CPSIA – Am I a Tea Partier?

I have heard the comment that I am too harsh on the Democrats and risk marginalizing myself as some sort of Right Wing Nutjob, a Tea Party extremist.

Is this a fair criticism?

My POV is that this criticism fails to take into account my experiences in this business tragedy and does not consider that my views and my anger did not come from the sky – they were built, block by block, by Congressional Democrats and by the leadership at the CPSC.

I won’t defend my being perpetually angry at the agency or Congress for their defiant stance of indifference. [Some Dems cloak their indifference in words of sympathy, never matched by actions consistent with their purported tears. I follow actions, not words, and prefer to ignore insincere blubberings unless something concrete is offered. It never is.] I have been working on this project for three years now, and actively working to get the CPSIA fixed for almost two years. That’s a punishing death march, guys, particularly since almost everything I have written or pushed for has been disregarded or completely ignored. It seems improbable that I have been wrong about everything without exception for two long years – even a blind squirrel finds the occasional acorn. Hence the anger and the mounting frustration.

Of course, there are other sources of anger and frustration. The process of implementing this flawed law by the CPSC has destroyed so much good in the process. What we have left is much less protective of public health or well-being. The constant media pandering and the relentless positioning of businesses and business people as evil societal elements that must be controlled is, frankly, embittering. Under the pressure of this relentless drumbeat, it is hard to not feel unprotected and in great danger. We have no defenders and are on notice that we are prime suspects.

No defense, but please someone, tell me, what am I supposed to do now? Grin and bear it? Give in and pretend everything’s okay? If you think either option is realistic, you really don’t understand my situation or my motivation. These aren’t realistic options. I am fighting off doomsday – grin-and-bear-it doesn’t work when the Grim Reaper is coming your way. And there are no days off.

So if I can’t go along to get along and if the CPSC and Congress have proven beyond a shadow of a doubt that they have made up their mind and have no interest in me or my problems, what options are left to me? The process of advocacy that I have been practicing and that I have been financing hasn’t produced enough results – we are still in the soup. If I can’t give up and if what I am doing just doesn’t work – logic suggests I need to do something else.

So what I have been doing is telling the truth – it’s the Dems who have done all this and it’s the Dems who refuse to fix it. It’s the Dems who won’t listen and it’s the Dems that refuse to acknowledge their errors. If everyone in Congress voted to save their job by supporting passage of the CPSIA in August 2008 rather than face reelection attack ads, that was then and this is now. The Dem leadership has chosen to ignore the OBVIOUS and continue to deny that anything can or should be done in this matter. There’s nothing wrong or politically-incorrect about speaking the truth – and that’s the truth. We are where we are because of the Dems. They own it.

If the politicians who are busily engaged in snuffing out our business enterprises won’t listen and cannot be influenced, then what’s left to me? I must enter the political arena to specifically target them for removal. And that’s what I am doing. It’s only fair – they act like they want my business dead. So we need to put different people in their place. And we need to do it right away.

If this makes me a Tea Partier or a Right Wing nutjob, so be it. My head is not bowed. My customers, my suppliers and my working associates and partners know where I stand. I am fighting for our business life and will not rest until the people responsible for this mess are brought to justice.

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CPSIA – Am I a Tea Partier?

CPSIA – Waxman Amendment Mark-Up CANCELLED for Today

In the wake of a private meeting between Henry Waxman and Joe Barton this morning, today’s mark-up of the Waxman Amendment 2.0 (Consumer Product Safety “Enhancement” Act of 2010) has been CANCELLED. It had already been pushed back to 2 PM EST for a supposed “scheduling conflict”. The content of the Waxman-Barton meeting is not known, however Mr. Waxman has been adamant that he would not proceed with this bill if there was ANY opposition. At a mark-up, the opposition has the right to introduce amendments. This is what Mr. Waxman intended to avoid. Perhaps that was not longer in his control, which may have led to the cancelled mark-up session.

What are the next steps? It’s not certain at this point. There is an agreement in place between the Dems (Waxman) and Republicans (Barton) that ALL bills will pass through mark-up and subcommittee prior to committee consideration. IF this agreement is still being observed (no exceptions), then this bill only moves forward AFTER a mark-up. If there will be no mark-up session that features amendments, then this bill may be on life support in its present form. That suggestion is based on too many assumptions to set out here, but that may be the reality.

Another possibility is that this meeting featured a much stronger push for a hearing. Believe it or not, our pain and suffering has been noted. In addition, the evidence of insanity set in motion by the noxious CPSIA is mounting. Rumors swirl that a real legislative hearing may come next. Don’t hold your breath . . . but it’s possible. Real companies telling about their real issues.

The legislation, which I strongly oppose, has garnered the support of several key corporate players, like the ATV industry, the bike folks, the mass market retailers (no need to shed a tear for them anymore, I guess) and even little HTA. Some of them have practically gushed over these meager gains, perhaps haunted by the threat (implied or otherwise) that to spurn this attempt is to get nothing. No one wants to cut their nose off despite their face. This is how we compromise ourselves to hell, frankly. I remain opposed to a defective and unworkable legislative scheme that reduces our regulators to paper pushers, our financial statements to shreds and elevates our tort lawyers and safety testers to unknown new heights – all without making a MATERIAL positive impact on children’s safety.

Please spare me the retort about falling recall rates. That really isn’t the right metric. After all, we could all go out of business and recalls would fall to zero. A squeeze induced by sabre-rattling regulators wielding big penalties can cause a lot of “reform” at huge expense – but produce no results.

The right metric is injuries and deaths. Has the handiwork of Mr. Waxman and Ms. Tenenbaum led to statistically significant lower injuries and deaths? Well, my statistical analysis of lead-in paint recalls in a 25-month period from January 2007 – January 2009 showed 125 recalls (an all-time high) . . . and one injury, no deaths. That’s what we are trying to improve upon. And if anything has actually changed since then, what did it cost? Do our markets function anymore? Under the CPSIA, there are already about 2500 pages of rules for companies like ours to master, implement and obey. Wait until I summarize the so-called “15 Month Rule” for you – the children’s market is on a death march to oblivion.

Until the CPSIA is restored to sanity, we are facing a terrible end. Everything about safety in children’s products has been fouled by the CPSIA and the pending amendment, the new “enhancement” cooked up by the Dems, is completely off the mark. We can only hope that members of Congress with the courage of their convictions and a dash of common sense will continue to push for rationality in our safety laws and regulations. That’s our only hope.

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CPSIA – Waxman Amendment Mark-Up CANCELLED for Today

CPSIA – New Waxman Amendment Draft Issued Tonight, Mark-up Set for Wednesday Morning

The third draft of the Waxman Amendment 2.0 was released this evening. I have attached a clean copy of the legislation, as well as a redline for your convenience. The powers-that-be also released a draft of their “report language“. The report language is interpretative language and is not included in the law mainly to keep future law clerks busy doing research. It should also give us something new to argue about.

This is the Committee Briefing Memo accompanying the draft legislation.

Consistent with past practice, this draft was issued with the usual coercion. A mark-up has been scheduled for Wednesday AM 10:00 a.m. in Room 2123 Rayburn House Office Building BUT the Dems will decide tomorrow if they will proceed with that process. All talk of a hearing to vet this legislation has been quashed by the Dems who are scrupulous in managing the record. [I will never get to testify, that's for sure.] There will be a meeting on Tuesday at 4 PM to discuss this draft, at which point the Dems will either pull the plug or move forward. Presumably, this depends on the enthusiastic response to this draft. The Dems say they want a bipartisan bill and further want to send it to the Senate with the news that the bill is “supported by industry”. In other words, Mr. Waxman is not interested in negotiating with the Senate, just wants their rubber stamp. He’s not big on “jawboning” if that means he has to listen to others and make concessions . . . .

You are right to consider this another patented Waxman “take it or leave it” offer.

In response to complaints that this bill ignores the many legitimate concerns of the small business community, Waxman staff has advised that they “can’t help everyone”. That means you, guys.

Changes in this Draft:

a. Functional Purpose “Exception” – Minimal changes, mainly reverting back to the “public health or safety” test formulation. References to “all foreseeable users” is gone now. The “town hall” provision allowing “interested parties” to intervene in every proceeding has been eliminated. The “Previously Denied Petitions” provision is unchanged and still makes no sense.

The report language clarifies the meaning of “practicable”, noting that excessive or unreasonable costs should be considered not “practicable”. Specifically, they note: “The Committee does not consider a mere increase in the cost of manufacture or production, in itself, to be excessive. The Committee does expect that the Commission will consider compliance to be impracticable where compliance would place the viability and continuation of a class of products or materials in jeopardy, such as youth All Terrain Vehicles or youth bicycles made with recycled steel.” [Emphasis added]

In case you were wondering about the purpose of the functional purpose exception, it is a gift to the noted industries. It’s not for you. Remember, this relief is only available to those who are capable of mounting an exception application. Not a small undertaking.

Remember that the applicant for a functional purpose exception must apply for relief for a “specific product or material”. You must also PROVE that your costs are not “practicable”. Can you see some wiggle room there? A true believer Commission might have very little incentive to interpret these terms permissively. [You can count on that one with the Dems in charge.] This will be a costly and technical process. Think of this in the context of your business – is this realistic? With our 1500 products, it’s just inconceivable. Too bad for us. Let’s also not forget the stringency of the three-prong test.

The report language specifies that a “measurable adverse effect” on public health or safety refers to changes in blood lead levels. The language is pretty specific and will require a toxicologist’s report to justify any exemption. Here are the magic words: “Given that there is no current blood level at which the scientific community considers lead exposure to be ’safe,’ the Committee understands that a very small adverse effect may theoretically occur at any level of exposure. The Committee intends, however, for the Commission to deny requests for exception under this section as having a ‘measurable adverse effect’ on health or safety only in the case of those adverse effects that the Commission determines to be empirically, as opposed to theoretically, measurable. At present, the Committee understands that there is scientific consensus to interpret the phrase ‘measurable adverse effect’ from lead exposure to mean a measurable increase in blood lead levels.“

This is a form of legislative filter to make sure that the exception is only for the chosen industries or companies. Again, this isn’t meant for small fry, just big business. That’s equity these days, I guess.

Anyone remember how hotly the Dems defended the inclusion of ATVs and bikes in this law back in ‘08 and ‘09? It was intentional, they insisted, necessary to protect the public against deadly lead. There’s no safe level of lead, blah blah blah. Guess they got over that one . . . after they received 170,000 emails from ATV’rs.

b. Thrift Store Relief: Virtually no change, other than minor clarifications.

Not unlike the workings of other parts of the CPSIA, this new provision will be good for large scale thrift organizations like Goodwill or Salvation Army who are presumably able to centrally evaluate complex laws and implement system-wide responses to changes in law. i wonder how the smaller independent Mom-and-Pops will react to this provision. In any event, the provision tacitly bans resale of children’s jewelry, painted toys and vinyl children’s products. Stores will have to keep straight which items are in and which are out. With many resale stores staffed with minimum wage workers, I question how effectively most owners can prevent violations without just avoiding the category (at least in part).

Resale of childcare articles, including cribs, seems unaffected. The real gotcha is the risk the stores will bear from recalls. For that reason, I think many stores will stay away from reselling this category of goods. Clothing may make a reappearance in resale shops, finally.

It is uncredible that the Democrats let this industry flap in the wind for almost two years before acting to save them from CPSIA oblivion. Think of the economic devastation these insensitive legislators wrought on small businesses all America, not to mention the patrons of this important industry – through two cold winters. This is just inexcusable, a true demonstration of stubbornness or being completely out of touch. Those who suffered at the hands of the Dem inaction have no recourse, either. Shame, shame.

c. Relief for Small Batch Manufacturers: The sham of this “relief” is perpetuated in this new draft. The definitions of “covered products” and “Small Batch Manufacturer” were left structurally intact but the thresholds were tweaked upward meaninglessly to 7500 units or $50,000 sold per item per (calendar) year, with an overall cap of company sales of $1 million. “Covered Products” oddly continues to refer only to manufactured items but Small Batch Manufacturers are defined by sales of manufactured OR imported goods. Go figure.

As I pointed out earlier today, Mattell and Hasbro have quarterly revenues of $880 million and $672 million, respectively. The so-called relief here is for companies with annual revenue of under $1 million. If these little companies pop over that revenue hurdle, they will be held to the same standard as Mattel and Hasbro. Don’t worry, the CPSC plans to coach the little guys! Now if only they could provide non-recourse financing . . . .

Even if you are salivating over this pathetic crumb of “relief”, I encourage you to reread what goodies Mr. Waxman is giving you. Here’s the meat of it: “Any such alternative requirements shall provide for reasonable testing methods to assure compliance with the relevant consumer product safety standards.” The reasonable TESTING METHODS must ASSURE COMPLIANCE. You tell me what this English sentence means. I think it means the small fry will be testing. I know the rest of us will, too. Testing and testing and testing and testing. It’s time to buy stock in Intertek, I think. Later on, the bill instructs the Commission to work “cooperatively” with the little guys to “impose the least burdensome testing requirements . . . consistent with goals of statute.” And those goals are, what exactly? Comprehensive, prophylactic testing.

Oh, the bounty of this relief!

d. Phthlates and Inaccessible Components: No material changes.

e. Subpoena Power: No changes whatsoever. Somebody’s going to be sorry someday that this procedural speed bump was removed. Unfettered power of government was always un-American . . . until we met these Democrats.

Conclusion:

I wish I could recommend this bill. It has some good stuff in it. Unfortunately, it is utterly ineffective to arrest the damage being inflicted by the CPSIA. It is a gift to large industries but leaves the hammerlock on American small businesses catering children’s markets. It sustains the fantastic notion that those of us in this business have somehow been poisoning kids for years or decades. That’s a slanderous notion, something deeply offensive to me, but for the Dems to admit otherwise would mean a mea culpa. And there’s no chance of that.

If the Dems manage to tempt enough corporate entities to sell out for this low price, it will be the biggest gift ever given by the corporate community to Mr. Waxman. He should host a champagne party for himself if he buys off the resistance. There will be no remaining organized opposition to the bulk of his CPSIA handiwork, and the focus will shift to surviving a manic CPSC bent on enforcing voluminous but ineffective safety rules and ladling out massive penalties for infractions without injuries. And once the action moves permanently to Bethesda, we’ll see finally how much Cassandra got right.

I’m not looking forward to finding out. Vote NO on Waxman.

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CPSIA – New Waxman Amendment Draft Issued Tonight, Mark-up Set for Wednesday Morning

CPSIA – Why Have Five CPSC Commissioners?

Last night I was accused of being politically naive for having written:

“It would appear that the ‘governing principle’ demonstrated by yesterday’s passage of the health care bill applies here. There is little need for Democrats to try to build a consensus [on the Waxman Amendment]. They have control, so bipartisan support will only be achieved when those with opposing views capitulate or are outvoted. Brave New World, I feel so safe now. . . .”

I might be naive, I suppose. Who knows, it’s not for me to judge. I was informed that this is how things work in Washington and the Golden Rule applies – he who has the gold rules.

Nonetheless I think there’s a larger point here. If you scroll back to the Halcyon days of 2008, you may recall the apparently urgent need to return to a “full” Commission of five CPSC Commissioners. It was asserted that somehow a Commission of three Commissioners just would not be adequate to meet the challenges of a modern world. At the time because of a vacancy, there were only two Commissioners (one Democrat and one Republican). Republican Nancy Nord, the then Acting Chairman, was savaged by Democrats for “gridlock” since the only possible explanation for the slow progress implementing the CPSIA must have been “foot dragging”. Ah, how the passage of time gives us all new perspective . . . . Anyhow, with the smaller Commission, it was said that there wasn’t enough dialogue, fresh perspectives, blah blah blah.

The gridlock was all a hoax, as Nord and Moore voted together on all but one CPSIA decision in their tenure together. While the issues may have been fractious and they might have rarely shared the same outlook, they still managed to find a way to vote together. The problems, the “unintended consequences”, were beyond the Commission’s ability to resolve. It was Congress’ fault, not theirs.

Now with a full Commission of five Commissioners, three Democrat and two Republican, we find ourselves in a far more stratified and partisan situation where dialogue is often strained or nonexistent and voting blocks dominate decisions. Sadly, consensus building does not seem to be the modus operandi of this Commission or of this Chairman. With three certain votes, the Dems on the Commission hardly need to broker agreements or compromise to get to “yes”. They control the Commission, and will do as they please. As Tenenbaum’s and Adler’s joint comments on the Waxman Amendment and the Tenenbaum/Adler/Moore joint comments on the Civil Penalty Factors indicate, the Dems are making no pretense about their controlling voting block. Pelosi and Waxman must love it.

It is a shame that this partisan situation has arisen at the Commission. After all, the CPSC is supposed to be about safety, not politics. The division along party lines smacks of closed doors and minds already made up. Reasonable positions are being discounted by the Dems for political reasons, creating many losers but few winners. It is certain to produce lesser decisions. The upside of a full Commission is being squandered without the Chairman’s commitment to seek consensus.

Of course, there is far less need to open up or listen when control of the outcome is certain. Debate becomes a kind of charade mainly for public consumption. As has been apparent in the health care debate, frustration builds quickly when absolute power is used coercively. I heard someone on CNBC refer to the process leading to the passage of that bill as “dictating, not governing”. This kind of resentment of the CPSC is also mounting as the “have not’s” in the regulated community find themselves with fewer and fewer options. We did not sign up for a dictatorship.

This is a sad reflection of the increasingly polarized world that followed Mr. Waxman into his Chairmanship of the House Committee on Energy and Commerce. He governs by “take it or leave it” as in his two CPSIA amendments. This is not the only way to get things done, however, as the Dingell era demonstrated.

Naive? That’s the reality that I see, unfortunately.

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CPSIA – Why Have Five CPSC Commissioners?

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.

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CPSIA – "Low Volume Manufacturers" under Waxman Amendment

CPSIA – Draft of Second Waxman Amendment Is Released

The House Democrats just released the first publicly available draft of their proposed corrective amendment to the CPSIA. The draft may be viewed at this link. The next step in the legislative process will be either a hearing or a “mark-up”, neither of which has been scheduled. While the Dems had originally offered to follow the usual procedure for such important legislation, namely a public hearing followed by negotiation of the language (the “mark-up”), of late this idea has seemingly drifted away. Let’s hope it resurfaces. At this time, the Dems have requested comments on this draft from various interested parties by next Friday.

Please NOTE that this draft is a result of recent backroom negotiation, such as it is with Mr. Waxman, and thus reflects the Dems’ view of “middle ground”. The “bipartisan” nature of the drafting process leaves something to be desired, as Mr. Waxman and his team have insisted that the bill be based on his failed unilateral CPSIA amendment of last December, and have resisted the larger changes necessary to restore rationality to the law. While some issues are addressed by this draft, other problems move backwards or are simply ignored or buried. As you might imagine, this has not pleased everyone. Time will tell whether the Dems will continue to exhibit selective hearing as the process moves forward.

For now, enjoy reading the latest. I will provide analysis in due course, and in any event, look forward to your comments.

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CPSIA – Draft of Second Waxman Amendment Is Released

CPSIA – How Important is Testing After All?

Let’s zoom up to 40,000 feet and look down on the CPSIA mess. If Martians were watching this affair unfold before their uncomprehending eyes, what would they think?

In 2007/8, a large number of toy recalls and jewelry recalls dominated the newspaper headlines. A closer examination of these recalls shows that they were largely restricted to lead-in-paint and lead-in-jewelry, but few people bothered with the details – hysteria was a lot easier. Sold on a rationale that it is “impossible” to know if something’s safe without testing it, Congress wrote up legislation to require prophylactic testing of all children’s products, a mind-boggling array of products ranging from pens to t-shirts to science kits to ATVs to shoes.

Being entirely unable to anticipate any problems with this brilliant construct, Congress was shocked to find that the CPSC couldn’t implement these requirements without crushing small businesses (among others). A finger-pointing contest broke out, where Congress insisted that the CPSC had the power to implement the new law with “common sense” (read, make up law to make the whiners go away) and the CPSC pushed back that it lacked regulatory flexibility under the CPSIA and legally was forbidden to assess risk. Standoff!

Of late, a weary and perhaps more sensitive CPSC is now taking a more conciliatory stance, expressing an interest, in the words of Ms. Tenenbaum, “to get it right”. Aside from soliciting feedback from stakeholders, the agency is clearly trying to draft rules permitting small companies to reduce their compliance costs. The net effect: testing is ebbing away. Now with component testing, it is possible for companies to get out of testing altogether for many of their products. Other rules, like flexible rules on rules on sampling and testing frequency, among other rules being crafted, are further reducing the testing burden. [I strongly support this movement by the CPSC, let there be no doubt.]

But I am confused now. Rachel Weintraub of the Consumer Federation of America famously taught us that “Businesses’ assertion that they’re having to test products they know are safe is absurd. You only know if a product is safe if it’s been tested.” [Emphasis added.] Yet the CPSC seems to be pulling away from Ms. Weintraub and her wisdom on testing. Is testing critical or not? Is safety achievable in other ways (perhaps various elements in combination)? If testing isn’t so essential after all, what’s really going on here?

I have a theory to share on this question: The recent movement by the CPSC on testing is tacit acknowledgement of our argument that there is more to safety administration than testing. Furthermore, the ebbing of testing requirements is a further acknowledgement that we are not facing a massive public health crisis in children’s products – and never were. Yes, that means poison zippers, brass bushings, ATVs, pens and bikes really is a joke, as you thought. So why the big fuss, why isn’t everyone linking arms and singing Kumbaya, if there is acceptance that a lesser standard will be sufficient to ensure safety?

It’s simple – the issues go beyond this law, and that’s why the Dems in Congress will budge. In fact, we are pawns in a bigger game, namely the battle to establish the precautionary principle in the Toxic Substances Control Act (TSCA). This is Mr. Waxman’s dream legislation, his effort to rein in the chemical industry. The folks behind the TSCA reform legislation are deeply suspicious of chemicals in our lives and want to regulate them on a precautionary basis, not entirely unlike the way we approve drugs. It’s the “fear of everything” all over again but BIGGER.

How does this tie back to the CPSIA? We are the test case, kids. The CPSIA was the first skirmish in the TSCA war. The two substances regulated on a precautionary basis under the CPSIA, lead and phthalates, either make or break the case on TSCA. If the Dems give in to our demands and acknowledge that their precautionary scheme didn’t work, that it ate up the regulatory agency (now nicknamed the Children’s Product Safety Commission), then how can they win approval of TSCA?

This is why the Dems are so resistant to rational change of this ridiculous law. This is why they won’t listen to reason or consider facts. The facts are contrary to their larger goals, so they need to ignore them or deny them. In this context, it is better to send us down the river than deal with our issues. Although their tough testing scheme is being unraveled, they won’t admit that it means that the crisis never was; without a crisis to fix, the entire logic of the CPSIA and their precautionary trial balloon fizzles. The Dems must insist that the crisis is still severe and that there is only one solution, the precautionary principle. Otherwise, they don’t get TSCA.

[Side note: There was a "telltale" in the Waxman amendment to the CPSIA last week on TSCA. A big issue in TSCA reform legislation is the possible use of "junk science" to justify removing valuable chemicals from use in our country. With all the self-appointed consumer representatives clamoring for a chemical-free world, there is good reason to fear manipulative use of science under TSCA to disrupt the chemical industry. It's no different than the misuse of lead toxicity and antimony health effects by consumer groups to attack toys and other children's products under the CPSIA. Some people have been insisting on a "peer-review" standard for these scientific challenges to chemical use - which Mr. Waxman fear may hobble his precautionary principle law. This term is used in Section 101 (b) in the CPSIA to make it more difficult to get exemptions - but was stripped out of the law in Mr. Waxman's unilateral amendment. See my first blogpost on his amendment. His "generous act" in removing this ridiculous stumbling block wasn't a signal of increasing sympathy with our problems. No, in fact, it was simply aimed at resolving one of his problems with TSCA.]

I have no easy answers for how this ends. If you feel your anger welling up, you’re not alone. Actually, I think the regulators are sick of it, too. The CPSIA has truly consumed the CPSC and made the daily affairs of that agency some kind of purgatory for the staff there. I can’t imagine it’s much fun being a Commissioner either. Frankly, the biggest shame of all is that by Congress (the Dems, really) insisting on an unworkable scheme for reasons unrelated to children’s product safety, the agency has been rendered ineffective, bureaucratic and stuck in gridlock. The CPSC’s essential role has been mooted. That’s bad for everybody – in a perfect world, the agency is free to do its job and look for real safety problems to solve. Instead, it has to spend its time figuring out whether water slides are primarily intended for children and the like. What a tragic waste.

In the wake of last week’s demise of the Waxman amendment and the extension of the lead content Stay, we must retain our focus and continue to push hard for a change in the law. The facts are piling up and the excuses for inaction are fading. It’s time for action – for the good of consumers, for the good of industry and for the good of the CPSC.

Read more here:
CPSIA – How Important is Testing After All?