Regulating for the sake of?

Over the past week, I have commented briefly on the President’s Executive Order as well as the Commission Majority’s unfortunate decision to move forward on the reduction of lead in toys from 99.97% lead free (current level) to 99.99% lead free. As I have mentioned in the past, the Commission Majority often points to the inflexibility of the CPSIA or the need to protect public health to explain its willingness to burden the economy with unnecessary and wasteful regulation. The party-line decision last week that there are no products or product categories for which 100 ppm total lead content (99.99% lead free) is not technologically feasible belies those claims. The Majority has ignored the flexibility Congress granted the Commission to avoid imposing a 100 ppm limit, and cannot point to any gain in public health to offset the substantial economic harm its decision will cause.

There is a reason President Obama issued an Executive Order in January requiring Executive Agencies to reduce unwarranted regulatory burdens on American businesses, and issued another Executive Order last week imploring independent agencies, including the CPSC, to do the same. The President recognizes that overly burdensome regulations are strangling the economy and hindering the job growth essential to a sustained recovery.

Last week’s 100 ppm vote gave this Commission the opportunity to let the President know that it is listening and that it understand and cares. Instead, hiding behind the President’s inability to compel us to act and under the guise that the statute made them do it, the Majority once again chose to impose huge economic costs on American manufacturers with no evidence that there will be any improvement in public health.

I encourage each of you to take the time to read my official statement which provides more clarification and analysis of this issue. As always, I welcome your feedback and comments.

One Agency Answered The Call. Perhaps It's Time We Follow

Today the Wall Street Journal published an article entitled, "Toying With Deregulation: Another agency ignores Mr. Obama's executive order." I bring this to your attention because it focuses on the CPSC’s direct disregard of President Obama’s Executive Order in relation to last week’s vote on the reduction of lead content in children’s toys to 100 parts per million. As the article notes, “while the additional safety gain will be negligible, the change will do damage in other ways, causing companies to avoid recycled metal and plastic, which may contain higher amounts of lead. It will also raise costs for metal parts, potentially driving some businesses to substitute plastic for metal, or stop producing children’s products.”

This article raised three questions in my mind. First, is this really what consumers want for their children or what legislators thought when they drafted this law? Second, how many businesses does the CPSC need to close before somebody gets the message? And finally, and most importantly, how serious are we about following other agencies examples in responding to the President’s Executive Order?

Well, in reference to my last question…apparently not very serious. On July 15th, the EPA (an agency we routinely cite for their stance on lead standards) decided against a proposed rule that would have required contractors to test dust to prove the absence of lead following renovations involving lead paint. It is well known within the health community that lead paint in older homes is one of the most significant causes for higher lead level in children, not toys. If the agency that regulates this recognizes the impact of overregulation on the economy, then why can’t we?

How to Kill Business 101

Earlier today I had the privilege of being a guest speaker at the American Enterprise Institute. My speech, entitled "How to Kill Business 101: An Insider’s Look at How Over-Regulation Is Killing Our Economy” focused on my experiences in Congress as compared to my current position as a Commissioner at the Consumer Product Safety Commission.

Throughout the discussion, I was able to hear from the regulated community as well as provide some of my insights into ways in which we can lower the cost of regulations while also ensuring the safety of our products. In particular, my speech addressed three main points:

First: It is my belief that when Congress enacted the Consumer Product Safety Improvement Act that they never meant for the law to have such a costly affect on the regulated community. During my confirmation hearing, I was asked to find flexibility in this law, and work towards finding a balanced solution in determining what regulations we needed moving forward. My efforts to encourage my fellow commissioners in the majority to find flexibility in the law continue to fall on deaf ears. It is my hope that today’s event will bring the attention that is needed to change the course of regulations here at the CPSC.

Second: As many of you are aware, last week the commission by a 3-2 vote mandated that every component in products intended for children 12 and under will move from being 99.97 percent lead free to 99.99 percent lead free. We are not talking about lead in paint, which actually does pose a risk to children but rather lead in metal substrate. In the briefing package, even our own staff discounted any health benefits to children. Furthermore, going to such levels will be exceedingly costly to those who make children’s products who will now have to re-engineer, buy virgin plastic and virgin steel and absorb higher testing costs to prove to us that they are complying. American families on modest budgets will soon be paying the cost of this excessive regulation. As I have mentioned before, and NIH and EPA studies verify, the traditional dangers with lead stem particularly from old houses where paint contains high lead levels and areas where gas has been left on the ground, potentially causing ingestion in a child. Ironically, the EPA, who is tasked with oversight of this issue, has just withdrawn a Rule that would have focused on reducing children’s exposure to lead in paint while we are going in the opposite direction.

And Finally: I focused on the importance of following the President’s Executive Order at the CPSC. The President has asked even the Independent Agencies to consider cost/benefits analysis and look for less costly alternatives but that did not stop the Majority here at the CPSC. Our staff actually acknowledged that moving to the 99.99% lead free might be impossible for businesses and that they might close, that it would make products less durable and that they would not work as well.

I would like to thank AEI for having me come to speak today and always welcome the opportunity to be a guest at any organization. Together I believe we can truly make a difference here at the CPSC, and look forward to your continued input and support.

Can't meet 100ppm? "Just petition us!"

At yesterday’s hearing on the technological feasibility of dropping the lead content limit to 100ppm, it was stated that if there’s any manufacturer out there that’s having trouble reaching this lead content limit (even though the Commission’s Majority already made the decision that it’s technologically feasible for all products to meet 100ppm)----just file a petition with the Commission, and we’ll consider it.

Really…..it’s that simple?

Aside from the fact that there is a clear split among the Commissioners regarding how they view the flexibility allowed by Section 101 of the statute, the petitioning process for any company, under just about any of our statutes, is immensely complicated. Here are some key considerations for a company filing a petition as well as some facts and figures to keep in mind:

- First, does the company’s request for relief count as a “petition”? In the past 2 years, the Commission has docketed approximately 6 petitions in the Federal Register. All this illustrates is that these documents were prepared to the required specifications to be deemed a "petition" by the Commission. This does not, however, count the many requests for relief that we rule out simply because they do not meet the guidelines to be considered a “petition” outlined in our regulations.

- Can the manufacturer make the scientific, engineering, legal and other showing necessary to support their petition for relief? While the largest of businesses may be able to achieve this feat, most small businesses do not have metallurgists or a legal team on hand to put together such a petition.

- Who can afford the cost? We know from one former petitioner to our agency that the cost to file a petition, including legal fees, was approximately $50,000—-and can run much more. Mind you, that is without the odds favoring any guarantee that the Commission will even grant their request.

- Is there a chance of winning? Granting petitions by the Commission is always subjective. As seen in today’s hearing, there are a wide variety of opinions regarding the statute’s flexibility on 100ppm – and even regarding the lack of a health benefit. Just for perspective, it is helpful to remember that every product-specific petition for exclusion filed previously under Section 101 (e.g., petitions for bicycles, ATVs, ball point pens, crystals, and toy cars with brass axles…) has been denied.

- Do you have the time to wait? As a number of manufacturers already know, the petitioning process takes time – including a notice and comment period for the public, and taking into account the many other priorities of the Commission. There is no guarantee that a company will receive the decision they need, and in time to make a difference.

- And realistically…if your business is failing due to the Commission’s decision that it was technologically feasible for you to drop to 100ppm (and/or due to the CPSIA’s myriad mandates)…do you really have a spare $50,000 and the time necessary to petition a federal agency?

As of yesterday’s vote, the Commission may have unnecessarily consigned an unknown number of products and businesses to oblivion. Let's at least have the spine to admit it, rather than pretend we are awaiting the opportunity to provide relief, through petitions, to all comers.

Stay tuned in the upcoming days for my statement and further commentary on the 100ppm decision….

Now it’s crystal clear – independent agencies must be responsive to the President’s call to roll back burdensome regulations

Today, President Obama issued a new Executive Order, requesting that the CPSC and other independent agencies comply with the President’s earlier Executive Order 13563, calling for the reevaluation and potential repeal of overly burdensome regulations and the promulgation of new regulations “only after consideration of their costs and benefits (both quantitative and qualitative).”

No longer can the statement, “this Order doesn’t apply to us,” hold true for Commissioners at the CPSC.

Last week, I had the opportunity to testify before the Energy and Commerce Subcommittee on Oversight and Investigations concerning President Obama’s earlier Executive Order (E.O.) 13563 and the lack of responsiveness to the E.O. of agencies such as ours. While this original Executive Order did not apply to independent agencies, Administrator Cass Sunstein had urged that they voluntarily comply.

In my testimony, I continued to argue for ways in which the Consumer Product Safety Improvement Act’s regulations can be implemented with less burdensome regulations. I also suggested specific reforms to the law that would ensure that the CPSIA and its regulations would not hurt our ability to create jobs in this economy.

Following the hearing, my former colleague, Representative Marsha Blackburn (R-TN) guest blogged on the Heritage Foundation’s The Foundry website with her reactions to the hearing. I concur with Rep. Blackburn’s statement: “It’s important to understand the reason why regulators are resisting voluntary compliance with Obama’s order: they can’t justify their costly rules and mandates.” The reality is…we need action. We need to better quantify the costs that our regulations are having on businesses throughout the country. We need to engage those most affected by our regulations and we need to provide them with the opportunity to comment on those issues. Further, we need to admit our mistakes, learn from them, and look back at ways we can lessen the unnecessary burden of CPSIA-mandated regulations when there is no known risk.

Several months ago, I applauded the President for his Executive Order and urged my colleagues at the CPSC to help to shred the excess in terms of how we regulate. I have testified before Congress several times requesting more flexibility in the statute and urged my fellow Commissioners to do the same. Last week’s hearing and the latest, dire unemployment statistics have created a new awareness of the issues regulated by independent agencies. I remain strong in my belief that the White House, Congress and the public can play an important role in shaping the CPSC’s decisions.

I once again urge my colleagues to follow the new Executive Order and to stop any further regulations without a plan in place that addresses the concerns of the President, mainly that we “produce a regulatory system that protects public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation."

My Op-Ed in the Washington Times

Crib crash kills cash, doesn't save kids

Today, the Washington Times printed my op-ed on the implementation of the recent crib rule. I could not have written this without your stories and experiences regarding this rule. I hope you will keep sending me more in the upcoming weeks and months!

Crib Response

Following the implementation of the crib rule, I received several e-mails and letters from those most affected by the Commission Majority’s decision. While I will continue to urge my Democratic colleagues toward a reasonable interpretation of the CPSIA and the avoidance of unnecessarily burdensome regulation, I and my fellow Republican Commissioner have an uphill battle. I am hopeful that by sharing some portions of these letters with you that my colleagues on the Commission will understand the harm their rulemaking is causing not only to American businesses, but more importantly, to the hardworking American family.

From Sarah in Utah:

When I had my first baby, we were so poor that I had to make all my maternity clothes from leftover fabric, and even then I wasn't able to make enough to last me a week without washing. My aunt lent us a crib that had been hers since my cousins were babies. It was a drop-side crib and it in no way met the current safety standards of that time (13 years ago), let alone today's safety standards. But my daughter survived it too, just like my cousins did, and if it hadn't been for that crib my daughter would have slept in the proverbial dresser drawer.

When I had my oldest son, we were a bit more prosperous and we could afford a used (fixed-side) crib which we bought for $80. That was all we could afford and still get the other things we needed. And by "needed" I mean like clothes and car seats, not diaper wipe warmers and fancy toys. Even so we could only afford used clothes. We used that crib for three boys total, the second of which, a budding engineer, removed two of the slats and forced us to jerry-rig it back together with a metal rod (totally untested by a third party lab) so that it could be used for the third boy, who was born just a couple months later. And when we were done with it, we gave it to another family in need of a crib.

This is how it works in the REAL world, far from the rarefied heights of Washington D.C. Most people starting their families are not prosperous, and not everybody's got a relative who can afford to buy them a brand spanking new crib when they can't pony up the cash. You can make it illegal to sell cribs and put the proverbial Fear of God into retailers and resellers, but you can't stop the distribution of these cribs, because they will continue to be passed down through families and around neighborhoods. If we had done this today, we must have committed several felonies in the provision of sleeping quarters for our four children! And yet, if we had not done so, we would have been guilty of child neglect.

From Rafael de Castro, NINFRA:

I hope that even though we were unsuccessful in our petition, the commission now sees the unintended side effect of instituting the same compliance date for two different segments of our retail supply chain. I can attest to the damage the implementation of this standard has done to many small retailers throughout this country and I am sure this was never intended when the commission decided to adopt 16CFR-1219. In both sides of the argument presented to the commission on June 16th, retailers had suffered unnecessary harm cause by this implementation plan, all of which could have been avoided if retailers would have been given an opportunity to sell through their inventor.

In a statement [by one of the Commissioners] following the vote, he says the following:

“Any Type of extension of the effective date for this rule would be patently unfair to the many retailers, both small and large, that have planned ahead, worked hard, played by the rules and prepared themselves to sell only compliant cribs on June 28th.”

I can tell you that we planned ahead and we worked hard to sell only compliant cribs by June 28th. The problem was never planning or how hard we were working, the problem was the fairness of the rules. As we move forward, I can only hope this commission does whatever studies it has to do to understand the full impact of this implementation plan. Maybe then, opinions such as those stated above by [the] Commissioner will change.

Personally there is a point I must make. While watching the webcast I could not help but notice how the four retailers fighting this extension were portraying us. We were being painted as profit hungry retailers with little regard for the safety of children. Nothing can be farther from the truth. The retailers I am proud to represent are family oriented good people. They understand the importance of safe cribs and welcome any standards, which make cribs safer. We support 16CFR-1219 and think it has set a safety standard this industry has needed for quite some time.

From Jim Vieira, President, Baby Boudoir:

Political ideology aside, anyone leading a government agency should be able to recognize an error in judgment, and take the necessary steps to correct that error when new substantiated information challenges a previously held position. It's clearly illustrated by Commissioner Northup's statement that this error was not even considered, let alone corrected. Meanwhile, were still waiting for certificates of conformity, retrofit hardware and a miracle to save a number of stores on the brink of bankruptcy.

I appreciate all the feedback I have received on this matter and will continue to provide as much information to the Commission as possible. Your input continues to help me in my efforts of being a responsible advocate during the CPSIA rule making process.