The Assault on American Competitiveness

I have written and blogged about the extent to which excessive rulemaking at the CPSC has led to job-killing overregulation to US business.  Unfortunately this Commission’s partisan rulemaking has destroyed businesses, undermined job growth, reduced the choice American consumers have in the market, raised prices and made some products less durable.  

In 2011, both Congress and the President called for cost-benefit analyses and reduction in burdensome rulemaking, yet the CPSC majority finalized some of our most costly rules ever. In that regard, I would like to share with you a recent editorial I wrote for The Ripon Forum entitled "The Assault on American Competitiveness." This article focuses on the “rush to regulate” as the term of one of the Democrat Commissioners and, thus the Democrat majority, came to an end.  

I urge you to read the article to gain some insight into the challenges we face here at the Commission and the impact these regulations are having on American manufacturers.  If you wish to respond, you may contact me either on my blog or by emailing me at commissioner_northup@cpsc.gov.

Common Sense Exception

Recently, the CPSC unanimously voted to grant an exception to the 100 ppm lead content limit for certain children’s ride-on pedal tractor component parts made with aluminum alloys. This vote represents a watershed moment in the Consumer Product Safety Commission’s approach to the regulation of lead in the metal substrate of children’s products. It establishes for the first time bipartisan acceptance, based on the expert advice of CPSC’s professional staff, of the principles that (1) lead in children’s products presents a risk of harm only to the extent that children are exposed to the lead; and (2) metal substrate containing 300 ppm of lead that is not likely to be placed in the mouth, ingested, or extensively contacted by children does not present a health risk, because it does not measurably increase blood lead levels.

I can only hope that this milestone decision will invite additional petitions as well as inspire the Commission to independently consider other opportunities to alleviate the unnecessary economic harm caused by its 100 ppm decision. I only wish the rational approach represented by the Commission’s adoption of staff’s analysis of the Ertl petition had prevailed sooner.

If you would like more information on the Ertl Petition, I encourage you to read my statement on the vote or to email me with your questions.

VGB Relief

As many of you know, last September the CPSC voted to reinterpret the phrase “unblockable drain” under the Virginia Graeme Baker Pool and Spa Safety Act (VGB Act) to no longer permit the use of unblockable drain covers to protect against entrapment in public pools using single drain systems. As I wrote several months ago, I believe that the decision by the majority of Commissioners was both ill-advised and unnecessary. To date, there have been no entrapment incidents in pools using drain covers compliant with the original interpretation of an unblockable drain. I remain firm in my belief that unblockable drain covers provide better protection against pool drain entrapment than the most commonly used (but widely criticized) back-up systems.

That said, however, last week a majority of Commissioners voted to provide some relief by extending until May 23, 2013, the time within which pool owners that installed unblockable drains in response to the prior interpretation are required to comply with the new interpretation. I appreciate that a majority of Commissioners were willing to invite comment from the public on the impact of the reinterpretation, and that a majority heard and responded to the calls for relief from communities and individuals across the nation.

Going forward, I am hopeful that by continuing to listen to those impacted by the Commission’s VGB Act regulations, the Commission will promote pool safety in a more effective, rational and efficient manner and revert back to the original interpretation which was both safer and more cost effective.

Budget Woes

Earlier this week, President Obama unveiled his 3.8 trillion dollar budget to both Congress and the nation. The budget included the Consumer Product Safety Commission’s request for funds from Congress. As with many government agencies, the CPSC Chair controls the process through which the annual budget is prepared, both by establishing the agency’s goals and priorities, and by exercising authority over agency personnel to direct budget’s preparation accordingly. In the case of the CPSC, the product that comes before the Commission is a long and detailed document specifying the amount of funding sought for the fiscal year, as well as precisely how the money will be allocated among the agency’s strategic goals. Unfortunately, individual commissioners do not have a meaningful opportunity to influence the agency’s budget, and are instead called upon to approve or disapprove the budget as presented by the Chair. While my vote was not intended to oppose the budget, I was unable to endorse it, because I disagree with many of the funding choices it contains.

As a Commissioner, I believe it is my responsibility to both advance the safety mission of the agency and to be a good steward of taxpayer dollars. As I have illustrated countless times, my main concerns with this agency is the wastefulness of the enormous new investment in the Information Technology (IT) program. After already spending over 29 million dollars to “upgrade and improve” its IT systems, the Commission now seeks an additional $7.44 million to continue the work, and neither figure includes the millions of additional dollars in Commission staff time. The results so far are not encouraging. Take for example the public database, which as designed by the Commission, has resulted in a product with no chance of being useful to consumers. Its public interface is so primitive, cumbersome and limited in the scope of information it contains, that a consumer seeking information on the safety of a product would be far better served by one of the many private sector clearinghouses for consumer product information, such as Amazon.com, than by our publically funded portal. I believe that the staff time and resources dedicated to the Commission’s IT program over the last several years and projected into the future would be better focused on the agency’s core safety mission or on a more efficient and effective approach to upgrading its IT systems.

At a time when every agency is being asked to conserve resources to reduce the national debt and relieve taxpayer burden, the Commission must do its part by performing its safety mission in the most efficient and cost effective manner possible. Instead, the Commission is requesting an additional budget increase on top of the last four years of substantial budget increases, and intends to spend the money on priorities that will not enhance consumer safety.

CPSC Registry Launch Could Hurt Those It Was Meant To Help

Under administrative authority and without agreement from the Commission, the Consumer Product Safety Commission has implemented procedures under which small batch manufactures can register to utilize an alternative testing requirement or exemption from third party testing and certification. In doing so, the agency has inappropriately made a unilateral policy decision to publish the business name, city and state of any small batch registrant who cannot prove that the publication would disclose confidential business information.

Congress, in an effort to prevent small business closures and the accompanying financial hardship to business owners and their employees who would be affected by CPSC’s third-party testing requirement, directed the CPSC to provide small batch manufactures with either alternative testing requirements or a complete exemption from third party testing and certification.

In order to register as a small batch manufacturer under the law, a business must make no more than $1 million in total gross revenues from the sale of all consumer products, and must make no more than 7,500 units of the registered product. The revenue and production data of businesses identified as having registered would therefore also be made public. Given the nature of these small businesses, it is unrealistic to expect their owners to possess the legal knowledge necessary to provide evidence and argument establishing the confidentiality of their revenue and production data.

The administrative decision by the CPSC to publish the business information of small batch manufactures on www.SaferProducts.gov may end up hurting many of the organizations and manufacturers that Congress intended to help. Such companies could be subject to potential negative advertising from larger competitors claiming that the failure to third-party test makes the products less reliably safe. In addition, the same consumer groups who have long pushed for third-party testing may also wish to more widely disseminate the names of manufacturers whose products are not third-party tested, to their competitive disadvantage. Smaller companies can also have greater difficulty placing their products with retailers; so exposing a business’ low revenue threshold could reduce its sales opportunities.

Finally, a small company with a successful product may not wish potential competitors to know that its size makes it an easy target for lower cost competition or a hostile takeover. Companies’ aware of these issues could well choose not to register in order to avoid the competitive harm that may result. It is impossible to imagine that Congress meant to imperil small batch manufacturers who take advantage of this exemption.

Stay No More

As many of you are aware, on December 31, 2011, the CPSC will lift its stay of enforcement on the requirement that most children’s products be third-party tested and certified for compliance with lead, phthalates and/or ASTM F 963 toy safety standards.

As a result, over three years after passage of the CPSIA, children’s product manufacturers and importers will begin to bear the greatest burden imposed by the Act. As I have argued in the past, it has become increasingly clear to most that third-party testing will impose enormous costs without a proportionate justifying benefit, and that the CPSC’s exercise of new enforcement authority and cooperation with the U.S. Customs and Border Patrol (CBP) is a better and more cost-effective approach to ensuring the safety of children’s products sold in the United States.

I want to share with you a recent article I wrote for the BNA Toxics Law Reporter entitled, “The Best Approach to Ensuring the Safety of Children’s Products Sold in the United States.” I hope you find it both interesting and insightful.

Los Angeles Port Tour

Last week, I had the privilege of visiting our country's largest port in Los Angeles to see first-hand some of the new and exciting technologies that our ports are using to ensure our safety. It is nice to know that the CPSC is benefiting from the port's use of cutting edge technology to protect American consumers from unsafe products.

During my visit to Los Angeles, I was able to take some photos that show much of the work that is being conducting at our ports on a daily basis. I hope you enjoy them.