CPSIA – Treatment of Section 101(b)(2) in the New Waxman Amendment

i have attached a conformed version of Section 101(b) reflecting the new Waxman amendment’s proposed changes for your reference.

The dilemma posed by the current Section 101(b)(2) is that exclusions to the lead standard are basically impossible to obtain. There have been several rejected exemption requests and much pleading by Nancy Nord and Anne Northup for changes providing flexibility.

Last December, Mr. Waxman (supposedly with input from Chairman Tenenbaum) launched a sneak effort to implement something called the “functional purpose” exemption to “solve” these issues. The original construct of this exemption applied to situations where the manufacturer could demonstrate that the lead served a “functional” purpose and could not be removed without consequences (not including economic loss). This provision would have permitted ATV manufacturers to assert the need to put lead in certain parts to strengthen the steel, for instance. The functional purpose concept derives from a similar procedure under the EU’s ROHS-WEEE and is also present in the treatment of electronics under the CPSIA.

Waxman’s functional purpose language generated howls of protest as the “solution” solved nothing for anyone. Later, the Commission could not agree on a functional purpose recommendation for its January 15h report, and the idea “died”.

In the new Waxman Amendment which emerged last week, a new version of the functional purpose exemption was introduced to modify Section 101(b)(2). You may find the conformed version of Section 101(b)(2) helpful in understanding how the new provision works.

My thoughts on the new language:

a. The limitations of the exemption process in Section 101(b)(1) are UNCHANGED. In other words, the problematic “any” language is still effective. The new functional purpose exception will be an exception to the exception. Get it?

b. The Section 101(b) structure which limits exceptions to specific products, materials (or component part, in the case of the functional purpose section) remains in place. The language does NOT permit exceptions by product class. You must apply product by product, material by material. The rule even specifies that each component must be individually considered. How many parts are in an ATV . . . .

c. The Commission is now allowed to act “on its own initiative” to exempt “a specific product, material, or component part”. A petitioner may also seek the same relief.

It is hard to imagine how this would take place – will a Commission of five people pick lucky companies or industries for random acts of kindness? Of course, the first products likely to be accorded this “on its own initiative” treatment would be books, ATVs and bikes because of political pressure. [Let's not call that "influence peddling".] More complex product categories, like school supplies (my industry), would be stuck without an effective means to seek exemption.

d. The process, regardless of who initiates it, will be subject to a notice and comment period. This is new and presumably is designed to enable consumer groups to “participate in” (read, slow down or obstruct) the exception process. You have to hand it to the authors of this provision – they found a way to make a slow, expensive and tedious process even worse.

e. The standard for obtaining a functional purpose exception has several parts (all of which must be satisfied) -

“(i) the product, material, or component part requires the inclusion of lead because it is not practicable or not technologically feasible to manufacture such product, component part, or material in accordance with subsection (a) by removing the excessive lead or by making the lead inaccessible.”

This clause has several tricky parts in it. First, the word “practicable” was supposedly chosen because of a Supreme Court decision holding that “practicable” implies consideration of economic factors. So bickering over what “practicable” means is almost certain under this provision. The legal standard will need to be developed to make this provision workable – another nice project for Cheryl Falvey and her CPSC legal department. No guidance has been provided on how much economic pain needs to be incurred before lead removal is deemed not “practicable”. Consider for instance the use of recycled metal for bike frames. When is removal of lead from bike frames not “practicable”? Each frame is presumably different. Virgin metal is available without lead. You figure it out, I can’t.

Let’s not forget that the amendment also uses the term “technologically feasible” as defined in CPSIA Section 101(d). The CPSIA definition omits any reference to economics – intentionally. So the phrase “is not practicable or not technologically feasible” means that it is either too expensive or impossible to remove lead. This makes no sense to me, as the term “practicable” with its advertised meaning incorporates technologically feasibility and makes inclusion of the latter term duplicative. If there is a reason to use both terms, I can’t figure it out. Readers?

In addition to the problematic standard of “practicable”, the petitioners must also demonstrate that it is both too expensive to remove the lead to levels below the standard AND also too expensive to make the part inaccessible. Since the standard for “too expensive” (not “practicable”) is not specified, this language means we must invite the CPSC, the Commission and (due to the notice and comment period) the general public and our competitors into our business processes. That rag-tag lot will get to decide whether the expense of money on the removal of lead from the subject product, material or component is “practicable”. Yes, that’s what it means – you must publicly expose your judgments and economic choices to the Commission for their feedback and approval. Presumably, this would require you to publicly disclose your costs to obtain the “not practicable” decision.

That really sounds like FUN! I can’t see a deterrent to submitting a petition . . . can you?

“(ii) the product, material, or component part is not likely to be placed in the mouth or ingested, taking into account normal and foreseeable use and abuse of such product, material, or component part by a child; and”

Two years ago, I might have thought this was reasonable language. In a world where logic prevails, this language is something that most companies could fairly easily (and probably already do) consider. However, after Ms. Tenenbaum’s testimony about rhinestones on September 10, 2009 in which she speculated about the ingestion of 50 rhinestones by a child, it is hard to predict which imaginary risk the CPSC will fixate on. Recent events suggest that “foreseeable” is now in the eyes of the beholder.

“(iii) an exception for the product, component part, or material will have no measurable adverse effect on public health or safety.”

This third plank in the exception standard is supposedly meant to connote that contact with a subject product which produces less than 1 micro-gram per deciliter change in blood lead levels (the smallest increment for measuring blood lead levels today) is okay. It does not say so explicitly but wink-wink-nudge-nudge, that’s what it means.

Unfortunately, the precision of this “standard” promises more than it delivers. There are few identifiable lead threats in children’s products that could foreseeably cause this kind of change in blood lead levels other than lead-in-paint (probably above 90 ppm, too) and lead in jewelry. So if each case must be argued and decided, isn’t the standard and the process some sort of sham? I think the difficulty and expense of proving the negative in this case is a strategy by the Dems to keep their ridiculous standard in place while appearing to be magnanimous in offering an exception process. Few companies will get exceptions.

Sadly, fear does not allow for the use of science. There’s a lot of hypocrisy here, too. Apparently, the risk from lead in handlebars of a bike is far more worrisome than lead in our air, water or food supply. Likewise, it must be far more serious than, say, lead-in-paint on cars and boats (both of which are perfectly legal). And for those cases which this law obsesses over, lead-in-substrate in children’s products, the zealots cannot agree on how to measure what’s safe – mainly because they don’t know. Let’s not forget that Commissioner Bob Adler wrote a lengthy paper )with 89 footnotes) on how there is NO safe level for lead. The non-scientists who now control this issue have even drafted a MOVING target for safety – it is dependent on what we can measure. If we can measure lead blood levels more precisely in the future, the exception standard will automatically tighten. Like a noose.

f. The Commission can require a warning label for those items afforded an exception under this strict standard. What? Are they going to warn us that the product is safe? No, it’s Proposition 65 creeping into federal law – apparently, the Dems think that the Commission may decide to warn the public that they weren’t able to rid these items of lead, even though they have determined in an investigation that the products are safe. Again, since the zealots think “there is no safe level for lead”, it is very scary for them to concede that anything could be safe if it contains lead. This is a belief system, stop trying to figure it out.

Btw, have any of you ever tried selling a children’s product with such a warning label? At our company, we would drop such an item rather than try to sell it. No one will buy such a product for their child or for use in their classroom. The imposition of a Prop. 65-style lead warning on a children’s product is a tacit ban.

g. The petitioner has the burden of proof in applying for an exception under this provision. That means a small business has to make the same case as a Big Business. Why not simply say that small businesses can’t have an exception under this provision?

The petitioner may utilize data submitted by other petitioners in making its case, but there is no requirement that such data be made publicly available. In recent cases, the submission of the petitioners has not always been made public.

h. The language allows a sunset date to be imposed for the exceptions, even though the very terms of the exception requires that the CPSC conclude that public health and safety will not be imperiled by sale of the product. I am made to understand that the motivation behind this illogical provision is that exceptions should not last forever. Why not? I think it’s the belief system again, or it could be some sense of unjust enrichment. In any event, the CPSC would be empowered to force the continued gratuitous erosion of a company’s cost structure for no particular reason other to remedy the offense of an exception to the rule.

i. The exception will have retroactive effect unless otherwise specified by the Commission. This sounds good . . . other than the fact that we have been shooting our businesses in the foot since August 2008. The ability to give retroactive effect to exceptions might have been valuable two years ago. To put it in an amendment now, two years too late, is an insult to the regulated community. Alternatively, it is yet more evidence of the absolute inability of Democratic legislators to even SIMULATE understanding of business issues under this law.

Next up – discussion of the Resale Shop Exception under Section 101(b)(3).

Read more here:
CPSIA – Treatment of Section 101(b)(2) in the New Waxman Amendment

CPSIA – The New Waxman Amendment Analyzed

On Friday, House Democrats began to circulate a discussion draft of a new amendment to the CPSIA. This draft follows the abortive effort by Chairman Henry Waxman of the House Committee on Energy and Commerce to slip a CPSIA amendment to his own liking into omnibus legislation last December. [That effort was disclosed and discussed in this space from December 11-16, 2009.] The crash-and-burn of the first Waxman amendment created a new dynamic in CPSIA negotiations as it was the first (tacit) public acknowledgement by Waxman that the law was flawed AND that the CPSC could not fix it by itself. The failure of the secret amendment effort also showed that Mr. Waxman isn’t invincible. So, a step in the right direction.

Recently, in the wake of the January 15th recommendations of the CPSC Commission, the Dems reignited the simmering discussion of CPSIA changes by engaging various stakeholders on how the first Waxman amendment could be improved. This process was constrained by the Dems’ insistence that comments be in the form of changes to the first Waxman amendment, thereby eliminating anything too “blue sky”. Consistent with the recent (and short-lived) post-Massachusetts Dem preference for bipartisan “cooperation”, the Dems actually asked House Republicans what they thought. Let’s just say the Republicans see some basic flaws in the law. . . . Anyhow, the Republicans having provided their feedback, largely rebuffed, this draft emerged.

The procedural process forward is unclear. The standard (and appropriate) process would be a hearing followed by a “mark-up”. The Senate also has something to say on this legislation (their position is not clear although Senate Dems more readily acknowledge the need to fix the law). It remains to be seen whether Waxman will allow a real hearing on the CPSIA to take place. Dissenting views are not well-tolerated in this era of Congress. Anyhow, the Dems are asking stakeholders to send comments by this Friday.

I intend to discuss this proposed legislation in several essays. In this essay, I would like to discuss global issues. I will return to discuss the specifics of the law, notably the treatment of Section 101(b), in later posts.

A few thoughts, generally:

a. The amendment dodges most of the serious issues in the law. My list of changes is comprehensive, and the draft legislation avoids most of it. This amendment makes no effort to respond broadly to the well-documented flaws in the law. No one can argue anymore that the CPSC can fix these problems. The legislation reads (to me) like the position of someone almost completely in denial.

Let’s face FACTS – the CPSIA was passed on August 14, 2008. It is now March 14, 2010. That’s a long time. The CPSC has blown countless deadlines, and has failed to resolve MANY critical issues so far, like the phthalates test standard, the 15 month rule and so on. They are working around the clock. This thing is not going to fix itself, and the agency’s future is literally at stake.

The Dems refusal to face up to these issues is a betrayal of you, your customers and your marketplace.

b. You might ask – WHY are the Dems avoiding all of these serious issues? Are they deaf?

I think the answer is that they are hardly deaf but have little interest in opposing viewpoints. The CPSIA is their legacy and as such, no amendment will be blessed by them if it admits a defect in their original thinking or their asserted Perfect Legislative Process. An “acceptable” amendment must therefore pay homage to the original law and its structure. By working within the law’s original structure, the Dems ensure that the basic defects will survive amendment – and the consequences to your business, your market and to the regulators themselves will remain devastating.

[The Dems' "legacy" also survives if they can delay change long enough to make it impractical or impossible to unwind all rules and regulations implementing the misguided CPSIA. After all, we business people have no choice but to upend our businesses to follow these rules, and would incur more damaging expense to change our processes a second time. There seems little doubt that the forces behind the CPSIA want the law's infrastructure to be impossible to untangle by future Congresses or CPSC Commissions.]

The Dems’ homage to the original law is evident in several places. For instance, the concept of a “low volume manufacturer” is designed to provide a very (VERY) limited opportunity to craft an exception to the original testing requirements. Even so, the language clearly states that exceptions benefiting the LVMs must still “assure certification based on compliance with the relevant consumer product safety standards.” [Emphasis added.] In other words, no exception will be given to the little guys from the law’s basic premise that manufacturers must prove compliance before sale. [More on LVMs later.]

The proposed rules on the so-called “functional purpose” exception also kowtows to the law’s concept that everyone must ask for permission to be excused from lead requirements. In other words, the Dems reject the notion that the law can be narrowed rationally and appropriately without a burdensome bureaucratic process. Even action by the agency on its own initiative will be a major ordeal. The Dems know (because they have been told) that the exception process is effectively a closed door for all but the most well-capitalized companies. You may interpret the legislative language as the Dems’ response to this small business issue.

Another good example of the Dems’ sticking with the original law’s structure is the use of the word “practicable” in the Section 101(b) changes. This change is the doorway for the ATV’rs and book publishers to argue for exceptions to the lead-in-substrate standards. I am told that this word was chosen because of a Supreme Court decision (that I have not read) holding that “practicable” incorporates concepts of economics. Ah, I see. In other words, this language is a way to make the law look just like the original one, but still provide a faint hope for business people that they can somehow wriggle out of ridiculous lead-in-substrate restrictions. It’s obscure, to say the least, but leaves the original legislative structure in place – the Dems’ principal goal.

c. The new amendment ADDS more complexity to an already blindingly complex law. I have written about complexity numerous times, and recently posted a video explaining the frustrating challenge of trying to understand this law fully. Complexity in this case does not reflect the difficulty in creating a safe market for children’s products. Actually, that issue is long-resolved. The complexity stems entirely from a defective legal structure and its consequences. If the Dems insist on keeping the original CPSIA structure in place, you must get used to complexity spawning more complexity in your business life. It will only get worse.

This is what Big Government looks like. Hope you like it.

d. CRITICAL ISSUES are absent and unaddressed in this legislation. Examples:

• Risk Assessment by the CPSC and/or the Commission.
• Changes in age limits for the lead standards and phthalates ban.
• Narrowing of the scope of “Children’s Product” to eliminate many categories of products unthinkingly pulled into this law by its overly broad language.
• True reform to protect small businesses.
• Tracking labels relief.

And so on. As noted above, to take these steps would mean acknowledging that the original law was grossly defective. The Dems would rather eat lead-free glass than admit their career achievement was fundamentally defective. Ironically, the Republicans have no such reluctance, despite voting for the original law. The sad prospect is that unless the Dems have a change of outlook (soon), real reform may need to wait for a change in gavel (bye, bye, Mr. Waxman).

Hence my excitement over the prospect of voting in November.

More to follow.

Read more here:
CPSIA – The New Waxman Amendment Analyzed

CPSIA – In Defense of Lead

Perhaps you have been expecting it. After all the “heat” in this blog over the past year, finally, my defense of lead. Hope you’re happy now. . . .

Last Friday, Commissioner Bob Adler posted his long-awaited position paper on lead and related CPSIA issues. Weighing in at 21 pages and 89 footnotes, Mr. Adler’s paper includes a thorough recitation of facts as well as his recommendations about the law. Among other things, he recommends making the lead exemption process more flexible and allowing clothing to be sold through charity resale shops. He also left the door open to changes that would ease the economic burden of the CPSIA on small businesses and low-income consumers. I agree with all of these changes – but I also think many other and more extensive changes are needed, too. I do not agree with the basis of Mr. Adler’s reasoning, however, and that makes all the difference.

Mr. Adler devotes about half of his statement to a detailed analysis of lead safety, reciting many facts not in dispute. Unfortunately, he then leaps to familiar conclusions that we have seen in recent Commission meetings and which are also found in many of his written statements. He does signal some extremely limited flexibility on lead, more or less hewing to the line put forth by Central Casting.

Ironically, Mr. Adler’s statement sometimes leaves you wondering where he stands, since he seems so sympathetic to both sides. It is frustrating to not have a clear picture of how he really sees the world. I fail to find persuasive his argument that the lead rules are good for us when they lead to ridiculous results like the banning of brash bushings on toy cars. Mr. Adler himself noted in the Learning Curve hearing that the brass bushings pose NO risk to children at a hypothetical tipping point with blood lead levels (in other words, the toys were incontrovertibly safe) – and then voted to ban them because the law compelled it. This should trigger a sense of outrage in the Commissioner . . . but it doesn’t.

To me, as an ex-lawyer, the illogical results documented in the Learning Curve case are intolerable. It is proof of a defective law and a defective system. Banning acknowledged safe products is a SIGN of problems, not something to rejoice in. As you know, it costs money to toss away perfectly good product. It also costs a lot of money to employ CPSC staff and Commissioners to decide silly cases like the brass bushing case. Something’s quite wrong if we are celebrating a system so obviously broken.

i believe there are fundamental flaws in Mr. Adler’s views on lead which prompt him to make recommendations basically defending a broken, illogical and self-destructive legislative system. Let me start by stating what I considered to be incontrovertible facts:

• Lead is bad
• Lead can be dangerous to children
• Harming children is bad, and unacceptable if reasonably foreseeable.
• Lead poisoning in children is largely if not entirely the fault of lead house paint and leaded gasoline

Mr. Adler makes the latter point in his footnote 83: “Clothing is not a significant source of lead poisoning. Far and away the greatest source of lead poisoning is lead paint in older housing, lead-saturated soil from gasoline emanated over the years from automobile exhausts, and lead-saturated dust (both from paint and gasoline).” [Other citations omitted] It is important to remember that Mr. Adler KNOWS that blood lead level problems stem from house paint and the long term consequences of years of leaded gasoline use (particularly in the inner city).

Mr. Adler tries to prove that lead is bad – but that fact beyond dispute. He goes further and builds the case that there is no “safe” level of lead, providing citations. Thus established, he then seems to justify the legislation’s strict terms based on the logic that if science hasn’t identified a safe level for lead, every instance of lead is therefore dangerous: “We may have currently reached the outer limits of our ability to measure negative effects of exposure to small amounts of lead, but that does not mean that no adverse effects are occurring. It basically means that we do not know.” Scary stuff. . . but what does he really think?

It’s hard to tell. Notwithstanding his assertion that no level of lead is safe, Adler seems oddly reassured by the permitted levels set by Congress: “[Given] that lead remains ubiquitous and often unavoidable, policymakers who are fully aware of lead’s risks, have sought to determine some level of lead that would be acceptable – at least until new information becomes available.” And these all-knowing policymakers (Congress) set a retroactive scheme of rapidly declining permitted lead levels. In other words, what was considered “safe” (meaning legal) on February 9, 2009, was “unsafe” on February 10, 2009, and what was considered “safe” on February 10, 2009 became “unsafe” on August 14, 2009, and what was “safe” on August 14, 2009 promises to become “unsafe” on August 14, 2011. Mr. Adler analyzes retroactivity under the CPSIA in his statement and then endorses it. Huh?

I fail to grasp the logic of either Congress or Mr. Adler here. Is lead in substrate dangerous or is it not? Is there a safe level for lead or is there not? Is lead safe on one day, and not safe on the next day? If so, can someone explain the science of that safe/unsafe trigger to me? I believe Mr. Adler’s accommodative attitude toward the lead standards and retroactivity is best explained by politics than by any notions of safety or risk.

It is even harder to take Adler’s stern tones on lead seriously when you consider the volume of lead elsewhere in a child’s life. Will regulation of lead in substrate in children’s products have any material impact on blood lead levels? Can anyone prove that it will, or that the cost of getting rid of all the lead is worth the cost? Remember that we could redeploy the same money for more impactful projects, like eliminating high lead levels in drinking water in schools or remediating soil contaminated with lead. We have already covered the fact that Mr. Adler knows that blood lead levels are fundamentally tied to exposure to leaded house paint and contaminated soil. It is also well-known that cars are coated in lead paint, legally under our laws. Lead is also in our food chain, is found in nature – and enters our bodies every day. [For data on this topic, see "Eat My Dust".] By obsessing on children’s products in the face of these facts, Congress ensured that its new legislation would fail to deliver measurable results.

In essence, the slogan “no safe level for lead” connotes a risk-free condition. “Risk-free” is an unrealistic standard and FAR too expensive as public policy. Mr. Adler uses this formulation in his lengthy analysis of used clothing sales: “In sum, I cannot state with certainty that a “safety” threshold of, say, 1 µg/dL blood level change would never occur from zipper sucking. . . . The fact that I cannot say there is no risk is why I characterize the choice [between allowing and banning resale of used clothing] as between bad and worse.” [Emphasis added] Mr. Adler is not following a legal principle here, he is asserting one. This is the precautionary principle, the famous Nanny State being implemented before your very eyes.

It is difficult to diffuse an argument based on the elimination of all possible risk. If we wish to organize our society around the elimination of risk, rather than the management of risk, we are doomed. All of us, not just the children’s product industry. The sad truth is that no one in the Federal government can prove that the policies of the last 35 years on lead caused injury. Mr. Adler implicitly asserts that our inability to prove that it DIDN’T is enough justification to throw the old system out. This is a belief system, not science.

The fear of risk is fanned by the threat of undetectable dangers. Mr. Adler notes: “To say the effects [of lead on healthy children] are not directly observable is not to say that that they are minor.” He amplifies this point by implying a link to children’s products to lead injuries without any proof of a relationship: “[MRI] technology has permitted us to identify permanent damage in adults stemming from childhood lead exposures.” Exposure to what, precisely? ABC blocks or the soil next to an inner-city apartment building in the leaded gasoline era? Mr. Adler’s assertion that we just don’t know what the harm is dodges the real question – how do you know there is any harm resulting from THESE USES OF LEAD? No answer is supplied because no one can answer that question.

The Adler statement paints a pretty compelling picture and the 89 footnotes were presumably intended to add academic gravitas to his arguments. However, not all academics agree with Adler. Here are videos of the presentations of two Ph.D.s who specialize in risk assessment in children’s products and lead issues taking an opposite view: Richard Reiss of Exponent and Barbara Beck of Gradient. They both note that the dose makes the poison and that only through true risk assessment will a sensible safety system be possible.

A couple brief notes:

- Mr. Adler talks a lot about retroactivity in the CPSIA. At the end of the day, he comes down . . . get ready for it . . . in favor of retaining retroactivity, but also for the recommendation of the Commission to make the pending 100 ppm lead standard prospective. I am not commenting on his arguments other than to say that I think relaxation of this provision would bring considerable economic relief without any possibility of physical harm to anyone. That’s enough reasoning for me.

- In calling for change to the lead exemption process, Adler is apparently willing to support only “a modest expansion in the amount of discretion granted to the Commission”. I find this rather curious and unexplained – he only wants a little discretion. Why? Does he worry that the Commission can’t handle the responsibility for full discretion? Again, why? I wonder if greater powers suggested this very limited recommendation out of a lack of “trust”, namely trust of future Commissions not hand-picked by this Dem-dominated Congress. No matter the explanation, it is curious indeed to see a Commissioner ask Congress to extend his Commission limited discretion.

- Adler devotes considerable space to sale of children’s clothing at resale shops. He ultimately recommends that charity resale shops be allowed to sell children’s clothing (possibly subject to posted Proposition 65-like warnings, see footnote 88). Adler’s logic in this section is puzzling to me. Is Adler trying to defend children or defend the CPSIA? He concedes that clothing has no history of causing injury from lead but is apparently troubled that it cannot be proven that a child couldn’t be harmed by clothing. Incredibly, he resolves the dilemma by distinguishing between resales made by charity shops and by for-profit shops, leaving the latter out of his proposed exemption. So is he approving the sale of unsafe products by charity resale shops to poor people so they can stay warm? Or is he saying that the clothes are probably safe, but can’t be sold by for-profit stores for . . . what reason? If the clothing is safe to sell, sell it . . . and if it isn’t, don’t. WHO sells it shouldn’t matter. But apparently it does.

An aside: Mr. Adler uses some strong language to discuss those of us who have pushed back on this law: “As I have waded into the debate, I have encountered many thoughtful, sincere, and anguished concerns about the CPSIA. I have also heard numerous overheated arguments, scanned many bloviating blogs, and read great numbers of error-laden emails (and letters) commenting on the law.” For those of you who don’t know this SAT word, “bloviating” is defined as “[to] discourse at length in a pompous or boastful manner” on dictionary.com. I wish our government officials would stick to the issues and avoid attacking the exercise of Free Speech by U.S. citizens. This is particularly the case here, since after a long fight, many of those bloviaters have been proven right. I don’t expect thanks, but I think this is out of line.

I could go on, but I won’t. Mr. Adler’s voice in the debate is an important one and I appreciate his efforts to set the record straight. I don’t agree with him and appreciate the opportunity to reply.

You be the judge!

Read more here:
CPSIA – In Defense of Lead

CPSIA – Transparency, Tenenbaum/Adler-style!

In a truly creepy decision today, the Democrat-dominated CPSC Commission today voted down Anne Northup’s motion to have a public debate of the agency’s recommended changes to the CPSIA. The vote was 2-2 along party lines. [Party affiliation should NEVER be predictive of positions on safety.] By this vote, the Commission ensures that there will be no public airing of views on the agency’s recommendations for amending the awful CPSIA before their report to Congress is due on January 15 (see below). Apparently, the general public’s interest in understanding this critical debate was deemed by the Democrats to be a low priority.

It is ironic that the Democrats would choose to spurn the Government in the Sunshine Act (”Sunshine Act”) so brazenly. The decision to leave Northup’s item off the upcoming meeting agenda is not technically a violation of the Sunshine Act, but then again it is certainly NOT on the list of exceptions to the public meeting rule (5 U.S.C. 552(b)(c)). In my humble opinion, it is a clear violation of the spirit of the Sunshine Act and can hardly be characterized as “transparent” government. As Ms. Northup noted, the sponsors of the Sunshine Act would be appalled. So why did the Dems do it?

Before I recap and analyze of this incredible event, I would like to quote Inez Tenenbaum on the importance of “transparency” (emphasis added):

• CPSC Press Release (July 9, 2009): “Ms. Tenenbaum identified three major areas of focus for her common sense approach to serving as Chairman. ‘First, I want CPSC to be more accessible and transparent to parents and consumers. By creating an electronic database of product incident reports that consumers can search and by collaborating with state and local agencies and consumer groups, we can give the public confidence that CPSC is working openly and in their best interest,’ she stated.”
• APEC Conference Keynote Address (August 1, 2009): “My regulatory philosophy embraces open dialogue, information sharing with all stakeholders, and a commitment to finding mutual interests. . . . Enforcement is actually one of my three top priorities as Chairman, along with government transparency and consumer education and advocacy.”
• Statement Before the Subcommittee on Commerce, Trade, and Consumer Protection (September 10, 2009): “In my first two months leading the CPSC, I have focused on three key goals: transparency and openness to those we serve . . . .”
• Keynote Address, 3rd CPSC-AQSIQ Safety Summit (October 21, 2009): “I embrace open government, information sharing with all stakeholders, and a commitment to finding mutual interests.”

With Ms. Tenenbaum’s apparent commitment to “transparency”, it should not be surprising that she originally moved to add an agenda item to discuss this very topic (apparently for today’s brief meeting), and then somehow the decision was voted down 3-1, presumably Tenenbaum, Moore and Adler voting against, Northup voting for, and Nord on leave (she’s back now). [I cannot find any record of this vote on the "wonderful" CPSC website and gave up, sorry.] So at one time at least, Tenenbaum was publicly calling for a public discussion of five Commissioners on this critical subject.

One must wonder who spoke to whom to get this flip flop accomplished. Assuming Ms. Tenenbaum meant what she said publicly about the need for “transparency”, someone must have really put a wet blanket on the idea of publicly discussing this subject. I wonder who might have strong views on the wisdom of an unstaged, open discussion of these issues . . . .

Consider Ms. Northup’s argument: This is one of the most critical issues to come before the Commission. The CPSIA has been controversial and difficult to work with two years now. The Appropriations Committee has asked us to give recommendations on how to change to the law. [See this link, pp. 33-34 for the actual instructions.] There is no disagreement that blood lead levels need to be a top priority in children’s safety but none of the CDC, NIH or EPA point to children’s products as a serious lead threat. The Sunshine Act prevents the Commissioners from meeting other than one-on-one without calling a public meeting, which means we can never sit down together to discuss these issues. The issues are too important to relegate to a game of “telephone”. A hearing is the only way for the five of us to discuss this issue at one time.

Tenenbaum’s response was telling: The Staff has been working night and day on this and everyone has had a chance to put in their comments. Each Commissioner has had some drafting responsibility. Each Commissioner has the right to submit their own statement to Congress and likewise to request to testify to present their own personal views. Given our ability to have “extensive discussions” one-on-one, this debate is best held in private. We should NOT have a public hearing on this subject.

Okay, are you persuaded? This is coming from Ms. Transparency, to judge from her many uses of that old chestnut in various speeches and testimony.

Nancy Nord made the point that the reason to have a Commission is to meet publicly and have discussions openly and transparently. Apparently this didn’t persuade the Dems. Bob Adler amplified the “argument” against trusting the American public to listen in to the debate: After conceding that he would sound like the “Prince of Darkness”, he stated that an open Commission hearing should involve give-and-take but a hearing on this topic would not involve deliberation but instead speeches telling him why he’s wrong and the others are right. He said he was very comfortable with the current process because he knows everyone’s views quite well and besides, so does the public via blogs, tweets, statements and so on. The minority Commissioners are not being “squelched”. He said that a public meeting removes the ability to think out loud. “As soon as you say it [in a public meeting], it’s all over the blogosphere.” [Thanks for the plug, Bob.]

So what does this MEAN? A few thoughts:

- The Dems don’t want to allow an unruly public debate of the issues – why? There are several possible reasons – (a) they have been told a public debate is “not a good idea” by Congressional Dems who have consistently refused to hold public hearings, (b) they have been told that many/most changes are “non-starters” by Guess Who so don’t even think about suggesting them, or (c) they don’t want to defend their views publicly because . . . there is no way to put a good face on their views.

- The Dems were outfoxed today. By putting up the request to discuss this subject publicly, the Republicans forced their fellow Democratic Commissions to stand up publicly – before you, the general public – and try to defend “smoke filled room” politics. Now that’s “Change We Can Believe In!” In other words, they were caught between a rock and a hard place – their Congressional handlers said “no way” and to get this result, they had to publicly wave their arms and try to convince us that secrecy is somehow openness. The Dems can NEVER again say they are all about transparency. If they do, they will expose themselves as being all about . . . something else.

- The “commitment” of the Commission to find middle ground and vote more cohesively as a group, which they achieved after considerable effort on the recent Stay decision (lead testing and certification), is apparently paper-thin. Ms. Tenenbaum obviously knew of Ms. Northup’s motion ahead of the meeting today (she had her response drafted in advance). [Did anyone else catch the chill in the air during the meeting?] So, if they all knew this was coming, where was that commitment to work together? To consider everyone’s views? Forget it. It’s also hardly an advertisement for the ability of the Chairman to steer this group.

- The illusion that this government cares about the mess it made or is making any reasonable effort to fix it has been blown up. The game is fixed and has been fixed from the get-go. You need only read the Appropriations conferee report (link above). The Democrats control both Houses of Congress – so this statement was written by Democrats: “The CPSIA was signed into law on August 14,2008 and is considered to be the most significant piece of consumer protection legislation enacted since the CPSC was established in the early 1970s. The legislation received nearly unanimous bipartisan support in Congress. Congress passed this legislation in the wake of a massive number of consumer product recalls in 2007 and 2008–more than 20 million-many of which involved toys manufactured in China. The conferees strongly support this legislation but are aware of concerns surrounding implementation of certain aspects of the law.” Of course, I have already documented that 43 Senators and 96 Members of the House have either sponsored or voted for CPSIA amendment legislation. It’s a complete mischaracterization of the current reality – but when read by Ms. Tenenbaum into the record during the meeting today, it almost sounded true . . . .

This process is some sort of Kabuki Theater for your amusement. Having fun yet?

Today’s decision is par for the course in a twisted, bass-ackwards debate over safety characterized by ideologues out to steal our legal system, bureaucrats devastating markets that they simply do not understand, regulators witnessing the destruction of their agency to serve a small number of Congressional “masters” with a broad, world-changing agenda. To propel it along, the Dems now propose to shield their work under the cloak of darkness. Does it really matter? Well, Bob Adler already knows what everyone thinks and doesn’t care to be told he is wrong (and others are right). So I guess it really doesn’t matter. His mind is made up, Waxman’s mind is made up – and no one cares what you think.

So, when you have to let a few more people go to cover ridiculous testing costs or to pay your lawyer extortionate fees to keep you on the straight and narrow, or when you cut your product line or drop some customers to find profit elsewhere, just remember: the Democrats on the Commission thought it would be best to have the debate on the CPSIA one-on-one in private, rather than let you understand their views or participate in an open hearing.

Just remember that . . . on November 2, 2010.

Read more here:
CPSIA – Transparency, Tenenbaum/Adler-style!

CPSIA – Workshop on the Public Database Jan. 11/12

The CPSC has scheduled another two day workshop in January, this time for the dreaded and much-feared public database. This workshop comes on the heels of a lightly-attended hearing on the same subject held November 10 at CPSC headquarters. [You can watch the hearing at this link.] I testified at this hearing, one of two companies to participate (there were also a few trade associations presenters and the usual assortment of highly-motivated consumer “advocates”). There has been no response by the agency to this information-gathering exercise other than to schedule the workshop.

No never mind, they really want to hear from us. According to a blanket email I received from Scott Wolfson, “Education and advocacy are at the center of our priorities, which means strengthening partnerships with community leaders like you . . . . We hope for significant participation and we greatly value your input.” Wow, I am touched.

Of course, it is nice that the agency is attempting to show an interest in dialogue and exchange of views with stakeholders. I certainly appreciate being afforded the opportunity to speak at these events. However, I find this particular workshop opportunity somewhat grating. Here are a few reasons why I am so easily annoyed:

a. I testified at the November 10th hearing at the request of the Commission. I was not planning to attend the hearing, as I have made many trips to Washington in the last year – all at company expense and at the sacrifice of my “regular” job. The CPSC staff made it clear that they not only wanted me to attend, but that I should present. This may have been particularly important because as of the beginning of the week of the hearing, there were only two people committed to speaking (including me). Okay, so I go to Washington, study up on the issue, write a little speech, and try to keep it short. They have a strict time limit, you see. This wasn’t always a problem. At my first hearing (lead panel, Nov. 5, 2008), my speech was impromptu and they let me speak for 23 minutes (other speeches were longer). That flexibility is a mere memory now, as I learned at the tracking labels hearing (May 12) when I was cut off at the ten minute mark. And, drat, at the public database hearing, I again ran a bit over. Even with hardly anyone in the room, the time limit police stopped me at ten minutes, mid-sentence.

So I find it irritating that they asked to fly in to tell them my thoughts in November, but limited me to ten minutes, and now they want me to pony up for more flight and travel expenses, so they can . . . what, cut me off again?

b. I would take this process a bit more seriously if they gave ANY sign of listening at the last workshop. Why so cynical, Rick? Well, wasn’t it this Commission who moved to act on the testing stay only three business days after we attended the LAST workshop (December 10/11, on the so-called “15 Month Rule”)? There was no time to process the testimony at the 15 Month Rule workshop before the stay decision was made (those three days were devoted to complete chaos, courtesy of Henry Waxman and his unilateral amendment of the CPSIA). The fact that the agency spent two days intensively gathering information from 250 stakeholders on the impact of the 15 Month Rule and then the Commission almost immediately disregarded it in one of their most important decisions of the year made me feel the workshop was a SHAM. And if that one was a sham, this one promises to be an even greater sham. Since the last hearing has apparently generated no work product or further dialogue and since it was so lightly attended, the January workshop appears to be entirely for show.

I can talk to myself at home for free.

c. Finally, does the CPSC think drafting implementing rules for the CPSIA is some sort of hobby for the business community – or is it a plot to make the conduct of regulated business impossible? Do they really think any ordinary business can sacrifice its leadership to monthly trips to Washington to blather on to regulators who are only slightly interested in what they have to say? [Let's not forget about the CPSC's pet organization, ICPHSO, which bookended meetings in late October 2009 and mid-February 2010. ICPHSO meetings are essentially unofficial CPSC workshops/hearings.] Who can afford this financially, as a matter of priorities or allocation of scarce corporate resources? It seems obvious to me that the more frequently the CPSC holds these meetings, the fewer participants they will garner. The scheduling of meetings and hearings every month by the CSPC seems naive and sinister at the same time.

I won’t be there.

All Roads Lead to Rome, as the old saying goes. Why the nuttiness here? I have the usual explanation:

• an irrational, over-reaching law is impossible to implement sensibly;
• the regulatory agency is left with no discretion under the new law and has no power alter the ridiculous, irresponsible or impossible language of the statute;
• Congress won’t listen and would prefer that the CPSC make the problem go away, perhaps even at the expense of breaking the law Congress passed;
• The agency gamely tries its best to carry on, with increasing chaos and market damage inflicted; and
• Businesses (particularly small businesses) are the big losers, with the agency itself a close second.

So we have another two-day session to help the CPSIA create an over-arching database that will likely harm American businesses, create liability storms, eliminate jobs (except at plaintiff law firms and at consumer groups) and generally fail at whatever starry-eyed objective underlay its conception. A good time for all, no doubt.

Let me know how it goes.

Read more here:
CPSIA – Workshop on the Public Database Jan. 11/12

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?

CPSIA – The Votes Are In . . . (The Stay Was Extended)

The CPSC Commission ballot votes were announced today with the five Commissioners’ statements released as well (Adler, Moore, Nord, Northup, Tenenbaum). The Commission made three decisions:

1. Adopted the interim enforcement policy allowing the use of component tests (5-0)
2. Lifted the stay on testing for bike helmets, dive sticks, bunk beds, and rattles (5-0)
3. Extended the stay on testing for lead content to February 10, 2011 “date certain” (4-1, Adler dissenting)

These votes reflect a considerable effort by the Commission to pull together. Other than Mr. Adler’s principled decision to opt out of the endorsement of a longer extension of the stay on lead content, the Commission managed to find common ground. The unification of the Commission, if it sticks, would be a positive development. I hope this is a sign of recognition that safety is not inherently political and therefore Democrats and Republicans can work cooperatively and productively together.

The extended stay (”Stay”) will be of value to manufacturers without endangering consumers. This is helpful . . . but is not a complete solution. It’s a compromise and may have to be revisited again. I believe the Commission was not able to agree on Ms. Northup’s formulation of the extension (six months after the issuance of the so-called “15 Month Rule”) because Mr. Adler’s objected to it as too open-ended and expressed a concern that it might be pushed out indefinitely. So now we have a stay expiring on a “date certain” and an agency with another artificial deadline to meet. The 15 Month Rule was not made an explicit condition of the decision, which means that more market chaos is probable.

Let’s step back at this point and think about the issues that this vote raises:

A. The notion that another year will be enough to tidy up the details on lead content is probably a pipe dream. A few points of reference:

• Today is the one year anniversary of my first comment letter on civil penalty factors. When they finally came out in September, I sent in a second comment letter. To date, the new penalty factors have not been announced. We are in our second year of waiting.
• The phthalate test standards are also in limbo. The agency has had two cracks at that one. The first one allowed testing of the entire product as a single part (based on statutory interpretation) and after a storm of protest from among others the CA AG, the CPSC reversed course and reissued the test standard requiring that each component, even internal inaccessible ones, be individually tested. No doubt this pleased Jerry Brown, candidate for governor of California, but it created (brace for it . . . ) another storm of protest. Yet more comment letters were submitted. And . . . nothing. Please NOTE that the phthalate ban was SO urgent that the CPSC allowed it to become effective RETROACTIVELY with exactly TWO BUSINESS DAYS NOTICE. Obviously, phthalates must be a serious problem right??? Well, the CPSC has twice investigated phthalates and given them a pass both times. A third CHAP is currently grinding away. You get the picture. Hurry up and wait – just like the Army.
• On January 30, Nancy Nord issued her statement in support of the original stay. In that letter, she called for the issuance of the component testing rule. Have you seen it yet? The interim enforcement policy is the closest thing we have to a component testing rule. The birthday party for Ms. Nord’s call to action is about a month away. Get the cake ready.

I am skeptical that the “15 Month Rule” will come out anytime soon. As Ms. Northup notes, it is going to be wickedly complicated. EVERY such rule when issued has been a major speed bump in the implementation process. See above . . . . The CPSC is also not without its other challenges or little projects. There is, of course, the day-to-day business of the agency like hunting for shoes with lead-infused insoles. There are also unexpected emergencies like Chinese drywall. And then there’s that endless time sink, the CPSIA, with its many unfolding requirements. Why just today, the CPSC announced yet another two-day workshop on the public database. Didn’t we just have a hearing on this? Perhaps I should buy a condo in Washington . . . . Anyhow, these other obligations will get in the way of the master plan here. That’s a certainty.

The consequences of these artificial deadlines for businesses are pretty severe. Our problems are largely with the “regulatory compliance exuberance” of our larger and more risk-averse dealers/retailers. This risk-aversion is principally driven by the excessive liability of the new law and the apparent predilection of the CPSC to hand out whopping fines. It is also related to speculation that it is only a matter of time before the agency or one of the State AGs decides to give the felony provisions a road test. Who will be first in line? Our larger customers have no interest in finding out. This may be why we have one customer who insists on testing EVERY item for lead-in-paint . . . even if it has no paint on it. And another customer who wants us to test EVERY item for flammability, even if the products are exempt (like paper-based items).

How do you think these customers will react to a “hard” deadline on testing? With little sympathy and a great deal of advanced planning. They will not want to speculate on whether we will get relief if the CPSC runs late on something important. Likewise, they will not want to stop and start. Some companies are ALREADY incorporating the August 2011 100 ppm lead standard into their requirements NOW – even though the CPSC has made NO determination that it will impose that (ridiculous) standard yet. A one year extension of the Stay means that the testing requirements will take form for us much sooner than February 10, 2011, and once started, will be hard to stop.

B. Some of the remarks of Commissioners at the hearing and in their statements seem detached from market realities. This is worrisome. The denial by certain Commissioners of information they have been provided (Adler: “While there will be some disruption in the marketplace no matter which date is chosen, no hard evidence has been brought to my attention that would require an even longer extension of this stay than two years from the passage of this landmark legislation”) and the misconstruction of the impact of their decisions (Adler: “I know of no company that has indicated that it will withhold production until the 15-month rule becomes effective.”) erodes confidence.

It’s time to abandon pretense and role-playing. The decisions being made have very serious consequences for many people (perhaps this is why I am still up at 1 AM writing this blog) and must be handled with the utmost sensitivity. If the Commissioners seem to be stuck in a tunnel with no end, believe me, so are manufacturers. Let’s not make the situation worse – particularly since there is NO crisis to resolve right now.

C. Of particular concern to me is that the agency seems to have lost its ability to determine what is safe and what is not. Today’s recall of Timberland scuffproof boots is just an illustration of our broken compass. The CPSIA’s famous “precautionary principle” holds that we cannot trust anything until it is proven safe upfront. Thus, the CPSIA subjects every product and every component in every children’s industry to new regulation, and requires the CPSC to carve out exceptions. This MAXIMIZES workload, chaos and confusion because it requires in-depth inquiries into EVERYTHING. This approach multiplies complexity as regulations devolve from common sense guidelines into endless lists of exceptions. Look around you – this entire mess, the last 18 months of misery and the coming months of new misery, is the inevitable outcome of this defective way to regulate our markets.

The mounting exceptions are only part of the mess. Then there are the interpretations. There is simply no way to catalog all of these decisions. Every nuance needs a regulator’s okay. Ms. Northup highlights the determination that a children’s water slide is NOT a “children’s product” because it must be designed to withstand the weight of an adult. Very good, quite a helpful decision, but HOW are manufacturers supposed to replicate that reasoning without taking undue liability risk? Isn’t it obvious that such determinations are quirky and hard to apply? The trend to greater opacity is unstoppable under this regime.

As long as we ignore this fundamental problem, we will face a worsening environment at the CPSC. The cohesiveness of this Commission today will degenerate quickly. The morale of CPSC staff will decline further. The rules and interpretations will pile high into the sky and manufacturers will start to ignore them – or just leave the marketplace for sunnier climes. Ridiculous demands of retailers for testing will drive more companies from the market or just cripple the ability of U.S. companies to compete internationally. The flaws in the CPSIA will also likely spark a consolidation trend toward bigger and bigger companies as this kind of environment is deadly to small businesses and entrepreneurs.

Not a pretty picture. Thanks Congress!

So with this stay decision, I conclude that little has been accomplished to address the basic problems. We kicked the can down the road, which is fine, but the fundamental issues remain and will pop up again in short order. Until we put them to rest, the fighting will intensify, the agency will descend into gridlock and personal reputations and legacies will be harmed.

There is no need to stand idly by and let this carnage happen. As has been pointed out by many in recent days, the CPSC needs to tell Congress honestly what needs to be done to fix the law. Mr. Waxman has conceded a fix is necessary. We need now must tell Congress where they went wrong. I disagree with Ms. Northup that the CPSIA’s flaws were mysterious in July 2008 – but whether or not that’s true, they are pretty obvious now.

I wish the Commissioners and all my readers a restful holiday season, but after you have had a nice nap and a chance to catch up with the relatives, it’s back to work. We need to put together the list of fixes and march over to the Hill.

Read more here:
CPSIA – The Votes Are In . . . (The Stay Was Extended)

CPSIA – Waxman Language Dropped from Defense Bill

In a triumph for rationality (?), the Waxman CPSIA amendment has been DROPPED as an attachment to the Defense Appropriations Bill. It is dead and will not become law (the bill is posted on the House Rules Committee page and does not include this amendment). The people have spoken! Apparently, no one particularly liked the process dreamt up by the Waxmanites, and with full rebellion by various industry groups, certain CPSC Commissioners, other House Democrats, the Senate and of course, the slighted Republicans, the language was killed.

Notably, the very fact that Waxman himself proposed this amendment is a strong concession that something needs to be done legislatively to fix the law. This is also an acknowledgement from the top that the CPSIA can’t be fixed by the CPSC alone. Furthermore, it is clear that the language didn’t go nearly far enough to address the many well-known issues or put the CPSC in a position to take sensible steps to fix the mess. Finally, I sense a growing desire among legislators to work cooperatively and in a bipartisan way to fix the law. Perhaps more than a year of vicious fighting is wearing everyone down. Let’s not forget that the CPSIA was originally the product of bipartisanship. The withdrawal of the Waxman amendment is a strong vote AGAINST poisonous relations across the aisle, at least as it relates to safety.

Because of its evident flaws, the demise of the Waxman amendment is a very positive development, although I would (of course) prefer to see the law fixed. But fixing the law needs to be done the right way. It’s time to move beyond message control and the false notion that any amount of lead is dangerous somehow like uranium. We are all adults here, and know that something less than an outright ban of trace levels of lead would work just fine to protect consumers. There may be legitimate consumer concerns over toy safety and the safety of other children’s products, but the CPSIA (a law borne in anger) is misconceived as a solution.

Perhaps this crash-and-burn will bring about real change. The best outcome would be an overall change in atmosphere. There is NO REASON that all the stakeholders must continually fight like cats and dogs. When it comes to safety, this is a particularly ridiculous situation. The common interest of all adults is to protect children – NO ONE opposes safety. However, the issues in safety are procedural and economic in nature, which must be acknowledged, and the solution is more complex than may be apparent. It is my belief that a reconsideration of the CPSC’s relationship with the market may provide the best “pop” for safety. A reinvigorated CPSC committed to industry outreach and partnership would work wonders. Rebuilding a genuine sense of mutual trust, rather than a mutual sense of fear and loathing, will provide the best long term protection of consumer interests.

This is NOT a pipe dream! In the wake of the demise of the Waxman amendment , we need to move forward TOGETHER to recast the law to facilitate the strength of the U.S. marketplace while protecting the legitimate interests and rights of consumers. No one needs to lose in this process. And a lot of jobs can be saved – if we act promptly and with insight.

Read more here:
CPSIA – Waxman Language Dropped from Defense Bill

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

CPSIA – Waxman To Amend the CPSIA . . . Who Can We Trust?

In a remarkably-timed event, an amendment to the CPSIA was unveiled right on the heels of the two-day CPSC workshop on the “15 Month Rule”. The amendment, expected to be attached shortly to the Defense Appropriations Bill (believed to be S. 1390 National Defense Authorization Act for Fiscal Year 2010), was developed by the House Committee on Energy and Commerce Democratic majority (Waxman and his staff) WITHOUT consulting with the Republicans on the Committee. Attaching the amendment to a moving bill in another committee is a procedural way for the Democrats to amend the law without hearings or discussion by the committee that drafted the CPSIA – and thus never lose control of the process. This maneuver is particularly outrageous given that Rep. Joe Barton, the Ranking Republican on the Committee, has a bill pending to amend the CPSIA (H.R. 1815, co-sponsored by 29 Representatives) and also has requested hearings on the CPSIA (which requests were ignored).

The outrages of this new bill extend beyond discourtesies in Congress. Equally remarkable is Waxman’s apparent consultation of the General Counsel of the CPSC on the text of the amendment without informing certain of the Commissioners. This shocker to the Commissioners is quite extraordinary and possibly poisons the well for Inez Tenenbaum’s CPSC Commission. There seems to be big issues of trust here. It is not known how many Commissioners knew of the existence or terms of this amendment, but it is strongly believed that this language was drafted in consultation with and perhaps under the supervision of Ms. Tenenbaum and her staff. It is also known that the Republican Commissioners were entirely in the dark as recently as 3 PM EST today. The apparently schism in the Commission has now broken into the open with the exclusion of Commissioners from this critical collaborative process along strictly party lines. Apparently safety IS a partisan issue.

The amendment tracks the little-publicized admission by Chairman Tenenbaum in response to the written questions of Rep. George Radanovich (R-CA) that a “functional” exception to the CPSIA lead restrictions is needed. [See paragraph 16(b) of the attached document.] This amendment is primarily focused on her request. The subject of a “functional” exception to the law has been discussed behind closed doors by many stakeholders but no common vision of such language emerged. As recently as a few days ago, Congressional staffers were denying that language would be attached to the new appropriations bill. Ah, truth in politics!

The draft language, said to be “final”, can be summarized as follows:

• Redesigns Section 101(b)(1) by adding a VERY limited “functional” exclusion.
• The new language now permits a component to be excluded.
• Gives the Commission the power to exclude WITHOUT a hearing. Evidence no longer needs to be “peer-reviewed”.
• Preserves the loathed “result in the absorption of any lead into the human body” language in the exclusion provision.
• Allows exclusion for product, component part or material “by reason of its functional purpose because it is highly impracticable or not technologically feasible to remove or make inaccessible the lead in such product, component part, or material” if “contact by a child with the lead . . . may reasonably be expected to be infrequent” and it is not expected to be mouthed.
• Each product, component part or material excluded must be labeled to indicate the presence of “accessible lead”.
• The Commission may by regulation require the reduction of lead in the excluded item or material and/or establish a schedule for full compliance.
• The new amendment restricts the ability of the Commission to exclude “an entire product” if ANY part of the product does not meet the foregoing requirements. This provision is entitled “NARROWEST POSSIBLE SCOPE OF EXCLUSION”.
• “Ordinary books” and “ordinary paper-based printed materials” are excluded from the lead restrictions under the CPSIA. This exception seems to include “quick copy” print materials, too. Materials not meeting the strict definitions of these terms are NOT excluded.

This language is not likely to make anyone particularly happy other than publishers and the library people:

The Pro’s:

1. Waxman acknowledges, finally, that the law produced by a “perfect legislative process” needs some tweaks.
2. There is no denying now that the CPSC can’t fix all the problems, and Waxman apparently concedes this point.
3. The Commission can now grant exclusions without a hearing.
4. Books were inadvertent inclusions in the CPSIA, and libraries were unfair victims. That has been corrected.
5. An awkward path for fixing ATVs, bikes and perhaps pens now exists. It is also possible that even rhinestones can be addressed, at least in part, under this language.

The Con’s:

1. The amendment leaves in place the terrible “any lead” language, making exemption requests a (bad) joke.
2. Exclusions will be hard to get and require a great deal of expense to obtain.
3. ALL exclusions come with a Proposition 65-like “consumer right to know” label, making the sales of the product highly unlikely. Few products can carry an accessible lead label and still be sold in volume.
4. The narrowness of the exclusion inherently limits the freedom of the Commission to act according to common sense.
5. The Commission and the CPSC are still not empowered to assess risk.
6. Small business issues were completely ignored, as were testing cost, liability and labeling issues.

Some additional observations:

• The approach of Waxman to fixing this law demonstrates that the CPSIA is now a House Democrats’ law. I will spit every time someone mentions the original 424-1 vote – the illusion of bipartisanship has been snuffed out once and for all. The exclusion of Republican Congressmen and Republican CPSC Commissioners from this process speaks volumes about how Washington intends to administer this law.
• Ms. Tenenbaum’s technique in obtaining this “relief” makes her look like Mr. Waxman’s bag man. The close alignment of Bob Adler and Ms. Tenenbaum on the Commission puts Mr. Adler into this camp, too. [When this subject comes up, Mr. Adler's prior job on Waxman's staff always has heads nodding.] The quiet development of this language breaks the illusion that talking to the Democrats on the Commission will somehow bring changes independent of Mr. Waxman. This bill makes it look like he maintains staffers on the Commission.
• The exclusion of books is nice, but smells a bit funny to me. The American Association of Publishers appointed Tom Allen as its CEO in April. Mr. Allen, a Democrat, served under Henry Waxman on the Energy and Commerce Committee and often followed his lead as a Congressman. Small wonder he got this job, right? It wasn’t a real shock then that books were excluded in this amendment. Despite the holier-than-thou rhetoric, it’s “business as usual” in Washington under Obama and Pelosi. A friend in need is a friend indeed.
• The narrowness of the exclusion process and the requirement of labeling despite the apparent admission that such exclusions pose few health risks strongly suggests that the legislative process is being controlled by zealots who will not yield to reason. The “true believers” who now dominate Washington have a world view that you need to take on board – Californiziation. There is no compromise on these issues, regardless of common sense or hard reality. Given the exposure of the axis between these Congressional leaders and the control block on the Commission, there seems little reason to be especially optimistic of serious advances in implementation of the CPSIA by the agency.
• The Chairman and Democratic majority on the Commission lack the political will to take on Waxman in an effort to fix the CPSIA. This potentially sacrifices the long term effectiveness of the agency in its stated purpose to protect consumer safety and possibly also the vigor and competitiveness of the American children’s product industry, all to avoid the unpleasantness of a contentious job. Complaints at the CPSC that it should be renamed the “Children’s Product Safety Commission” or the “Consumer Product Compliance Commission” will likely gain traction. The lack of political will to fight the good fight and to stand up for common sense create the conditions for a terrible legacy. Will these Commissioners be able to say they left the agency better off than they found it? An interesting question. Guys, there are no free moves in this game . . . .

I continue to shake my head over the timing of this development. Were I Chairman Tenenbaum, I might have told Mr. Waxman that I didn’t need this kind of help. Consider what may have been lost: (a) the bonhomie and trust built in the last couple days at the workshop as CPSC Staff and all sorts of stakeholders mingled in good faith and with open dialogue, (b) the goodwill generated by the CPSC efforts to protect Cepia LLC and their Zhu Zhu Pets from unfair consumer group attacks, goodwill that now must be reevaluated, and (c) the general appearance of a new cooperative, open-minded wind blowing through the CPSC in the last six weeks. I now have my doubts about the candor of discussions and the legitimacy of stated intentions to “fix” the system. The good intentions and well-meaning of the CPSC Staff is not really in question here – but the leadership must be held accountable. You can’t ask for trust and then expect this kind of thing to be ignored. You are either a partner . . . or you aren’t.

The Stay is now on the table. The CPSC Commission has been meeting behind closed doors with a sense of purpose and urgency to figure out what to do with it. Your letters and emails are being read . . . but the open question is whether enough Commissioners care. The Republicans on the Commission have been open in their support for extending the Stay, but the three Dems are unaccounted for. One is said to feel strongly that the Stay needs to go away, on the grounds that Congress wants it gone. Let’s not make any bones over this – it’s not Congress, it’s Henry Waxman. If it were Congress (in other words, a bipartisan movement supporting the existing CPSIA), then perhaps Mr. Waxman wouldn’t have to sneak around to get a CPSIA amendment through Congress without hearings or discussion. So when you hear that “Congress” wants something with this law, connect the dots.

A very disappointing way to wrap up a promising week.

Read more here:
CPSIA – Waxman To Amend the CPSIA . . . Who Can We Trust?

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