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Bill to Beef Up Consumer Safety Agency Clears First Hurdle

Lobbyists' concerns dismissed as Senate mulls safety reform bill

By Joseph S. Enoch
ConsumerAffairs.com

October 30, 2007

• Safety Agency Waits 16 Months to Recall Lead-Laden Key Chains • Lawmakers Propose Bill To Prevent 'Stove Tipping' • Senate Passes Tough New Consumer Safety Bill • Infant Deaths in the Nursery Increasing • Sears Stove Tip-Over Case Illustrates Safety Agency's Shortcomings • Next Season's Toys: Technology Meets Hannah Montana • Toys Safer than Ever, Toy Makers Claim • Toy Industry Needs Import Safety Checklist • Toys Getting Safer, Safety Chief Claims • Plastic War Hits The Toy Industry • Feds Propose New Furniture Fire Rule • Safety Recalls a Sign of Success? • Congressional Leaders Send Message to Mattel • Another Industry Lobbyist To Head Safety Agency? • $30 Million Settlement in Thomas & Friends Suit • Consumer Protection Bills Spark Bitter Lobbying Battle • Time Running out for Consumer Safety Agency --- • More Consumer Safety News • Recall Notices

The U.S. Senate today came one step closer to passing what consumer advocates are calling “the most important consumer legislation in decades.”

The Senate Committee on Commerce, Science and Transportation unanimously voted for the "Consumer Product Safety Reform Act of 2007" and all of its amendments.

The bill would boost funds and staff while introducing sweeping reforms to the Consumer Product Safety Commission's regulatory powers.

“I think it's a major victory that we finally after years and years and years are starting to take consumer issues more seriously,” said Sen. Amy Klobuchar (D-Minn.), one of the bill's outspoken co-sponsors. “The agency's a shadow of its former self. Millions of toys have been recalled and kids have died and I think it's long overdue.”

The bill as it was voted by the Senate Committee on Commerce, Science and Transportation includes 25 provisions, including:

• Authorize funding levels for 7 years starting at $80 million in 2009 and increasing at a rate of 10 percent per year through 2015. With the help of a previous amendment, the agency's expected 2008 budget will be $73,250,000. For 2008 and 2009, an additional $40 million would be authorized to upgrade CPSC’s laboratories and $1 million would be authorized to research the safety of nanotechnology in products. Currently, the agency's outdated laboratories are housed in a 1950s missile tracking site.

• Increase civil fines up to $250,000 per violation with a cap at $100 million. Currently the agency can fine companies a maximum of $1.83 million.

• Require third party safety certification on every children’s product that enters the United States. Independent certification companies may have better testing facilities and more regulatory authority over their member manufacturers.

• Require manufacturers to label children’s products with tracking information useful to facilitate a recall. Often recalled products are found on shelves months or years after a recall because they are not always easily tracked.

• Ban the direct use of lead in all children’s products. The agency has worked on standards for years but this would wipe out any discrepancies over how much lead is considered safe.

• Restore the Commission to five members instead of three members to prevent future absences of quorum. The agency has been without a quorum since June 2006 and at times has not been able to fully function as a result.

• Allow state Attorneys General to bring civil action on behalf of states residents to enforce product safety laws and obtain damages and restitution.

• Provide whistleblower protections for manufacturers’ and importers’ employees to shed light on any problems along the supply chain. Since CPSC import inspectors have almost no powers and since the agency cannot legitimately test every product on the market, Senators and consumer advocates agree that whistleblower protection is essential for consumer safety.

• Make it unlawful for retailers to sell a recalled product. This would place the onus of removing dangerous products from the marketplace on the final step of the supply chain.

• Streamline product safety rulemaking process to be timely and proactive. The CPSC currently spends years -- sometimes decades -- trying to pass new rules to protect consumers.

A victory?

While consumer advocates are heralding today's vote as a victory, industry leaders are not as pleased about an agency that may soon have enough bite to force manufacturers into stronger consumer protection standards.

“In its current form, we are unable to support (the bill) and urge you to make considerable changes to the bill at the mark-up,” wrote a coalition of presidents and CEOs of 15 of the nation's largest industry lobbying organizations.

The committee did not make any notable changes at today's mark-up and completely ignored the proposals which those lobbyists submitted.

Those lobbyists are largely concerned with the whistleblower, increased fines and lead ban provisions.

The whistleblower provisions, the coalition argued in its letter, would potentially give employees too much incentive to provide erroneous or unsubstantiated details in order to collect as much as $25 million in civil penalties. The funds would only be collected if it was in fact revealed that the company in question was in violation of safety laws.

The coalition argued that the increased fines could harm company leaders who may not have known their actions were illegal. Senators argue that the increased fines would encourage executives to know the law and pay attention to what their company is producing.

There are also concerns that the complete lead ban is too extreme because trace levels of lead, that have been shown to have no ill effects, are found naturally on some products, the coalition wrote. The CPSC has been working for years on a proposal that would limit lead to .06 percent.

Determined to proceed

But consumer advocates and a largely bipartisan group of Senators seem determined to bolster an agency that is “withering on the vine,” said Sally Greenberg, executive director of the nonprofit National Consumer League.

Almost since the day George W. Bush took office, the regulatory agency's funds and staff numbers have plummeted and according to recent reports, so has staff morale. To make matters worst, the CPSC is running on only two of the required three commissioners needed to vote on many regulatory matters.

Meanwhile, the CPSC's powers have not seen significant revisions since it was created in 1974 and as a result gives companies no incentive to make safe products or any fear of the regulatory judgment that the weak agency could hand out.

The next step for this legislation is for it to be voted on by the entire Senate, which Rachel Weintraub, director of product safety at the nonprofit Consumer Federation of America, said she expects to happen between Thanksgiving and Christmas.

The House is working on a similar piece of legislation which is not as harsh. Most notably, it increases the fines to only $10 million instead of the Senate's $100 million. That bill's mark-up has not yet been scheduled but will likely be before the end of the year.

A couple of nervous lobbyists were overheard after today's mark-up saying their hope is that the House can implement many of the industry's proposals.

The bill's primary opponent will likely be President Bush.

“Our best bet is to package it with something he is really passionate about,” Greenberg said.

Democrats this year have been forced to attach regulatory bills, similar to this one, to Bush's war projects.

“Public opinion may have a positive effect on Bush's decision,” Weintraub said. “I hope he'll see that public opinion falls squarely behind these laws; and that he chooses what's best for consumers over what's best for special interest.”

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