Consumer Product Safety Commission


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Chapter 1

During the height of consumer activism in the late sixties and early seventies, Congress succumbed to pressures and agreed to formalize a federal role in product safety. At one time policy makers considered establishing a cabinet-level agency for that purpose.

The Commissioners were to be free of political control, with three members allowed to be of the President's party and two of the opposition party (or Independents). [Now, the ratio is 2 to 1.] Terms of seven years were staggered, and Commissioners could not be removed for anything less than failure to perform their duties or malfeasance in office.

The statutory mission was to protect consumers from "unreasonable risks of injury from consumer products." Those products were defined in the act as anything used in and around the home, in schools or in recreation. Certain products already regulated under other laws were exempted.

The operative law, the Consumer Product Safety Act, was signed into law by President Nixon in 1972 and the agency set up shop in 1973. Four other laws were transferred to the authority of the CPSC: The Federal Hazardous Substances Act, the Flammable Fabrics Act, the Poison Prevention Packaging Act and the Refrigerator Safety Act.

Policy makers assumed that the new agency would quickly dispose of the most hazardous products by issuing federal standards covering hundreds of categories. But the steps required to issue these rules called for Commissioners to make finding regarding the severity of the hazard, the population exposed to the risk, costs and benefits of the rule and a determination that no other remedy would protect the public. Rulemaking was governed also by the Administrative Procedures Act, which requires extensive notice and comment. Final rules could be challenged in court.

In the early years, CPSC was able to promulgate rules covering architectural glazing materials, matchbooks, CB antennas, swimming pool slides, cellular foam insulation,various toy regulations, walk-behind lawn mowers, bicycles and rules governing cribs, rattles and pacifiers.

But it soon became clear that the standard-setting procedures were rigid and bureaucratic at a time when technology was demanding greater design flexibility. Not only that, it could take from two to five years, and sometimes longer, to develop a rule. In that amount of time, often a rule was outdated before it was finalized.

In addition, by the late seventies, the sheer silliness of some of the Commission's actions had damaged its reputation. CPSC also lost some of the legal battles that ensued over its more far reaching rules. The most notable of these was urea-formaldehyde foam insulation (UFFI).) Unfortunately, the negative publicity brought about by the CPSC's original action all but destroyed the UFFI business.

By 1981, reformers in Congress, backed by many in industry, enacted some limited amendments to the original law. The most important change made in the 1981 amendments was to mandate the Commission to defer to an existing voluntary standard rather than promulgate a federal rule, if the Commissioners determined that such standard provided adequate protection to the public, and would receive substantial compliance.

There is a well developed system of private sector standards in the United States, which has served both consumers and industry well. While most consumers have little knowledge of this network of standards writing bodies, testing and certifying laboratories, those in the manufacturing sector are quite familiar with it. Industry reasoned that CPSC deference to a voluntary, consensus-based standard would allow it to have more input than would traditional rulemaking, and would reduce the burdens of federal inspections, enforcement and potential penalties. Additionally, voluntary standards took less time, were less costly and easier to amend.

These seemed like worthy goals. In fact, almost since its inception, CPSC staff had worked behind the scenes with standards groups and testing laboratories. The staff appreciated that the small, low budget agency could never hope to duplicate the scientific and engineering resources of those business-backed institutions. Moreover, career civil servants truly dedicated to the cause of public safety were not so concerned with getting the credit for better products. Therefore, working with the private sector in that mode was not new to the Commission in 1981. It seemed the public was about to gain from a more direct and speedy solution to defective or unsafe products.

Of course, one effect of the new amendments was to put pressure on industries with alleged safety problems to undertake writing a voluntary standard to avoid federal rulemaking. Many times, this leverage had the desired effect.

Commissioners appointed by President Reagan supported the new emphasis on voluntary standards. There were some early successes, notably a joint effort to find a fix for chain saw "kickback" and warning labels for hand-held hairdryers to caution against the possibility of electrocution when used near a bathtub full of water. Later, the industry developed an Immersion Detection Circuit Interrupter (IDCI) which automatically shuts the appliance off if it is accidentally dropped into water. In another case, the Commissioners voted to repeal an existing standard for unvented gas space heaters, since a new and better voluntary standard had been developed by industry.

While the new emphasis on private sector action took shape, the changes themselves soon began to produce an entirely new set of problems.

Predictably, some consumerist groups were not at all pleased with this new deference to voluntary standards. They continued to lobby, many times successfully, for policies which would tighten the circumstances in which voluntary standards would supplant federal rules. Prior to the 1994 election, congressional oversight committees, highly susceptible to the lobbying and media manipulation used by organizations such as the Consumer Federation of America (CFA) and Public Interest Research Group (PIRG), intervened to demand more rather than less regulation by CPSC. In several cases, federal regulations were passed over the objections of Commissioners who could not make the appropriate statutory findings to support mandatory rules. Examples include mandates to develop a federal standard for bicycle helmets (in spite of the existence of two perfectly suitable voluntary standards, and the lack of any evidence that the existing helmets were not effective), to mandate a new voluntary standard for garage door openers and to order a ban on lawn darts.

While tobacco products are outside the jurisdiction of CPSC, a bill sponsored by a Massachusetts Congressman required the Commission to report on the feasibility of developing a "firesafe" cigarette.

Opposition to the bias toward voluntary standards also developed from the industry side of the equation.

With deregulation occurring at the federal level, many state governments were becoming active in product safety regulation. Private sector standards, even when widely observed, lack preemptive effect over state law. Fearing the proliferation of more state regulation, many in industry who had been supporters of the 1981 amendments sought congressional relief through laws to mandate a specific voluntary standard.

A recent example of Congress legislating regulations first deemed unnecessary by the Commission is the Toy Labeling Act. For several years the Commission considered a petition which would have resulted in a regulation to impose additional labeling requirements on toys with small parts. {A mandatory small parts regulation affecting toys intended for children under three years old had been in effect for several years.} The Commission went through lengthy regulation procedures, examined all the evidence and terminated rulemaking.

Later, the industry--fearing conflicting state laws--turned to Congress to adopt by law the same regulation rejected by the Commission. Congress agreed. Now that CPSC must enforce that law, the staff is engaged in writing interpretive rules which the industry is finding onerous.

At other times, whole industries have reversed themselves in the midst of drafting a voluntary standard and forced the CPSC to adopt a rule. A case in point was the effort to develop a child-resistant "fix" for disposable butane cigarette lighters. The industry was well on its to way to developing its own standard, one which the Commissioners at the time found acceptable. But, worried about preemption of state law and the threat of competition from cheaper imports, the industry abandoned its effort at the eleventh hour. The CPSC, under congressional direction, was forced to make the standard a mandatory rule.

There were other assaults on the preference for voluntary standards.

Outraged that CPSC was sticking by its bias toward voluntary standards, consumerist groups such as CFA and PIRG demanded that Congress intervene once again. Spurred by these complaints, Congress in 1990 added language to the CPSA to require that companies report to the Commission under its "Substantial Product Hazard" section (section 15), any product which failed to comply with a voluntary standard on which the Commission had relied under Section 9 (the rulemaking section of the CPSA.)

This was a clever piece of legislative one-upmanship. It effectively turned the 1981 amendments upside down. A manufacturer who neglects to report a product which somehow fails to comply with a "voluntary" standard to which the Commission had deferred, even though it may not have participated in the development of that standard, incurs the possibility of significant financial penalties. In effect, the federal government now had the authority to enforce a voluntary standard.

This de facto federalization of the voluntary standards system is a turn in the wrong direction.

For nearly 100 years, the United States has had a well-developed system of private standards that have grown from the "bottom up." Uniquely American, this market-driven voluntary standards system has been reaffirmed in practice and through legislation. The Trade Agreements Act of 1979 and OMB Circular A-119 both reference the use of voluntary standards. Through the Department of Defense and the General Services Administration, the government is itself an important user of voluntary standards. The Federal Trade Commission conducted hearings in 1979 on a "Proposed Trade Regulation Rule on Standards and Certification," concluding at the end that the system was functioning well without the regulation.

There are more than 270 standards writing bodies in the U.S. Most of them have consumer representation in their procedures. Some 400 organizations are involved in testing and certification. The system has met the needs of industries and consumers in the U.S. well and continues to be market-responsive.

The ASTM (formerly, American Society for Testing Materials), has developed around 8,000 voluntary standards, many of which become de facto international standards.

The American National Standards Institute (ANSI), founded in 1918, provides an umbrella for standards writing groups. A not-for-profit organization, ANSI reflects the strong free market views of most of its members, which include some 1,300 companies and 250 standards writing organizations.

Underwriters Laboratories (UL) is perhaps the best known testing and certifying organization. When UL tests a product, it allows the use of its seal. Other certifying groups which use seals include the American Gas Association, the Juvenile Products Manufacturers Association and the American Furniture Manufacturers.

Big government consumerist groups ignore the impressive record of the private sector. While paying lip service to the achievements of non government standards, they raise questions concerning the strength, effectiveness and enforcement of those standards.

Few ever attempt to respond to those objections. But there are good answers.

Most important is the question of effectiveness. All available evidence, including injury data and marketplace monitoring, indicate that the record of voluntary standards is as good as that of mandatory rules. With regard to the strength of those standards, the voluntary standards groups can often write more stringent rules than can CPSC, since they do not have to meet the strict legal findings contained in the law.

Compliance with voluntary standards is achieved through two market forces: competitiveness and the threat of liability suits.

Under the current Chairman of CPSC, Ann Brown, the term voluntary has taken on new meaning. Under her tenure, both statutory rulemaking and reliance on the private sector standards system has been supplanted by official "nudging" of companies to undertake recalls and product redesigns. At times, the chairman has targeted an industry by using public recognition of one company's "fix" to persuade the rest of the industry to conform.

When Congress directed CPSC, in 1981, to defer to private standards whenever feasible, it could not foresee that future appointees would use their positions as a "bully pulpit" to achieve a level of product safety that can only be called "foolproof." Whether the product is baby walkers, five gallon buckets, or gas hot water heaters, Chairman Brown sides with those who say the agency must protect not only the responsible consumer, but the irresponsible one as well.

These actions take place outside the framework of official Commission action, which requires the votes of three commissioners.

It would appear that the current system is the consumer's worst enemy. The expenditure of tax dollars to focus on trivial safety issues and the trend toward federalizing the private sector standards system should set off alarm bells in Congress. The threat of regulation or enforcement represented by the excessive use of federal power distorts market forces, drives up prices and reduces choices for consumers. The 104th Congress has an opportunity to redesign the federal role in product safety. Returning the major responsibility for standards writing, testing and certification to the private sector should be first on the agenda.

Collecting injury data to aid in analyzing safety trends is a CPSC function which may have value. At present, the agency contracts with hospital emergency rooms to provide that data through reports made at the time an injured patient is treated. CPSC epidemiologists project data from a small number of hospitals to determine national numbers of injuries associated with specific products.

The raw information can be useful, since it spots trends. But the system in use does not place blame for these injuries on either the product or on the user. That type of information could only be obtained through staff-intensive, "in-depth investigations" (IDIs). That procedure is time-consuming and expensive, and cannot be used in more than a few cases.

The information has many limitations. Often it has been misused. Even if the entire present budget of the CPSC were devoted to data collection, the causality issue could not be resolved satisfactorily.

Yet there is a plausible argument that the injury data system should survive. If so, the Centers for Disease Control, which maintains a wide network of disease and injury reporting, could certainly take over that function. The CDC could also provide public warnings, where appropriate, when a real product safety hazard surfaces.

With standard setting a function of the private sector, and data collection allocated to the CDC, what might happen to other current CPSC functions?

Clearly, the five statutes administered by the CPSC would need review. The regulations now enforced by CPSC should be revisited by an independent panel to determine whether they should be retained, amended or repealed. Enforcement of remaining standards could be handled by other federal agencies as appropriate. As Congress considers whether to dismantle the CPSC, it will gather relevant information so that it can determine the proper disposition of any remaining federal responsibility.

Industry has a grave responsibility for the safety of its products. To encourage greater participation by consumers in the network of U.S. standards groups, manufacturers should establish programs to educate consumers about the meaning of standards, testing and certification. They should do a better job of publicizing the seals of approval that appear on many products. As we approach the year 2000, with the mind-boggling rate of change in design, production and marketing of consumer products, it is time that our method of dealing with consumer safety change as well. The 104th Congress has a unique opportunity to make that happen.

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Understanding Consumer Activism

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