Once again, I want to thank Rep. Pompeo and his Chief of Staff Mark Chenoweth for their political conviction and political bravery. We are never going to get out of this mess without some help from courageous members of Congress willing to stick their neck out for us. Thank you!

You have to laugh at the Democrats’ call for bipartisan work on safety during Thursday’s CPSIA hearing (including Mr. Waxman in his opening statement). This amendment is a good measure of how committed they are to bipartisan cooperation. One has to wonder if their concept is that bipartisan work on safety will be possible when the Republicans “wake up” and see things Mr. Waxman’s way.

Please don’t breathe any sighs of relief yet. The Senate is a big stumbling block to progress on the Pompeo Amendment. There’s plenty of politics yet to come. I will try to keep you posted!

Read more here:
CPSIA – Pompeo Amendment Passes!

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

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!

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

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.

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