineup, were recalled for lead in the paint, according to the Consumer Product Safety Commission. There were even fewer lead-in-paint recalls of all other children’s products (54) in the same period. Exactly one injury was reported from these incidents over 24 months. Notably, no recalls for reported injuries from phthalates were imposed in this period. Given the virtual absence of injuries at this high point of product recalls, it is incredible that the prior law is not regarded as “precautionary.”

While other product defects resulted in recalls of toys and other children’s products in 2007 and 2008, the fact remains that toys and other children’s products are not “toxic” and 99.99-plus percent of the many millions of children’s products (apparel, footwear, toys, books, bicycles, pens, electronics, bedding and so on) will never be recalled for any reason. Smearing our industry with allegations of toxicity spreads unjustified fear, talks down our businesses and our future, and victimizes legitimate, responsible businesses. Consumers also suffer as good products and good companies exit the market under withering attack.

The problem began when Congress usurped the CPSC’s role in making safety assessments. Despite regularly lauding the performance of the professional staff at the CPSC, Congress limited the agency’s discretion by imposing inflexible “one-size-fits-all” standards to a broad class of products cutting across many markets. As implementation of the new law became mired in stays and disputes over “unintended consequences,” the consumer advocates and their supporters on Capitol Hill faced an ironic dilemma — their long-anticipated new safety law was turning into a system of noncompliance. Yet instead of acknowledging the problems with the law and opening it up for reasonable fixes, the CPSIA backers stood their ground and implicitly defended a potentially unsafe legal environment where real bad guys may go free. Their legacy of landmark legislation has degenerated into a fracas in which neither safety nor the integrity of the market for children’s products is a primary concern.

The environmental and consumer groups promote the concept that American safety laws need to operate on a “better safe than sorry” basis. If 99.99 percent of all children’s products are safe (not subject to recall) in an active period like 2007-2008, how is a change to a different form of “precautionary” law going to make children safer? If the track record of the agency is to recall products in anticipation of injury, haven’t we already benefited from more than enough precaution? Even the distracting contention that implementation problems have been caused by the acting CPSC chairman is not supported by the record. Until the May 13 split vote on tracking labels, the two commissioners (Democrat Thomas Moore and Republican Nancy Nord) voted together on every previous CPSIA ballot (23 in all).

The issue of children’s safety is trivialized by the assumption that only Congress has the integrity or character to protect children. It is also an insult to companies like ours whose mission is to help educate children. It is unthinkable that we would allow children to be harmed using our products — and we never previously needed a coercive safety law to embrace that philosophy. We are no different than the thousands of other law-abiding companies who tirelessly serve children’s markets in so many important ways. Unfortunately, if the law remains in its present form, many of our safe elementary math, science and reading products will no longer be available to help children learn and make a better life. That’s a high price to pay for “better safe than sorry.”

It’s time for the politics of safety to take a backseat to effective safety administration. The fundamental flaw of the CPSIA must be corrected, namely that the responsibility for determining whether products are safe or unsafe should be restored to the experts at the CPSC. Wasteful provisions like tracking labels and retroactive application of the new standards should be dropped, and penalties should be refocused on truly bad acts, not on technical violations that discourage commerce. Congress should take this action promptly to restore order to the marketplace and empower the new commissioners to do their job of protecting children. With an ability to focus its considerable resources according to risk of injury, the CPSC can again establish rationality and predictability as a hallmark of American safety regulation.

Rick Woldenberg is chairman of Learning Resources Inc. and the Alliance for Children’s Product Safety.

Please save micro-businesses like Violet’s Peapod from the CPSIA!

I am a San Francisco Bay Area Designer who specializes in 100% natural, locally-made, completely adorable peapod-shaped baby sleep sacks.  I came up with my business idea while pregnant with my precious daughter, Violet, which is why I named the business after her.  Working from home doing what I love, while raising my two kids has given me the fulfillment I always wanted in life.  I truly want to keep that dream alive, but the CPSIA threatens the livelihood of thousands of micro-businesses like myself.

Many San Francisco children’s designers like me decided to band together and fight this law, making calls, writing letters, and e-mailing State Representatives, Congress people, and the Consumer Product Safety Commission (CPSC).  We have been fueled by our passion to hold onto our dreams, and we voiced our opinions to save small business like us from this unfair law.  Many, many other groups across the nation formed their own calling/letter writing campaigns and it was refreshing to know that our collective voices were finally heard…at least temporarily.

On January 30th, 2009, the CPSC approved a stay of certain certification and testing requirements under the CPSIA.  This was good news, as this allowed us some breathing room.  I was lucky to find a resource to XRF laser scan my baby sleep sacks, which is considered a reasonable way to self-test and prove that products are in compliance with the CPSIA law.  My sleepsacks passed with the tests with flying colors, and having my General Conformity Certificates has offered assurance to stores who have decided to carry my goods.  But once the stay is removed In February of 2010, 3rd party testing will be required and my XRF test results won’t be good enough proof of compliance.

If I were to have each batch of my current inventory tested by CPSC-approved third party, I would have to pay $57 per print and batch for 3rd party lead testing, and $278 per print & batch for phthalates, totaling $4,690 altogether.  If I were to increase my price point based on cost increases to cover this 3rd party testing, I’d have to raise my price point by $19.14 each.  My precious baby sleepsacks are barely selling at $53.95, so charging $73.09 each in these tough economic times would surely put me out of business.

My only other alternative would be to liquidate my inventory completely, selling it for half it’s worth (and losing $13, 218 in the process).  Once I’d get the cash flow from that, I’d be able to start up a single batch of sleepsacks (ONE PRINT).  I’d then have it 3rd party tested for lead and phthalates, and increase the price point to $57.95.  With an increased price point and only one style/print in my line, I could hardly remain competitive in the marketplace!

If the law doesn’t change by February 2010, I may sadly have to close my doors forever.  I started my business with my life savings and a dream, and I would hate to have to give those up.

Please hear the voices of local small businesses and help keep entrepreneurial spirit alive!  Amend the CPSIA!

www.violetspeapod.com

Blowback on Lead Limits

Industries say that new rules to protect children’s products go too far. Are babies really likely to eat bicycles?

Click here to read entire article by Lobbying & Law.

Toy testing rules ‘overwhelming’ to small businesses

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Toy importer Rob Wilson’s company sometimes sells wooden children’s puzzles, but he hasn’t ordered one since last November.

Wilson, vice president of Challenge and Fun in Ashland, said new federal rules that require testing of children’s products could force him to spend more than he can afford to check for lead in paint used on the games.

Along with other small toy manufacturers, shop owners and distributors, Wilson has been calling for changes to the Consumer Product Safety Improvement Act since Congress passed it last year.  Click here to read more…

Tracking Label Enforcement

CPSC COMMISSIONER MOORE VOTES TO PREVENT

STAY OF ENFORCEMENT ON TRACKING LABELS

FOR IMMEDIATE RELEASE

May 14, 2009

Contact: Ashley Hutto, (202) 828-7637, ashley.hutto@bgllp.com

The Commissioners of the Consumer Product Safety Commission (CPSC) split their vote today on a request by the National Association of Manufacturers for an emergency stay of enforcement of the tracking label requirements of the Consumer Product Safety Improvement Act (CPSIA). This marked the first time that there was not a unanimous vote by the Commissioners on a CPSIA-related matter. The tie vote means that no stay will be granted and the tracking label requirement will go into effect as scheduled in August 2009. Acting Chair Nancy Nord voted to grant the stay request and Commissioner Thomas Moore voted to deny it.

Rick Woldenberg, Chairman of the Alliance for Children’s Product Safety, issued the following statement in response to the vote:

“We are deeply disappointed in Commissioner’s Moore vote to deny the petition. His vote will result in more chaos for manufacturers and retailers from this law – particularly for small businesses – who are already reeling from a difficult recession. The leaders of Congress should take note that Acting Chair Nord, in voting to approve the petition, showed the flexibility and leadership that had been urged in letters by Senator Mark Pryor (Chairman of the Senate Subcommittee on Consumer Affairs) and other Members of Congress. It is time for these same Members of Congress to urge Commissioner Moore to do the same.

“Because of a deluge of conflicting priorities caused by the CPSIA, the CPSC has yet to issue rules for implementing the label requirement that will take effect in three months, leaving little time for manufacturers to prepare. Even when the new rules are released, tracking labels will create practical problems for small businesses. Processing labels is expensive and adds significantly to the complexity of small production runs. In addition, some products have more than one source or are assembled from components made at different times. Small businesses are throwing up their hands over this new burden.

“It is time for Congress to fix this law, which has caused massive economic damage because of its overly broad definition of children’s products, its unrealistic deadlines and its retroactive bans on the sale of existing inventory.”

The Alliance for Children’s Product Safety is a coalition of small business owners, manufacturers, crafters and entrepreneurs who are impacted by the Consumer Product Safety Improvement Act. To view the Alliance’s Capitol Hill rally that took place April 1, 2009, visit www.AmendTheCPSIA.com. For more information, please contact Ashley Hutto at (202) 828-7637.

President Obama Fills New CPSC Posts

Announces expansion of CPSC leadership;
Agency will receive 71 percent more funding than in FY2007

WASHINGTON – Today, President Obama announced his intent to nominate Inez Moore Tenenbaum as Chair of the Consumer Product Safety Commission (CPSC) and Robert S. Adler as a new Commissioner of the Consumer Product Safety Commission. Furthermore, in the President’s budget, the CPSC receives $107 million, a 71 percent increase in resources since FY 2007. This is almost three quarters of the way to meeting the President’s goal of doubling CPSC’s funding.

President Obama believes strongly in the mission of the Consumer Product Safety Commission: to protect the public, especially children, from unreasonable risks of serious injury or death from consumer products, including children’s products such as toys and strollers. For over fifteen years, CPSC has operated with only three Commissioners. To revitalize the agency, President Obama is going to expand the Commission later this summer, to include five Commissioners at CPSC. If confirmed, Robert Adler would fill one of these new posts. The addition of extra Commissioners is tangible evidence of President Obama’s commitment to restoring the health of the agency, and will ensure opportunity for additional viewpoints to be expressed at the top of the agency.

President Obama said, “It is a top priority of my administration to ensure that the products the American people depend on are safe. We must do more to protect the American public – especially our nation’s children – from being harmed by unsafe products. I am confident that Inez and Bob have the commitment and expertise necessary to fill these roles and raise the standard of safety. To ensure these goals are met, I will also increase the number of Commissioners at the CPSC. I am confident this new leadership at the CPSC will revitalize the agency and achieve the high standard of product safety that the American people deserve.”

President Obama announced his intent to nominate the following individuals today:

Inez Moore Tenenbaum, Nominee for Chair, Consumer Product Safety Commission

Inez Moore Tenenbaum was elected South Carolina’s State Superintendent of Education in 1998 and completed her second term in 2007. Throughout her career, Tenenbaum has been an energetic and determined advocate for children and families and has extensive experience in administrative and regulatory matters. During her tenure as South Carolina’s State Superintendent of Education, student achievement in South Carolina improved at the fastest rate in the nation, with scores increasing on every state, national, and international tests administered. At the end of Tenenbaum’s tenure, the prestigious journal Education Week ranked South Carolina number one in the country for the quality of its academic standards, assessment, and accountability systems. Tenenbaum also ran as the Democratic candidate for retiring Democrat Fritz Hollings’ seat in the U.S. Senate in 2004. She previously practiced health, environmental, and public interest law with the firm Sinkler & Boyd. Before attending law school, Tenenbaum served as the director of research for the Medical, Military, Public and Municipal Affairs Committee of the South Carolina House of Representatives. She carried out the Committee’s responsibilities for all legislation relating to public health, the environment, child welfare, social services, adult and juvenile corrections, state military affairs, and local government. Tenenbaum has also served on numerous task forces that provide oversight on children and family services in the state. She received her Bachelor of Science and Master of Education degrees from the University of Georgia and her law degree from the University of South Carolina. Tenenbaum is the recipient of several honorary degrees and has been recognized by numerous state and community organizations for her civic work on behalf of children and families. She currently serves as special counsel to the McNair Law Firm in the area of public school finance.

Robert S. Adler, Nominee for Commissioner, Consumer Product Safety Commission

Robert S. Adler has a breadth of experience in consumer product safety issues and an extensive knowledge of the CPSC. He is currently a Professor of Legal Studies at the University of North Carolina and the Luther H. Hodges, Jr. Scholar in Law & Ethics at Chapel Hill’s Kenan-Flagler Business School. He has served as the Associate Dean of the MBA Program and as Associate Dean for the School’s Bachelor of Science in Business Administration Program. A recipient of teaching awards both within the business school and university-wide, Adler’s research and teaching focus on consumer protection, product liability, ethics, regulation and negotiation. Before joining the UNC faculty, Adler served as Counsel on the Committee on Energy and Commerce where he advised on CPSC legislative and oversight issues under the leadership of Henry Waxman. Prior to that, he spent eleven years (from 1973-1984) as an attorney-advisor to two commissioners at the CPSC in Washington, D.C. One of the commissioners for whom he worked was David Pittle, an original appointee at the inception of the CPSC. Before joining the CPSC, Adler served as a Deputy Attorney General for the Pennsylvania Justice Department, where he headed the southwest regional office of the Pennsylvania Bureau of Consumer Protection. Adler has been elected six times to the board of directors of Consumers Union, publisher of Consumer Reports magazine. He also served on the Obama-Biden Presidential Transition Team and co-authored the agency review report on the CPSC. Adler graduated from the University of Pennsylvania and received his J.D. from the University of Michigan.

Peapods Pushes for CPSIA Rules Reforms

Just wanted to share a recent article in Ed Play about Dan, his wife Millie and their store, Peapods in MN. The link below talks about what Dan is doing with the CPSIA. The actual magazine does a wonderful highlight about his and Millie’s store in MN with lots of pictures. You need to subscribe to the magazine in order to see the in depth article about the store. Congrats Dan and Millie on this well deserved recognition of your success in your store and all you have done for those of us in the Handmade Toy Alliance!

Click here to view the article.

Rally Video – Amend the CPSIA, Washington DC April 1st

Amend the CPSIA Rally in DC April 1 2009 from Maeploy on Vimeo

Why Congress Won’t Fix the CPSIA

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.

Rally Comments and Questions

Thank you for participating in our Rally in person or online! We’d like to hear your comments or questions. Please add your comments to this page.

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