CPSIA - NSSEA Calls for Letters on ECADA

The NSSEA (National School Supply & Equipment Association) is calling for letters in support of the pending CPSIA Amendment legislation (ECADA).  Please send the below letters BY FAX to your House Representative and to members of the House Committee on Energy and Commerce.  You can get the fax numbers off each Representative's website.  The mark-up may happen as soon as Monday June 20th (but is not scheduled yet to my knowledge).

Now's the time to stand up and be counted!!!  There are two forms of letter below (Manufacturer and Dealer/Retailer).  Please modify as appropriate.


Letter from Manufacturers:

Dear XXXXXX:

I am writing as a constituent and concerned member of the National School Supply & Equipment Association (NSSEA) to express my support for HR 1939, the Enhancing CPSC Authority and Discretion Act of 2011 (ECADA). We urge you to support this important bill that fixes problems created by the Consumer Product Safety Improvement Act (CPSIA) while maintaining the core provisions of this law that ensures the safety of consumers.

[INSERT INFORMATION ABOUT YOUR BUSINESS, INCLUDING NUMBER OF EMPLOYEES]

The safety of our products and the safety of our customers are our top priorities. Unfortunately, we have encountered many problems in trying to comply with the well intentioned but overly burdensome CPSIA. We have been forced to spend thousands of dollars for unnecessary lead and phthalate testing and continue to deal with compliance programs that change multiple times to meet constantly changing rules. ECADA provides common sense reform to sections of CPSIA which have burdened our industry during these challenging economic times. Given your strong record as a friend of small business and manufacturers, I hope that I can count on your support for this bill.

A costly new rule mandating a burdensome, unreasonable testing regime, the lifting of the stay on third party testing for lead substrates, and the retroactive application of a tighter lead standard despite overwhelming evidence showing that this new limit is not technologically feasible are just several challenges that my company will face this year if the reforms in ECADA are not approved by Congress soon. ECADA reduces the most excessive regulatory burdens created by CPSIA while maintaining protection for consumers. The bill enhances the Consumer Production Safety Commission’s (CPSC) ability to investigate complaints and prioritize testing based on cost-benefit analysis, and improves the CPSC’s public database by ensuring more accurate information.

As manufacturers and small business struggle to recover from the worst recession in decades, it is vital that government does not impose costly and unnecessary regulations that have no positive impact and hinder the fragile recovery. I urge you to vote for ECADA to ensure that companies like mine can continue to provide quality products and services that are so important to our children's education.

Sincerely,

XXXXXXXX

 
Letter from Dealers/Retailers:
 
Dear XXXXXX:
 
I am writing as a constituent and concerned member of the National School Supply & Equipment Association (NSSEA) to express my support for HR 1939, the Enhancing CPSC Authority and Discretion Act of 2011 (ECADA). We urge you to support this important bill that fixes problems created by the Consumer Product Safety Improvement Act (CPSIA) while maintaining the core provisions of this law that ensures the safety of consumers.

[INSERT INFORMATION ABOUT YOUR BUSINESS, INCLUDING NUMBER OF EMPLOYEES]

The safety of our products and the safety of our customers are our top priorities. Unfortunately, we have encountered many problems in trying to comply with the well intentioned but overly burdensome CPSIA. As a distributor, we fear that the range of products offered by our suppliers will continue to narrow due to the costs manufacturers incur for unnecessary lead and phthalate testing. In turn, the needs of American students will be unmet, including those children with disabilities and special learning needs, because fewer specialized products will be available to our customers.

CPSIA has caused considerable confusion in the marketplace due to the constantly changing rules and regulations associated with the law. ECADA reduces the most excessive regulatory burdens created by CPSIA while maintaining protection for consumers. The bill provides common sense reform to sections of CPSIA which have burdened our industry during these challenging economic times. The bill enhances the Consumer Production Safety Commission’s (CPSC) ability to investigate complaints and prioritize testing based on cost-benefit analysis, and improves the CPSC’s public database by ensuring more accurate information.

Given your strong record as a friend of small business and manufacturing, I hope that I can count on your support for this bill. As small business struggles to recover from the worst recession in decades, it is vital that government does not impose costly and unnecessary regulations that have no positive impact and hinder the fragile recovery. I urge you to vote for ECADA to ensure that companies like mine can continue to provide quality products and services that are so important to our children's education.

Sincerely,

XXXXXXXX

CPSIA - The Senate Wants to Save ATVs . . . What about the Rest of Us???

Yesterday Senators Klobuchar and Tester offered an amendment to S. 493, a moving bill to reauthorize the small business administration ("SBIR/STTR Reauthorization Act of 2011").  This amendment is intended to exempt ATVs, dirt bikes, motocross and snowmobiles ("All-terrain vehicles") from the lead restrictions of the CPSIA.  To my knowledge, this amendment has not been voted on yet.  The text of their amendment reads as follows:

SA 259. Ms. KLOBUCHAR (for herself and Mr. TESTER) submitted an amendment intended to be proposed by her to the bill S. 493, to reauthorize and improve the SBIR and STTR programs, and for other purposes; which was ordered to lie on the table; as follows:

On page 116, after line 24, add the following:

SEC. 504. EXEMPTION OF OFF-HIGHWAY VEHICLES FROM BAN ON LEAD IN CHILDREN'S PRODUCTS.

(a) Exemption.--Section 101(b) of the Consumer Product Safety Improvement Act of 2008 (15 U.S.C. 1278a(b)) is amended-- (1) by redesignating paragraph (5) as paragraph (6); and (2) by inserting after paragraph (4) the following:

(5) EXCEPTION FOR OFF-HIGHWAY VEHICLES.--

(A) IN GENERAL.--Subsection (a) shall not apply to an off-highway vehicle.
(B) OFF-HIGHWAY VEHICLE DEFINED.--For purposes of this section, the term `off-highway vehicle'-- (i) means any motorized vehicle--(I) that is manufactured primarily for use off of public streets, roads, and highways; (II) designed to travel on 2 or 4 wheels; and (III) having either -- (aa) a seat designed to be straddled by the operator and handlebars for steering control; or (bb) a nonstraddle seat, steering wheel, seat belts, and roll-over protective structure; and (ii) includes a snowmobile.

(b) Additional Amendment.--Such section is further amended in paragraph (1)(A) by striking ``any''.

This is pretty stunning, really.  Did you notice that they are "fixing" the CPSIA by making two changes (one surmises that they think these are the only needed fixes), exempting All-terrain Vehicles from the law, and ALSO knocking out the word "any" from the lead exemption process.  If their amendment were to become law, the CPSIA Section 101(b)(1)(A) lead exemption would read as follows:

"The Commission may, by regulation, exclude a specific product or material from the prohibition in subsection (a) if the Commission, after notice and a hearing, determines on the basis of the best-available, objective, peer-reviewed, scientific evidence that lead in such product or material will neither— (A) result in the absorption of any lead into the human body, taking into account normal and reasonably foreseeable use and abuse of such product by a child, including swallowing, mouthing, breaking, or other children’s activities, and the aging of the product . . . ."

I must be stupid, but in this context, I don't think anything is achieved by deleting "any" (assuming "plain English" is the language of choice for legislative interpretation).  The word "any" is implied in "the absorption of lead into the human body", at least I think it is.  This is the kind of legislative change I am used to from the Dems in the last three years, a change that brings no relief whatsoever.  After all, they are plainly deaf.

Perhaps more interesting is why they chose to make these changes now.  I have long asserted that ATVs have no business being regulated under the CPSIA.  Klobuchar was a prime mover for the CPSIA but apparently found out later that her state of Minnesota is deeply affected by this awful law because of the ATV ban.  Oops!  Minnesota is home to several large manufacturers of these products.  Jobs, jobs, jobs are the key nowadays, especially if you are running for reelection.  Oh no, did I say that?  How cynical of me!  Tester is also running for reelection - last time, he won by by 3,662 votes.

There must be some reason why Klobuchar and Tester think legislation relieving these industries from the burden of regulation.  Since I know the Senators are ALL ABOUT safety, I can only conclude that they figured out that these products are already safe.  Aha.  I wonder how they made this determination.  Perhaps they took note of the fact that lead in these products has never injured any children EVER.  That fact suggests that it is wasteful to regulate the presence of lead in these products - it would not make anyone safer.  Even if there were one or two injuries, wouldn't the argument be the same?  After all, we are a country of 300 million, with 50 million-plus kids in the age range enveloped by the CPSIA.  A tiny handful of injuries over a decade of use by perhaps 75-80 million children passing through the age range would hardly justify the billions in expense and disruption caused by the CPSIA. Good thinking, Senators!

Have I ever mentioned that the CPSC cites one death and three unverified injuries from lead over an 11-year period from 1999-2010?  Hmmm.

If THAT'S the standard now, then I think Senators Klobuchar and Tester should expand their amendment to exempt ALL other products classes and components that have the same safety profile.  Rhinestones?  T-shirts and shoes?  Educational products?  Rocks and fossils?  Books?  Pens?  Musical instruments?  CDs and DVDs?  Steel and other metal parts? 

Isn't this proposed amendment just what we have always wanted - a concession by zealot Democrats that the law makes no sense and needs to be sharply revised?  If they are rational legislators (that's a big "if"), let them tell us WHY it makes sense to NOT regulate All-terrain Vehicles and STILL regulate everything else for lead in children's products.

Senators Klobuchar and Tester, you owe us an explanation!  This regulatory torture has gone on for three years, not in small part because of your unwillingness to do the right thing.  Now that you are sufficiently motivated to propose giving a pass to certain favored products and industries, you must tell the Electorate why this is GOOD LAW and why the rest of us deserve to stay in Purgatory.

'Fess up - we've had enough!

CPSIA - House Hearings Questions about Rock Labels

Rep Butterfield questioned me about whether we REALLY needed to place labels on our rock kits indicating that our rocks might contain lead. As you may recall, I wrote about this last week and provided the clear explanation that the CPSIA bans the sale of any children's product which has components that may contain lead. That includes rocks in rock kits. Oops. I have embedded the clip of his query below, followed by a clip where Rep. Cassidy (a medical doctor) attempts to clarify the situation further.

I think it is important to note that Mr. Butterfield was making a point he believed in. He was gracious to me and my children before the hearing and I don't wish to question his intelligence here. I mean no insult or disrespect. Actually, the implication of his question is significant. He had days to study up on this question (he had a copy of my remarks in advance) and relied on Democratic counsel to the committee to analyze this legal point. He and his lawyers got it plainly wrong. As you will see below, Nancy Cowles also fumbled this same ball. The law CLEARLY requires this label of me, and it's THEIR law (the CPSIA). So what do I conclude? The Dems and the safety zealots don't understand the workings of the law they so vigorously defend. I believe this speaks directly to the challenge operating businesses face. If the authors don't get it, how are we supposed to? The answer is self-evident.

The question of WHY they continue to push so hard for a law they don't understand remains open. I don't think we can assert that they are bad people or dumb. If that's the case, and it is, what are they up to? I will chip away at this point in coming days.

Rep. Butterfield on rocks:



Rep. Cassidy on rocks:

CPSIA - House Hearings Testimony of Richard Woldenberg 2-17-11

I have created some clips from the hearing on CPSIA and CPSC Resources held before the House Subcommittee on Commerce, Manufacturing and Trade on February 17, 2011 in Washington, D.C. I have not prepared every single clip from the hearing. If you want to see the entire thing, click here and enjoy! Otherwise, I am going to post numerous clips and you can pick and choose as you see fit.

My testimony at the House hearing:

CPSIA - A Fuller Response to Rep. Butterfield

At yesterday's hearing, Ranking Member Rep. G.K. Butterfield (D-NC) questioned our use of a strange lead label on our rock kits. We mark our rock kits with a label that says “Caution: Federal law requires us to advise that THE ROCKS in this educational product may contain lead and might be harmful if swallowed.” We also mark fossil kits with a similar label. I characterize this label as humiliating to us.

As I often say to people, these labels only tell half the story. We don't warn people to not eat our rocks for the real reason - that they are rocks. Eating rocks can break your teeth. Eating fossils destroys our fossil record, too. This is not a good idea.

Mr. Butterfield questioned whether this label was really a CPSIA issue. I can understand the confusion. As I testified, we have to work hard to master the 3,000+ pages of CPSIA rules and law that pertain to our business. We have 5.5 people in our QC department now, including me, and an outside lawyer to help us, too. After about three years of work, we think we have a pretty good idea about how the rules work. Maybe on a good day . . . .

Much of this gobbledygook makes no sense - and count this example as Exhibit A for nonsense rules. I testified that I did not want to use this label and that we had a one hour conference call with our lawyer over this one label. I was overruled - we had to use it. I was not happy and remain miffed over the label.

Why did we have to do it?

Well, we sell rock kits that are intended for kids and schools. There's no question about that. If you make a product aimed at kids, every part has to be lead-free, even if it's a rock, a fossil or something else made by G-d long before man showed up to roam the Earth. We can't "assure" ourselves that we are selling lead-free rocks because every rock is different. G-d's QC processes predate the CPSIA, you see. Anyhow, to sell rocks to kids, rather than sell them pictures of rocks in our kits, we need an "out". Otherwise, I suppose we risk jail time.

Hey, I didn't write the damn law. Don't blame me . . . .

Fortunately, there is a little crack in the veneer that allows us to keep selling rock and fossil kits. This section from the CPSC's Q&A gives us a way to keep going:

"Are chemistry sets, science education sets and other educational materials excluded from the lead limits for content and paint and surface coatings if they bear adequate labeling under 16 C.F.R. § 1500.85?

16 C.F.R. § 1500.85 provides that certain articles that are intended for children for educational purposes are exempt for classification as a banned hazardous substance under the FHSA and the lead limits under CPSIA if the functional purpose of the particular educational item requires inclusion of the hazardous substance, and it bears labeling giving adequate directions and warnings for safe use, and is intended for use by children who have attained sufficient maturity, and may reasonably be expected, to read and heed such directions and warnings. For example, an electronics kit or robotics kit would be considered educational and the inclusion of a lead-containing component would not subject the kit to the lead testing requirements because the use of lead in some components is required to make the electronic device. Similarly, the materials used for examination or experimentation for science study such as soil, rocks, chemicals, dissections, etc. would also be exempt." [Emphasis added]

In my opinion, this is shameful and wrong and misleading to consumers, but it's our only choice. The CPSIA forces us to hire lawyers to figure out how to legally bend over, pick up a rock, put it in a box and sell it.

I have boldly decided to not label the flagstones leading to my front door because they're not "Children's Products". If Trick-or-Treaters choose to lick the sidewalk on the way to our door next October, no one can blame me!

Blame Congress instead.

CPSIA - Canada Tries to "Out-Stupid" Us - Is that EVEN Possible?

When I went to Toronto one year ago to attend the international ICPHSO conference, I came away impressed with the sensibility of the Health Canada folks. They were grounded, they were calm and reflective, they seemed to understand that the CPSIA went too far and was not needed as the basis for Canadian law. I left with a sense of admiration and confidence in them.

And one year later - they are showing troubling signs of declining IQ points, a possible sign of lead poisoning! In a stunning turn of events, Canada apparently has decided to play one-upsmanship with the United States. Not satisfied at losing in the international arena of regulatory lunacy, Canada proceeded to tighten up our oh-so-loose CPSIA lead standards.

Editorial Pause Here - Someday I want to see governments everywhere refer to INJURY STATISTICS when they call for new laws to make people safer. To figure out if people are "unsafe", one must certainly know if they are being injured . . . right? You'd really want to be able to measure that, wouldn't you? Please tell me you understand this point . . . . Soooo, if one chooses to argue that we are harming children with "too much" lead in children's products, isn't incumbent on the accuser to demonstrate in some meaningful way that the harm we will spend zillions to "eliminate" actually exists, you know, at a bare minimum? Shouldn't we demand a higher standard of justification than "it stands to reason"?

Back to Canada - Canada announced on November 29th "the most stringent rules in the world" on lead. The Canadians have decided that lead limits should be 90 ppm for toys and any product other than a kitchen utensil intended to come in contact with the mouth for children three years old and under. They will also join us at 90 ppm for lead-in-paint.

Please recall that the dirt in Mr. Obama's backyard tested for lead at higher levels than 90 ppm. His DIRT. So now we know he won't be able make toys or teething rings out of his dirt and sell those products in Canada. Finally, the menace is contained!

So why did they do this? "Health Canada says the new limits are needed because while reputable companies do their best to ensure lead has not been added intentionally to their products, companies can still run into trouble with quality control when importing huge volumes of goods in complex supply chains."

Oh, I see - it's the fault of darkest China! Good Canadians wouldn't do this but those evil people in their complex supply chains - they can't be trusted.

I would toss this off as some kind of joke other than the fact that this creates a massive business problem for us. And, of course, after the cynical and ignorant politicians get past congratulating themselves on saving the populace (from what?), there will be great mystery about what happened to variety of playthings in Canada or why educational products are much harder to find. What a mystery that will be!

As an American supplier of many Canadian school supply dealers and Canadian schools (we make Canada-specific educational products), I want to note that we have never had a single accusation of injury in Canada from any of our products since we were founded in 1984. I do not relish attempting to meet this asinine standard, lower than the loathsome U.S. standard of 100 ppm due to come into being in August for no particular reason other than to kill jobs. Will anyone feel sorry for me when we get our first test report showing lead levels of 93 ppm on a single part in an assembled toy? In other words, compliant with the U.S., but 3 parts-per-million above the arbitrary trace standards of Canada? Nah, it will be ours to savor - no one will care. We have to make children safe, safe, safe and who could put a price of the safety of our children?!

I don't know how long we will sell products for kids under three in Canada if this law goes forward. Perhaps the Canadians figure the kids can start to be educated after three.

Maybe Canada really has a chance to out-stupid us if they keep this up. Bully for you, Canada! And I thought it couldn't be done . . . .

CPSIA - Making It Up as We Go Along

743 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are 68 days left until Election Day.


The CPSC today whacked education company Lakeshore Learning Materials with a recall of Magnetic Maze products. This recall involved 18,500 units of a total of five products sold over a 18-month period. Was this recall justified? Well, anything goes these days but consider the facts:

There have been no reported injuries from this "hazard" - namely loose magnets. The company has received ten reports of loose magnets. The CPSC sums up the "hazard" this way:

"The magnetic maze board’s plastic wand can separate and expose a magnet that can be a choking hazard to children. Also, if a child has more than one of these toys and the magnets detach and are swallowed, the magnets can attract each other and cause intestinal perforations or blockages, which can be fatal." [Emphasis added]

Before we unpack this baloney, please consider for the umpteenth time where the CPSC's LEGAL BASIS for issuing a recall comes from. The authority to recall consumer products derives from the FHSA which restricts the agency's authority to "imminent hazards". Section 12(a) of the FHSA provides this definition: "As used in this section, and hereinafter in this Act, the term 'imminently hazardous consumer product' means a consumer product which presents imminent and unreasonable risk of death, serious illness, or severe personal injury." [Emphasis added]

So the CPSC must reach the legal conclusion that this product creates an IMMINENT AND UNREASONABLE RISK of death, serious injury or severe personal injury to order a recall. Did they meet that standard here?

The CPSC provides two explanations for this recall, namely small parts/choking hazards and intestinal perforations from ingestion of magnets. Of course, the latter hazard is derived from a fear of Magnetix, a notorious recall in the bad zone of 2007/8. There is no indication that these magnets were strong magnets as found in the Magnetix product.


A quick glance at this product confirms that the product is DESIGNED with small parts. These products were certainly tested for compliance with law (we know these folks well, and they are exemplary corporate citizens who are exceptionally careful about legal compliance and safety). Therefore, the assertion that the presence of small parts in this product somehow constitutes a violation of law or good practice just doesn't hold water. I could use stronger language, but I think this is a nonsense excuse.

And what about intestinal perforations? That's pretty icky, shouldn't we be intolerant of loose magnets? Well, the CPSC states the conditions under which these magnets could be a problem:

Step 1: The child must have more than one recalled product. [You need two products to have two magnets! There are 18,500 defective units in the world, let's not forget - a total universe of 18,500 magnets.]

Step 2: TWO magnets must fall out, one from each unit. [Ten loose magnets in the world are known. As noted above, there is no indication that these magnets are dangerously strong enough to perforate anything. A niggling detail?]

Step 3: An idiot child must choose to EAT these two yummy loose magnets in one sitting.

This has never happened, apparently. Could it happen?

This is well-beyond farfetched, but there you go. At today's CPSC, the agency is apparently no longer permitted by the politicians who run the place to reason or to assess any form of risk. If the risk can be put into words, that seems to make it real enough to punish any company severely. No doubt this recall exposes Lakeshore to grievous penalties, too. And for what? Can anyone make the case that this makes anyone ACTUALLY safer? And, call me picky, but is this a case of "imminent and unreasonable risk of death, serious illness, or severe personal injury"? I believe this speaks for itself - the answer is no.

Remember, these regulators work for us, the citizens of this country. As the regulators confuse and scramble the expectations of industry and consumers, as they disregard their enabling legislation to chart a path that makes sense only to them - something important is lost. Is that acceptable? Not to me. Remember this on November 2nd. Let's hope it's not too late by then.

GUEST BLOG: Etienne Veber - Learning the CPSIA Civics Lesson...the Hard Way

Five years ago, I joined Learning Resources eager to leverage my previous experiences for the benefit of a small business that makes a positive and lasting impact on our society. Little did I know then that this decision (one of the best in my life) would totally change my view of our government.

This past week-end my wife and I visited our older son who is currently working as a summer intern for a Member of Congress. We indulged in a personal tour of the Capitol (a pretty amazing working environment if you ask me...). As we went thru the various halls of our legislative branch, we stumbled upon this quote from Louis Brandeis: "The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding". Of course, he was not thinking about our current CPSIA situation when he wrote these words in 1928. However, if the combination of good intentions with a lack of understanding is not a main source of many unintended consequences in our laws, I do not know what is.

Our Constitution was built to protect us against these types of situations by encouraging all sorts of meaningful dialogue between various opposing groups, and by establishing good science as the foundation to make sound and nonpartisan decisions. Then, why after so many months - with the overwhelming market evidence, the many companies "going under", so many jobs lost, so many voices shouting for reasonable adjustments, so many questions still unanswered- why has the myriad of unintended consequences of the ill-fated CPSIA still not been addressed yet?

Sadly, the answer has become all too clear.

The Democratic leadership in Congress has consistently refused to have any meaningful dialogue with the various groups involved in this issue, unless they agree with their point of view. I do not need to remind the regular readers of this blog how long it took to have a proper hearing on the CPSIA! And, what has happened since then? NOTHING, absolutely nothing. Obviously, this lack of action demonstrates beyond the shadow of a doubt that the Democratic leadership in fact does not intend on making any adjustments to the law. It does not matter that the CPSIA does not make our products safer, but simply more expensive, effectively destroying an entire portion of our economy (the small/medium companies who cannot afford all these senseless compliance activities).

What really matters is that the Democratic leadership and other CPSIA-supporters look like they are protecting our children in front of a camera. After all, who can argue against more safety for children products? So, while we are at it, let's have lots of recalls to make people feel that the situation is really dire and that the terrible cost of this legislation (hundreds of thousands of lost jobs) is a necessary consequence!

However, the absurdity of some of the recent recalls and their numbers have reached such proportions that even consumers are now simply tuning out. Did you not hear growing up that one should not cry "Wolf!" too many times, or risk finding oneself without support when it is really needed? This fast evolving situation is the direct result of the political decision from leading Democrats (Waxman & Co.) to strip the CPSC from any true independence. The Commission has stopped using sound judgment and making decisions strictly based on sound science. By playing along with a populist political agenda, the CPSC leadership is responsible for creating a situation that is out-of-hand. The separation of power between the legislative and executive branches was created for a reason!

So what does this means for me? As the president of our company, I have had to eliminate jobs, terminate projects, stop investments in our future growth, and reduce the number of new products we develop each year. Why? Simply to pay for all the incremental and constantly increasing costs of complying with the CPSIA. With new revisions constantly being added to the law and some retail customers “pouring oil on fire,” we may not be done cutting our workforce and stopping investing in the future!

Our products help children engage and develop an early passion for math or science. I think we can all agree that these are the kinds of children's products we need right now.

Over the last 25 years we have built one of the most prolific innovation engines in the education market. So, the real "losers", thanks to the CPSIA and the Democratic leadership, will be our children and with them the future of our society!

Did I mention that all these incremental costly requirements will result in absolutely ZERO incremental benefits in terms of safety for our children? Surely you have seen the compelling and comprehensive set of data that Rick has documented so diligently over the last 18 months in this blog. Did I also mention that for more than 25 years our safety record has been impeccable? This situation is absolutely maddening.

I have now learned a civic lesson that I will not forget for a very long time. I want these "well intended " leaders out the door! I owe it to my co-workers, the teachers that we serve, and to the children that need our products. I can accept a misguided law, but I cannot accept continued intolerance and ignorance from our leaders.

Being on the frontline of this battle, as the president of a small business, has opened my eyes and I am better off from it. Our country needs jobs, lots of them right now, and it is the small businesses - that this wrongheaded Congressional leadership is working so hard at destroying - that can provide them.

Do not close your eyes. Speak up against this CPSIA absurdity and those responsible for its awful implementation!

Etienne Veber is President/CEO of Learning Resources, Educational Insights & Northpoint Horizons

CPSIA - What does "Any" Mean, Anyhow? Waxman Staff Weighs in.

The Waxman Amendment 2.0 is still percolating but with Congress on its Spring break, progress has stopped briefly. That does not mean, however, that discussions have ended or that the Amendment is "dead". It will likely spring back to life shortly as Congress wakes up again next week.

Those of you who savor fractiousness and gridlock in your government will no doubt be pleased to know that the usual bickering and stubborn disputes over the awful CPSIA continues unabated.

In a meeting last week about the Waxman Amendment, senior Waxman staff again rejected the concept of allowing the CPSC to assess risk. [Given the extraordinary conservatism of this CPSC Commission, I can't imagine what Waxman is worried about . . . .]

The position of the Waxmanis has significant implications for the controversy over the word "any" in the lead exemption provision. Some commentators have argued that "any" does not mean none and that if "any" is accorded that meaning, then the exemption process would never yield any exemptions. [CPSC staff have reached similar conclusions, hence their universal rejection of exemption requests. This also explains their puzzling approval of nuclear waste for inclusion in children's products.] Resolution of this issue might not only crack the door for exemptions but might also help narrow the scope of CPSC responsibilities by eliminating obviously safe products from the lead rules. This would be good, to restate the obvious.

According to Waxman staff, the CPSC got it exactly right - the word "any" is meant to prevent exemptions if ANY lead could pass from the subject item into the human body. No matter that this means that there will never be any exemptions possible under the exemption process (!). No matter that there are many other environmental sources of lead which pose a far greater hazard in a child's life than almost all children's products. No matter that many useful products might be banned (see my latest casualty post). In the Waxmanis' estimable view, Congress "wanted" ZERO lead in the communal toy box. Otherwise, there might be a "perverse" effect on safety. Or so they say.

This is exceptionally unlikely to be true. Interviews with MANY members of Congress over the past two years confirms that "Congress" believed that the CPSIA included a real and workable mechanism for sensible exemptions. Not that anyone thought about the details of this bill for more than a few micro-seconds, but if they did, they thought there was a viable exemption process. Actually, it takes virtually no effort these days to find members of Congress who assert that the CPSIA was a toy bill. Gotta keep 'em guessing, I suppose.

It must be nice to be able to project your own views onto an entire institution. This is a good way to defect blame. What did Congress "want"? No one can know what that amorphous institution wanted or wants. At this point, the Waxmanis are self-appointed interpreters of the Congressional psyche. In reality, it only matters what "House baron Henry Waxman" wants. In this case, an impotent exemption process is exactly what he wants. The sham also provides him with cover against more skeptical members of Congress. That you can see through it hardly matters - do you actually expect members of Congress to read the law and figure out how it works? Come on!

That's participatory government for you. Unfortunately, you only think you are participating. Mr. Waxman will let you know when he needs your input. . . .

CPSIA - CPSIA Casualty of the Week for April 9

The Alliance for Children's Product Safety's "CPSIA Casualty of the Week" highlights how the Consumer Product Safety Improvement Act (CPSIA) is disrupting the U.S. marketplace in order to draw attention to the problems faced by small businesses, public institutions, consumers and others trying to comply with senseless and often contradictory provisions of the law. These provisions do nothing to improve product safety, but are driving small businesses out of the market.

Congress and the CPSC need to address the problems with CPSIA implementation to help small businesses by restoring "common sense" to our nation's product safety laws.

CPSIA Casualty of the Week for April 9, 2010

CPSIA EXPELS EDUCATIONAL PRODUCTS FROM SCHOOL

The approximately 1,500 businesses that comprise the National School Supply and Equipment Association (NSSEA) are dedicated to providing educational supplies, equipment and instructional materials to schools, parents, and teachers. This small industry serves a vitally important market – American schools – providing specialized products that form the backbone of the American educational system. Without the support of this small business-dominated industry, the needs of many American children would be left unmet, including children with disabilities and special learning needs.

The Consumer Product Safety Improvement Act (CPSIA) has had a negative effect on nearly every NSSEA member company, says a recent NSSEA survey of manufacturers/suppliers and dealers.

According to the findings, 64% of surveyed NSSEA suppliers, and almost half of the dealers (46%), have been negatively affected by CPSIA regulations. About 47% of dealers surveyed have removed items from inventory, and 40% of manufacturers have either removed items or discontinued production. Almost 80% have incurred additional testing costs. Unfortunately, all this expense and disruption has served no purpose - the CPSIA has imposed economic turmoil on an industry that has a great safety record. Recalled educational products have been responsible for a total of three reported injuries in the last ten years, one from an overheating battery compartment and two relating to a defective hinge on a changing table.

A NSSEA manufacturer wrote, "We have been forced to discontinue safe products because the testing costs have not justified keeping them in the line. This has had a very negative impact on our bottom line by destroying very good and safe product. Teachers who have been using these products for decades will not have access to them anymore. Going forward, we will not be able to develop niche products that are specific to education because the testing costs will not justify anything with low sales."

"From delayed orders to confusion regarding the requirements, members have been left with eroding margin, increased labeling and testing expenses, and a decrease of education products available to the marketplace," wrote NSSEA Vice President Adrienne Dayton in a recent association newsletter.

CPSIA - ICPHSO Update - Remarks of Gib Mullan, Head of CPSC Enforcement

Gib Mullan's remarks on enforcement:

• Import surveillance staff is now up to 18 people.
• Using Commercial Targeting Analysis Center (CTAC) to stop things at the port. Can see what's coming in before it arrives.
• Is working with the International Trade Commission, the folks responsible for HTS Codes (Harmonized Tariff Schedule). The CPSC is trying to "piggyback" on HTS code to identify the products of interest to the agency. Making "significant headway".
• Imports samples rising at a rapid rate. Only about half of the samples fail.
• Use of XRF is one of the agency's "secrets for success". Will use for cadmium, too. Only one-tenth of items scanned are being sampled. This implies that less than 5% of items scanned fail. Most items are not inspected, which is just a numbers game.
• Field Investigation Division is back to a "growth mode", in 55 locations with 89 investigators. Expanding to Internet surveillance. They have seen a surge in eBay sales of recalled items after recalls are announced. Interesting!
• Created email address for the public to report sales of recalled products. Now everyone can be on a cop on the beat, how wonderful. Hope I can still trust my kids. . . .
• Retailer reports are rising. Participants in this program include WalMart, Sears, Amazon and others. 20,000 reports a year. Also reports by email and on the hot line 800 number are jumping. The total number of reports is cresting at 50,000 per year. All of this is BEFORE the public database. [Soon a system will be fully constructed that will make doing business in the U.S. children's product industry impossible, something to look forward to (this is my thought, not Gib's remarks).]
• Field "blitzes" are increasing. Examples are pool and spas, drywall, drawstrings, cribs. This is a new activity although blitzes at the port are old hat, in my experience.
• Defect Investigations Division has 19 compliance officers.
• Recalls in 2009 DECLINED from 563 to 466. Number of units went up to an all-time high, 229 million units. Lots of big recalls in 2009. Should we feel safer now? I wonder . . . . Gib himself questions whether this is "good or bad".
• Fast Track recalls are pretty steady. "Fast tracks" are recalls initiated by companies and brought to the CPSC's attention by the company itself. CPSC-initiated recalls are steady in the 50-60 range. Cases stemming from regulatory violations declined from 167 to 47.
• Early warning system relating to cribs, bassinets and play yards is resulting in faster recalls. [No info on the availability of cribs and so on was provided, or the cost of those goods now.]
• Joint recalls with Canada was done first on February 19, 2009 (that fills in a hole!). Total of 13 joint recalls in 2009 and 16 in 2010 to date. Expects more joint recalls in the future, broadening to other countries. Gib thinks this makes it simpler for companies going through recalls. Again, not sure how I feel about this but am not opposed in principle.
• Regulatory Enforcement Division has 18 Compliance Officers now. This includes Chemical, Children's, Flammability and Mechanical hazards. Letters of Advice ("LOAs") fell a bit in 2009 by perhaps 12%. Only a small percentage result in recalls. In 2009, found 338 lead content violations and 118 lead in paint violations, mainly at the port. Recalls have come down considerably, almost to zero. Stops at the port are higher than that, but don't result in recalls necessarily. Those are declining, too.
• Compliance Division now has 14 of its own attorneys
• Civil penalties rose a lot in 2009. Gib specifically noted that he was not being "gleeful" about penalties but simply noting that penalties are a more serious risk now. I am okay with this tone, it is common sense. Penalties totalled nearly $9 million. I just hope that penalties moderate and become more purposeful, rather than political.
• Made a STRONG point about fraudulent testing. The CPSC caught fraud in lighter testing and it led to criminal charges. They are working on another case now. This is great news as far as I am concerned. Cheating is a REAL problem (an actual problem, not an imaginary problem). The CPSC should find the bad guys and punish them. The resources of the agency are well-served if focused on removing these unscrupulous people from the market.
• The agency is forging new alliances with the State AGs. They have a monthly conference call with this group. This is the CPSC's proactive effort to reign in the State AGs by making them part of the process. If this works, great. Again, we need to watch out for the lowest common denominator risk.
• Working with China on implementing "best practices". Getting better, faster. China recalls went DOWN in 2009 and he anticipates improved safety in Chinese products. This, too, is a good use of agency resources. If we really are getting better, faster, Gib and his team should take a bow. Safety benefits everyone. Next up, consideration of the relationship between these initiatives and cost. Safety is an inherently economic subject. We need recognition of this basic fact.

I have omitted all reference to drywall here. This is a one-of-a-kind problem that seems unrelated to the CPSIA as far as I can tell. Likewise, I have not attempted to summarize the issues relating to ATVs and other tangential product/safety issues brought up by Gib. [He did say that repairs to the Rhino seem to be working well, btw.]

To Gib's credit, I found his presentation quite balanced with no particular effort to frighten. I appreciate the choice of tone for what could be a quite intimidating topic.

Gib's presentation was one of the few I can recall in the last two years on the topic of enforcement that did not materially raise my blood pressure or make me think dark thoughts about the future. Let's hope that the CPSC can build on this base to restore trust among the business community. Safety and fear mongering is an unholy alliance. The CPSC needs the cooperation and trust of the manufacturing base.

CPSIA - Commission Report to Congress on CPSIA Changes

The CPSC Commission issued its January 15 Congressional report on recommended changes to the CPSIA last Friday. As promised by Inez Tenenbaum, the Commissioners were afforded the opportunity to present individual statements to accompany the Commission report. Four of the Commissioners (Tenenbaum, Adler, Nord and Northup) chose to present their own statements. Adler also promised a supplemental statement on the subject of lead, which has not been released yet to my knowledge.

The Report and the accompanying statements make interesting reading. I do not propose to summarize the documents here, but have set out a few thoughts:

a. The Commission's Consensus is Important. The Commissioners made a big effort to speak with one voice in the report. While they certainly did not agree on everything, their effort to achieve bipartisanship agreement in the report sends a good message. The Commission needs to work harder to find this middle ground more consistently and less fractiously. There is NO JUSTIFICATION for turning safety into a game of political football. If the Commission can work better together, confidence in their administration will grow and extremes will be avoided.

The prohibition against full Commission meetings in private (the Sunshine Act) is a hidden factor in the report. Since the Commission ill-advisedly voted down a public discussion of the report, the Commissioners were prevented from meeting in groups of three, four or five. When you read this report, imagine how it might have read if the five Commissioners were allowed to sit in a room and duke it out. It might have been a better document, more complete and more prescriptive.

b. Where's the Functional Purpose Exception??? The report is as interesting for what it DOESN'T say as for what it does say. Most importantly, the functional purpose exemption is GONE. Rumorville has it that the functional purpose exception became more and more ornate and complex as the Commissioners struggled to write a recommendation until even its most ardent supporters had to concede that it wasn't going to work. This was set up to be Waxman's excuse to do nothing or nearly nothing. It's not there anymore.

Too bad for Henry, huh?

c. The Commissioners' Statements Reveal that Common Sense is Divided on Party Lines. The Commissioners' statements reveal a lack of communication within the Commission. I know they were talking but it appears that some messages weren't being heard. The statements of the two Democrats (Moore apparently did not prepare a statement) were straight out of Central Casting. Disappointingly, Ms. Tenenbaum chose to repeat a fairy tale about the law's origins:

"In response to the flood of dangerous imported products, which were involved in tragic fatalities, poisonings and injuries involving children, Congress closely examined the needs of the CPSC and the statutory changes necessary to enhance the regulatory safety net maintained by the agency. Congress spent considerable time reviewing these needs and continually consulted with the agency’s leaders, staff, consumer groups, and the regulated community in order to carefully craft the proper legislation to achieve this end. Seeing a clear need to reauthorize and reinvigorate CPSC with new energy and purpose, Congress passed a sweeping law." [Emphasis added]

The re-characterization of what was essentially an anger-fueled legislative mania into some sort of group hug is apparently the Democrats' effort to justify a passive or inert approach to fixing the law. In addition, both Tenenbaum and Adler repeated the misleading togline about the dangers of lead, although I don't think that's news anymore. It's also not really relevant to discussing the issues under the law - and their persistent refusal to acknowledge this is disappointing.

The Republicans (Nord and Northup) delivered rational and balanced statements that calmly and appropriately diagnosed the issues with the law. They are cognizant of the excesses of the law, the dramatic impact on both the regulated community and the hobbled agency itself. The Reps make no effort to prop up the CPSIA - you know, the law passed by REPUBLICANS AND DEMOCRATS ALIKE. There's no pride of authorship by the Reps - to their credit, these Commissioners seem to be trying to restore a rational system of law and regulation designed to provide appropriate levels of safety at an affordable cost.

I am tired of the Dems on the Commission simply being good Dem soldiers rather than committed stewards of safety. The ANGER expressed in Massachusetts today is a strong message to the Dems - America is sick and tired of government aggressively inserting itself into every aspect of our lives, including by way of the CPSIA and its precautionary principle. See tonight's Wall Street Journal for more details. It will be interesting to see if Massachusetts impacts the CPSIA amendment process.

d. Does it Matter What's Safe Anymore? I am struck again by the absurdity of the debate over lead. As I see it, the debate is over which incidents of lead that are illegal should be permitted. This is different from defining what constitutes safe lead. This used to be a simple decision. Now the premise is that there is NO safe level of lead. Is that really TRUE?

Think of ALL cases where lead is found in children's products. Now separate them into two piles, one that is labeled "safe" and one that is labeled "not safe". How do these piles compare to the piles made by the CPSIA, FHSA and CPSA? Well, that question never comes up in the debate. The big question is about compliance with law, not safety.

This is not a rational system for administering risk. First of all, if lead were so deadly that it needed to be eliminated in all cases in all children's products, then presumably we would be even MORE motivated to remove it from our food, water and air (not to mention dirt). After all, we consume food etc. and the lead in the food gets into our bloodstreams. But this isn't an issue today because the CPSIA didn't make it illegal - and apparently the CPSC does not feel lead is dangerous in food, water or air (or else it would have acted on the threat under the FHSA). It gets worse - consider that lead paint is illegal on children's products but not on cars. If lead is so dangerous and mere contact with lead-in-substrate is so dangerous that it is utterly intolerable in a modern, sophisticated society likes ours, then why does the CPSC permit kids to touch or even ride in cars? After all, the zipper pull on a kid's golf bag is illegal if it has a dot of lead paint on it. But a whole car dripping with lead paint, that's fine.

The answer - it doesn't matter what's safe when it comes to lead, it only matters what's legal. The Dems prefer to portray what's illegal as unsafe, and imply that what's legal is safe. [Call this the All-Knowing Congress argument.] It's hard to take this seriously. It's time for them to drop the precautionary principle pretense and start being accountable for the rationality of their regulatory positions. If lead is a crisis as they say, then please ban everything with lead in it, including our entire food chain. I am ready to be safe, finally.

e. What Has Been Accomplished in the Last 18 Months??? Does it bother you as much as me that so little has been accomplished by the last 18 months of chaos? The many steps and achievements documented in the report and statements might make a bureaucrat blush with pride but how have injury statistics changed? [Recall statistics are a poor measure of the effectiveness of safety rules.] How much did we pay as a society for these extremely meager achievements? If you add in the cost to our society of a crippled safety agency, the price we paid is staggering. The waste is sickening. It's not possible for me to read the recounting without a sense of loss.

f. Does Anyone Else Want An Exemption? Umm, Yeah! It's important to note that the low number of exemption requests does not reflect a lack of interest in exemptions. Exemption requests are very expensive to prepare and are complex. In many cases, the exemption request will obviously be rejected or is too broad to state in any compelling way. For instance, educational products span so many categories that it is impossible to state a coherent exemption request. More importantly, the real inhibition to filing is a fear of losing the request. For many companies, it just doesn't pay to ask for permission - they prefer to beg for forgiveness if a problem ever arises.

Anne Northup correctly notes in her statement that it is bad law to require that regulated companies line up for exemptions. She is not arguing on behalf of the companies - she focuses on the huge burden these requests place on the CPSC and the Commission. She is TOTALLY correct. The idea that we should have a safety system based on exceptions would only appeal to the IRS. Somebody needs to listen to Northup on this point.

g. The Report Whitewashes Ineffective Help for Resale Shops. It is a sad joke to assert that coaching resale shops with the CPSC's guidance document and a few workshops is somehow a solution to the massive problem caused by the CPSIA. For one thing, it is quite clear that this message has not reached its audience. The CPSC's approach is inherently inefficient and unlikely to bring relief to many affected stores. A better law is the necessary solution. Second, it is apparent that the CPSC's efforts did not relieve anxiety - the stores are still dropping children's items. This lack of accountability begins to look cynical when you consider that only last week, Scott Wolfson was warning people not to sell cheap jewelry on auction sites or in resale shops. Hmmm, that sounds very reassuring, doesn't it? Problem solved!

If the Commission truly cares about resale shops, then a more effective approach (including a communication strategy) needs to be implemented.

With the issuance of the report and statements, the shuttlecock has been batted back to Congress. The next step is to work on a long-needed amendment of this awful law. Stay tuned.

CPSIA - Educational Company Woes under the CPSIA

Michael Warring, President of American Educational Products, was quoted in the Nov/Dec issue of NSSEA Essentials in an article called "Realities of the Recession" as follows:

"The resources that we have to invest to comply with CPSIA are truly wasted. The human cost is incredible, never mind the waste of physical and cash resources. I anticipate that CPSIA will generate four to eight hours a year of work for every product that we sell - we will be measuring it in man-years. Existing regulations prior to CPSIA were adequate, and like many regulatory requirements, only needed adequate funding to be completely effective. The timing could not have been worse for our industry."

. . . .

"As mentioned before, CPSIA has had a significant impact on our business. Every second is spent addressing our customers' concerns, working with our suppliers to meet requirements. I personally have spent at least about 30 percent of my time this year (on CPSIA) in one form or another. As president of the company, I should be investing my energy (on other things)."

Mike, I feel your pain!

CPSIA - CPSIA Casualty of the Week for November 16

The Alliance for Children's Product Safety's "CPSIA Casualty of the Week" highlights how the Consumer Product Safety Improvement Act (CPSIA) is disrupting the U.S. marketplace in order to draw attention to the problems faced by small businesses, public institutions, consumers and others trying to comply with senseless and often contradictory provisions of the law. These provisions do nothing to improve product safety, but are driving small businesses out of the market.

CPSIA Casualty of the Week for November 16:

“Pockets of Learning” Emptied by CPSIA
Special Needs Products Being Driven from Market By Testing Costs

Pockets of Learning is a Rhode Island-based company that for 20 years has designed, manufactured and sold unique heirloom-quality cloth toys and gifts, many of which offer skill-building experiences to children such as tying, matching, buttoning and counting. The company helps fill niche markets, including special needs, religious and independent retailers. Pockets of Learning has an impeccable safety record, and has never offered a product to the marketplace that had not been tested according to CPSC requirements.

On November 10, 2009, Pockets of Learning informed its customers that thanks to CPSIA, it will no longer sell its "How Do I Feel Today?" wall hanging, a bear-themed product sold for young children with special and emotional needs. The company told its customers that it "can no longer afford to manufacture and offer these products, due to the over 500% increase in safety testing cost…The annual volume of the product does not allow for the investment required to properly safety test under the new CPSIA guidelines."

The loss of this item was made known to us by a leading distributor of therapy tools and other products for educational professionals and psychologists who had his order cancelled.

Pockets of Learning President Jack Grant told us in an e-mail that this product loss is only the "tip of the iceberg." Due to the financial impact of CPSIA testing, Pockets of Learning is planning to reduce its product line from about 65 products to approximately 22 because of "the reality that CPSIA testing would typically add 30% or more to the cost of each item" made in small production runs.

Large multinational manufacturers who make high volume items can absorb higher testing costs imposed by CPSIA. But the thousands of small businesses across the country that fulfill specific, niche markets are the untold casualties of this law. Worse yet, kids in need are losing access to essential teaching materials. "How Do I Feel Today?", indeed!

For more information, please contact Caitlin Andrews at (202) 828-7637 or e-mail caitlin.andrews@bgllp.com

CPSIA - More Victims (Am I Boring You Yet?)

I received a phone call on Friday from a reader of this blog who, among things, wanted to report to me that she is losing suppliers at a rapid clip. Why? She makes hair bows and barrettes for kids. [She recently branched into dog hair bows because it is outside the CPSIA reach and might be a viable business after the rest of her business craters thanks to Mr. Waxman. Where have we heard this strategy before, namely leaving the children's product market to escape the penal reach of the CPSIA?] She decorates her bows and barrettes with various doodads like buttons and other shiny bling. It turns out that her suppliers of buttons and so on have no interest in paying for testing for or compliance with the CPSIA. They tell her, "Listen, these things aren't intended for kids. We are not subject to that law and refuse to test. If you don't like it, buy someone else's buttons (etc.)." That rules them out as suppliers because she can't afford to test. Each such answer creates yet another off-limits supplier and supply item.

I wish I could say any of this is surprising to me. In fact, it is not. I spoke about this particular subject ONE YEAR AGO at the CPSC on November 6, 2008. Here's the video that segment of the speech:



[The first and third parts of this old speech are also worth watching. Old but good. I stand by the speech, although some minor things have changed since then.]

This subject is rather relevant right now. Hey, CPSC, are you actually considering market feedback on your component testing concept? I have made numerous points about component testing and hope you are listening. Here's another one (it's a repeat but please think about it anyway): IF you give us "relief" by allowing us to use the tests provided by our suppliers, what are you going to do to force suppliers from outside the market to provide test reports? How will your rule provide relief to Ms. Barrette above? This problem is EXACTLY what I highlighted last November. If component testing won't solve her supply problem for her, it won't work for me. And, PLEASE, watch my video above and take note of the various other testing fantasies that component testing WON'T resolve. As I have said innumerable times, test reports do not equal safety. Supply chain management and risk assessment does. In this case, your wonderful CPSIA has gaps in it that make full and compulsive compliance impossible. The casualties are mounting.

As noted by others, we need the CPSC to stand for safety, not for the CPSIA. There is a consequence for the passage of time. Please do not assume that your efforts to clarify the law over a yawning 18-month period won't have a very real cost to those of us left in the children's market. And you are responsible for that cost.

It's time to tell Mr. Waxman and his buddies over in Congress what's wrong. Please don't kill us while you work up the nerve.

CPSIA - Brace for It, Things Are About to Get WORSE

CPSIA Testing Costs . . .
Tracking Labels . . .
Retroactivity . . .
Civil Penalties . . .
Criminal Penalties . . .
Phthalates ban . . .
State AG enforcement . . .
Market Chaos . . .

It's bad, bad, bad right now. Could it REALLY get worse?

Consider Section 102(d)(2)(B) of the CPSIA, the latest horror story to smack you in the kisser:

"(d) ADDITIONAL REGULATIONS FOR THIRD PARTY TESTING . . . (2) COMPLIANCE; CONTINUING TESTING.—Not later than 15 months after the date of enactment of the Consumer Product Safety Improvement Act of 2008, the Commission shall by regulation . . . (B) establish protocols and standards— (i) for ensuring that a children’s product tested for compliance with an applicable children’s product safety rule is subject to testing periodically and when there has been a material change in the product’s design or manufacturing process, including the sourcing of component parts; (ii) for the testing of random samples to ensure continued compliance . . . ."

Nice and obscure, buried deep in the CPSIA. Never heard of it? Ayyy! Haven't I told you that you must ALWAYS read the fine print???

This rulemaking, which has been giving CPSC Bar attorneys sleepless nights but has otherwise escaped the attention of the business community, is due in about seven weeks (November 14 deadline). It has the potential to be the final nail in our coffin, guys. Right now, there are no rules on frequency of safety testing. We are free to negotiate with our customers or establish our own testing plan. This has worked rather well for many, many years - after all, less than 0.01% of all children's products are EVER recalled. But no longer. The CPSC is going to tell us how to assure safety and quality now. The premise is that we are incompetent to do so without government involvement. In our company's case, the 130 pieces we recalled in 25 years (one incident) out of perhaps a billion pieces sold is no proof that we know what we are doing, apparently. Thank heavens we will finally have someone qualified to oversee our processes!

The speculation is that the CPSC is going to specify testing every X pieces or Y lots, or at least annually. In addition, the requirement to have random testing suggests that we cannot be allowed to supply testing samples directly. The "idea", as simple-minded and insulting as it may be, is that manufacturers might somehow pull the SWITCHEROO after a test report is issued. After all, we are SO EVIL! The CPSC does, actually, worry about the "switcheroo". They have mentioned it repeatedly as one of the impediments to the long-promised component testing rule that is aging like fine wine somewhere. NEVER has anyone pointed to a SINGLE recall that involved a "switcheroo" to my knowledge, but whatever - laws don't need any basis in reality anymore. Hence the CPSIA.

Math Interlude Begins Here . . . .

I have submitted information to Congress on testing for one of our telescopes. We recently obtained a new quote on testing - it now costs about $11,500 all-in (including the 23-24 samples). Our annual revenue for this item before the econony crashed was about $30,000 per annum. Assuming gross margins of 33%, typical for the toy industry (and easy for illustration purposes), our annual gross profit (not NET profit) would be $10,000. The cost to test this item is MORE than our annual GROSS PROFIT. This means that the telescope dies - even IF we can set our own reasonable testing program. If testing on this item is conducted annually, our COMPANY dies, too.

Let's look at it another way. Say your testing cost (including samples and so on) is $3,000 for a particular product. How much profit do you require to make it worthwhile to sell that item? If you need a gross profit 33% to make 5% on the bottom line, presumably you cannot afford an annual testing cost of even 5% of the total revenue of the item. If you accept breakeven as the tipping point for this illustration, then the math is also simple: $3,000/5%, or $60,000 in annual revenue. Ideally, you would want more than that so you aren't just "trading dollars". You would be marginally profitable at $80,000 in annual revenue for this ONE item. In the specialty market, a product producing $80,000 per annum is pretty darned good. The profit you would earn on this $80,000 item would be 5% net profit or $4,000 less the testing cost of $3,000, or a grand total of $1,000. Sell $80,000 in telescopes, make a thousand bucks. Nifty, that must be how Bill Gates got so rich.

Remember, this also means that the prospective revenue hurdle for a comparable NEW item is ALSO $80,000 per annum revenue. AND, in the case of a new telescope, you would have to front $11,500 before you get revenue dollar "one". Hmmm, that might cut your product development pipeline down a LOT.

In fact, this annual testing requirement will send many companies scurrying into other markets, such as the mass market or into other businesses, in any event far, far away from the CPSC and this law. I do not see how the education market would survive. Honestly, virtually every manufacturer serving the NSSEA market (educational dealers) is a small company. Even the bigger small companies still do insufficient revenue on the vast majority of products to justify this expense. I know that this rule ALONE could many companies to shed at least two-thirds of their product line. That's too horrible to contemplate.

Math Interlude Ends Here . . . .

It is another irony of this rule that by formalizing the requirement to retest when you change components, you actually provide a negative incentive to become more efficient or more safe. There is no incentive to change factories if you save less than the new testing costs. It will take our factories about two seconds to realize that this gives them dominion over their customers. American businesses will be tied to their sources irretrievably even as costs rise, and will thus be at a cost disadvantage outside the U.S. to more efficient European and other competitors. In addition, the law punishes companies for improving their products by imposing a testing penalty on any change. Thus, your incentive to change a product to, for example, make it better or safer is greatly reduced - you will pay (literally) for your good deed. As these innovations are often voluntary, it will be impossible for the government to know how you might have improved your products had they not meddled in your business. You save money, and your products are more expensive, uncompetitive and less safe. What a great way to run an economy!

Given everything that has happened to date, we shouldn't expect a Knight in Shining Armor to emerge from the CPSC to save us. After the double-speaking phthalates standard and tracking labels guidance, plus the truly stupefying rules on exempt materials, I find it hard to believe they will do the right thing here. The lip service by Commissioners about recognizing the needs and legitimate concerns of the business community has been just that - lip service.

How could disaster be averted? It would take unprecedented bravery and character by Inez Tenenbaum. Democratic leadership in Congress has thumbed its nose at the children's product industry. It would be overly kind to call their attitude a calculated indifference to our fate. That leaves us in the hands of Chairman Tenenbaum. Thusfar, Ms. Tenenbaum has chosen to kiss the pinkie rings of Mr. Waxman and Mr. Rush and with Southern charm, coo about the "good statute". She has done nothing to stand up for the moral, law-abiding, crucial businesses serving the children's market despite overwhelming documentation of the senseless damage being done by the terrible CPSIA.

Ms. Tenenbaum needs to have a change of heart. If she takes the route of least resistance and issues guidance requiring frequent testing and other unnecessary but expensive similar requirements, it is probably game over for everybody. On the other hand, she could rise to the call of history and tell Mr. Waxman to drop his pretense that this law is somehow workable. Frankly, there is no data available to justify Section 102(d)(2)(B). The assertion that the government must, for the first time in history, tell us how often to test to assure quality has no basis in fact. It's just a Congressional staffer's (or consumer group's) lunkheaded idea.

Ms. Tenenbaum, it's your call. You can save us and be a hero, or you can send us down the river and be remembered as the one who committed this mortal sin. You won't be afforded the opportunity to blame this one on Congress - you can act, and you know it.

CPSIA - More "Kudos" for CPSC's Resale Roundup Program

The Atlanta Journal-Constitution published a nice article on the noxious Resale Roundup entitled "Garage Sales Could Land You In Jail". Apparently, I am not the only one who sees something dark in this PR blitz-driven program designed to root out recalled items from resellers in stores and online. As pointed out by one of my commenters, the real issue for regulators in the resale of recalled items is not the onesies and twosies at resale stores or Craigslist.com - it is the inventory liquidators who might be pedalling large volumes of these items. Of course, if there are items of special concern, like a particular recalled crib, then the CPSC should invest in educating (not terrifying) the resale outlets to keep them off the market. The presumption that members of the business community cannot be trusted to work with a well-intentioned agency with realistic goals is a sad reflection of the current anti-business atmosphere that the Pelosi-Waxman-Obamites are fomenting.

However, the Resale Roundup is exactly the kind of grandstanding likely to become a favorite trick of the "new" CPSC. After all, promoting their "vigorous" enforcement of the CPSIA to a rabid media and equally rabid Democratic majority leadership seems to be a major objective of the agency nowadays. The supposed "crisis of confidence" of the American public is the stuff of their press releases, not reality.

It's ironic, then, that the CPSC seems to be annoyed by my observation that rocks and fossils need to be tested for lead and sharp points under the new law. You'd think they would be proud of this as it is required as part of a vigorous enforcement of their nifty new law. Yes, if I sell rocks to schools or as part of an educational toy, these natural materials are subject to the same excessive safety rules as injection-molded toys or painted wooden trains. So we must pay a lot of money to test rocks for "safety", and in fact, have actually had to redesign products when a test report came back with an idiotic "fail" for sharp points. [These test reports are doubly infuriating because natural materials vary piece to piece. Testing a sample is no indication of the compliance of rest of the units - you would have to test each one to know for sure that they all comply. But the law wants us to get the little piece of paper, so we buy the little piece of paper.] Find me some mica or fool's gold without sharp points, please. Nah, let's just learn as much as possible from smooth stones good for skipping.

With all this in mind, I suggest that the CPSC take the opportunity to start a new program called Residential Rock Roundup. Why draw the safety "line" at rocks that are sold to schools or as educational toys? Frankly, most rocks are found not in boxes on store shelves but on the ground. I know that's shocking, but it's true! Surely those plentiful rocks present a much greater risk of childhood lead poisoning or sharp points than our boxed sets. As Rachel Weintraub of CFA has instructed us, it is "absurd" to suppose that we can be sure about anything without testing. And, of course, you can't be too safe, either.

I think the CPSC should send its newly-expanded cadre of field inspectors out into the neighborhoods to gather up and test every rock they can find. Some rocks may also fit into a choke tube and if suitable for children under three, would need to be impounded to keep kids safe from choking hazards. Only an expert like a CPSC field inspector would know which rocks present this kind of deadly risk. No doubt this kind of outreach will impress everyone and demonstrate the CPSC's commitment to keep kids safe, so so safe. Now that I have learned that rocks and fossils may cause lead poisoning (the victims are presumably the same kids chowing down on rhinestones, tasty!) or might cause lacerations from their sharp points, I do not know how the CPSC can tolerate rocks littering the United States that have not been tested. Perhaps the CPSC should also "sequester" some national parks deemed too "rocky" and therefore a danger to children. I also hope the agency will call for all Americans to voluntarily send their rocks in for testing - just to be safe.

If you can think of some other programs that the CPSC should start - to keep us all safe - feel free to leave a comment!

CPSIA - AP Story Features April Rally Committee Members

New lead limits big concern for small businesses

By JENNIFER C. KERR

The Associated Press
9:31 p.m. Thursday, August 13, 2009

WASHINGTON — Tighter limits on the amount of lead the government allows in children's products and a requirement for new tracking labels are stirring fear among small business owners, already hurting in a tough economy.

Starting Friday, the new limits and labels are required as part of a consumer product safety law passed by Congress last summer in the wake of dozens of recalls of lead-tainted toys.

Consumer advocates hailed the measures. But some small businesses, like American Educational Products in Fort Collins, Colo. — it sells classroom teaching aids like flash cards, animal models, globes and relief maps — say the testing and labeling costs are crippling to their operations even though their products are safe. They want the law amended to exempt products that present little or no risk to young children.

"The challenge as a small business is that I cannot do it all (the testing) immediately," said Michael Warring, president of AMEP. "I would have to spend a full year of revenue to test every product I sell."

Warring recently laid off four of his 70 employees. In his 15 years with AMEP, he has not had one safety recall or complaint about lead.

Even so, Warring says he is required to test samplings of all products he makes and sells for young children, which he said costs about $2,000 per product. The tracking labels will add another cost, he says, since they must be a permanent marking on each product.

The new chairman of the Consumer Product Safety Commission, Inez Tenenbaum, has tried to reassure businesses that the agency will work with them as it enforces the new requirements.

"We're going to take into account situations where businesses are making the right efforts to manufacture products safer," said her chief spokesman, Scott Wolfson. "We are going to continue to put out new rules and new guidance to help companies in that effort."

The law, known as CPSIA, sets strict standards for lead and chemicals called phthalates when used in toys and products for children 12 and under. Lead can cause irreversible brain damage,
and some studies have linked phthalates to reproductive problems.

The bill was signed into law one year ago. Since then, CPSC rules have been trickling out — explaining who must comply, and how, as well as announcements about delays in enforcement for certain industries.

But the guidance from the agency has been confusing and belated, says Jolie Fay, a mother who runs a home crafts business — Skipping Hippos — making children's jackets and fleece ponchos out of her basement in Portland, Ore.

"My products are mostly fabric, and they're safe," Fay said. "Mom-home sewers are being pulled into this law to meet the same standards as big companies like Fisher-Price. It's not right."

Fay's orders began drying up in February, when the lead limits first became effective. On Friday, the limits tighten further, with the amount of lead allowed in kids' products decreasing to 300 parts per million and 90 ppm for lead paint.

Fay had all the fabrics and buttons tested on her clothing, and she says there was no lead. Still, she says, boutiques stopped calling in orders, too worried that they might lose inventory if a test later turned up positive for lead.

CPSC has issued guidance that natural fabrics like cotton and silk are exempt from the rules, but zippers, buttons and snaps are not.

Wolfson says the agency is working hard to hear the concerns of small business. But, he added, they have a "responsibility to know their obligations and comply with these new safety requirements starting on Friday."

CPSIA - Exceptions, Exceptions

The CPSC today docketed their long-awaited decision on CPSIA Section 3 lead standards exceptions for materials known to be "always" compliant. This ornate 94-pager succeeds in making an awful law even more confusing and unworkable. [I have already commented on its shameful impact on library books.] Owing to the decision's length and the bad reputation I enjoy for going on and on, I will try to keep this comment as succinct as possible. Please keep in mind that I am summarizing a 94-page document, however.

Needless to say, the obvious effort here was to narrow the scope of the law to lessen its financial impact on many industries. In that regard, some good was accomplished. There will be some winners, generally makers of simple and untreated goods. Many (not all) "crafters" will be delighted. I hate to break the news . . . but the economy goes a bit further than crafters. What about those of us who make products more complex than an unadorned white cotton t-shirt? There's a word for those people - it's "losers".

The CPSC has the well-known problem of being forbidden to assess risk under the CPSIA. Thus, this queer document simply examines the physical attributes of various materials for compliance with the arbitrary lead standards, all without regard to whether the materials present any known safety risk. This was Congress' fervent desire - that the CPSC not exercise judgment. You can see how items like rhinestones, pens, bikes and Potato Clocks might present particular problems under this construct of law. There is no way to let these items out despite the everyday knowledge that they pose absolutely no risk to consumers from lead content.

The document spends pages and pages in tortured analysis determining which materials can safely and unassailably be construed to be compliant in all known manifestations. If upon reading it, you begin to see a giant wedge of Swiss cheese forming before your eyes, you are not imagining things. Congress' great innovation here was to make everything "illegal" and then carve out exceptions only upon evidentiary consideration after submission of very expensive petitions. If you don't apply for a carve-out, you don't get a carve-out. So holes pockmark the law in seemingly random and unpredictable fashion, all related to whomever ponied up for a (successful) application for exception. The holes cannot be accurately anticipated (they might or might not be there - you must look). Congress' genius legal construct essentially creates a law that resembles organic chemistry - an illogical subject that can only be mastered through pure memorization. I did not like that class. At all. Just as in my dreaded Orgo class, there is a lot to learn to master the CPSIA regulations.

The decision lists many materials that are now excluded from the testing requirement (nothing is excluded from the tracking labels requirement, btw), and many others are explictly NOT excluded. Even if you were able to fit wholly within the safe harbor, the decision is not intended to let you rest easy. It's not really a safe harbor, we are all supposed to remain at risk: "The Commission intends to obtain and test products in the marketplace to assure that products comply with the CPSIA lead limits and will take appropriate enforcement action if it finds a product to have lead levels exceeding those allowed by law . . . . Moreover, even when a particular product or material has been relieved of the testing and certification requirements under section 102 of the CPSIA, manufacturers and importers remain responsible for verifying that the material or product has not been altered or modified, or experienced any change in the processing, facility or supplier conditions that could impart lead into the material or product to ensure that it meets the statutory lead levels at all times." They want you to squirm - even if you are making products entirely from materials explicitly deemed compliant. The law and the CPSC have not identified any behavior or conduct that will cleanse you of liability. The clear message - you make children's products at your own risk. Are we having fun yet?

The details of what's in and what's out are in the linked document. I will highlight a few choice bits without attempting to summarize the complete decision. Please refer to the document for the list of excepted materials.

Glues: I particularly like the exception given to glues. The CPSC doesn't know the composition of most glues (other than "animal glue" - I wonder if that includes "Gorilla" brand specifically) and since risk and safety are utterly irrelevant now, the decision does not give a pass to these materials. However, good news - glues are apparently often "inaccessible" and thus don't need to be tested. Sound good? Now, here's a question - how am I supposed to NOT test the glue that is adhered to the material the CPSC wants tested? And if the glue saturates the material, then what? If the material + glue fails the test but I can prove that the raw material is fine, then what? Who performs this test, a lawyer or a testing lab? Get ready to earn your Ph.D. in testing and safety regulations.

Metals: More good news: the decision exempts "surgical steel". So, if you make toys with surgical steel, like "My First Really Sharp Scalpel Kit" or "Home Brain Surgery for Kids!", you are good to go. Other common metals used in children's products, such as pure gold and silver, titanium (both α-and β-phase - whew!) , platinum, palladium, rhodium, osmium, iridium and ruthenium are also usefully blessed. I know the ATV'rs are thinking of pure platinum models to solve their compliance problems - it's your lucky day, apparently. Even stainless steel is okay (but certainly not 303Pb - you know that one, don't deny it!). Stay away from unusual items like non-steel or non-precious metal components such as solder or base metals in electroplate, clad, or fill applications and aluminum, copper or pewter. Let's not even TALK about brass.

Education: What about rocks, you know the things that were here before Mr. Waxman began to roam the Earth? The CPSC helpfully determined that Congress made them illegal under some circumstances. "As with the precious gemstones and certain semi-precious stones that the Commission determines do not contain lead at levels that exceed the CPSIA lead content limits, other rocks and stones may comply with lead limits provided that they are not based on lead or lead compounds and are not associated in nature with any mineral that is based on lead or lead compounds. In general, we agree that most minerals do not contain lead. However, some minerals are known to contain lead or are associated in nature with minerals than contain lead. We have previously identified minerals that can contain lead, such as aragonite, bayldonite, boleite, cerussite, croroite, linarite, mimetite, phosgenite, vanadinite, and wufenite. We have also identified galena, and will add this mineral to the list of lead containing minerals under section 1500.91(d)(2)." [Italics added.] Clear enough for you? And how does this apply to granite or fossils? You tell me, we do not employ a Ph.D. geologist (yet). This is going to make school supply so EASY! It's "common sense" going full blast.

Apparel: While the decision excises most fabrics and dyes from the need for compliance testing, it also explicitly includes "after-treatment applications, including screen prints, transfers, decals, or other prints." Along with the decision on rhinestones (also noted and affirmed in this document), all accoutrements found on apparel or footwear will be subject to endless testing. The message to apparel makers - if you want to keep life simple, make dull, unadorned clothing, and try to use string as closures (but not TOO much string, Mr. Hoodie). Snaps, zippers and so on expose you to liability risk and cost. "Boring" is the new "exciting" under the CPSIA.

Paper and Ink: Papers have been excluded, even when printed. This is consistent with the decision to exclude books printed on or after 1985. Printing inks used in four-color process are also blessed, however the following inks are NOT excluded: "spot colors, other inks that are not used in the CMYK process, and inks that do not become part of the substrate". Boy, this will be so easy to manage. . . .

The decision continues: "In addition, as discussed in part D.13 of this preamble, we have found that certain after-treatments, including screen printing, may use leaded pigments. Accordingly, inks used in any after-treatments for decals, transfers, and other prints also will be excluded under new § 1500.91(d) (6). Other additional treatments such as . . . laminators or laminations, including plastic sheet or film, or other coatings, would continue to require testing and certification under section 102 of the CPISA if such products are plastic component parts or a paint or similar surface-coating material under 16 CFR part 1303."

Were you feeling good for a minute there? That was unintentional, the CPSC apologizes for any misunderstanding. Hopefully you are now experiencing a good deal of anxiety again.

Fasteners: Staples on books need to be tested IF they are accessible BUT you can get out of it if you use surgical steel for your staples! Bookbinding will be a great new market for medical supply companies. If you use screws as a fastener . . . well, you can guess.

Plastic or Metal Components: Give up the idea that ANYTHING made of plastic or metal will be blessed if not included in the above exceptions: " . . . based on the Commission's past experience with other children's products that have been found to contain lead, the Commission cannot make a determination that any component parts made out of plastic or metal (with the exception of metal determinations made in this rule) falls under the lead content limits." Zippers, grommets, etc. - all are left IN the law. Component testing will be addressed later. I am waiting with baited breath.

While the CPSC tried its best to be sensible, the law does not permit good sense on their part. They are not to be blamed, they didn't write the law and are not permitted to rewrite it. Frustration with the decision is appropriate, but the "bad guy" is clearly Congress and its estimable "leaders". As we get walked down the plank, remember who did it to you. The voting booth beckons . . . .

CPSIA - Chair Tenenbaum Gives a Speech

Inez Tenenbaum, Chairman of the CPSC, gave a speech on August 1 at the recent APEC Regulator Dialogue on Toy Safety in Singapore. The link above includes the transcript of her speech.

While Ms. Tenenbaum states in her speech that "[t]he U.S. experience with safety standards has been that you get a great deal of product safety by relying on voluntary consensus standards coupled with regulatory authority to intervene quickly", she then proceeds to discuss the new mandatory standards handed down by Congress without comment. Here's a good example: "As with the phthalates limits, the lead content limits have a one year stay on enforcement of testing and certification. This stay will expire on February 10, 2010, and CPSC will surely enforce all requirements at that time. " In case you thought this was all some kind of cruel joke . . . . Btw, we received a bill today for $5,973 for testing ONE item to the new standards.

Ms. Tenenbaum seems to think the issue about lead in substrate is a very limited issue: "Regarding lead in products, we have been facing the classic regulator's dilemma in some cases. Lead has been widely used in many metals to ensure the structural integrity of the material. If you remove the lead - which can act as a neurotoxin in the bodies of children - you have to answer the question about the structural safety of the product or the safety of the metal used to replace the lead. " This is verbiage from the exemption decisions on bicycles and ATVs - perhaps Ms. Tenenbaum thinks they are the only ones with a problem. The rest of us are fine, the lead can just be "removed". Magic! In fact, lead in many materials is pretty much impossible to remove and if the standards are enforced without regard to considerations of risk (the law is written that way), then it is essentially a ban of those products. Ms. Tenenbaum has bikes and ATVs on her mind - but what about microscopes for kids?

The speech also suggests that the "fix is in". Take, for example, tracking labels: "In implementing the CPSIA, CPSC has reached out to other regulators, to industry, consumer groups, and other stakeholders. For example, the tracking label provision that goes into effect this month has been the subject of both a national and internationally coordinated call for comments from stakeholders. CPSC held a public meeting to solicit input, and CPSC staff has been instrumental in the planning for an international regulators conference on tracking label policy to be held in Stockholm on September 10th. This event is sponsored by the International Consumer Product Safety Caucus and is open to all product safety regulators." But how well did the CPSC listen to those comments it solicited? Given that the CPSC seems intent on plunging ahead (forget "common sense"), why are we asked to bother giving comments? Congress won't listen either.

Ms. Tenenbaum doesn't beat around the bush - her job is to enforce the law, not write it. This is why her speech is TOTALLY absent of perspective (that's not her role). " My regulatory philosophy embraces open dialogue, information sharing with all stakeholders, and a commitment to finding mutual interests. When a law has been passed by U.S. legislators or a new regulation has been established by CPSC, however, it becomes the law of the land. As CPSC's chief regulator, I will ensure that our requirements are enforced vigorously and fairly. Enforcement is actually one of my three top priorities as Chairman, along with government transparency and consumer education and advocacy." She is essentially telling us that her concept of open dialogue has limits - she'll listen but if what you need is contrary to Congress' express desire, regardless of how ridiculously misguided the law is, you will lose. She does not promise to be an advocate on these issues. If you don't like the law, it seems to me that the message from her is that YOU need to get Congress to change it.

Her speech included NO opinions on what the law should say or what Congress should do. If Congress isn't going to listen (this is well-known, thanks Mr. Waxman) and the CPSC will simply take Congress' orders without any feedback, what alternatives are left for us? I already know what the law says, and if I can't run a profitable business while complying with the law, what choices are left for me? WHY isn't this of greater concern to regulators and Congress? Ms. Tenenbaum is an ex-teacher and ex- school system administrator but seems oblivious to the threat this law poses to our schools. Is our company's role as a supplier of educational materials SO suspect that the only possible solution is to coerce us out of business on the grounds that "we cannot take a chance". I would remind you that our company has recalled 130 pieces in 25 years of business. Many other industries have equally strong arguments against the over-arching requirements of the law.

I wonder if Ms. Tenenbaum "gets it" yet. She says: " Within this new paradigm, my job as head of the CPSC is to ensure that product safety is as high a priority as fostering trade - and there need be no conflict between the two as long as product safety is sufficiently factored into fostering trade. And that's why we're all here, after all. " Fine, noble, public-minded. I, too, am quite concerned about safety, which is why we have the track record of compliance and quality leadership that we do. BUT if the new rules makes it impossible for us to do business, yes, recalls will go down and so will trade. If you put us out of business, there won't ever be another recall of our products. Nor will there be any societal benefits received from our products or the advancement that flows from our innovations. The only thing you can measure, however, is recalls. It might even look like a "gain" if you saw recall rates decline by putting so many companies out of business. What a victory!

Maybe someone in government is listening. I am wondering if they are listening with comprehension, however.