CPSIA - Final CPSIA Amendment (HR 2715) Moves to President's Desk for Signature

Here is the final form of the CPSIA Amendment  (HR 2715) that should become law sometime this week.

I want to quote from another blog (thank you, Steven Hansen) on this amendment's path to the President's desk:

"This bill and the path it has taken is an example of why people are very frustrated with Congress and getting legislation passed in general. These 'legislative' fixes have been getting passed around in backrooms for months and when they finally did come to a 'vote' the 'fix' was already in and they sailed thru in minutes or seconds on votes that were purely formalities. There was really no warning that this would be passed when it did or in this fashion. If you did not get what you wanted in here well that's too bad because you are not likely to see any further relief for some time. Apparently Congress is going to be in recess until after Labor day as they had to work so hard to pass the debt ceiling bill."

Mr. Hansen is completely correct.  We know that even Republican members found out about this amendment when it was docketed for a House floor vote.  Mark-up, schmark-up.  The Senate also made the decision (if that is even possible, since the Senate is an inanimate organization without a mind) to shift to HR 2715 without debate, and passed it with a voice vote.  These decisions were literally made in minutes behind closed doors and Members of Congress had no time to read (and perhaps no interest to read) the "noncontroversial" bill.  After three years of intense bickering, a small group of individuals made the decision for all of us that this bill is good enough to "fix" the CPSIA.  There won't be another "fix" to this law again, perhaps EVER.  You know the bill sucks if Henry Waxman is clucking about it.  In fact, most of the text of the bill was his handiwork almost entirely (functional purpose, testing "relief" (Eshoo), database (Markey), small batch "relief").

And what did we get for all our good government dollars?  I have previously given my quick assessment of this law and have no interest in repeating the exercise at this point.  I would like, however, to highlight low lights of the bill:

Winners:   ATVs, Bicycles, Resale Goods, Books, Libraries

Losers:  See above list, and if you're not on it . . . you.

Technical Fixes of Past Congressional Screw-ups: 

• 100 ppm lead standard is prospective now.  And WHY wasn't Congress able to do this for 300 ppm or 600 ppm?  Good question.  The five CPSC Commissioners called for this particular change back in January 2010.  What's the hurry now???
• Changes to testing requirement to "representative" rather than "random" samples.  And we just hired our third statistician, too!
• Restricts the phthalates ban to accessible plasticized components.  i guess Congress isn't worried about kids with serpent tongues any longer.
• Makes FUTURE crib standards prospective.  And who said the $32 million in recently discarded good fixed-sided crib inventory died in vain?!

Shame, Shame, Shame:

Small batch manufacturers, the most micro of businesses (under $1 million in total turnover) must register prior to utilizing any of the nifty cost-saving testing innovations now being cooked up by the very open-minded CPSC.  This is the CPSC's version of the sex offender registry.  Is there ANY basis for singling these people out for special attention?  Why doesn't Mattel have to register, too?  Oh, come on, you know we must have different rules for Mattel!  They need their own firewalled labs and so on for their efficiency.  [Here's a good example of their efficiency.]  It's only fair, the real safety worry is the crafters . . . .

The only good news is that none of the small batch manufacturers will ever have to suffer this indignity. The clever gnomes of Congress have figured out how to appear to give something to those heart-rending  little nobodies without doing squat.  How do they do that?  The only "relief" that the CPSC may implement must meet this standard:  "Any such alternative requirements shall provide for reasonable methods to assure compliance with any applicable consumer product safety rule, ban, standard, or regulation." [Emphasis added]  This CPSIA term has already been interpreted by this Commission multiple times.  The word "assure" ensures that no relief will ever be given since nothing can "assure" compliance other than prophylaxis.  Notably, the Commission has purportedly looked for this "out" for three years and came up with nada.  And Bob Adler has been "agonizing" over it for that entire time.  [I feel AWFUL for him, he suffers for each of us.] How will another year or two of agonizing produce a different result?

Suckers are welcome to wait longingly for this promised "relief" but they will be disappointed again and again.  Protest is futile.

Disgusting, Repellent Hypocrisy:

Consider the amazing gimme provided to bicycle manufacturers:

"(B) METAL COMPONENT PARTS OF BICYCLES.—The third party testing requirements established under subsection (a) shall not apply to metal component parts of bicycles with respect to compliance with the lead content limits in place pursuant to section 101(b)(6) of the [CPSIA]."

They don't have to test their metal components at all.  AT ALL, EVER.  Bicycle manufacturers are different than you and me.

Let me be clear - I think testing metal components on bikes is a stupid and pointless waste of time and money.  The bike industry testified in the CPSC 100 ppm hearing that when they tested a single part in ten places, they got ten different results.  Whoa!  They proved they had an unsolvable problem and apparently Congress listened.  How heartwarming!

I gave similar testimony and submitted similar data about our products at the same hearing in the same panel sitting at the same table.  Congress must have gone deaf by that time.  Oddly, the CPSC staff included this data and my testimony in their 100 ppm report.  So perhaps Congress isn't just deaf, they may be blind, too.  Or perhaps they just don't bother with the details.

Inquiring minds want to know about this particular term benefiting bicycle manufacturers:

1.   The AAP testified that there is a real risk that kids might lick their bicycles.  Problem?  Apparently not, but the testimony was taken morbidly seriously at the time.  I wonder why Congress wants to protect bike lickers now.

2.   Perhaps you recall that the CPSC rejected the request of Learning Curve to exempt its brass bushings on toy car wheels.  This decision was a "major victory" for safety because, get ready for it, there was lead in the brass bushings although Bob Adler noted there was no danger even to a child at the "tipping point" in lead exposure.  [Adler voted to reject LC's petition nevertheless. He "had" to, the law left him no choice.]  Later the Consumers Union warned against playing brass instruments in a band because of the dreaded lead in brass.   [Degchi (Curry cookware) is one of many traditional Indian cooking utensils and pots made of brass.  Where are all the Indian victims from generations of eating off brass?]  The CPSC also held the line against bikes, pens and ATVs over the purported lead content of their metal components because the Dems asserted that there is no safe level of lead.  Is Congress signalling that metal components are uniquely safe in bicycles?  How did Congress figure this out?  Is there something in the Congressional record on this point?

The term about testing metal bicycle components first appeared in this bill when it went to the House floor on suspension.  Bills on suspension cannot be amended.  Hmmm.

3.   I recall Rachel Weintraub intoning during testimony at the CPSC and in Congress that consumers expect their products to be tested before sale.  [Former Commissioner David Pittle told the same tale at a CPSC hearing.]  Bicycles won't be tested before sale now.  How will consumers be able to sleep peacefully?  How will they know which items are not tested (ATVs, books, bikes, resale goods of all types) and which are tested?  Won't they have the same uncertainty again?  I can feel the fabric of our society tearing a little bit . . . .

4.   Bicycle manufacturers have indicated that tests of metal components vary depending on where you test the component.  There is unpredictable variability in their test results because . . . metal components are not precisely homogeneous.  Metals are used in components in many children's products, not just bikes.  It follows that all metal components pose the same issue.  It also follows that metals pose an equal risk of lead poisoning regardless of the product they are used in.  So why must we test our grommets and staples when bikes can tool around untested?

5.   Is there a reason why OTHER components on a bicycle (presumably made of plastic and vinyl) must be tested?  Is there a known health hazard there that bike companies must protect against?  Will those tests achieve anything for anyone?  And why must every other product category still subject to the CPSIA test every component, whether metal or plastic?

6.   The CPSC has held that it is "technologically feasible" to make every component of every children's product compliant to the 100 ppm standard.  There were no exceptions to their conclusion.  Why did Congress in its infinite wisdom decide that bicycles alone could be forgiven the need to meet this standard and alone to not have to test its metal components?  [The other problem child under this provision, ATVs and motocross, was written out ENTIRELY.]  Why weren't bikes made to comply with the astute judgment of the CPSC and shift over to new materials to meet the "toughest lead standard in the world"?  After all, that only costs money, and Bob Adler assured us that the cost would be minor and worth it.  Can't be too safe and, of course, we all know that safety delayed is safety denied.  Isn't this action of our all-knowing Congress denying safety?

As I have noted, this law picks winners and losers.  Applying reason and rationality to this arbitrary allocation of spoils is a pathetic waste of time at this point.  Congress has decided what's best for all of us, and with the Tenenbaum gang in charge at the CPSC, you shouldn't spend much time hoping things are going to change in the future. Henry Waxman and Rachel Weintraub won.

CPSIA - Don't Faint . . . Senator Pryor Put Up CPSIA Amendment Today

Senator Pryor today introduced the so-called "Consumer Product Safety Flexibility Act of 2011" to amend the CPSIA.  This four-pager is targeted at three problems:

First, it makes the 100 ppm lead-in-substrate standard prospective.

Second, it exempts ATVs and motocross (off-highway vehicles) from the lead standards of the CPSIA.  It also gives a year extension on the standards for all-terrain vehicles.

Third, it codifies the holdings of the CPSC stay as it applies to bicycles (‘Notice of Stay of Enforcement Pertaining to Bicycles and Related Products’, published June 30, 2009 (74 Fed. Reg. 31254)), thus exempting bicycles from the 100 ppm standard.

The bill to my knowledge is not up on any of the Congressional monitoring sites yet and does not have a bill number.

This is a useful effort by Senator Pryor.  For one thing, the 100 ppm lead standard issue MUST be addressed before Congress goes on its August recess.  Hats off to Mr. Pryor for at least providing a means to address this issue.  Rumorville has it that the Senator wants to do more than is expressed by this bill.  Other Dem Senators are on the list as purportedly wanting to do more for us.  All I can say is . . . get in touch with your feelings, Senators.  We need help NOW and we would appreciate your help and leadership in particular.

As for saving the ATV'rs and bikers, well, they never belonged under this law in the first place.  The devastation wrought by this law should have been addressed long ago.  That said, there is nothing more or less sympathetic about ATVs or bikes under this law than the rest of us losers under the act.  None of us were poisoning children or even injuring children with lead-in-substrate, much less phthalates.  The neuroses of the consumer groups is no more applicable to bikes and ATVs than to us.  [Please note my prior disclosures, dating back to January, that the AAP has long supported application of CPSIA lead provisions against the ATV industry to effect a tacit ban of youth model ATVs.  The AAP admits they want youth model ATVs off the road.  This duplicity exposes the sham nature of the CPSIA, how it has been misused for political reasons by the white-cloaked and self-righteous proponents of children's product safety.]

Having spent literally countless hours on advocacy on this issue since 2007, I cannot say what more needs to be said or can be said to explain how misconceived the law is.  The ATVrs and bike industry should be let off the hook . . . but so should all the other innocents.  If ATVs deserve a pass, so do rhinestones, so do t-shirts and shoes, so do books, so do science kits.  Come on , guys, science kits?!  Do you REALLY want to send America's science education back to the Stone Ages?  It's time to loosen the noose on American industry.

One can only hope that this bill moves quickly through the Senate, and that the House quickly regains its Mojo on ECADA, leading to a useful and hopefully productive Conference negotiation to produce the long-awaited CPSIA Amendment that we have long craved and which is so long overdue.

CPSIA - Futile Provision or Gimme for Big Biz?

In response to my blogpost on the "Functional Purpose" exception so desperately desired by the Dems (Waxman and his Waxmanis, plus the Dem CSPC Commissioners) as the "solution" to the inflexibility of the CPSIA restrictions on lead, I am informed that some people think the door is still cracked open for exclusions.

I must disagree.

Here is the language on the functional purpose exception from the last published version of ECADA: 

"(1) FUNCTIONAL PURPOSE EXCEPTION.—(A) IN GENERAL.—The Commission, on its own initiative or upon petition by an interested party, shall grant an exception to the prohibition in subsection (a) for a specific product, class of product, material, or component part if the Commission, after notice and comment in accordance with subparagraph (B), determines that—(i) the product, class of product, material, or component part requires the inclusion of lead because it is not practicable or not technologically feasible to manufacture such product, class of product, material, or component part, as the case may be, in accordance with subsection (a) by removing the excessive lead or by making the lead inaccessible; (ii) the product, class of product, material, or component part is not likely to be placed in the mouth or ingested, taking into account normal and reasonably foreseeable use and abuse of such product, class of product, material, or component part by a child; and (iii) an exception for the product, class of product, material, or component part will have no measurable adverse effect on public health or safety, taking into account normal and reasonably foreseeable use and abuse." 

I have added color to the key words in this section.  In blue, I have highlighted that the exemption will ONLY apply to those products or materials which "require" the inclusion of lead.  In yellow, I have highlighted the two parts of the exception, namely cases where the inclusion of lead is not practicable or not technologically feasible. 

Who will benefit from this provision, and how will they benefit?

First, to take advantage of this provision, you must demonstrate that your product "requires the inclusion of lead".  When might lead be required?  According to the CPSC Staff in their recently released report on the "technological feasibility" of 100 ppm lead, no products or components under 600 ppm concentration requires lead:  "Staff has found no intentional uses of lead in materials at concentrations at or near any of the three statutory lead limits (i.e., 100 ppm, 300 ppm, or 600 ppm). Therefore, staff does not believe that children’s product manufacturers intentionally design or make products or components with the maximum allowable lead content because lead concentration near the maximum limit would have no benefit or purpose to the product or the manufacturer." 

No benefit whatsoever of trace lead content.  Who would have guessed that?!

Thus, this provision only applies to items, components or materials well over 600 ppm lead.  For those of you on the sidelines hoping that this will save your trace levels of lead in components, like metals in bicycle components, sorry!  It's not for you.

I believe this provision is only intended for a very limited list of components - namely, brass, metal alloys or possibly rhinestones.  In reality, it's just for metal alloys which actually require lead as a component, like engine components (or brass).  There will be almost no argument possible where there is a market substitute that the CPSC thinks is adequate. They get to run your business now, don't forget.

Rhinestones are so done.

For those items, components or materials that make it through the "requires the inclusion of lead" filter, the provision then further limits coverage where avoiding the inclusion of lead is not "practicable" or technologically feasible.  The above-referenced report states the opinion of CPSC Staff that NOTHING requires the inclusion of lead as defined by the CPSIA:  "Based upon this analysis, the staff could not recommend that the Commission make a determination that it is not technologically feasible for a product or product category to meet the 100 ppm lead content limit for children’s products under section 101(d) of the CPSIA. No such determination has been made by the Commission. Therefore, all children’s products sold, offered for sale, manufactured for sale, distributed in commerce, or imported for sale in the United States must meet the 100 ppm lead content limit beginning August 14, 2011 as statutorily mandated by the CPSIA unless otherwise excluded . . . ."

Some people believe the legal definition of "practicable" in certain legal rulings (case law) takes into account economics  and is intended to be a more pragmatic standard allowing applicants to plead that the law will ruin their businesses.  This theory depends on a richer, more nuanced meaning of the term than provided in online legal dictionaries ("when something can be done or performed" or "anytime something can be done or performed").

A more detailed explanation, closer to the wishes of those pinning their hopes on this provision, comes from JustAnswer.com:  "Normally one would say, in a legal arena, that if it does not cause an undue hardship to one party or the other, then it is 'practicable'. An example would be if during a child support hearing, one party wants the other party to pay for a brand new corvette for their 16 years old child to drive, that would be considered impracticable whereas if they asked for the other parent to provide safe transportation and it is agreed to get a used Ford Escort, that would be practicable. If during a hearing on a property easement the land owner wants $200,000 for a 40 foot easement, the easement holder to pour a new driveway for them both to use, and he can only use it on Fridays, that would be impracticable. Does that make sense? It is basically saying that if there is a reasonable way to provide whatever is being asked, or rather 'whenever practicable', that should be done."

Anyone hoping to win an exception under this provision must be prepared to explain that there is no reasonable way to accomplish their goal, that it is in that sense not "practicable".  This definition does not permit exceptions simply because in their absence costs might rise.  The cost must be "unreasonable" but can be much greater than zero.  What might be deemed an "unreasonable" cost by this CPSC Commission?

Well, I think some factors are quite relevant in evaluating whether such exceptions will EVER be granted.  First, the three Dem Commission has taken the position publicly that there is no safe level of lead.  This is wrong, as we know, because since every human takes lead into his/her body every minute of the day and night through lead in air, water, food and dirt (at a minimum), we cannot conclude that life degrades in the presence of lead alone.  The source, concentration and exposure to lead determines the nature of the risk (as they say, the dose makes the poison).  Unfortunately, these Dem non-scientists are beyond convincing.  Try telling them that money is more important than their unthinking appraisal of the "risks" confronting children with lead.  I can't see it.

As if that weren't enough, the CPSC Staff has publicly stated that everything can be made lead-free based on the bizarre definition of "technological feasibility" under the CPSIA. That term of art does not have the expected meaning of its English words since economics were written out of the definition.  This Commission knows that everything can be made without lead, and given their caveman fear of lead, any applicant will have to explain why other available options are no good.  The concept of technological feasibility and not practicable are not really as divorced as they seem.

CPSC Staff shed some light on practicability in their 100 ppm report:

a.  " . . . low-lead materials that can be used in the production of children’s products generally appear to be commercially available in the market place"

b.  "In general, for cost increases affecting a broad base of industries, there will be a mixture of effects: both increases in the retail prices of children’s products and reductions in overall production levels."

c.  "Alternatively, some manufacturers may need to redesign or re-engineer their products. Valve stems for bicycles, for example, may need to be fitted with more secure caps, which will effectively render them inaccessible and potentially more difficult to use. In addition, products may be simplified to reduce the number of components for testing."

Overall, the implication of the economic analysis is that the bulk of economic damage (rising costs) has already occurred.  In addition, the CPSC seems to think there is more than one way to skin a cat - and that would be quite relevant in any proceeding under the Functional Purpose Exception provision  Which items would likely be eligible for consideration for relief?  It would likely only be items that are being sold subject to a stay (ATVs and bicycles) because everything else that's on the market is already compliant.  And how many items are being openly sold today are NOT in compliance with the current lead standards?  Damn near zero.  As Mike Larson notes in the Star-Tribune (March 27, 2011):  "Unfortunately, this hasn't helped because the many manufacturers and dealers have chosen not to sell the smallest youth model ATVs because of the risks of selling under the stay, and there's now a limited availability of these products for consumers.  In fact, half of the major ATV manufacturers are no longer selling youth model off-highway vehicles."

My conclusion:  No one can apply for this exception and if they do, they are highly likely to be turned down. Just like the last three years.  It's a big win for Waxman - he appears to be "listening" but instead is perpetrating a fraud on all the dupes in the children's product industry.  He cares not about your petty problems (that he created).  It's truly heartwarming . . . .

One last thought:  Who really gets the short end of the stick here?  It's you as usual, the little guy.  The CPSC Staff acknowledges that the 100 ppm standard is anti-small business:  "Despite the existence of complying materials and components in the marketplace, some manufacturers, especially very small ones, may not be able to readily purchase these materials and components due to the lack of available distribution channels. For example, the Handmade Toy Alliance stated that its members would be unable to consistently obtain materials complying with such a low lead limit because its members do not purchase raw materials, but instead purchase component parts from retail stores."

But, heck, who will take the time to actually read their 59-page report?  Believe me, Waxman ain't losing sleep over the possibility that you will read it, much less actual members of Congress.

And then there's the practicality of the exception process - it's like major litigation against the government. Think of the cost - you would need to hire experts, lawyers, consultants and would have to prepare dossiers on each and every material, component and product you want exempted.  You will bear the burden of proof, you will be judged ONLY on the "proof" you submit, and best of all, you will be judged by a panel controlled by Tenenbaum, Adler and Moore.  Who on Earth will waste their money and their time on this?  Perhaps Mattel, WalMart and a few Asian manufacturers of bicycles (China makes 58% of world bicycle production).  It's not for you - you can't afford it.  This is a meager gimme for big business, like "firewalled test labs", something to ease the troubles of the mega companies affected by the CPSIA.

As for the rest of us, let's not forget the wisdom of Senator Dick Durbin's office:

"I think you are right that the CPSIA imposes costs on businesses, and because of economies of scale it’s the smaller businesses that will feel these costs more acutely. This is part of a larger calculation that it’s worth the costs to shift from the old system of post-market correction (once a dangerous product is out in the market and leads to sick kids, recalls, lawsuits, etc.) to a new system of pre-market testing and certification (instead of just assuming products are safe and paying the price for false assumptions)." [Correspondence dated April 16, 2009]

I think the real false assumption is that the Democrats care about anything other than getting reelected.

CPSIA - Battles Lines Drawn

As ECADA moves toward a mark-up, possibly next week, the action over the CPSIA is happening elsewhere on the Hill.  In yesterday's The Hill newspaper, it was announced that the pending Appropriations Bill knocks out all funding for the noxious CPSIA database. 

It is symptomatic of the partisan gridlock in Washington that a policy debate has to be dealt with by withholding funds.  The parties are simply unable to agree on anything.  To agree is to give up political advantage.  In gridlock, it is always possible to blame the other party and to paint them with whatever black brush is handy.  This is particularly attractive to a minority party like the Dems in the House - they want their majority back.  Thus, while the "defenses" for the absurdly over-reaching rules governing the database are almost laughable, the Dems posture as though any change threatens the American way of life.

That said, it's a good thing that the Appropriations Bill is doing the work that the House Energy and Commerce Committee hasn't done or perhaps cannot do.  Brokering agreement with someone as unyielding and unreasonable as Henry Waxman is no small feat.  Rationality and reason, not to mention good policy, have no apparent effect on this ideologue.  He won't concede that Rep. Mike Pompeo, and the other database haters, have legitimate concerns.  NO ONE is asking that the database die, just that it be a fair game for everyone.  It's only because the Dems won't give a millimeter that you get the Appropriations Bill.  If Energy and Commerce can't change the database, or the CPSIA, I commend the Appropriations Committee for taking action to protect American businesses from government-sanctioned slander.  Somebody had to do it.

There's no telling where all this goes.  The Republican majority in the House may be able to shine a light on the issues of the CPSIA, but since the Dems control the Senate and White House, it seems as though the Dems are capable of blocking progress.  Three years of work have no persuaded one Dem of anything, by all appearances.  [Hence my disillusionment, frustration and outrage.] 

There is little sign that the Dems will give an inch - and you know what that likely means.  You and I are (remain) screwed.  Stasis means the 100 ppm standard gets implemented in two months, possibly retroactively.  It means that you must continue to test internal components for phthalates and test and retest everything else endlessly without relief of any kind.  It means that the 12-year-old age limit for everything stays in place, rhinestones and brass remain illegal (but osmium, iridium and ruthenium are still a-okay!), books and bikes and ATVs remain under the thumb of the CPSC, and many, many businesses will further weaken. 

NO child will be safer, and NO injury will be avoided.  The advocates can't provide evidence that ANYONE was EVER injured so there is no rational reason to believe this massive disruption will save a life or even a paper cut.

The battle lines are drawn.   Perhaps now you know why I was so disappointed when only one wiener resigned from Energy and Commerce today. I can think of a few more that ought to go . . . .

VOTE FOR ECADA AND END THE CPSIA CHARADE!

CPSIA - Consumer Group Testimony at CPSC 100 ppm Lead Standard Hearing 2-16-11

I have prepared some clips from the CPSC hearing on 100 ppm Lead Standard on February 16, 2011. I have not prepared comprehensive clips on every presentation. For instance, I omitted the testimony of the testing companies from the second panel (here's a hint - guess what they are ready and willing to do?). If you want to see video that I have not delivered to you on a silver platter, check out the CPSC video of the Morning Session (consumer groups and testing companies) and Afternoon Session (industry representatives, including my testimony).

There is a lot of interesting testimony not in my clips, in particular in the afternoon. Although I think I am giving you a lot of relevant information in the clips I prepared, you are always welcome to check my work. I was quite impressed by the other presenters in the afternoon session, and the vigorous and interesting discussion that followed, but anticipated that you would not likely spend 4-5 hours watching the entire thing. If that floats your boat, please enjoy the links above.

In this post, I am embedding several clips from the morning session where the consumer groups stated their "case". I hesitate to characterize the testimony as "tall tales" but watch for yourself and see what you think. I have come to believe that the consumer groups will say ANYTHING to prop up their beloved CPSIA. [Consider the laughable "consumer poll" prepared by the Consumers Union promoted by Henry Waxman on the eve of the House Hearings on February 17, 2011. CU shamed themselves with this pathetic effort to "win" the debate with garbage polling data.] This may include the remarkable hyperbole in the clips below. We can speculate among ourselves whether Don Mays really shakes with fear at the thought of his daughter playing a brass instrument (he says he would be "very concerned").

Likewise, does Dr. Dana Best believe the nonsense statistics she flung around last week, like the one about ingesting an object with 300 ppm lead costing a child four IQ points? Please, dear G-d, that statistic is absurd on its face. The assertion that children are losing four IQ points from swallowing objects with trace levels of lead is irresponsible and misleading at a minimum, and something much worse if done with understanding or intent. The spectacle of Ms. Best's testimony included calculations of the "cost" of 1 million injured children DESPITE the inability of any consumer group to produce the case history of a single child injured from lead-in-substrate in children's product EVER. [I replied to Dana Best in my testimony.]

We must hold Dana Best responsible for the words that came from her mouth. Interestingly, Dr. Best was the only nominal author of the seminal testimony on lead in the CPSIA debacle. According to her colleague Cindy Pelligrini, Dr. Best didn't write her 2007 Congressional testimony (Pelligrini told me in a phone interview in 2008 that she wrote it for Dr. Best to deliver). Did Dr. Best write last week's testimony or was it another Cindy Pelligrini job? One can't help but wonder, given the shocking assertions based on misleading and garbled data. The AAP should be ashamed.

Dr. Dana Best (AAP) on losing IQ points and "millions" of victims:



Dr. Dana Best worries about children licking their bicycles . . .

My 17 year old daughter came along on this adventure and at breakfast the next morning, asked me why a child would like their sibling's bike rather than their parent's? After all, the adult bike is not regulated. I thought that was a good point, and added that if we posit that the child was going to lick something inappropriately, why would they lick a bike - why not the family car, which is coated with lead paint? Of course, I got it wrong. I was later corrected by someone who, after listening to this story, reminded me that the two year old wouldn't lick either bike or even the car - they would play in the pool of oil under the car. You can take it from there . . . .



Don Mays (Consumers Union) and Dana Best (AAP) on the frightening prospect of children playing in brass bands:

CPSIA - CPSC's Shameful Failure of Leadership

On Monday, the CPSC will decide whether or not to extend the testing and certification stay that has been in place for two years. The 16-page document which sets out the parameters of the decision does not mention risk anywhere. That's because the law prohibits the CPSC from considering safety in its work under the CPSIA. [Ironically, the CPSC warns users that use of its http://www.saferproducts.gov/ website is at their own risk (see par. no. 2 in the user's agreement) - and ironically, we're talking about a "dot gov" website, too!]

The CPSC explains that extension of the stay is only one of its options. It can do nothing, it can roll all the existing stays forward, or just some of them (to heck with the ATV'rs and the bike industry). Presumably, they will choose to roll all of it forward to September 14, 2011. We can all be screwed on the same day. I like the symmetry of that!

The CPSC has not lost sight of the issues. They know they haven't finished their work. They note that two years ago on February 9. 2009 when the Commission first extended the testing stay. it was because delaying implementation of the testing requirement by a year "give[s] us the time needed to develop sound rules and requirements as well as implement outreach efforts to explain these [new] requirements of the CPSIA and their applicability."

How time flies! That didn't happen, so the Commission again extended the stay by another year on December 8, 2010. Why? Chairman Tenenbaum: "I voted to extend the stay on lead content testing and certification until February 10, 2011, in order to allow component testing adequate time to develop and to give our stakeholders adequate notice of new requirements." Commissioner Robert Adler: "One of the primary rationales advanced for extending the stay is to await the effective date of the so-called 15-month rule."

Where does the time go?? None of that ever happened. Hey, CPSC, take all the time you need!

So now the Commission is poised to kick the can down the road until September 14, 2011. Why that date? The CPSC Staff report notes that this gives the Commission time to sort out the new, lower lead standard due to be imposed on August 10, 2011. The CPSC is holding a hearing on February 16 on the feasibility of the 100 ppm standard. As Staff notes, if the Commission doesn't determine that 100 ppm is feasible, then they will have to set a standard between 300 ppm and 100 ppm that is feasible. "Feasibility" was defined in the CPSIA, lest there should be any disagreement, to exclude ANY consideration of economics. In other words, if it's possible at any price or under any condition, it is considered "feasible" and thus mandated by the law. I can save the CPSC some time - under that definition, it's definitely feasible. Completely unreasonable and unnecessary but "feasible".

The idea promoted in the Staff memo is that we will time to get used to all this if the stay lifts a month after the implementation of the new lead standard. [The concept of "learning disability" floats through my head. Have we heard this song before?] "Staff recommends that the Commission extend the stay to allow time for the Commission to determine whether it is technologically feasible to lower the amount of lead in children's products to 100 ppm." I guess once the Commission makes up its collective mind, the CPSC will wave a magic wand and make your business, your supply chain and your sales channel comply with the new rules in a matter of days. The fact that the rules are hazy after almost three years is no concern of theirs. Is it a concern of yours?

I love magical rules and magical plans! It must be a job requirement for Commissioners to be wizards, too.

All concerns over the "15 Month Rule" seem to have evaporated. This is presumably Robert Adler's doing (see his statement above, which is a rant that the 15 Month Rule and the stay are separable issues). The Staff report intones: "While a Commission decision to extend the current stay of enforcement will give industry an opportunity to test and certify finished products and components according to the final rule and provide the Commission time to clarify any confusion regarding the new rule, it is not necessary for the testing rule to be complete to lift the stay as to the initial test for lead compliance." Can't see any problem there, can you???

The CPSC doesn't want you to worry, however. They have apparently promulgated several documents that set out their policy and whatnot on lead, namely "Statement of Commission Enforcement Policy on Section 101 Lead Limits" (February 6, 2009) (6 pages); "Children's Products Containing Lead: Interpretative Rule on Inaccessible Component Parts" (August 7, 2009)(32 pages); "Statement of Policy: Testing and Certification of Lead Content in Children's Products" (October 2009)(5 pages); and "Interim Enforcement Policy on Component Testing and Certification of Children's Products and Other Consumer Products to the August 14,2009 Lead Limits" (December 28, 2009) (4 pages). If these four documents totalling 47 pages don't clear up everything, the CPSC is ready for you. "Manufacturers of children's products can seek guidance for what the Commission considers reasonable and representative testing in these rules."

You may have to wait a few years for a reply, but darn it, they're going to answer your question. And that's because they really CARE. We're the government and we're here to help!

A few more cock-ups aren't deterring the agency. The phthalates standard is still undrafted, likewise the certification procedures for phthalate testing labs. Oopsie! Well, they've been busy . . . and the much fantasized-over component testing "market" has failed to materialize. Imagine that, businesses that inadvertently serve the children's market with components or which derive a small percentage of sales from children's products aren't volunteering to test their items and expose themselves to the ravages of a crazy and out-of-control federal agency. Shocking!

Those of you who live in the past may recall my mentioning this very issue on November 6, 2008 (yes, 2008) when I addressed the CPSC Lead Panel. [It's a safe assumption no one was listening at the agency - opportunities for stakeholder feedback is not for listening, it's for venting.] I talked about the futility of expecting our suppliers of aluminum foil (widely used in schools in science kits) to test their products. After all, they are allowed to sell it for use with food without testing, so why should they test for me? If I asked them for a test for compliance with the CPSIA, they would certainly refuse and then ask in outrage why I was selling aluminum foil to kids anyway. As I said, who could see this coming? No one . . . .

For all the outrages that this sick situation brings to mind, NOTHING is as shameful as the CPSC's refusal to admit that this is all administrative, bureaucratic nonsense (or use your own word for "nonsense") that has nothing to do with SAFETY. Oh yeah, safety - isn't that word in the name of this agency - the Consumer Product SAFETY Commission. What about safety, guys? Are you concerned about that anymore? This failure of leadership is the basic issue I have with the folks running the agency today. There's a reason that bureaucrats are called "soul-less".

The fact is that this administration at the CPSC (Democrats) will not stand up for what's right - they are prepared to go down with the ship. It's ironic that they remain so strident and so stubborn. Mr. Obama can smell change in the air and even he has called for reconsideration of the deluge of regulations. The Republicans in the House have declared war on over-regulations and the House Energy and Commerce Committee has made reform of the CPSIA the top priority of Mary Bono-Mack's subcommittee.

As I have said again and again - this is YOUR government at work. Their shameful acts which are harming your markets and your business are destroying jobs, discouraging innovation and hurting children by impairing the activities of businesses devoted to children's welfare. This intolerable situation will only be fixed when you MAKE it change. You can do it and you must. There is a new Congress in town and they need to hear from you. Don't let the Democrats keep on wrecking your industry. This isn't about safety and never was. This is politics, pure and simple.

Make them pay for their sins. Call your Congressman.

CPSIA - New Waxman Amendment Draft Issued Tonight, Mark-up Set for Wednesday Morning

The third draft of the Waxman Amendment 2.0 was released this evening. I have attached a clean copy of the legislation, as well as a redline for your convenience. The powers-that-be also released a draft of their "report language". The report language is interpretative language and is not included in the law mainly to keep future law clerks busy doing research. It should also give us something new to argue about.

This is the Committee Briefing Memo accompanying the draft legislation.

Consistent with past practice, this draft was issued with the usual coercion. A mark-up has been scheduled for Wednesday AM 10:00 a.m. in Room 2123 Rayburn House Office Building BUT the Dems will decide tomorrow if they will proceed with that process. All talk of a hearing to vet this legislation has been quashed by the Dems who are scrupulous in managing the record. [I will never get to testify, that's for sure.] There will be a meeting on Tuesday at 4 PM to discuss this draft, at which point the Dems will either pull the plug or move forward. Presumably, this depends on the enthusiastic response to this draft. The Dems say they want a bipartisan bill and further want to send it to the Senate with the news that the bill is "supported by industry". In other words, Mr. Waxman is not interested in negotiating with the Senate, just wants their rubber stamp. He's not big on "jawboning" if that means he has to listen to others and make concessions . . . .

You are right to consider this another patented Waxman "take it or leave it" offer.

In response to complaints that this bill ignores the many legitimate concerns of the small business community, Waxman staff has advised that they "can't help everyone". That means you, guys.

Changes in this Draft:

a. Functional Purpose "Exception" - Minimal changes, mainly reverting back to the "public health or safety" test formulation. References to "all foreseeable users" is gone now. The "town hall" provision allowing "interested parties" to intervene in every proceeding has been eliminated. The "Previously Denied Petitions" provision is unchanged and still makes no sense.

The report language clarifies the meaning of "practicable", noting that excessive or unreasonable costs should be considered not "practicable". Specifically, they note: "The Committee does not consider a mere increase in the cost of manufacture or production, in itself, to be excessive. The Committee does expect that the Commission will consider compliance to be impracticable where compliance would place the viability and continuation of a class of products or materials in jeopardy, such as youth All Terrain Vehicles or youth bicycles made with recycled steel." [Emphasis added]

In case you were wondering about the purpose of the functional purpose exception, it is a gift to the noted industries. It's not for you. Remember, this relief is only available to those who are capable of mounting an exception application. Not a small undertaking.

Remember that the applicant for a functional purpose exception must apply for relief for a "specific product or material". You must also PROVE that your costs are not "practicable". Can you see some wiggle room there? A true believer Commission might have very little incentive to interpret these terms permissively. [You can count on that one with the Dems in charge.] This will be a costly and technical process. Think of this in the context of your business - is this realistic? With our 1500 products, it's just inconceivable. Too bad for us. Let's also not forget the stringency of the three-prong test.

The report language specifies that a "measurable adverse effect" on public health or safety refers to changes in blood lead levels. The language is pretty specific and will require a toxicologist's report to justify any exemption. Here are the magic words: "Given that there is no current blood level at which the scientific community considers lead exposure to be 'safe,' the Committee understands that a very small adverse effect may theoretically occur at any level of exposure. The Committee intends, however, for the Commission to deny requests for exception under this section as having a 'measurable adverse effect' on health or safety only in the case of those adverse effects that the Commission determines to be empirically, as opposed to theoretically, measurable. At present, the Committee understands that there is scientific consensus to interpret the phrase 'measurable adverse effect' from lead exposure to mean a measurable increase in blood lead levels."

This is a form of legislative filter to make sure that the exception is only for the chosen industries or companies. Again, this isn't meant for small fry, just big business. That's equity these days, I guess.

Anyone remember how hotly the Dems defended the inclusion of ATVs and bikes in this law back in '08 and '09? It was intentional, they insisted, necessary to protect the public against deadly lead. There's no safe level of lead, blah blah blah. Guess they got over that one . . . after they received 170,000 emails from ATV'rs.

b. Thrift Store Relief: Virtually no change, other than minor clarifications.

Not unlike the workings of other parts of the CPSIA, this new provision will be good for large scale thrift organizations like Goodwill or Salvation Army who are presumably able to centrally evaluate complex laws and implement system-wide responses to changes in law. i wonder how the smaller independent Mom-and-Pops will react to this provision. In any event, the provision tacitly bans resale of children's jewelry, painted toys and vinyl children's products. Stores will have to keep straight which items are in and which are out. With many resale stores staffed with minimum wage workers, I question how effectively most owners can prevent violations without just avoiding the category (at least in part).

Resale of childcare articles, including cribs, seems unaffected. The real gotcha is the risk the stores will bear from recalls. For that reason, I think many stores will stay away from reselling this category of goods. Clothing may make a reappearance in resale shops, finally.

It is incredible that the Democrats let this industry flap in the wind for almost two years before acting to save them from CPSIA oblivion. Think of the economic devastation these insensitive legislators wrought on small businesses all America, not to mention the patrons of this important industry - through two cold winters. This is just inexcusable, a true demonstration of stubbornness or being completely out of touch. Those who suffered at the hands of the Dem inaction have no recourse, either. Shame, shame.

c. Relief for Small Batch Manufacturers: The sham of this "relief" is perpetuated in this new draft. The definitions of "covered products" and "Small Batch Manufacturer" were left structurally intact but the thresholds were tweaked upward meaninglessly to 7500 units or $50,000 sold per item per (calendar) year, with an overall cap of company sales of $1 million. "Covered Products" oddly continues to refer only to manufactured items but Small Batch Manufacturers are defined by sales of manufactured OR imported goods. Go figure.

As I pointed out earlier today, Mattel and Hasbro have quarterly revenues of $880 million and $672 million, respectively. The so-called relief here is for companies with annual revenue of under $1 million. If these little companies pop over that revenue hurdle, they will be held to the same standard as Mattel and Hasbro. Don't worry, the CPSC plans to coach the little guys! Now if only they could provide non-recourse financing . . . .

Even if you are salivating over this pathetic crumb of "relief", I encourage you to reread what goodies Mr. Waxman is giving you. Here's the meat of it: "Any such alternative requirements shall provide for reasonable testing methods to assure compliance with the relevant consumer product safety standards." The reasonable TESTING METHODS must ASSURE COMPLIANCE. You tell me what this English sentence means. I think it means the small fry will be testing. I know the rest of us will, too. Testing and testing and testing and testing. It's time to buy stock in Intertek, I think. Later on, the bill instructs the Commission to work "cooperatively" with the little guys to "impose the least burdensome testing requirements . . . consistent with goals of statute." And those goals are, what exactly? Comprehensive, prophylactic testing.

Oh, the bounty of this relief!

d. Phthalates and Inaccessible Components: No material changes.

e. Subpoena Power: No changes whatsoever. Somebody's going to be sorry someday that this procedural speed bump was removed. Unfettered power of government was always un-American . . . until we met these Democrats.

Conclusion:

I wish I could recommend this bill. It has some good stuff in it. Unfortunately, it is utterly ineffective to arrest the damage being inflicted by the CPSIA. It is a gift to large industries but leaves the hammerlock on American small businesses catering children's markets. It sustains the fantastic notion that those of us in this business have somehow been poisoning kids for years or decades. That's a slanderous notion, something deeply offensive to me, but for the Dems to admit otherwise would mean a mea culpa. And there's no chance of that.

If the Dems manage to tempt enough corporate entities to sell out for this low price, it will be the biggest gift ever given by the corporate community to Mr. Waxman. He should host a champagne party for himself if he buys off the resistance. There will be no remaining organized opposition to the bulk of his CPSIA handiwork, and the focus will shift to surviving a manic CPSC bent on enforcing voluminous but ineffective safety rules and ladling out massive penalties for infractions without injuries. And once the action moves permanently to Bethesda, we'll see finally how much Cassandra got right.

I'm not looking forward to finding out. Vote NO on Waxman.

CPSIA - Waxman's New Amendment Progress Report

In the last couple weeks, Rep. Henry Waxman's staff on the House Committee on Energy and Commerce has been approaching Republicans and various stakeholders for feedback for a "bipartisan" approach to fixing the CPSIA. In these discussions, the staff has acknowledged that the law is "flawed" and requires surgery, not just tweaks. An interim (artificial) deadline of this week has been established for comments on their planned amendment. A draft of this amendment has not seen the light of day yet. No one knows what it will say.

While this may sound "good", the Waxman staffers have also attempted to constrain the development of the amendment. For starters, they insist that the amendment be based on the failed Waxman amendment of last December. [Last year's try was covered in several posts in my blog from December 11-16.] They have also drawn quite a few lines in the sand, such as no change to age limits in Children's Products. They favor exemptions for individual product categories or even individual products, a Swiss Cheese approach. [I hate this approach, as does just about everyone else other than the Waxmanites.]

The Waxmanites seem interested in helping out the ATV'rs. Apparently, the legislative logic is that if the amendment caters to the ATV'rs, who have been quite noisy and enjoy wide support among members of Congress, no one will be able to vote against the amendment for political reasons. Thus, the makings of a Democrat victory and the appearance of bipartisanship. I can see it now: "The two parties worked together and fixed the parts of the law that caused unintended consequences. All is well!"

Among the "have-nots" in this approach:

• "Common Sense". This case-by-case or product-by-product approach means that the Waxmanites refuse to even consider trusting the CPSC to do its job and assess risk for itself. The only people the Waxmanites and consumer groups can trust are . . . are . . . themselves. You won't be able to draw a line between those that are "in" and those that are "out" in any rational way.
• Rhinestones. On the subject of rhinestones, my understanding is that they are so resolute on keeping these innocent stones in the bill that they would be willing to write rhinestones in explicitly. This is the opposite of case-by-case exclusion - it's a case-by-case INCLUSION.
• Educational Products. While the Waxmanites say they want to exclude educational products, they can't figure out how to do it since you might use an educational product in your home. Horrors! Again, without a simple notion of what's safe and what's not, how do you expect a sensible rule to emerge from this primordial goo?
• Bikes. They really want to figure out how to help bikes but can't seem to do it. For this reason, they are chatting about an indoor/outdoor exclusion. In other words, and I am not kidding, they have suggested a rule that if you keep something in your garage, it's "out", and if you keep it indoors, it's "in". So everybody - move all your toys, children's clothing and shoes, furniture, books, pens, appliances and so on into your garage, quick, so you can qualify for this great new exemption! [Try to resist holding a garage sale, though, because that presents special risks under the law!]

Not one to look a gift horse in the mouth, I am happy they are thinking of an amendment, but I am not happy that we still find ourselves adrift without any sense of what's safe and what's not. It is hard to foresee an amendment that does much good with this kind of inflexibility. Bipartisanship promises to be hard to obtain or a sham staged by Democrats for their own benefit.

Remarkably, a hidden issue that may weigh on these proceedings is the growing awareness of paralysis at the CPSC. The agency saw a massive increase in its budget last year, to match its massive new responsibilities, but still finds itself mired in open projects and conflicting priorities. Simple things are taking forever. Agency paralysis cannot be prevented in this environment without a significant paring of CPSIA priorities, something that the Waxmanites have a hard time conceding. And Obama won't give the agency more money, so they're stuck. And we're stuck.

That's not where you want to be.

Something to think about as we go forward:

1. Principle One: Your silence is deemed to be your approval. Silence = approval. You must swing from the rafters to get their attention, too. No, don't do that - too dangerous.
2. Principle Two: An unopposed view, particularly a document with footnotes, is considered definitive. After all, if it were wrong, why didn't anyone point it out, with footnotes? This is really how the Waxmanites think.

You need to keep these principles in mind. Your loud involvement can help a lot.

To Be Continued . . . .

CPSIA - Anne Northup's Op-Ed in the Wall Street Journal

For those of you who may have missed it over the holidays, here is Commissioner Anne Northup's Op-Ed in Thursday's WSJ:

OPINION
DECEMBER 24, 2009
12:07 A.M. ET

There Is No Joy in Toyland
The overreach of a child-safety law is killing American jobs and businesses. It's not too late for some common-sense changes.

By ANNE M. NORTHUP

With the unemployment rate stubbornly high and President Obama focused on job creation, it's a perfect time for Congress to revisit a law that's making our economic problems worse, and spoiling Christmas for many kids to boot.

Thanks to the Consumer Product Safety Improvement Act (CPSIA), small businesses like Baby Sprout Naturals and Whimsical Walney have already closed their doors. And some 40% of companies responding to a Toy Industry Association survey planned to eliminate jobs this year because the cost and complexity of compliance with this law is too great. For manufacturers and sellers of children's products, perhaps a renewed interest in saving small businesses comes in the nick of time.

The safety legislation, which passed with overwhelming bipartisan support in 2008, is a study in the law of unintended consequences. The new law reduced the Consumer Product Safety Commission's longstanding discretion to act in response to genuine risks, substituting instead the rigid, broad-brush, and unscientific judgment of Congress.

Though written in response to dozens of recalls of Chinese-made toys with lead paint, the law goes well beyond lead paint (which poses an undeniable risk to children) to ban all children's products that contain a component with more than three one-hundredths of 1% lead. This means such ordinary items as zippers, buttons, belts, the hinge on a child's dresser—and even that bicycle from Santa Claus—are outlawed.

These products often contain lead in excess of the new legal limit, but unlike lead surface paint, this lead is contained within the metal or other substrate material. The lead can rub off these items in miniscule amounts detectable only with sensitive lab equipment, but it is not "bioavailable"—meaning it is unable to be extracted and absorbed into a child's bloodstream. By failing to distinguish between easily absorbable lead in paint and not easily absorbable lead in other materials, the legislation was a dramatic overreach.

It gets worse. In addition to banning components that do not create a lead hazard for children, the law also imposes onerous product testing by outside labs that smaller manufacturers and handicraft makers simply cannot afford. Instead of spending money to expand and create jobs, companies have diverted billions of dollars so far to destroy innocuous but noncompliant inventory, as well as to understand and meet complex new compliance obligations.

Major charities, like Goodwill Industries and the Salvation Army, have publicly estimated lost inventory and disposal costs at $100 million to $170 million in secondhand children's clothing—such as winter coats with metal snaps—that's not affordable to test for compliance, yet still needed by many families.

Bicycle manufacturers have re-engineered dozens of parts from more expensive and less environmentally friendly materials to replace handle bars, spokes, tire valve stems and other harmless metal parts that contain lead.

To cope with annual testing costs running to half a million dollars or more, domestic retailers and manufacturers like Challenge & Fun, Inc., Constructive Playthings, and ETA Cuisenaire (a maker of educational tools), have reduced payrolls or limited product lines. Many small apparel companies, including JenLynnDesigns, have either closed shop or exited the children's apparel market completely.

In just the first eight months after enactment, the Consumer Product Safety Commission estimated that the 2008 safety law cost businesses in the "billions of dollars range," including: more than $2 billion in losses to the toy industry; $200 million in potentially violative inventory for members of one apparel industry group (the California Fashion Association); and an estimated $1 billion in annual losses reported by the Motorcycle Industry Council for lost sales of youth model motorbikes and off-road vehicles. Several popular German toymakers such as Selecta Spielzeug, whose products comply with stringent EU regulations, have stopped selling their toys in this country. Consumers are facing higher prices for a smaller variety of products that are no safer than before.

Some of the commission's decisions have made matters worse. Last month my colleagues in the majority interpreted one exclusion built into the statute based on the absorbability of lead so inflexibly that not a single children's product could qualify for it. That vote denied a petition for exemption to brass axle collars on toy cars even though—as one majority commissioner admitted—the commission's staff would have no concerns about letting their own children play with them. The commission thus decided that the law prohibits the sale of toys that impart less lead than the Food and Drug Administration allows in a piece of candy.

For the past several months, American businesses have been caught in the middle of a classic standoff between the federal commissioners in the majority, who argue that the statute ties their hands, and members of Congress, who claim they wrote flexibility into the law and blame the commission for any harsh consequences. Although the commission steadfastly refused to reach out to Congress to seek clarifications to the law, Congress has now reached out to us—asking the agency last week for a list of recommendations to amend the statute.

Thankfully the commission responded, in part, by agreeing to extend the stay on testing and certification for lead content. This window gives Congress time to consider such common-sense changes as: allowing for higher lead content in products like bicycles where only a tiny amount could be absorbed; restoring the commission's longstanding discretion to focus its efforts in response to genuine risks; lowering the age range covered by the law so that products for 12-year-old children and 12-month-old babies are not treated identically; and eliminating the retroactive effect of the law—which disproportionately affects libraries and thrift stores. Hopefully, this request from Congress will result in real changes to the law, not a half-hearted effort on our part or Congress's to avoid responsibility for the problem.

President Obama could help this process along by urging Congress to pursue a bipartisan fix. We can protect children from harmful products without striking a blow against the teetering American economy—but we must act quickly. Otherwise, the CPSIA's Grinch-like rules will needlessly cost our country more jobs and reduce the opportunity for small businesses to help lead our country out of recession.

Ms. Northup is a Republican commissioner on the Consumer Product Safety Commission. She represented Louisville, Ky., in Congress from 1997-2006.

CPSIA - Hearing on Testing Stay and Interim Enforcement Policy

There was an important hearing yesterday at the CPSC on the testing stay as well as on the announcement of another interim enforcement policy on component and lead-in-paint testing (their third). I was able to watch about 1:40:00 of the hearing before I lost the signal. I think I got the gist of it, and wanted to give some highlights here.

First and foremost, the tone was relaxed, friendly and open. I want to compliment the Commission and CPSC Staff for making an effort to change the "feel" of their communications. I have not lost sight of the fact that substance matters . . . but so does choice of words, actions and tone. In this space, I have criticized Gib Mullan for this in the past. I would now like to publicly acknowledge Gib for taking pains to communicate his new enforcement policy in a reasonable and business-like tone. There were no threats; quite to the contrary, Gib portrayed the interim policy as flexible, reasonable and measured. I appreciate that.

The Commission and the CPSC Staff are also asking better and more sensitive questions, like whether there is enough lab capacity to do all the tests when required (for instance, there is apparently ONE lab approved to test bikes), how much lead time industry needs to adjust to the component testing rules, whether people are testing components now, and so on. Jay Howell even advised the Commission to weigh the impact on regulated industries when considering how or to what extent to lift the stay. This line of reasoning is another sign that we are being heard, and the issues confronting regulated businesses are on the radar . . . finally.

The content of the hearing was essentially technical. This lengthy discussion was all about compliance with the new requirements. The rules implementing the blessed CPSIA are ornately complex. Mullan in fact informed the Commission that his new interim enforcement policy is replete with footnotes - in other words, the micro-print is now getting smaller. NONE of the discussion involved SAFETY or any discussion of risk.

Let's consider what that might mean. The CPSC seems obsessed with paperwork now. The two hours I watched were all about how companies might comply, whether they could comply, what forms they had to fill out, who had to perform tests and when, and so on. Of course, that is a critical subject to discuss . . . but it struck me as odd when these details droned on and on without a single mention of the purpose of the discussion - making kids safer.

It is hard to see how this byzantine structure will achieve better safety. To me, the new scheme is all about bureaucracy divorced entirely from purpose. This is the CPSC that the Commission apparently thinks Congress legislated - a bureaucratic agency, one no longer empowered to allocate its resources to prioritized safety threats, instead relegated to paper pushing. Congress has redesigned the agency to be administrative in nature as it relates to children's products. By defining "safety" precisely in the CPSIA for the CPSC to administer, it forbade the agency from exercising judgment. Likewise, we in the business community are no longer trusted to exercise judgment or operate without governmental supervision. The Nanny State knows best, better than the business community or even the CPSC, and insists now that the CPSC stop thinking and just administrate.

With this new focus, the conversation about safety has taken a bizarre turn, in my opinion. The discussion is principally about how companies can comply. That is the standard against which the new CPSC policies seem to be evaluated. Is there enough testing capacity? Can companies afford it? Can a "home crafter" find paint that was tested by the manufacturer? [By the way, this is a so-called voluntary test - Congress in its INFINITE wisdom decided that makers of children's toys must test paint, not people who actually produce the paint, thus the CPSC has to hope and pray that paint companies will test their paint. Nice!] Which components need to be tested on a little dress? Only the buttons, yippee! No mention of safety or the purpose of this exercise. The high point occurred when both Chairman Tenenbaum and Gib Mullan volunteered that most paint is already certified to be lead-free. This was stated without irony, despite the 20 minutes tortured lecture on how to test paints to ensure compliance. Safety, what's safety?

So are things now as simple and easy as portrayed? Robert Adler asked if any groups besides the Handmade Toy Alliance had contacted the CPSC with concerns about the lifting of the stay. Jay Howell said no. [My ego survived this minor bruising!] Putting aside the massive failure of business people and trade associations to effectively lobby on this issue, this seems to portray business people as accepting of the lifting of the stay, or at least highly unmotivated on the subject. Ergo, it's fine to let it go.

What might a lifting of the stay mean? We'll all have to test. Test what? Ah, that's the rub. It's so complicated that I can't begin to attempt to explain it here. It took them Powerpoint slides upon slides to lay it out, and it is full of asterisks and exceptions. A taste: there still is no phthalates standard or any approved phthalate testing labs or any approved ASTM F963 testing labs. [Makes me wonder what I have been paying for all these years in our tests against F963. . . .] So testing will only be required against some rules, not all, and as new rules come into effect, you will have to figure out what additional tests are required over time. Good luck getting it right.

Sadly, the agency avoids the issue of complexity by focusing on whether it's POSSIBLE to comply. They put up a photo of a little dress, announce with satisfaction that only the buttons need to be tested, and then assert that button companies will test those buttons to preserve their market. Okay, let's concede that point - it's probably true. Does that solve the problem? Not if the rules are so complicated that no one understands them. Even if you understand them, will the people you deal with understand them the same way (your customers, your consumers, consumer groups, the CPSC, Customs, 50 State AGs, the Chicago Tribune, and so on)? THIS ISSUE I have raised again and again (so when the Commission asks about complexity, I want a plug!] Very few people understand these rules so is it realistic to assume they will follow them (even if they are able to comply)?

A typical problem for people who are immersed in something complex and highly-specialized si forgetting that everyone else is not as immersed in the details as they are. It's a big wide world out there, but the CPSC may only be dealing with people who have invested the time and energy in understanding the complex rules as they have. This may make it look like EVERYONE gets it but in fact, they don't. The 800 lb. gorilla here is the silence of the majority. What do they know and understand? Not much. This is where the expression Keep It Simple, Stupid (The K.I.S.S. Principle) comes from. The new rules are anything but understandable AND the CPSC tries to solve each identified problem by adding more and more complexity (more rules and exceptions).

So what have we here now? We have a much more congenial and seemingly well-intentioned CPSC that finally grasps the nature of the mess with the regulated community and is trying hard to change course and create a workable solution . . . but all within the context of a law that makes no sense. So to do that, they are building an entirely unworkable sets of rules, unworkable because no one could possibly understand them. Each rule violation is the possible subject of a lawsuit by an eager plaintiff's attorney, a newspaper investigation spurred on by a consumer group or the subject of a fine or possible jail time, or all of the above. Fear of these externalities will scare people out of the market, simply because they know they can't control their business environment. This is real. I personally fight these fears every day - and I am someone obsessed with these rules and know them well. But not perfectly. Of course, we could do something else with our time, our resources and our people - but we don't want to. We are very devoted to the education business and are trying to defend our right to engage in that endeavor without undue risk.

The sad fact is that the CPSC cannot create a workable solution, even with a smile on their faces and good intentions in their hearts, without addressing the deficiencies of the law. A nonsensical law cannot be fixed with implementing rules. At some point, the CPSC is going to figure this out when they see that compliance is very low, and they are overflowing with violations. The rabid and compromised consumer groups have demonstrated their utter lack of character in hunting down technical violations, like sandal insoles, and then mobilizing self-interested local politicians to enforce without even talking to the CPSC. We can certainly expect them to continue to hound innocent makers out of this market.

The details of this hearing are also interesting. The CPSC will be releasing a definition of a "children's product", "toy" and "childcare item". This is a possible hint that some items or product categories may be excised from the law, perhaps including certain educational items used in schools, some kinds of apparel, ATVs and so on. The CPSC Staff has crafted some interesting solutions to testing of lead-in-paint and components, that will help lower costs significantly. They also are aware of the heavy load carried by small volume manufacturers with fixed testing costs and are trying to find an economic solution. They even acknowledge that larger companies also make low volume products, meaning that solutions need to take EVERYONE'S situation into account. All of this is good, it's progress . . . but it's not enough. The Commission needs to attack this law and push Congress to get it fixed. If this Commission does not want to leave behind a neutered and impotent CPSC, crippled by a hornet's nest of ineffective rules, it needs to take on this ultimate battle.

I certainly hope they won't duck this very important pitch.

CPSIA - Resale Shop Handbook Reissued

The CPSC revised its Resale Shop Handbook this week. The dancing and weaving continues as the CPSC tries to keep Resale Shops and Consignment Stores in the kid business while trying to scare them out of selling recalled products. This micro-problem has been made a TOP priority and obsession of the agency by our dear friends in Congress and the consumer groups, resulting in the devastation of the market.

Here's a great example of the CPSC's efforts to "reassure" these small businesses: "You are not required to test your products for safety. However, resellers (including those who sell on auction Web sites) cannot knowingly sell products that do not meet the requirements of the law. You can protect yourself by screening for violative products. Ignorance of the law is not an excuse." How comforting!

More stern warnings to get the "point" across: "If you should happen to sell or offer for sale a product in violation of the CPSIA or other law, CPSC’s response will vary depending upon the circumstances, including the nature of the product defect, the number of products, the severity of the risk of injury associated with the product and the type of violation. The Commission’s response would also take into account the fact that you may be a small business." Clearly, they are going to be friendly . . . unless they decide not to. The CPSC's friendly Enforcement officers will decide later, thank you.

The unrealistic, almost delusional advice goes on: "Under the new law, it is now illegal to sell ANY recalled product (for adults as well as children). If you are in the business of reselling products, you are expected to know the laws, rules and regulations that apply to your business, including whether or not a product you are selling has been recalled for a safety issue. Before taking a product into inventory or selling it, check the CPSC Web site for dangerous recalled products, including cribs, play yards, strollers, high chairs, toys with magnets, toys that are choking hazards, and other products. You can search by product type, company name, product description, hazard, country of manufacture and by the month and year in which the recall took place."

Or, here's a labor-saving shortcut: stop selling children's products! The CPSC continues: "Resellers, in particular, need to make sound business decisions about the products they sell. As a practical matter, you can: (a) Test the product (though not required); (b) Not accept the product; (c) Use your best judgment based on your knowledge of the product; or (d) Contact the manufacturer about questionable products." At least you have options.

The new handbook includes a nice list of what to sell and not sell. Bikes are okay to sell for two years, that's it. Jewelry, resale shops are supposed to stay away from. Old books (pre-1985) are ONLY okay to sell if they are collector's items. Otherwise, toss 'em! [Perhaps a lovely bonfire is called for. Some people LOVED book burning in the '30's.] "Clothes with rhinestones, metal or vinyl/plastic snaps, zippers, grommets, closures or appliqués" are also on the "don't sell" list. Of course, anything can be sold if the resale shop tests it (won't ever happen even IF it were affordable - safety testing is destructive).

As to phthalates, dreaded phthalates, what's a person to do? "How can I tell if a product contains a prohibited phthalate? As with lead, you are not required to test your products for phthalates or to certify that they do not contain prohibited phthalates. There is, however, no easy way to tell whether a product contains a phthalate or what kind of phthalate it contains. Unlike lead, where there is a reliable screening tool (the X-ray Fluorescence machine), there is not a screening device to detect the presence of phthalates." Now that just builds retailer confidence! I can foresee a very healthy market for . . . for . . . my vision just got blurry, sorry.

I recently learned that Washington, D.C. and Bethesda, MD are both located on Mars, so perhaps the folks behind this document are unaware of the nature of resale and consignment shops. Resale shops are not perhaps the most profitable businesses on Earth and tend to have low-paid staff. I have heard of chains of stores with managers receiving minimum wage. If you run an entity operating on thin margins staffed by poorly paid workers, what is the likelihood that ANY of the foregoing can be handled adequately? Nil. In addition, many owners of these stores don't have time for the absurd recommendations in this handbook. As a group, they are quite worried about liability. The stories about resale shops closing their children's departments are true (see this article, too). The advice in this handbook will not reverse or halt the terrible shrinkage in this market. Should we care? Yes, quite a bit. Many families depend on thrift stores for their basic needs (including clothing). The wreckage of this market will keep kids shivering during the cold winter ahead. We should all feel ashamed.

The CPSC is doing its job, but it's a terrible assignment. It's supposed to implement the laws written by Congress, stupid or not, and that's what it is doing. Nonetheless, its leadership needs to work harder to force Congress to rewrite the CPSIA. The havoc wrought by this law is creating carnage everywhere you look. Being a good soldier in Mr. Waxman's army just won't cut it. We all need to stand up and get our country back again, even the paid employees and managers of the CPSC.

CPSIA - Fashion Jewelry Loses a BIG One

With morbid anticipation, I just read the statements of the three CPSC Commissioners on the Fashion Jewelry industry petition to exclude crystals and glass beads from the overbearing strictures of the CPSIA. On a day when I was a bit emotionally damaged by Tom Watson's failure to win the British Open, these statements more or less finished me off. Should we laugh or cry over this decision? Cry, because it bodes terribly for all of us.

The jewelry industry made all the usual arguments for excluding these non-controversial items from the law. The items in question have no history of causing injury, they are infrequently abused, the amount of lead possibly ingested is absurdly low, etc. Been there, done that. The staff recommended against the petition, per form, because the law clearly states that nothing can be exempt unless it either is always within the law's lead limits (in other words, it already complies) or else it cannot emit so much as an atom of lead into the body. The CPSC staff has previously opined that it has yet to identify a single Earthly material which meets this "common sense" standard which is why it has recommended denial of each and every stay.

The two Democrat Commissioners voted to deny the request on the grounds that the law does not permit exceptions. They then said they would direct the enforcement activities of the agency toward the class of children they deemed most "at risk" (a relative term, if there ever was one). Republican Nord also voted against the exclusion as required by law, but recommended a stay, mainly to allow Congress to fix the law.

Seems like "same old, same old", right? Not in this author's opinion. Here's what I take away:

a. The Days of Easy Stays are Over. The ATV'rs and bike industry can take some (limited) pleasure in their short stays. The window seems closed. Of course, it also means that when their stays are up, they are likely in big trouble. Chairman Tenenbaum took a strict constructionist view of the law: "[Having concluded that swallowing crystals and beads is foreseeable as required under Section 101(b)(1)(A),] the question turns to whether the ingestion or mouthing of these beads would result in the absorption of any lead by a child. In making a determination, I was mindful that the statute does not use the term "harmful" amount or another term which would allow staff to utilize a risk based approach." [She later explicitly rejects a risk based approach as not permitted under the CPSIA.] In other words, true to her word at her confirmation hearing, Ms. Tenenbaum is committed to enforcing the laws handed down by Congress without judgment. She read the law faithfully and did what it instructed. There was no consideration of consequences of the decision or of the relative risk posed by these materials.

Commissioner Moore chimed in with his own analysis of Congress' instructions on the narrow question of crystals. In quoting from the House Report behind HR 4040 (CPSIA), Moore noted that "Paragraph (4) authorizes the CPSC, in very narrow circumstances, to exclude, by rule, certain materials and products from the total lead weight limits. The lead content of these materials must be in a form that will not result in absorption of any lead whatsoever into the human body. . . ." [Emphasis added.] There you go.

Mr. Moore also notes that this decision of the Commission effectively overrules a Proposition 65 settlement applying to crystals. Not sure how the Commission's decision could be made more disruptive or commercially devastating. Even the over-the-top Proposition 65 is outdone by the CPSIA. The reliance of jewelry companies on this California settlement was seemingly not taken into account by Commissioners Moore or Tenenbaum. I believe the effect of this decision is to render the industry's inventory prepared in compliance with various states laws like California and Minnesota instantly WORTHLESS. To continue to sell these items on Monday is an intentional violation and we all know what misery that might bring. More gratuitous business risk and economic losses from your friends in Congress. . . .

I believe the Commission's stay decision on pens needs to be read very, very narrowly in light of the jewelry decision. It is hard for me to believe that the logic of the pens decision will be utilized again. Until it is, I believe that decision should be regarded as limited to the specific facts and circumstances of pens.

b. Economics Will Not Be Considered in Exclusion Decisions. Commissioner Nord produced a laundry list of immediate economic harm from the decision to reject a stay. It is shocking. Presumably, this data was available to the entire Commission but notably neither Tenenbaum nor Moore mentioned it. This makes sense because the CPSIA does not make financial impact relevant in these decisions. The Commission's decision is driven by the law's definition of the interest of consumers (note, I do NOT mean the ACTUAL interest of consumers), namely that "any lead is too much lead" and thus, financial impact is outside the decision matrix. I do not think this is right, because the law is really just a bundle of economic incentives, and in making this decision, the Commission is changing the rules of the market which will change behavior. Products will be killed, choice reduced and companies will exit. The widespread elimination of children's departments in the resale industry is a pertinent example of this effect. By narrowly defining consumer interests in this way, the CPSC ensures maximum economic damage to everyone.

Here's a glimpse of the future: In two years, the Commission will make a decision on whether the new 100 ppm lead limit is technologically feasible. This term is defined in the CPSIA in Section 101(d) - and nowhere will you find a reference to economics. Thus, my new pet saying can be taken as LAW now: If Rolex CAN do it, Timex MUST do it. Put that in your pipe and smoke it.

[There will be a Congressional election before this determination is made, please note. Some careful consideration of your voting choices could have a significant effect on this law, for those of us still in business by then.]

c. The Commission Seems to Think that Enforcement Discretion Makes Violations Go Away. The statements make clear that the CPSC won't be enforcing this rule outside of the market for children six years of age and under. What they do not address is the fact that they have clearly stated that these materials violate the law for all children 12 years of age and under. Thus, to "knowingly" import or sell these items into their no-enforcement zone is to take the chance that a shift in regulatory wind could mean BIGGGG trouble. The CPSC is unable to restrict the 50 State AGs either, so it leaves everyone WIDE OPEN to nastiness on the State level. Sound good? Who would take this chance?

The gerry rigging of this law in this way does not replicate the law that preceded the CPSIA (if that was the goal). In other words, this construct simply does NOT work to lessen risk or financial harm. By saying that the CPSC will only enforce in certain circumstances does NOTHING to make it easier to do business. We are not allowed to violate the law, whether the CPSC wants to enforce it or not. Read the penalties section and think about how penalties have been handed out so far (with lots of imputed "knowing" conduct). In the olde days, the decision on where to enforce or not was completely effective to demarcate the part of the market that needed to tighten its legal belt because back then, everything wasn't illegal. Now it is. The policy to only enforce in part of the market doesn't relieve any responsibility under the law - it only gives the appearance of shifting risk to that part of the market. Remember your 15(b) obligation to report - it still applies to ANY violation. Remember your whistleblower risk - you can't discuss using violative materials in the no-enforcement zone or risk "problems". Remember that any intentional violation of the law, whether the CPSC intends to enforce or not, could be grounds for a felony charge. Hey, it's not my idea - read the law. Do you want to run your business feloniously, even if the Commission says it's okay (today)?

d. Forget "Common Sense". The Commissioners in avoiding the obvious conclusion that glass beads and crystals can be safely sold and sticking closely to the ridiculous language on exemptions (notwithstanding the encouragement of the CPSC by a "primary sponsor" of the CPSIA to grant exclusions for "materials that can be shown to pose no [risk of a] measurable increase in a child's blood lead level", as noted by Ms. Nord) clearly breaks with the tentative baby steps of the Commission under Nord and Moore to introduce a semblance of common sense into the implementation of the CPSIA. Those days seem to be over. The new attitude appears to be that the law as written is to be enforced and that blunting the edges with "common sense" is inappropriate.

The Tenenbaum Commission's approach to statutory construction makes a lot of sense to me. I have long asked the Commission to enforce the written law and not make it up as they go along. Unwritten laws are even worse than bad written laws. I am glad the Commission is showing it can read. Congress remains in denial. I don't know if the jewelry decision is more of a message for Mr. Waxman or for you and me. If we or anyone wants a different way to administer safety, it will require a change in federal law. This is the reality of our situation, like it or not. This Commission apparently intends to enforce the law as written, and that won't change even if the law is foolish on its face. "Common sense" is no longer part of the calculus in interpreting this law strictly.

e. Don't Hold Your Breath for Relief on Tracking Labels. The narrow reading of the law by the Commission here, where almost nothing (other than money) was at stake, suggests grim tidings in the super-secret tracking labels guidance due to be voted into effectiveness without your comments on July 20. I can only speculate on why the Commission didn't think we should read the guidance before they voted on it. I think we could have handled it. The jewelry decision suggests that it is highly likely that the many problems created by the tracking labels provision will be left in place. As previously noted, the CPSC has not deigned to respond to ANY questions on the noxious tracking labels provision in the last 11-and-a-half months. We have no idea where they stand on anything.

Let me give you a great example - I think the guidance is going to require you to disclose your sources on your packaging and on your product directly. This was forecast by Gib Mullan and Cheryl Falvey at ICPHSO in February (we were told to "get over the mourning process"). This term alone will kill many companies and many products. All high volume customers will now have the option to go direct, courtesy of Congress. While this may seem like a zero sum game at first glance, what it really means is that the incentive to innovate or take financial risk on any item that you cannot protect will end. Private labeling will become much harder or impossible. Trading among competitors will end. The net result will be shrunken markets and withered companies. Serious consequences will follow. Again, the Commission has more or less indicated that economic consequences are not its concern, as Congress in its infinite wisdom has determined this provision is best for all of us. Brace for it.

I have long stated that tracking labels is the absolute worst part of this law. The emergency posed by this law is drawing near. If tracking labels becomes law on August 14 without delay and if this law isn't revised significantly in the very near future, the outlook appears very, very grim for all of us. The posture of this Commission suggests that we might be facing a worst case scenario soon. This is disappointing, to say the least. It is Congress' fault. The CPSC is doing what has been asked of it, ridiculous or not.

If you are still sitting on your hands, you might want to call your lawyer soon.