[Senate Hearing 108-940]
[From the U.S. Government Publishing Office]
S. Hrg. 108-940
REAUTHORIZATION OF THE CONSUMER
PRODUCT SAFETY COMMISSION (CPSC)
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CONSUMER AFFAIRS AND PRODUCT SAFETY
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JUNE 17, 2003
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South
CONRAD BURNS, Montana Carolina, Ranking
TRENT LOTT, Mississippi DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas JOHN D. ROCKEFELLER IV, West
OLYMPIA J. SNOWE, Maine Virginia
SAM BROWNBACK, Kansas JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon JOHN B. BREAUX, Louisiana
PETER G. FITZGERALD, Illinois BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada RON WYDEN, Oregon
GEORGE ALLEN, Virginia BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire BILL NELSON, Florida
MARIA CANTWELL, Washington
FRANK R. LAUTENBERG, New Jersey
Jeanne Bumpus, Republican Staff Director and General Counsel
Robert W. Chamberlin, Republican Chief Counsel
Kevin D. Kayes, Democratic Staff Director and Chief Counsel
Gregg Elias, Democratic General Counsel
------
SUBCOMMITTEE ON CONSUMER AFFAIRS AND PRODUCT SAFETY
PETER G. FITZGERALD, Illinois, Chairman
CONRAD BURNS, Montana RON WYDEN, Oregon, Ranking
GORDON H. SMITH, Oregon BYRON L. DORGAN, North Dakota
C O N T E N T S
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Page
Hearing held on June 17, 2003.................................... 1
Statement of Senator Fitzgerald.................................. 1
Witnesses
Gall, Hon. Mary Sheila, Commissioner, Consumer Product Safety
Commission..................................................... 12
Prepared statement........................................... 13
Gold, Stephen, Vice President, National Association Manufacturers
CPSC Coalition................................................. 48
Prepared statement........................................... 49
Klein, Gary S., Senior Vice President, Government, Legal and
Regulatory Affairs, Toy Industry Association, Inc. (TIA)....... 51
Prepared statement........................................... 53
Korn, J.D., Alan, Director, Public Policy and General Counsel,
National SAFE KIDS Campaign.................................... 41
Prepared statement........................................... 43
Moore, Hon. Thomas H., Commissioner, Consumer Product Safety
Commission..................................................... 6
Prepared statement........................................... 8
Pittle, Ph.D., R. David, Senior Vice President, Technical Policy,
Consumers Union................................................ 25
Prepared statement........................................... 27
Polk, Robert, on behalf of the National Association of State Fire
Marshals....................................................... 58
Prepared statement........................................... 59
Stratton, Hon. Hal, Chairman, Consumer Product Safety Commission. 2
Prepared statement........................................... 4
Weintraub, Rachel, Assistant General Counsel, Consumer Federation
of America..................................................... 35
Prepared statement........................................... 36
REAUTHORIZATION OF THE CONSUMER PRODUCT SAFETY COMMISSION (CPSC)
----------
TUESDAY, JUNE 17, 2003
U.S. Senate,
Subcommittee on Consumer Affairs and Product
Safety,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:35 p.m. in
room SR-253, Russell Senate Office Building, Hon. Peter G.
Fitzgerald, Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. PETER G. FITZGERALD,
U.S. SENATOR FROM ILLINOIS
Senator Fitzgerald. Thank you all for waiting. I am sorry I
was delayed. And I am glad to call this Committee hearing to
order in order to hear testimony on the reauthorization of the
Consumer Product Safety Commission. We hope to get an
authorization in place for the Commission very soon.
I would like to thank Chairman Stratton, Commissioner Gall,
and Commissioner Moore for being here with us today. I would
also like to welcome the other witnesses to the Committee. I
would also like to thank Senator McCain for his leadership on
this and other issues before the Committee and for his interest
in addressing these and other issues related to the
reauthorization of the Consumer Product Safety Commission.
The CPSC's mission is to, ``reduce unreasonable risks of
injury and death from consumer products and to assist consumers
in evaluating the comparative safety of consumer products.'' It
has jurisdiction over some 15,000 products. According to the
CPSC, since its inception there has been an almost 30 percent
decline in the rate of deaths and injuries related to hazardous
consumer products. Without doubt, the CPSC has contributed
significantly to this decline.
In 2002, the CPSC completed 387 cooperative recalls
involving about 50 million product units. It completed 13 civil
penalty cases that resulted in over $4 million in fines last
year. The CPSC has also attempted to keep up with the effects
that modern technology has had on how consumers purchase
products.
I was interested to learn that the CPSC joined forces with
Amazon.com and eBay to alert their customers to products for
sale on their auction sites that may have been recalled, and
direct them to CPSC's website for recall information.
I would like to congratulate the Commissioners and the CPSC
on the work that has been done over the last several years to
protect American consumers.
The CPSC was last reauthorized in 1990, for Fiscal Years
1991 and 1992. Since the expiration of that reauthorization,
its funding has been increased by approximately 5 to 6 percent
each year, mainly through the appropriations process. This
funding has not adequately allowed the CPSC to keep pace with
the growing number of consumer products and its increased
workload. Since 1990, the CPSC staff has decreased by 10
percent.
According to the CPSC, there is still an average of 23,900
deaths and 32.7 million injuries each year that are related to
consumer products under its jurisdiction. The deaths, injuries,
and property damage associated with consumer products cost the
United States over $700 billion each year. These statistics
underscore the need to reauthorize the CPSC this year.
I am proud to be an original cosponsor of the Consumer
Product Safety Commission Reauthorization Act of 2003, which
Senator McCain introduced last week. This bill will reauthorize
the CPSC through Fiscal Year 2007. It will provide it with the
funding increases that it needs to update its laboratories and
technology. This reauthorization bill is essential to the CPSC
being able to continue to carry out its mission and to meet the
demands of the continual technological advances that are part
of our society.
I look forward to hearing testimony today on the
reauthorization of the CPSC, as well as their thoughts on how
the CPSC should carry out its mission in the coming years. I am
pleased we have such a diverse group of consumer organizations
here today. I am also interested to learn more about some of
the current consumer issues, such as fire safety, the fire
safety of various household products, all-terrain-vehicle
safety, recall effectiveness, as well as other issues that
affect the CPSC.
And with that, I would like to thank the Commissioners for
being here, Chairman Stratton, Mr. Moore, and Ms. Gall. I would
like to ask you each if we could limit our testimony to 5
minutes each. We will allow your written statements to be
introduced and submitted for the record. I would think that
most of you would be in a position to talk off the top of your
heads and be more succinct than your well-written, well-done
reports that we will file for the Committee's record today.
So, Chairman Stratton, thank you very much for being here.
STATEMENT OF HON. HAL STRATTON, CHAIRMAN,
CONSUMER PRODUCT SAFETY COMMISSION
Chairman Stratton. Thank you, Mr. Chairman. I appreciate
that. Frankly, your statement was better than mine is going to
be----
[Laughter.]
Chairman Stratton.--so I am going to try to shorten up my
statement as I go through, because, I agree, I would just as
soon respond to the questions on things you want to hear about.
I appreciate the opportunity to come before your
Subcommittee today, along with my colleagues, to answer any
questions that you and other Subcommittee Members may have as
you work to reauthorize the Consumer Product Safety Commission.
As you know, I had the honor of being sworn in as the
Chairman of the Commission on August 2, 2002. Before my
swearing in, the CPSC was ably led by my friend and colleague,
Commissioner Moore, who was the Acting Chairman, with strong
support from my friend, Commissioner Gall. And I might just
indicate that we, up here, now have, collectively, almost 20
years of experience at the CPSC. My tenure contributes 10
months to that.
[Laughter.]
Chairman Stratton. So sitting beside me, we have almost 20
years of experience, and I expect them, should I get in trouble
today, to bail me out.
[Laughter.]
Chairman Stratton. The Commission has jurisdiction, as the
Chairman has said, over some 15,000 types of consumer products.
To effectively enforce the law, the CPSC divides itself into
three main divisions: hazard identification and reduction,
enforcement and compliance, and public information. To support
these divisions, the CPSC operates advanced hazard
identification systems, including an internationally recognized
injury reporting system, a toll-free hotline, and a website,
all of which have been cited as models among Federal agencies.
The Commission has a range of options available to address
consumer-product problems, including the power to promulgate
safety regulations, implement recalls, and exact civil and
criminal penalties, where appropriate. We are very serious
about our mission at the CPSC. As the Chairman stated, last
year we had 387 cooperative recalls, which involved 50 million
product units. Our enforcement division concluded 13 civil
penalty cases that resulted in $4 million in fines for failure
to report a hazardous defect to the Commission or for selling
products in violation of the CPSC's mandatory standards.
The authorization before you today would allow us to
maintain our current safety programs and employee levels, while
increasing our efficiency through modernization of our
laboratory and improved technology.
As an information-driven agency, CPSC needs to continually
invest in our data-handling resources. As one example of the
importance of this, we have just launched a new burn center
reporting system to collect better data and better identify the
origins of burn injuries to children under 15 years of age. We
are pleased to be working on this project, along with the
Shriners Hospitals for Children, the American Burn Association,
and the National Association of State Fire Marshals, in
developing and implementing this new and important system. And
I would just like to thank them publicly for coming together
with us. It is the first cooperative effort like this ever, and
I think it is going to be very successful.
As a former State Attorney General, I am committed to
strong enforcement of the law. American consumers and Congress
should expect that the CPSC will assertively use the tools that
you provide us to get unsafe products out of the marketplace.
Further, I believe that our decision-making process should
include the full participation of the public, and that is why
we have opened up the Commission's meetings, inviting
petitioners, stakeholders, and other interested parties to
testify directly before the Commission.
Earlier this month, we held a very successful field hearing
in Morgantown, West Virginia on ATV injuries. We heard from
medical doctors, ATV dealers and riders, consumer-safety
advocates, and families of victims. We returned to Washington
much enlightened, I believe--at least I am speaking for myself
there--and much better prepared to make intelligent decisions
on this matter of great concern.
In conclusion, I would like to say that I appreciate the
Committee's support for the CPSC. Mr. Chairman, I will be happy
to answer whatever questions you have.
Thank you.
[The prepared statement of Commissioner Stratton follows:]
Prepared Statement of Hon. Hal Stratton, Chairman,
Consumer Product Safety Commission
Thank you, Chairman Fitzgerald, and good afternoon. I appreciate
the opportunity to come before your subcommittee today, along with my
colleagues, to answer any questions that you and other subcommittee
members may have as you work to reauthorize the Consumer Product Safety
Commission.
As you know, I had the honor of being sworn in as Chairman of the
Consumer Product Safety Commission (CPSC) on August 2, 2002. Before my
swearing-in, the CPSC was ably led by my friend and colleague
Commissioner Thomas Moore with the strong and active support of my
friend and colleague Commissioner and Vice Chair Mary Gall. I never
miss an opportunity to applaud their leadership and commitment to the
CPSC during that period, and I want to express my appreciation for
their continued support and guidance.
Mr. Chairman, the CPSC has a very important mission. Thirty years
ago, Congress established the CPSC to protect children and families
against unreasonable risks of injury and death from hazardous consumer
products. Over that time, the work of the Commission has contributed
significantly to the 30 percent decline in the rates of deaths and
injuries from these products.
The Commission enforces five Federal statutes: the Consumer Product
Safety Act, the Flammable Fabrics Act, the Poison Prevention Packaging
Act, the Federal Hazardous Substances Act and the Refrigerator Safety
Act. Through these laws, we have jurisdiction over the safety of some
15,000 consumer products.
In enforcing these laws, the CPSC divides itself into three main
divisions--hazard identification and reduction, enforcement and
compliance, and public information and education. These divisions are
staffed by the 471 employees at our headquarters, our laboratory and
our field offices around the country, and I should note that one of our
three regional centers is in the Chairman's hometown of Chicago. Our
employees and the skills that they bring to their jobs are the most
critical component of the CPSC success story. Because of the nature of
our work, the Commission relies on a highly educated scientific and
technical staff. Their expertise covers a wide range of disciplines and
is central to our safety mission.
In fulfilling this mission, the CPSC operates advanced hazard
identification systems, including an internationally-recognized
hospital emergency room injury reporting system, a toll-free hotline
and a website that have all been cited as models among Federal
agencies. When a hazard is identified, the Commission has a wide range
of options available to address the problem including voluntary
standards, safety guidelines, labeling and consumer information,
cooperative product recalls, and when necessary, mandatory rulemakings
and litigation.
The Commission's actions are based on rigorous risk-based analysis
to assure that our solutions are fair and effective. We initiate our
safety efforts by working cooperatively with affected industries, and
this has resulted in hundreds of voluntary safety standards that have
assured safer products for American consumers.
The Commission's current appropriation is $56.6 million, and we
believe that is a great value to the American people. We don't put a
price on the loss of any human life, but beyond the human grief and
tragedy of injuries and lost lives from unsafe products, there is also
the measurable economic toll of medical bills, legal costs and property
damage. As the Committee members well know, these societal costs can be
extraordinary. Just one avoided serious injury can save society
literally hundreds of thousands of dollars. In this regard, CPSC is a
bargain for America's tax-paying families.
We are very serious about our mission at the CPSC. Last year alone
the Commission completed 387 cooperative recalls involving about 50
million product units. These recalls ranged from promotional toys to
power tools. Our enforcement division completed 13 civil penalty cases
that resulted in over $4 million in fines for failure to report a
hazardous defect to the Commission or for selling products in violation
of CPSC's mandatory safety standards.
We are a results-oriented agency, and our current strategic plan
has focused on clear, measurable goals that have reduced death rates
from fires, electrocutions, poisonings and children's head injuries. As
called for by the Government Performance and Results Act, we are
currently developing our new strategic plan for the next six-year cycle
to begin in 2004.
The authorization levels before you would allow us to maintain our
current safety programs and employee levels while increasing our
efficiency through improved information technology and a modernized
laboratory. Our funding increases since our last authorization in 1990
have averaged 3.3 percent annually, a figure that is outpaced by the
agency's mandatory cost increases for such items as salary cost-of-
living adjustments, health benefit increases, and rent increases.
Any authorization above these mandatory expenditures would be
applied to quality improvements in our ability to collect and examine
data through upgrades to our technology infrastructure, laboratory
equipment and staff training. As you know, expenditures such as these
can significantly increase agency productivity without increasing
agency employment.
As a data driven agency, CPSC needs to continually invest in data
handling resources to maintain our capabilities as well as take
advantage of technological efficiencies. Many of these investments are
mandated by legislation such as the Clinger-Cohen Act, the Government
Information Security Results Act and the Government Paperwork
Elimination Act.
As one example of our continuing efforts in this regard, we have
just launched a new Burn Center Reporting System to help us collect
better data and better identify the origins of clothing related burn
injuries to children. We have been pleased to work closely with the
Shriners Hospitals for Children, the American Burn Association and the
National Association of State Fire Marshals in developing and
implementing this important new system.
There are about 115 burn centers nationwide that treat children.
Some burn centers are already reporting under this new system, and the
system is expected to be fully operational this summer. For each of the
burn incidents reported in this new system, the burn center will
provide the CPSC with preliminary information on the incident. A CPSC
investigator will then be assigned to the case to conduct an in-depth
investigation. All reports will be reviewed and logged into the CPSC's
epidemiological databases. That data will be available for all
interested parties to analyze through the Commission's Injury
Information Clearinghouse.
I know this is an issue of great concern to many members of the
Committee, especially to Senator Burns and Senator Breaux, and I am
pleased to be able to report the significant progress we have made on
this matter.
The authorization before you would also enable us to establish a
planned annual three to four year equipment and software replacement
cycle and to improve our data access and the security of our
information technology. The authorization would also enable us to
establish a one-stop query capability for agency staff use. Currently,
staff must query five different databases to complete research. Such
integration would also reduce redundancy in data collection and data
entry.
Additionally, since CPSC makes its decisions based on injury and
death data, the agency should continually invest in its capabilities to
identify, analyze and perform in-depth study of product hazards. CPSC
has pilot-tested an improved fire injury and death system in response
to a General Accounting Office audit; however, we do not have the funds
to operate the system.
With regard to our laboratory modernization, funding would be used
to establish a replacement cycle for major laboratory equipment. CPSC
does not have a capital equipment replacement fund. The laboratory
testing facility is a key tool underpinning much of our work, and our
goal is to maintain it in modern, state-of-the-art condition to the
greatest extent possible.
This authorization would allow us to improve training for agency
staff and to establish training for our state and local partners. We
greatly increase our effectiveness by working with state and local
officials to conduct recall effectiveness checks and safety programs
such as our highly successful annual recall round-up safety campaign.
When I accepted this position last year, I began this job with a
number of goals. First, because we are a small agency with a small
budget and a large mandate, it is critical that our resource allotments
be based on the most accurate and optimum risk assessment and data
collection. Every CPSC dollar spent on identification and reduction of
any given safety hazard is a CPSC dollar not spent on some other safety
hazard. Our goal is to use each taxpayer dollar to its maximum safety
effectiveness, and I am pleased that the Office of Management and
Budget has recognized CPSC's performance and has given the agency an
overall rating of 83 percent under their Program Assessment Rating
Tool, one of the highest ratings of any agency. We are building on that
excellent performance assessment.
Secondly, as a former attorney general, I am committed to strong
enforcement of the law. American consumers--and Congress--should expect
that CPSC will assertively use the tools that you provide us to get
unsafe products out of the marketplace. In my nine months as Chairman,
I have overseen 249 product recalls and over $3.5 million in civil and
criminal penalties.
Further, I believe that our decision-making process should include
the full participation of the public. To a great extent that is
provided for in our regular rule-making process, but beyond that we
have opened up Commission hearings to full public participation
inviting petitioners and other interested parties to testify before the
Commission. Earlier this month, we held a very successful field hearing
in Morgantown, West Virginia, on ATV injuries. We heard from medical
doctors, injury prevention researchers, ATV dealers and riders,
consumer safety advocates and families of victims from ATV-related
crashes. It was an extraordinary day, and I believe that Commissioners
Gall and Moore agree that we returned to Washington much enlightened
and much better prepared to make intelligent decisions on this matter
of great concern.
In conclusion, I would like to say that I appreciate the
Committee's support for the Consumer Product Safety Commission over the
years. We are certainly not the largest agency within your
jurisdiction, but we do have an impact beyond our size on America's
families and the safety of their homes and playgrounds. We are pleased
to work with your local offices in your home states in helping your
constituents learn more about unsafe products and help them protect
themselves and their families from the tragic accidents that we receive
reports on every morning.
Mr. Chairman, product safety is our goal, our commitment and our
mission as public servants. Thank you for your interest in
reauthorizing our agency, and we look forward to answering your
questions.
Senator Fitzgerald. Thank you.
Mr. Moore?
STATEMENT OF HON. THOMAS MOORE, COMMISSIONER, CONSUMER PRODUCT
SAFETY COMMISSION
Commissioner Moore. Thank you.
Mr. Chairman, I am here to support the reauthorization of
the United States Consumer Product Safety Commission. Without a
doubt, the Commission is charged by Congress----
Senator Fitzgerald. Could you pull your microphone closer
to your mouth? Thank you.
Commissioner Moore. The Commission is charged, by Congress,
with the critical responsibility of protecting the American
public against unreasonable risk of injuries and deaths
associated with consumer products. Protecting life, without
question, is a crucial responsibility. Our work has resulted in
an almost 30 percent decline in the rate of deaths and injuries
related to hazardous consumer products since about 1974.
However, despite significant reductions, there remains, on
average, about 23,900 deaths and 32.7 million injuries each
year related to unsafe products. Moreover, the deaths,
injuries, and property damage associated with unsafe products
cost the Nation over $700 billion annually.
In 2002, alone, the Commission took direct action against
nearly 55 million products units through recalls, repairs,
replacements, refunds, design changes, or seizures. Ensuring
the removal of unsafe products from potential consumer use is
essential.
Another issue in the enforcement area relates to civil
penalties. I support the elimination of the monetary cap on
civil penalties for business failure to report the marketing of
unsafe products. The reality is that a $1.65 million fine means
nothing to many of the corporations we regulate. Why do we need
a cap at all? We already have statutory considerations which
guide our decision as to how large a penalty to assess.
I believe that regulatory policies should recognize that
the private markets are the best engines for economic growth.
Regulations, therefore, should be cost effective, consistent,
sensible, and understandable.
Whenever appropriate, we encourage voluntary industry
action to address safety requirements. Voluntary actions. Since
1990, we have worked cooperatively with industry to conduct
more than 4500 recalls, and resorted to litigation to compel
recalls only seven times. Effective voluntary action is always
preferable.
The Commission's successes are a major source of optimism.
I have been very pleased to have been involved in many of these
successes. The agency, with a $56.6 million budget for Fiscal
Year 2003, really pays for itself many times over by reducing
societal costs associated with hazardous consumer products.
By all current measures, CPSC provides both tremendous
service and value to the American people. CPSC's reductions in
deaths, injuries, and costs associated with unsafe products
saves the Nation many times the agency's annual budget. This
year, we expect to reduce societal costs by over $13 billion.
These savings are over 200 times CPSC's Fiscal Year 2003
budget.
In addition, I still advocate the idea of a product-safety
research effort at the Commission. Clearly, Congress envisioned
research as part of the Commission's safety efforts. The
language in Section 5(b)(1) of the Consumer Product Safety Act
explicitly addresses conducting research. Yet, for too many
years, we have had to defer any research program for lack of
funding.
In closing, I think that reasoned Commission action
reflects a pragmatic approach to resolving product-safety
problems and recognizes that regulation is only one of many
options for addressing safety issues. But, if safety is not the
goal of a certain industry or manufacturer, the Commission
stands ready to protect the consumer expeditiously and without
compromise.
However, the key to the Commission's continued success is
funding. To successfully continue the mission of the agency,
the Commission must have the resources to respond quickly and
effectively where the lives and health of the American public
are at risk. Our U.S. CPSC is a worldwide example of how a
free-market economy protects its people.
I thank you for allowing me to address my concerns at this
hearing, and I look forward to working with you and your staff
in the reauthorization process. And of course, I will try to
respond to any questions you may raise.
Thank you.
[The prepared statement of Commissioner Moore follows:]
Prepared Statement of Hon. Thomas H. Moore, Commissioner,
Consumer Product Safety Commission
Mr. Chairman and members of the Subcommittee, I appreciate the
opportunity to appear before you today to provide testimony on the
reauthorization of the United States Consumer Product Safety Commission
(CPSC). The Commission is charged by Congress with the critical
responsibility of protecting the public against unreasonable risk of
injury and death associated with consumer products. This is a crucial
responsibility because, often without CPSC's intervention, the
consequences of exposure to the hazards associated with dangerous
products may literally be of a life and death nature for individual
consumers unknowingly in possession of unsafe consumer products.
As you are aware, CPSC has not been reauthorized since 1992 and has
not had a reauthorization hearing before this body since 1996. Although
these proceedings could be an exceedingly intensive undertaking for the
CPSC, I welcome this reauthorization process because I believe it
presents a unique opportunity to focus on the Commission's present and
future agenda.
The Mission
In examining the legislative history of the statute creating the
CPSC 30 years ago, we find that Congress, in its wisdom and foresight,
was concerned about technological advances creating a variety of new
products with greater potential for injury which would be less easily
recognized and comprehended by the American consumer. Congress
recognized that the dramatically increasing number of consumer products
and the consumer's increasing reliance on more complex labor saving and
recreational devices would create increasing risk of injury from their
use. Additionally, continuing product development demonstrated that
previously acceptable risk levels were no longer reasonable in light of
available safety technology.
Today, the risk of injury and death from unsafe consumer products
continues to be enormous and costly. CPSC's mission is to protect
children and families against unreasonable risk of injury and death
from about 15,000 types of consumer products. Our work has contributed
significantly to the almost 30 percent decline in the rate of deaths
and injuries related to hazardous consumer products since the agency's
inception. However, despite significant reductions over the years,
there remains on average about 23,900 deaths and 32.7 million injuries
each year related to consumer products under CPSC's jurisdiction. These
numbers represent almost 9 deaths and 12,000 injuries per 100,000
people each year. Moreover, the deaths, injuries, and property damage
associated with consumer products cost the Nation over $700 billion
annually.
Unintentional injuries are the leading cause of death for all
Americans under the age of 45 and are the fifth leading cause of death
in the Nation. Individuals 65 years of age and older are three times as
likely to die of unintentional injuries than their representation in
the population. We know that for the most part, we accept national and
state governments' responsibility to protect citizens from intentional
injury or death. Aside from questions of justice, do loved ones grieve
less when a serious injury or premature death occurs through
unintentional means? Is there less grief if one is, say, paralyzed for
life after a fall from a defective stepladder as opposed to a spinal
cord injury from a robber's knife or bullet?
Today, our reliance on consumer products in our lives is tremendous
and growing. We rely on manufactured mechanized and electrical devices
to assist us in too many of life's activities to mention--at play, at
work, in education, in travel, and particularly inside and outside of
the home: in food preparation, in cleaning and making repairs around
the home, in child-care, in trimming trees and grass, and on and on and
on. To further complicate matters, more and more of these products are
manufactured abroad. Increasingly, other western nations are following
our lead in having recognized a governmental responsibility to become
actively engaged in reducing the consumer's risk of injury or death
from hidden dangers in hazardous consumer products. In today's complex
marketplace it is going to be exceedingly difficult for any amount of
libertarian sophistry to overwhelm these obvious facts of modern life.
It is suggested in some circles that the modern, sophisticated
marketplace of today can effectively regulate itself for product
safety. I strongly submit that the previously discussed justification
for governmental involvement in the protection of the consumer's right
to safety is even more compelling today than it was 30 years ago. Very
simply put, competition and voluntary actions of today's businessmen do
not always suffice to safeguard the public interest. Competition does
not and will not inevitably take the form of a rivalry to produce the
safest product. The role of the CPSC in today's consumer product
marketplace remains compelling, substantial and relevant.
Addressing Product Safety Hazards
Aside from using its rulemaking authority, CPSC can act forcefully
and quickly to remove dangerous products from the marketplace through
two main enforcement activities. The first is in vigorously enforcing
its current regulations; and the second is in utilizing its Section 15
authority to achieve recalls or corrective action plans when it is
believed that a product meets the level of a substantial product
hazard.
I point out to you that in 2002 alone, the Commission obtained 625
corrective actions involving regulated products. Fifty-one of these
actions involved consumer level recalls covering more than 2.4 million
products units that violated the Commission's regulations. We accepted
another 342 corrective action plans involving approximately 48 million
product units that were not subject to mandatory standards, but which
may have contained a product defect.
With the help of U.S. Customs Service, we detained an additional
3.5 million foreign products that violated our regulations. Unless
interdicted, those goods would have competed with U.S. manufactured
products, often undercutting them on price because the foreign
manufacturers did not bother complying with our safety regulations. Our
efforts to keep these violative products out of the marketplace protect
not only the American consumer, but the American manufacturer as well.
Thus, in 2002 alone, the Commission took direct action against
nearly 55 million product units through recalls, repairs, replacements,
refunds, design changes or seizures. If these millions of products were
left in the hands of or reached unsuspecting consumers, the
consequences could be death or serious injury to loved ones.
Requiring a manufacturer, distributor or retailer to recall
defective products is a primary mechanism in CPSC's continuous
undertaking to address product safety hazards. However, announcing the
recall is just one step in an overall process of eliminating the
hazards presented by unsafe products in consumer's homes. Ensuring the
removal of those unsafe products from potential consumer use is also
essential. Given the limitations presented by CPSC's resources, it is
tremendously important that the Commission maximize the effectiveness
of this particular aspect of the recall process.
Recently, there have been questions raised about just how effective
the Commission has been in facilitating the removal of unsafe products
from consumer use: Is the unsafe product message being effectively
communicated to the public, are enough products being effectively
removed, and are there additional things that the Commission can do? I
think that there are certainly enough legitimate questions surrounding
the best method for determining what constitutes an effective recall in
any particular case to merit careful review.
In July 2001, the Consumer Federation of America petitioned the
CPSC to require manufacturers (or distributors, retailers, or
importers) of products intended for children to provide a product
registration card along with every product sold. In March 2003, after
being briefed on the issue by CPSC staff and hearing presentations from
representatives of consumer groups and industry, a majority of the
Commission voted to deny the petition. While I am disappointed that we
have not begun the formal process that I believe is necessary to give
this issue the prominence it deserves, I believe my fellow
Commissioners are also very serious in wanting to address issues raised
by this petition. To that end, a multi-disciplinary team of CPSC staff
is exploring the issue of recall effectiveness. The team has developed
a multi-stage plan to determine how best to address the way we do
recalls including scheduling a series of three meetings to obtain
information on this issue from outside experts.
Another issue in the enforcement area lies within the civil penalty
arena. I have supported, and continue to support, the elimination of
the monetary cap on civil penalties. While the cap does rise
periodically, the reality is that a $1.65 million fine means nothing to
many of the corporations we regulate. Why do we need a cap at all? We
already have statutory considerations which guide our decision as to
how large a penalty to assess, and those should be sufficient. It is
one thing to limit the amount one consumer can recover against a
company (and not a position I necessarily support either), but it is
quite another to limit the government's ability to penalize a company
on behalf of all consumers, thereby limiting the deterrent effect of
civil penalties. Perhaps some companies would be less likely to try to
stall our agency by putting off reporting hazardous products if we had
penalties that were more commensurate with the harm they can cause.
Cooperation as a Key Element
I believe that regulatory policies should recognize that the
private sector and private markets are the best engines for economic
growth. Regulatory approaches should respect the role of state and
local governments. And, regulations should be cost effective,
consistent, sensible, and understandable.
Our regulatory decisions are intensely scientifically based. We
rely on the analyses of dozens of high-level and well-experienced
Epidemiologists, Pharmacologists, Toxicologists, Physiologists,
Chemists, Engineers, Statisticians, and Economists as the underpinning
of CPSC decision-making. As confirmation, the Office of Management and
Budget (OMB), in applying its new Program Assessment Rating Tool (PART)
to CPSC, found that the Commission scored relatively high (83 percent)
among the 20 percent of Federal programs rated this year. While the OMB
assessment suggested areas for improvement, OMB found that CPSC
performs very well, thus giving support to our overall regulatory
policies.
Additionally, the Commission works well with, and understands the
needs of, corporate America. Whenever appropriate, we encourage
voluntary action by industry to address safety requirements. Since
1990, we have worked cooperatively with industry to conduct more than
4500 recalls and resorted to litigation to compel recalls only 7 times.
Further, we worked with industry and others to complete about 6 times
as many voluntary standards as mandatory standards (CPSC assisted in
completing 214 voluntary safety standards while issuing 35 mandatory
standards). The Commission recognizes that, in this time of shrinking
resources, voluntary action is preferable to mandatory regulations when
such action is implemented in a timely fashion, carried out
productively and, most importantly, when such action adequately
addresses an unreasonable risk of injury.
As an example, CPSC worked with industry to revise the voluntary
baby walker safety standard to address injuries from stair falls. New
walkers with safety features are now on the market. There has been a
decrease in injuries of over 70 percent since 1995 likely due in large
part to the new voluntary standard requirements. CPSC projects societal
costs decreasing about $600 million annually from this one action. So
in this time of shrinking resources, the Commission is always looking
for faster, more cost-efficient ways to reach our goals.
Furthermore, many product problems involving safety-minded
corporations have been resolved through carefully negotiated high-
integrity agreements. Co-operative engagement with industry
contemplates and facilitates the amelioration of product safety hazards
without resorting to the time-consuming and costly use of the
regulatory process.
An example of this is the continued success of the Fast Track
Product Recall Program. This program is designed to speed up corrective
actions, including product recalls, and, most importantly, quickly
remove unsafe consumer products from the marketplace. Over 700 firms
have participated in the program since its inception, resulting in
almost 1,100 corrective action plans involving over 124 million product
units. This effort was a winner of the 1998 ``Innovations in American
Government Award'' sponsored by the Ford Foundation in conjunction with
the Harvard University's Kennedy School of Government and the Council
for Excellence in Government.
Additionally, the Commission has learned that finding and assessing
hazards, developing and enforcing standards and regulations, and
informing and educating the public about product safety matters can
best be handled as a partnership between CPSC and appropriate state/
local agencies.
Success Stories
The Commission's successes are a major source of optimism. During
my time at the Commission, I have been very pleased to be involved in
many of the Commission's successes. The agency, with a $56.8 million
budget for FY 2003 really pays for itself many times over by reducing
societal costs associated with hazardous consumer products.
By all current measures, CPSC provides both tremendous service and
tremendous value to the American people. Each year through reductions
in deaths, injuries, and other costs associated with unsafe products,
such as health care costs and property damage, CPSC saves the Nation
many times the agency's annual budget. As I indicated earlier, CPSC is
the major factor in the 30 percent decline in the rate of deaths and
injuries related to consumer products since 1974. Through our standards
work, compliance efforts, industry partnerships, and consumer
information, this year we expect to prevent 1,600 fire deaths, 460
electrocution deaths, 40 child-poisoning deaths, 140 infant deaths from
suffocation and strangulation hazards associated with cribs, and 60
carbon monoxide (CO) poisoning deaths. In addition, we expect to
prevent over 13,000 children's head injuries and 40,000 injuries
associated with dangerous fireworks. We expect the annual number of
deaths and injuries prevented by just these examples to reduce societal
costs by over $13 billion. These savings by themselves are over 200
times CPSC's FY 2003 budget.
Currently, the Commission collects information about product-
related injuries treated in hospital emergency rooms through our
National Electronic Injury Surveillance System or ``NEISS.'' This
unique system provides statistically valid national estimates of
product-related injuries from a probability sample of about 100
hospital emergency rooms. These estimates provide the data support for
many of the Commission activities allowing the Commission to spot
hazard patterns, set priorities, and give direction to product safety
efforts. These estimates are also valuable to industry, which can use
the data to spot hazard patterns to help give direction to their own
product safety efforts.
In 2002, NEISS supplied about 350,000 product-related cases from
its sample of hospital emergency rooms. Several foreign governments
have modeled their national injury data collection systems after the
Commission's system. Additionally, in 2000, NEISS was expanded to
provide data on all trauma-related injuries. This expanded data
provides other Federal agencies, researchers, and the public with more
comprehensive information on injuries from all sources, not just
consumer products.
Present and Future Activities
Protecting the most vulnerable segments of our society is a special
interest of mine. Children, the elderly, the infirm, low-income
families, minorities, and those for whom English is not their native
language are often disproportionately represented in our injury and
death data. I think that it is a reasonable conclusion that if we
concentrate on lowering the risk of injury and deaths due to consumer
products in these vulnerable groups, overall reductions would be
proportionally reflected.
Balancing the concerns of product safety in vulnerable populations,
against product safety concerns in the population as a whole, will
always be one of my more challenging tasks at the Commission. It just
seems to naturally follow that the more educated the general public is
to the dangers of the use or misuse of a product, the more sensible
their use of that product will be. Keeping the public properly informed
about product safety hazards continues to be key. In 2002 alone, we
informed the public of hazardous products through 247 press releases,
19 Video News Releases (VNRs), 1.9 million distributed publications,
specific consumer product safety discussion appearances on network TV
shows, and through CPSC's consumer hotline, website, and National
Injury Information Clearinghouse. I would like to see continued
emphasis at the Commission on education and information campaigns. In
particular, the Commission's use of VNRs has proven to be an effective,
inexpensive way of quickly reaching tens of millions of consumers with
critical product safety information.
Just as disseminating information is an essential role of the
Commission, collecting all relevant product safety data is also
essential to protecting vulnerable segments of our population. To
address any possible issues related to sleepwear-related thermal burn
injuries to children, the Commission, in cooperation with the American
Burn Association, the Shriners Hospitals for Children, and the National
Association of State Fire Marshals, is developing a new National Burn
Center Reporting system for collecting and sharing information on
clothing-related burn injuries to children under the age of 15. There
are about 115 burn centers nationwide that treat children. Some burn
centers are already reporting under this new system and it is expected
that the system will be fully operational this summer.
I also strongly feel that the role of the Commission is essential
to the U.S. marketplace in an increasingly competitive international
marketplace. The Consumer Product Safety Commission and the marketplace
must work together to ensure international consumer product safety
standards and enforcement compatibility so we can enhance international
trade and export opportunities without lowering U.S. safety standards.
Just as the Commission played an essential role in the development
of uniformity in domestic product safety standards and has thereby
minimized conflicting state and local regulations, that role should now
be expanded to working with industry internationally to harmonize
safety standards and thereby reduce non-tariff trade barriers that
varying international safety standards can create.
It is also worth noting that there is now, at CPSC, an added
emphasis on public participation in our overall safety efforts. The
Commission has added a new dimension of public participation to our
decision-making process by inviting the interested public to make oral
presentations at our public staff briefings on regulatory matters under
consideration by the Commission. The public provided both written and
oral presentations at recent Commission meetings on chromated cooper
arsenate (CCA) treated wood and product registration cards, and is
invited to make similar presentations at our meeting to consider a
notice of proposed rulemaking on baby bath seats scheduled for July 28.
In addition, the Commission, on June 5, held a field hearing in
Morgantown, West Virginia on issues related to the hazards associated
with All-Terrain Vehicles (ATVs). From 1997 to 2001, annual ATV-related
injuries rose 104 percent, from an estimated 54,700 to 111,700. This
was the first field hearing held by the Commission since it held
hearings on this same issue in the late 1980s.
I have also given considerable advocacy to the idea of a product
safety research effort at the Commission. Most other Federal health and
safety agencies have research budgets that are a vital part of their
programs. Clearly, Congress envisioned research as part of the
Commission's safety efforts when it adopted the Consumer Product Safety
Act and established the Commission. The very first Commission Annual
Report in 1973 indicated that research was an important component of
the agency's work. The language in Section 5 (b)(1) of the Consumer
Product Safety Act explicitly addresses conducting research. Yet, for
too many years, we have had to defer any research program for lack of
funding. One project for consideration is to conduct long-term testing
and evaluation of the performance of circuit breakers and panel boards
to determine whether the safety standards for these products should be
upgraded. This research could provide important safety benefits because
residential electrical distribution systems (including circuit
breakers, panel boards and wiring) were implicated in an estimated
39,000 fires resulting in 280 deaths and $680 million in property
damage in 1998, the last year for which this data is available.
Conclusion
In closing, while I believe that consumers must take responsibility
for their own safety, there clearly is a role for the CPSC to assure
that products are designed safely and recalled where there is a
problem. Consumer responsibility is something that all three
Commissioners feel strongly about. I think that consumers should be
informed about the products they purchase and take reasonable care in
using them. Mr. Chairman, I believe that our government is attempting
to move into a new era of accountability. It is my hope that this will
be an era where well-reasoned, and I emphasize the word reasoned,
government action will be the rule, and not the exception.
I also think that reasoned Commission action reflects a pragmatic
approach to resolving safety problems and recognizes that regulation is
only one of many options that can be employed to address safety issues.
We will work actively to achieve safety goals, and I expect, as is
often the case, industry will respond reasonably. But, if safety is not
the goal of a certain industry or manufacturer, the Commission stands
ready to protect the consumer expeditiously and without compromise.
Given CPSC's important role, it is clearly reasonable to assert
that funding flexibility is critical if the Commission is to adequately
address the risk of injury and death from future major unexpected
safety hazards that are beyond the current funding capability of the
agency. As Congress envisioned 30 years ago, the Commission should have
the capability to handle increasingly technologically complex products
as well as the capability to uncover high injury risks and defective
products using today's sophisticated data sources. To successfully
continue the mission of the agency, the Commission must have the
resources and the flexibility to respond quickly and effectively to
critical situations where the lives and health of the American public
are at risk.
I would like to thank the Subcommittee for allowing me to address
my concerns at this hearing and I look forward to working with the
Members of the Committee and its staff in this reauthorization process.
Thank you.
Senator Fitzgerald. Thank you, Mr. Moore.
Commissioner Gall?
STATEMENT OF HON. MARY SHEILA GALL, COMMISSIONER, CONSUMER
PRODUCT SAFETY COMMISSION
Commissioner Gall. Thank you, Mr. Chairman. Good afternoon.
I will make my statement short and sweet, just like me.
[Laughter.]
Commissioner Gall. I believe that the Commission and
industry and consumers have worked well under our current
statutory framework, and I have no recommendations to make for
substantial amendments.
I do want to make a quick note of a critical investment
that we cannot, at this time, incorporate into our
authorization levels that we are discussing here today, and
that is about our laboratory that is located in Gaithersburg.
It is eight acres, five buildings that were constructed in the
1950s as part of a Nike missile base for the military to track
Nike missiles. We need to relocate some of the facilities
there, and we need to do some new construction as an overall
redevelopment activity for our laboratory. This has been
approved by the National Capital Planning Commission, and we
are in the process right now of working with GSA to develop the
costs and the design. So we will have a better understanding of
how much that will cost us in late fall.
I would make note, though, that we will require a multi-
year investment of at least several million dollars in order to
pay for the redevelopment of the lab. And the lab, of course,
is at the very heart of our operations at the Commission, and
so this is very important.
In closing, I just want to say thank you for holding this
hearing today, and I hope that all of us will focus on what a
great value CPSC is to the American public.
Thank you, sir.
[The prepared statement of Commissioner Gall follows:]
Prepared Statement of Hon. Mary Sheila Gall, Commissioner,
Consumer Product Safety Commission
Thank you for the opportunity to come before you today. The
Subcommittee has doubtless noted that the Commission has proposed no
amendments to its statutes beyond a technical one to conform the
statute to the existing organizational structure. During the thirty
years of the Commission's existence, the statutes administered by the
Commission have evolved and have been subject to amendments,
interpretations, and administration through regulations. The
Commission, industry, and consumers have worked well under this
statutory framework, as evidenced by the continuing improvement in the
Nation's product safety. I do not believe there is a need for
substantive revisions of the Commission's authorizing legislation.
Proposed Authorization Levels
While acknowledging that the Commission has been successful in
improving product safety, I do want to note that the proposed
authorization levels we have submitted for the next five years leave
some critical investments of the Commission unfunded. We have routinely
asked for this funding, but in this difficult budget climate, our
requests have not been granted.
Laboratory
The $0.5 million we have proposed for laboratory modernization
expenditures will establish an annual replacement cycle for laboratory
equipment. More, however, is needed to modernize the laboratory. CPSC's
laboratory provides critical support to compliance investigations and
safety standards activities. The laboratory structures were originally
designed for military use in the 1950s. While the Commission and GSA
have made modest investments and slight modifications to the existing
structures over the years, the laboratory is in need of redevelopment.
By relocating and consolidating specialized laboratory and office
sites, we could make much better use of the limited available space.
The National Capital Planning Commission recently approved our
redevelopment plan for the laboratory, which would include renovation
of existing facilities, construction of new testing space, and
outfitting the laboratory facilities. The renovation and modernization
of the laboratory would lead to efficiency and productivity gains. An
estimated $750,000 to $1 million would be needed to begin implementing
a redevelopment plan for the laboratory. Final implementation of the
plan would require a multi-year investment of at least several million
dollars. We are working with GSA to develop these costs; these figures
should be available this fall.
Information Technology
As you are aware, as a Federal agency the CPSC must meet a number
of Information Technology (IT) requirements established under Federal
mandates. These include the Clinger-Cohen Act of 1996, the Government
Information Security Reform Act (GISRA), the Government Paperwork
Elimination Act (GPEA), and the Telecommuting Act. The agency's
proposed funding level of $1 million for IT investments funds the four-
year modernization cycle of agency computers, software, and network
components as mandated by the Clinger-Cohen Act. The proposed funding
level of $0.5 million for database integration and programming would
provide the funds necessary to integrate the five agency databases.
Currently, if a field investigator needs to do a search of a chainsaw,
the investigator must search separately through each of the agency
databases. The integration of databases, on the other hand, will allow
this investigator to do a single search for the desired information.
Furthermore, integrated databases will reduce redundancy in data
collection and data entry. Integration of CPSC's databases is
consistent with, and supports, enhanced access for remote users in our
telework program and quick and easy access by citizens to CPSC services
as recommended in the President's Management Agenda.
While our proposed funding levels provide the funds for an
information technology capital investment fund and integration of
agency databases, other requirements mandated by the Clinger-Cohen Act
and GISRA are not fully funded. In 2002, we began to address weaknesses
found in our first GISRA audit by applying one-time, unanticipated
operating savings. We currently have no funds allocated to continue IT
security enhancements. Furthermore, we cannot move ahead to fully
implement other Federal mandates such as the Government Paperwork
Elimination Act and Teleworking Act without addressing IT security.
Efficiency
The Commission is adept at channeling its limited resources to the
areas in which it will see the most benefit. For example, in order to
enhance the type of training the agency offers to its employees, the
Commission has leveraged on other existing training programs, Federal
and otherwise. In addition, the Commission has undertaken partnerships
with industry and consumer groups in order to conduct various projects
or relay consumer product safety information to the public. For
example, last year the Commission worked with the Juvenile Product
Manufacturers Association in a campaign to educate the public about the
hidden hazards of placing infants on adult-sized beds. The Commission
is working in conjunction with Customs to enable CPSC field personnel
to monitor imported consumer products with the aid of Customs
databases.
Conclusion
By any measure, the Commission saves the Nation many times its
annual budget each year and is a great value to the American people. We
are adept in using in our limited resources wisely, as well as in
working within the construct of our statutes to protect the public from
hazardous consumer products. I believe that the Commission represents a
health and safety bargain for the American people, and ask that you
reauthorize the agency today so that it may continue its good work in
the future.
Senator Fitzgerald. Well, Commissioner Gall and Chairman
Stratton, and Commissioner Moore, thank you all very much.
I do have a few questions, and I want to start by following
up on some testimony that Commissioner Moore gave. Commissioner
Moore recommended that the cap on civil penalties, that I
gather is now in your authorizing statute--is that cap in the
authorizing statute? You recommend, Mr. Moore, that that cap be
eliminated altogether.
Commissioner Moore. Yes.
Senator Fitzgerald. I am wondering if you can give me
examples of cases where you think the cap made you assess a
fine that was too small. Could----
Commissioner Moore. Well, I cannot give you a specific
example. However, the specific reason why I think the cap ought
to be removed is that the cap can serve as a hindrance to
enforcement in the sense that if an entity that is violating
some of our rules is not aware of any particular cap, we are
then in a better position, I think, to get submission and to
get behavior control, in not only that one particular
situation, but across the board, because they have no idea of
what the assessment might be against them.
Senator Fitzgerald. They will fear you more.
[Laughter.]
Commissioner Moore. That is right.
Senator Fitzgerald. OK.
Have you ever reached the cap in any cases? Do you know of
any?
Commissioner Gall. No, we have not reached it yet.
Senator Fitzgerald. You have never reached it? In no----
Commissioner Gall. No.
Senator Fitzgerald.--in no case have you reached the cap.
Commissioner Gall. No.
Senator Fitzgerald. Now, Chairman Stratton and Commissioner
Gall, do you wish to weigh in on this issue of whether the cap
should be eliminated or raised?
Chairman Stratton. Ladies first, Mr. Chairman.
[Laughter.]
Commissioner Gall. Well, that is one point for
consideration. We have yet to reach our current cap. And----
Senator Fitzgerald. What is the biggest fine----
Commissioner Gall.--it is 1.1----
Senator Fitzgerald.--you have ever assessed?
Commissioner Gall.--million. Fisher-Price was $1.35 million
for Power Wheels--I believe it was for Power Wheels, right?--
for Power Wheels, which were these nifty little motorized
vehicles for children, toy rides for children.
We assessed a civil penalty of $1 million, I think, against
General Electric for dishwashers that tended to catch fire. And
we have yet to reach the cap itself, which is one concern.
A second concern is that if we remove the caps, then we
would need sufficient resources to take on any battles that we
have, which would result in greater effort on the other party's
part because the amount would be so much higher.
Senator Fitzgerald. Have you had fines that you have
assessed challenged in court?
Commissioner Gall. I believe we have had some fines
challenged, but not in court. I mean, we have come to
settlement agreements.
Senator Fitzgerald. Internally.
Commissioner Gall. We came to one recently where we were
looking for a penalty of six--no, seven figures, and we settled
for $750,000.
Senator Fitzgerald. OK. And you used in-house lawyers, I
would imagine, to handle those cases, right?
Commissioner Gall. Yes, that is correct. Yes.
Senator Fitzgerald. Do you use outside counsel at all?
Commissioner Gall. Well, we work with the Department of
Justice, of course. When we----
Senator Fitzgerald. They represent you.
Commissioner Gall.--bring the cases. But we negotiate our
settlements.
Senator Fitzgerald. So when you say you would need more
resources if you had the ability to levy bigger fines, for what
would those additional resources be used? Not for legal fees,
because you use either inside lawyers, in-house counsel, or the
Justice Department.
Commissioner Gall. Yes. Well, I think we would have to, for
one thing, spend a lot more time than we do now. We would have
to spend a lot more staff time in addressing those issues.
I would expect that we would have--if we are looking at
fines that are much, much higher than the current cap, that we
would get more of an argument from the other side. So it
certainly would be a greater investment of time and resources,
additional investigation, and so on, to document, and then
perhaps more cases might actually go to court.
Senator Fitzgerald. For some of these companies, Mr. Moore,
would you not think that just the adverse publicity that the
firm faces after word leaks out that you are acting against
their corporation for a defective product even be more of a
penalty than the monetary fines we assess?
Commissioner Moore. Certainly that is a penalty, but I
still think the leverage, potential leverage, of an unlimited
potential for fining is meaningful. I think that leverage would
be meaningful.
Senator Fitzgerald. Well, it would give the Commission more
power. There is no doubt about that.
[Laughter.]
Senator Fitzgerald. Well, this is an issue that may come
up. I know that Senator Hollings may offer an amendment to
either increase your fine limit--I think his amendment is to
increase it from the $1.65 million to $20 million. But another
alternative would be to remove the limit altogether. Does
anyone know how long that limit has been in place? Does that go
back to your original authorization, in the 1970s?
Chairman Stratton. I do not know.
Commissioner Gall. Well, it is adjusted. It is adjusted
through periodically----
Chairman Stratton. It began at $500,000, and it has been
ratcheted up starting in 1990, I forget what the number was,
but they put an inflation kicker on it, so it kicks up every 5
years. It has gone up to $1.65 million.
Mr. Chairman, could I weigh in on----
Senator Fitzgerald. Yes.
Chairman Stratton.--on the cost issue here without talking
about the caps?
It is a huge resource to engage in this kind of litigation.
Most of the work gets done before the case goes to the Justice
Department. That is where you try to settle the case and build
your case and settle it. Our lawyers, even after it goes to
Justice, are intimately involved in this kind of litigation and
other kinds of litigation.
If the caps were increased to $20 million, or if they were
unlimited, you are putting us in a whole 'nother ball game. And
I suspect when you want us to come back next year, you will
want us to have utilized those caps and to have put the whole
penalty paradigm in another dimension at the CPSC. Right now,
there is a dimension where everybody kind of knows what the
penalties are. If we move it up to $20 million, it is going to
be a lot more.
Right now, our lawyers make decisions about when to
schedule cases--and it's not always based on when the judge is
available or in the earliest time available. We often do it
based upon what fiscal year we are in, because of how much
money we have, and to make sure we have enough money to attend
the trial.
In the Wal-Mart case that we just mentioned, where we
settled for $750,000 after sending it to Justice and going
through litigation--this was a settled case, not a pre-case
settlement--Wal-Mart hired eight lawyers in that particular
case to litigate against us. I suspect if we were going for $20
million, they would hire just that many more. And I have been a
litigator for 26 years now, on and off, through the attorney
general's office, complex litigation, and in private practice.
It is a very expensive process, and I just want it to be clear
to the Committee that if we do go in, take it up to the next
step, and we become a litigation agency involved in litigating
millions or tens of millions of dollars, that we are going to
have to have more lawyers. We have got--I do not know how many
lawyers we have now--less than 30 in the whole place, and I
think that includes me and Commissioner Moore, and most of them
are not involved in litigation.
So I just want to bring that to your attention as we move
through this, that you are moving us into a new area, which--
and, you know, I have done this for 26 years, so I am happy to
lead that effort, but you have got to have the soldiers if you
are going to go into battle.
Senator Fitzgerald. Now, you bring up lawyers. Many of
those lawyers that those companies that are resisting you hire,
they are former staff attorneys at the CPSC, too, are they not?
Chairman Stratton. I do not know if I would say ``many,''
not in this particular case, but we certainly do see some
staffers that worked at the CPSC litigating.
Senator Fitzgerald. Now, does that not bring up another
issue called the ``revolving door'' issue about staffers who
leave the Commission and immediately go to work for a law firm
representing the other side, and also the issue of whether your
authorizing statute should put into place some restrictions,
maybe a cooling-off period for a year or so, or more, before
staff attorneys and others can go work against the Consumer
Product Safety Commission?
Chairman Stratton. Mr. Chairman, I did not expect this
question, so I apologize that I do not have the exact answer,
but my belief is that they are covered, currently, under--not
our act, but under the general--whatever other ethics acts we
have in government. I think they have to wait a year before
they can litigate directly against us. And there is some 2-year
period, as well.
Senator Fitzgerald. Does anybody know the answer to that
question? Any staff person?
Chairman Stratton. Here is our General Counsel, Mr.
Chairman.
Mr. Duross. Mr. Chairman, my name is Bill Duross. Bill
Duross, D-u-r-o-s-s. I am the General Counsel. Under the
Government ethics regs, there are restrictions, Mr. Chairman,
for any matter that they personally--the lawyer has personally
handled--dating for a year or up to 2 years, depending on
whether it was a matter that they substantially handled, for
any particular matter in the agency.
Senator Fitzgerald. What if they did not personally work on
the matter while they were in the agency?
Mr. Duross. Well, that is the ethical question, what is the
definition of a particular matter, and how much involvement a
particular lawyer may have with that particular question. But
if it is a litigation matter, which is what you are discussing
with the Chairman right now, then any involvement in litigation
would trigger those restrictions if the lawyer worked on the
litigation personally and substantially, or had it pending
under his or her supervision within one year before departing
from CPSC.
Senator Fitzgerald. OK. But somebody who was not involved
in the matter while at the CPSC can immediately go to work for
an outside law firm that would be fighting against the CPSC
with no cooling-off period. Is that the same for all Government
agencies?
Mr. Duross. Yes, Mr. Chairman. If you are not involved in a
particular matter, rather a matter of general applicability,
you do not have any restriction in dealing with that.
Senator Fitzgerald. OK.
Chairman Stratton. I would just say, Mr. Chairman, in
defense of lawyers, if you----
[Laughter.]
Chairman Stratton.--and I know that is a precarious
slippery slope--but if you are going to make that rule for
lawyers, you ought to make it for everybody else, because we
have people leaving our agency at all times, going out into the
private sector and then doing work that falls into----
Senator Fitzgerald. And then coming back and lobbying you.
Chairman Stratton. We do not get seriously lobbied at the
Consumer Product Safety Commission. If we are lobbied, we have
to notice a hearing and make it an open hearing, if we are
lobbied on any substantive issue before the Commission. So it
is not----
Senator Fitzgerald. Is that your internal rules, or is that
in the statute?
Chairman Stratton. I am sure it is a reg. I do not believe
it is in the statute.
Senator Fitzgerald. So XYZ Company that you are considering
levying fine against. They cannot come in and lobby you, take
you out to dinner before you have the vote on that.
Chairman Stratton. No.
Senator Fitzgerald. OK.
Chairman Stratton. Absolutely not.
Senator Fitzgerald. OK.
Chairman Stratton. And even if they did, nobody on this
Commission would do that, Mr. Chairman, I can assure you.
Senator Fitzgerald. Oh, I am sure they would not.
Chairman Stratton. Let me say, since I have been at the
CPSC, I have met with scores of stakeholders on courtesy
meetings. When I do a courtesy meeting with somebody, or when
the Commissioners do, we formally notice it to the public.
Every meeting I have had with anybody has been formally
noticed.
Now, if we are going to discuss anything substantive, we
not only formally notice it, but we open the meeting up to
anybody that wants to come. I have had one of those requests
and one of those meetings out of literally probably a hundred
meetings in the last year, and nobody takes us out to dinner,
and nobody takes us out to lunch.
[Laughter.]
Senator Fitzgerald. OK.
Chairman Stratton. And let me assure you--and my wife has
been speaking with me about all these lunches I have been
having----
[Laughter.]
Chairman Stratton.--since I have been here. It is not like
the legislature in New Mexico.
[Laughter.]
Senator Fitzgerald. Going back to the original question of
the fines, the cap on the fines, Mr. Moore, would you not think
that just the ordinary tort liability that companies face if
they introduce a defective or dangerous product into the stream
of commerce is really the deterrent effect against negligent
design or manufacture of a product that could harm a consumer--
and that that is a far more significant deterrent than your
fines, unless your fines were extraordinarily large?
Commissioner Moore. That certainly is an element, but, in
working to remove defective products from the market, we like
to have companies respond positively and as quickly as
possible, rather than to delay responses to us. And, that often
happens. They delay, delay as long as they possibly can, in
responding to the agency.
I am saying that, with the higher potential fines out
there, that they are going to be more concerned with the
potential damage to their operation and to their companies, and
that they are more likely to get in line more quickly to try to
get these things resolved. That is the way I see it.
Commissioner Gall. If I could just add one thing, it seems
to me that one of the important factors in all of this is
perhaps not so much the dollar amount of the fine as the
certainty that the fine will come and the publicity that
attends that. When the Consumer Product Safety Commission makes
an announcement about something along these lines in a fine
against a company, that is covered around the country, and
companies are very sensitive to having a Federal Government
agency make note of some safety defects. And I think that has
an impact.
Senator Fitzgerald. Well, as I said before, I would think
just the adverse publicity, alone----
Commissioner Gall. Yes.
Senator Fitzgerald.--and the damage to sales figures and so
forth would be an awfully big deterrent.
Off the top of your head, do any of you know whether the
fines you levy are ordinarily covered by the manufacturer's
product liability insurance, or are those typically not
insurable--are there policies that----
Commissioner Moore. I have no idea.
Chairman Stratton. Our director of compliance tells us he
believes not, that they would not be covered by----
Senator Fitzgerald. Probably most----
Chairman Stratton.--product liability insurance.
Senator Fitzgerald.--policies would not cover such
regulatory fines.
Chairman Stratton. Right.
Senator Fitzgerald. I believe, in your written statement,
Chairman Stratton, you mention briefly the ongoing safety
problem that exists with regard to children operating all-
terrain vehicles. Would you explain, in more detail, how
serious the problem really is, in your view, and any possible
solutions that may exist?
Chairman Stratton. Mr. Chairman, I will be happy to do
that. And once again, the Commissioners who are sitting here
with me have been through these ATV matters for quite awhile,
and so they may have something they want to add.
About three or four years ago, it became clear that ATV
injuries were rising on a much steeper curve each year than
they had been in the past. If you look at the curve, back in
the 1980s there was a steep curve of injuries, primarily due to
three-wheel ATVs. Those were banned by the Commission back in
the 1980s. Actually, there was a consent decree on that. And
you saw the injury rate drop.
And it dropped, and it kind of stayed down and kind of just
leveled off. And then, in 1997 and 1998, it increased. And it
increased to about 111,700 emergency-room visits a year.
Senator Fitzgerald. Say that number again.
Chairman Stratton. 111,700 emergency-room visits per year.
Senator Fitzgerald. 111,000 emergency-room visits a year?
Chairman Stratton. That was for 2001. So----
Senator Fitzgerald. For 2001. But just from injury on ATVs.
Chairman Stratton. Correct, Mr. Chairman.
So I know that seems like a large number to some people,
and that is what we do at the Commission. So we decided we had
better take a look at it. The Consumer Federation filed a
petition, part of which is still pending, which asks us to ban
sales of adult ATVs to children. And my view, not speaking for
the other Commissioners, was, even if we do that, that we are
probably still going to have a problem. And it was then the
considered opinion of the Commission to go out and look into
this.
We had a brief study that was done in cooperation with
industry, which has come back and given us some partial answers
on why this is occurring; such as, it appears that it happens
more often with people who have less experience on ATVs. It
certainly happens with the higher-per-capita of younger people
who are on ATVs. But it did not give us the whole story, and
the increased number of ATVs did not give us the whole story.
So we decided we should look into it, and we got together
and decided the first thing we ought to do is have a hearing.
And since we do not see many ATVs driving around the District
of Columbia, we thought we might take it out on the road. It
has been a long time since the Commission had taken a hearing
on the road. So we went to Morgantown, West Virginia, just the
week before last.
Commissioner Gall. June 5.
Chairman Stratton. June 5--and had our first hearing, at
which we had 35 people testify, from all over the country,
mainly in that region, up that way.
So what I would hope to do is to conclude this study and
come up with some ideas about how to reduce those numbers. I
think the overwhelming theme of the West Virginia hearing,
without prejudging this issue--and I do not want to prejudge it
here, because I have not heard enough about it--is that a lot
of this activity is behavioral. And as the Chairman knows, we
do not regulate behavior; we regulate dangerous, hazardous
products.
So what I would hope to do, by the time we conclude this,
is to understand what is causing the increase, with some good,
hard data, so we know for sure what is causing the increase,
and then the Commission can do what it does, in regard to the
issue, what it should do, and the other jurisdictions, who have
jurisdiction, can do the same, whether it is the State of West
Virginia, whether it is local Governments, or anybody else.
So that is the game plan. But to come here today and tell
you why it is so high, I do not think we can do it. That is why
we are out there digging, trying to figure it out.
Senator Fitzgerald. Would either Ms. Gall or Mr. Moore care
to respond on the ATVs?
Commissioner Moore. I think the Chairman has done an
excellent job. I wanted to clarify a point, though, in terms of
the numbers. That number was over a 4-year period increase,
from 1997 to 2001, from 54,700 to 111,700, which was 104
percent increase in that brief period of time.
Senator Fitzgerald. Could it be because you are monitoring
emergency-room visits better? Has anything----
Commissioner Moore. I do not think so.
Senator Fitzgerald.--changed? No?
Commissioner Moore. That has not changed.
Senator Fitzgerald. OK.
Commissioner Moore. That has not changed.
Commissioner Gall. That----
Chairman Stratton. Everybody--I am sorry.
Commissioner Gall. Go ahead.
Chairman Stratton. I am sorry. I was just going to say,
there is no particular disagreement on the numbers. Everybody
pretty much agrees those are the numbers. The issue is, ``What
do we do about it,'' basically.
Senator Fitzgerald. How many ATVs are in existence? Do you
have any idea?
Chairman Stratton. Tons.
Commissioner Moore. The numbers rose 40 percent--from 4
million to 5.6 million, I believe, in that period, in that
four-year period. That is the data that I have here. Yes. The
number of ATVs rose 40 percent from--over that 4-year period,
from 4.0 million to 5.6 million.
Chairman Stratton. That is right.
Senator Fitzgerald. OK.
Commissioner Gall. We did take a look at the injury data
over that five-year period that the other Commissioners have
talked about, we looked at the number of riders, the number of
hours that ATVs are ridden, and you cannot account for the
dramatic increase of 105 percent in injuries over that period
of time, when you look at those factors, there is something
else at work here.
One of the reasons we went to West Virginia was because
they have such a high rate of injuries and death with ATVs. We
have noted that when states have State laws that require
helmets, require off-road riding rather than on-road riding,
and some other laws that pertain to ATV safety, their numbers
are lower than states that do not have these kinds of safety
initiatives.
When we did the Consent Agreement and post-consent
agreement action plans, dealers agreed not to sell engines
larger than 90 cc's for use by people under 16. But the problem
is, a lot of families can only afford to buy one ATV. They want
an adult size, for whatever reason. It is difficult to tell a
14-year-old who has been driving a tractor for several years
that now he cannot get on an adult-size ATV.
We have education programs to help train people how to ride
ATVs safely. Another factor that we are looking at is that the
engine size of ATVs has increased dramatically in the past few
years, and we wonder if the power of those engines may have
some implications for safety, as well.
So there are a number of issues that we are looking at. But
I certainly agree with the Chairman. As someone at our hearing
said, ``The key to safety with ATVs is the person who holds the
keys.'' And so behavior is a very important component of this
issue.
Senator Fitzgerald. Mr. Chairman, for many years, product
flammability issues have been among the most frequently raised
when discussing CPSC activities. Appearing on the second panel
today is a representative of the State Fire Marshals. Last
November, I, along with Senator McCain, Senator Hollings, and
Senator Dorgan, sent you a letter asking that you make fire-
safety issues one of the Commission's top priorities.
Would you explain what activities the CPSC is engaged in
currently to reduce fire-safety concerns regarding candles,
upholstered furniture, and mattresses? Which of these products
is the CPSC most concerned about with respect to flammability?
Chairman Stratton. Mr. Chairman, I will answer the last
question first, and that answers all of them; and I will go
through them briefly, and then I will ask the other
Commissioners to chime in, because burn injuries are one of the
very top priorities at the CPSC.
The first thing that I noted as I was getting your letters
and other letters, even during confirmation, and in questions
during my confirmation process, was, where was our burn data?
And I would talk to the Shriners and the State Fire Marshals,
and we could not agree on whether--it is not a matter of
disagreement; it was the fact that we did not have enough data.
And that is why I, frankly, am so proud of our Commission and
the Shriners and the American Burn Association and the National
State Fire Marshals Association for coming together and putting
this together.
Now, this is going to begin on the 1st of July, when we
start collecting this new data on children 14 and under. And
so, within a year, we should, hopefully, have better data upon
which to act when it comes to this type of burn injury.
Let me talk about, now, briefly, about each of the issues
that you raised.
First is upholstered furniture. That petition has been
pending since--I do not know if it is 1993 or 1994. And I
know--I think I committed to you, during confirmation, that I
would come in and get that cleaned up. And we now have a
proposal from the American Furniture Manufacturers Association,
which is a substantial movement on their part, toward a
mandatory regulation. And I expect that, by the end of the
month, we will have another proposal from the textile
manufacturers, the American Textile Manufacturers. And I hope--
I have no idea what it is going to be, and I am not sure it is
going to happen, because these are not the kind of things that
you learn about ahead of time, but I suspect it will be
substantial movement, as well.
Senator Fitzgerald. From the textile manufacturers? Is that
regarding sleepwear for children or----
Chairman Stratton. I am talking about upholstered furniture
right now.
Senator Fitzgerald. Upholstered furniture----
Chairman Stratton. This would be----
Senator Fitzgerald.--OK.
Chairman Stratton.--the fabrics. This would be the fabrics,
that we are talking about on the furniture.
And our staff is poised to give us the report, with all of
our options on this matter, no later--keeping my fingers
crossed--July 9. And the reason they need to do that is because
I am addressing the Annual Convention of the National State
Fire Marshals' Association on July 10----
[Laughter.]
Chairman Stratton.--and they are going to expect me to have
that, and if I do not have that, I may not be coming back.
[Laughter.]
Chairman Stratton. But we will know, by that date, what our
options are. I then suspect we will be setting a hearing up as
quickly as we can. I do not think--we might do it in August,
but I understand things do not happen in this town in August,
so we probably will not get it done that quickly. But I would
not be surprised if we had a hearing on this in September, at
which all the stakeholders will be allowed to testify, and then
we will be ready and poised to vote on this particular
regulation. And I do not know which way it is going to go, and
I do not know what is going to happen. But I do know this.
There has been substantial movement on behalf of a lot of the
stakeholders in the case. So that is what I can tell you today
on upholstered furniture.
On mattresses and what the industry calls ``bed
clothing''--covers, sheets, blankets, comforters, those kind of
things--we are also in a rulemaking process. That is going a
little bit slower. We have an advanced notice of proposed
rulemaking out on that. Right now, our staff is in the process
of working with NIST to develop the appropriate methodology for
testing mattresses and bed clothing.
I should first tell you that we do have a petition on
mattresses. We do not have a petition on bed clothing. But I
suspect that our staff is going to recommend that we take that
issue up and that we look at both of those--whether we pass a
regulation or not, that we take them both into account and look
at them.
Now, this is not going to happen as quickly as the
upholstered-furniture reg, I do not believe. I think it may be
sometime next year that we finally get a report out of our
staff and based on the NIST methodology that they have come up
with. But as soon as we get that, the Commission will be ready
to move immediately to resolve the mattress flammability issue.
Candles. We have just finished promulgating a regulation
banning lead in candle wicks, a mandatory regulation, which is
done. That happened in the last month or so. So we have gotten
that behind us now.
As far as other candle safety is concerned, that is
currently in the voluntary regulation process. It is being
negotiated with the voluntary standards group with the
industry, with the fire marshals and others. I understand that
they published a provisional voluntary performance standard
that is out there right now. It is provisional. It has not been
finalized. But they are moving toward a finalized voluntary
standard in that area, and that is going to include things like
the end of the useful life of the candle, the flame height, and
secondary ignition problems.
So we do not technically have a regulatory proceeding going
right now. That is in the voluntary standard proceeding.
So I think I covered the three topics, and if the other
Commissioners have anything to add, I will be happy to have
them do that.
Commissioner Gall. No, I have nothing to add.
Commissioner Moore. No, that is fine.
Senator Fitzgerald. Well, thank you very much. That pretty
much concludes my questions of the Commissioners. And I want to
thank you for coming before us. We have another panel we want
to get to. I want to thank you all for your hard work on the
Commission, and we will look forward to working with you as we
try to move a reauthorization bill forward. So thank you all
very much for coming.
Chairman Stratton. Thank you, Mr. Chairman.
Senator Fitzgerald. And with that, I would like to invite
the second panel to make their way up to the witness table.
Appearing on the second panel, we have R. David Pittle,
Senior Vice President, Technical Operations, of the Consumer
Union; Ms. Rachel Weintraub, Assistant General Counsel,
Consumer Federation of America; Mr. Alan Korn, Director of
Public Policy, National SAFE Kids; Mr. Stephen Gold, Vice
President of the National Association of Manufacturers; Mr.
Gary Klein, Senior Vice President, Government Legal and
Regulatory Affairs, from the Toy Industry Association; and Mr.
Robert Polk, Chairman, Consumer Product Fire Safety Taskforce,
National Association of State Fire Marshals.
I want to thank all of you for appearing before the
Committee today and weighing in with your thoughts on the
reauthorization of the CPSC.
As I asked the Commissioners, I would appreciate it if you
could all be kind enough to summarize your remarks orally for
us, as opposed to reading your written statements. I would
prefer to just take your written statements and have them made
part of the permanent record, and we would ask that you limit
your testimony to no more than 5 minutes, as there are six of
you. We want to give all of you a chance to be heard.
So, Dr. Pittle, if we could start with you, and we will
move left to the right; so Mr. Polk, you will have a long wait,
down at the other end. Dr. Pittle?
STATEMENT OF R. DAVID PITTLE, Ph.D., SENIOR VICE PRESIDENT,
TECHNICAL POLICY, CONSUMERS UNION
Dr. Pittle. Thank you. I expected to be last, so I have to
redo this.
Thank you for the opportunity to be here today. I speak to
you today as one of the original five Commissioners of the
Consumer Product Safety Commission, also as the former
technical director of Consumers Union, the Nation's largest
consumer product testing organization, and currently as CU's
Senior Vice President for technical policy. Serving in these
three capacities, I have experienced both the public's critical
need for the unique services of CPSC and the many difficult
technical and legal hurdles that the agency must overcome in
order to deliver on its mandate.
Based on more than 30 years of working on product safety
and reducing unreasonable risk to consumers, I have concluded
that the agency should be reauthorized, but by asking two
questions first. Are the agency's mission and authority, as
stated in its enabling legislation and subsequent amendments,
appropriate to fill the public's need for safer products? And
if not, how should they be changed?
During my tenure at CPSC, four different Presidents, from
two parties, resided in the White House, and numerous Senators
chaired the CPSC's oversight committees. Many things changed
since then, but many things have stayed the same. For example,
the basic mission of the agency has remained the same.
Every Congress that has reauthorized CPSC during the last
30 years has reaffirmed its clear and unmistakable purpose, to
reduce or eliminate unreasonable risks of death and injury to
consumers. There is no equivocation. The pain and suffering
from accidents involving chain-saw kickback, flammable
children's pajamas, or explosions caused by leaking gas valves,
or unstable ATVs is devastating.
To make the agency more effective--that is, to save more
lives and to reduce more injuries--there are several areas of
CPSC's basic legislation that we believe warrant change. These
include Section 6, Section 15, Section 37, and restoring the
authority over fixed-site amusement park rides. And this has
all been submitted in our full testimony. And in an era marked
by scarce resources, it is incumbent on us to remove all the
obstacles that hamper the agency from being more effective.
I would like to turn to Section 15. And fortunately for me,
I was taking notes, so I do not have to go to my own prepared
text. I would just like to mention a few things from the last
discussion.
First of all, Section 15 is not designed to make companies
fearful of CPSC. Its purpose is to get companies to report
hazards before people are injured or killed by those hazards.
And so the purpose of a fine is to make there be a cost to the
manufacturer who purposefully misbehaved by not reporting that
information to the agency. And this is not a new requirement.
That requirement has been on the book and known to corporations
for the last 30 years. So when a manufacturer has had recall
after recall, and they do not notify the agency promptly
enough, it is not as if they did not understand what their
responsibility was. They made a calculated business decision
not to inform the agency.
So we favor removing the caps altogether. We think that
when you have a cap that says $1.65 million, it does not mean
much to a company like General Electric, whose got revenues of
$137 billion a year. This is just a decimal point that gets
lost at the edge of the page.
And so companies like Graco and Cosco, Fisher Price,
General Electric, West Bend, Honeywell, Wal-Mart, these
companies all know what their responsibilities are. And for
them to pay a $2- or $300,000 fine is simply silly. The only
way that this will get their attention, if they are not
responsible to do it in the affirmative, is to remove the cap
so that there is always a question in their mind, ``How big
will this fine be?'' They might pay more attention to it.
So it seems clear to us that these current caps have the
effect of imposing a $2 ticket for parking down in downtown New
York City. It just does not mean anything, and people will not
pay attention to the requirements. So we would be very
supportive of removing those caps. Really, the whole thing is
about preventing injuries, not about making money. But, darn
it, when a manufacturer does not report, they are putting their
customers at risk.
I would like to turn now to the last section, which is
Section 6. Opponents of Government regulations insist that the
Government's role should be to provide information to the
public and let consumers make their own choices. Well,
unfortunately, this is very difficult to do with CPSC. This
agency stands alone among the Federal health and safety
agencies in being unable, as a practical matter, to provide
important safety data to the public. The reason is that Section
6(b) of the Consumer Product Safety Act presents a major
obstacle to the timely release of product safety information
that is in the agency's possession. It does so by barring the
release of this information unless and until the agency has
sent a copy of the information to the manufacturer, allowed the
manufacturer 30 days to comment on the information, reviewed
their comments regarding the accuracy and the fairness of
releasing it, and then, finally, determining whether or not it
is important to release it.
We think it is bad policy for Congress to require a
Government agency to censor health and safety information to
the consumers. If the CPSC has acquired information that raises
questions about a product, CU thinks the public should have
access to the data and decide for themselves. CPSC official,
Mark Schoem, was quoted in Consumer Reports 1994, saying, ``The
effect of Section 6 is to make the release of some information
almost impossible.'' Objections by any manufacturer can lead to
a long struggle. Even newspaper clippings on a particular
product cannot be released by CPSC without prior review by the
manufacturer.
So, in concluding my remarks, there are several other
things--in particular, ATVs--that we think that the Congress
has a role to play, and we hope you will.
Thank you.
[The prepared statement of Dr. Pittle follows:]
Prepared Statement of R. David Pittle, Ph.D., Senior Vice President,
Technical Policy, Consumers Union
Mr. Chairman and distinguished members of Committee:
It is a pleasure for me to address this subcommittee regarding the
reauthorization of the Consumer Product Safety Commission (CPSC). I am
joined today by Sally Greenberg, CU's Senior Product Safety Counsel.
I speak to you today as one of the original five commissioners of
CPSC (1973-82); as the former Technical Director of Consumers Union,
the Nation's largest consumer product testing organization; and
currently CU's Senior Vice President for Technical Policy. Serving in
these three capacities, I have experienced both the public's critical
need for the unique services that CPSC provides and the many difficult
technical and legal hurdles that the agency must overcome in order to
deliver on its mandate.
As a member of the original Commission, I spent nine years weighing
the complex factors involved in establishing product safety standards
and bans, recalls of substantial hazards, policies to encourage
voluntary action by industry, comprehensive compliance programs and
campaigns to inform and educate the consumer. Based on 30 years of
working on product safety and reducing unreasonable risks to consumers,
I have concluded that an agency like CPSC should be reauthorized by
asking these two fundamental questions:
Are CPSC's mission and authority, as stated in its enabling
legislation and subsequent amendments, appropriate to fulfill
the public's need for safer products and if not, how should
they be changed?
In my view, the answers to these questions comprise the basic
ingredients that together determine how successful CPSC will be in
saving lives and reducing injuries.
During my tenure at CPSC, four different Presidents resided in the
White House, and numerous senators chaired the CPSC's oversight
subcommittee. Many things changed--but many things stayed the same. For
example, the basic mission of the agency has remained the same. Every
Congress that has reauthorized CPSC during the past 30 years has
reaffirmed its clear and unmistakable purpose: reduce or eliminate
unreasonable risks of injury and death to consumers. There is no
equivocation--and rightly so, in my opinion. The pain and suffering
from accidents involving chainsaw kickback, toxic formaldehyde vapors,
flammable children's pajamas, explosions caused by leaking gas valves,
unsafe infant safety gates, unstable ATV's and so on is devastating.
And I believe consumer safety is so important that it should transcend
partisan politics. The pain and suffering is the same--regardless of
who is in the White House or who sits on the Commission.
The National Commission on Product Safety issued its final,
bipartisan report to the President and Congress in June 1970. That
report set the stage for the establishment of CPSC to promote safer
products in the marketplace and regulate those companies manufacturing
those products. The agency today estimates that deaths, injuries and
property damage from consumer products cost the Nation more than $700
billion annually. CPSC also estimates that its work to ensure the
safety of consumer products--from toys, cribs, power tools, and home
heating equipment to dangerous household chemicals--has contributed to
the 30 percent decline in the rate of deaths and injuries associated
with consumer products over the past 30 year. Clearly protecting the
public from unreasonable risks of serious injury or death from the more
than 15,000 products under the CPSC's jurisdiction makes good sense in
both human and economic terms.
To make the agency more effective--i.e., save more lives and reduce
more injuries--there are several areas of CPSC's basic legislation that
we believe warrant change, including section 6, section 15, section 37,
and fixed-site amusement park rides. In an era marked by scarce
resources, it is incumbent on us all to remove obstacles, especially
low-cost obstacles that hamper the agency from being more effective.
Amusement Rides (Fixed-site)
Mr. Chairman, in 1981, Congress, as part of an overall political
compromise, removed the Commission's authority over fixed-site
amusement rides. To say the least, the decision was entirely political
and not based on the merits. Unfortunately, this political deal has not
worked to the advantage of the millions of consumers who annually go to
enjoy amusement rides. Numerous deaths and injuries have occurred--and
continue to occur--on these rides. And the states, upon which the
Congress depended to step into the regulatory void, simply have not
done so in an effective or timely manner.
We believe this loophole in Federal law with regard to amusement
park safety is nonsensical and dangerous for consumers. As I said,
fixed-site amusement parks are host to literally millions of patrons
each year. When an accident occurs on such rides, the law actually
prevents the CPSC from even looking into the incident to find out what
happened. While some states will conduct an investigation, many conduct
little or no regulatory oversight at all over amusement parks in their
own states. We think it makes far more sense for the Federal safety
officials to play both an oversight and information clearinghouse role
for safety information about the amusement park rides, especially since
a number of the same rides exist in different parks in different parts
of the country. Further, no state has the jurisdiction or resources to
be able to share safety information with all of the other states.
Consumer Reports surveyed consumers about their experiences at
amusement parks for the first time this past spring. We also discussed
the safety record of these parks and noted that while the safety risks
appeared small, they are nonetheless very real.
In 2001, 6,700 people were treated in emergency rooms for injuries
at fixed-site amusement parks. At least 55 people have died on
amusement park rides in the last 15 years. In August 1999, four deaths
occurred on roller coasters in one week, including a 12-year-old boy
and an 8-year-old girl. Since then, there have been six more fatalities
on amusement park rides. This past spring an 11 year-old-girl died at a
Six Flags Park in Illinois.
We don't understand the logic of carving an exception out for
fixed-site amusement park rides. We ask simply that CPSC be authorized
once again to investigate the injuries and deaths, determine the
causes, and work to reduce or fix the hazards.
I'd like to direct the Committee's attention to the fact sheet and
overview of legislation introduced by Congressman Edward Markey of
Massachusetts to correct this problem. Congressman Markey has also
gathered statistics on the increase of injuries in fixed-site amusement
parks and enumeration of injuries in parks across the country.
Section 15--Remove the cap on fines that can be levied for failing to
report dangerous or defective products under Section 15(b)
The Consumer Product Safety Act's Section 15 (b) requires that
manufacturers, distributors and retailers report to CPSC when they have
reason to believe a product 1) isn't in compliance with safety
standards, 2) contains a defect that could be create a substantial
product hazard, or 3) creates an unreasonable risk of serious injury or
death.
The history of manufacturers failing to report in a timely manner
under this section is all too well known--and is especially worrisome
for children's products that have caused injury or death. Included
among companies failing to report are Wal-Mart and GE, two of the
wealthiest corporations in America. We believe the cap on the fines
CPSC can levy for non-reporting diminishes the power of the reporting
statute. That cap is $7,000 per each violation with a total of
$1,650,000 for any related series of violations--pathetically small
amounts that are hardly felt by large corporations.
Below are details of fines CPSC has imposed for failure to report
under 15(b).
In 1991, Graco, a children's products manufacturer, paid a
$100,000 civil penalty for failing to report stroller injuries
to CPSC in a timely fashion. In 1989, the Philadelphia Inquirer
estimated Graco's revenues at $150 million.
In April of 2001, Cosco/Safety 1st agreed to pay CPSC a
total of $1.75 million in civil penalties--the largest fine
CPSC has ever levied--for failing over a four year period to
report to CPSC defects in cribs, strollers and a toy walker
that caused the deaths of two babies and countless other
injuries. Both companies had previously been fined for failing
to report under 15(b). In 1996 Cosco paid a $725,000 civil
penalty and in 1998 Safety 1st paid a $175,000 penalty. Both
companies have also had an inexcusable number of recalls of
products used by children. By the time this fine was levied in
2001, Cosco had had 12 recalls of children's products and
Safety 1st had five recalls. Dorel Industries, which owns Cosco
and Safety 1st, reported $421 million in sales from juvenile
products in 2002. Does a $1.75 million fine deter a firm of
this size from failing to report?
In June of 2001, CPSC fined Fisher-Price $1.1 million for
failing to report injuries from a dangerous and defective toy.
The company had not reported 116 fires from the Power Wheels
toy. Fisher Price, a wholly owned subsidiary of Mattel, boasts
sales of $1.2 billion in its most recent annual report and
notes that its sales are up 8 percent worldwide.
In November 2001, CPSC fined Icon Health and Fitness
$500,000 for failure to report serious safety hazards with home
exercise equipment.
In August of 2002, General Electric (GE) paid the CPSC a $1
million penalty for failing to report defects in dishwashers
that it first became aware of 10 years earlier. GE is one of
the largest companies in the history of the United States, with
2002 revenues of $131.7 billion.
In March 2001, West Bend Co. paid CPSC a $225,000 fine for
failing to report fire hazards caused by a defect in its water
distillers it had learned about three years earlier.
In 2002, the CPSC won a case in court imposing a $300,000
fine on a juice extractor company that had failed to inform
CPSC about injuries 22 customers had complained of when using
their juicers.
In 2002, Honeywell paid $800,000 for failing to report under
15(b). In 2003 to date, Weed Wizard has paid 885,000, while
Wal-Mart has paid $750,000.
Are these fines acting as an adequate incentive for companies to
report product safety hazards? The record suggests they are not. We
believe these companies are well aware of the CPSA's reporting
requirements--these requirements have been on the books for 30 years.
It seems clear that the caps on these fines limit them to the
deterrence equivalent of a $2 parking ticket in downtown New York City.
Recommendation: CU recommends lifting the cap on penalties for
failure to report for several reasons:
(a) Caps mean the companies can figure in the cost of paying
penalties at or below the cap as a cost of doing business
(b) A cap usually means that CPSC is always negotiating down
from that amount; the CPSC has never fined a company to the
limits of the current cap
(c) Other Federal safety agencies aren't hindered in their
enforcement powers by caps on penalties. The FDA last week
announced that it had won a court case that imposed a $92.4
million against Guidant Corporation for the company's failure
to notify the agency of defects in its artery device. There was
no artificial cap hindering the FDA's enforcement.
(d) The number of companies paying fines for failure to report
demonstrates the need for higher penalties. Of course, we all
would like to think that these companies would report because
it is the right thing to do, but we know from the CPSC's
experience that far too often this is not the case. We must put
the sting back into the failure to report a dangerous or
defective product under 15(b) by lifting the caps on the fines.
Section 37
Section 37 was added to the CPSA in the 1990 and intended to
strengthen CPSC's ability to learn about relevant product hazards.
Section 37 says that if a consumer product is the subject of at least
three civil actions filed in Federal or state court for death or
grievous bodily injury resulting in a final settlement involving the
manufacturer or a court judgment in favor of the plaintiff, the
manufacturer must report that fact to the CPSC.
Section 37 was supposed to serve as an ``early warning'' system to
CPSC to ensure that it hadn't missed important product hazard
information. The problem with Section 37, however, is that its wording
renders it largely ineffective. Under Section 37 CPSC receives
information about lawsuits when the three cases involving the same
product are settled, which is simply too late in the process to provide
the requisite early warning. If the statute required reports to CPSC
once three cases involving serious injury or death were filed as
opposed to settled, the early warning intent of this statute would be
greatly enhanced.
Jeffrey Bromme, at the time serving as CPSC General Counsel and
writing in the December 27, 1999 BNA Product Safety and Liability
Reporter, reaffirmed this flaw in the law. Bromme cited ``two chief
reasons that Section 37 has contributed little to consumer safety.
First, reports received by the Commission generally come too late to
serve as any kind of 'early warning system. Second, the Commission is
receiving fewer reports.'' Bromme concluded: the original 1990 proposal
to require reports of litigation when filed--and not when settled--
would likely have served as a far more effective ``early warning
system,'' if such a system were truly what Congress intended.
Further, if a product defect exists, reports under 15(b) are
required long before any litigation is settled, hence, a Section 37
report seldom provides the first warning. Secondly, according to
Bromme, from January 1991 to January to 1992, there were 190 reports
under Section 37. That number dwindled throughout the 1990s in October
1999, there were only 19 reports, from November 2001 through December
2002 there were 41 reports and for the first six months of this current
two year period, there have been only 2 reports. Bromme speculated that
this dwindling number might be stem from companies having found a way
to delay the third settlement on the same product until the next
reporting period, thereby avoiding the reporting requirement. In any
case, it is abundantly clear that even with the best of congressional
intent, Section 37 as currently written is largely a failure.
After a decade of experience, we believe that it is time to amend
Section 37 to conform to how it was originally drafted.
Recommendation: Amend Section 37 to require manufacturers to report
to CPSC when three or more lawsuits are filed (not settled) about the
same product that allege that serious bodily injury or death has been
caused by that product and that product falls under CPSC's
jurisdiction.
Section 6
Mr. Chairman, one of the criticisms of health and safety agencies
is that they regulate rather than inform. Opponents of CPSC regulations
insist that government's role should be to provide information to the
public and let consumers make their own safety choices.
Unfortunately, this would be difficult to implement at the CPSC.
The agency stands alone among the Federal health and safety agencies in
being unable, as a practical matter, to provide important safety data
to the public. The reason is that section 6(b) of the Consumer Product
Safety Act presents a major obstacle to the timely release of product-
specific safety information in the agency's possession. It does so by
barring the release of this information unless and until the agency has
sent a copy of it to the named manufacturer, allowed the manufacturer
30 days to comment on the information, reviewed the manufacturer's
comments regarding the accuracy of the information and the fairness of
releasing it, and determined that disclosure of the information would
effectuate the purposes of the Act. Exceptions to these restrictions
are extremely limited.\1\
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\1\ Section 6(b)(1) requires that the CPSC must, at least 30 days
prior to ``public disclosure'' of information, notify each manufacturer
or private labeler identified in the documents of the forthcoming
release and give them an opportunity to submit comments, and take
reasonable steps to ensure accuracy.
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The resource drain on the Commission staff for these procedures is
enormous and unfair. Even if section 6(b) constituted good public
policy--which it does not--it consumes so many staff hours and causes
so many delays in the release of information, one cannot avoid the
conclusion that it causes more problems than it solves. The CPSC is one
of the smallest health and safety agencies. Yet, it alone must follow
these burdensome procedures, and consumer safety is the loser.
Moreover, industry knows about and constantly exploits CPSC's
resource problems. Most manufacturers are well aware that a strong
letter to the agency threatening litigation over the release of the
information will chill the agency's ability to release information
about them. They know that the most common reaction will be to
accommodate a manufacturer's objections, even if the objections do not
have substantial merit, simply to avoid a lawsuit.
But, my opposition to section 6(b) goes deeper than agency resource
problems. I think it is bad policy for congress to require a government
agency to ``censor'' health and safety information. If the CPSC has
acquired data that raises questions about a product, CU thinks that the
public should have access to the data and decide for themselves.
In this regard, I find completely unconvincing the argument by some
manufacturers that merely by virtue of being the repository of
information, the CPSC will inevitably be viewed by the public as having
placed its imprimatur on it. A carefully worded disclaimer would easily
handle this problem. Indeed, I don't hold a library responsible for the
content of the books on its shelves, nor would the public conclude that
the accuracy of every consumer complaint in CPSC files is endorsed by
the agency.
As stated earlier, CPSC is the only Federal health and safety
agency that operates with these substantial restrictions on information
disclosure.\2\ We believe that Section 6 hampers the agency's ability
to let the public know breaking information about safety matters, as
NHTSA did during the Ford/Firestone tragedies, for example, in
statements like ``we are looking at reports about the Ford Explorer's
safety record'' or the ``Firestone tire's tendency to lose its tread at
high speeds.''
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\2\ In 1983 the Commission was directed by Congress to compare
these restrictions to those of ten other health and safety
organizations. None operated with restrictions other than the normal
restrictions on trade secrets and confidential business information.
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CPSC official Marc Schoem told Consumer Reports in 1994 that the
``effect'' of Section 6 ``is to make the release of some information
almost impossible. Objections by any manufacturer can lead to a long
struggle.'' Even newspaper clippings on a particular product cannot be
released by the CPSC without prior review.
Executive Order Already Protects Trade Secrets and Confidential
Commercial
Information
Section 6 is unnecessary and redundant, and is in direct conflict
with the public health and safety goals CPSC was set up to promote. It
is premised on protecting the trade secrets and legitimately
confidential information of manufacturers. Executive Order No.
12600,\3\ signed by President Ronald Reagan in 1987, already provides
such protections and Federal agencies use this Order for the very same
purposes that Section 6 was set up to accomplish, except that Section 6
goes far beyond the requirements set out in President Reagan's
Executive Order.
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\3\ The Executive Order requires the head of each Executive
department and agency to establish procedures to notify submitters of
records containing confidential commercial information, if the agency
determines that it may be required to disclose the records. The agency
is to afford the submitter a reasonable period of time to object to the
disclosure and to state all grounds for objection, and the agency is
bound to give careful consideration to all specified grounds for
nondisclosure prior to making a determination on the issue. 52 Red.
Reg. 23781 (June 25, 1987),
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6(b)(5) for example, doesn't permit CPSC to disclose information on
whether a product may present a ``substantial product hazard'' unless
the Commission has filed a formal complain against the company, settled
the case or the company agrees to disclosure. Under FOIA, however, such
information would have to be disclosed unless the information qualified
for protection under one of FOIA's exemption, i.e., that it is a trade
secret or confidential commercial information. Thus, 6(b)(5) prevents
the press and watchdog groups like CU from determining whether
manufacturers are complying with their duty to report substantial
product hazards.\4\
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\4\ Congress added amendments to 6(b) in 1981 largely at the urging
of the Chamber of Commerce, which argued that companies would be more
likely to report product hazards under 15(b) if the public did not have
access to such information. To the contrary, after passage of the
restrictions, the number of ``15(b) reports'' dropped significantly.
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The Supreme Court's holding in GTE Sylvania v. Consumer Prod.
Safety Comm'n, 447 U.S. 102 (1980), expanded the restrictions on CPSC's
ability to release of information to the public to include FOIA
requests as well as affirmative disclosures by the CPSC.
Robert Adler, law professor at the University of North Carolina and
former CPSC attorney-adviser to two CPSC commissioners, reviewed the
Commission's record of releasing information during the 7 years before
the Supreme Court's decision in GTE Sylvania. He found the CPSC
released information in about 50,000 cases when it received FOIA
requests. When pressed to cite abuses in releasing information, the
industry cited only six limited and debatable set of examples, several
of which Adler found to be inaccurate or unfair. Further, of the six
examples cited by industry representatives, five related to CPSC-
initiated information releases which would remain covered by 6(b) even
under reform measures offered by members of Congress. Finally, in
releasing information that it has in its files, the government's job is
not to determine which information is accurate and which is not. That
is the public's responsibility--and its right.
As a final point, I must say that I find it disturbing that those
who argue most vehemently for giving the public adequate information
and letting them make safety decisions tend to be those most opposed to
doing so in the case of section 6(b)
Recommendation: Repeal Section 6(b) of the CPSA. It inhibits public
access to important information about product safety. Indeed, as
presently constituted, it is the exact opposite of promoting the
consumer's right to know about safety information, possibly life saving
information, in the files of CPSC.
Ongoing CPSC Safety Concerns
1. The Safety of ``Durable'' Childrens Products
According to the July 5, 2002 CPSC Nursery Product-Related Injuries
and Deaths to Children under age 5 Annual Memorandum, an estimated
69,500 children under age five were treated in hospital emergency rooms
for injuries associated with nursery products. An average of 65
children, according to this CPSC report, have died annually in such
incidents from 1997-1999.
We believe the number of injuries and deaths from using such
products is far too high-indeed, it is unconscionable--and we urge this
Subcommittee to focus a series of hearings on:
The extent to which safety is incorporated in the design and
manufacture in the design and manufacture of baby products;
Pre-market testing of baby products by manufacturers;
Voluntary safety standards set by private standards-setting
organizations for baby products;
Barriers to public access to information about injuries to
children using baby products;
Frequent recall of baby products intended for use by
children;
Secrecy in settling lawsuits when children have been injured
or killed when using a baby product.
We urge the Subcommittee to focus on products like strollers, high
chairs, or portable cribs, products that one would find in a nursery,
which we call ``durable'' children's products.
Why do we urge this action on the Subcommittee?
The top 5 manufacturers of durable childrens' products have had an
alarming number of recalls over the past decade.
From March 1993 to February 2003, we have listed the five top
companies and their respective recalls:
Dorel Juvenile Group--20 products recalled (includes Cosco 12,
Safety First 8)
Graco--11 products recalled
Century--11 products recalled
Kolcraft--9 products recalled
Evenflo--9 products recalled
It is unreasonable and unconscionable for any company, especially
those making products for use by children, to have more than one or two
recalls over a decade. Proper safety-oriented design, rigorous pre-
marketing testing, and strong industry-wide voluntary safety standards
should prevent the recurring problem of having to recall product after
product. And yet recalls clearly are not uncommon for the top five
durable child product manufacturers.
Add this lax record of putting products into the stream of commerce
that must be recalled later to the fact that only 10-30 percent of
product recalls are effective--i.e., the product is successfully
repaired, replaced, refunded and/or destroyed--and you have a recipe
for extreme danger, and that danger is to children, our most vulnerable
consumers.
Consumers Union has met with parents whose children have died using
products that were recalled but the parents or the day care center were
unaware of that recall. While we are critical of how often new products
are getting into the marketplace without proper testing, we are also
critical of CPSC's ineffective process of recalling those products from
consumers.
The Commission held a hearing on May 15, 2003, that focused on
methods for increasing recall effectiveness, bringing many top public
relations and marketing experts to the table. These experts discussed
many creative methods for increasing recall effectiveness and consumer
response, however, most of them require manufacturers of products and
the agency to spend money and resources. We commend the Commission for
bringing together so much experience and talent, but we are concerned
that it may lack the will to require manufacturers to put into place
effective recall strategies that may cost money.
Perhaps our concern is prompted by the Commission's rejecting by a
2-1 vote, shortly before the May 15 hearing, a petition calling for
baby products to be accompanied by Product Registration Cards that
would allow parents the opportunity to fill the cards out with simple
contact information and thereby allow manufacturers to contact them in
the event of a recall. The industry argued that the cost of such cards
was not worth the benefit they might provide. We disagree. We had urged
the Commission to tailor a rule that required companies to provide
registration cards for higher cost ``durable'' baby products,
indicating that these cards would be used only for safety recalls and
not for marketing, allowing consumers to provide multiple contact
information, and have the postage paid. We believe we would see greater
registration percentages and the possibility of saving young lives.
Recommendation: This committee should hold hearings on the
manufacture of child products, as discussed above. CU supports two
legislative proposals related to durable children's products and
recommends that this Subcommittee hold hearings on both:
(a) Legislation offered by Senator Mary Landrieu Product Safety
Notification and Recall Effectiveness Act of 2003, S. 584,
would require registration cards to accompany products intended
for use by children. These cards would clearly state they are
only for the purpose of contacting the consumer in the event of
a recall and would ask not for marketing information, as so
many cards currently, but for simply contact information. There
is a precedent for this. The National Highway Traffic Safety
Administration began requiring such cards with the sale of each
child restraint in 1993 and the numbers of consumers
registering went from 3 percent to 27 percent in 10 years.
(b) Legislation introduced in the last Congress by U.S.
Representative Jan Schakowsky of Illinois entitled ``The Infant
and Toddler Durable Product Safety Act,'' HR 3283, would
require pre-market testing of all durable children's products
by an independent entity. This legislation was initiated by a
leading child safety advocacy organization, Kids in Danger,
based in Illinois, whose founders' son was killed in a recalled
portable crib.
We also recommend that CPSC report annually to this Committee on
effectiveness of recalls for the preceding calendar year. Most
consumers are unaware that success rates for recalls are so low; we
believe making the information public would spur manufacturers to
improve their safety records.
2. All Terrain Vehicles
Between 1993 and 2001, the number of injuries caused by ATV-related
accidents more than doubled, with 111,700 ATV accidents occurring in
2001. The number of injuries suffered by children under sixteen
increased 94 percent to 34,800 in 2001.
Pursuant to a petition filed by the Consumer Federation of America,
CU supports calling for CPSC to ban the sale of ATVs to children under
the age of 16 (and other safety measures). The CPSC held an all day
hearing on ATV fatalities and injuries on June 5 of this year in West
Virginia. That state has the 6th highest number of injuries, while
efforts to pass a state law regulating ATVs have met with defeat on
several occasions.
We commend the Commission for providing an open forum at that
hearing for some 36 individuals, including ATV enthusiasts, state
legislators, industry representatives, consumer advocates,
pediatricians, neurosurgeons, and ATV dealers to share their ideas for
addressing the problem. One message that came out of the meeting is
that in states with laws regulating ATVs, the number of deaths and
injuries are lower than in states with no such regulations. The
challenge is how to encourage states to pass such laws. We think
Congress has an invaluable part to play in making this happen.
Recommendation: This Subcommittee should work with the Commission
to schedule hearings on ATV safety, perhaps on a smaller scale but
similar to the kind of hearing the CPSC held in West Virginia. Congress
should then provide financial incentives to states to adopt ATV safety
laws. (The American Academy of Pediatrics Model Statute is an excellent
and comprehensive approach to ATV regulation, providing for training
and licensure of ATV riders and requiring safety gear like helmets and
proper clothing).
There is precedent for this approach. In 2000, Congress passed and
President Clinton signed a law requiring that states enact a 0.08
percent BAC (blood alcohol content level) law by October 1, 2003 or
lose a portion of highway funding. Federal law currently offers
financial incentives to the states to adopt a 0.08 percent permissible
blood alcohol level for drivers and has been successful in persuading
states to adopt this provision. Prior to this law, 18 states and the
District of Columbia had passed 0.08 percent BAC laws. In the two years
since, the total number of states with 0.08 percent BAC laws has
increased to 33 and the District of Columbia.
3. Baby Bath Seats
CU feels strongly that this baby product should have been banned
long ago and indeed, we supported the Consumer Federation of America's
2000 petition to ban these seats. Baby bath seats have been involved in
96 baby drowning deaths since January 1983, according to CPSC's May
2003 Staff Memorandum. The tragedy, we believe, is that the Commission
voted to proceed with a mandatory rule on these seats in August 2001,
but to this day still has not acted to ban or improve their design. In
the interim, an additional 10 babies have died in this nearly two year
period.
We know that the staff has recommended a mandatory performance
standard for baby bath seats. While we maintain an open mind about the
recommended changes, we are skeptical: these devices, despite the
warning stickers on them, still give parents a false sense of security
that when they place their child in these seats, it is safe to leave
them in the bathtub alone. Clearly, the bath seats being sold and used
today are not safe, and we are simply not sure that any design change
will remedy these inherent problems.
4. Furniture Flammability and other fire hazards
The Commission has failed, in our view, to address in a
comprehensive way the issue of fire safety over the past several
decades. The U.S. has one of the highest fire death rates in the
industrialized world. Each year, fire kills more Americans than all
natural disasters combined.
More than 730 people on average die each year in fires where
cigarettes, matches, lighters and candles ignite upholstered furniture
or mattresses and bedding. These ignitions are the number one cause of
fire deaths. Since 1980, when the CPSC began gathering data on fire
deaths, more than 20,000 people have died and countless more have been
injured, in fires involving smoldering and open flame ignitions of
upholstered furniture, mattresses, and bedding. The government has been
making and considering mattress and furniture flammability standards
since before the CPSC was established over 30 years ago.
We recommend that CPSC develop fire safety standards in the
following areas: fire safe cigarettes, \5\ fire safe candles,\6\
residential bedding systems (mattresses, foundations, accessories, etc)
and upholstered furniture. The Commission would not be starting from
scratch. Much research has been done over many years in each of these
areas. The comprehensive fire safety program, as recommended by the
National Association of State Fire Marshals, is a good starting point.
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\5\ Cigarette fires are the leading cause of fire deaths in the
United States, resulting in 800 deaths, including 100 children, in
1998. New York State has a fire safe cigarette standard based on the
National Institute of Standards and Technology (NIST) testing
methodology for cigarettes. This is one example that the Commission
could consider in developing a national standard for fire safe
cigarettes.
\6\ Candle fires resulted in 170 deaths and 1,200 injuries in 1998,
representing a 750 increase in deaths from 1980 to 1998.
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What has been is lacking is strong and decisive leadership on the
part of the CPSC in moving forward with standards. Perhaps the agency
needs greater resources to adequately address fire hazards. We
encourage Congress to provide those resources.
Few issues have received more research or debate at the Commission
than developing a fire safe standard for upholstered furniture. We
understand that developing such a standard is a highly complex issue
and one that requires careful consideration, but it has been nine years
since (petition granted in 1994) the Commission granted the National
Association of State Fire Marshals Petition to do so and the research
seems to be never ending.
The news last week regarding the terrible a fire at a Seton Hall
University dormitory that killed three students and injured more than
50 others highlights the problem. Yes, this fire was started by
students deliberately setting a poster on fire, but as the New York
Times noted, ``The poster . . . was lying on a couch made of highly
flammable foam that caught fire and filled the dormitory with smoke. .
.'' \7\ The foam inside most upholstered furniture is highly flammable,
a fact few consumers comprehend. California is the only state with an
upholstered furniture safety standard and the deaths and injuries in
that state from upholstered furniture fires are far fewer than in the
rest of the country.
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\7\ New York Times, June 13, 2003, p. A28.
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Recommendation: The Commission should move forward with a
comprehensive plan to set fire safety standards for candles,
cigarettes, upholstered furniture, and mattresses and bedding.
Conclusion
The product safety agenda has much unfinished business. Too many
consumers, especially children, are still injured and killed through no
fault of their own, and the sad part is that much of this grief can be
prevented. Consumers need and depend on the vigorous, ongoing work of
CPSC. We believe the recommendations we make here, if adopted, would
make the agency far more effective in reducing or eliminating
unreasonable risks from consumer products. We urge you to provide this
Federal safety agency the necessary financial resources and exercise
the strongest possible oversight to make CPSC function as Congress
intended.
Thank you.
Senator Fitzgerald. Thank you, Dr. Pittle.
Ms. Weintraub?
STATEMENT OF RACHEL WEINTRAUB, ASSISTANT GENERAL COUNSEL,
CONSUMER FEDERATION OF AMERICA
Ms. Weintraub. Mr. Chairman, I am Rachel Weintraub,
Assistant General Counsel with Consumer Federation of America.
CFA is a nonprofit association of approximately 300 pro-
consumer groups, with a combined membership of 50 million
people. CFA appreciates the opportunity to testify today on the
reauthorization of the U.S. Consumer Product Safety Commission.
We are pleased to offer our strongest support for the
reauthorization of this final consumer safety agency.
We are asking Congress to do eight things to help
strengthen CPSC and protect consumers from unsafe products.
First, the Consumer Product Safety Commission plays an
extremely critical role in protecting American consumers from
product hazards. Yet with jurisdiction of 15,000 different
products, this small agency has a monstrous task. This
challenge is heightened by the fact that, over the last two
decades, CPSC has suffered deep cuts to its budget and to its
staff. Because of these constraints, CPSC cannot maintain its
current level of safety programs, nor can it invest in its
infrastructure to improve its work for the future. It is for
this reason that CFA believes that the most important thing
that this Subcommittee can do is to assure that sufficient
reauthorization funding levels are approved.
We believe that the current amount of funding sought should
be expanded by at least a modest 10 percent. This would allow
for much-needed improvements. For example, in spite of the
critical role of CPSC's laboratory, no major improvements have
been made in the past 25 years. If CPSC were granted the funds
to modernize the laboratory, the agency would gain
significantly through increased productivity and efficiency.
Second, CFA suggests that Congress eliminate the cap of
$1.65 million on the amount of civil penalties that CPSC can
assess. Eliminating the cap will encourage manufacturers to
recall products faster, will act as a deterrence to
noncompliance with CPSC's regulations, and will strengthen
CPSC's bargaining power when negotiating with companies.
Third, CFA urges Congress to restore CPSC's authority over
fixed-site amusement parks. 55 fatalities have occurred on
amusement parks in the last 15 years, and serious injuries have
soared 96 percent in the last 5 years. Federal oversight is
crucial, due to the vast variation in State laws and the
complete absence of regulation in some states. CPSC should be
authorized more money to take on this expanded role.
Fourth, CFA urges Congress to eliminate Section 6(b) of the
Consumer Product Safety Act. This provision, which no other
health and safety regulatory agency must adhere to, requires
that CPSC must check with the relevant company before it can
give out certain information to the public. This has the effect
of delaying or denying access of important information to
consumers.
Fifth, we urge Congress to require businesses selling toys
on the Internet to provide, on their website, the same
cautionary labeling that is required on toy packaging. Online
retailers should be required to post the cautionary warnings on
their websites so that consumers can be aware of the potential
safety issues before purchasing the product.
Our sixth request for Congress relates to recall
effectiveness. CFA filed a petition with CPSC in June 2001
requesting that CPSC initiate rulemaking to require all child
product manufacturers to provide a product registration card
with every product. Unfortunately, by a vote of two to one,
CPSC denied our petition. CFA maintains that product
registration cards are necessary because our current system of
recall notification is failing. Recall rates are very low, and
many CPSC recalls involve products for children. Recalls of
children's products often occur because of choking,
strangulation, suffocation, burns, or serious fall hazards. We
urge Congress to require CPSC to submit a report, within 1
year, on the steps it will take to increase recall return
rates, including an evaluation of product registration cards.
Seventh, CFA has long been concerned that the all- terrain-
vehicle industry's self-regulating approach to safety is
failing. Unfortunately, our concern has been increasing as
injuries and deaths on the ATVs, especially injuries and deaths
to kids, have been on the rise. Between 1993 and 2001, the
number of injuries caused by ATVs more than doubled. And in
2000, alone, as was previously stated, 111,700 people were
injured seriously enough by ATVs to require emergency-room
treatment. Tragically, data show that between 1982 and 2001,
children under 16 make up 38 percent of the total number of
fatalities and 37 percent of total number of injuries.
CFA urges CPSC, through a petition we filed last August, to
ban the sale of adult-size ATVs for use by children under 16.
We ask Congress to monitor this issue closely and to hold
oversight hearings on ATV safety to determine the role Congress
should play in this public-health crisis.
Finally, CFA supports CPSC action to ban baby bath seats.
Since 1981, approximately 96 children have drowned to death,
and 153 were injured seriously, while using baby bath seats.
Caregivers who use bath seats are more likely to take riskier
behaviors because they incorrectly believe that the device
provides an added measure of safety. Furthermore, mechanical
problems with baby bath seats make it more likely that a child
will drown if unattended.
CFA petitioned CPSC to ban baby bath seats in July of 2000,
and the agency recently announced a meeting for the end of July
on CPSC staff's recommendations. Congress should carefully
track CPSC's progress on this issue.
In conclusion, CFA supports the multi-year reauthorization
of CPSC and urges an increase of at least 10 percent so that
all consumers, especially our Nation's children, will have a
strong CPSC to protect them from unsafe products.
Thank you.
[The prepared statement of Ms. Weintraub follows:]
Prepared Statement of Rachel Weintraub, Assistant General Counsel,
Consumer Federation of America
Mr. Chairman and members of the Subcommittee, I am Rachel
Weintraub, Assistant General Counsel for Consumer Federation of America
(CFA). CFA is a non-profit association of approximately 300 pro-
consumer groups, with a combined membership of 50 million people that
was founded in 1968 to advance the consumer interest through advocacy
and education.
CFA appreciates the opportunity to testify here today on the
reauthorization of the U.S. Consumer Product Safety Commission. We are
pleased to offer our very strongest support for the reauthorization of
this vital consumer safety agency.
The Consumer Product Safety Commission (CPSC) plays an extremely
critical role in protecting American consumers from product hazards
found in the home, in schools and during recreation. We know from past
experience, from survey data, and from consumers, who contact us on a
daily basis, that safety is an issue that consumers care deeply about
and that CPSC is an agency that consumers support and recognize as
protecting them and their families.
Yet, with jurisdiction of over many different products, this small
agency has a monstrous task. This challenge is heightened by the fact
that, over the past two decades, CPSC has suffered the deepest cuts to
its budget and staff of any health and safety agency. Today, CPSC's
budget is $56.7 million with 471 full-time employees.
To put these staffing levels and budget appropriations in
perspective, it is necessary to consider the history and authority of
this consumer agency. Established by Congress in 1972, CPSC is charged
with protecting the public from hazards associated with over 15,000
different consumer products. Its statutes give the Commission the
authority to set safety standards, require labeling, order recalls, ban
products, collect death and injury data, and inform the public about
consumer product safety.
In 1974, when CPSC was created, the agency was appropriated $34.7
million and 786 FTEs. Now 28 years later, the agency's budget has not
kept up with inflation, has not kept up with its deteriorating
infrastructure, has not kept up with increasing data collection needs,
has not kept up with the fast paced changes occurring in consumer
product development, and has not kept pace with the vast increase in
the number of consumer products on the market. CPSC's staff has
suffered severe and repeated cuts during the last two decades, falling
from a high of 978 employees in 1980 to just 471 for the coming fiscal
year.
While every year an estimated 23,000 American consumers die, and an
additional 31 million suffer injuries related to consumer products
under the jurisdiction of the CPSC, this agency, with its reduced staff
and inadequate funds, is limited in what it can do to protect
consumers. Because of these constraints, CPSC cannot maintain its
current level of safety programs, nor can it invest in its
infrastructure to improve its work in the future.
In addition to giving CPSC the tools it needs to comply with its
mandate, an increase in authorized funding will help to reduce the
enormous costs to society caused by unsafe products, estimated at $500
billion annually.
Because of this historically bleak resource picture, CFA is
extremely concerned about the agency's ability to operate effectively
to reduce consumer deaths and injuries from unsafe products. It is for
this reason that CFA believes that the most important thing that this
Subcommittee can do in reauthorizing the CPSC is to assure that
sufficient reauthorization funding levels are approved. We believe that
the amounts sought by CPSC have been overly conservative and should be
expanded by at least 10 percent.
In a time when limiting Federal agency budgets may be necessary, it
is important to understand the context in which CFA and others
(including the agency itself) seek sufficient authorization levels for
CPSC. CPSC's current budget, staff, and equipment are stretched to the
point of breaking. CPSC salaries and rent currently consume 85 percent
of the agency's appropriation. An additional 11 percent of the agency's
budget pays for other functions (such as supplies, communications and
utility charges, operation and maintenance of facilities and equipment)
that merely allow CPSC to keep its doors open for business each day.
Much of CPSC's equipment, particularly at the laboratory is old and
outdated. CPSC's testing laboratory serves a crucial role in CPSC's
compliance investigations and safety standards activities. In spite of
the laboratory's critical importance, no major improvements have been
made in the past 25 years. Rather, CPSC and GSA have made only slight
modifications to its infrastructure, which was originally designed for
military use not laboratory use. Currently, CPSC staff working at the
lab are working under merely adequate conditions. If the laboratory
were to be modernized, CPSC would gain significantly through increased
productivity and efficiency.
As often as it can, CPSC operates in a very cost efficient manner.
Most of the recalls brought about by the agency are the result of
voluntary agreements reached between CPSC and manufacturers and/or
distributors. However, in every recall matter it considers, the
Commission must be prepared with research evidence to convince the
company of the need for action. In cases where the agency must file a
complaint and litigate the matter, the agency may require even more
extensive testing and research data for use as evidence at trial. This
testing and research, whether leading to a recall or trial, may need to
be contracted out and is very costly. This contingency is one with
enormous ramifications. In effect, not having sufficient resources puts
CPSC in a terrible position as an enforcement agency. It can't put its
money where its mouth is--so to speak--because it can't be sure it will
have the money needed to follow through.
This concern is further exacerbated as new products and new
technologies come on to the market. Sophisticated, high tech products,
such as Segway devices, which CPSC engineers may have never seen, much
less have expertise with, pose particularly resource intensive
challenges. For CPSC to live up to its safety mandate, it must be able
to keep pace with the ever-changing development of technology.
Because of CPSC's limited resources, some might argue that the
private sector should do more to pick up the slack in protecting the
public from consumer product hazards. While on the surface this might
appear an appealing partial solution, CFA believes that it is an
unworthy answer for two reasons. First, the private sector can never
take the place of a regulatory agency that has the force of law as its
underpinning. Congress, with widespread bipartisan support, created
CPSC because a corporation's goals of increasing profits and making
safe products sometimes collide, and there is a need for government to
provide consumers with a safety net when this occurs. CPSC's ability to
set product standards, ban products, collect data and force recalls are
functions, which must necessarily remain with government. Second,
private non-profits have limited resources and budgets to fund
educational and informational programs.
However, like many organizations, CFA works on several fronts to
increase public awareness on safety issues. For example, Safechild.net,
a project of CFA's sister organization, the CFA Foundation, is a
website designed to be the most comprehensive child safety website on
the Internet. Our website features special sections for parents,
professionals who work with children, and child advocates. In order to
aid parents seeking more information about recalls and child safety,
SafeChild.net makes available a free, non-commercial and confidential
e-mail notification service detailing major child-safety product
recalls and related child-safety tips. This is so necessary because
CPSC's recall notification system is not effective. Most consumers do
not respond to recalls because they don't hear about them. This is not
surprising, given that CPSC's primary method of telling consumers that
a product they own has been recalled is through a press release.
SafeChild.net has logged more than 18 million hits since its launch on
June 21, 2001. While CPSC has managed to leverage its resources in
working with private sector partners, its leadership position as our
Nation's consumer safety agency should not be further compromised.
While CFA fully supports the reauthorization of CPSC, CFA believes
that CPSC could be an even more effective agency if a number of changes
were made to the statutes over which CPSC has jurisdiction.
First, CFA suggests that Congress eliminate the cap on the amount
of civil penalties that CPSC can assess, as spelled out in section 20
(a) of the Consumer Product Safety Act (CPSA), against an entity in
knowing violation of CPSC's statutes. The current civil penalty is
capped at $7,000 for each violation up to $1.65 million. A ``knowing
violation'' occurs when the manufacturer, distributor or retailer has
actual knowledge or is presumed to have knowledge deemed to be
possessed by a reasonable person who acts in the circumstances,
including knowledge obtainable upon the exercise of due care to
ascertain the truth of representations. Knowing violations often
involve a company's awareness of serious injury or death associated
with their product. Eliminating the cap will encourage manufactures to
recall products faster and comply with CPSC's statutes in a more
aggressive way. Importantly, the elimination of the cap will act as a
deterrent to non-compliance with CPSC's regulations.
Eliminating the cap will also strengthen CPSC's bargaining power
when negotiating with many companies to take a particular action. For
example, consider a situation that came to light just last week
concerning a company regulated by another health and safety agency, the
Food and Drug Administration (FDA). The recent guilty plea to 10
felonies by Guidant, a division of one of the country's largest makers
of medical devices, and its admission that it lied to the FDA and hid
thousands of serious health problems, including 12 deaths, caused by
one of its products, shows how important the role of civil penalties
play in not only preventing but punishing manufacturers for wrong
doing. According to a June 13, 2003 New York Times article, the case
against Guidant resulted in $92.4 million in criminal and civil
penalties, the largest ever imposed against a maker of medical devices
for failing to report problems to the government. Unfortunately, CPSC
has companies under its jurisdiction that have made products that have
caused many deaths and injuries. For example, CPSC fined Cosco, a
Canadian company, which is the largest children's product manufacturer
and distributor in the United States, $725,000 in September 1996 for
failing to report 96 known toddler bed and guardrail entrapments and
one death associated with its toddler beds. In 2001 CPSC again fined
Cosco and Safety 1st a record fine of $1.75 million after failing to
report two deaths and 303 injuries to CPSC. However, these companies
never admitted wrongdoing and obviously the penalty did not deter non-
compliance with the reporting requirements.
Second, CFA urges Congress to restore CPSC's authority over fixed-
site amusement parks. Fifty-five fatalities have occurred on amusement
park rides in the last fifteen years. According to the CPSC, serious
injuries on theme park rides have soared 96 percent in the last 5
years. Federal oversight is crucial to the prevention of any future
deaths and injuries associated with fixed site amusement parks due to
the vast variation in state laws and the absence of any regulation in
some states. CPSC has illustrated its ability to identify and prevent
injuries from many consumer products including mobile amusement park
rides. CPSC should be granted the same scope of authority to protect
against unreasonable risks of harm on fixed-site rides that it
currently retains for carnival rides that are moved from site to site.
However, with this additional authority, CPSC should be authorized more
money to take on this important role.
Third, CFA urges Congress to eliminate section 6(b) of the CPSA.
This section of the Act prohibits CPSC, at the insistence of industry,
to withhold safety information from the public. This provision, which
no other health and safety regulatory agency must adhere to, requires
that CPSC, before it can give out certain information to the public,
must check with the relevant industry before disclosing information. If
the industry denies access to the information, CPSC must evaluate their
response and may just drop the issue and deny access of the information
to consumers. This has the effect of delaying or denying access of
important information to consumers.
Fourth, we urge Congress to require businesses selling toys on the
Internet to provide on their website the same cautionary labeling that
is required on toy packaging. Currently, Section 24 of the Federal
Hazardous Substances Act (FHSA) requires cautionary labeling on small
balls, marbles and toys that contain small parts for children 3 years
of age and younger. This labeling must be apparent to consumers at the
point of purchase so consumers are able to make informed decisions
about potential safety hazards associated with the toys. Online
retailers should be required to post the cautionary warnings on their
website so that consumers could be aware of the potential safety issues
before actually purchasing the product.
In addition there are a number of issues currently before the
agency in which we have a deep concern.
Recall Effectiveness
CFA filed a petition with CPSC in June 2000 requesting that CPSC
initiate rulemaking to require all manufacturers, (or distributors,
retailers or importers) of products intended for children to provide
along with every product, a Consumer Registration Card that allows the
purchaser to register information through the mail or electronically,
require recall remedies to be indefinite and require manufacturer
identification and contact information on each product. CPSC agreed to
consider only the issue of product registration cards, a requirement
that the National Highway Transportation Safety Administration (NHTSA)
currently has for child car seats. Unfortunately, on March 7 by a vote
of 2 to 1, CPSC denied our petition. We were very disappointed with
this decision and continue to believe that product registration cards
are an essential component of any effort to improve recall
effectiveness.
Our current system of recall notification is failing. By relying
upon the media and manufacturers to broadly communicate notification of
recalls to the public, CPSC and the companies involved are missing an
opportunity to communicate with the most critical population--those who
purchased the potentially dangerous product.
Requiring companies that manufacture, distribute, import or sell
products intended for children to take additional measures to assure
the effectiveness of recalls is necessary for the following reasons:
(1) First, return rates for CPSC-recalled products are
extremely low. In Fiscal Year 1996, CPSC recalls experienced an
18 percent return rate. In Fiscal Year 1997, the most recent
year for which data is available, the return rate fell slightly
to 16 percent.
(2) Second, many CPSC recalls involve products for children. In
Fiscal Year 2002, CPSC instituted recall actions involving 84
toy and children's products, involving more than 11 million
product units.
(3) Third, children are a vulnerable population who deserve
additional protections.
(4) Fourth, the risks of death or serious injury associated
with children's product recalls are substantial. These recalls
often occur because of choking, strangulation, suffocation,
burns or serious fall hazards. All of these too often result in
the death of a child or serious injury. Children have no
capacity to prevent any of these hazards.
The effective recall of hazardous products is an important purpose
of the Consumer Product Safety Commission and should be the priority of
any company that puts a consumer product into the market place. While
CPSC denied the petition based primarily upon industry's assessment
that these cards would be too expensive and may not work, we continue
to believe that the costs involved are reasonable considering the
benefit of the lives that may be saved. In addition, efforts by NHTSA
to require registration cards for child car seats have been successful.
Because child restraints are used in automobiles, NHTSA has
jurisdiction over this product and has required that manufacturers
provide cards to consumers. In a new study released January 6, 2003,
NHTSA evaluated its child safety seat registration program. The study
found that child safety seat registration was successful in notifying
purchasers of recalls. Specifically the NHTSA study found:
(1) Increased registration rates increased recall compliance
rates: the repair rate on recalled seats is now 21.5 percent
vs. 13.8 percent in 1993--a statistically significant 56
percent increase.
(2) The indirect cost to consumers of the mandatory standard is
43 cents for each car seat sold.
(3) Return rates for registration cards are now at 27 percent
vs. 3 percent before the rule was implemented.
NHTSA's experience with registration cards over the last decade
provides an important model for CPSC to emulate. NHTSA's recent study
evaluating their product registration card proves that the cards are
not only effective in increasing consumer compliance with recalls but
also achieve a successful result at a low cost to consumers. We urge
CPSC to consider product registration cards as an important part of
their current ``broader look'' at recall effectiveness. In addition, we
urge Congress to require CPSC to submit a report within 1 year, on the
steps it will take to increase recall return rates including an
evaluation of product registration cards as one alternative.
All-Terrain Vehicles
CFA has long been concerned about all-terrain vehicle (ATV) safety.
Unfortunately our concern has been increasing as injuries and death on
ATVs--especially injuries and deaths to kids--have been on the rise.
CPSC data consistently shows that ATV-related injuries and deaths are
increasing: between 1982 and 2001, at least 4,541 adults and children
were killed in ATV accidents; between 1993 and 2001, the number of
injuries caused by ATVs more than doubled; in 2001 alone, 111,700
people were injured seriously enough by ATVs to require emergency room
treatment; and between 1993 and 2001, the number of injuries involving
four-wheel ATVs increased by 211 percent to nearly 100,000.
Tragically, the CPSC data show that children under 16 are at high
risk. Between 1982 and 2001, 1,714 children under the age of 16 were
killed in ATV incidents, representing 38 percent of the total number of
fatalities. Of those ATV deaths involving children, 799 were to
children 11 or younger. Between 1993 and 2001, ATV-related injuries
suffered by children under 16 increased 94 percent to 34,800.
The history of ATVs in the United States proves that the current
approach--the industry's self-regulating approach--to safety is not
working. Self-regulation by the ATV industry has led to larger and
faster ATVs and more children being killed and injured. CPSC's own data
illustrates that CPSC and the states must act to end this hidden
epidemic by moving aggressively to protect young children from the
dangers posed by adult-size ATVs. In particular we have urged CPSC
through a petition we filed this past August, to ban the sale of adult
size ATVs for the use of children under 16. We hope that the agency
will act soon to ensure that these trends are reversed. We urge
Congress to monitor this issue closely and to hold oversight hearings
on ATV safety to determine the role Congress should play in this public
health crisis.
Baby Bath Seats
Since 1981, when baby bath seats came onto the market,
approximately 96 children have drowned to death and 153 were injured
while using the product. One study of caregivers who use bath seats
found that: they are likely to fill the bathtub with more water,
increasing the chance of drowning, and they are more likely to
willfully leave a child in the bathtub alone when a bath seat is in use
believing that the device provides an added measure of safety.
Furthermore, there are mechanical problems with baby bath seats that
make it more likely that a child will drown if a caregiver leaves the
child unattended. There are no mandatory safety standards for these
products. CFA petitioned CPSC to ban baby bath seats in July, 2000.
CPSC ruled in favor of an Advanced Notice of Proposed Rulemaking in
2001 and just recently announced a meeting for the end of July on CPSC
staff's recommendations for a notice of proposed rulemaking. Ten of the
deaths occurred since the Commission voted to initiate an ANPR in May
of 2001. CPSC should not wait for more deaths and injuries to occur
before they take action on this hazardous product. Congress should
carefully track CPSC's progress on this issue.
In conclusion, this Subcommittee must step in and exercise its duty
to make sure that the Federal Government lives up to the commitment it
made to protect consumers from product-related deaths and injuries when
it created the Consumer Product Safety Commission. CFA supports the
multi-year reauthorization of CPSC and urges more funds to be
appropriated to the agency so that more people will have the benefit of
CPSC's efforts to protect consumers from unsafe products. Thank you.
Senator Fitzgerald. Thank you, Ms. Weintraub.
Mr. Korn, thank you for being here. And thank you for your
help last year on child booster-seat laws that we passed. I
appreciate your help in the past.
Mr. Korn?
STATEMENT OF ALAN KORN, J.D., DIRECTOR, PUBLIC POLICY AND
GENERAL COUNSEL, NATIONAL SAFE KIDS CAMPAIGN
Mr. Korn. Thank you, Mr. Chairman. You just read the first
paragraph. We know, by working with you and your staff on the
TREAD Act and the booster-seat component bills of that, that
our children will be well-served by your stewardship here.
I will, in uncharacteristic fashion, kind of lift my head
up from my written comments and just summarize some of the
things. We did turn in very detailed written comments, which I
know will be in the record. Any specific questions beyond that
can be answered in those.
Suffice it to say, our organization is wildly supportive of
the Consumer Product Safety Commission. It does a super job,
with very little. Nonetheless, the reauthorization process
gives us an opportunity, and the CPSC and other groups, to
comment on ways it could be better and improve. Since it has
not been done in 8 years or 10 years, it does give us an
opportunity to get a few things in front of the Committee of
jurisdiction and oversight.
The first is one topic that has not been raised yet, so I
would like to spend a little bit more time on that one. SAFE
Kids believes that allowing an unfettered election of remedy,
under Section 15, does not necessarily serve the public
interest. And here is what I mean by that. Once the Commission
determines that a product distributed in commerce presents a
substantial product hazard and requires some kind of remedial
action, Section 15 allows the CPSC to order the manufacturer to
do one of three things: repair the product, replace the
product, or refund the purchase price, less a reasonable
allowance for use. However, there is an election on there. It
allows the manufacturer to choose amongst those three remedies.
And we believe that discretionary election may not always serve
the public interest.
For instance, if the CPSC is recalling a $75 toaster that
poses an electrocution hazard or a burn hazard, the
manufacturer, once ordered to remedy, may elect to refund,
minus a reasonable allowance for use. A toaster or an electric
appliance that has been on the market for 10 years may have a
value of $10. This refund, we believe, may not be a motivating
enough factor to encourage the consumer to actually remove that
product out of their household.
Instead, we would like to have a check on that election
where the Consumer Product Safety Commission can, if it serves
the public interest, choose another remedy. In that particular
case, it could be repair or actually removal of the product
from the marketplace, or a refund price that is a little bit
higher for economic motivation.
We are not asking or suggesting that the election be
eliminated; only that there be a check on the election and that
the CPSC staff, and the compliance staff, in particular, have
the ability to check the election process of a manufacturer.
That is Section 15(d) of the enabling statute.
Second, we have talked quite a bit about the cap. SAFE Kids
is not necessarily supporting an elimination of the cap, but we
do think it is time for an increase of the cap. In many cases,
the 1.65 million--in fact, in probably all too many cases--the
$1.65 million cap may not be enough of an economic deterrent to
prevent a company from engaging in an unlawful act.
Here is a quick example. If a company has $50 million worth
of product in the marketplace, it may be willing to incur that
civil penalty instead of reporting a defect in the product or
an injury in the product to the CPSC, as is required under
15(d), in order to avoid the recall--in other words, pulling
$50 million worth of product off the marketplace. The cap makes
the economic decision, ``Well, we will just incur that civil
cap,'' instead of doing something that might better serve the
public interest, and, in our view, children, getting a burn
hazard or an electrocution hazard out of the home.
We do note that, you know, there is different companies of
different sizes, so we are suggesting that if you were to
choose, in the Committee's wisdom, to, at the very least,
increase the cap, that the cap could be tied to the size of the
companies--meaning, the greater the company, the bigger the
gross revenue for the company, the higher the cap; the smaller
the company, the lower the cap--or maybe some kind of a cap
that is tied to the egregiousness of the act.
Section 19 lists lots of prohibited acts. Some are very
egregious and really do affect the consumer health and safety
of children--the group that we represent here today--and some
are less--all are important, but some are less important; that
is not the best word, but less egregious--and maybe a smaller
cap could be tied with those.
I do want to make a quick comment on the denial of the
petition that the CPSC had recently on the CFA and the American
Academy of Pediatric's petition on registration cards. The CFA
and other groups petitioned that all children's products have
registration cards attached to them so that if there is a
recall, they can better notify the consumer of that recall. We
believe that there is--and they denied that petition--we
believe there is somewhere in between a complete denial and the
requirement of registration cards on all consumer products.
And in our testimony, we talk about two different types of
products. Briefly, we kind of--we make up our own phrase,
``consumer products that are intimately interwoven with a
child's life''--a crib, a changing table, a baby walker, an
exercise play station--those that, either by design or by
practice, allow a child to be left unattended, and, finally,
maybe products that serve a safety purpose, like child safety
seats, at NHTSA, carbon monoxide detectors, smoke alarms, baby
gates. We think it is important to get those products off the
market very fast if there is a problem. Registration cards may
help in that process.
And finally, I just want to add support for the Committee.
We were very happy to see the numbers, the authorization
numbers, through 2007. Obviously, they could use a whole lot
more, but we think that demonstrates the confidence in this
Committee in this agency. And SAFE Kids will try to educate the
appropriators to do the same.
[The prepared statement of Mr. Korn follows:]
Prepared Statement of Alan Korn, J.D., Director of Public Policy and
General Counsel, National SAFE KIDS Campaign
My name is Alan Korn and I am the Director of Public Policy and
General Counsel for the National SAFE KIDS Campaign. It is my pleasure
to testify before the Subcommittee today. Mr. Chairman, thank you for
inviting me to address the important role of the U.S. Consumer Product
Safety Commission (CPSC). As the mission of the National SAFE KIDS
Campaign (hereinafter ``SAFE KIDS'') is to prevent childhood
unintentional injury, collaborators like the CPSC are vital to our
efforts. SAFE KIDS believes that a strong and effective CPSC is
critical to keeping Americans, especially children, safe from injury
and death due to dangerous consumer products. We also believe, however,
that the CPSC can fulfill its responsibilities without becoming overly
invasive. The Commission cannot, and should not, attempt to protect all
consumers from every possible risk. Consumers, and parents in
particular, have a role in their own and their children's safety.
Consumers should be informed about the products they purchase and use,
follow instructions, and take care in using them.
Nonetheless, the pending reauthorization process affords the Senate
Commerce, Science, and Transportation Subcommittee on Consumer Affairs
and Product Safety, the CPSC, and organizations like SAFE KIDS an
important opportunity to examine the agency's effectiveness and ways
that its capabilities can be enhanced to better protect children. SAFE
KIDS hopes that the Subcommittee will consider the following comments
as it reviews legislation to reauthorize the CPSC. There may be room
for enhancement or update.
I. Background: Childhood Injury and the National SAFE KIDS Campaign
As you may know, unintentional injuries are the leading cause of
death and disability to persons ages 1 to 35. Each year, for all ages,
there are 23,900 deaths and 32.7 million injuries related to consumer
products. The deaths, injuries, and property damage associated with
consumer products cost our Nation approximately $700 billion annually.
Unfortunately, injuries to children make up too large a portion of
these numbers. Each year, more than 5,600 children die and nearly 12
million (one child in five) are hurt seriously enough to require
medical care due to unintentional injury. More than 16 percent of all
hospitalizations for unintentional injury among children result in
permanent disability. Many of these injuries are preventable and some
of these preventable injuries are associated with hazardous or
dangerous products.
The National SAFE KIDS Campaign is the first and only national
nonprofit organization dedicated solely to the prevention of
unintentional childhood injury--the number one killer of children ages
14 and under. Launched in 1987, SAFE KIDS' current nationwide
grassroots network of over 600 state and local coalitions and chapters
have provided hands-on assistance to families to help prevent these
needless tragedies from occurring in the first place. The on-going work
of SAFE KIDS coalitions, and partners like the CPSC, has helped lead to
the decline of the unintentional injury death rate from 1987 to 2000--a
39 percent decline for children ages 14 and under.
II. Specific Comments: CPSC's Core Functions, Capabilities, Strengths,
and Needed Improvements
As the CPSC monitors the safety of over 15,000 types of consumer
products, SAFE KIDS knows that it is charged with an enormous
responsibility to keep families safe from injury and death. SAFE KIDS
recognizes that the CPSC over the last few years has been extremely
effective given its small budget and large statutory mandate. Overall,
SAFE KIDS believes that the CPSC serves its core functions very well,
and has many capabilities and strengths that help protect the public.
However, there are some areas that can be improved upon with additional
resources.
A. Unique Data Collection Capability
The CPSC's data collection is unique among all Federal agencies and
is one of its most important functions. A key component is its National
Electronic Injury Surveillance System (NEISS), a national probability
sample of hospitals in the U.S. and its territories. Using NEISS,
injury data from hospital emergency rooms is collected and analyzed to
identify patterns of occurrence and risk groups for specific injuries.
This valuable information forms the basis for preventive measures and
educational programs. The agency should continue this important
function. SAFE KIDS applauds the evolution of NEISS throughout the
years, such as increasing the number of hospitals used in the sample
and the expansion of the system to capture data on all injuries,
including those not associated with consumer products.
SAFE KIDS applauds the Commission's new initiative to better
monitor children's burn injuries.
CPSC is working with the American Burn Association and Shriners
Hospitals to set up a reporting system encompassing all burn centers in
this country. Each burn center will file a report to the CPSC
containing information on every clothing-related burn injury to a child
under the age of 15. In turn, CPSC analysts will use that data to
assess hazards related to the flammability of all children's clothing,
including sleepwear. As a result, the data will enable the CPSC to have
a comprehensive picture of the most serious clothing-related burns to
children and will substantially improve their basis for making
decisions on appropriate injury reduction strategies. This information
will also help SAFE KIDS target our programming, so that it is more
effective and more valuable to families.
In addition, the CPSC ``Safety Hotline'' provides a vital link
between the government and America's consumers to report a product
complaint or report a product-related injury. Despite its small budget,
the CPSC maintains this toll-free hotline that permits consumers to:
(1) report an unsafe product; (2) report a product-related injury; (3)
find out whether a product has been recalled; (4) learn how to return a
recalled product or arrange for its repair; (5) obtain information on
what to look for when buying a consumer product; and (6) receive
information on how to safely use a consumer product. State and local
SAFE KIDS coalitions, and other grassroots organizations, have used the
hotline to both report potentially dangerous products and to collect
information on unsafe products. The hotline is an invaluable resource
to groups like SAFE KIDS that are in the business of communicating
critical safety messages to the general public.
Information gathered from the NEISS system, the ``Safety Hotline'',
and other sources, such as death certificates and special
investigations, guide the Commission in setting priorities for
identifying potentially hazardous products that may warrant future
investigation or action. This data provides the CPSC with critical
basic information that may eventually lead to a product modification or
the development of voluntary or mandatory safety standards.
Additionally, the information is used by outside organizations, like
SAFE KIDS, to aid in the development of injury prevention initiatives.
B. Adequate Testing Labs
A few years ago, several members of the Campaign staff toured the
CPSC testing lab located in Gaithersburg, Maryland. The CPSC, among
other things, uses this lab to test thousands of consumer products to
ensure that they comply with existing voluntary or mandatory standards,
or to determine whether or not they pose an unreasonable risk of injury
to the American public. SAFE KIDS staff was impressed by the commitment
and expertise of CPSC lab personnel, but was surprised by the poor
quality of the lab's conditions. The CPSC, while fulfilling their
mission, has done so with less than adequate technical facilities. We
believe that the CPSC should have a lab that, at the very least,
competes with those found in the private sector and that Congress
should authorize and appropriate the funds necessary to upgrade the
facility. If the CPSC staff can access a well-equipped lab, this most
certainly will translate into better and safer consumer products.
C. Effective Market Oversight
The CPSC has the mandate to ensure that companies that produce or
sell consumer products comply with the laws, regulations, and standards
that protect consumers and children from hazardous products. The CPSC's
ability to recall dangerous or defective products allows the agency to
remove products that could injure or kill children if left on the
market. It is important to note that since 1973, the Commission's use
of its recall authority has resulted in the initiation of thousands of
recalls or other corrective actions involving millions of products.
These recalls have included baby rattles, pacifiers, cribs, toys
bearing lead paint, flammable clothing, and bike helmets. Although it
is a process than can be improved, America's children live in a safer
environment because of the CPSC's market oversight efforts.
D. Effective Public Education
The CPSC uses a wide range of tools to spread important safety
messages that are critical to the prevention of product-related
injuries. Each time the CPSC educates a parent, an adult, or a child
about the proper use of a product, it is helping to create a safer
environment for America's children.
Grassroots-based organizations, such as SAFE KIDS, are especially
effective in spreading safety information to underserved and hard-to-
reach populations. In other administrations, the CPSC seemed to be
reluctant to engage groups like ours in its effort to spread safety
messages. SAFE KIDS is pleased that the new agency administration has
regularly engaged our organization and our coalition network. The new
Chairman and his staff have made concerted efforts to actively seek our
input on different topics. It has been a pleasure working with the new
administration. We encourage this cooperative relationship to continue
with our organization and with other groups. These partnerships will
help to ensure that educational campaigns more effectively reach their
target population.
E. Encouragement of Market Solutions
The CPSC should continue to emphasize market-oriented solutions to
product safety hazards. In the past, the Commission has convened
meetings with industry and consumer groups to address hazards
associated with a variety of children's products, including multi-use
helmets, baseball safety equipment, movable soccer goals, and
bleachers. These meetings allow for industry, government, and consumer
groups to exchange ideas in a productive environment that lead to
widely accepted solutions to product hazards--without unnecessary
regulation or legislation. The new CPSC administration is continuing,
and has expanded, this effective approach by initiating a series of
recall effectiveness roundtables. We applaud the Chairman's initiative
to reach out to a wide range of groups of different interests and
viewpoints.
F. The Commission Should Consider Select Use of Product Registration
Cards to
Improve Recall Effectiveness
The CPSC recently denied a petition that requested the agency to
require registration cards ``for all products intended for children.''
This general definition applied to a wide universe of products ranging
from toys to art supplies to clothing to children's books to cribs.
This requirement, in our view, would have not only been overly
burdensome on manufacturers, but also could have decreased the value of
registration cards as they are used in the marketplace today. The CPSC
was technically justified when it denied the petition. SAFE KIDS
believes, however, that there may be a need for an expanded role and
use of product registration cards. SAFE KIDS suggests at least two
types of products that may benefit from a registration card
requirement:
Items Intimately Interwoven in a Child's Daily Life
SAFE KIDS believes that registration cards may be of value when
accompanied with items such as cribs, bunk beds, strollers, high
chairs, baby walkers, changing tables, and play yards--products that
are intimately interwoven in a child's daily life. These types of
consumer products have special characteristics, in that a child often
interacts with them for a substantial period of time. Additionally,
many of these products are designed by intent or by practice to allow
for a child to be left unattended for several moments or for an even
longer duration. If the Commission were to determine that one of these
products posed an unreasonable risk to the child, and subsequently
required a recall, SAFE KIDS believes that it would be particularly
important to notify consumers as quickly as possible. Registration
cards would assist in that process.
Products with a Safety Purpose
Mandatory registration cards may have some value when attached to
products that are designed to fulfill a safety purpose, such as baby
monitors, bike helmets, safety latches, baby gates, catcher's masks and
other sports safety equipment, smoke alarms, and carbon monoxide
detectors. Consumers purchase these products to serve a preventive role
in order to protect their children and families from deaths and
injuries. If the Commission determines that one of these products is
not adequately fulfilling that safety purpose, it is critically
important to remove that product from the marketplace as soon as
possible. We cannot have consumers relying on a safety product when the
product itself fails to fulfill its intended purpose. Again, in those
circumstances, it would be particularly important to notify consumers
quickly about the defect.
III. Suggested Congressional Considerations
The CPSC must be active guardians of consumer safety. We cannot
wait for deaths and injuries to happen before we act. We must spend our
time, effort, and resources now in order to prevent the incidents from
ever occurring. Accordingly, SAFE KIDS offers the following points for
Congress to consider.
A. Overall Budget Increase
The CPSC monitors the safety of over 15,000 product categories--
including kitchen appliances, sporting equipment, safety devices, home
furnishings, and art materials--just to name a few. The CPSC must
regulate these products, recall them when necessary, educate the public
about safe use and behavior, and stay current on new injury product
trends. SAFE KIDS believes that the Commission does the best it can
with a $60 million annual budget--clearly not enough money given the
CPSC's breadth and depth of products under its jurisdiction. SAFE KIDS
urges the Subcommittee to authorize additional funding, so that the
agency can better fulfill its broad mission (i.e., better marketplace
policing, more effective consumer education, improved testing of
products).
B. Allowing Election of Remedy Under Section 15 Does Not Necessarily
Serve the Public Interest
Once the Commission determines that a product distributed in
commerce presents a substantial hazard and that remedial action is
required to serve the public interest under Section 15 of the Consumer
Product Safety Act, the CPSC may order the manufacturer of the
dangerous product to elect (at the product manufacturer's discretion)
to either:
A. Bring the merchandise into conformity with requirements
of the applicable consumer product safety rule; or
B. Replace the product with a like or equivalent product; or
C. Refund the purchase price (less a reasonable allowance
for use).
(Consumer Product Safety Act, Section 15d)
This discretionary election may not always serve the public
interest. For instance, if the CPSC is recalling a $75 toaster that
poses a serious electrocution or fire and burn hazard, the
manufacturer, once ordered to remedy, may elect to refund the purchase
price less a reasonable allowance for use. The refund on a toaster that
has been in the marketplace for five years may have a refund value of
$10. This refund may not be a motivating enough factor to encourage the
consumer to remove the dangerous product from their household. In this
case, the public may be better served by a different remedy--such as
receiving a replacement item that is of similar quality or having the
recalled product repaired. SAFE KIDS believes that CPSC compliance
officers should ultimately decide what constitutes an appropriate
remedy given the totality of the circumstances. Congress should
consider a technical change to Section 15 of the enabling statute that
empowers the CPSC to police the manufacturer's elected remedy option.
C. Congressional Consideration of Increase of Civil Penalties under the
Consumer Product Safety Act
During this reauthorization process, SAFE KIDS urges Congress to
consider an increase in the civil penalty allowed by the Consumer
Product Safety Act. In its present form (under Section 20), any person
who knowingly engages in a prohibited act, as outlined in Section 19,
is subject to a civil penalty not to exceed approximately $1.65
million. In some cases, and in particular when larger companies are
involved, the $1.65 million cap may not be enough of an economic
deterrent to prevent the company from engaging in an unlawful act. For
example, a company that has $50 million worth of product in the
marketplace may be willing to incur the civil penalty instead of
reporting a defect or injury as required under Section 15 in hopes of
avoiding a recall. Congress should consider increasing the civil cap to
an amount that better represents a deterrent. In order to avoid an
unduly harsh and unfair penalty, if Congress chooses to increase the
cap, consideration could be given for different caps for different
companies based on gross revenues. For instance, bigger companies could
have bigger caps, and smaller companies could have smaller caps.
Alternatively, an increase in the cap could also be raised for only the
most serious violations of Section 19.
D. Fixed Site Amusement Park Rides Should be Considered a ``Consumer
Product''
SAFE KIDS urges Congress to amend the Consumer Product Safety Act
to include fixed site amusement park rides as a consumer product under
CPSC jurisdiction. In its present form, Section 3 of the Consumer
Product Safety Act defines a consumer product as, among other things,
``any mechanical device which carries or convey passengers . . . for
the purpose of giving its passengers amusement . . . and which is not
permanently fixed to a site.'' (Emphasis added.) This definition is
commonly referred to as the ``roller coaster loophole.''
SAFE KIDS supports Congressman Ed Markey's National Amusement Park
Ride Safety Act of 2003 (H.R. 2207), which among other things, closes
the ``roller coaster loophole.'' This loophole prevents the CPSC from
investigating any amusement park ride accident in any park in America.
Instead, all authority has fallen by default to the states--many of
which do not have the resources to oversee these activities--leaving
regulation largely to the parks themselves. However, even if state-by-
state regulation were adequate, the fact that no one with 50-state
authority has the ability to investigate deaths or serious injuries in
amusement parks means:
Accidents in one state may be repeated on similar rides in
other states--resulting in possible tragedies that could have
been prevented but for the loophole;
Injury and accident trends are not identified because there
is no independent government source of data;
When safety repairs are ordered by one state, they are not
required in any other state.
The Markey bill would restore fixed site amusement park ride
jurisdiction to the CPSC (jurisdiction that was removed from the
Commission in 1981). The bill would allow the CPSC to investigate
accidents; develop an enforced action plan to correct problems if
found; and act as a national clearinghouse for incident and defect
data.
If Congress in its wisdom chooses to restore this jurisdiction to
the CPSC, SAFE KIDS urges the Subcommittee to authorize and Congress to
appropriate adequate funding to the agency to carry out this new
policing effort. SAFE KIDS recognizes that if CPSC jurisdiction were
expanded to include these facilities, the Commission would need a
substantial increase in funding to ensure its proper implementation.
E. Congress Should Monitor CPSC Activities Regarding All-Terrain
Vehicles
Pending before the Commission is a petition filed by the Consumer
Federation of America, the American Academy of Pediatrics, and the
American College of Emergency Physicians, which requests, among other
things, a ban of adult all-terrain vehicles (ATVs) for use by children
under the age of 16. SAFE KIDS supports most of the petition.
SAFE KIDS has long believed that adult ATVs should not be operated
by children ages 15 and under. ATVs are often beyond the developmental
capability of children to control. This concept, coupled with the
increased number of associated injuries and fatalities, show that there
are inherent dangers to children driving adult ATVs. Between 1982 and
2001, 1,714 children under age 16--including 799 under the age of 12--
were killed in ATV incidents. Furthermore, between 1993 and 2001, the
number of ATV-related injuries by children under age 16 increased 94
percent to 34,800. Recent CPSC data revealed that while only 14 percent
of all ATV riders were children under the age of 16, these children
disproportionately suffered approximately 37 percent of all injuries
and 38 percent of total fatalities between 1985 and 2001.
In our view, banning adult ATVs for children would not remove the
products from the marketplace, but simply preclude ATV manufacturers
and dealers from marketing or knowingly selling their adult products to
children. Additionally, ATV salespeople would be required to warn
potential purchasers about the dangers of the product and ask parents
if the adult ATV was being bought for a child under the age of 16.
These measures, if properly enforced, would pass on vital safety
information to parents as well as help to prevent child ATV-related
incidents from occurring in the first place.
At this juncture, SAFE KIDS believes that there is no need for
congressional intervention. The CPSC is taking the petition seriously
and in our view, is properly researching all the potential public
health/policy solutions. However, we urge the Subcommittee to follow
the CPSC's activities to ensure that whatever plan is implemented by
the agency is one that serves the public interest.
IV. Conclusion
The CPSC has used its relatively small budget and staff to
accomplish an incredibly important task--keeping children safe from
defective and hazardous products. As the CPSC is now under new
leadership, SAFE KIDS expects that the current administration will
continue this strong track record. As product-related injuries still
exist and can be prevented, the CPSC is needed now more than ever to
protect consumers, families, and children. I would be happy to answer
any questions.
Senator Fitzgerald. Mr. Korn, thank you very much.
Mr. Gold?
STATEMENT OF STEPHEN GOLD, VICE PRESIDENT,
NATIONAL ASSOCIATION MANUFACTURERS CPSC COALITION
Mr. Gold. Mr. Chairman, I am Stephen Gold.
I am a Vice President at the National Association of
Manufacturers, and I am also Executive Director of the NAM
Council of Manufacturing Associations. And one of the hats I
wear at NAM is to administer the NAM's CPSC coalition, which is
a coalition of approximately 65 manufacturing companies and
associations, all who are responsible or involved in consumer
products. The coalition has actually been around for about two
decades, and its function is to basically serve as a forum to
work on the common issues and the concerns regarding the CPSC
and the legislation--the statute.
In reauthorizing the Commission, first and foremost, we do
urge the Committee to do no harm. A recent study by the NAM
which we just released last week, shows that a vibrant
manufacturing sector is critical to our Nation's long-term
prosperity. This study also pointed out the very serious
economic challenges that manufacturers are presently facing,
including challenges that have led to a loss of 2.3 million
manufacturing jobs over the last 3 years.
Global competition, particularly in the consumer product
industry, is more intense than ever; and in such an economic
environment, manufacturers should not be disadvantaged by an
unnecessarily intrusive and inefficient regulatory regime.
So, first--and to that extent, first, we would recommend
the Committee and the Commission provide better guidance in the
implementation of the Section 15 Substantial Product Hazard
Reporting Provisions. Manufacturers with defective products
that constitute substantial product hazards are obliged to
report to the Commission, and, if needed, to take corrective
action, including recalls.
But the law and the implementing regulations are vague, and
they are ambiguous. It is difficult for manufacturers,
especially small businesses, to determine when reporting and
corrective action is actually necessary. Likewise, it is
difficult for them to comprehend how the Commission justifies
its penalties for failing to report in a timely fashion.
We believe that the lack of bright-line guidance for
failing to--on reporting and on the penalty computation leads
to resolutions that could be very arbitrary. So the Commission
is already authorized, by the way, to develop more effective
guidelines in this area, and we encourage this. You do not even
have to bother with redoing the statute for that--revising the
statute.
The coalition also opposes--and this was something new to
us since we actually filed our testimony--the coalition opposes
the lifting of the maximum level for penalty caps to an
impractical and unrealistic level. First, we do not know of any
evidence that the cap is limiting the Commission's enforcement
activities. Small businesses are sufficiently discouraged by
the 1.5 million, or as it continues to rise, cap; while the
larger businesses are sufficiently discouraged by other
reasons.
You mentioned tort liability. It was mentioned by the
Commissioners. Publicity will always deter businesses, in
general, especially the larger businesses, which have greater
publicity.
In addition, we believe that raising the penalty cap to a
much higher level will generate more litigation. That is, a
corporation will choose to fight the penalty, or even a recall,
if you are looking at an unreasonably high cap that the
Commission decides to levy--I mean, the penalty the Commission
decides to levy.
Finally, I mentioned before, ambiguities in the statute, in
Section 15, will exacerbate the unfairness of increased penalty
caps. Not only does the statute not distinguish between late-
filing a report and actually violating a safety standard, the
criterion for a presumption of knowledge under Section 20 is a
very loose standard and subject to abuse.
Thank you, Mr. Chairman, for providing the NAM and its CPSC
coalition the opportunity to testify. We look forward to
working with you and the Commission.
[The prepared statement of Mr. Gold follows:]
Prepared Statement of Stephen Gold, Vice President,
National Association Manufacturers CPSC Coalition
Mr. Chairman and members of the Committee, I'm Stephen Gold, Vice
President at the National Association of Manufacturers and executive
director of the Council of Manufacturing Associations. One of my roles
at the NAM is to administer the NAM CPSC Coalition. Thank you for
providing our CPSC Coalition an opportunity to testify on the
reauthorization of the Consumer Product Safety Commission.
Our Coalition represents approximately 65 consumer product
manufacturers and manufacturing associations. It has functioned for two
decades as a forum to address common issues and concerns about the
operation of the Commission and about manufacturers' requirements under
the Consumer Product Safety Act and related acts. The mission of the
Coalition is to ensure that the shared goal of consumer product safety
is achieved in a just and balanced manner. To that extent, our
Coalition very much supports the important and vital mission of the
Commission.
Today's U.S. economy is the most consumer-driven in history, and
more consumer products are manufactured and sold in the United States
than ever before. With that in mind, industry standards organizations
and internal safety requirements developed by manufacturers provide the
margin of safety that allows American consumers to be comfortably
secure in the use of their consumer products.
Still, there are occasions where the Commission justifiably acts to
remove unsafe products from the marketplace, and to set standards where
private standards either do not exist or are clearly inadequate.
Consumer product manufacturers are committed to working with the
Commission to achieve these objectives. We support the Commission's
efforts, along with the Customs Service, to monitor imported products
to ensure that they meet appropriate safety standards, an important
step toward better enforcement regarding imports. In addition, our
Coalition also believes that the Commission has a significant role in
educating consumers about safe practices.
That said, our Coalition has made no secret of its discomfort with
certain Commission practices, policies and procedures over the years.
We have expressed concern in the past when cooperation with industry
was minimized while a public-relations campaign to tarnish a company
was launched in the media. We have objected in the past to proposed
mandates when education, research and innovative private initiatives
were not first encouraged. We have pointed out when due process was
given short shrift by the Commission.
Our Coalition applauds the current Chairman and his colleagues'
interest in seeking the views, transparently and broadly, of all
interested parties without predisposition on important matters. We
appreciate the recent Commission hearings and workshops to improve
recall efficiency, at which experts from a variety of disciplines were
given the opportunity to share information. And we laud the
Commission's growing emphasis on sound research and data, including its
focus on more rigorous cost-benefit analyses.
With respect to reauthorization of the Commission, first and
foremost we ask this Committee to ``do no harm.'' A recent study
commissioned by the NAM highlights not only how critical a healthy
manufacturing sector is to our Nation's prosperity, but the exceedingly
difficult economic times U.S. manufacturers presently face. Global
competition, particularly in the consumer product industry, is more
intense than ever. In such an economic environment, U.S. manufacturers
should not be disadvantaged by an unnecessarily intrusive and
inefficient domestic regulatory regime.
Along those lines, we believe that there are ways to make the
Commission more effective and at the same time more efficient. As I
noted, in these difficult economic times complexities and confusion in
the regulatory process are an unnecessary burden on consumer product
companies. Allow me to share a few proposals on ways the Commission can
increase its effectiveness in protecting consumers while minimizing
burdens on the manufacturing sector of this country.
First, we believe that the Commission could rejuvenate its consumer
and educational function. In recent years, the Commission has devoted
relatively little attention to educating consumers about the importance
of safe practices and careful supervision of minors. We support dynamic
new partnerships between industry and the Commission to promote safety
and safe consumer practices. Consumer education does not substitute for
the essential responsibility of manufacturers to provide safe products,
but statistics show that a large percentage of accidents are due to
improper or irresponsible consumer conducts or lack of supervision of
minors. The Commission is fully authorized to embark on such programs,
but encouragement from Congress would be appreciated.
Second, there is a need for better guidance from the Commission in
the implementation of the Section 15 Substantial Product Hazard
Reporting provisions. Manufacturers with defective products that
constitute substantial product hazards are obliged to report to the
Commission and, if needed, to take corrective action including recalls.
However, the law and implementing regulations are vague and ambiguous.
It is difficult for manufacturers, especially small businesses, to
determine when reporting and corrective action is necessary. Likewise,
it is difficult for them to comprehend how the penalty for the failure
to report in a timely fashion is justified by the agency. We applaud
the Commission's willingness to resolve corrective action issues and
many penalty issues without resorting to litigation, as many other
agencies are prone to do. That being said, we believe that the lack of
a bright-line guidance on reporting and penalty computation may lead to
resolutions that are arbitrary. The Commission already is authorized to
develop more effective guidelines in this area, and we encourage this.
Finally, we are supportive of the Commission's involvement in
private standards activities as authorized in the current statute.
These standards are the bulwark of our national and even international
safety system, and the Commission plays an important role in providing
comments and proposals. However, we believe the Commission needs to
better manage and supervise its internal process, particularly staff
input to standards organizations, to ensure an opportunity for public
comment and to prevent proposals which lack technical merit or
otherwise cannot be justified as Federal standards.
Thank you, Mr. Chairman, for providing the NAM and its CPSC
Coalition the opportunity to testify. The Commission is an important
agency and we support its mission. It can and should, for the benefit
of consumers, be administered more effectively than in the past, and we
look forward to working with the current Chairman, the Commissioners
and the Committee to this end.
Senator Fitzgerald. Mr. Gold, thank you.
Mr. Klein?
STATEMENT OF GARY S. KLEIN, SENIOR VICE PRESIDENT,
GOVERNMENT, LEGAL AND REGULATORY AFFAIRS,
TOY INDUSTRY ASSOCIATION, INC. (TIA)
Mr. Klein. Thank you, Mr. Chairman.
My name is Gary Klein, the Senior Vice President of the Toy
Industry Association. And thank you for inviting me to be here
today.
TIA is a not-for-profit trade association composed of more
than 345 members, including members whose aggregate sales
exceed $24 billion annually. The U.S. toy industry leads the
world in innovative, cost-effective design and sale of toy
products; and TIA members account 85 percent of domestic toy
sales, and, globally, approximately 50 percent of all toys
sold.
TIA emphasizes the importance of play in all children's
lives. Not only is it fun and educational, but a necessary part
of growing up. However, to ensure that all children have a
positive play experience, TIA's primary concern is that toys
are safe. And since the 1930s, TIA has established a tradition
of working with others, including--and I go into acronym mode
here--NSB, NSC, ANSI, ASTM, ISO, and SAFE Kids--to ensure the
manufacture and distribution of safe toys.
This commitment continues today. And in 1999, TIA launched
the first year-round industry consumer website to assist U.S.
consumers with questions and concerns about toy safety.
Comprehensive and accurate information is available any time of
day through a specially designed area on the TIA website.
Under the auspices of the National Bureau of Safety, TIA
led the development of the voluntary safety standard for all
toys, in 1976; which, in 1986, was revised and designed under
ATM. The current standard is published in CFR.
In addition, TIA works regularly with the CPSC to develop
voluntary standards and to monitor any potential hazards
associated with toys already on the market. The Commission's
active participation in voluntary standards activities is
instrumental in making the U.S. toy-industry products the
safest and best in the world.
Testing is a vital component of achieving that result, and
our members make more than 100 separate tests and design
specifications included in the ASTM standard, and Federal
regulations to reduce or eliminate hazards with the potential
to cause injury under normal conditions of use or foreseeable
use.
TIA and its members are vitally interested in developing
reputations as safety-conscious companies; because, indeed,
when you think of who the end user of toys are, there is no
other industry that understands better the fragility of a brand
and how the company and its reputation can be damaged by merely
being tarnished with the label of having produced an unsafe
toy.
What our testimony boils down to, Mr. Chairman, is that
CPSC needs to reallocate resources based upon demonstrable
data. In spite of progress that has dramatically improved the
length and quality of kids' lives in the U.S. over the past
century, today's children obviously still face significant
risks. However, as the data in our testimony, on page 5, shows,
toys do not figure prominently in that risk. The actual rate
for toys would be about the same rate as suicide for children
under ten, which is extremely rare.
Important work in creating tools to benchmark and catalog
risk is being undertaken and should be supported by this
Committee and the CPSC.
CPSC's own annual report indicates that of the 15 commonly
used household products, toys had among the lowest number of
incidents of injuries or deaths for children from birth to 15.
Yet it is remarkable that media attention continues to focus on
the small risks associated with toys, while some very big risks
remain under-appreciated, under-reported, and unaddressed. In a
world where perception is reality, where misinformation often
drives perception, and where some advocacy groups find motives
to highlight new, scary, and uncertain hazards, without
providing context, it is no wonder policymakers and parents
lack that context for understanding and managing children's
risks.
Unfortunately, the net result is that we often collectively
waste scarce financial resources on hypothetical hazards at the
expense of allocating them efficiently to make children's lives
measurably safer. Further, this perpetuates a lack of
coordination between groups that are all arguably committed to
helping children, that focuses on individual issues and agendas
instead of children, themselves, and that promotes competition,
rather than cooperation, for the resources to truly protect
children.
We support the mission and goals of the CPSC, and we think
there is room for improvement. We have made four suggestions
that are in our testimony that I will leave for the Committee.
We can talk about them later.
But we believe the Commission has made significant progress
in the past year at creating a more transparent regulatory
process. We welcome the opening of the Commission hearings to
testimony from the public. We welcome efforts made to solicit
expert advice on ways to enhance recall effectiveness and
better communicate with the public, recognizing that not all
recalls involve serious risk of injury or death, and the need
to communicate to the public according to relative risk.
CPSC needs to be judged by how effectively it communicates
relative risks to the public, not by a count of how many
products subject to recall are actually returned. We welcome
the seemingly common sense notion that scarce resources should
be allocated according to demonstrable risk, based upon
analysis of real-world data, an application of statutorily
mandated cost-benefit analysis.
We support the Commission's request for resources to
efficiently carry out its mission. We think they should be
provided with resources to develop tools to assess real-world
relative risks of injury from products, and should be
encouraged to utilize existing resources more efficiently, in
partnership with industry, consumer groups, academia, State and
local health and safety officials. And we certainly support the
funding they need to update their laboratories.
Thank you.
[The prepared statement of Mr. Klein follows:]
Prepared Statement of Gary S. Klein, Senior Vice President, Government,
Legal and Regulatory Affairs, Toy Industry Association, Inc. (TIA)
Mr. Chairman and members of the Committee, I'm Gary Klein, Senior
Vice President, Government, Legal and Regulatory Affairs, for the Toy
Industry Association, Inc. (TIA). Thank you for providing TIA an
opportunity to testify on the reauthorization of the Consumer Product
Safety Commission (CPSC).
TIA
The Toy Industry Association, Inc. is a not-for-profit trade
association composed of more than three hundred forty-five (345)
members, including manufacturers whose aggregate sales at the retail
level exceed $24 billion annually (regular members), as well as product
design firms, toy testing labs and safety consultants, and others
(associate members). The U.S. Toy Industry leads the world in the
innovative, cost-effective design and sale of toy products. We are in
the business of developing fun, innovative products with which children
can play and learn. TIA's primary office is located in New York City.
TIA members account for 85 percent of domestic toy sales and, global in
character, approximately 50 percent of all toys sold worldwide.
TIA emphasizes the importance play has in all childrens' lives. Not
only is it fun and educational, but a necessary part of growing up.
However, to ensure that all children have a positive play experience,
TIA's primary concern is that play is safe. Together with the U.S.
government, TIA and its members have led the world in the development
of toy safety standards by investing heavily in child development
research, dynamic safety testing, quality assurance testing, risk
analysis and basic anthropometric studies of children. Moreover, since
the 1930s, TIA has established a tradition of working with others to
ensure the manufacture and distribution of safe toys.
TIA is proud of its record of significant accomplishments in the
area of toy safety over many decades through relationships with the
National Safety Council (NSC), National Bureau of Standards (NBS),
American National Standards Institute (ANSI), ASTM International
(formerly American Society for Testing and Materials, ASTM) and
International Organization for Standardization (ISO). We have also
worked in collaboration with many charities and consumer organizations
to promote the well-being of children. This includes working with the
International Consumer Product Health and Safety Organization (ICPHSO)
and National SAFE KIDS Campaign, to advocate the need for product
safety initiatives in both the U.S. and internationally.
This commitment to toy safety continues today, and in 1999, TIA
launched the first, year-round, industry consumer website to assist
U.S. consumers with questions and concerns about toy safety.
Comprehensive and accurate information is available any time of day,
through a specially-designed area on the TIA website: www.toy-tia.org./
consumer/parents/safety/4toysafety.html.
The Voluntary ASTM Consumer Safety Specification on Toy Safety is the
``Gold'' Standard
Under the auspices of NBS, TIA led in the development of a
voluntary safety standard for all toys in 1976, and then, in 1986 it
was revised and designed under ASTM. The current standard is the ASTM
F963-96a Consumer Safety Specification on Toy Safety, published in
January 1997. The standard is currently undergoing its five-year review
and should be completed this year. All of the Federal toy safety
regulations, which appear in the Code of Federal Regulations Title 16-
Commercial Practices, are referenced in ASTM F963. ASTM is one of the
largest voluntary standards development organizations in the world. The
standards are an example of the various ways TIA incorporates and
coordinates its safety activities with CPSC.
Almost all toy packages include a suggested age range for use. A
child's actual age, physical size, skill level and maturity, as well as
safety, are all taken into consideration when developing age labels for
different types of toys. To help manufacturers reach a greater degree
of consistency in age grading practices and age labeling toy packages,
CPSC publishes a manufacturers' guide for age labeling toys.
Since children develop at different rates and vary in their
interests and skills, age labeling on packages is intended to give the
consumer a general guideline on which to rely to base toy selections.
Typical designations might be ``Recommended for children from eighteen
months to three years'' or ``Not recommended for children under three
years of age.'' Additional specific cautionary labeling requirements
specified by ASTM F963 or by CPSC regulations cover products such as
crib gyms, electrically operated toys, chemistry sets, swim-aids and
such toy features as functional points and edges (i.e., paper doll
scissors and toy sewing kit needles).
The standard also contains cautionary labeling requirements, as
mandated by the U.S. Consumer Safety Protection Act (CSPA, 1995),
relating to potential choking hazards to children under three years of
age from toys or games intended for children ages three through under
six years, which contain a small part, any small ball, marble or
balloon. TIA supported this 1994 legislation that also contains a
preemption provision precluding states or localities from legislating
in this area in a manner not identical to the Federal requirements.
Regardless of labeling, however, there is simply no substitute, at any
age, for appropriate adult supervision.
In addition, TIA works regularly with the CPSC to develop voluntary
standards and to monitor any potential hazards associated with toys
already on the market. CPSC staff often participate in the
Association's safety seminars and other safety-related activities. The
Commission's active participation in voluntary standards activities is
instrumental in making U.S. toy industry products the safest and best
in the world.
If a manufacturer misrepresents compliance with ASTM F963, the
company is subject to prosecution under Section 5 of the Federal Trade
Commission Act, which prohibits unfair and deceptive methods of
competition.
How the Industry Tests Its Toys for Safety
There are more than 100 separate tests and design specifications
included in ASTM F963 and Federal regulations to reduce or eliminate
hazards with the potential to cause injury under conditions of normal
use or reasonably foreseeable abuse. These tests and design
specifications include use-and-abuse tests, testing for accessible
sharp points and edges, and measuring for small parts, wheel-pull
resistance and projectiles. Tests include those for flammability,
toxicity, electrical and thermal requirements, as well as acoustical
requirements for toy caps. Several manufacturers, especially larger
ones, have their own in-house testing laboratories sophisticated enough
to ensure that products meet standards for safety. Those without safety
facilities on site use independent testing laboratories. Manufacturers
producing toys overseas test them before shipping, and then sample
production lots again once they arrive in the United States. TIA and
its members are vitally interested in developing reputations as
``safety conscious'' companies.
CPSC Needs To Reallocate Resources Based Upon Demonstrable Data
In spite of remarkable progress that dramatically improved the
length and quality of children's lives in the U.S. over the past
century, today's children still face significant, real risks. For
example, often-avoidable unintentional injuries take the lives of more
than 1 out of every 10,000 children in the U.S. annually. That may not
sound like a lot, but this includes over 150 infants that die before
their first birthday in motor vehicle accidents and nearly 50 who drown
in bathtubs.
Estimated Annual Mortality Risk for Children Under Age 10
(Number of deaths per million children)\1\
------------------------------------------------------------------------
------------------------------------------------------------------------
Motor vehicles 46 Guns 25
------------------------------------------------------------------------
Drowning 20 Poisoning 2
------------------------------------------------------------------------
Suffocation 17 Bicycles 2
------------------------------------------------------------------------
Fire 16 Medical care 2
------------------------------------------------------------------------
In addition, statistics that show other significant risks to young
people include: \2\
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\1\ Harvard University School of Public Health, Kids Risk
Symposium, March 26-27, 2003 (Kimberly Thompson, M.S. SCP, Assoc.
Professor of Risk Analysis and Decision Science, Children's Hospital
Boston, Harvard Medical School Co-Founder/Director of Research Center
on Media and Child Health; Director HSPH Kids Risk Project.
\2\ Based on 1997 data from: (1) the National Center for Injury
Prevention & Control, Centers for Disease Control and Prevention and
population estimates from Statistical Abstract of the United States for
1997.
16 percent of American children under the age of 18 live in
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families with incomes below the poverty level
4 percent live in households experiencing food insecurity
with moderate to severe hunger
69 percent live in two-parent families, down from 77 percent
in 1980
Birth rate for females (age 15-17) around 26 per 1000
Substance use rates are high
21 percent of 12th graders smoke daily
30 percent of 12th graders have at least 5 drinks in a
row at least once in the previous 2 weeks
25 percent of 12th graders report illicit drug usage
in past 30 days
14 percent of young adults age 18-24 have not completed high
school
8 percent of youths age 16-19 are not in school or
working
Further, as you can see, the risk of death to children from toys
does not figure prominently in much of the data. The actual rates for
toys would be about the same as the rate of suicide for children under
10, which is extremely rare! Important work in creating tools to
benchmark and catalogue risk is being undertaken and should be
supported by this Committee and CPSC.
Compare these childhood risks with the handful of ``toy-
associated'' deaths per year for children from birth to approximately
age 13 (primarily balloons and ride-on toys like scooters), or to
CPSC's own annual report that indicates that of fifteen commonly used
household products, toys had among the lowest number of incidences of
injuries and deaths. Although there are risks associated with some
toys, they are clearly very small by comparison, and it is remarkable
that media attention continues to focus on the small risks associated
with toys while some very big risks remain underappreciated and
unaddressed. In a world where perception is reality, where
misinformation often drives perception, and where some self-proclaimed
advocacy groups find motives to highlight new, scary and uncertain
hazards without providing context, it is no wonder that policy makers
and parents lack context for understanding and managing children's
risks. Unfortunately, the net result is that we often collectively
waste scarce financial resources on hypothetical hazards at the expense
of allocating them efficiently to make children's lives measurably
safer. Further, this perpetuates a lack of coordination between groups
that are all arguably committed to helping children; focuses on
individual issues and agendas instead of children themselves; and
competition rather than cooperation for the resources to truly protect
children. This is true at all levels, and anecdotal evidence includes a
scenario in which, despite years of safe use with no real, measurable
effects on children, a commonly used chemical in plastic toys (PVC or
polyvinyl chloride) became the focus of major new stories, needlessly
frightening parents and politicians worldwide. The wealth of research
conducted on behalf of national and international industry determined
that vinyl toys were safe.\3\
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\3\ The American Council on Science and Health (ACSH), a panel
headed by former Surgeon General Dr. C. Everett Koop stated that,
``Consumers can be confident that vinyl toys. . .are safe.'' This same
conclusion was reached this year by the Consumer Product Safety
Commission after considering a report of the Chronic Hazard Advisory
Panel (CHAP), a body of experts nominated by the American National
Academy of Sciences.
---------------------------------------------------------------------------
CPSC's extensive NEISS injury data (National Electronic Injury
Surveillance System) do not usually give the details of the
circumstances in which the injury took place. Therefore, when examining
the data it's not always possible to determine whether the particular
toy-associated injury was the result of the accident (e.g., a child
tripping over toys left on the stairs), unintended misuse of the toy,
or a fault in the toy's design, material content, construction or
performance. Studies of NEISS data by the CPSC have shown that most
toy-related injuries appeared to be minor, with hospitalization
occurring less than half as frequently as the overall average for
injuries. As illustrated by the CPSC data, the industry's commitment to
designing and producing safe toys and emphasizing the importance of
parental supervision and appropriate selection of playthings has made
toys one of the safest products that can be brought into the home.
TIA Supports The Efforts Of The CPSC
For these reasons, we support the mission and goals of the CPSC. Of
course there is room for improvement. However we believe that the
Commission has made significant progress in the past year at creating a
more transparent regulatory process. We welcome the opening of
Commission hearings to testimony from the public. We welcome the
efforts made to solicit expert advice on ways to enhance recall
effectiveness and better communicate with the public, recognizing that
not all recalls involve serious risks of injury or death and the need
to communicate to the public differently according to relative risk.
CPSC needs to be judged by how effectively it communicates relative
risks to the public, not by a count of how many products subject to a
recall are returned. The latter is a simpleminded approach, since it
ignores the use, cost and distribution of different products. We
welcome the seemingly common sense notion that scarce resources should
be allocated according to demonstrable risk based upon analysis of real
world data and application of statutorily mandated cost benefit
analysis (Section 9 of the CPSA/15 U.S.C. Sec. 2003). We support the
Commission's request for resources to efficiently carry out its
mission. We think they should be provided with resources to develop
tools to assess real world relative risks of injury from products and
should be encouraged to utilize existing resources more efficiently in
partnership with industry, consumer groups, academia and state and
local health and safety officials. We also believe that CPSC needs
funding to update its laboratories.
TIA Recommends CPSA Improvements To Make CPSC More Efficient
TIA recommends the following changes to enabling Statutes in order
improve the function of the CPSC:
PSA Section 6 (f)
Add a new Section 6(f) as follows:
Any report furnished under subsection (b) of section 15 shall
be inadmissible in any civil action in a State or Federal court
or in any administrative proceeding.
Rationale: Many firms claim that they are reluctant to report under
Section 15(b) of the CPSA because of a concern about the possible use
of such reports in court actions. This provision would provide an
incentive to reporting by assuring that reports filed under Section
15(b) will not be admissible in any civil action or administrative
proceeding (except one brought by the Commission against the
manufacturer, distributor or retailer). The availability of the report
to plaintiffs would continue to be subject to the normal rules of
discovery in civil actions or proceedings, and, this provision is not
intended to affect the admissibility of the facts set forth in Section
15 reports.
CPSA Section 20
Section 20 should be amended by eliminating the reference to
19(a)(4) and (11) from Section 20(a)(1) and by adding a requirement
that a violation of Section 19(a)(4) and (11) shall constitute a
separate violation with a maximum penalty to be set for such a
violation. Additionally, 20(d)(2) should be omitted.
Section 20 (c) should have an additional sentence added after the
second sentence, which states:
The Commission shall also consider whether a company
voluntarily reported, is a first-time offender and whether the
penalty sought would be detrimental to the viability of the
business as a going concern, resulting in the loss of jobs.
Rationale: The current statute is confusing. Penalties are keyed into
individual products which are sold when they are not in conformity with
an applicable consumer product safety standard under the Act or which
have been declared a banned hazardous product by a rule under the Act
or fail to meet required filings and performance requirements. A
violation for a failure to file information required under Section
15(b), Section 37 or Section 102 should constitute a separate offense
and is unrelated to the sale of individual products. Currently, CPSC
assesses fines based upon sales of individual product units which are
perceived to be subject to a report, whether or not the products are
defective or violative of standards or rules under the Act. The
violation involved is the failure to file a report and is unrelated to
the sale of a product. Currently, the Commission staff does not
adequately consider and make a distinction between companies filing
voluntarily, first-time offenders, or its impact on the viability of
the business and its potential to damage the company's reputation and
cause the loss of jobs. The omission of the last sentence in 20(d)(2)
would make it clear that actual knowledge would be required before
imposition of onerous penalties. The current language is too vague.
CPSA Section 29 (f)
Add a new section 29(f) as follows:
(1) For purposes of carrying out this Act, the Commission is
authorized to undertake such product safety harmonization,
conformity assessment, testing, research, monitoring,
coordinating, and other activities as the Commission may deem
appropriate, in cooperation with other United States or foreign
agencies, governments, or public or private institutions;
(2) In connection with the cooperative activities authorized by
subsection (f)(1), the Commission, unless specifically
prohibited by law, and as appropriate, may:
(A) make use of resources offered by foreign countries
participating in improving consumer product safety;
(B) participate, and otherwise cooperate in,
international activities which contribute to improving
the safety of consumer products imported into the
United States;
(C) exchange information on consumer product safety
research, test methods development, death and injury
data, product bans and recalls, proposed product safety
standards, and remedial strategies to reduce deaths and
injuries associated with consumer products; and
(D) work to harmonize foreign regulations to make them
compatible with U.S. standards, provided that the
Commission determines that such amendment is desirable
to reduce or eliminate non-tariff trade barriers for
U.S. companies posed by foreign safety standards.
(3) In issuing amendments to its regulations, the Commission
shall follow the procedures set forth in this Act.
Rationale: The differences between Canadian and U.S. mandatory toy
safety requirements illustrate the need to clarify CPSC's authority to
harmonize international product safety regulations. Canada and the U.S.
agree in large part on most toy safety requirements. However, there are
specific cases in which differences in our respective regulations
contribute to restraint of free trade. This situation is also evident
with PVC toys. After exhaustive study by the Commission and a Panel of
Advisors from the National Academy of Sciences, these products were
determined to be safe. Despite this, certain countries have blocked
sale of U.S. toys if they are made from PVC plastic, creating a non-
tariff trade barrier based upon ``junk science.'' More important, these
differences create confusion in the toy industry and among product
safety experts as to which set of criteria are most appropriate to
ensure safer products for children. Such harmonization processes will
be beneficial to other industries that face similar restriction on
their products in foreign markets. By streamlining the processes
necessary to harmonize product safety regulations, we can move more
quickly toward establishing unified standards that facilitate global
free trade and provide rational equal protection from unsafe products
for all consumers.
Additional Clarification of Preemption Provision Should be Added to
Sec. 26(a) of the Consumer Product Safety Act, Sec. 16(a) of the
Flammable Fabrics Act, Sec. 18(b)(1)(A) and Sec. 8(b)(1)(B) of the
Federal Hazardous Substances Act, Sec. 7(a) of the Poison Prevention
Packaging Act, as follows: \4\
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\4\ This is similar to the chaos faced by the industry when states
fail to defer to the coloration and marking of toy guns under 15 U.S.C.
Sec. 5001(g).
This provision expressly preempts and supersedes any state or
local law, rule, regulation, or standard, providing for
registration, certification, payment of fees, or any pre-sale
conditions or requirements relating to any rule, standard,
regulation or requirements applicable to any risk of injury
---------------------------------------------------------------------------
promulgated by the Consumer Product Safety Commission.
Rationale: From time to time, states have enacted registration,
certification, fee requirements and other pre-sale requirements as a
condition to the sale of federally compliant product in the state.
These unduly burden and hamper the free flow of commerce and expose
manufacturers to multiple state or locality registration,
certification, pre-sale conditions and fee requirements, even though
these products are fully in compliance with Federal standards,
regulations or requirements. This burden would be eliminated by the
enactment of this requirement. This change would not affect the ability
of states to enforce existing CPSC regulations or third party tort
actions. This is consistent with existing provisions in the Acts which
require localities to use identical requirements.
Conclusion
TIA is a strong supporter of CPSC. We believe additional funding
should be provided to develop effective models so that the data
currently collected can be better analyzed in order to prioritize and
catalog risk to the public using objective criteria. If the Agency
requires funding to utilize outside expertise in order to create risk-
benefit analysis models, it should be provided. Cost-benefit analysis
should continue to be a crucial requirement prior to imposition of
rules. This is especially important in a global economy and at a time
when the U.S. is faced with increasing competition and a soft economic
outlook. The integrity of due process requirements currently required
under the enabling statutes should be strictly adhered to. Objective
measures should be used to determine civil penalties and a distinction
needs to be made between penalties imposed for the sale of violative
product and reporting failures. Actual knowledge should be a
prerequisite for the imposition of penalties. The Commission should be
encouraged to explore creative ways to provide valuable information to
consumers. They should be lauded for recent efforts in this regard. The
flexibility and safeguards currently provided in the existing statutes
should be maintained and the Agency should not be subject to micro-
management. We look forward to continuing to work with the Agency to
promote child health and safety.
Senator Fitzgerald. Thank you very much.
Mr. Polk?
STATEMENT OF ROBERT POLK, ON BEHALF OF THE NATIONAL ASSOCIATION
OF STATE FIRE MARSHALS
Mr. Polk. Yes, thank you, Senator Fitzgerald.
My name is Robert Polk. I appear before you on behalf of
the National Association of State Fire Marshals. As you know,
our association represents the most senior fire official in the
50 states and the District of Columbia.
Our mission is simple. It is to protect life, property, and
the environment from fire and other hazards. We receive
virtually all of our resources from Federal and State
Government agencies, and we thank you for this opportunity to
testify today.
Senator Fitzgerald, I have a longer, more defined statement
that I would ask be made part of the record. In my limited
time, I would wish to make a few observations and
recommendations for this Subcommittee as you consider the
reauthorization of the Consumer Product Safety Commission.
The National Association of State Fire Marshals does not
support wholesale changes to the various pieces of legislation
that the Commission oversees. It is our view that the Consumer
Product Safety Act, the Flammable Fabrics Act, and the other
such laws, provide adequate statutory framework to protect the
public and gives the Commission the powers that it needs.
It is clear, however, that the Commission has generally not
kept pace with changes in the manufacturing, distribution, and
retailing world. A perfect example of this is the 50-year-old
wearing-apparel fire-safety standard that is so woefully
inadequate that it has been reported that newspaper can pass
the test. This lack of effective and current standards has
implications for issues such as tort reform as it opens the
apparel industry to a litany of lawsuits. The Commission has
the power and, we believe, the information it needs to set a
real standard.
Although some progress is being made--and the Commission's
new Children's Fire Burn Injury Reporting System is evidence of
this--it is clear much more needs to be done.
Beyond the basic statutory framework in which the
Commission operates, there are improvements that the National
Association of State Fire Marshals believes can and should be
made to enhance safety.
First, trade groups and industry associations should be
added to the list of groups obligated to report to the
Commission should they come into possession of information that
suggests a given product is unsafe. Many such groups conduct
independent studies and research. It stands to reason that if
members companies are required to report to the Commission, so,
then, should those groups that represent their interests.
Second, in an ever-globalizing marketplace, we need to make
sure that all the agencies of the Federal Government are
working cooperatively to ensure that imported goods are safe
for Americans. This will require greater interagency
cooperation between the Commission and agencies involved in the
making of trade policy, such as the U.S. Trade Representatives,
State Department, and the Customs Service.
Third, the Commission should take a more active role in
strengthening and defending voluntary standard development and
compliance programs. How is it that we have roughly 20,000
fires per year from electrical appliances that are supposed to
be in compliance with voluntary standards set by Underwriters
Laboratory? These fires resulted in 100 deaths and nearly 800
injuries during 1998, which is the latest year for which we
have data.
Let us also be aware that some industries prefer the
mandatory approach. The American Furniture Manufacturers
Association recently asked for a mandatory national fire safety
standard for upholstered furniture in a letter to the
Commission dated May 2, 2003.
Finally, the civil penalties prescribed in the Consumer
Product Safety Act need to better reflect the era of large
corporations. Take for example what has been discussed today,
Wal-Mart, which was recently fined $750,000 by the Commission,
as a retailer, for failing to report a safety problem. This
amount is equivalent to approximately 1 hour's profit for Wal-
Mart during the year 2002. One hour's profit. Large
corporations have little incentive to work hard on ensuring
safety when the repercussions are so minor. A more flexible
penalty system, with higher maximum fines, would give the
Commission greater leverage.
If Congress is serious about ensuring the safety of the
products that we use every day, we must pursue innovative
solutions for the 21st century problems we face. Enhanced
interagency cooperation, revamped civil penalties, and ensuring
the Commission has sufficient resources are essential steps
that Congress must take.
I thank the Committee for holding this hearing and would be
happy to take any questions. And on behalf of myself and all
members of the National Association of State Fire Marshals, we
would like to wish Chairman Stratton a safe and uneventful
return from our upcoming conference.
[Laughter.]
[The prepared statement of Mr. Polk follows:]
Prepared Statement of Robert Polk, on Behalf of the National
Association of State Fire Marshals
Senator Fitzgerald, Members of the Committee, my name is Robert
Polk. I appear before you on behalf of the National Association of
State Fire Marshals. Our association represents the most senior fire
safety officials of the 50 states and District of Columbia. Our mission
is to protect life, property and the environment from fire and other
hazards. We receive virtually all of our resources from Federal and
state government agencies. We thank you for this opportunity.
Yesterday, I retired from a challenging and incredibly rewarding
31-year career as a firefighter, paramedic, fire chief, emergency
services director--most of it in Illinois and Florida--and, for the
past three years, as the State Fire Marshal for the great state of
South Carolina. I have been asked for the time being to remain as
chairman of our Association's Consumer Product Fire Safety Task Force,
and it is in that capacity that I address you this morning.
The United States Consumer Product Safety Commission's authorizing
statutes were written decades ago and have been amended rarely in the
intervening years. Compared to virtually all of the other Federal
regulatory agencies, the Commission has received relatively little
attention from the Congress, industry, news media or even the advocacy
community. There were years when our association was the only
organization to testify before the Commission's annual hearing on
priorities.
My personal view is that a passive Commission has opened the doors
wide to the trial bar. Case in point: we have a 50-year-old wearing
apparel fire safety standard that is so weak that newspaper is able to
pass it. This standard has absolutely no value to fire safety, or to
the textiles producers who are routinely sued for fires involving
products that pass the Federal requirement. The Commission has the
authority--and, we believe, the information it needs--to set a real
standard. The Commission has potentially made a step forward in
addressing this issue through its recent collaboration with State Fire
Marshals, the American Burn Association and the Shriners on the new
Children's Fire Burn Injury Reporting System, which will include
analysis of garments worn by children who have been burned.
The National Association of State Fire Marshals believes that the
statutory tools available to the Commission--the Consumer Product
Safety Act, the Flammable Fabrics Act, the Federal Hazardous Substances
Act and the other laws that give the Commission its powers--are more or
less adequate if they are used.
The Commission is what it is. But, in my remaining time, I would
like to share our vision of what it could be.
Consumer product safety is no less important than the credibility
of financial reporting or the production of tires--both of which have
been the subject of intense Congressional scrutiny in recent years.
This Committee has distinguished itself many times on the subject of
corporate integrity. Once again, we are talking about the integrity of
the private sector.
In simple terms, we believe the Commission should make it as easy
as possible for the tens of thousands of consumer product manufacturers
and retailers who are committed to doing the right thing. But, by the
same token, the Commission should make it far tougher on the few
companies--and, in some instances, whole industries--that knowingly
make hazardous products, conceal data on reportable incidents and
generally disregard their responsibility to public safety.
How might we make it easier for responsible companies to do the
right thing?
We would begin by using every tool at our disposal to facilitate
the international trade of products that are made with integrity,
regardless of where they are manufactured. Safety, health and
environmental requirements differ from nation-to-nation, state-to-state
and even city-to-city. This patchwork penalizes the companies that
respect the rule of law, and yet we have the means to establish true,
serious and integrated safety, health and environmental standards for
consumer products. Where Commissions in other administrations have
ignored global markets, this Commission seems intent upon working on
these issues.
Such an approach would require greater collaboration with other
government agencies. The Commission should work more closely with the
office of the U.S. Trade Representative (USTR), the Customs Bureau, the
Environmental Protection Agency, the State Department and other
agencies defining trade policy. In an ever-globalizing market, we need
to bring all of our resources to bear in order to make sure that
average Americans are not exposed to unsafe products.
In addition, we collectively must do more to strengthen and then
defend voluntary standards development and compliance programs.
Organizations like the National Fire Protection Association,
Underwriters Laboratories (UL), American Society for Testing and
Materials (ASTM), American National Standards Institute (ANSI) and the
International Code Council have developed hundreds of requirements that
save lives and protect property every day. But--in the interest of
maintaining the credibility of these requirements--the Commission might
provide more oversight and guidance.
For example, how is it that we have roughly 20,000 fires a year
involving electrical appliances that are expected to meet UL
requirements? Those fires resulted in 100 deaths and 730 serious
injuries in 1998, which is the most recent year for which statistics
are available.
It should be noted that some industries prefer mandatory national
requirements. The American Furniture Manufacturers Association recently
took this position in a letter to the Commission dated May 2, 2003.
Now to address the other part of our recommendation: How might we
make it far tougher on those companies and industries that ignore their
obligation to make and sell safe products?
First, we would add industry associations to the list of
organizations accountable for product safety. In many cases, industries
work together to improve standards. The International Sleep Products
Association has done a wonderful job with new mattress fire safety
requirements. But other associations work against public safety. The
Consumer Electronics Association has attempted to discourage any
consideration of standards that would prevent fires from external
sources--for example, a candle tipping over onto a ``boom box'' in a
child's room. In tests conducted and funded by electronics producers
this past January at UL, the industry observed a computer keyboard
ignited by a birthday candle.
We respect the right to commercial free speech, but Section 15 of
the Consumer Product Safety Act might be amended to include an
affirmative duty on trade groups to report to the CPSC when they come
into possession of information that may suggest a product is unsafe. It
stands to reason that if individual companies are obliged to report
unsafe products to the Commission, so too should the groups that
represent their interests.
Second, if we intend to facilitate trade of properly made consumer
products, we must also use every legal means possible to prevent cheap,
non-compliant, dangerous products, components and materials from
entering into this country. The National Association of Manufacturers
recently listed Chinese-made imports among its greatest concerns. We
would agree, but no one expects the Chinese to do much, and the U.S.
Customs Bureau is spread thin with its many responsibilities. Closer
collaboration between the Commission and agencies like the Office of
the U.S. Trade Representative may help. Naturally, ensuring that the
Commission has the resources it needs remains vital.
Beyond working toward safer imports, we believe additional steps
can be taken with respect to our Nation's largest retailers, who
effectively define the choice of products available to American
consumers. The law already holds retailers accountable for the safety
of the products they sell. However, when one examines the limited
penalties that the Commission may seek from those that manufacture or
sell unsafe products, it is easy to see why some remained undeterred.
Take, for example, Wal-Mart. The recent lawsuit and civil penalty
of $750,000 imposed by the Commission represented the first time a
retailer was punished for failing to report a safety problem, where the
retailer was not also an importer or private labeler. However, the
penalty amount was, in context, minuscule--equivalent to about one
hour's profit earned by Wal-Mart in 2002.
A firefighter or police officer who does something wrong can lose a
couple of weeks of pay. One hour of lost earnings isn't much of a
statement to anyone, especially large corporations.
The statutory limitation on fines that can be assessed by the
Commission is woefully inadequate if it intends to get the attention of
large retailers and manufacturers. Furthermore, the Consumer Product
Safety Act makes no provision for special penalties in the event of an
industry-wide attempt to deceive consumers. The current civil and
criminal penalty scheme in effect rewards larger companies.
The Commission has most of the basic statutory tools it needs to
help responsible companies. However, in the thirty-one years since the
Consumer Product Safety Act was first adopted, we have witnessed
drastic changes both in the U.S. market and global market place. If
Congress is serious about ensuring the safety of the products that we
use every day, we must pursue innovative solutions to 21st Century
problems. Enhanced inter-agency cooperation, revamped civil penalties
and ensuring the Commission has sufficient resources are essential
steps that Congress must take.
I thank the Committee for holding this hearing and would be happy
to take any questions.
Senator Fitzgerald. Well, thank you, all of you, for your
testimony.
I think most of you brought up the issue of the civil money
penalties, and there is a difference of opinion about whether
the cap should be raised or increased.
Dr. Pittle, you were in favor of it. You mention that, in
the case of large corporations, a $1.6 million fine is the
equivalent of a $2 parking ticket in New York City, ``Why not
just go ahead and pay it?'' Others of you thought it should be
raised. Others of you thought it should not be raised.
With respect to those who favor raising it, like Dr. Pittle
and Mr. Polk, do you not think the tort liability is a much
more serious concern for the big companies, along with the
adverse publicity?
Mr. Polk. Well, I would respond by saying that, in the case
of Wal-Mart, they did not manufacture the product for which
they were fined. They were fined for failing to report a
product that they were retailing to the consumer. But, again,
we support more flexibility in that system. Whether or not it
should be lifted entirely or raised is a matter for the
Commission and Congress to decide. But we feel, when you are
able to negotiate a settlement, knowing, going in, what the
maximum penalty can possibly be, it gives the corporations in
America somewhat of a competitive advantage going into that
negotiations process.
Senator Fitzgerald. Mr. Gold, do you want to respond to
that?
Mr. Gold. Yes. I have not heard or seen any evidence--and I
will just say--and Commissioner Moore, kind of, could back me
up on this--that the current penalty cap is not working.
I mean, again, what we are talking about is incentives
here. There are a lot of different ways go create incentives or
disincentives. There is no doubt in my mind that it could be
that it is like a $2 parking ticket for a large company. But
the publicity from a large company violating a safety standard
or coming to--having problems with safety standards is going to
be far, far greater. That could be millions and millions and
millions of dollars.
The way the marketplace works, the fact is, with our
customers, we need to have an honest relationship with them.
They need to know they can trust us. It is not in our interest,
in a business group's interest, to pretend that relationship
does not exist.
Senator Fitzgerald. Dr. Pittle, is this true?
Dr. Pittle. Yes. Well, in a perfect world, every
manufacturer would read the Consumer Product Safety Act, look
at Section 15(b), and affirmatively report whenever they find
that one of their products could create a substantial hazard.
Unfortunately, this is not a perfect world, and that is why
there are penalties for people who do not act perfectly. And I
do not think we can rely on the tort liability system to do
that, because that is a post-injury mechanism, an important
one.
Here, we are talking about--the name of the game is
``injury prevention.'' We are trying to get the attention of
manufacturers, distributors, and retailers to give an early
warning that they see a problem. There is no penalty for having
a problem. The penalty is for covering it up and letting the
complaints and the injury data pile up in your records and not
notifying the agency in a timely manner.
Some of the cases in which they have recently issued a fine
involve companies that have had a dozen recalls prior to that,
and it is not as though they do not know what they are doing.
They know what they are doing. They are making a calculated
business decision that $1.65 million, at max--``What's the big
deal? I mean, we are a multimillion-dollar or billion-dollar
corporation.''
The attention-getting by taking the cap off is that this is
not certain anymore. And it is the hope that manufacturers will
give this a more serious attention. They have got to know that
the agency welcomes them with open arms when they come in and
say, ``I think we have a problem.'' They do not penalize them
for that. It is when they discover, through a death certificate
or some kind of report, that they go back to the company and
find out that festering into their files are hundreds of
complaints and people saying, ``I've been injured,'' or
somebody has been killed. That is what they get fined for. That
is calculated misbehavior. And I think that they ought to take
the cap off and let them walk in there--and of course there is
negotiation.
You asked before, ``Did anybody ever go to the maximum?''
The fact is, you always negotiate down from the maximum. That
is just the way it is. There should not be a maximum. And then
I think manufacturers would give it greater attention, the
attention that it needs.
Senator Fitzgerald. Mr. Klein?
Mr. Klein. Thank you.
I know what Chairman Stratton said before about, you know,
in a sense, making this a lawyer relief act. And I am a
recovering lawyer in the 12-step program----
[Laughter.]
Mr. Klein.--so I do not put myself in that category. But
part of the problem--well, first of all, we will get to the
manufacturer's reputation. Again, with a toy company, as soon
as somebody says a toy is unsafe, that company is in trouble.
It either has to do something immediately to fix the product,
it has to recall the product, it has to repair the product. And
the reputation of that company is on the line.
But part of the problem is that Section 15 is vague,
because it talks about what is reasonably foreseeable abuse of
a product and what a reasonable person would know to be an
abuse of a product. And if you do not fit into that description
and you do not report, because you do not think that is
reasonable abuse, then you could be subject to these caps.
Senator Fitzgerald. That is pretty much the same as a tort
standards, is not it?
Mr. Klein. Well, but--well, you have a jury deciding what a
reasonable man is in a tort standard. And a jury may have a
totally different opinion than what the Commission might have.
So that is the question. And then you do get into the area of
how much is it going to be worth to a company to litigate and
to try to deal with that reasonable foreseeability of abuse.
Senator Fitzgerald. Ms. Weintraub?
Ms. Weintraub. Yes, Senator Fitzgerald. CPSC was created
precisely because the tort system alone was insufficient to
protect consumers from unsafe products. So the role of the
agency----
Senator Fitzgerald. It was created a long time ago. We have
a lot more trial lawyers today, though, than we did back in the
1970s, do we not? At least in my State of Illinois, I think we
do.
Ms. Weintraub. I do not know.
But, in addition to that fact, and the fact that, as Dr.
Pittle said, the tort system does not work necessarily at
preventing injuries before they happen, we know that publicity
alone does not work, and we know that the current caps hinder
the entire system, because there are repeat offenders. For
example, CPSC levied a fine of $725,000 against Cosco, which is
a children's products manufacturer, in 1996, for failing to
report 96 known toddler bed and guardrail entrapments and one
death associated with its toddler beds. So this was 96 known
injuries, one known death.
Again, in 2001, CPSC again levied a fine against Cosco,
along with another company, Safety First. And this was a record
combined fine of $1.75 million after failing to report 2 deaths
and 303 injuries from a number of products. So this shows that
the system, with the caps in place, is not working, and it is
really failing as acting as a deterrent.
Senator Fitzgerald. Mr. Gold, could you give us concrete
examples of when vague implementing regulations of Section 15
substantial product hazard reporting provisions have caused
confusion on the part of manufacturers in determining what
their reporting and corrective duties are with respect to
particular products?
Mr. Gold. You know, what I can do--I mean, we have a
coalition of 65 different manufacturers and associations. I
would be glad to collect that. I know there are cases in which,
for instance, the--well, what I--the best thing for me to do is
to just tell you that I can go back to the coalition and
collect it. I would be glad to, in the next 2 days, submit it
to the Committee.
So, at this point, I simply know that we have had the--
enough of our coalition members have told us, at the NAM, that
this is a problem and they are having problems. And in fact, I
could, perhaps, even point to the cases we are simply talking
about, not necessarily the most extreme cases. But when you
tell me somebody has filed a late--is given a penalty for a
late filing, I might respond to--that could be a case in
which--simply in which that company did not--misunderstood or
did not have a clear understanding of what late was. So----
But I would gladly submit examples in the next 2 days, if
you would like.
Senator Fitzgerald. Dr. Pittle?
Dr. Pittle. Can I add--that is an interesting juxtaposition
here. The cases we are talking about are when people have had
hundreds of complaints over a period of years. It is not a
matter that you are 2 days late or a month late in reporting.
The agency is not unreasonable. What they do when they levy one
of these penalties is that it is just simply an egregious
misbehavior on not filling the responsibilities clearly spelled
out in the law. I mean, for the last 30 years, the CPSC staff
has traveled the world, all over this country, giving seminars
to manufacturers, explaining to them what they mean by what is
a substantial hazard and when is a time to report.
The agency staff has asked people to come in and say,
``Come in and show us what the problem is. If there is no
problem, you will walk out, and there is not even a file opened
on you.'' They are bending over backward to reach out to
manufacturers and say, ``Tell us, before we wind up with a
bunch of deaths or a bunch of injuries,'' because that is what
Congress intended this act to do, is to head off and prevent
things that are known to the manufacturers and not known to
other consumers.
And so I think it is--it feels distorted to me to paint
this as if everybody is kind of confused and nobody knows what
to do. The agency staff has tried to make it very clear to
businesses what their responsibilities are. They know what
those responsibilities are. They may not have product liability
lawyers working for them, but they have other lawyers telling
them, ``There's probably a way to get around this if you do not
quite report now. You can always decide that it is not quite
clear.'' Well, the fact of the matter, it is clear, and you
want to resolve these uncertainties in the favor of the
consumers. I mean, if the people are really concerned about
their customers, they will go to the agency and check it out.
There is no penalty for checking it out. The penalty comes for
letting it sit.
Senator Fitzgerald. Mr. Klein, I do not know if you have
anything to add. You complained of vagueness in the standards,
as well, in Section 15.
Mr. Klein. Well, you know, another part of the problem with
the caps is, they make no distinction between what are, in
fact, safety violations under Sections 19(a)(1) and (2) and
minor technical reporting, and it is all part of the same bag.
There is no distinction between major violations, those that
actually are safety hazards that have resulted in serious
bodily harm or grievous injury, and those that have merely been
late filings. Not late filings that are 10 years late or 20
years late, but simply late.
And I think, as Mr. Gold said, I mean, he can provide some
examples of those situations, and so I think that is what the
Committee really needs to look at. And whether or not----
Manufacturers of products, I mean, their reputations, for
the most part, are very important to them. And again, I think
what you were suggesting before, between public opinion, tort
liability, and a $1.65 million fine, all taken together, have a
salutary effect on how a company is going to behave or that
company will not be in business.
Senator Fitzgerald. Did you want to respond, Dr. Pittle?
Dr. Pittle. I am sorry. Somehow there is always another
side to these things. They do not levy fines for minor
technical violations. They levy fines when someone has an
egregious act that is right there before them--many, many
complaints, deaths and serious injuries that have been known
for a long time, sometimes 3 or 4 years, or longer.
So General Electric did not get fined because they were a
day or a month late when they--about those dishwashers. They
were 10 years late.
So there is a reason why this is there. This is the power
that Congress gave, because this is a small agency with a very
large job to do. So it has to reach out to the manufacturing
industry to act in the affirmative to consider the customer's
safety as important as it is the sale. And the only way they
can do that is to get them to come in and talk about problems
and give them a safe haven to talk about them. And if they sit
on the information, that is when there is a fine.
So I have to go back to something else. The agency has
published explanation, documents trying to educate the
manufacturers affected, and they have gone to great lengths to
make sure that people do know what their responsibilities are.
But some of these manufacturers that we are talking about have
had a dozen or more recalls. It is not as though this is a
surprise to them. This is just, unfortunately, a way of doing
business.
I wanted to just tell you one thing that we were hoping--
and we have laid out in our testimony--just in the area of
children's nursery products. Five of the largest companies--
Doral, Graco, Century, Kolcraft, and Evenflo--have had 60
recalls in the last 10 years. And these are mature companies.
This it not into a product line where they have never been
before. This is their business. And to have 60 recalls tells me
there is something not right here. There is something that is--
I am just an old country engineer, and so I do not know about
this lawyer stuff, but I have to think that there is not the
right kind of prototype testing or the right kind of pre-market
testing. Something is wrong when manufacturers have this kind
of recall history, because parents look to these names, and
they go in and they buy a product for their kid. And these are
involuntarily risk-takers. They cannot make a decision for
themselves. They are going to rely on their parents. Their
parents are relying on information, like the advertising, and
the names they trust. 60 recalls--there is something wrong.
I would think that maybe this Committee could convene a
hearing and ask the manufacturers, ``What's going on? Why are
you all not able to put a product out that does not wind up in
a recall?'' There is something wrong.
Mr. Klein. One quick thing, Mr. Chairman. Fisher-Price,
that $1.65 million fine against Fisher-Price for those Power
Wheels, it was a question of--nobody was ever hurt, no injury
was ever reported with those. The question was, they failed to
report because they considered what was happening with those to
be unreasonable abuse. People were bypassing the fuse and
putting pennies into the product, and it was causing combustion
and, therefore, potential fire hazard. And they were hit with
that fine. Again, it was a failure to report. But the question
was, was it something that they could foresee? And the answer
was, ``Yes, you should have foreseen that people were going to
put pennies instead of fuses.''
So I do not know about the 10 years and the other examples;
I am just giving you an example that was given before about
Fisher-Price.
Dr. Pittle. May I?
Senator Fitzgerald. Doctor?
Dr. Pittle. There is another side to this. There are 116
fires. At least. If the fuses are going out and people are
putting pennies in them, that is really dumb on the part of the
consumer. And so we should say that is dumb on the part of the
consumer. I do not give them any credit for that. But the
manufacturer is seeing that there is something going on in
their product in which the electrical system is causing the
fuse to keep blowing. There is something that could create a
fire. There could be something--I do not know--down at the end
of the table--people should not be putting pennies in things,
because houses burn down.
That was something that should have been reported to the
Commission. They would not have gotten a bad mark or a press
release or the evening news. They would have walked in and
said, ``We've got a problem here.'' And the staff would have
worked with them. Those engineers spend time trying to help
manufacturers develop a competent fix.
But to sit on a 116 fires, that was inappropriate. That is
not getting to the will of Congress to say, ``Let's get ahead
of the curve. Let's not wait until there's a body count. Let's
not wait until people''--we can demonstrate that it was a
hazard. Remember, the act says you are supposed to report if
your product ``could'' create a substantial hazard, not that it
already has demonstrated that it was. That is too many deaths
and injuries to prove that.
Senator Fitzgerald. I want to move to a different topic
now, and this is really going to be my last line of
questioning. You have all been very good, and I appreciate your
being here. But I did want to ask about the amusement park
rides.
I gather the CPSC lost authority to regulate amusement park
rides back in 1981, I think it was. Dr. Pittle, you mentioned
it. I think, Ms. Weintraub, you mentioned it. Mr. Korn, I do
not think you brought it up.
Mr. Korn. In the written statement.
Senator Fitzgerald. In your written statement? I do not
know if Mr. Klein or Mr. Gold want to defend--you have no dog
in this----
[Laughter.]
Senator Fitzgerald.--in this fight. Nobody is up here to--
the Fire Commissioners do not have a dog in this fight either.
Maybe we should have had somebody here from the amusement park
industry, because I am sure they probably were instrumental in
trying to get the CPSC out of their affairs.
Mr. Gold. I would be glad to alert them, if you are looking
for information. They are a member of our coalition, even
though they are not manufacturers. So----
Senator Fitzgerald. Oh, they are a member of your
coalition? OK. OK.
Mr. Gold. So if you would like, we can say you are looking
for information immediately----
Senator Fitzgerald. OK.
Mr. Gold.--on that.
Senator Fitzgerald. OK.
Well, Dr. Pittle, is there evidence that the states----
Dr. Pittle. Oh, yes.
Senator Fitzgerald.--do not have the ability to do this and
have not been doing a good job?
Dr. Pittle. I was Acting Chairman of CPSC at the time that
this compromise took place--not with my input; it just was
handed to us--and it was purely a political event that took
place up here. It had nothing to do with the merits of whether
we could effectively--or we were ineffective.
What the ultimate result is, is that these rides, which
appear in different parks throughout the country, some of the
same rides--there is no Federal presence, there is no way to
collect the data. CPSC, because they have no authority, is
obligated not to spend one penny on this, so they stand back
and watch.
So if you find that someone dies in a roller-coaster
accident or some kind of ride in one State, and the same ride
appears someplace else, there is nobody to collect the
information, share it with the other states----
Senator Fitzgerald. You used to collect the information,
nationwide data? Did you do that at the CPSC?
Dr. Pittle. I would have to check--that was back 20-some-
odd years ago. I do not remember. Because it might have been in
the NEISS injury data system. I cannot say for sure. But I know
that, since 1981, there is no single source of this
information. And so----
Senator Fitzgerald. Have accident rates or injury rates
gone up since then?
Dr. Pittle. The injury rates have gone up. There is 55
deaths in the last--it is in our testimony--in the last so many
years--the last 15 years.
The important thing is that some states are more aggressive
and more assertive than others, and that there is no way to
share among the states about what is going on. None of them
have the authority, nor take the resources, to notify the other
49 states about what happened with their state.
We think that it makes no sense for a Federal--the only
Federal presence in the marketplace today on these kinds of
products, on these types of products, is CPSC, and it seems
like they should have the authority, if nothing else, just to
collect data and investigate the accidents.
Senator Fitzgerald. Alan Korn?
Mr. Korn. Yes, Senator, I--there is a carousel that sits
right on the mall, and I have a three-year-old. I have taken my
three-year-old three or four times, and I sit on the bench
outside and watch my three-year-old go around on that carousel.
And it strikes me--I am a District resident, and it strikes me
that this carousel may not be the top priority of the District
of Columbia. It could be. I do not know. Based on some of its
other issues, I am tending to think not. So I think to myself
as I sit there, I sure would like to have at least the CPSC to
have some authority to look into this product in the fixed-site
scenario, whether or not it is up at Hershey Park or Dollywood,
down in Tennessee, to spot patterns as data collect, as Dr.
Pittle has said.
The one thing I will say, though--and that seems very
reasonable to me--if the Committee were to expand that
jurisdiction--I have been told by staff, and, quite frankly, I
agree 100 percent--that if you were to do it, it would require
probably a lot, a boatload, of money for the CPSC to get an
expertise on these types of fixed-site amusement parks. So----
Senator Fitzgerald. It is a lot of money. There is no
doubt. That is why maybe, Dr. Pittle, you are only recommending
that they have the ability to collect data and keep statistics.
Dr. Pittle. If they have the authority to, for example, say
to the fixed site--they do not travel; they are not on wheels;
they are fixed--and so if they have the authority to require
that each of them send in all the accident information, deaths
and injuries, they have a central clearing house, they put that
in NEISS. Now, there is something--it is amazing what
information will do. I think that is probably another way of
saying that is why 6(b)(2) ought to be abolished. Because when
people have information, they can make intelligent and informed
choices.
Mr. Korn. And spot trends and report----
Senator Fitzgerald. And spot trends?
Mr. Gold. Let me just respond. If he is talking about
getting rid of 6(b)(2), involving third-party allegations--I
just want to note that third-party allegations can have
inaccuracies, they can be unverified, it can be unfair
information. All it says is that a company can look at this.
And I think that companies have rights and duties, in some
cases, to protect their reputation before information gets put
out by a Federal agency.
Senator Fitzgerald. And from competitors, too, calling in,
could it not?
Mr. Gold. Well, there is another section for that. But, in
this case, it is simply in terms of--I just do not think the
hurdle is particularly high for a company to be able to simply
look at the information that is being submitted by a third
party, an allegation by a third party.
Mr. Klein. I just quickly want to agree with that, Senator.
Remember, what is being reported is raw information. It is
unconfirmed, uncorroborated. And in fact, like you said--under
an FOIA request, which apparently is filed mostly by
competitors and trial lawyers, what it can do to a company's
reputation if this raw data, which has not been looked at by
anyone, gets out to the public--again, just the inkling that
something is unsafe, and the company's reputation can go down
the hill.
Basically, what is in there--there is a 30-day period that
allows companies or individuals to comment about the accuracy
of the information before the Commission decides what to do
with it. And we think that was wisely put in place by Congress,
and we would also oppose removing 6(b).
Ms. Weintraub. I would just like to clarify that no other
health and safety agency has this type of prohibition. It is
extreme, and it has a really--the effect of delaying or denying
information. Some of the information would have--most, I am
sure, actually--would not have an effect on competitive issues
or issues that the company would not want someone to know when
it comes to the intricacies of their product. Most of it is the
type of information that any other agency would give over right
away. But this creates a whole other level for the company, for
the regulated company, to basically censor the information.
Dr. Pittle. Could I answer that?
If you were to ask for information from NHTSA, you would
get it, and these are complaints from consumers. And you know,
people have their own opinions about what is wrong with their
car. We do not live in a censored society, but CPSC does live
in one. And it is--if you were to ask the members of the press,
over there, about their ability to get product information,
categorically or specific, that has anybody's name on it, they
will tell you that it takes either forever or never, because of
the process. It is not just 30 days to give the company the
opportunity to comment on it. Then it comes back, and then
there is a wrangling in how it is going to go out, and the
threats of lawsuits and everything else, and it has come to a
halt. It is very hard to get information.
CPSC is--I remember when I was being--during my
confirmation hearings, virtually every Senator sat there and
said, ``You've got to make sure that you let the public know
about hazards.'' We did not have the 6(b) restrictions then.
``You have to make sure that the consumers get the information
in a timely way so they can make informed decisions that may
head off regulation.''
It is now the reverse, and there is nothing--the
marketplace is free of ideas that are not perfect when they go
out there, and people talk about it as everybody talks back and
forth. Right now, that safety information about cribs and
strollers and bicycles and everything else is kept locked up,
even a newspaper article, which becomes ridiculous.
It really ought to be taken off. It is really painful for
consumers.
Senator Fitzgerald. Mr. Gold--and this is the final
question--do you want to say anything regarding ATVs? There
have been a lot of statements made here today about this issue.
Mr. Gold. No, actually, you know what? We do not do
product-specific in the coalition. And the NAM, in fact, does
not do industry-specific. I mean, what we do is, we try to
cover the broad--what is of interest to all of our members. We
would leave it to the individual industry representative to
discuss that.
Senator Fitzgerald. OK. OK. I did want to leave that option
out there. And if any of your members want you to submit a
written statement, I encourage them to do so. I think, going
back to Commissioner Stratton, who noted 111,000 accidents that
have resulted in trips to the emergency rooms just in the last
few years--that is starting to catch some attention.
All of you, thank you very much. You were all very good,
and we appreciate your being here.
I am not going to take on the carnival industry myself.
About a year ago at this time, Ken Lay, from Enron, sat where
Alan Korn is sitting, and I compared him to a carnival barker,
and I said, ``But that might not be fair to carnival barkers,
because a carnie will at least tell you up front that he is
running a shell game.''
[Laughter.]
Senator Fitzgerald. Well, I heard from carnival barkers all
over the country----
[Laughter.]
Senator Fitzgerald.--and I did not know there were so many
of them. And we immediately heard from them.
So thank you all very much. I appreciate your being here.
[Whereupon, at 4:30 p.m., the hearing was adjourned.]