Is Consumer Product Safety Testing Stifling Job Growth?

Feb. 17, 2011 -- House Republicans today took aim at recently enacted consumer product safety regulations, saying they caused unintended consequences: creating a burden on small businesses and stifling job creation. The target of their complaint: The Consumer Product Safety Improvement Act (CPSIA) of 2008.

"For thousands of businesses, who strive to be responsible, let's do what's best for consumers. CPSIA has consumed an inordinate amount of their time trying to understand how each new regulation and standard will affect them," Chairman Mary Bono Mack, R-Calif, said. "Unfortunately, many have gone out of business, attributing their demise to some of the burdens of compliance with the many provisions of the new law."

Representatives from the Consumer Product Safety Commission (CPSC) and various small businesses and manufacturers testified before a subcommittee of the House Energy and Commerce Committee.

CPSC commissioner Anne Northup, a Republican appointed to the commission by President Obama, argued that third-party testing requirements mandated by the CPSIA for lead in products had a negative impact small businesses on job growth.

"It has been shocking to me the number of businesses that we have entirely caused to go out of business, the number of businesses that have left children's product arena completely because of this bill, the number of choices that parents no longer have," Northup said.

According to Northup, businesses have told the CPSC that testing requirements "stifle innovation and product variety by erecting significant cost barriers to adding to toys new accessories, new colors, or other variations"

Jolie Fay, secretary of the Handmade Toy Alliance, operates Skipping Hippos, a company that makes homemade ponchos, out of her home. Fay says third-party testing requirements jeopardize the existence of her company and other small businesses across the country.

"We can't afford the third party testing. We can't," Fay said.

"So it'll shut you down?" Vice Chairman Marsha Blackburn, R-Tenn., asked."

"Yes," Fay said.

CPSC Chairman Inez Tenenbaum defended the CPSC's implementation of the CPSIA thus far to ensure safety standards are maintained for consumer products.

Democrats joined the praise for the law, calling it a vast improvement from the consumer product safety bills in years past.

"The fact remains that the system we had in place was a failure, and this law was necessary to protect kids and families across the country," Rep. Henry Waxman, D-Calif., said.

"The bottom line issue of protecting consumers and particularly children -- that is the proper role of government," said Rep. Jan Schakowsky, D-Ill. "That is our proper role that we will exert today. We're going to protect our consumers and our children."

In March, the CPSC is set to unveil a publicly searchable database, mandated by the 2008 law, which will allow consumers to check the safety of products on the market and submit independent claims about products.

"This database will empower consumers with information allowing them to quickly determine whether products they already own or are considering purchasing are associated with safety hazards or recalls," Tenenbaum said.

CPSC Database Prompts Praise, Criticism

Tenenbaum stressed the importance of the database for consumers and revealed the CPSC has set in place certain safeguards to ensure inaccurate data does not appear on the database, including requiring contact information for all reports, giving the product manufacturers ten days to respond to reports if they are materially inaccurate, and providing manufacturers with the ability to respond to any reports.

But the database has received some backlash from those in industry and Congress claiming it will negatively impact job growth further.

The National Manufacturers Association said the CPSC database will significantly harm businesses without ensuring additional safety.

Freshman Rep. Mike Pompeo, R.Kan., has introduced legislation to stop the launch of the database until Congress holds more hearings claiming it will negatively impact job growth by opening the door to erroneous and non-specific reporting.

"The database's final role, in my view, has created and will create far more harm than good than it will do," Pompeo said. Pompeo hopes the amendment will face a vote, as the House considers funding for the government for the remainder of the fiscal year.

Enacted in 2008, the CPSIA requires companies to test and document several substances, including lead, used in consumer products, specifically targeting children's products.

Earlier this month, the CPSC extended until December, the deadline for companies to have the appropriate certificates guaranteeing products were tested for lead content in order to sell their products in the United States.