Saturday, March 14, 2009

Consumer Product Safety Chairman On CPSIA: "There Are Some Real Problems Here"

The economic scourge caused by the CPSIA continues to destroy billions of dollars worth of inventories in this recessionary ecomony, and the US Congress doesn't appear in any hurry to amend any of the unintended consequences of their Consumer Product Safety Improvement Act. They seem unable to admit they have made a mistake, and the final cost for this vanity is reaching an astonishing level.

Radio talk show host Hugh Hewitt continues to do an excellent job of covering this appalling story, in fact he's one of the only media voices giving this economic plague any regular attention. Yesterday Hugh Hewitt interviewed Nancy Nord, Chairman of the Consumer Products Safety Commission, looking for some answers to the obvious question: What is being done to fix this problem?

The good news: the commission knows about the economic damage the CPSIA is causing.
The bad news: there doesn't seem to be anything they can do to stop the damage from continuing.

From the transcript:
Hugh Hewitt: Congress and the commission are now sort of pointing fingers at each other. I’ve been forwarded e-mails from Senator Durbin’s office to some of the impacted business out there saying it’s up to you guys to grant exemptions. And I’ve read some statements from commission staff saying we don’t have the authority to grant exemptions. You know, so the finger pointing goes on, and the businesses are burning down. What’s happening?

Nancy Nord: Well, it really is something that we’re very concerned about. Congress passed this very well-intended piece of legislation in response to the recalls of 2007-2008. They did it very quickly, and perhaps did not give sufficient thought to some of the provisions. You raised the exemption provision, and that is a very, very good example of what I’m talking about. Although the legislation indicates that we can give exemptions from the lead provisions of the law, in certain circumstances, those circumstances are very, very limited. And Congress was very precise in telling us when we could give exemptions, and when we could not. And unfortunately, we are now seeing many, many more products that have trace amounts of lead, products that really are not going to harm consumers at all. They’re not unsafe. But they don’t meet the very, very strict standards of the law. And the way the law is written, our hands are tied. So Congress really needs to find, to help us find some wiggle room here, if you will. We’re very hard-pressed to find exclusions from this new law.

HH: Now if I were your general counsel, and I have been the general counsel of two federal agencies, OPM and NEH, I’d come in and I’d say to you, Madame Chairman, we’ve got to take a stand here, we’ve got to issue an exemption, for example, to all-terrain vehicles, regardless of the trace amounts of lead, because they’re dying, people are losing their jobs, hundreds of millions of dollars of inventory are lost, and let the chips fall. You’re not going to go to jail, I’m not going to go to jail, but these people are going to go out of business. How do you respond to that?

NN: Well, our job as a regulatory agency is to implement the law that Congress wrote as Congress wrote it. So that is what we need to do. You should be aware, I’m sure you probably are aware that we did try to take a reasonable approach with respect to implementing one of the provisions dealing with a substance called phthalates, which are used in plasticizers. It’s what makes a rubber ducky squeezable, if you will. And a federal district court overturned us and said no, our reading of the law was incorrect, that Congress really intended that everything in inventory, everything on store shelves, things sitting in container ships making their way to this country, they were all outlawed if they were not tested for phthalates.
HH: I’ve gotten a lot of e-mails, you probably have as well…from very small businesses, people who make a thousand dollars worth of products, or five thousand dollars worth of products. Now I’ve had big time lawyers on like Wolensky of Snell and Wilmer, and they represent sporting goods and all-terrain vehicles, and they can go argue the case to the commission. But these small timers, they’re just wiped out. Are you getting those e-mails as well?

NN: Well, of course we are. One of the problems with this law, and actually, I think one of the biggest problems with this law, is the fact that it basically is retroactive. It put in place a ban on lead in children’s products, and it applies not only to products manufactured after the effective date of February 10th, but it applies to all products sold in the United States after that date, which pulls in inventory, it pulls in products on store shelves, things that were deemed perfectly safe on February 9th, on February 10th, are deemed to be illegal. And that is perhaps not the best way to regulate...
The thing that I think you need to understand, and your listeners need to understand, is that the law has been pretty precise in what they have told us to do, and that is what we need to do. Our obligation as a regulatory agency is to implement the CPSIA.
Now as we have gone through this process, we have found that there are some real problems here. We have brought them to the attention of Congress. I would hope that we can work with Congress to solve these problems as quickly as we possibly can, because the last thing that we want to do, that I want to do, is to impose economic havoc on businesses that are really just trying to provide safe products to the consumers.

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