CPSIA - My Letter to Eric Cantor re CPSIA Over-regulation

VIA FAX (202-225-0011)

The Honorable Eric Cantor
United States House of Representatives
Office of Republican Whip
329 Cannon Building
Washington, DC 20515

Re: ”Delivering on Our Commitment” Letter

Dear Representative Cantor,

I am writing in response to your November 3rd letter entitled “Delivering on Our Commitment” in which you call for increased Congressional oversight of federal agencies legislating through regulations. My industry, the children’s product industry, is a victim of this kind of regulatory abuse. The Consumer Product Safety Commission's (CPSC) blizzard of new safety rules and regulations sharply ramps up government intrusions into markets by adopting the suffocating “precautionary principle” as its legal standard. This European-style approach to regulation, while doing nothing to improve the safety of products, is a job-killer and a business-killer plain and simple.

We really need your help!

In August 2008, Congress passed the “Consumer Product Safety Improvement Act of 2008” (CPSIA). The CPSIA had a noble purpose – to improve safety for children’s products by tightly regulating lead and phthalates (a plastic softener). It is a cliché now to observe that this flawed law was beset by “unintended consequences.” Unfortunately, Congress and the CPSC have been unmoved by the chaos that has ensued in the marketplace and the business community’s persistent pleas for relief. Small businesses are notable and well-documented victims of this law.

The children’s product industry, as defined by the CPSIA, goes far beyond toys and spans the U.S. economy. Children’s products under the definition of the CPSIA include ATVs, motorcycles, bicycles, pens, educational products, books, consumer electronics, apparel, shoes, jewelry, DVDs, furniture, musical instruments, carpeting and so on. Even the local resale shop and your own garage sale are now subject to new regulation under this law.

Our objections to this law do not reflect callousness toward safety. Quite the contrary, our industry’s lifeblood is children – and our outstanding safety track record befits an industry of caring adults. None of us want to endanger children. Likewise, we cannot tolerate being subject to laws that make operating our businesses unprofitable or exceptionally risky.

The CPSIA saga has become the poster child for “over-regulation”. While proponents of this safety law stress the possibility of injury to children (the curb appeal of the law), they fail to account for the probability of injury or prove a nexus between our products and the few known injuries. This is a critical distinction. While advocates argue that the so-called “Year of the Recall” justifies the arch new legal regime (473 products were recalled in 2007), the fact remains that children’s product recalls by the CPSC are associated with only one death (from a piece of leaded jewelry) and three unverified injuries over the 11-year period from 1999-2010 (according to published CPSC recall notices). By comparison, CPSIA compliance costs have been estimated to be more than $5.6 billion per annum.

We all agree that lead is a dangerous natural substance that can harm children – but the question is HOW. Other federal agencies, like the Environmental Protection Agency and the Center for Disease Control, point to house paint, industrial pollution and the residual effects of leaded gasoline as causes of elevated blood lead levels in children. The connection between lead in children’s products and injuries from lead remains undocumented. Daily intake of lead from children’s products is less than daily intake from food, water and the air, yet the CPSC remains undeterred.

Likewise, phthalates concerns remain highly controversial. The safety advocates have yet to produce a single known victim of phthalates – other than our businesses. Notably, since passage of the CPSIA in 2008, the agency recalled only one product for phthalates – 140 inflatable toy baseball bats. Even so, our company may have to spend hundreds of thousands of dollars on phthalates testing annually under the new law.

The agency’s response to lead and phthalates has been to impose a multi-billion dollar annual compliance cost accompanied by threats of heavy penalties, injunctions by the U.S. Attorney and possible felony charges. The agency’s obsession with lead and phthalates has led some staff members to refer to it as the “Children’s Product Safety Commission.” By comparison, the agency devotes few resources to swimming pools and spas, for instance, which account for more than one childhood death and between 11 and 12 serious injuries EVERY DAY according to the CPSC. I believe these confused priorities represent a subversion of the purpose of this agency under federal law.

Efforts to blunt the CPSIA’s impact have fallen on deaf ears. Sadly, Congress’ refusal to address the law’s shortcomings has only made the problem worse for the industry. Since passage, the CPSIA has been the subject of only one oversight hearing with a single witness, CPSC Chairman Inez Tenenbaum. There have been two other hearings, one by a subcommittee of the House Committee on Small Business and the other by a subcommittee of the House Committee on Energy and Commerce. Congress has never chosen to act on the many documented abuses of the business community under this law. The agency itself has held innumerable hearings and called for public comments again and again, but few objections of the regulated community have influenced outcomes. Votes on the Commission are now often on partisan lines – an abomination if one concedes that safety is not a partisan issue.

The regulatory nightmare of the CPSIA yawns wide in front of us. I testified before Congress in April 2010 that my company is now subject to more than 2500 pages of laws, regulations, rulings and other disorganized documents. Prior to the CPSIA, we were responsible to follow about 80 pages of rules, most of which did not apply to us on a daily basis. The total number of pages of applicable laws and rules now balloons far larger than Obamacare – and any violation of any sentence constitutes a possible felony offense under the terms of the CPSIA. We also must bear the risk that any of the 50 State Attorneys General might enforce this law if the CPSC defers. It is a regulatory nightmare of Orwellian dimensions. The CPSIA is an economic depressant by any definition.

The issues under the CPSIA fall into four categories: (a) Cost, (b) Complexity, (c) Legal risk and (d) Government intrusion. Our markets are now in total disarray because of the massive intrusion of the federal government along with scare tactics used by regulators trying to coerce compliance and, at the same time, obtain larger funding from Congress. Ironically, the more the agency uses the CPSIA to make us look bad, the more essential and irreplaceable they make themselves look. This perverse incentive is hard to combat. We need Congress to stop this madness.

The problems with the CPSIA and its implementation by the CPSC deserve much closer Congressional scrutiny. Our employees, our retailers and suppliers, and most importantly, the schools, teachers, families and children who want, need and depend on our educational products are counting on the new majority party in the House to restore sanity to federal safety administration.

Thank you for your urgent consideration of this matter. Please do not hesitate to contact me with any questions or comments.

Sincerely,


Richard Woldenberg

Chairman
Learning Resources, Inc.
380 North Fairway Drive
Vernon Hills, IL 60061

Chairman
Alliance for Children’s Product Safety