Monday, May 18, 2009

CPSIA - Making "Sense" of It All . . . .

The last week featured numerous important events:

a. The CPSC Public Meeting on Tracking Labels (May 12)
b. The CPSC Commission Decision to Reject the Bicycle Industry Application for Exemption and Call for a Two-Year Stay (May 12)
c. The CPSC Commission Decision to Reject the NAM Petition to Stay the Tracking Labels Provision (May 13)
d. The House Small Business Committee Hearing on the CPSIA (May 14)

These events are all over the map but can be correlated. It boils down to this (no surprise): the CPSIA is a rigid and inflexible law designed to remove discretion from the CPSC Commission. The CPSC is not free to decide what is safe and what is not anymore. The twisted logic of the CPSIA creates legal conundrums that have no possible solution under the law, leaving the Commission little choice but to legislate with stays (see the bicycles decision, for example). Small business remains a pawn in this dirty game of politics.

When faced with the request by the Bicycle Product Suppliers Association for an exemption, the CPSC staff correctly concluded that although the lead intake from bicycle use was absurdly low (as any sane adult would acknowledge), they had no choice under the law but to reject the request because SOME lead is absorbed. Less lead than absorbed by eating your daily dietary requirement of dirt, but more than zero. Under the CPSIA, this is an irresolvable dilemma. [I will spare you the silly comparisons between the intake from bikes and candy.]

The Commission, stuck with this law, utilized its only remedy to avoid a plainly stupid result for bikes - it authorized a two-year stay on a basis to be determined. Yes, they need a reason to grant the stay, to at least maintain the appearance of staying within their legal authority to protect the public. As in the case of ATVs, the Commission needs a safety excuse to permit the resumption of manufacturing and sale of bicycles in violation of the lead standards. [N.b., this decision is an illegal act under the Constitution (legislation by a Federal agency is against the law).] In the ATV case, the Commission noted the need to keep kids safe by keeping them off adult-sized ATVs. And in the case of bikes, the CPSC intends to protect against what dangerous alternative? Spraining your ankle while walking? Not being able to reach the pedals on adult bikes? Ms. Nord, in her statement accompanying the bike decision, comments: "This course of action is becoming all too frequent for the CPSC. It is needed to avoid market disruption and to protect consumers. However, it is not an optimal way to implement a statute." It doesn't take much to reduce a legal system to a shambles.

The Commission's helpful spirit didn't last long. In an incredible irony, on the very next day the Commission split 1-1 over a tracking labels stay in its first deadlock over the CPSIA. Despite overwhelming evidence of market damage provided in testimony at the CPSC's public meeting on Tuesday, as well as in more than 130 comment letters, the Democratic Commissioner decided he had given out enough justice for one week. Mr. Moore commented: "While the Commission has stayed enforcement of a few sections of the CPSIA for certain products, it has not granted a blanket stay of enforcement from a provision for every affected product, which is what this request seeks." Ummm, other than the stay on testing and certification you voted for, Mr. Moore. No matter, Mr. Moore notes that "[this] will be a learning process for all of us. . . ." Something to look forward to.

One can only wonder how Mr. Moore's vote was regarded by the backers of the CPSIA agenda. First, we hear again and again that the CPSC must toe the line of the law. Then, when ATV'rs and the like begin to flex their political muscle and embarrassing articles about library books crop up, some Congressional venom flows and 28 Senators plead for "common sense". The Democrat on the Commission was positioned as the "good one" with "common sense" and Republican Nancy Nord set up as the "bad guy" standing in the way of progress. Now it again looks like Mr. Moore hasn't been reading his script. Of course, this is the guy who called for sequestering library books.

Mr. Pryor in his April 9 letter with 27 Senator friends instructs: "We confirm that the Congress provided for agency discretion . . . to implement the Act in a manner that would recognize anomalies in implementation and to work with businesses, institutions, and consumers to establish the protections of the Act without undue impact on the stream of commerce." [Emphasis added] Ah, but surely they didn't mean twice in ONE WEEK! With his "we'll all learn a lesson on this one" decision, Mr. Moore punctures the illusion (shaky at best) that the Republicans are the ones who lack common sense. Live by the sword, die by the sword. . . .

These decisions were bookended by a tracking labels hearing at the CPSC which set out extensive industry concerns over the cost and consequences of the new label rule, and a House subcommittee hearing that documented the terrible impact of the CPSIA on small business. After the polite and unusually civil hearing in the House, the Democrats nevertheless recharacterized it for their political purposes, ignoring clear ebidence provided by the witnesses.

Pardon me if the week left my head spinning.

So what happens next? An interesting perspective was offered by DNC Chairman Gov. Howard Dean on the CNBC Power Lunch program on May 7th: "[We've] had quite enough capitalism in the last eight years and I think we need some regulation now." That seems to sum it up.

Unless and until the new Commissioners okay a change in the law, unless and until a Democrat has the nerve or good character to admit a fundamental mistake in the drafting of the CPSIA (as the Republicans have conceded) and Congress takes action, there is little to hope for but time. The brunt of the impact of the law will be felt by small businesses and family businesses, a group with a great record for patrolling safety and staying close to the details. It's a shame that this strong group of corporate contributors will be sacrificed to satisfy the "better safe than sorry" crowd. We'll see whether they will feel safe or sorry when the consequences of their handiwork are known.


cmmjaime said...

Thank you Rick, once again for your straightforward, though depressing, words. You help us keep all this mess straight in our heads.

And you are right, small businesses and family businesses will keep up the fight -- and we will remember!

Lucky Pebble said...

We're still following everything you write. Thank you.

Anonymous said...

Love your comment about "small business being a pawn" in a dirty game of politics. That is especially true with respect to the big business/industry side that never had small business's back until around December when it was deemed politically expedicious for it to do so.
Regardless, I think you are a very articulate spokesman for small business, and I hope you are optimistic--as I am--that the newly appointed leadership of the CPSC will sort this mess out once and for all.

Rick Woldenberg, Chairman - Learning Resources Inc. said...

Well, well, look who's back! It's "Joe Consumer" from As to your contention that small business interests were sold down the river by big, bad business interests, I sadly must disagree. As someone said recently, it is important to distinguish between correlation and causation. ALL business interests will suffer from the CPSIA, not just small business, and the fact that we have all suffered together does not mean that the fault lays with big business. Small businesses will be very hard hit, and that is inexcusable, particularly since that group of businesses has an outstanding record of protecting consumers. I pin the blame on Congress, not big business.

You seem to contend that an empathetic and considerate Congress would have considered the reasonable objections of small business had anyone offered them. You state in your cited blogpost: "In fact, they should have been raised at the time the bill was being written, and they would have been dealt with."

Ah, so that's why this law was so goofed up - no one mentioned the issues to Congress! Ahem, I don't think so. I can show you my July and August 2008 correspondence setting out many of the issues that continue to dog the law. These letters have been acknowledged as totally unread by ALL major participants in the law's drafting, despite faxing to EVERY SINGLE CONFEREE. In addition, in my conversations with staffers at that time, it was clear that business was the enemy.

Let's not confuse the issue. No, Congress wasn't in the mood to listen last summer (and still isn't). However, the real issue is not the legislative process - it is that the law is unworkable for the many well-documented reasons. The continued refusal of Congressional leaders to deal with these issues is the ultimate in irresponsibility by public officials. Having made the mess, they refuse to clean it up.

We the voters will have to find a way to express our disappointment in about 18 months.

cmmjaime said...

To Mr/Ms Anonymous,
Since the leadership at the CPSC is not the problem with the CPSIA, I don't see how a change in leadership will help solve the problem.

As Rick said, Congress created the problem, and only Congress can fix the problem. And if the current batch of Congressmen/women refuse to fix their mess, it is the right and responsibility of us, the American citizens, to change Congress when we have the next opportunity.

Bad laws cannot be made good by wishing, or by regulating. They must be corrected by amending or repealing!