Welcome aboard, Chairman Tenenbaum. You just missed yet another strange act of regulatory confusion that your colleagues at the Consumer Product Safety Commission were forced into making because of the Consumer Product Safety Improvement Act (CPSIA).

The CPSC has issued a two-year stay of enforcement for youth bicycles from the law’s lowered standards for lead content. The action means the CPSC will not go after manufacturers and retailers for failing to meet the new standards, but it does not free the companies from legal liability.

It’s an unhappy medium. But then, enforcement of the law would have endangered children.

Commissioner Nancy Nord issued a statement upon the issuance of a stay. Excerpt:

From the standpoint of the consumer, enforcement of the law as written by the Congress would limit the availability and increase the costs of a product that is almost synonymous with childhood. But most importantly, because lead adds to the strength of the metal used and has other useful attributes, enforcement of the law could adversely impact the safety of children’s bicycles, leading to more deaths and injuries. A stay of enforcement is our only option to protect children.

While the stay of enforcement will allow children’s bicycles to continue to be sold over the next two years, the stay also contemplates that manufacturers develop plans to reengineer their products to remove the lead from the metal used in children’s bicycles. In other words, we are requiring that manufacturers use scarce resources in challenging economic times to attempt to address a risk that children just do not encounter.

It is very troubling that the commission has had to resort to using stays of enforcement to avoid the unexpected, and, in some cases, the dangerous consequences that would result from enforcement of the CPSIA. Such a result does not increase consumer confidence and creates uncertainty in the marketplace. There are those who would add that, at some point, regular use of stays opens the agency up to legal challenge for not enforcing the law.

Commissioner Moore also issued a statement expressing concern about the structural integrity of bicycles and supporting the two-year state.

The Consumer Product Safety Commission, with Commissioner Thomas Moore now acting chairman, has managed to make implementation of the Consumer Product Safety Improvement Act (CPSIA) even more confusing for business and consumers. Muddling a bad law is not progress, but then, the CPSIA is already plenty bad.

The issue at hand was a petition from the Writing Instrument Manufacturers Association for an exclusion from the lead-content limits in the CPSIA. The balls in ballpoint pens sit in a metal tip, and the alloy contains minute amounts of lead that fail to meet the CPSIA standards. Although expert analysis and the CPSC staff identify no health threat to children from using the pens, the 2008 law forbids the possibility of “any” absorption. Nothing, pens included, can meet this absolute standard.

Last week, the commissioners voted to issue the following decision, or non-decision, as the case may be:

A decision has not been reached on this matter. The Commission voted 1-1 on WIMA’s request for an exclusion of ball point pen tips. Acting Chairman Moore voted to deny the request for exclusion. Commissioner Nord voted to grant the request for exclusion, as it applies to children’s products. Regarding a stay of enforcement the Commission voted 1-1. Acting Chairman Moore voted that if the vote is to deny WIMA’s request for exclusion or the vote results in no action due to a one-one tie, do not direct the staff to draft a stay of enforcement of the section 101 (b)(1) lead for ball point pens that are children’s products. Commissioner Nord voted that if the vote is to deny WIMA’s request for exclusion or the vote results in no action due to a one-one tie, direct the staff to draft a stay of enforcement of the section 101 (b)(1) lead for ball point pens that are children’s products.

Manufacturers need legal certainty, an understandable and consistent statutory and regulatory framework — call it, oh, the rule of law — in order to function in an economy. IF, IF, IF is no help whatsoever.

Both commissioners attached statements to their votes, and the CPSC’s general counsel issued a letter to the trade association asserting the WIMA had exaggerated the potential impact to the ballpoint pen industry. WIMA contended that 4 to 5 billion pens would fail to meet the lead-content standards. The CPSC’s general counsel countered:

The lead ban is applicable to children’s products containing lead. The term “children’s product” means a consumer product designed or intended primarily for children 12 years of age or younger. Accordingly, to the extent that these pens are general purpose items not being marketed to, or advertised as being intended for use by children 12 years or younger, these pens would not be subject to the lead limits under CPSIA.

So we’re not talking billions of pens. It’s only a couple hundred million, at most.

The commissioners’ statements are well worth reading to demonstrate how bad law creates bad outcomes; they also offer a clear difference between the two’s regulatory philosophies.

Moore…

The writing instrument manufacturers have indicated that they may be able to find a
substitute for the lead in ball point pens in a couple of years. I hope they will work toward that goal. Their other alternative is simply not to make or market ball point pens with excess lead that appeal primarily to children. In the meantime, while I do not expect the agency to turn into the “pen police,” manufacturers, retailers and distributors should police themselves as we move toward a marketplace where lead in children’s products is dramatically reduced.

But remember, the Consumer Product Safety Improvement Act also grants enforcement authority to state attorneys general, and there’s also potential liability in the form of class-action suits. In Commissioner Moore’s view, the ballpoint pen manufacturers have to live with one of two things: A liability time bomb, or the withdrawal of millions of dollars worth of products from the marketplace.

Nord …

The Commission needs to spend its resources focusing on products that actually harm children, not chasing speculative harms that are not relevant to the real world. Removing perfectly safe products will needlessly limit consumer choice and, more importantly, not advance consumer safety. If Section 101(b) has any meaning at all, then a rulemaking proceeding to consider an exclusion for children’s pens should be initiated.

That is indeed the bottom line. The CPSIA requires removal of perfectly safe products from store shelves for no safety benefit whatsoever.

That the two commissioners have been pushed into this bizarre corner of regulating contra reality reaffirms what should be obvious to everyone, even the safety absolutists: The CPSIA is horrible, economically ruinous legislation that Congress — CONGRESS — must change.

With June’s arrival, there’s be an expected shift in the organization of the Consumer Product Safety Commission, with Nancy Nord, a Republican appointee, stepping down as acting chairman to be replaced by Thomas Moore, a Democratic nominee. Nord will stay on as a CPSC commissioner; her term runs through 2012.

One shouldn’t anticipate any great policy or regulatory changes from the administrative switch, which was required by the Consumer Product Safety Improvement Act. (Vice chairman becoming acting chairman, etc.) The chairman of multi-member regulatory boards like the CPSC has more personnel authority and can direct staff actions more easily than other members. Still, given the continued 1-1 split and the probable arrival this summer President Obama’s nominee, Inez Moore Tenenbaum, after her confirmation, the commission will just slog on. (AP story.)

There will be differences, to be sure. It’s hard to imagine Moore having asked the professional staff to write such a substantive response to the letter from Rep. John Dingell (D-MI) asking for details on implementation of the CPSIA. As chairman, Nord had the authority to ask for such a letter.

First as a Bush appointee and CPSC chairman, and then as acting chairman in 2009, Nord has suffered attacks by activist groups and others who unceasingly promote the expansion of the regulatory state. The calumnies from Capitol Hill for supposedly blocking effective application of the Consumer Product Safety Improvement Act were especially wrong and cynical; even Congress’ truest of true regulatory believers know the CPSIA is a legislative overreach and has caused terrible damage to businesses while depriving consumers of safe, desirable products.

Moore has served as acting chairman before, taking over the spot in November 2001. He’s been on the CPSC since 1995.

• Sarosota Herald-Tribune, “Consumer panel losing leader“
• The Palm Beach Post, with a scurrilous headline and misleading story, “Consumer safety chief resigns amid Chinese drywall scare.”

The Consumer Product Safety Commission voted 1-1 Wednesday to deny a petition from the National Association of Manufacturers and the CPSC Coalition for an emergency one-year stay in enforcement from the new tracking label mandate included in the immoderate Consumer Product Safety Improvement Act (CPSIA). The labeling requirements are set to quick in August 14, and they will be a nightmare to implement. Or an impossibility. Or an impossible nightmare.

From the petition:

Even if the Commission were to publish guidance on this new provision today, there would still be insufficient time for companies to implement this provision properly. Changes in product processes, including changes in labeling requirements for packaging and products, usually take at least a year in many sectors in order to ensure smooth execution. This process must begin at the design phase of the product, well before production takes place. Implementation of the new tracking label provision will necessitate legal reviews, compliance clearance, and training of supply chain partners. Moreover, many companies are already now ordering, planning, and costing production of goods that will be made in fall 2009 or later, meaning they are already making guesses about how the new labeling provision will be implemented. Should those guesses prove to be wrong when the Commission publishes guidance shortly before the August 14, 2009 implementation date, companies will have to scramble to rework labeling and packaging at significant cost. Electronic databases may need to be developed and tested to facilitate effective tracking, another aspect that will require significant time and resources in many industries.

And in yet another example of the CPSIA being disconnected from reality, the labeling requirements could apply to things like small toys, art materials or children’s jewelry.

This is actually a case where a stay of enforcement (see below) makes sense, because there’s not going to be a lot of legal liability or potential alternate enforcement if the CPSC allows a delay. Acting Chairman Nancy Nord voted yes, but Commissioner Thomas Moore voted no — apparently thinking that guidance could be written by August 14.

This is the first time the commissioners have split on votes about enforcement of the CPSIA. To which we say, FIX THE LAW.

For more on problems posed by the tracking label requirements, see the presentations from the CPSC sponsored forum held Tuesday in Washington.

Incredible. And how arrogant. Despite thousands of first-person reports of businesses closing up shop, children’s books being destroyed, thrift stores deprived of used clothes and toys, mini-bikes and kids bikes being made illegal, some “consumer activists” regard the Consumer Product Safety Improvement Act as a success.

From The National Law Journal, “Consumer bill sets off a furor“:

“Any legislative fixes at this point would be very premature,” said Public Citizen’s [Christine] Hines. “The most important issue right now is for Nancy Nord to be replaced. She was never a huge supporter of the law from the time of the year-long negotiations.”

Hines said the other commissioner, [Thomas] Moore, agrees that congressional intervention now would be premature.

“At this point, because there is so much difficulty at the agency in terms of agreement, the agency has taken a strict constructionist view of some of the language in the law,” said Hines. “I believe the new law gives the agency the authority to issue reasonable regulations. We still feel it has enough authority to address business concerns and to ensure that products are safe. The 2007 recalls and the uproar about unsafe products on the market tend to get lost in this debate.”

So nice that Public Citizen is now the official spokesman for Commissioner Moore.

But Nord and Moore have voted the same way on the last 23 votes. Replace Nord with a permanent chairman — as she herself has requested — and there’s no indication the commission will do anything differently.

Rick Woldenberg of Learning Resources Inc., a forceful advocate for CPSIA reform, responded recently to a hatchet job in ConsumerReports.org, which misrepresented a pro-reform rally and made the same, weak case as the Naderites at Public Citizen. Rick wrote:

Finally, you also mischaracterize the remarks of the Rally speakers as endorsing YOUR view that Nancy Nord is at fault for the delays and failures to issue exemptions that you assert. I do not recall Ms. Nord’s name or role being mentioned during any speech, and she was certainly not a focus of the day’s events. Speaking for myself, I do not agree with your statement at all, and would observe that the data shows that Acting Chairman Nord and Comm. Moore have voted 2-0 in their last 23 decisions. It is hard to understand the reasons behind the finger pointing at Ms. Nord or at Republicans in general if the Commissioners are apparently acting in bipartisan unison. Is it because attacks on Ms. Nord make a nice diversion from an examination of the law itself?

Yes. Yes it is.

The Wall Street Journal today covers the letter from Nancy Nord, acting chairman of the Consumer Product Safety Commission, to President Obama asking him to appoint a new chairman of the commission. (See earlier post.) The three-member commission has a vacancy, and is now split between Nord — a Republican Bush appointee — and Thomas Moore, a Democrat appointed by Clinton and reappointed by Bush.

The WSJ elicited a White House comment in reaction to Nord’s letter, although it’s not a substantive response. From “Obama Urged to Fill Product-Safety Post as Complaints Mount“:

A White House spokesman said: “We are moving ahead in an aggressive fashion on a whole array of issues. When it comes to staffing, we are remarkably ahead of where previous administrations were at this point.” He declined to comment on the specifics of Ms. Nord’s letter.

Criminy and cripes. What a narrow political remark.

Who cares about previous administrations? There are people who are losing their livelihoods, billions of dollars of products being kept off the market, destroyed or sequestered, and consumers denied access to toys, children’s clothing, used books and many other desired and necessary prodcuts. The Consumer Product Safety Improvement Act is a jobs-destroying disaster. Let’s get moving ahead in an aggressive fashion on THAT issue, and let the rest of the whole array sort itself out.

For more on the law, see these “CPSIA Update” posts.

Commissioner Thomas Moore of the Consumer Product Safety Commission on Friday submitted his own, separate letter in response to Rep. John Dingell’s request for information on the Consumer Product Safety Improvement Act’s implementation. Moore, a Democratic appointee, did not join in signing the letter sent by Acting Commission Chairman Nancy Nord, a Republican.

Obviously, politics is at play. The CPSC is now split 1-1, with a vacancy for the third, Democratic appointee. Now that we see Moore’s letter, we’d guess Nord asked him to sign a joint letter and he declined. (See earlier post on Nord and the staff’s response.)

Unfortunately, Moore’s letter lacks the value of Nord’s communication, or rather, her submission of a 20-page, detailed assessment by the professional staff of the CPSIA’s critical flaws. His letter reads as if it were designed primarily for political self-preservation and to serve the purposes of Moore’s patrons on Capitol Hill. Bureaucratic CYA, in other words. For example:

[I] think that when the agency gets the third Commissioner we will be better able to address some of the concerns voiced by staff and by industry. Until then any legislative “fixes” are premature. Only the Commission should recommend what, if any, changes should be made to the CPSIA and no assumptions should be made that there are no other solutions than legislative ones until all three Commissioners have a voice in the matter.

Moore letter does not acknowledge the main issue: The CPSIA is a dismal failure, causing tremendous economic harm, destroying businesses and harming consumers. He’s telling small business owners, retailers, manufacturers, consumers, people forced to discard inventories, etc., that the CPSC will address their concerns soon enough, maybe, if the agency ever gets a chairman.

Billions of dollars being wasted but there’s no need for a legislative fix? That’s just not a serious response.

The text of the letter follows:

Dear Chairman Dingell:

Thank you for your letter of March4, 2009, regarding the Commission’s implementation of the Consumer Product Safety Improvement Act of 2008 (CPSIA).

Nearly two years ago I stated that the CPSC was at a crossroads. We would either get more funding and more staff or we would continue a decline that would eventually result in the agency ceasing to be an effective force in consumer safety. At that same time, wave after wave of press stories about hazardous products that the agency hard purportedly not acted on in a timely manner were appearing and recall after recall involving lead were being announced. In response, Congress, and the citizens it represented, decided that not only should the agency survive but it should regain its lost stature. (continue reading…)

The Consumer Product Safety Commission yesterday voted 2-0 to reject the NAM CPSC Coalition’s petition for a stay in the effective date of the lead content limits in Section 101 of the 2008 Consumer Product Safety Improvement Act. The ballot and accompanying statements from Commissioners Nancy Nord and Thomas Moore are available here.

[UPDATE: Gah, that's bureaucratic. Let's try again: The CPSC just rejected the manufacturers' request to delay the effective date of new, lower lead content standards. We lost.]

Then today the CPSC voted 2-0 (ballot) to withdraw a proposed rule on the allowable lead content for electronic devices, issuing in its place an interim final rule — it goes into effect immediately — that specifies the exemptions. The ballot and interim final rule are available here.

The Commission also issued a draft statement on commission enforcement policy on Section 101 lead limits. The thrust of this statement is to announce that the commission staff does not plan to prosecute manufacturers or retailers involved in products that consistently fall below the lead limits – ordinary children’s books printed after 1985 and dyed or undyed textile used in children’s clothing and things like baby blankets.

But remember, the CPSIA gives state attorneys general enforcement authority, and goodness knows what class-action attorneys may be dreaming up.

The rejection of the Coalition’s petition and the issuing of draft rules and commentary lead us to conclude only Congress can fix this mess. And a fine mess it is.

Commissioner Thomas Moore of the Consumer Product Safety Commission has written a letter to the chairmen of the committees that oversee the agency, explaining at length his views of what the CPSC can and cannot do, is doing and will not do, and gee the CPSC is great, in response to the February 10th deadline for regulating the lead and phthalate contents of products that children might conceivably use.

If you’re a small manufacturer, a bookseller or home seamstress or toymaker, or a children’s retailer, Moore’s letter provides zero in the way of assurances about your liability under the new law, the Consumer Product Safety Improvement Act. “We’ll look the other way, probably,” is not a sentiment that engenders confidence.

Dawn Michelle writes at Reform CPSIA, which posts the letter: “Basically he says that although he didn’t agree with the CPSC’s Stay of enforcement he went along with it because of the misinformation out there from other related industries and organizations that originally fought FOR the CPSIA.”

Clarity!

Elsewhere, add gamers to the list of the alarmed. From Living Dice.com, “The Consumer Product Safety Improvement Act–And Why All Gamers Should Fear Toxic Games“:

All of this means that every die, board game, box of cards or game book (yes, it applies to books too) must pass the new testing regimen. All of which is sure to add to the price. How much is a matter of some debate. Clearly, gaming juggernauts like Hasbro will have no issue with getting all of their products tested. Economies of scale reduce their costs significantly. Imagine the impact on the small game company that assembles its game by hand. Remember, even if every component is “clean,” the final product must pass the test requirements.  So mom and pop game publishers, already working with razor-thin profit margins need some extra lab work done on their board game. Some companies will cease publishing and the survivors will work harder for less money on each sale. From my perspective, the only real winners from this law are testing labs. Their business is sure to flourish.