My Letter To Rep. Dingell (UPDATED; now with PowerPoint version)

Representative Dingell sent a letter to the CPSC to ask some very specific questions which indicate that he might be interested in making changes to CPSIA. So far he's the first Democrat who's expressed any realization at all that CPSIA might not be the rainbow-unicorn fantasyland that the bill's authors seem to think it is. Since he asked for information, I thought I'd give him some. Here is my response to his request.

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The Hon. Representative John Dingell

2328 Rayburn House Office Building

Washington, DC 20515

Dear Rep. Dingell;

I would like to thank you for your willingness to look into the destructive impact of the Consumer Product Safety Improvement Act (CPSIA) of 2008. This law, if it is allowed to stand as written, will work against government efforts to stimulate the economy and prevent job losses. As I am sure that you share the goal of preventing our nation from sliding into a depression, I hope you will support much-needed changes to this law.

I have read your letter to CPSC Commissioners Nord and Moore, and while I’m sure they will respond in a timely manner, I thought I might also add the information that I have on the subject. In my letter I will address four main failings of CPSIA: the short timeframe, the lack of consideration of actual safety, the impact of the retroactivity provisions, and the climate of fear it creates.

Regarding the deadlines for implementation, I’m sure that Congress thought that stepping down the lead content limits from 600 ppm to 300 and eventually 100 ppm was a good idea, and it is. What Congress evidently did not know is that inventory of children’s goods often sticks around much longer than the step-down timeframe they set, and is planned even further in advance. CPSIA allows six months for the 600 ppm standard and another 6 months for the 300 ppm standard. Because turnaround time is often more like one year, companies are having to jump directly to the 300 ppm standard, thus negating any mitigating effect Congress may have intended by writing a gradual step-down into the law.

Six months is also a completely unrealistic amount of time for implementing much of anything at the federal level. By comparison, the transition to digital television (which was to cost individual consumers far less money than CPSIA testing will cost businesses) was implemented over a period of several years, was well-publicized, and funds were set aside to assist people in buying set-top boxes for the transition. The lifetimes of TV sets were considered when constructing this timeframe. Congress even took time out of their work on the stimulus bill to extend the deadline for the DTV transition. However, with CPSIA, Congress discounted out of hand industry complaints that the timeframes were too short, ignored industry pleas to at least extend deadlines, and didn’t spend even one penny to give the CPSC enough funding to publicize, let alone enforce, the new standards. Even the 18^th Amendment allowed the liquor industry one year in which to go out of business. Six months was never enough time.

Given that the vast majority of the businesses impacted are tiny ones with less than 20 employees, and a very large majority of them are micro-businesses, I cannot imagine why Congress would lump small businesses in with huge publicly traded corporations like Hasbro and just assume we could suck up the costs of compliance. If you would like to defend “the little guy,” please be aware that businesses ARE “the little guy” more often than not.

The second failing of CPSIA that I’d like to address is that it does not have adequate provisions for assessing actual safety. Lead is a natural element and cannot be totally eliminated from everything by anyone, even by an act of Congress. Consequently, any lead standard must take into consideration the likelihood that the lead content will result in lead poisoning, as not every instance of contact with lead results in lead absorption. Because lead must be ingested in order to be toxic, a child could play happily next to a lump of pure lead and never be poisoned. Thus, lead in items like dirt bikes that are never mouthed by children never has, does not now, and never will cause lead poisoning.

While CPSIA allows exemptions where lead is inaccessible, CPSIA does not allow the CPSC to make the determination that lead is not absorbable. Any exemptions that are made have to be made on the basis of peer-reviewed scientific evidence. Congress evidently did not consider where such evidence might come from or how much time or money it might take to obtain it. Therefore the CPSC cannot exempt dirt bikes, ATVs, books, ballpoint pens, and other items that by necessity contain lead that is not absorbable or extraordinarily unlikely to be absorbed during normal use. I have read Representatives Rush and Waxman’s letter to the CPSC instructing Acting Commissioner Nord that the law was never intended to cover “ordinary books” and the like, but that’s not what the law they wrote actually says, and it certainly does not allow CPSC to exempt whole categories of items based solely on Congressional say-so.

CPSIA also is unrealistic in its age limits. While there are certain items that older children may mouth, such as pencils, only developmentally disabled 12 year olds routinely mouth their toys. The limit was originally intended to be age 7, but was raised to age 12 at the request of consumer groups on the grounds that young children often play with their older siblings’ toys. Young children often play with their parents’ things too, and in fact lead poisoning has occurred from this. However, the problem has been limited to certain items like paint, keychains and jewelry. No child to my knowledge has ever been lead-poisoned by contact with the unpainted belongings of others outside of those categories. Congress was right to regulate the items that are known to be dangers, but a better approach would have been to focus on those items for all age groups and not all products for children 12 and under both in and out of those suspect categories.

The third aspect of CPSIA, and one of the most destructive, is the retroactivity provisions for the lead and phthalate standards. It is this aspect of the law that is greatly affecting thrift stores. Products that were manufactured before some of the Congressmen who voted for CPSIA were even born are now illegal to be sold without testing or assurances from manufacturers and publishers long-defunct. It is unrealistic in the extreme to think that thrift stores running on tiny margins could afford testing. This is why despite all assurances by CPSC, Congress, and consumer groups that thrift stores should not be affected, they are dumping children’s products and books left and right. If a product cannot be sold, and it cannot be tested, what other options are left?

It is admirable to want to create a world where parents can walk into a thrift store and know that everything available to buy is perfectly safe, but CPSIA as it is written gets us to that world by passing through a world where thrift stores refuse to sell children’s items for many years starting in the middle of a deep recession. Is that really better than the alternative of passing through a world where items in thrift stores gradually get safer but are never less safe than they are now?

The final failing of CPSIA that I wish to address is the climate of fear it creates. CPSIA was intended to increase consumer confidence in the products they buy, but it is having the opposite effect, even as it turns every element of the supply chain against the others. Consumers often assume that if a product is recalled or taken off the market, it must be because it was “toxic” or dangerous. Now that products are being taken off the market merely for lacking the required compliance paperwork, consumers making that assumption are seeing that “dangerous” products are all around them, and wondering what else might be putting them at risk.

But it gets worse. Because CPSIA doesn’t have any provisions to exempt retailers from penalties if they act in good faith, retailers are being extremely wary, often requiring additional assurances above and beyond those required in CPSIA. Burlington Coat Factory asked its vendors, on pain of fines, to produce General Conformity Certificates for goods manufactured back as far as 2006. Amazon.com asked its vendors for compliance assurances by January 15, nearly a month in advance of the February 10 deadline. There are too many examples to list them all here. We are also finding that to avoid substantial losses, some unscrupulous manufacturers are issuing inaccurate certificates of conformity. A friend of mine, an environmental engineer, recently tested some articles from a major discount department store and found them noncompliant with the new lead standard, despite the store’s good faith efforts to comply. This is the kind of result I fear we’ll see more of, not less of, as the net tightens.

Because CPSIA requires only sampling of products and not testing each item, the laws of mathematics that govern this kind of sampling result in a paradox. When manufacturers try to comply with CPSIA, they must make the choice between a frustrating and expensive testing regime well beyond CPSIA’s requirements, and a significant chance that a noncompliant item will pass through undetected and result in disaster for them and their customers and investors. If you are interested in learning more about this paradox, I posted about it on my blog, Organic Baby Farm: http://organicbabyfarm.blogspot.com/2009/02/cpsia-and-stochastic-approach.html I am not advocating testing each item, as that would be even worse of an economic train wreck than CPSIA. I merely point out that the testing of samples has mathematical limitations that cannot be overcome by increasing penalties or stricter testing regimes. I wish Congress had known about these limitations before they condemned the previous testing regimes as inadequate.

Through this mathematical loophole, unintentionally noncompliant goods will slip; these can be detected by anyone who walks into a store with an XRF gun. Groups like Public Citizen, USPIRG, and NRDC already have histories of going into stores and randomly testing goods, and they would love nothing better than to count coup on business and win money in the process. Even if you think they’re above such dirty play, there are plenty of other groups that are not. Because acting in good faith is no defense under CPSIA, Congress basically handed these groups a license to go out and be bounty hunters, preying on small defenseless businesses who don’t have K Street lobbyists. Even a small chance of noncompliance caught by vigilantes results in a large chilling effect on retailers, distributors, and manufacturers alike. This does nothing for the safety of the public and in fact drives out anyone who cannot honestly bring themselves to do business if they cannot keep their assets, including their homes, safe from predation.

These honest, hardworking people are the ones you want in business selling goods for children, not the ones you want to drive out of business, because they take the time to select only the highest quality goods from small producers with excellent quality control standards. I know this because I’m one of them. I’ve spoken out publicly against CPSIA, so I fully expect one or more of these consumer groups to anonymously and falsely tip off the CPSC that I’m in violation at some point, triggering an investigation and allowing their false accusations to be published on the internet and remain there even when proven to be unsubstantiated. In order to protect myself from this kind of attack, I cannot rely on the CPSC’s stay of enforcement and do business without being in complete compliance. That means that I’ll be out of business in August, because I cannot afford the third party testing that would put me in full compliance with CPSIA. And I’m one of the lucky ones: my husband has a good job. I buy extras with my business income; many of my friends rely on their business income to pay their bills and mortgages.

There is a bill before the House Committee on Energy and Commerce, HR 968, which would rectify all four of these failures of CPSIA. Sadly, it will probably never make it out of committee. The Representatives in control of the committee are the same ones who wrote CPSIA, and they are unwilling even to acknowledge that there is a problem with CPSIA, let alone justify even the most minute changes to the law. Representatives Rush, Waxman, and Schakowsky in particular have been vehement in their defense of CPSIA as written, and they blame the CPSC for not writing exemptions for apparel, books, and dirt bikes. They are in complete denial that the law they wrote could possibly tie CPSC’s hands so tightly that they could not exempt any of these things.

I appreciate your open-mindedness and your willingness to reconsider this law before it has even more dire effects on our economy. By my calculations, which cover only a limited number of companies, losses from CPSIA are already nearly $2 billion and rising. I hope you are able to help stop this rising tide before it sinks all of our boats.

Sincerely,

Wacky B. Hermit

UPDATE: Someone in the comments asked for a PowerPoint version. Ask and ye shall receive!