CPSIA – Witness List for Thursday’s Hearing in Washington

The House Committee on Energy and Commerce has posted its witness list and briefing memo on the web page for the upcoming hearing on the Waxman Amendment (CPSEA). Thursday’s hearing is scheduled for 10 AM EST and will be webcast. I do not have a link to the webcast at this point and may not have it before the hearing. You should be able to find the link at the foregoing webpage. If you miss the hearing, it should also be available for later viewing on the Committee site. I will post that link when available.

The witnesses will be:

• Rosario Palmieri, Vice President for Infrastructure, Legal, and Regulatory Policy, National Association of Manufacturers [N.b., the briefing memo says it will be John Engler.]
• Paul Vitrano, General Counsel, Motorcycle Industry Council
• Jim Gibbons, President and Chief Executive Officer, Goodwill Industries International
• Dan Marshall, Handmade Toy Alliance
• Steve Levy, American Apparel and Footwear Association
• Rick Woldenberg, Chairman, Learning Resources, Inc.

The briefing memo states: “The following organizations support the text of this legislation and urge its enactment: the National Association of Manufacturers, the Retail Industry Leaders Association [Ed. Note: this is Wal-Mart and Target], the Motorcycle Industry Council, the Handmade Toy Alliance, and Goodwill Industries, Inc.” So, four of the witnesses are already on record as supporting the amendment.

I haven’t changed my view that the Waxman Amendment should be OPPOSED.

As if to amplify my point, the briefing memo hawks the amendment’s beneficence to small business: “To this end, the legislation provides three major forms of relief . . . Relief for small batch manufacturers and other businesses by allowing the commission to approve alternative testing requirements for certain small batch manufacturers, by requiring CPSC outreach and assistance to small businesses, and by providing that the law’s phthalates limits shall not apply to inaccessible component parts.”

As I have explained in the past, there are NO alternative testing methods available two years after passage of the CPSIA. Too bad for small business, huh? Thus, there is no possibility of relief under this provision. Still, the committee apparently thinks that “outreach and assistance” will do the trick. What is that, psychiatry for small businesses? There are days when I think I need it, too . . . .

It’s also worth noting that the exception to the phthalates ban for inaccessible parts – portrayed here as some sort of small business bonus – was included in this amendment at the urgent request of two famous small businesses who consider it essential for the smooth operation of their businesses. You know them well, they have stores in your neighborhood – Wal-Mart and Target. Now that’s some straight shooting by the Majority, isn’t it?

Anyone still wondering why I feel small business is getting the short end of the stick?

I fail to understand why Wal-Mart and Target get the ears of this committee but small business interests are completely ignored or brushed over. This is a really sad turn of events for our federal government.

Remember, if the committee doesn’t do the hard work of fixing this bill, REALLY fixing it, those of us who survive will be back. This issue isn’t going away.

Tune in on Thursday. I’ll do my best for you.

Read more here:
CPSIA – Witness List for Thursday’s Hearing in Washington

Time to Make Your Voices Heard!

I have perhaps the most important request of you readers since I started blogging on the CPSIA 18 months ago.

Tomorrow at 2pm Eastern time, the House Energy and Commerce Committee Committee will be marking up Henry Waxman’s “fix” to the CPSIA. In my opinion, this is no fix at all. I sent the e-mail below out earlier today that details why I think this “deal” should be rejected.

Now is the time for your voices to be heard. I encourage you to e-mail members of the Committee before 2pm tomorrow to voice your concerns about the proposed “fix” and demand that the Committee begin drafting a legislative solution that truly addresses the problems with the CPSIA.

You can find e-mail addresses for the Committee at here. Click the name of the Member of Congress, then click “contact” and that will take you to a form where you can submit an e-mail. You can choose one Committee member or all of them – it’s your choice but I ask you to send at least one e-mail by 2pm tomorrow. If you happen to live in the Congressional District of a Committee Member, even better.

If we don’t speak up now, we have only ourselves to blame.

My letter from earlier today:

Dear Friend,

We are at a critical juncture right now as the House Committee on Energy and Commerce is in the late stages of considering an amendment to the CPSIA. The proposed legislation has been analyzed in my blog over the past few weeks, but is now about to move to the subcommittee “mark-up” phase. Assuming it proceeds past mark-up, the bill will be put to a vote at the committee and then by the House, and submitted to the Senate for its consideration. This could happen rather quickly given its sponsorship by Henry Waxman. Notwithstanding his desires, the Republicans are not yet on board with this “bipartisan” bill and Senate cooperation is another unknown.

I wanted you to see my latest blogpost on this amendment and hope you will contact your representatives in Washington to express your concern. The new Waxman Amendment does nothing to fix the fundamental issues in the CPSIA and continues to stack the deck against small business in favor of big business and certain favored industries. If this legislation proceeds in its present form, Congress is likely to assert that they have “listened” to our complaints and addressed them, washing their hands of the matter. With almost 2500 pages of rules already promulgated by the CPSC to implement the CPSIA, and more spewing out on a daily basis, this law is not only incomprehensible to most businesses but completely unmanageable as well. Based on testimony by Chairman Inez Tenenbaum at last week’s Senate Appropriations Committee meeting, it seems clear that the CPSC is transitioning to an enforcement posture (from its implementation phase). Therefore, you can safely assume that you will held responsible in a matter of months by a CPSC that has little sympathy for your problems complying with their blizzard of rules. [If you doubt this, read my blogposts about penalties.]

The time to act is NOW. We must block this amendment.

Richard Woldenberg
Chairman
Alliance for Children’s Product Safety

Read more here:
Time to Make Your Voices Heard!

CPSIA – "Anchoring" in the Waxman Amendment

The concept of “anchoring” is well-known to experienced negotiators. Make an outlandish initial proposal, and afterwards, all further negotiation is relative to that initial offer. The context of the negotiation is reset by its starting point notwithstanding the nature of the problem being negotiated. This clever technique is a great way to engineer a favorable outcome in a negotiation by “compromise”, all while leaving your negotiating partner totally in the dark that they have been snookered.

Mr. Waxman wasn’t born yesterday and is playing the disorganized corporate community like a maestro. The Waxman Amendment 2.0 is a classic case of anchoring. As his staff slowly compromises away most (but not all) of the legislation’s obnoxious provisions, the corporate community seems to be forgetting what is really at stake and how low a price it would be accepting to go away.

Rumors are that this amendment could go to a vote as soon as this week. Forget the idea of a hearing – that was just another head fake by Waxman staffers trying to lull us all to sleep. We hold our fate in our hands as this amendment may essentially kill off resistance to the CPSIA.

The Waxman Amendment offers slight and attenuated relief on some relatively insignificant provisions of the underlying bill, namely elimination of the cost of testing internal components for phthalates and prospective application of the proposed August 2011 100 ppm lead-in-substrate limit (which must first clear OTHER hurdles before it becomes law). The total cost of the internal component phthalates testing is trivial in the context of testing costs imposed by the law. The impact of prospective application of the 100 ppm limit, with its long lead time, seems to be virtually nil in reality. What did Warren Buffett say about picking up nickels in front of a steamroller???

By selling out for the measly offerings of the Waxman Amendment, we would be setting quite a low price for the misery and years of pain that the CPSIA is certain inflict. Is that all it takes to buy us off?

Don’t bite at Mr. Waxman’s bait. Stand strong, demand real hearings, and if he won’t act, wait him out. What price for your kingdom? The Waxman Amendment isn’t that price, whatever it is.

Read more here:
CPSIA – "Anchoring" in the Waxman Amendment

CPSIA – What does "Any" Mean, Anyhow? Waxman Staff Weighs in.

The Waxman Amendment 2.0 is still percolating but with Congress on its Spring break, progress has stopped briefly. That does not mean, however, that discussions have ended or that the Amendment is “dead”. It will likely spring back to life shortly as Congress wakes up again next week.

Those of you who savor fractiousness and gridlock in your government will no doubt be pleased to know that the usual bickering and stubborn disputes over the awful CPSIA continues unabated.

In a meeting last week about the Waxman Amendment, senior Waxman staff again rejected the concept of allowing the CPSC to assess risk. [Given the extraordinary conservatism of this CPSC Commission, I can't imagine what Waxman is worried about . . . .]

The position of the Waxmanis has significant implications for the controversy over the word “any” in the lead exemption provision. Some commentators have argued that “any” does not mean none and that if “any” is accorded that meaning, then the exemption process would never yield any exemptions. [CPSC staff have reached similar conclusions, hence their universal rejection of exemption requests. This also explains their puzzling approval of nuclear waste for inclusion in children's products.] Resolution of this issue might not only crack the door for exemptions but might also help narrow the scope of CPSC responsibilities by eliminating obviously safe products from the lead rules. This would be good, to restate the obvious.

According to Waxman staff, the CPSC got it exactly right – the word “any” is meant to prevent exemptions if ANY lead could pass from the subject item into the human body. No matter that this means that there will never be any exemptions possible under the exemption process (!). No matter that there are many other environmental sources of lead which pose a far greater hazard in a child’s life than almost all children’s products. No matter that many useful products might be banned (see my latest casualty post). In the Waxmanis’ estimable view, Congress “wanted” ZERO lead in the communal toy box. Otherwise, there might be a “perverse” effect on safety. Or so they say.

This is exceptionally unlikely to be true. Interviews with MANY members of Congress over the past two years confirms that “Congress” believed that the CPSIA included a real and workable mechanism for sensible exemptions. Not that anyone thought about the details of this bill for more than a few micro-seconds, but if they did, they thought there was a viable exemption process. Actually, it takes virtually no effort these days to find members of Congress who assert that the CPSIA was a toy bill. Gotta keep ‘em guessing, I suppose.

It must be nice to be able to project your own views onto an entire institution. This is a good way to defect blame. What did Congress “want”? No one can know what that amorphous institution wanted or wants. At this point, the Waxmanis are self-appointed interpreters of the Congressional psyche. In reality, it only matters what “House baron Henry Waxman” wants. In this case, an impotent exemption process is exactly what he wants. The sham also provides him with cover against more skeptical members of Congress. That you can see through it hardly matters – do you actually expect members of Congress to read the law and figure out how it works? Come on!

That’s participatory government for you. Unfortunately, you only think you are participating. Mr. Waxman will let you know when he needs your input. . . .

Read more here:
CPSIA – What does "Any" Mean, Anyhow? Waxman Staff Weighs in.

CPSIA – Duplicity and Sleight of Hand in the Waxman Amendment

The icing on the cake of the Waxman Amendment is their sneakiness. As if the problems already reported were not enough, the Dem authors greedily tossed in some real bombs, all using language sufficiently opaque to obscure their meaning. I presume this was some sort of “clever” gambit to escape attention.

You deserve to know more.

First, by way of background, let’s review how we got to this point. The CPSIA was signed into law in August 2008 and howls of pain and protest began immediately. For more than a year, the Dems asserted that the law was perfect and the CPSC would fix the “unintended consequences”. Over time, overwhelming evidence mounted to prove that the law needed to be changed, the CPSC could not fix everything without help and most disappointing, not all the bad consequences were ‘unintended”. After more than a year of bickering, Henry Waxman unilaterally tried to sneak a CPSIA amendment into an omnibus bill in December but failed. Finally, the CPSC Commission was ordered to submit a list of recommended CPSIA changes to the House Appropriations Committee on January 15. The Commission issued its report on time but could only come to consensus on a small handful of items.

In the wake of the Commission report, this amendment was drafted by Waxman’s staffers to “fix” the CPSIA.

But . . . a couple other things happened. First, it is my understanding that Inez Tenenbaum sent a secret list of 20 changes she wanted to the Waxmanis. [I have not seen this document; its existence is an open secret.] So apparently, the Commission report was for public consumption, but the Chairman had her own wish list for private viewing.

The second thing that happened was that the Waxmanis decided (perhaps with the encouragement of Tenenbaum) to use this amendment as a way to further amend the original CPSA (dating back to 1972) and make things WORSE for you and your businesses. These changes were cloaked in seemingly technical jargon at the end of an the amendment. [Connsumer groups had also expressed support for these changes in recent public meetings.]

Let’s look at what the Waxmanis are trying to do:

a. An Open Door to Confidential Information. Section 6(b) of the CPSA provides a notice period before disclosure of information to the public by the CPSC. Among other things, this provision requires that the Commission must give notice to the manufacturer of the disclosure to permit comment and dialogue, as well as the initiation of court actions (injunctions) to prevent the disclosure of such information (this is called “due process”). The Commission is also obligated to make sure “that such disclosure is fair in the circumstances and reasonably related to effectuating the purposes of this Act”. This provision essentially provides a check-and-balance to prevent the unfair coopting of the information disclosure process against manufacturers.

The amendment makes the following change to Section 6(b)(1): “striking ‘its public disclosure’ and inserting ‘initiating the public disclosure’”. Wow. I can tell you’re reeling from the significance of this change.

Okay, what’s the big deal? Is there ANY difference here? Yes, in fact, there is. By changing these three words, Section 6(b) now applies ONLY to disclosures initiated by the Commission. Isn’t that everything? No. What kind of information disclosures might NOT be initiated by the Commission? Freedom of Information Act requests by, say, reporters, plaintiff attorneys or consumer groups.

Uh-oh.

Let me state this a little more clearly – the changes in the Waxman Amendment take away ALL protection of businesses on FOIA requests and allows the (passive) disclosure without prior notice. You lose ALL protection under 6(b) with this tiny change of three words. This would apply to all investigative files (like any of your Section 15 reports) and other confidential correspondence between you and the CPSC. Presumably, if enacted, that confidential material could show up on the front page of the Chicago Tribune WITHOUT NOTICE. [Disclosure of trade secret information is regulated by Section 6(a) and is presumably not eroded by this amendment.]

The relationship between this provision and the Public Database is not clear. It might change (reduce) the flimsy protections already in place, or might provide a way for reporters, plainiff attorneys and consumer groups to get at information that might not appear in the database.

This provision is entitled “CLARIFICATION OF LAW” in the Waxman Amendment. That is a plain, unambiguous LIE. The authors of this amendment think you are a fool.

b. Subpoena Authority Loses Its Check-and-Balance. The amendment changes the rules on subpoenas in two important ways. First, in another “clarification of law”, Section 27(b)(3) is amended “by striking ‘documentary evidence’ and inserting ‘documentary and physical evidence’”. This change does not incorporate any reasonableness standard and thus allows the CPSC to subpoena evidence in private suits regardless of the consequences, and even more importantly, can subpoena inventory as a backdoor way to recall it. This is unfettered government power. Is that a good idea?

The second change requires a little background. The Commission has broad powers to delegate its powers to staff – except for subpoena power. So, if the CPSC wants to issue a subpoena, there is a procedural check-and-balance in place to require the additional step of seeking Commission approval. The Commission, being an entity visible to the public, presumably would be less wrapped up in the emotions of an investigation and be capable of more balanced judgments. It’s a procedural safeguard that protects the integrity of the system but is highly unlikely to slow an investigation detrimentally.

The amendment, however, gives the Commission the power to delegate its subpoena power now. This opens up the possibility of zealous staffers who could use subpoena power to harass or even punish “uncooperative” firms, all outside of public view. There would be no due process protections to rely on, either. This is yet another expansion of government power – but with little demonstrated need. [In other words, what terrible things have happened that could only be fixed with this legislative change?]

c. Information Disclosures in Voluntary Recalls Ratchets Up. The CPSC recently put out a 17 page Federal Register notice of its requirements for Mandatory Recall notices. Memorized it yet? Why not?! Of course, you may be forgiven for feeling you could ignore it, since mandatory recalls are quite rare and usually relate to severe risks to public health and safety. Most recalls are voluntary, which means mandatory provisions are rarely used. In any event, if it ever comes to this, the disclosure probably needs to be more comprehensive and significant.

For those reasons, I did not comment on these rules. They seemed irrelevant to me. G-d forbid such a thing should happen on my watch. Pew-pew, knock wood. I may not have been the only one to look at it this way.

Oops, my bad. The amendment makes these provisions apply to VOLUNTARY RECALLS. Sneak attack? Perhaps. The rules for mandatory recalls includes several obnoxious requirements, making compliance much more burdensome and expensive, not to mention potentially devastating to your business.

d. If You Liked the Baby Slings Warning, You’ll Just Love This Change. Knowing you as I do, I imagine you are thinking “I wish the CPSC could act more impetuously and strike out at entire product classes or industries without doing studies or anything too science-y.” Well, it’s really your lucky day!

The Waxmanis sent you an early Christmas gift with their proposed change to CPSA Section 5(a) requiring the Commission to “promptly inform and educate consumers regarding a class of imminently hazardous consumer products upon identifying or being made aware of such a class of products.’’

And how will this work? “[Whenever] the Commission identifies or is made aware of a class of imminently hazardous consumer products, the Commission shall take appropriate steps to inform and educate consumers through the media, State and local governments, and private organizations regarding such class of products and the nature of the hazard.’’

I believe that the CSPC must go to court to do this now.

I have just a few questions:

- What about due process?
- What are the procedural safeguards?
- What constitutes a “class of imminently hazardous consumer products”? What steps must the Commission take to reach that conclusion? Is reading an AP story enough? [I presume the answer is yes.]
- Who will protect innocent companies inadvertently slandered by your advice? [For example, the baby slings warning apparently related to very young babies or preemies, but the headlines applied to everything in the product class. Too bad for companies making safe baby slings for older babies?]
- When the CPSC jumps the gun and hurts companies or entire industries needlessly or in error, who will pay the damages? Do we get a bailout?

Call me a cynic, but I think this erosion of safeguards is just a mite troubling.

There are probably other ticking bombs in this legislation that I haven’t found or told you about. I think you get the point nonetheless.

Two more thoughts:

1. These four changes significantly erode protection of corporate interests under the CPSA. This makes doing business MUCH riskier and invites a lot of randomness into our business lives. It also makes it tough to believe you can trust the CPSC during a Section 15 investigation or other altercation. If you have a real worry about how you will be treated, do you experience a heightened incentive to cooperate or to hide? Will this raise the rate of disclosure of problems, or provide an incentive to bury the problems?

If disclosure to the CPSC now involves certain pain, why would people bring misery on themselves voluntarily? And when more people start to hide – and are found and punished – will the cries for stricter rules rise or fall? They will rise, as howling consumer advocates will assert that this is “proof” of the venality of corporations. The “only” solution will be even stricter rules and higher penalties. Perhaps we should all be sent to jail preemptively, save some time.

2. I hope you share my utter outrage at the arrogance and effrontery of the duplicity and sneakery of the Waxmanis. Such arrogance is only possible when public officials feel that they are beyond reach. This deception shows clearly how high and mighty the Waxmanis feel, how imperious their attitude. Their anticipated ultimatum to the business community to fall in line behind this amendment is more of the same. It’s rather revealing.

There is no reason to puzzle over disillusionment with our government. The Dems blew it . . . and continue to blow it. This amendment was a chance to build bridges and mend fences. Insead, the Dems go on a rampage.

I am tired of being treated like this by my own government.

Read more here:
CPSIA – Duplicity and Sleight of Hand in the Waxman Amendment

CPSIA – "Low Volume Manufacturers" under Waxman Amendment

The proposed Waxman Amendment adds a new term to our CPSIA lexicon: “Low Volume Manufacturers” (LVMs). This term is introduced in the ironically-named Section 4: “RELIEF FOR SMALL MANUFACTURERS AND OTHER BUSINESSES”.

How small is “small”? The definition of a LVM is a manufacturer that

“(A) manufactured or imported no more than 2,000 units of all products manufactured by the manufacturer during the most recent calendar year; and (B) had gross receipts totaling not more than $200,000 during such year.”

To clarify, the definition intones:

“the products and gross receipts of a manufacturer shall be considered to include all products and gross receipts of each entity that controls, is controlled by, or is under common control with such manufacturer.“

Yep, THAT’S small alright. In other words, if you made or imported 2000+ units of anything regardless of value (all products added together) OR had gross receipts of $200,001 last year, you get nothing here. So, if you sold 3,000 Popsicle sticks for $50, you are out. If you sold 201 cabinets for $1,000 each, you are out. Only the true small fry are included here. Happy?

Hey, isn’t there some sort of federal definition of a “Small Business”? Yessir, the SBA publishes size standards to define Small Business. These federal standards are found in myriad federal legislation (shocking, right?). They are widely used – so why not include them here? That question was posed directly to the Dems – especially since earlier drafts of this amendment featured a higher dollar limit (also inadequate). Why did the Dems tighten the standard so much? Why not incorporate the SBA standards, like every other federal agency?

The best explanation I can give is that the Dems don’t really have any interest in providing relief to small businesses. They also may want to appear to give relief, principally to fool members of Congress who have expressed concern for the fate of crafters under the CPSIA.

Do you think I’m being too cynical? Let’s not forget the words of Senator Durbin’s associate a year ago: “I think you are right that the CPSIA imposes costs on businesses, and because of economies of scale it’s the smaller businesses that will feel these costs more acutely. This is part of a larger calculation that it’s worth the costs to shift from the old system of post-market correction (once a dangerous product is out in the market and leads to sick kids, recalls, lawsuits, etc.) to a new system of pre-market testing and certification (instead of just assuming products are safe and paying the price for false assumptions).“

She said it – small business problems induced by the CPSIA were part of a “larger calculation”. With this amendment, the Dems again test our gullibility.

The provisions relating to LVMs provide the following “relief”:

a. This provision is designed to provide modified requirements for LVMs under Section 14(d) of the CPSA, in other words, the long-delayed and never drafted “15 Month Rule”. For those of you scoring at home, the “15 Month Rule” is now four months late – call it the “19 Month (and counting) Rule”.

b. The “relief” that the CPSC can offer LVMs is “alternative testing requirements” that “provide for reasonable testing methodologies to assure certification based on compliance with the relevant consumer product safety standards”. The alternative methods must ASSURE COMPLIANCE. Can you picture what such “assured compliance” might look like? If these words have their normal English language meaning, the “relief” should be nil if compliance must be assured.

c. The CPSC has the right to implement such alternative testing requirements for LVMs on a product, product class or even for a specific safety standard or part of a standard.

d. NO relief is allowed for lead-in-paint, cribs, pacifiers, small parts, children’s metal jewelry, baby bouncers, walkers and jumpers and durable infant or toddler products (as defined somewhere). All of you LVMs, make a note!

Have you ever heard the expression “trap for the unwary”?

e. This provision also calls for the creation of an “Office for Business Education, Outreach, and Advocacy”. Since I called for such education resources in my first speech at the CPSC back in November 2008, I shouldn’t make fun of this. I just like the legislative goal of this organization: “assist the Commission in informing and educating manufacturers and retailers about requirements under this Act or any other Act enforced by the Commission”. This is much needed. Of course, given that you must master literally thousands of pages of gobbledygook to fully understand the CPSIA as implemented, I would DEFINITELY not want this job. If anyone calls about this opening, tell them I am at the dentist.

f. The provision adds an idyllic sounding provision (Section 4) to the CPSIA which states the pleasant intention to “cooperate” with LVMs “in enforcing the lead limits and third-party testing requirements”. Of course, all cooperation must be “consistent with [he] goals of statute”. In other words, you must be able to prove you comply. There are soothing words about assessing the practicability of tracking labels for these micro-businesses. [Remember that "practicable" incorporates concepts of economics .]

Shame that you and I won’t be eligible for tracking labels relief, too . . . .

This charade purports to provide relief to small businesses but in fact, will benefit virtually no one. Even the Handmade Toy Alliance, a CPSIA advocacy group created by crafters, has few members that would benefit. Notably, there are many more small businesses affected by this law beyond the HTA, so the failure to impact HTA members is just an indicator of how lame the proposed relief actually is.

The SBA sets a high bar in its definition of small business for several reasons (as high as 500 employees or $500 million in revenue). Among them is a fear that legal benefits for small businesses may be unfairly distributed if the definition is too narrow. Many small businesses could miss out on needed protections. Furthermore, the complexity of the U.S. economy makes it difficult to describe a small business. The high bar in the SBA definition leaves room for small businesses in every industry from airplanes to pencils to baby clothing.

The SBA certainly doesn’t want to disincentivize growth or prosperity among small businesses. They recognize that the small business community is a huge jobs creator, so maintaining its financial health is a public policy imperative. The SBA wouldn’t want small businesses to lose special legal benefits because of an immaterial event, like a small incremental sale. So a law that TAKES EVERYTHING AWAY when you sell one more unit of ANYTHING or take in one incremental revenue dollar (all at a very low level of sales that would not coincide with a fundamental change in the nature of your business) would never fly. Never fly with the SBA, that is. Mr. Waxman apparently thinks this is fine – but actually, it’s UN-AMERICAN. Our laws are supposed to encourage us to grow. At least they used to.

If there is one basic reason to be critical of this provision, it’s the very conceit of granting relief by business size. This misses the point of SAFETY entirely. Size of business only became an issue under the CPSIA because the law is too broad. Let’s not forget that the prior law had standards for products, not for companies by size. Why do we need size exceptions now?

Think about it – if your child is harmed by a product, will it matter how much revenue the manufacturer earned in the previous year? Do you think the CPSC wants to modify “safety rules” for little businesses only to find out that one of these businesses hurt your kid? Uh, no. So why take this legislative approach? It’s simple -the Dems have constrained the way we can fix the law. They have fixed, absolutely FIXED, the definition of “safety”. The original standards and the original age limits MAY NOT BE REVISITED. These rules are too broad and invite many negative consequences – but since the Dems will not agree to modify them, we must apparently devise ever more complex rules to circumvent (or apparently circumvent) the problems they cause. In this case, the Dems offer relief for tiny companies. Those of us who have enjoyed enough success to hire a few employees and stop working out of our bedrooms are ineligible for this “relief” although our problems are just as troubling.

I do not accept that there is no solution here, however any durable solution requires that the definition of safety be modified to something sensible. The Dems won’t allow it. This is their “legacy” and they are bound and determined to ensure that it survives, ridiculous or not.

That’s your small business relief. Enjoy!

I intend to publish one more post analyzing the rest of the Waxman Amendment. It will cover an exception to the phthalates ban for inaccessible components. It will also document the sneakiness of the remaining language in the amendment. You aren’t meant to understand it – but I will do my best to shed some light.

Sorry, Henry! Let the sun shine in.

Read more here:
CPSIA – "Low Volume Manufacturers" under Waxman Amendment

CPSIA – Waxman’s New Amendment Progress Report

In the last couple weeks, Rep. Henry Waxman’s staff on the House Committee on Energy and Commerce has been approaching Republicans and various stakeholders for feedback for a “bipartisan” approach to fixing the CPSIA. In these discussions, the staff has acknowledged that the law is “flawed” and requires surgery, not just tweaks. An interim (artificial) deadline of this week has been established for comments on their planned amendment. A draft of this amendment has not seen the light of day yet. No one knows what it will say.

While this may sound “good”, the Waxman staffers have also attempted to constrain the development of the amendment. For starters, they insist that the amendment be based on the failed Waxman amendment of last December. [Last year's try was covered in several posts in my blog from December 11-16.] They have also drawn quite a few lines in the sand, such as no change to age limits in Children’s Products. They favor exemptions for individual product categories or even individual products, a Swiss Cheese approach. [I hate this approach, as does just about everyone else other than the Waxmanites.]

The Waxmanites seem interested in helping out the ATV’rs. Apparently, the legislative logic is that if the amendment caters to the ATV’rs, who have been quite noisy and enjoy wide support among members of Congress, no one will be able to vote against the amendment for political reasons. Thus, the makings of a Democrat victory and the appearance of bipartisanship. I can see it now: “The two parties worked together and fixed the parts of the law that caused unintended consequences. All is well!”

Among the “have-nots” in this approach:

• “Common Sense”. This case-by-case or product-by-product approach means that the Waxmanites refuse to even consider trusting the CPSC to do its job and assess risk for itself. The only people the Waxmanites and consumer groups can trust are . . . are . . . themselves. You won’t be able to draw a line between those that are “in” and those that are “out” in any rational way.
• Rhinestones. On the subject of rhinestones, my understanding is that they are so resolute on keeping these innocent stones in the bill that they would be willing to write rhinestones in explicitly. This is the opposite of case-by-case exclusion – it’s a case-by-case INCLUSION.
• Educational Products. While the Waxmanites say they want to exclude educational products, they can’t figure out how to do it since you might use an educational product in your home. Horrors! Again, without a simple notion of what’s safe and what’s not, how do you expect a sensible rule to emerge from this primordial goo?
• Bikes. They really want to figure out how to help bikes but can’t seem to do it. For this reason, they are chatting about an indoor/outdoor exclusion. In other words, and I am not kidding, they have suggested a rule that if you keep something in your garage, it’s “out”, and if you keep it indoors, it’s “in”. So everybody – move all your toys, children’s clothing and shoes, furniture, books, pens, appliances and so on into your garage, quick, so you can qualify for this great new exemption! [Try to resist holding a garage sale, though, because that presents special risks under the law!]

Not one to look a gift horse in the mouth, I am happy they are thinking of an amendment, but I am not happy that we still find ourselves adrift without any sense of what’s safe and what’s not. It is hard to foresee an amendment that does much good with this kind of inflexibility. Bipartisanship promises to be hard to obtain or a sham staged by Democrats for their own benefit.

Remarkably, a hidden issue that may weigh on these proceedings is the growing awareness of paralysis at the CPSC. The agency saw a massive increase in its budget last year, to match its massive new responsibilities, but still finds itself mired in open projects and conflicting priorities. Simple things are taking forever. Agency paralysis cannot be prevented in this environment without a significant paring of CPSIA priorities, something that the Waxmanites have a hard time conceding. And Obama won’t give the agency more money, so they’re stuck. And we’re stuck.

That’s not where you want to be.

Something to think about as we go forward:

1. Principle One: Your silence is deemed to be your approval. Silence = approval. You must swing from the rafters to get their attention, too. No, don’t do that – too dangerous.
2. Principle Two: An unopposed view, particularly a document with footnotes, is considered definitive. After all, if it were wrong, why didn’t anyone point it out, with footnotes? This is really how the Waxmanites think.

You need to keep these principles in mind. Your loud involvement can help a lot.

To Be Continued . . . .

Read more here:
CPSIA – Waxman’s New Amendment Progress Report

CPSIA – Waxman Amendment Update

A few tidbits:

1. The Waxman amendment is expected to be attached to H.R. 3326 Department of Defense Appropriations Act, 2010. It has not been added yet, but will be done just before it goes to the floor of the House, presumably sometime tomorrow. It is expected to appear on the House Rules Committee website at that time. Speaker Pelosi is apparently going to Copenhagen on Wednesday which is also expected to be the last day that the House is in session this year. Thus, this amendment is expected to pass into law by Wednesday as part of this unstoppable appropriations bill.
2. Despite a flurry of frantic back room conversations, there appears little likelihood of change in the pending amendment language or terms. Mr. Waxman’s staff is telling one and all that the amendment is the “best we can do” and if we don’t like it, too bad for us. As noted, this amendment was written unilaterally by the Democrats with the cooperation of the Democrats on the Commission and without even showing the language to the Republicans on the House Energy and Commerce Committee or on the CPSC Commission. Hearings, naturally, are OUT OF THE QUESTION. Nancy Nord commented on the Democrats’ slight today: “While the amendment is less than clear legislative drafting, with its passage, Congress does acknowledge, for the first time, what many of us at the agency have been saying for many months–the inflexible nature of the CPSIA has limited the ability of the CPSC to minimize the unintended consequences of the law–hurting product sellers and limiting consumer choice while not advancing safety. This amendment was drafted in a closed and partisan process, without input from relevant stakeholders and its shortcomings reflect this flawed process.” [Emphasis added.]
3. The subterfuge of Mr. Waxman and his allies on the Commission has resulted in almost no media attention to this critical amendment. The press has barely picked up on it (there was a tentative mention in the Product Safety Letter tonight, but that’s it as far as I can tell). This plays right into their hands by keeping the dissatisfied members of Congress at bay, something that’s not particularly difficult when there is so much attention diverted to “fat cat bankers” and health care legislation, among other things. Still, keeping it out of the papers helps quite a bit.

One can only hope that these tactics will backfire. This much appears clear – the legitimate interests of the regulated community, the well-documented issues of businesses (large and small) under the CPSIA, have been totally ignored. Only a small group of politically-connected industries had the power to jump the queue. Nice for them, but lousy for those of us left behind.

Read more here:
CPSIA – Waxman Amendment Update

CPSIA – Still Steaming Over Mr. Waxman and His Unilateral CPSIA Amendment

I am still trying to unpack what happened late Friday when the Waxman amendment to the CPSIA leaked out. Since the news is so fresh and so few of the actors have come forward to account for themselves, let’s be conservative and analyze only the most positive possible scenario:

• Mr. Waxman now accepts that some aspects of the CPSIA need to be fixed.
• Mr. Waxman now accepts that the CPSC cannot fix the law through rulemaking alone.
• Mr. Waxman is being a “good guy” and showing his “good faith” by allowing a change to the law.
• Ms. Tenenbaum believed that something is better than nothing and made a practical judgment to support the Waxman amendment as a step in the right direction.
• Ms. Tenenbaum concluded that fighting with Ms. Waxman might worsen the situation for the agency and for the victims of the law.
• Ms. Tenenbaum thought that getting an amendment now might open the door to more amendments later.
• Ms. Tenenbaum thought the Commission could use this “loophole” to ease pressure on at least some victims of the law.
• None of this affects the good vibrations that emerged in recent weeks with the CPSC who has noticeably softened its rhetoric and reached out to the regulated community to find amicable solutions to the perplexing issues caused by the CPSIA.

I think that’s about as sympathetic a portrayal as I can paint of the Waxman amendment and the way it was generated. With that sunny scenario in mind, how would I now interpret the events?

1. Waxman is in control, and will not relent. Both minority members of Congress and minority Commissioners have been largely disenfranchised for the future of this law. His need for control made impossible redress of the many other issues documented by the likes of resale shops, education companies and apparel-makers.
2. Waxman will dictate precisely the speed and dimension of fixes to the CPSIA. The pain and disruption in the market does not influence him. As the terms of the original law indicate, he does not regard economics as a factor in setting safety policy. [An economist would characterize this outlook as irrational.] Political pressure does influence him, hence the meager effort to appease the ATV and publishing industries. This amendment is consistent with the longstanding position of his staff – so there is little to indicate further flexibility. If you believe the “one bite at the apple” crowd, this is grim news and contradicts the concept above that one amendment might lead to other amendments.
3. Waxman has no intention to publicly debate the issues under the law. Likewise, he has no intention of possibly losing control of the discussion or the message. Given his stated interest in reforming the Toxic Substances Control Act, it remains critical to portray the CPSIA as a success and as an advance in regulatory “theory”. The Waxman amendment makes clear that the legitimate concerns of the regulated community are taking a permanent back seat to a political agenda set by consumer groups and the California contingent. Again, not good for us. . . .
4. The CPSIA is now clearly the Democrats’ law. Republicans have been exiled from the safety debate. It is shocking that party lines now define the children’s product safety debate since injuring children is not a political issue. Yet, any notion of bipartisanship has been crushed.
5. Whether for political gain, sympathy with the original design of the legislation or for practical reasons, the Democrats on the Commission have fallen in line with the Waxmanites. The teamwork on this amendment makes them appear to be allies. If this means that the Waxman views on implementation will also hold sway, it forecasts grim developments ahead for regulated companies.
6. The appearance of appeasement or even complicity by Ms. Tenenbaum is inescapable. Even in the friendliest interpretation of events, Tenenbaum comes out as a weak defender of the legitimate interests and concerns of the regulated community. And “common sense” seems forgotten. What kind of partner does that make her? Do her statements on consulting with stakeholders and open dialogue seem somehow self-serving now? Right now, it is very hard to know when or whether she will toss regulated companies overboard. This makes partnership with her difficult because you must give to get . . . now that the “get” is in doubt, how can the regulated community become comfortable with the “give”? I also think it’s reasonable to ask why Ms. Tenenbaum allowed this provision to be negotiated in the dead of night. That’s not how a partner behaves.
7. There is a BIG issue of trust within the Commission here. The very public way in which the Republican Commissioners received notice of their irrelevance will cause lasting injury to relationships. It is hard to see collegiality restored quickly on the Commission after this betrayal. Of course, I can’t help but recall the mantra repeated by many pro-CPSIA advocates – that the CPSC needs a five-person Commission. Doesn’t the amendment “process” expose this as a joke? If Tenenbaum and Waxman are going to ignore the Republicans, was Congress really saying that the CPSC desperately needed three Democrats in a majority position? Gosh, I think the Republicans that voted for the law might take issue with this . . . .
8. The inclusion of lead labeling for excluded items confirms the zealotry of the Waxmanites, the impotence of the resistance movement and the persistent disregard for the needs of innocent victims of this law. Of course, difficult-to-obtain exclusions are quite anti-small business, as are the lead labels. The labeling is even more incredible if you take into account that exclusions will only be granted in circumstances where the inclusion of lead will have virtually no conceivable health impact. So if the Chairman would sell us down the river with a useless and extraordinarily-limited amendment without addressing ANY of the other pressing issues or demanding the right of the Commission to assess risk, then what else can we reasonably expect from here on out?

That’s the $64,000 question, isn’t it? Frankly, this amendment and the behind-closed-doors process which excluded all corporate stakeholders and many political stakeholders, sharply erodes trust in all directions. Doing this behind everyone’s backs – during a two-day workshop purportedly designed to solicit stakeholder feedback and get everyone on the same page – seems remarkably disingenuous. You can safely assume many recent conversations in retrospect seem less than candid or straightforward.

To work out the difficulties with this law, leadership on the Commission (Democrats) and in Congress (Democrats) need to come to grips with the fact that the law is incredibly misconceived and destructive. The dream that the Precautionary Principle actually works to anyone’s benefit has been debunked. To cram down this noxious law despite the legitimate concerns of the regulated community will NOT snuff out opposition – but instead will inflame it. The problems won’t go away, and cannot be buried. The issues will fester and rot until addressed.

If the issues marbling the law are allowed to linger long enough, the Democrats can ensure lasting damage to the agency and market catastrophe. I will repeat myself: there is a legacy issue for Tenenbaum and the Dems – and having jettisoned the Republicans, it’s all theirs now. The CPSC can be rendered ineffective and wholly bureaucratic, with all the attendant damage that entails, or it can be restored to glory. The choice is theirs and the stakes are high. Interestingly, the regulated community will support an effort to restore effectiveness at the agency, but that will necessarily involved restoration of risk assessment and political independence at the agency. Hard to see Waxman going along with that.

Do we have the leaders for this effort on the Commission? Time will tell. Like everyone else, they will be judged by their results. You and I are along for the ride, whether we like it or not.

Read more here:
CPSIA – Still Steaming Over Mr. Waxman and His Unilateral CPSIA Amendment

DeMint Amendment to the Senate Budget Resolution

SUPPORT THE DEMINT AMENDMENT TO THE SENATE BUDGET RESOLUTION

Senator DeMint will offer an amendment to the budget resolution to create a deficit-neutral reserve fund to protect small and home businesses from the burdensome and impractical requirements of the Consumer Product Safety Improvement Act (CPSIA) of 2008.

The CPSIA has caused many small and home businesses to unnecessarily increase the costs of their products without providing substantial improvement in product safety.   The legislation was drafted so broadly that it swept up small and family businesses that were never part of the problem.  The law imposes burdensome testing requirements when more common-sense approaches could guarantee the same level of safety.   Congress should have done better and it can do better.

The amendment that Senator DeMint will offer would:

• Delay the lead limits 6 months.
  • Congress and American businesses need breathing room so that we can fix this act.

• Exempt thrift stores and other second hand sellers
  • The Goodwill and the Salvation Army have never been a safety problem and in these hard economic times people need access to affordable goods now more than ever.

• Exempt the sale of books and children’s motorcycles from the CPSIA.
  
  • Books and bikes were never the problem.  These two products are the perfect example of the law of unintended consequences.

• Allows manufacturers to show that their products are within the lead limits by showing that all the components of their products are within the lead limit.
  • Lead doesn’t come out of thin-air! If it’s not in the component it won’t be in the product.   This is a common-sense approach that will save businesses thousands of dollars without compromising safety one bit.

• Prevents retroactive enforcement that would require otherwise safe products from having to be destroyed.
  • There are hundreds of millions of dollars of safe products on the shelves and in warehouses today that should be sold.  It is senseless to make businesses destroy perfectly good products.

These reforms will go a long way to fixing the CPSIA.  It’s also important to outline what this amendment won’t do.

The amendment will not change the lead limits in the Act.  The amendment would keep the same lead limits in place in the bill and require that the overwhelming majority of all children’s product sold in the U.S. – except the few exempted above – meet the stringent new standards in the CPSIA.   This is crucial.  Children will not be exposed to any higher levels of lead because of my amendment.  The only change will be a reform of the bureaucratic hoops that small and home businesses have to jump through.

If you have any questions about the amendment please do not hesitate to contact Tom Jones (tom_jones AT commerce DOT senate DOT gov) with Senator DeMint at 202-224-6121.