Congress Weighs Sweeping Overhaul of Consumer Product Commission (Wall Street Journal)

M.P. McQueen and Christopher Conkey, The Wall Street Journal, October 30, 2007

  Click here to download a PDF of this article.

"One of the more influential is the California-based Center for Environmental
Health. This month, it tested a Curious George toy on the market. Alleging that
it contained 10 times the legal amount of lead, CEH filed a notice to the
company and regulators, saying that it intended to take legal action. The same
day, manufacturer Marvel Entertainment Group Inc., said it would halt shipments
of the Chinese-made toy and conduct its own tests to see whether a recall was
warranted."

Spurred by a spate of scares over the safety of imported goods, Congress is
weighing the most significant consumer-safety legislation in a generation —
even as states and nonprofit groups step up their own watchdog
efforts.

A comprehensive bill that would substantially boost fines,
add staffers and increase transparency at the embattled Consumer Product Safety
Commission is moving through the Senate. The moves represent efforts to address
what consumer groups and critics widely see as the weakness and inefficiency of
the commission, the tiny federal agency charged with regulating at least 15,000
types of consumer products, from toys to all-terrain vehicles to
mattresses.

The House has already passed legislation that would lift
fines and establish separate product-safety requirements, and many House
Democrats hope to pass measures that more closely match the Senate bill's core
provisions. If the chambers can produce relatively similar products — a
prospect somewhat clouded by a number of industry-backed amendments in the
Senate — backers must also heal some wounds with President Bush, whose pick to
head the CPSC, a former manufacturing lobbyist, withdrew himself from
consideration earlier this year after drawing intense criticism from
Democrats.

For much of this year, the CPSC has been unable to enact
safety rules or levy fines for safety violations, in part because it has lacked
a third commissioner. Although Congress passed a temporary law this summer
authorizing the agency to act without a full panel, until now, it hasn't taken
any further action. An agency spokeswoman says it hopes to move soon on some
measures, including setting standards for children's jewelry and all-terrain
vehicles.

Manufacturers and retailers say they will fight some of the
bill's provisions, including the increase of fines to a maximum of $100 million
from $1.85 million. But their clout has been diminished by a rash of highly
publicized recent recalls involving everything from Halloween pails with lead
paint to hazardous cribs to toys with small parts that present choking hazards.
Many of the goods are imported from countries like China, where safety standards
are often less stringent. Adding to the problem are a fixation among U.S.
industry and consumers on getting bargain prices — sometimes, at a cost to
quality — and regulators' failure to keep up with changes.

The
commission's staff has been cut over the years to about 400 employees, less than
half the number it had when it started operating in 1973. Meanwhile, the number
of products it regulates is soaring, including imports. This has resulted in
long delays that have frustrated manufacturers and consumer groups.
For
some, the federal bill is preferable to a patchwork of legislation shaping up as
states including California move to increase safety standards on their own.
Responding to what they see as a major regulatory void, some states are
introducing tougher safety rules, while watchdogs are testing products and
unilaterally announcing results.

The new Senate bill, cosponsored by Sen.
Mark Pryor (D., Ark.) and Sen. Daniel Inouye (D., Hawaii) with significant
Democratic backing, would increase the commission's authorized funding by 58% to
$141.7 million over the next seven years, and allow it to hire about 100
additional employees.
The bill proposes "a pretty big change from the
system we have on the books now," Sen. Pryor said. "This is an effort to really
clean up the U.S. marketplace."

Although the Pryor bill faces industry
opposition and other hurdles on Capitol Hill, consumer advocates predict the
Democrat-controlled Senate could pass a version by year end. Industry groups say
Republicans aren't likely to try to kill the bill, but hope to amend it to
change provisions manufacturers find onerous.
The CPSC declined to
comment about pending legislation. Acting Chairman Nancy Nord, a Bush appointee,
has proposed raising the cap on civil penalties to $10 million, but has objected
to giving the agency more leeway to publicly disclose details about potential
hazards during ongoing investigations.

The CPSC regulates products mostly
by setting and enforcing voluntary and mandatory standards in cooperation with
manufacturers and others. Manufacturers and retailers must report any defects to
the CPSC in a timely manner. The agency may issue a recall if the product is
found to violate a standard or pose a safety threat.
In such cases, the
agency typically negotiates the recall terms and remedies with manufacturers
before goods are removed from shelves. It usually refrains from alerting the
public about potential hazards until an agreement is reached.

Most
children's products aren't currently required to undergo pre-market testing.
CPSC field investigators and customs officials check only a tiny sample of all
goods the CPSC regulates, at ports and elsewhere.
Linda Ginzel, a
psychology professor at the University of Chicago, has been fighting for reform
of product-safety laws since her 16-month-old son was strangled by a recalled
portable crib at his child-care provider's home in 1998.

He was the fifth
child known to have died in the Playskool Travel-Lite portable crib,
manufactured between 1990 and 1993 and first recalled in 1993. A sixth child
later died because of the same model crib.
With the Senate bill, Ms.
Ginzel said, "I think we finally have an opportunity for positive change to
protect children."

Some state regulators and watchdog groups are already
taking their own steps. California has enacted tougher fire-safety standards for
mattresses ahead of the CPSC, and Illinois has a ban on lead in children's
products that goes beyond federal law.
Illinois Attorney General Lisa
Madigan has disagreed with the CSPC over its handling of a crib recall, noting
that the commission alerted the public without offering a remedy. A CPSC
spokesman said the agency took the "very unusual step" because the cribs had
caused three deaths and posed an immediate threat.

Last week, distributor
Simplicity Inc. and the CPSC announced that the Reading, Pa., company will
provide repair kits to immobilize the cribs' problematic drop-side. Ms.
Madigan's office has asked Simplicity to offer a complete refund or replacement.
A Simplicity spokesman yesterday said the company "worked very closely with the
CPSC" and believes "the repair kit is the safest" remedy.
The "CPSC has
not been robustly and aggressively working to protect consumers," said Rachel
Weintraub, director of product safety at the Consumer Federation of America, a
nonprofit. "Other entities have stepped up to the plate."

One of the more
influential is the California-based Center for Environmental Health. This month,
it tested a Curious George toy on the market. Alleging that it contained 10
times the legal amount of lead, CEH filed a notice to the company and
regulators, saying that it intended to take legal action. The same day,
manufacturer Marvel Entertainment Group Inc., said it would halt shipments of
the Chinese-made toy and conduct its own tests to see whether a recall was
warranted.
Manufacturers said they oppose several key provisions in the
Senate bill. These include a proposal to end a prohibition on the CPSC
disclosing details about potentially hazardous products without first giving the
manufacturer a chance to respond.

Supporters of the measure argue that
agency investigations into such products can last months or years, while
injuries and deaths mount, and that other regulatory agencies aren't bound by
such rules.
Joseph M. McGuire, president of the Association of Home
Appliance Manufacturers, a trade group, said, "If the information is made
public, it could serve as the basis for litigation even though it may be found
to be invalid."

Industry groups also oppose a measure that would enable
state attorneys general to sue companies for violating federal product-safety
laws. They say it would expose companies to potentially inconsistent enforcement
and lawsuits.
Legislative hurdles also loom. There is a lack of consensus
on key provisions of the Pryor bill, and several amendments could slow its
progress once it moves to the Senate floor. So far, the House doesn't have a
matching bill: Recently passed House legislation would raise the cap on
penalties — but only by one-tenth as much as Mr. Pryor wants. The House
legislation didn't include the controversial measure on disclosure.


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