The icing on the cake of the Waxman Amendment is their sneakiness. As if the problems already reported were not enough, the Dem authors greedily tossed in some real bombs, all using language sufficiently opaque to obscure their meaning. I presume this was some sort of "clever" gambit to escape attention.
You deserve to know more.
First, by way of background, let's review how we got to this point. The CPSIA was signed into law in August 2008 and howls of pain and protest began immediately. For more than a year, the Dems asserted that the law was perfect and the CPSC would fix the "unintended consequences". Over time, overwhelming evidence mounted to prove that the law needed to be changed, the CPSC could not fix everything without help and most disappointing, not all the bad consequences were 'unintended". After more than a year of bickering, Henry Waxman unilaterally tried to sneak a CPSIA amendment into an omnibus bill in December but failed. Finally, the CPSC Commission was ordered to submit a list of recommended CPSIA changes to the House Appropriations Committee on January 15. The Commission issued its report on time but could only come to consensus on a small handful of items.
In the wake of the Commission report, this amendment was drafted by Waxman's staffers to "fix" the CPSIA.
But . . . a couple other things happened. First, it is my understanding that Inez Tenenbaum sent a secret list of 20 changes she wanted to the Waxmanis. [I have not seen this document; its existence is an open secret.] So apparently, the Commission report was for public consumption, but the Chairman had her own wish list for private viewing.
The second thing that happened was that the Waxmanis decided (perhaps with the encouragement of Tenenbaum) to use this amendment as a way to further amend the original CPSA (dating back to 1972) and make things WORSE for you and your businesses. These changes were cloaked in seemingly technical jargon at the end of an the amendment. [Connsumer groups had also expressed support for these changes in recent public meetings.]
Let's look at what the Waxmanis are trying to do:
a. An Open Door to Confidential Information. Section 6(b) of the CPSA provides a notice period before disclosure of information to the public by the CPSC. Among other things, this provision requires that the Commission must give notice to the manufacturer of the disclosure to permit comment and dialogue, as well as the initiation of court actions (injunctions) to prevent the disclosure of such information (this is called "due process"). The Commission is also obligated to make sure "that such disclosure is fair in the circumstances and reasonably related to effectuating the purposes of this Act". This provision essentially provides a check-and-balance to prevent the unfair coopting of the information disclosure process against manufacturers.
The amendment makes the following change to Section 6(b)(1): "striking 'its public disclosure' and inserting 'initiating the public disclosure'". Wow. I can tell you're reeling from the significance of this change.
Okay, what's the big deal? Is there ANY difference here? Yes, in fact, there is. By changing these three words, Section 6(b) now applies ONLY to disclosures initiated by the Commission. Isn't that everything? No. What kind of information disclosures might NOT be initiated by the Commission? Freedom of Information Act requests by, say, reporters, plaintiff attorneys or consumer groups.
Uh-oh.
Let me state this a little more clearly - the changes in the Waxman Amendment take away ALL protection of businesses on FOIA requests and allows the (passive) disclosure without prior notice. You lose ALL protection under 6(b) with this tiny change of three words. This would apply to all investigative files (like any of your Section 15 reports) and other confidential correspondence between you and the CPSC. Presumably, if enacted, that confidential material could show up on the front page of the Chicago Tribune WITHOUT NOTICE. [Disclosure of trade secret information is regulated by Section 6(a) and is presumably not eroded by this amendment.]
The relationship between this provision and the Public Database is not clear. It might change (reduce) the flimsy protections already in place, or might provide a way for reporters, plainiff attorneys and consumer groups to get at information that might not appear in the database.
This provision is entitled "CLARIFICATION OF LAW" in the Waxman Amendment. That is a plain, unambiguous LIE. The authors of this amendment think you are a fool.
b. Subpoena Authority Loses Its Check-and-Balance. The amendment changes the rules on subpoenas in two important ways. First, in another "clarification of law", Section 27(b)(3) is amended "by striking 'documentary evidence' and inserting 'documentary and physical evidence'". This change does not incorporate any reasonableness standard and thus allows the CPSC to subpoena evidence in private suits regardless of the consequences, and even more importantly, can subpoena inventory as a backdoor way to recall it. This is unfettered government power. Is that a good idea?
The second change requires a little background. The Commission has broad powers to delegate its powers to staff - except for subpoena power. So, if the CPSC wants to issue a subpoena, there is a procedural check-and-balance in place to require the additional step of seeking Commission approval. The Commission, being an entity visible to the public, presumably would be less wrapped up in the emotions of an investigation and be capable of more balanced judgments. It's a procedural safeguard that protects the integrity of the system but is highly unlikely to slow an investigation detrimentally.
The amendment, however, gives the Commission the power to delegate its subpoena power now. This opens up the possibility of zealous staffers who could use subpoena power to harass or even punish "uncooperative" firms, all outside of public view. There would be no due process protections to rely on, either. This is yet another expansion of government power - but with little demonstrated need. [In other words, what terrible things have happened that could only be fixed with this legislative change?]
c. Information Disclosures in Voluntary Recalls Ratchets Up. The CPSC recently put out a 17 page Federal Register notice of its requirements for Mandatory Recall notices. Memorized it yet? Why not?! Of course, you may be forgiven for feeling you could ignore it, since mandatory recalls are quite rare and usually relate to severe risks to public health and safety. Most recalls are voluntary, which means mandatory provisions are rarely used. In any event, if it ever comes to this, the disclosure probably needs to be more comprehensive and significant.
For those reasons, I did not comment on these rules. They seemed irrelevant to me. G-d forbid such a thing should happen on my watch. Pew-pew, knock wood. I may not have been the only one to look at it this way.
Oops, my bad. The amendment makes these provisions apply to VOLUNTARY RECALLS. Sneak attack? Perhaps. The rules for mandatory recalls includes several obnoxious requirements, making compliance much more burdensome and expensive, not to mention potentially devastating to your business.
d. If You Liked the Baby Slings Warning, You'll Just Love This Change. Knowing you as I do, I imagine you are thinking "I wish the CPSC could act more impetuously and strike out at entire product classes or industries without doing studies or anything too science-y." Well, it's really your lucky day!
The Waxmanis sent you an early Christmas gift with their proposed change to CPSA Section 5(a) requiring the Commission to "promptly inform and educate consumers regarding a class of imminently hazardous consumer products upon identifying or being made aware of such a class of products.’’
And how will this work? "[Whenever] the Commission identifies or is made aware of a class of imminently hazardous consumer products, the Commission shall take appropriate steps to inform and educate consumers through the media, State and local governments, and private organizations regarding such class of products and the nature of the hazard.’’
I believe that the CSPC must go to court to do this now.
I have just a few questions:
- What about due process?
- What are the procedural safeguards?
- What constitutes a "class of imminently hazardous consumer products"? What steps must the Commission take to reach that conclusion? Is reading an AP story enough? [I presume the answer is yes.]
- Who will protect innocent companies inadvertently slandered by your advice? [For example, the baby slings warning apparently related to very young babies or preemies, but the headlines applied to everything in the product class. Too bad for companies making safe baby slings for older babies?]
- When the CPSC jumps the gun and hurts companies or entire industries needlessly or in error, who will pay the damages? Do we get a bailout?
Call me a cynic, but I think this erosion of safeguards is just a mite troubling.
There are probably other ticking bombs in this legislation that I haven't found or told you about. I think you get the point nonetheless.
Two more thoughts:
1. These four changes significantly erode protection of corporate interests under the CPSA. This makes doing business MUCH riskier and invites a lot of randomness into our business lives. It also makes it tough to believe you can trust the CPSC during a Section 15 investigation or other altercation. If you have a real worry about how you will be treated, do you experience a heightened incentive to cooperate or to hide? Will this raise the rate of disclosure of problems, or provide an incentive to bury the problems?
If disclosure to the CPSC now involves certain pain, why would people bring misery on themselves voluntarily? And when more people start to hide - and are found and punished - will the cries for stricter rules rise or fall? They will rise, as howling consumer advocates will assert that this is "proof" of the venality of corporations. The "only" solution will be even stricter rules and higher penalties. Perhaps we should all be sent to jail preemptively, save some time.
2. I hope you share my utter outrage at the arrogance and effrontery of the duplicity and sneakery of the Waxmanis. Such arrogance is only possible when public officials feel that they are beyond reach. This deception shows clearly how high and mighty the Waxmanis feel, how imperious their attitude. Their anticipated ultimatum to the business community to fall in line behind this amendment is more of the same. It's rather revealing.
There is no reason to puzzle over disillusionment with our government. The Dems blew it . . . and continue to blow it. This amendment was a chance to build bridges and mend fences. Insead, the Dems go on a rampage.
I am tired of being treated like this by my own government.
Tuesday, March 16, 2010
CPSIA - Phthalates and Lead Limits in Waxman Amendment
Two minor but important points in the new Waxman Amendment relate to the ban on phthalates and the 100 ppm lead standard looming in August 2011.
Phthalates: The phthalates ban has been clarified to exclude "inaccessible" components, thus reducing the cost of testing for victims of this poorly-conceived law. The definition of "inaccessible" is based on foreseeable use and abuse by children. The term "reasonably foreseeable use and abuse" is defined, lest anyone misconstrue what the Waxmanis want it to mean, and hence new concepts have been incorporated: "breaking" as well as "the aging of the product". In the past, "reasonably foreseeable use and abuse" has been interpreted to exclude intentional misuse. The term did not typically include aging since most worn-out products are either handled differently or discarded. The changes wrought by this amendment fundamentally alter the common meaning of "reasonably foreseeable" in quirky ways, making a confusing law all the more difficult to understand or apply.
If "reasonably foreseeable use and abuse" includes breaking the toy, it's hard to know which parts will ever be considered "inaccessible". Reading this language by its plain English meaning, I cannot imagine what might survive this legislative test. Worthless. I sense another rulemaking process for the long-suffering CPSC.
The amendment also clarifies that the CPSC can revoke this exception to protect the public health and safety. Remember, we are talking about a rule affecting mandatory testing of internal components that may or may not contain phthalates. Can anyone tell me what threats to the public health and safety could POSSIBLY result from an internal component made with phthalates? Phthalates have been in use in this country for more than 50 years - wouldn't we know about "leaping phthalates" by now? Oh yeah, I'm sorry, i forgot that reasoning and science don't matter anymore. . . .
Perhaps concerned that the CPSC was running out of things to do, the authors added yet another rulemaking on "inaccessibility" for this new exception. They are free to adopt the definition already set for lead. It's up to them. Study up, guys! Can't wait to give comments . . . .
Can you say . . . mania?
It is worth noting that in taking this route to "resolve" the pain points on phthalates, the Dems have chosen to NOT address a pending issue between the CPSC and California. Attorney General Jerry Brown of California sent a hot letter to the CPSC last year indicating his unwillingness to accept testing of the entire product for phthalates ban purposes. In the wake of his letter, the agency reversed course and rescinded its rule permitting a single test on the entire product. This would have been inexpensive for manufacturers.
It is pure fantasy that the Dems would take on Jerry Brown since our Congressional overlords are largely from CA (Waxman, Pelosi, Boxer, Feinstein) and are busy trying to California-ize the rest of the country. Henry Waxman would certainly never preempt Jerry Brown for the national good. Hence the half-a-loaf approach here.
Lead: The Waxman Amendment makes the pending 100 ppm lead standard prospective. This is a tiny bone thrown in our direction. You may consider it a nod of acknowledgement of your pain from the retroactive application of the lead standards and phthalates ban. Nonetheless, this is all you will get.
Again, this is only half-a-loaf. A more thoughtful and helpful change would have been to draw a FIRM LINE under the 300 ppm standard, eliminating the 100 ppm standard altogether as well as the rule ratcheting down the lead standard in the future (forgot about that one, right?). They could have said that the CPSC would be free to lower the lead standard in the future if necessary to protect public health and safety (taking into account the cost and benefit of any such new rules). But they didn't.
The Waxmanis have no interest in such concessions. Whether out of zealotry or pride of authorship, no amendments will emerge if they reflect any concession of error or misjudgment in the Perfect Legislative Process. Thus, the 100 ppm standard can't be removed because they put it there for a reason. We must live with it . . . so they say.
Rumorville has it that the Waxmanis are about to deliver a message to leaders of the business community to fall in line behind this "wonderful" amendment or else . . . they'll get NOTHING. Don't you love this? And I used to think THEY worked for US. What an idiot I am!
And on that note, I encourage you to read ONE more blogpost about this toxic amendment. I still need to show you how the authors are trying to deceive you and gut the system that regulates safety of safeguards against governmental abuse. That is, abuse of the interests of your businesses. It's really something to see.
Phthalates: The phthalates ban has been clarified to exclude "inaccessible" components, thus reducing the cost of testing for victims of this poorly-conceived law. The definition of "inaccessible" is based on foreseeable use and abuse by children. The term "reasonably foreseeable use and abuse" is defined, lest anyone misconstrue what the Waxmanis want it to mean, and hence new concepts have been incorporated: "breaking" as well as "the aging of the product". In the past, "reasonably foreseeable use and abuse" has been interpreted to exclude intentional misuse. The term did not typically include aging since most worn-out products are either handled differently or discarded. The changes wrought by this amendment fundamentally alter the common meaning of "reasonably foreseeable" in quirky ways, making a confusing law all the more difficult to understand or apply.
If "reasonably foreseeable use and abuse" includes breaking the toy, it's hard to know which parts will ever be considered "inaccessible". Reading this language by its plain English meaning, I cannot imagine what might survive this legislative test. Worthless. I sense another rulemaking process for the long-suffering CPSC.
The amendment also clarifies that the CPSC can revoke this exception to protect the public health and safety. Remember, we are talking about a rule affecting mandatory testing of internal components that may or may not contain phthalates. Can anyone tell me what threats to the public health and safety could POSSIBLY result from an internal component made with phthalates? Phthalates have been in use in this country for more than 50 years - wouldn't we know about "leaping phthalates" by now? Oh yeah, I'm sorry, i forgot that reasoning and science don't matter anymore. . . .
Perhaps concerned that the CPSC was running out of things to do, the authors added yet another rulemaking on "inaccessibility" for this new exception. They are free to adopt the definition already set for lead. It's up to them. Study up, guys! Can't wait to give comments . . . .
Can you say . . . mania?
It is worth noting that in taking this route to "resolve" the pain points on phthalates, the Dems have chosen to NOT address a pending issue between the CPSC and California. Attorney General Jerry Brown of California sent a hot letter to the CPSC last year indicating his unwillingness to accept testing of the entire product for phthalates ban purposes. In the wake of his letter, the agency reversed course and rescinded its rule permitting a single test on the entire product. This would have been inexpensive for manufacturers.
It is pure fantasy that the Dems would take on Jerry Brown since our Congressional overlords are largely from CA (Waxman, Pelosi, Boxer, Feinstein) and are busy trying to California-ize the rest of the country. Henry Waxman would certainly never preempt Jerry Brown for the national good. Hence the half-a-loaf approach here.
Lead: The Waxman Amendment makes the pending 100 ppm lead standard prospective. This is a tiny bone thrown in our direction. You may consider it a nod of acknowledgement of your pain from the retroactive application of the lead standards and phthalates ban. Nonetheless, this is all you will get.
Again, this is only half-a-loaf. A more thoughtful and helpful change would have been to draw a FIRM LINE under the 300 ppm standard, eliminating the 100 ppm standard altogether as well as the rule ratcheting down the lead standard in the future (forgot about that one, right?). They could have said that the CPSC would be free to lower the lead standard in the future if necessary to protect public health and safety (taking into account the cost and benefit of any such new rules). But they didn't.
The Waxmanis have no interest in such concessions. Whether out of zealotry or pride of authorship, no amendments will emerge if they reflect any concession of error or misjudgment in the Perfect Legislative Process. Thus, the 100 ppm standard can't be removed because they put it there for a reason. We must live with it . . . so they say.
Rumorville has it that the Waxmanis are about to deliver a message to leaders of the business community to fall in line behind this "wonderful" amendment or else . . . they'll get NOTHING. Don't you love this? And I used to think THEY worked for US. What an idiot I am!
And on that note, I encourage you to read ONE more blogpost about this toxic amendment. I still need to show you how the authors are trying to deceive you and gut the system that regulates safety of safeguards against governmental abuse. That is, abuse of the interests of your businesses. It's really something to see.
Monday, March 15, 2010
CPSIA - "Low Volume Manufacturers" under Waxman Amendment
The proposed Waxman Amendment adds a new term to our CPSIA lexicon: "Low Volume Manufacturers" (LVMs). This term is introduced in the ironically-named Section 4: "RELIEF FOR SMALL MANUFACTURERS AND OTHER BUSINESSES".
How small is "small"? The definition of a LVM is a manufacturer that
"(A) manufactured or imported no more than 2,000 units of all products manufactured by the manufacturer during the most recent calendar year; and (B) had gross receipts totaling not more than $200,000 during such year."
To clarify, the definition intones:
"the products and gross receipts of a manufacturer shall be considered to include all products and gross receipts of each entity that controls, is controlled by, or is under common control with such manufacturer."
Yep, THAT'S small alright. In other words, if you made or imported 2000+ units of anything regardless of value (all products added together) OR had gross receipts of $200,001 last year, you get nothing here. So, if you sold 3,000 Popsicle sticks for $50, you are out. If you sold 201 cabinets for $1,000 each, you are out. Only the true small fry are included here. Happy?
Hey, isn't there some sort of federal definition of a "Small Business"? Yessir, the SBA publishes size standards to define Small Business. These federal standards are found in myriad federal legislation (shocking, right?). They are widely used - so why not include them here? That question was posed directly to the Dems - especially since earlier drafts of this amendment featured a higher dollar limit (also inadequate). Why did the Dems tighten the standard so much? Why not incorporate the SBA standards, like every other federal agency?
The best explanation I can give is that the Dems don't really have any interest in providing relief to small businesses. They also may want to appear to give relief, principally to fool members of Congress who have expressed concern for the fate of crafters under the CPSIA.
Do you think I'm being too cynical? Let's not forget the words of Senator Durbin's associate a year ago: "I think you are right that the CPSIA imposes costs on businesses, and because of economies of scale it’s the smaller businesses that will feel these costs more acutely. This is part of a larger calculation that it’s worth the costs to shift from the old system of post-market correction (once a dangerous product is out in the market and leads to sick kids, recalls, lawsuits, etc.) to a new system of pre-market testing and certification (instead of just assuming products are safe and paying the price for false assumptions)."
She said it - small business problems induced by the CPSIA were part of a "larger calculation". With this amendment, the Dems again test our gullibility.
The provisions relating to LVMs provide the following "relief":
a. This provision is designed to provide modified requirements for LVMs under Section 14(d) of the CPSA, in other words, the long-delayed and never drafted "15 Month Rule". For those of you scoring at home, the "15 Month Rule" is now four months late - call it the "19 Month (and counting) Rule".
b. The "relief" that the CPSC can offer LVMs is "alternative testing requirements" that "provide for reasonable testing methodologies to assure certification based on compliance with the relevant consumer product safety standards". The alternative methods must ASSURE COMPLIANCE. Can you picture what such "assured compliance" might look like? If these words have their normal English language meaning, the "relief" should be nil if compliance must be assured.
c. The CPSC has the right to implement such alternative testing requirements for LVMs on a product, product class or even for a specific safety standard or part of a standard.
d. NO relief is allowed for lead-in-paint, cribs, pacifiers, small parts, children's metal jewelry, baby bouncers, walkers and jumpers and durable infant or toddler products (as defined somewhere). All of you LVMs, make a note!
Have you ever heard the expression "trap for the unwary"?
e. This provision also calls for the creation of an "Office for Business Education, Outreach, and Advocacy". Since I called for such education resources in my first speech at the CPSC back in November 2008, I shouldn't make fun of this. I just like the legislative goal of this organization: "assist the Commission in informing and educating manufacturers and retailers about requirements under this Act or any other Act enforced by the Commission". This is much needed. Of course, given that you must master literally thousands of pages of gobbledygook to fully understand the CPSIA as implemented, I would DEFINITELY not want this job. If anyone calls about this opening, tell them I am at the dentist.
f. The provision adds an idyllic sounding provision (Section 4) to the CPSIA which states the pleasant intention to "cooperate" with LVMs "in enforcing the lead limits and third-party testing requirements". Of course, all cooperation must be "consistent with [he] goals of statute". In other words, you must be able to prove you comply. There are soothing words about assessing the practicability of tracking labels for these micro-businesses. [Remember that "practicable" incorporates concepts of economics .]
Shame that you and I won't be eligible for tracking labels relief, too . . . .
This charade purports to provide relief to small businesses but in fact, will benefit virtually no one. Even the Handmade Toy Alliance, a CPSIA advocacy group created by crafters, has few members that would benefit. Notably, there are many more small businesses affected by this law beyond the HTA, so the failure to impact HTA members is just an indicator of how lame the proposed relief actually is.
The SBA sets a high bar in its definition of small business for several reasons (as high as 500 employees or $500 million in revenue). Among them is a fear that legal benefits for small businesses may be unfairly distributed if the definition is too narrow. Many small businesses could miss out on needed protections. Furthermore, the complexity of the U.S. economy makes it difficult to describe a small business. The high bar in the SBA definition leaves room for small businesses in every industry from airplanes to pencils to baby clothing.
The SBA certainly doesn't want to disincentivize growth or prosperity among small businesses. They recognize that the small business community is a huge jobs creator, so maintaining its financial health is a public policy imperative. The SBA wouldn't want small businesses to lose special legal benefits because of an immaterial event, like a small incremental sale. So a law that TAKES EVERYTHING AWAY when you sell one more unit of ANYTHING or take in one incremental revenue dollar (all at a very low level of sales that would not coincide with a fundamental change in the nature of your business) would never fly. Never fly with the SBA, that is. Mr. Waxman apparently thinks this is fine - but actually, it's UN-AMERICAN. Our laws are supposed to encourage us to grow. At least they used to.
If there is one basic reason to be critical of this provision, it's the very conceit of granting relief by business size. This misses the point of SAFETY entirely. Size of business only became an issue under the CPSIA because the law is too broad. Let's not forget that the prior law had standards for products, not for companies by size. Why do we need size exceptions now?
Think about it - if your child is harmed by a product, will it matter how much revenue the manufacturer earned in the previous year? Do you think the CPSC wants to modify "safety rules" for little businesses only to find out that one of these businesses hurt your kid? Uh, no. So why take this legislative approach? It's simple -the Dems have constrained the way we can fix the law. They have fixed, absolutely FIXED, the definition of "safety". The original standards and the original age limits MAY NOT BE REVISITED. These rules are too broad and invite many negative consequences - but since the Dems will not agree to modify them, we must apparently devise ever more complex rules to circumvent (or apparently circumvent) the problems they cause. In this case, the Dems offer relief for tiny companies. Those of us who have enjoyed enough success to hire a few employees and stop working out of our bedrooms are ineligible for this "relief" although our problems are just as troubling.
I do not accept that there is no solution here, however any durable solution requires that the definition of safety be modified to something sensible. The Dems won't allow it. This is their "legacy" and they are bound and determined to ensure that it survives, ridiculous or not.
That's your small business relief. Enjoy!
I intend to publish one more post analyzing the rest of the Waxman Amendment. It will cover an exception to the phthalates ban for inaccessible components. It will also document the sneakiness of the remaining language in the amendment. You aren't meant to understand it - but I will do my best to shed some light.
Sorry, Henry! Let the sun shine in.
How small is "small"? The definition of a LVM is a manufacturer that
"(A) manufactured or imported no more than 2,000 units of all products manufactured by the manufacturer during the most recent calendar year; and (B) had gross receipts totaling not more than $200,000 during such year."
To clarify, the definition intones:
"the products and gross receipts of a manufacturer shall be considered to include all products and gross receipts of each entity that controls, is controlled by, or is under common control with such manufacturer."
Yep, THAT'S small alright. In other words, if you made or imported 2000+ units of anything regardless of value (all products added together) OR had gross receipts of $200,001 last year, you get nothing here. So, if you sold 3,000 Popsicle sticks for $50, you are out. If you sold 201 cabinets for $1,000 each, you are out. Only the true small fry are included here. Happy?
Hey, isn't there some sort of federal definition of a "Small Business"? Yessir, the SBA publishes size standards to define Small Business. These federal standards are found in myriad federal legislation (shocking, right?). They are widely used - so why not include them here? That question was posed directly to the Dems - especially since earlier drafts of this amendment featured a higher dollar limit (also inadequate). Why did the Dems tighten the standard so much? Why not incorporate the SBA standards, like every other federal agency?
The best explanation I can give is that the Dems don't really have any interest in providing relief to small businesses. They also may want to appear to give relief, principally to fool members of Congress who have expressed concern for the fate of crafters under the CPSIA.
Do you think I'm being too cynical? Let's not forget the words of Senator Durbin's associate a year ago: "I think you are right that the CPSIA imposes costs on businesses, and because of economies of scale it’s the smaller businesses that will feel these costs more acutely. This is part of a larger calculation that it’s worth the costs to shift from the old system of post-market correction (once a dangerous product is out in the market and leads to sick kids, recalls, lawsuits, etc.) to a new system of pre-market testing and certification (instead of just assuming products are safe and paying the price for false assumptions)."
She said it - small business problems induced by the CPSIA were part of a "larger calculation". With this amendment, the Dems again test our gullibility.
The provisions relating to LVMs provide the following "relief":
a. This provision is designed to provide modified requirements for LVMs under Section 14(d) of the CPSA, in other words, the long-delayed and never drafted "15 Month Rule". For those of you scoring at home, the "15 Month Rule" is now four months late - call it the "19 Month (and counting) Rule".
b. The "relief" that the CPSC can offer LVMs is "alternative testing requirements" that "provide for reasonable testing methodologies to assure certification based on compliance with the relevant consumer product safety standards". The alternative methods must ASSURE COMPLIANCE. Can you picture what such "assured compliance" might look like? If these words have their normal English language meaning, the "relief" should be nil if compliance must be assured.
c. The CPSC has the right to implement such alternative testing requirements for LVMs on a product, product class or even for a specific safety standard or part of a standard.
d. NO relief is allowed for lead-in-paint, cribs, pacifiers, small parts, children's metal jewelry, baby bouncers, walkers and jumpers and durable infant or toddler products (as defined somewhere). All of you LVMs, make a note!
Have you ever heard the expression "trap for the unwary"?
e. This provision also calls for the creation of an "Office for Business Education, Outreach, and Advocacy". Since I called for such education resources in my first speech at the CPSC back in November 2008, I shouldn't make fun of this. I just like the legislative goal of this organization: "assist the Commission in informing and educating manufacturers and retailers about requirements under this Act or any other Act enforced by the Commission". This is much needed. Of course, given that you must master literally thousands of pages of gobbledygook to fully understand the CPSIA as implemented, I would DEFINITELY not want this job. If anyone calls about this opening, tell them I am at the dentist.
f. The provision adds an idyllic sounding provision (Section 4) to the CPSIA which states the pleasant intention to "cooperate" with LVMs "in enforcing the lead limits and third-party testing requirements". Of course, all cooperation must be "consistent with [he] goals of statute". In other words, you must be able to prove you comply. There are soothing words about assessing the practicability of tracking labels for these micro-businesses. [Remember that "practicable" incorporates concepts of economics .]
Shame that you and I won't be eligible for tracking labels relief, too . . . .
This charade purports to provide relief to small businesses but in fact, will benefit virtually no one. Even the Handmade Toy Alliance, a CPSIA advocacy group created by crafters, has few members that would benefit. Notably, there are many more small businesses affected by this law beyond the HTA, so the failure to impact HTA members is just an indicator of how lame the proposed relief actually is.
The SBA sets a high bar in its definition of small business for several reasons (as high as 500 employees or $500 million in revenue). Among them is a fear that legal benefits for small businesses may be unfairly distributed if the definition is too narrow. Many small businesses could miss out on needed protections. Furthermore, the complexity of the U.S. economy makes it difficult to describe a small business. The high bar in the SBA definition leaves room for small businesses in every industry from airplanes to pencils to baby clothing.
The SBA certainly doesn't want to disincentivize growth or prosperity among small businesses. They recognize that the small business community is a huge jobs creator, so maintaining its financial health is a public policy imperative. The SBA wouldn't want small businesses to lose special legal benefits because of an immaterial event, like a small incremental sale. So a law that TAKES EVERYTHING AWAY when you sell one more unit of ANYTHING or take in one incremental revenue dollar (all at a very low level of sales that would not coincide with a fundamental change in the nature of your business) would never fly. Never fly with the SBA, that is. Mr. Waxman apparently thinks this is fine - but actually, it's UN-AMERICAN. Our laws are supposed to encourage us to grow. At least they used to.
If there is one basic reason to be critical of this provision, it's the very conceit of granting relief by business size. This misses the point of SAFETY entirely. Size of business only became an issue under the CPSIA because the law is too broad. Let's not forget that the prior law had standards for products, not for companies by size. Why do we need size exceptions now?
Think about it - if your child is harmed by a product, will it matter how much revenue the manufacturer earned in the previous year? Do you think the CPSC wants to modify "safety rules" for little businesses only to find out that one of these businesses hurt your kid? Uh, no. So why take this legislative approach? It's simple -the Dems have constrained the way we can fix the law. They have fixed, absolutely FIXED, the definition of "safety". The original standards and the original age limits MAY NOT BE REVISITED. These rules are too broad and invite many negative consequences - but since the Dems will not agree to modify them, we must apparently devise ever more complex rules to circumvent (or apparently circumvent) the problems they cause. In this case, the Dems offer relief for tiny companies. Those of us who have enjoyed enough success to hire a few employees and stop working out of our bedrooms are ineligible for this "relief" although our problems are just as troubling.
I do not accept that there is no solution here, however any durable solution requires that the definition of safety be modified to something sensible. The Dems won't allow it. This is their "legacy" and they are bound and determined to ensure that it survives, ridiculous or not.
That's your small business relief. Enjoy!
I intend to publish one more post analyzing the rest of the Waxman Amendment. It will cover an exception to the phthalates ban for inaccessible components. It will also document the sneakiness of the remaining language in the amendment. You aren't meant to understand it - but I will do my best to shed some light.
Sorry, Henry! Let the sun shine in.
Subscribe to:
Posts (Atom)
Posts
