    [House Hearing, 110 Congress]
    [From the U.S. Government Publishing Office]

                 PROTECTING CHILDREN FROM LEAD-TAINTED IMPORTS

    =======================================================================

                                    HEARINGS

                                   BEFORE THE

                        SUBCOMMITTEE ON COMMERCE, TRADE,
                            AND CONSUMER PROTECTION

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                           SEPTEMBER 19 AND 20, 2007

                                   __________

                               Serial No. 110-65

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

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                        COMMITTEE ON ENERGY AND COMMERCE

                      JOHN D. DINGELL, Michigan, Chairman

    HENRY A. WAXMAN, California          JOE BARTON, Texas
    EDWARD J. MARKEY, Massachusetts          Ranking Member
    RICK BOUCHER, Virginia               RALPH M. HALL, Texas
    EDOLPHUS TOWNS, New York             J. DENNIS HASTERT, Illinois
    FRANK PALLONE, Jr., New Jersey       FRED UPTON, Michigan
    BART GORDON, Tennessee               CLIFF STEARNS, Florida
    BOBBY L. RUSH, Illinois              NATHAN DEAL, Georgia
    ANNA G. ESHOO, California            ED WHITFIELD, Kentucky
    BART STUPAK, Michigan                BARBARA CUBIN, Wyoming
    ELIOT L. ENGEL, New York             JOHN SHIMKUS, Illinois
    ALBERT R. WYNN, Maryland             HEATHER WILSON, New Mexico
    GENE GREEN, Texas                    JOHN B. SHADEGG, Arizona
    DIANA DeGETTE, Colorado              CHARLES W. ``CHIP'' PICKERING,
        Vice Chairman                    Mississippi
    LOIS CAPPS, California               VITO FOSSELLA, New York
    MIKE DOYLE, Pennsylvania             STEVE BUYER, Indiana
    JANE HARMAN, California              GEORGE RADANOVICH, California
    TOM ALLEN, Maine                     JOSEPH R. PITTS, Pennsylvania
    JAN SCHAKOWSKY, Illinois             MARY BONO, California
    HILDA L. SOLIS, California           GREG WALDEN, Oregon
    CHARLES A. GONZALEZ, Texas           LEE TERRY, Nebraska
    JAY INSLEE, Washington               MIKE FERGUSON, New Jersey
    TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
    MIKE ROSS, Arkansas                  SUE WILKINS MYRICK, North Carolina
    DARLENE HOOLEY, Oregon               JOHN SULLIVAN, Oklahoma
    ANTHONY D. WEINER, New York          TIM MURPHY, Pennsylvania
    JIM MATHESON, Utah                   MICHAEL C. BURGESS, Texas
    G.K. BUTTERFIELD, North Carolina     MARSHA BLACKBURN, Tennessee
    CHARLIE MELANCON, Louisiana
    JOHN BARROW, Georgia
    BARON P. HILL, Indiana

                                     ______

                               Professional Staff

                     Dennis B. Fitzgibbons, Chief of Staff

                       Gregg A. Rothschild, Chief Counsel

                          Sharon E. Davis, Chief Clerk

                   David L. Cavicke, Minority Staff Director

                                      (ii)

            Subcommittee on Commerce, Trade, and Consumer Protection

                       BOBBY L. RUSH, Illinois, Chairman
    JAN SCHAKOWSKY, Illinois             CLIFF STEARNS, Florida,
        Vice Chairman                         Ranking Member
    G.K. BUTTERFIELD, North Carolina     J. DENNIS HASTERT, Illinois
    JOHN BARROW, Georgia                 ED WHITFIELD, Kentucky
    BARON P. HILL, Indiana               CHARLES W. ``CHIP'' PICKERING,
    EDWARD J. MARKEY, Massachusetts          Mississippi
    RICK BOUCHER, Virginia               VITO FOSSELLA, New York
    EDOLPHUS TOWNS, New York             GEORGE RADANOVICH, California
    DIANA DeGETTE, Colorado              JOSEPH R. PITTS, Pennsylvania
    CHARLES A. GONZALEZ, Texas           MARY BONO, California
    MIKE ROSS, Arkansas                  LEE TERRY, Nebraska
    DARLENE HOOLEY, Oregon               SUE WILKINS MYRICK, North Carolina
    ANTHONY D. WEINER, New York          MICHAEL C. BURGESS, Texas
    JIM MATHESON, Utah                   MARSHA BLACKBURN, Tennessee
    CHARLIE MELANCON, Louisiana          JOE BARTON, Texas (ex officio)
    JOHN D. DINGELL, Michigan (ex
        officio)

                                 C O N T E N T S

                                  ----------

                               September 19, 2007

                                                                       Page
    Hon. Bobby L. Rush, a Representative in Congress from the State
      of Illinois, opening statement.................................     1
    Hon. Cliff Stearns, a Representative in Congress from the State
      of Florida, opening statement..................................     3
    Hon. Jan Schakowsky, a Representative in Congress from the State
      of Illinois, opening statement.................................     4
    Hon. Joe Barton, a Representative in Congress from the State of
      Texas, opening statement.......................................     6
    Hon. John D. Dingell, a Representative in Congress from the State
      of Michigan, opening statement.................................     7
    Hon. Joseph R. Pitts, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     9
    Hon. John Barrow, a Representative in Congress from the State of
      Georgia, opening statement.....................................     9
    Hon. Lee Terry, a Representative in Congress from the State of
      Nebraska, opening statement....................................    11
    Hon. Charles A. Gonzalez, a Representative in Congress from the
      State of Texas, opening statement..............................    12
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................    13
    Hon. Darlene Hooley, a Representative in Congress from the State
      of Oregon, opening statement...................................    15
    Hon. Marsha Blackburn, a Representative in Congress from the
      State of Tennessee, opening statement..........................    17
    Hon. Diana DeGette, a Representative in Congress from the State
      of Colorado, opening statement.................................    18
        Prepared statement...........................................    19
    Hon. G.K. Butterfield, a Representative in Congress from the
      State of North Carolina, opening statement.....................    21
    Hon. Edolphus Towns, a Representative in Congress from the State
      of New York, opening statement.................................    22
    Hon. Mike Ross, a Representative in Congress from the State of
      Arkansas, opening statement....................................    23
    Hon. Jim Matheson, a Representative in Congress from the State of
      Utah, opening statement........................................    24
    Hon. Mike Ferguson, a Representative in Congress from the State
      of New Jersey, opening statement...............................    24
    Hon. Jane Harman, a Representative in Congress from the State of
      California, opening statement..................................    26

                                   Witnesses

    Nancy A. Nord, Acting Chairman, Consumer Product Safety
      Commission.....................................................    27
        Prepared statement...........................................    29
        Answers to submitted questions...............................    78
    Thomas H. Moore, Commissioner, Consumer Product Safety Commission    33
        Prepared statement...........................................    34
        Answers to submitted questions...............................    95
    Robert A. Eckert, chairman and chief executive officer, Mattel,
      Incorporated...................................................    63
        Prepared statement...........................................    64
        Answers to submitted questions...............................   102

                               Submitted Material

    Ruth Ann Norton, executive director, Coalition to End Childhood
      Lead Poisoning, Baltimore, MD, submitted statement.............   110

                               September 20, 2007

    Hon. Bobby L. Rush, a Representative in Congress from the State
      of Illinois, opening statement.................................   113

                                   Witnesses

    Dana Best, M.D., American Academy of Pediatrics..................   114
        Prepared statement...........................................   117
    Olivia D. Farrow, assistant commissioner, Division of
      Environmental Health, Baltimore City Health Department.........   130
        Prepared statement...........................................   131
        Answers to submitted questions...............................   240
    Michael Green, executive director, Center for Environmental
      Health.........................................................   132
        Prepared statement...........................................   135
        Answers to submitted questions...............................   263
    Lori Wallach, director, Global Trade Watch.......................   146
        Prepared statement...........................................   148
        Answers to submitted questions...............................   276
    Mary Teagarden, professor, global strategy, Thunderbird School of
      Global Management..............................................   166
        Prepared statement...........................................   168
        Answers to submitted questions...............................   271
    Carter Keithley, president, Toy Industry Association,
      Incorporated...................................................   193
        Prepared statement...........................................   195
        Answers to submitted questions...............................   268
    Allen Thompson, vice president, global supply chain policy,
      Retail Industry Leaders Association............................   196
        Prepared statement...........................................   198
    Michael Gale, Fashion Jewelry Trade Association..................   203
        Prepared statement...........................................   205
        Answers to submitted questions...............................   243
    Gary E. Knell, chief executive officer and president, Sesame
      Workshop.......................................................   215
        Prepared statement...........................................   217
    Kathie Morgan, vice president, technical committee operations,
      ASTM International.............................................   225
        Prepared statement...........................................   226

                 PROTECTING CHILDREN FROM LEAD-TAINTED IMPORTS

                                  ----------

                         WEDNESDAY, SEPTEMBER 19, 2007

                  House of Representatives,
               Subcommittee on Commerce, Trade,
                               and Consumer Protection,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:00 a.m., in
    room 2123 of the Rayburn House Office Building, Hon. Bobby L.
    Rush (chairman) presiding.
        Members present: Representatives Schakowsky, Butterfield,
    Barrow, Markey, Towns, DeGette, Gonzalez, Ross, Hooley,
    Matheson, Dingell, Stearns, Whitfield, Radanovich, Pitts,
    Terry, Burgess, Blackburn, and Barton.
        Also present: Representatives Ferguson and Harman.

     OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Mr. Rush. The subcommittee will come to order. The Chair
    will recognize himself for the purpose of an opening statement.
        It is important that this subcommittee convene on this
    particular issue. It is difficult to believe that children are
    still being dangerously exposed to the dangers of lead, given
    that Federal law banned the neuro-toxin almost 30 years ago. It
    used to be that young children, particularly those in low-
    income communities, had to be protected from the peeling paint
    from old houses. They were even admonished for innocently
    putting paint chips in their mouths. But now, incredibly,
    children face lead exposures from a far more innocuous source,
    from the toys they play with.
        The danger of lead to young children and their developing
    brains are well known. Chronic exposure to lead can lead to
    attention problems, learning disabilities, anti-social and
    delinquent behavior, even mental retardation. Acute exposure
    can result in severe illness and death. As such, in 2007, given
    that all we know about the dangers lead poses to our children,
    how is it possible that lead can still be found in the alloys
    of children's jewelry and in the paint of toys? How is it that
    our regulatory system has broken down? Who are the stakeholders
    responsible for such a travesty? And most important, how do we
    fix the problem?
        This morning, in beginning our 2-day hearing, we take the
    first steps toward answering all of these questions. Since
    becoming chairman of this subcommittee, I have repeatedly
    stated that reforming the Consumer Product Safety Commission to
    better protect children is one of my top priorities. Today I
    want to begin a deliberative process that eventually results in
    legislation that significantly strengthens our national safety
    net for children and their families. I want to work on a
    bipartisan basis with our friends in the minority to ensure,
    among a host of other goals, that a timely and effective recall
    system is in place.
        Indeed, I want to work toward a solution in which these
    dangerous products never, ever make it to the store shelves in
    the first place. The problem of lead in children's products
    have many dimensions. First, we must start with the Consumer
    Product Safety Commission. Is the CPSC adequately equipped with
    the resources and underlying regulatory authority to address
    lead in children's toys and jewelry? Is the Commission capable
    of preventing these products from entering interstate commerce
    and quickly recalling defective products that slip through the
    cracks?
        Second, what are the global market forces that underlie the
    manufacture and importation of these lead tainted products?
    Eighty-six percent of toys in the United States are
    manufactured in China. Why is this? Why is China such an
    attractive venue for toy manufacturers and how do health and
    safety standards and their enforcement, I might add, differ
    from those in the United States and other countries?
        Third, who bears responsibility for these lead tainted
    children's products? Retail entities seem to blame the
    manufacturers or importers of these toys, while manufacturers
    and importers blame their contractors and subcontractors from
    China. This chain of commerce from production to retailer
    clearly does not have the requisite quality controls in place,
    nor is there adequate Federal oversight to ensure that all
    stakeholders abide by well-defined rules and regulation.
        As such, it is important that all parties in the chain of
    commerce, from media companies that market popular icons such
    as Elmo, to toy manufacturers and importers, to retail outlets,
    to the Congress and the CPSC, take ownership of this problem
    and earnestly work to fix the problem at all costs. The health
    and well-being of our children is far too important for us to
    tolerate needless finger pointing and petty squabbling. Our
    kids can afford to be childish; we cannot.
        On that note and in closing, let me express my extreme
    disappointment with one invited stakeholder for refusing to
    testify before this subcommittee. Dollar General is one of the
    biggest retailer chains in the United States and they largely
    sell their products to working class and low-income consumers.
    Dollar General and other discount stores have a heavy presence
    in districts such as mine in Chicago. Just as was the case with
    lead paint and the disproportionate impact it had on low-income
    children who live in dilapidated homes and public housing, I
    fear that the current toy fiasco will likewise have a
    disproportionate impact on children who live in underserved
    economically disadvantaged communities where some cheap toys
    and children's jewelry dominate the shelves of so-called dollar
    and 99 cent stores, which have a heavy presence in poor
    neighborhood.
        If a company like Dollar General can sell their products to
    my constituents and make money off of my constituents, one
    would think they could, at a minimum, appear before this
    subcommittee and answer some important questions for my
    constituents. I am not pleased with Dollar General's blatant
    disregard for the importance of this hearing and their refusal
    to appear before tomorrow's germane panel.
        With that, I want to thank our witnesses, who have agreed
    to testify in front of this subcommittee today and I look
    forward to hearing from all of them. With that, I yield back
    the balance of my time.
        The Chair now recognizes the ranking member of the
    subcommittee, my friend from Florida, Mr. Stearns.

     OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF FLORIDA

        Mr. Stearns. Thank you, Mr. Chairman, and let me compliment
    you for holding this hearing. You and I have worked together on
    this project and in fact, we sent out 20 letters, together, to
    20 manufacturers of toys and we have responses back from these,
    and I understand you and your staff have put them on the
    committee Web site, and I think that shows that this hearing
    has been transparent and our efforts in working together is for
    the common good.
        Parents, obviously, are particularly concerned about the
    amount of toys recalled for containing lead paint in excess of
    the Federal mandatory standard, which is 600 parts per million.
    While many of the toys recalled this year have been from
    smaller manufacturers and importers, it has been more
    surprising to many of us that a significant number of the
    recalled products are produced by industry leaders, notably
    Mattel, that obviously has the resources that perhaps the
    smaller manufacturers do not have.
        As the subcommittee examines this issue, we will probably
    look at appropriate legislation, if it is required. But I want
    to commend Chairman Nord for her thoughtful draft proposal that
    she has already brought forward, the Product Recall Information
    and Safety Modernization Act, PRISM Act, she developed, with
    her staff, and has shared with us on this committee. There are
    a number of good proposals contained within her draft proposal
    and I think, Mr. Chairman, a lot of these merit our
    consideration if we move forward with our own piece of
    legislation.
        Let me say I believe there are two problems highlighted by
    the recalls. The first is quality assurance and control of the
    manufacturing, design and production of consumer products,
    particularly toys. The recalls have gained much attention, I
    believe, because there has been a loss of trust that has
    created doubt whether the products are safe for children.
    Parents have relied upon many of the name brands because they
    have always stood for quality. Industry professionals readily
    admit that prior to the recalls, Mattel was viewed as having
    one of the most rigorous quality control systems in place, yet
    here we are, holding a hearing on this subject and we are left
    questioning how these products made it through the production
    chain, into our stores and into our homes.
        What is equally troubling is what this means for the rest
    of the toy industry. If Mattel was a leader, what quality
    control systems do the smaller manufacturers and importers have
    in place? Are we facing more problems down the line? There is
    good and bad news that comes from this recall operation. The
    bad news is that the problems with unsafe consumer products are
    similar to our problem with both imported and domestic
    contaminated foods. We do not have the resources to test every
    product that comes into our shores.
        The good news that toys are manufactured and reproduced in
    an identical fashion. Tests of reproduction runs should
    indicate immediately whether a problem exists with the entire
    production run and should be detected with sampling tests. If a
    problem occurs with the production run, all the products can
    quickly be recalled. What I don't understand is how the testing
    was done that did not initially detect these problems.
        In addition to the industry response to ramp up their
    testing of their products, the Chinese Government announced
    last week, during a product safety summit, here, that they will
    take steps to ban the use of lead paint in their toys, in all
    toys. I welcome the step and would like to know how they intend
    to enforce that ban. The second problem is the larger problem
    of risk posed by products that do not meet U.S. safety
    standards, including lead paint and lead content. When the
    United States passed the current ban on lead paint in toys in
    1978, the threshold became 0.06 percent or 600 parts per
    million.
        According to a study of the President's Task Force on
    environmental health risk to children in 2000, lead paint,
    lead-based paint content used in homes prior to that averaged 9
    percent for interior paint after 1960, but had been as high as
    74 percent, dating to the 1940s. So we have come a long way to
    eradicate the harms that lead in our environment has caused us,
    particularly for children who are growing up and are more
    easily susceptible to elevated lead in their blood levels.
        So Mr. Chairman, I look forward to hearing the response and
    action plans of industry participants to prevent a repeat of
    this summer's problem. The efforts of some to increase their
    testing are a good first step and I want to hear more how they
    will ensure safe products. This is an important issue and I
    look forward to working through the issues and determine what
    action would be required. And I thank you.
        Mr. Rush. Thank you. The Chair now recognizes the
    gentlelady from Illinois, my colleague, Ms. Schakowsky.

     OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Ms. Schakowsky. Thank you, Chairman Rush. I want to
    congratulate you for opening this investigation and for calling
    this hearing today in perhaps the most important subject that
    we deal with, which is the protection of our children. The
    issue today is lead paint on toys, a clear and present danger
    to the health and development of infants and toddlers. So who
    would endanger our children this way? Unfortunately, all
    parties bear some of the burden from manufacturers to retailers
    to the agency that is supposed to protect our children and
    families; the Chinese, who are responsible for applying lead
    paint to Elmo, Big Bird, Ernie and other toys, including
    accessories for Barbie, but Mattel was also responsible for
    contracting with Chinese sweatshops to make the toys without
    being willing to spend the money to supervise production.
        No one believes that Mattel intentionally sold toys that
    they knew were painted with lead, but they certainly didn't do
    enough to stop it. Our committee staff that recently traveled
    to Beijing and Hong Kong learned that it is a common practice
    for foreign firms ordering goods from China to employ strict
    quality control measures over the production process. These are
    necessary steps that should never be left to Chinese contract
    or subcontract manufacturers. It is well known that the legal
    and regulatory systems of China are not to be relied upon as a
    guarantee for product quality, particularly in an environment
    where Chinese firms are subject to enormous price pressures.
        Mattel chose to gamble with our children's health,
    apparently for a few extra dollars or to meet the demands of
    mega firms like Wal-Mart, that are always pushing for the
    cheapest good, regardless of the human cost. Mr. Chairman, our
    staff has not been able to discover what happened because
    Mattel has decided to obstruct our inquiry. They failed to
    arrange a visit to two of the contracting plants in China,
    despite our repeated requests. They refused to make their
    investigators available for staff interviews in Hong Kong,
    another of our requests.
        In fact, they refused to make the man responsible for
    Chinese operations available for an interview in Hong Kong. We
    have yet to receive an accounting of what happened in China
    that caused our children to be exposed to lead paint or the
    magnets that can harm young children. I believe that Mr.
    Eckert, Mattel's chairman, hopes to be able to stonewall us the
    way he has stonewalled the CPSC over the years, refusing to
    obey the law that requires the reporting of consumer complaints
    about defects in Mattel toys because he believes the law to be
    unreasonable, as he recently explained to the Wall Street
    Journal.
        I wonder if the board of directors of Mattel has done
    appropriate due diligence on the managerial failures that have
    resulted in recalls of millions of unsafe toys. This is
    apparently a management that tries to hide its systemic
    failures. Mattel says it sells 800 million units and only a few
    million are defective and dangerous and besides, they will do
    better in the future. Mr. Chairman, I, for one, believe that
    Mattel's management has forfeited their right to expect any
    parent to trust them. Certainly, we should not until we have a
    credible report on the breakdown of quality control that placed
    our children in danger.
        Mr. Chairman, I think we should determine whether Mr.
    Eckert considers the perjury and obstruction of justice laws
    also to be unreasonable. He should be reminded that attempts to
    obstruct our investigation will not be tolerated. And finally,
    I am looking forward to hearing from CPSC chair, Nancy Nord and
    Commissioner Moore. Like parents and grandparents around the
    country, I want to know why CPSC has not done a better job
    protecting precious children, our most precious treasure, from
    unsafe and potentially lethal products.
        I hope we will hear today that the CPSC has decided not
    just that it needs more resources, but that it is going to
    adopt a more aggressive approach to consumer safety. I yield
    back.
        Mr. Rush. I thank the gentlelady. The Chair now recognizes
    the ranking member of the full committee, Mr. Barton of Texas.

       OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Barton. Well, thank you, Mr. Chairman, for holding this
    hearing and for Ranking Member Stearns' support of this
    hearing. A lot of what we do up here is of intellectual
    curiosity to Members, it is all-important public policy,
    sometimes it is personal. Today is one of those days, for me,
    that is personal. Most members of this committee are at a stage
    in our lives where we buy toys for our grandchildren, our
    nieces and our nephews and great-nieces and great-nephews, and
    I have four grandchildren. But I have a 2-year old toddler,
    son, Jack. He had his 2-year birthday party this past Saturday.
    So this is personal for me.
        When you can't trust Thomas the Train and you can't trust a
    company like Mattel, I remember when Mattel was the advertiser
    of the Mickey Mouse show in the 1950s. It is just staggering
    that we have to worry about some of these issues. But to their
    credit, the American toy manufacturers, as they found out that
    they have got problems with some of these products, they have
    done voluntary recalls and the Consumer Product Safety
    Commission has instigated some other recalls.
        And if we have a productive hearing, and I am sure we will,
    with Chairman Rush's personal involvement and full committee
    chairman Dingell's involvement, if we need to take steps
    legislatively, as the ranking Republican, I am willing to
    commit that I will work in a bipartisan fashion, because I want
    the toys that are sold and used by the children of America to
    be safe, period. Not may be safe, not reasonably safe, but
    safe. My son, Jack, got a big Tonka dump truck last Saturday
    and a Radio Flyer tricycle. And his mother, my wife, Terri, and
    I, when we went to the toy store, we really looked at where
    those products were manufactured and looked at the label,
    because we want him to be safe. And with a 2-year old, if it
    will go in his mouth, it is going to go in his mouth. You just
    know that.
        So Mr. Chairman, I have got a lengthy statement on official
    policy, but just simply let me say that if you are an American
    toy manufacturer, I really don't care where you manufacture
    your toys. I would rather they be manufactured in the United
    States of America and really prefer they be manufactured in
    good old Texas, but if you are going to manufacture them in
    China or Taiwan or Timbuktu, wherever, they had better meet the
    American safety standards and the government officials of these
    countries, especially the Chinese, better start getting it.
        They seem to think that all we are interested about in the
    United States is the cheapest product at the lowest cost, but
    they are sadly mistaken. There are some things that price is
    the predominant issue with, but the safety of our children,
    there is no price you can put on that, Mr. Chairman. And
    certainly, for young Jack Kevin Barton, all of 2 years old, his
    safety, just like the children and the grandchildren of every
    other member of this committee is paramount, so I am going to
    pay real close attention and I appreciate you holding this
    hearing and I would submit my full statement for the record.
        Mr. Rush. I want to thank the gentleman for his comments
    and his personal statement. I also want to inform the gentleman
    that Radio Flyers are manufactured in Illinois, the next best
    place to Texas.
        Mr. Barton. Well, he hadn't figured out the pedal part of
    it, yet. He is still in the scooting part of it.
        Mr. Rush. OK. All right. The Chair now recognizes the
    chairman of the full committee, Mr. Dingell of Michigan.

    OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        Mr. Dingell. Mr. Chairman, thank you. And I begin by
    thanking you and Ranking Member Stearns for holding this
    hearing today. It is an important one and it is very timely. As
    I have said in the hearing of this subcommittee on May 15, our
    responsibility to our children and this country's
    responsibility to protect these children, is one of the most
    important in our society. I am pained to note this morning that
    it appears that all of us have been derelict in this matter. It
    is the responsibility of this committee, the subcommittee and
    very frankly, the Federal Government, to determine the
    resources that are available and the sources of the lapse that
    have taken place and to take all necessary steps to correct it.
        It would be far too easy to attribute this summer's recall
    of children's toys and other products to Chinese poorly
    regulated export manufacturers. To be sure, that is true, and
    China is clearly not without blame. But regulatory
    deficiencies, shoddy business practices and the forces of
    globalization all play a substantial role in this catastrophe.
    In short, there is lots of blame to go around to everybody.
        Appearing before us today are the two commissioners from
    the Consumer Product Safety Commission, CPSC. As the Nation's
    consumer safety watchdog, this agency bears significant
    responsibility for protecting our children, yet it has remained
    largely under-funded since its inception. And it should be
    noted, of late, it has endured an exodus of competent staff and
    an apparent significant diminution of its ability to carry out
    its responsibilities. In addition, CPSC's testing laboratory is
    an embarrassment. I note that there are only two of the five
    authorized commissioners available and we are going to have to
    find out whether they have the capacity to carry forward with
    their proper responsibility.
        I would expect, then, that Acting Chairman Nord and
    Commissioner Moore will help our committee to understand the
    situation and to strengthen the CPSC by answering some of the
    following questions. (1) How has CPSC's dwindling resources
    affected its ability to intercept dangerous products at U.S.
    ports? (2) Has reliance on voluntary industry compliance given
    rise to recent toy and other manufacturers and children's
    product recall crises? Lastly, I think we are going to have to
    ask that acting Chairman Nord discuss, in detail, the agreement
    recently included between the CPSC and the Chinese general
    administration for quality supervision inspection and
    quarantine.
        I would note that the Chinese have set extraordinarily high
    levels of failure, not just in these kinds of consumer
    products, but also in foods, drugs, cosmetics and appliances
    and devices. More precisely, then, in what terms of concrete
    results are we to expect that this agreement is going to
    deliver any additional protection to American consumers?
        I note also appearing before us today is Mr. Robert Eckert,
    who is Mattel's CEO. The practices of Mattel and its role in
    industry leader reflect no credit upon it, yet I am concerned
    about the apparent disdain for Federal regulation and laws
    present in some public statements. The front page of the
    September 4, 2007 Wall Street Journal reported Mr. Eckert's
    comments that Mattel discloses problems on its own timetable
    because it believes both the law and CPS enforcement practices
    are unreasonable.
        I think he will probably want to explain these matters, but
    I will want to hear a similar explanation from the CPSC about
    why they are not more diligent in addressing these questions
    and what they have proposed to about this or whether additional
    authorities are needed from this committee and from the
    Congress to address this kind of behavior and disregard the
    proper responsibilities of the manufacturers or importers, and
    what the CPSC is going to do to get the attention of these
    people so that they will be a little more attentive to their
    responsibilities to America and to its children.
        I further wish to convey my great disappointment that
    Mattel made little demonstrable effort to comply with the
    requests of a bipartisan delegation of the Committee on Energy
    and Commerce staff recently, in Hong Kong, to meet with its
    internal investigators and quality control staff. That is a
    poor kind of cooperation to be afforded this committee and it
    will hardly be helpful in our relationship with the company. I
    expect Mr. Eckert will be available to answer these questions
    about the status and intent of Mattel's internal investigation
    of its recalls this summer, with clarity and provision.
        Lastly, I have heard that CEO's apology for lead tainted
    toys, but I would seek reassurance about this pledge to improve
    the safety of Mattel's products, given Mattel's past resistance
    to cooperating with CPSC over the safety of another toy, Power
    Wheels. I look forward to the committee's second day of
    hearings on this matter, also, Mr. Chairman. In particular, I
    find it prudent that we should explore the following. (1) How
    should the United States structure future trade agreements to
    enhance the protection of American consumers? (2) How can the
    U.S. and others compel China to enforce its own regulations?
    (3) What sorts of quality control practices should U.S.
    businesses employ in China to assure supply chain integrity?
    (4) How do cost pressures applied by large retailers to toy and
    other manufacturers diminish quality control?
        And last of all, what additional authorities, funding and
    resources does CPSC need, as well as legal authorities, to see
    to it that they are able to properly carry out their
    responsibilities in matters of this kind. These questions and
    others are going to inform the committee and enable us to do a
    better job to improve our ability to protect our consumers and
    their children. We intend to remain vigilant in this task and
    produce tangible results. I will note that we will be having
    legislation on this. We will shortly be introducing legislation
    to address some of the problems with regard to Chinese imports
    and Food and Drug in its inability to address problems at our
    borders.
        And I intend to do a similar thing with regard to CPSC and
    we will be looking forward to answers and cooperation from CPSC
    today to see what must be done by this committee and we will
    anticipate that they will give us answers, both about their
    authority and how they are functioning, whether they have the
    resources that they need to do their job and also, what they
    have to do to get enough commissioners down there to have the
    quorums and to be able to conduct their business in a proper
    fashion.
        Mr. Chairman, I thank you and I commend you for this
    hearing and I thank our good friend, Mr. Stearns, also, for his
    participation.
        Mr. Rush. I want to thank the chairman. The Chair now
    recognizes the gentleman from Pennsylvania, Mr. Pitts, for 5
    minutes of an opening statement.

    OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. Pitts. Thank you, Mr. Chairman. I won't take all that
    time, but first of all, thank you for holding this important
    hearing on protecting children from lead tainted imports. Our
    children, as it has been said, are our future, and therefore we
    must ensure their protection in all ways possible. The
    documentation describing the deaths of children from lead
    painted toys, as well as from swallowing magnets from toys is
    disturbing and unacceptable. And of course, our sympathies go
    out to the families who have lost children due to illnesses
    related to the issues we are discussing today.
        It is vital that toy manufacturers, as well as the U.S.
    Government, where appropriate, be assertive in enforcing
    standards and safety inspections at all points of the
    manufacturing process. Manufacturers must hold contractors and
    subcontractors accountable for upholding production standards.
    And the U.S. Government must hold Chinese and U.S. companies
    accountable for the safety of their products. Recent steps by
    toy manufacturers are welcome, but there must be a system in
    place to monitor local contractors in China and other nations
    in which enforcement of regulations may be lax or entirely
    nonexistent.
        It is in the best interest of our Nation's children, as
    well as the toy companies and their contractors and their
    subcontractors, to abide by safety standards. And so I look
    forward to hearing our distinguished witnesses today, what they
    intend to do to ensure the safety of their products and I thank
    you for and commend you for holding this hearing.
        Mr. Rush. I want to thank the gentleman. The Chair now
    recognizes the gentleman from Georgia, Mr. Barrow, for 5
    minutes of opening statement.

      OPENING STATEMENT OF HON. JOHN BARROW, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF GEORGIA

        Mr. Barrow. Thank you, Mr. Chairman, and thank you, Ranking
    Member Stearns, for having this hearing. Everybody knows the
    difference between somebody who don't know about a problem with
    this product and don't care, and someone who does know about a
    problem with the product and don't care to tell folks about it.
    It is as old as the story they tell back home about the guy
    that bought a mule from somebody only to discover, a couple of
    days after he bought it, that it was blind. Went back to the
    guy that sold him, said why did you sell me a blind mule and
    the guy said well, the guy that sold it to me didn't tell me
    about it and I sort of felt he wanted it kept confidential.
        Well, I sort of feel like the manufacturers in this country
    that don't know or don't care, but there is no difference in
    terms of the impact to the consumer. If the product is
    dangerous and you don't know, you should know. The impact is
    just the same as if you do know and suppress that knowledge. We
    are all going to be held to the standard of what people, what
    reasonable people know or should know about their products and
    how they are affecting folks in the stream of commerce.
        And I think that applies to us, to the Government, as well.
    If we know, because we have discovered things that are going
    wrong with stuff that is coming into the stream of commerce, we
    have got to act. Now, Ranking Member Stearns made an allusion
    to the food situation. And me, I don't know, maybe taking a
    broad view of history, maybe food is going to kind of wake us
    up to some of the problems of globalization and the way that
    exporting and outsourcing our clothes and just about everything
    else hasn't. Certainly, that was the experience of this country
    when the FDA was adopted in the first place.
        But as the only Member of Congress, on both the Agriculture
    Committee and the Energy and Commerce Committee, I can share
    with my colleagues and report to you all what we learned on the
    Agriculture Committee about how things are done differently in
    two different models we got in this country for regulating
    imported food. You got the model that the FDA uses when they
    are trying to monitor the importation and the quality of
    specialty crops that are being imported in this country getting
    mixed up with our domestic specialty crops, and what the USDA
    is doing in the cases of meat.
        Now, the USDA does not rely on the kindness of strangers to
    determine whether or not the meat that is coming into this
    country is safe. We send inspectors abroad, the USDA sends USDA
    inspectors to the packing facilities abroad to inspect the
    conditions there at the packing facilities. This is in marked
    contrast to the policing policy followed by the FDA for
    monitoring the quality of specialty crops, the vegetables that
    are getting mixed up on our shelves.
        What we do with imported specialty crops is very different.
    What we do is we monitor the subject population and wait and
    see if someone gets sick in the test group. And after someone
    in test group has gotten sick, we try and figure out where it
    comes from and we flag stuff and we can trace it up the stream
    of commerce. The test group is 350 million Americans. We are
    all guinea pigs for the FDA's method of compliance, of
    monitoring folks' compliance with the quality and safety of
    food that comes into this country. Now, we don't do that with
    the USDA. We take an affirmative, proactive stance to try and
    make sure the imported meat is safe before it gets here.
        We need to take the same approach with respect to
    commodities that are manufactured abroad for use in this
    country. We haven't just got our toys mixed up, domestic stuff
    mixed up on the shelves with stuff that is made abroad. It is
    something like 86 percent of the toys in this country are
    manufactured in China. So we have to make sure that we don't
    just interdict this stuff after it enters the stream of
    commerce, but before it lands on our shores. I think we ought
    to think about trying to adopt the model of the USDA and try
    and stop manufacture, the wholesale manufacture of unsafe
    products in our trading partners to begin with.
        If the idea of letting this stuff get into the stream of
    commerce and match the flows and then trying to stop it after
    it reaches our shores is impractical. It is what the FDA is
    doing and that is why people are getting sick from eating crops
    and they are not getting sick from eating meat. Now, that seems
    to me to be a model that we can build on. Certainly, we need to
    know that what is going on now is not behind the scenes, it is
    not somewhere unaware of. Now that we know about it, we are all
    tasked with doing something about it.
        Thank you, Mr. Chairman. I yield back the balance of my
    time.
        Mr. Rush. I want to thank the gentleman. The Chair now
    recognizes, for the purposes of opening statement, Mr. Terry
    from Nebraska.

       OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEBRASKA

        Mr. Terry. Thank you, Mr. Chairman. I want to express my
    appreciation to you for holding this hearing, not only because
    lead on our toys is an important issue for our families and
    because I have three children, although the youngest is now 7
    and probably doesn't chew on too many toys. Certainly, though,
    I think this is a matter that we need to be vigilant. There is
    a variety of information in discussions about how to properly
    handle this. I agree with the gentleman from Georgia that if we
    could do a better job at the source, the supplier, the
    manufacturer, to adopt the best practices, to make sure that
    the product is safe once it is packaged, to be exported to the
    United States.
        I think the move by the Chinese Government is positive, but
    as the full committee chairman has said, unfortunately, China
    has a history of not following through with its promises, so I
    want to hear from Mattel especially how they feel the Chinese
    Government is going to react and enforce what they have
    promised in tightening up the procedures in China. What we have
    heard, from others that have testified in past testimony in the
    Senate, one of the issues with the Chinese manufacturers is for
    one run of the manufacture of a toy and spraying on paint, that
    batch of paint meets the standards, but the next buckets of
    paint they pour in don't. And so literally, you can have the
    same batch of toys with some meeting the standards and some
    not.
        So you really have to be able to rely on the Chinese who
    basically run these factories over there to crack down,
    otherwise I am going to agree with my colleagues on the other
    side that says that maybe the importers of these toys that are
    slapping their name on it should look to different countries to
    set up a new shop for manufacturing. I also want to
    congratulate the chairman on holding a hearing on lead
    contamination. One of the reasons why this issue is important
    to me, personally, is that I am from Omaha, Nebraska. One-third
    of my city is a Superfund site for lead contamination.
        Now, that is soil. That is from several of our factories
    from the 1800s up until the mid-1950s and 1960s before they
    closed down. But what lead does when it is ingested by a child,
    especially a toddler like Mr. Barton's son, Jack, what it does
    is it retards the development of the brain so that you have, as
    they develop into young adults, have a more difficult time of
    learning. That is the lesser of the symptoms, as we have
    learned from an incident in Minnesota, in ingesting a lead toy
    or medallion, is that it can also lead to death.
        So I appreciate, I guess the one silver lining from these
    hearings and all of the news media attention on these toys, is
    that the public has become educated on lead poisoning. That has
    been the single most difficult part of our Superfund site in
    Omaha, is educating people in the Superfund site, especially
    those with children, on what they need to do to reduce the risk
    of lead contamination. So in one fell swoop, Mattel and others
    have helped educate an American public, because as Mr. Rush can
    certainly testify to, when we represent urban areas, like I do,
    almost every house is contaminated with lead paint.
        And we need to have, I think, broader discussions in this
    country about lead poisoning in our urban areas and so I am
    going to keep bringing up lead throughout here as a way to
    educate the public on lead poisoning, because we have an
    epidemic of lead poisoning in our own country that we need to
    deal with, as well. So Mr. Chairman, I appreciate you holding
    this hearing. I think, overall, we are going to do good for
    this country by this hearing.
        Mr. Rush. The Chair thanks the gentleman. The Chair now
    recognizes the gentleman from Texas, Mr. Gonzalez, for the
    purpose of an opening statement.

    OPENING STATEMENT OF HON. CHARLES A. GONZALEZ, A REPRESENTATIVE
                  IN CONGRESS FROM THE STATE OF TEXAS

        Mr. Gonzalez. Thank you very much, Mr. Chairman, for your
    leadership on this issue and I want to remind everyone that
    this is not the first hearing that you have conducted where we
    have had the chair of the Consumer Product Safety Commission
    and we should have learned, at that hearing, basically what set
    the stage for what we are experiencing today regarding the
    lead-based paint toys that were contaminated.
        I think I came away from the last hearing, because I know
    that the chairman has made her best effort. She has sought us
    out. I think she even has some proposed legislative remedies
    and such. But what I learned from that hearing was that we have
    a commission that is under-staffed and overworked. Congress is,
    I think, party to some of that condition by cutting its
    funding, historically. So I don't think that we actually come
    into this with clean hands. And the other thing I learned that
    I really thought, that the industry was pretty much self-
    regulated, that we had a watchdog with a muted bark and no
    bite.
        Now, Mr. Dingell has indicated we are going to have some
    legislation. I know that the chairman is going to make some
    recommendations today. I am hopeful and I think that she will,
    and we need to be acting on it. The American people truly
    believe that the Government is there to protect them,
    especially from unsafe products. But I am here to tell them
    that is not the fact. And you have heard some of my colleagues
    allude to the situation. We are faced with the reality that it
    really is industry driven. You have already heard references to
    basically a toy company can make a determination when it feels
    it may be imperative to take some action regarding a toy that
    has been placed in the stream of commerce that poses a danger
    to Americans and their children. That is not the way it is
    supposed to work.
        So where is the Government's responsibility? And it is not
    solely Government, but it has to be the toy company, it has to
    be the retailer and even the consumer has a role to play. As
    Mr. Barton pointed out, when he and his wife went to buy the
    toys for their son, there was due diligence exercised by the
    consumer. So I think there is a role for all of us, but I tell
    you, it definitely will start with the commission and it ends
    with the commission. But it will take a joint effort, a
    collaborative effort, and that is what we should be seeking
    today.
        I will tell you now, there was no doubt this was going to
    happen. If you were here for the last hearing, we were just
    waiting for an incident. It just so happened that it was toys
    and it was Mattel, which is obviously one of the most prominent
    toy distributors, manufacturers. And we are going to get into
    design and we are going to get into manufacturing and we are
    going to see what is the duty of someone that supplies toys,
    that designs them and then off-shores and the manufacturing of
    those toys, to make sure that whoever is manufacturing them, in
    China or in any other country, is abiding by those standards
    that we are going to apply to that finished product when we
    bring it onto our shores.
        Again, thank you very much, Mr. Chairman. I yield back.
        Mr. Rush. I want to thank the gentleman. The Chair now
    recognizes the gentleman from Texas, Mr. Burgess, for 5
    minutes.

    OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
                  IN CONGRESS FROM THE STATE OF TEXAS

        Mr. Burgess. Thank you, Mr. Chairman, and I appreciate you
    holding the hearing today. Now, most of us, with the increasing
    number of recalls that we have seen, are extremely concerned
    about the safety and security of really, what we consider
    rather mundane, normal household products, and now, especially
    in regard to our children's toys and as a parent, the last
    thing you would ever want to do is give your child something
    that could cause them harm. However, that determination seems
    to be getting harder and harder by the day to make, as more and
    more recalls are announced.
        In a lot of ways, America has the safest products in the
    world, but after a summer of recalls, the confidence of the
    American consumer is severely undermined. And what most of us
    are concerned about is the safety of imported goods, especially
    those imported from the People's Republic of China. And what
    that leaves us with, as far as we are trying to discriminate is
    something harmful or not harmful to bring into our home, we
    look for that country manufacturer, and I will just tell you,
    in my household, if it is made in China, it does not come home.
        In July, my friend and colleague, Mr. Greg Walden, who is
    on the Oversight and Investigations Subcommittee with me, we
    sent a letter to the Oversight and Investigations Subcommittee
    asking for an investigation regarding for the many food and
    consumer product safety recalls from the People's Republic of
    China. In August, in response to the Thomas the Train recall, I
    sent yet another letter to the O & I subcommittee. Once again,
    I urged them to embark on an investigation regarding the
    increasing number of consumer product recalls from the People's
    Republic of China. I have yet to receive a response back from
    the subcommittee, but Chairman Rush and Ranking Member Stearns,
    I thank you for your leadership on this specific issue in
    calling for this hearing today.
        I have given those two letters to the majority counsel and
    ask unanimous consent that they be included as part of today's
    record.
         Chairwoman Nord, I am glad you are here with us today. I
    know that you and your colleague, Commissioner Moore, will
    provide some much needed insight regarding the recalls of the
    Consumer Product Safety Commission. In some ways I am
    disappointed in how the committee handled the hearing in June
    and I think the committee could have benefited greatly from
    your testimony 3 months ago, when we were just on the cusp of
    discovering the severity of this problem. Obviously, the head
    of any Federal agency should be treated with respect,
    regardless of one's political affiliation. I am grateful that
    you have graciously agreed to be here with us today.
        You can't turn on the television at 6 o'clock at night in
    Washington, DC without hearing Lou Dobbs talk about this, and I
    was watching him, because I wanted to see what my e-mails and
    letters are going to look like the next day. And the media,
    rightfully so, has spent a lot of time and attention on the
    issue of recalls this summer and we are all concerned about the
    number of recalls. But it is also important that we step back
    and think about some of the things that are being done
    correctly and make certain that we don't do anything to
    undermine those things.
        Chairwoman Nord, even though you specifically note, in your
    testimony, that the Consumer Product Safety Commission has not
    historically engaged in international activities and does not
    have direct authority to handle imported products at ports, you
    and your agency have made some significant progress in regards
    to the issue of Chinese imports and last week's agreement with
    China's general administration of quality supervision
    underscores this. I am grateful that your agency was able to
    get China to agree immediately to implement a plan to eliminate
    the use of lead paint. I will have to say people in this
    country already expected that their toys be painted with lead-
    free paint, but this is clearly a step in the right direction.
        And certainly now, as Chairman Dingell has pointed out, we
    have got to hear, going forward, what is going to happen as far
    as the enforcement. I am also grateful that members of industry
    and manufacturing are here today. I am extremely interested in
    what happens to all of the volume of recalled product that is
    going to be returned. Do we burn it and put the lead into the
    atmosphere? Do we bury it and put the lead into our groundwater
    or do we just simply resell it on eBay and continue the
    problem?
        I would also like to briefly mention the voluntary recall
    system versus the mandatory recall system. Right now
    manufacturers bear a legal responsibility to report to the
    Consumer Product Safety Commission if there are problems. This
    is existing Federal law and manufacturers must play by the
    rules. Now, Chairman Dingell talked about a mandatory system of
    recalls. I am concerned that if we go to an exclusively
    mandatory system of recalls, we will extend the timeline. I
    think it is important that the chairwoman has the flexibility
    to ask for a voluntary recall. I cannot imagine anyone in
    industry ignoring that call for a voluntary recall and that can
    happen in a couple of weeks.
        If we go the mandatory route, we have to go through the
    courts, involved lawyers and you know what happens there. It is
    a couple of years before we get something resolved. Now, in my
    district back in Texas, a local television station, Fox 4, has
    documented a problem with sandals, flip flops, that cause a
    severe localized dermatitis. I cannot imagine what the cause
    for that might be, but again, we need to get to the bottom of
    that. And the CPSC is not just to protect consumers, it is to
    protect manufacturers, too, because when the confidence of the
    American public is undermined, the manufacturer is ultimately
    the one who is going to suffer. Again, we will not buy a
    product in my household if we see that it was manufactured in
    the People's Republic of China.
        Mr. Chairman, I will submit my entire statement for the
    record. I do understand Chairwoman Nord has some draft
    legislation that bears us looking at that. We also need to talk
    significantly about the funding. I am concerned, with all the
    talk about funding, and we had that discussion earlier this
    summer, that the House Appropriations Committee, really, the
    increase in funding was rather modest for their budget this
    year and I will be interested in hearing from both Chairwoman
    Nord and Commissioner Moore about their opinion of the House
    level of funding that was sent by the Appropriations Committee
    and I will yield back the balance of my time.
        Mr. Rush. I want to thank the gentleman. The Chair now
    recognizes, for the purposes of opening statement, the
    gentlelady from Oregon, Ms. Hooley, for 5 minutes.

     OPENING STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF OREGON

        Ms. Hooley. Thank you, Mr. Chairman, for holding this
    important hearing and thank you, Chairwoman Nord and
    Commissioner Moore for being here today and providing your
    testimony. Like Representative Barton, this is very personal.
    Last week, my district director, who just had a baby, found out
    that her baby's favorite teething ring had lead in it. Now, I
    wonder how many other parents are out there that have given
    their children teething rings with lead in it. When it says
    safe for children, people have expected that it is going to be
    safe for their children.
        Hopefully, it is no longer news to anyone that we have a
    serious problem with the influx of dangerous lead-tainted and
    faulty children's products flooding our shelves. So far this
    year, the Consumer Product Safety Commission has issued 113
    recalls, 43 due to excessive lead. I would like to believe this
    number won't go up, but I know that it will. Not enough has
    been done to make sure that toys that reach the shelves across
    this country are safe and there is plenty of blame to go
    around.
        Manufacturers have not been as vigilant as they could have
    been in monitoring and testing their complicated off-shore
    supply chains. To prevent the introduction of dangerous toys
    and other children's products into the marketplace,
    manufacturers should be required to have independent, third
    party tests certifying their products are safe before they
    reach our shelves. I commend the Toy Association to agreeing
    that this needs to happen.
        Recent recalls have highlighted safety problems with
    Chinese imports. An overwhelming majority of the recalls have
    been from China. China is now our second largest trading
    partner and yet, last year supplied the United States with 86
    percent of its toys. Currently, it is almost as we are relying
    on China's weak safety regime to make sure that products we
    import for them are safe. We can all agree that this isn't
    enough.
        Consumer Product Safety Commission is another piece of this
    puzzle. The CPSC is charged with the enormous task of
    protecting the public, including children from unreasonable
    risk associated with consumer products. Right now we are trying
    to do this with 400 employees in contrast to the thousand they
    had in 1981. Clearly, this is not sufficient. They also lack,
    in some areas, statutory authority to protect the consumers. By
    the CPS's own admission, the 1950s facility they are using to
    test potentially dangerous products don't even meet the code.
        Moving forward, I sincerely hope the CPSC will be as
    constructive and proactive as possible in addressing this
    multifaceted and complicated issue. I also hope that we quickly
    and thoughtfully pass legislation, giving them the resources
    and the authority to be more effective in performing their
    vital duties. We have to be careful, though. In the process of
    addressing the problems with CPSC, we should not replace the
    testing by the private sector. The CPSC needs to establish
    uniform testing rules that the private sector has to adhere to.
        It is vital to our children and economy that parents are
    confident that when they purchase, off the shelves, that
    product is safe. I look forward to hearing from both panels
    today and working with my colleagues on addressing this very
    serious problem. And I yield back the remainder of my time.
        Mr. Rush. I want to thank the gentlelady. Now the Chair
    recognizes the gentleman from Kentucky, Mr. Whitfield, for the
    purposes of opening statement. The gentlemen from Tennessee and
    from Kentucky left. Now the Chair recognizes the gentlelady
    from Tennessee, Mrs. Blackburn, for the purposes of an opening
    statement.

    OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF TENNESSEE

        Ms. Blackburn. Thank you, Mr. Chairman. I thank you for
    holding today's hearing and I do want to welcome our witnesses.
    We are looking forward to hearing from you and exploring some
    of these issues that do relate to consumer product safety and
    the quality of imported products. As a mother, as a retail
    industry veteran, and also now as a Member of Congress, I have
    different lenses through which I can look at and evaluate this
    issue. I think all of us also look at it as a consumer, as we
    purchase and use these products. And it is something that I
    think is of deep concern to us as we evaluate the safety of the
    products that have made their way into the U.S. retail
    mainstream. It is something that affects every single
    socioeconomic level.
        And I think it is of concern to us that we see an up-tick
    in the occurrences of products that contain toxins and it is
    going to be imperative that this subcommittee carefully examine
    these problems that have been brought on by both the recent and
    the not-so-recent recalls that are in this industry and to look
    for a solution that is going to give peace of mind to the
    American consumers. There is no substitute for a safe
    marketplace and I know that our witnesses today are going to
    talk with us about effective policy and what they see is
    effective policy for ensuring that marketplace.
        Now, I hope that, as we approach this, that we have an eye
    towards solving the problem and not pointing fingers because a
    solution is what we need to this, whether it is the potential
    inadequacies that the Federal Hazardous Substance Act or the
    regulatory structure at the CPSC or companies that are
    importing, let us agree to isolate the problem and then agree
    to work toward a solution on addressing that. And I hope that
    nobody is going to be tempted to blame all businesses and start
    to paint with a very broad brush and I know that there is going
    to be some that say we need more money and we need a bigger
    regulatory regime and we need new Government programs.
        And many times that will happen, but I think we have to
    ask: Will millions of dollars and new Government spending and
    hundreds of new bureaucratic inspectors prevent willful
    negligence on the part of some of the Chinese regulators? Or
    will they prevent those with the different sets of standards,
    those foreign contractors and those local officials that have
    different sets of standards from ours, those in developing
    nations, from preventing shoddy quality control of product
    manufactured in their country?
        Now, on the issue of funding, knowing this would come up, I
    went back and looked at this. The current budget authority and
    the appropriated funding levels for the CPSC are nearly $10
    million higher for fiscal year 2007 than it was in the final
    year of all Democratic government in 1994 and that is in the
    term of 2006 dollars and that is taking inflation into account.
    So we have got more money that is there for the CPSC than in
    1994. And clearly then, it is hardly a direct correlation
    between additional funding and new employees and a hazard-free
    marketplace.
        So then we have to say what is the problem and looking at
    the 43 toy recalls that we have had this year alone and the 14
    separate instances related to unsafe exposure levels to lead
    paint, we have to say that is 43 too many and I know that many
    responsible industry leaders, certainly one in my home State of
    Tennessee, are already acting above industry standards and are
    testing imported products for toxic components at levels that
    exceed the Federal standard, whether it is lead or otherwise.
    And it seems to me that these actions are instructive and that
    we can learn from these companies who have taken the
    initiative.
        We all know that the private sector is a partner with the
    Federal Government in determining that the U.S. marketplace is
    safe from toxic products and we want to be certain that
    everyone lives up to their responsibility and then see if there
    are additional steps that are needed. Mr. Chairman, I thank you
    again for the hearing. I am looking forward to hearing from our
    witnesses. We welcome you and I yield the balance of my time.
        Mr. Rush. The Chair recognizes the gentlelady from
    Colorado, Ms. DeGette, for 5 minutes.

     OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF COLORADO

        Ms. DeGette. Thank you very much, Mr. Chairman. I will
    submit my full statement for the record, but to avoid trying to
    be redundant, I just want to say the parents of this country
    right now really feel like they are under siege and if you had
    to ask me, when I ran for Congress 10 years ago, would I be
    sitting in a consumer protection hearing in 2007 talking about
    lead paint in toys, I would have laughed and frankly, most of
    the parents of America would have laughed because they thought,
    maybe 30 years ago, that the problem of lead paint in toys had
    been resolved.
        But what has happened in the meantime is about 86 percent
    of our toys are coming from China and obviously our regulatory
    scheme, both the Consumer Product Safety Commission, the
    independent toy manufacturers and others, are simply not
    stepping up to meet the oversight demands that that increased
    number of imports is bringing on us. The reason I say the
    parents of America feel like we are under siege is it is coming
    at us from all sides. We buy spinach for our children thinking
    that we are feeding them healthy foods and then they end up
    with E. coli or salmonella because of our food safety
    inspection system.
        We buy, as the ranking member, Mr. Barton, said, Thomas the
    Tank Engine for our nephews or our sons and we have to worry
    about whether those toys are contaminated by lead. So with all
    due respect to my friend from Tennessee, Mrs. Blackburn and
    others, I think that we need to take a long, hard look at the
    consumer product review, the entire situation in this country,
    and see why we are having such extreme lapses. Last week, my
    staff wrote, in my statement, I am a parent of two daughters
    and I remember buying them toys, as kids, but in fact, last
    week I found a princess crown and some other things, some rings
    and earrings and things in my car that my 13-year old daughter
    had bought. I guess that says something about my 13-year old
    daughter.
        She brought this stuff home and it was manufactured in
    China and I was sitting in the car looking at it, trying to
    decide should I put it in the bag for Goodwill or should I put
    it in the bag of paint and paint thinner that I was taking to
    the toxic waste disposal site. That is really kind of sad when
    parents are thinking about that, Mr. Chairman, and it turns out
    that my concerns were probably well-founded. Ms. Hooley talked
    about how there were 15 recalls by the Consumer Product Safety
    Commission last year, but before 2007, there were an average of
    four recalls a year. So obviously, it is skyrocketing up.
        And what is even worse, the Consumer Product Safety
    Commission found that of the 113 recall notices for children's
    product, 42 were for toys and 71 were for other children's
    products like jewelry. And in fact, of these, 38 percent had to
    do with excessive lead. So in fact, 7 million pieces of
    children's jewelry last year, like the ones that were in my
    car, were contaminated with lead and these are things that
    little girls are putting on their heads and in their mouths and
    on their fingers and on their ears. We can't accept that and we
    can't accept a regulatory scheme that allows that.
        So Mr. Chairman, I think that this 2-day hearing is one of
    the most important things we can do in Congress this fall
    because many of my colleagues have said, accurately, that the
    blame is well spread around and the solution is not simple. I
    will say one thing, though, and again, I need to respectfully
    disagree with my friend from Tennessee, if you are not going to
    have adequate and robust oversight, it is hard to see how you
    can avoid some of these problems.
        In fact, if you look historically, since 1981, the Consumer
    Product Safety Commission has shrunk from 1,000 employees to
    about 400 today. President Bush's budget that he has submitted
    would actually cost the Consumer Product Safety Commission 19
    more employees. So in truth, while throwing money at problems
    never works, you have to have a regulatory scheme that is
    robust and that is adequately enough staffed. And I think that
    is part of the solution, but industry has to step up as well,
    and we all know that.
        With that, I will yield back, Mr. Chairman.
        [The prepared statement of Ms. DeGette follows:]

    Prepared Statement of Hon. Diana DeGette, a Representative in Congress
                           from the State of Colorado

         Thank you, Mr. Chairman, and thank you for holding this 2-
    day hearing.
         The fact that this hearing is 2 days shows how important
    the topic is--protecting the interests of children. Children
    are our most precious resource, for they are the future of this
    country. If we want a bright future for them, and for us, we
    have to make sure they are made healthy, through appropriate
    health care, provided a first class-education, and be kept
    safe.
         We have a long way to go in all of these areas, but this
    past year has shown acute failures in our ability to protect
    children from dangerous toys. In particular, they have been
    exposed to millions of products with dangerous levels of lead
    paint and lead content.
         Protecting kids from lead is not some wild-eyed notion.
    Lead is contaminant which can cause serious health problems and
    even death. Lead builds up in the blood stream overtime and
    causes developmental and behavioral problems in children. For
    example, studies have shown that lead in the body can reduce a
    child's IQ. Acute lead poisoning, caused when one quickly
    ingests a large amount of lead, can cause serious injury or
    death. Kids get exposed to lead by chewing on or swallowing
    toys covered in paint or otherwise tainted by lead.
         I'm a parent of two daughters I remember buying them toys
    as kids. Simply put, parents want to feel secure that when they
    do something nice for their kids they aren't unknowingly giving
    them a toy that could be deadly. Hard-working and busy parents
    shouldn't have to figure out which products have lead; and, in
    fact, that would basically be impossible because there is no
    way to know if a toy has lead or lead paint just by looking.
    Parents have to rely on industry and government to prevent
    these dangerous toys from ever getting into the hands of kids.
         On that score, we are failing at an alarming rate.
    According to the prepared testimony of Mr. Thomas Moore,
    Commissioner of the Consumer Product Safety Commission (CPSC),
    prior to 2007, the CPSC had been averaging four recalls per
    year for children's toys with excessive levels of lead paint.
    This year there have already been 15. Overall, the CPSC has
    issued 113 recall notices for children's products this year, 42
    for toys and 71 for other children's products, like jewelry. Of
    these 38 percent had to do with excessive lead. In terms of raw
    numbers that comes to 7 million pieces of children's jewelry.
         Some of these recalls were pretty high profile. Mattel
    alone had three separate, massive recalls, including ones which
    covered such popular products as those involving Sesame Street,
    Dora the Explorer, and Barbie. It wasn't just Mattel either--
    RC2 Corporation had to recall 1.5 million Thomas the Train toy
    cars.
         Most of these toys were made abroad, particularly in
    China, and much has been made of that fact. China is now our
    second largest trading partner; our trade with it has grown to
    $343 billion per year. We get 86 percent of our toys from
    China.
         Relying on imports from China to such a large extent
    creates significant problems, not only with respect to toys but
    food safety as well. Getting business in China means keeping
    costs low, which some do by cutting corners and using cheaper
    lead paint or lead products. Its consumer protection laws are
    weak and, most importantly, at many levels there is a lack of
    enforcement. Corruption is a significant problem. While I think
    relying on China alone to combat this is foolhardy, we do need
    to work with the Chinese to improve their regulatory
    enforcement. I am pleased that that is being worked on by the
    CPSC.
         But, at the end of the day protecting American consumers
    is the duty of American companies and the American government.
    Americans need to step up and get the job done. Over the years
    we have seen more and more American companies move
    manufacturing overseas in search cheap labor and a lower cost
    of doing business. Regardless of the merits of the behavior, it
    is no excuse for weakening safety protections.
         These companies use contractors, who in turn use
    subcontractors, who in turn use other subcontractors. I know
    companies are trying and have rules to prevent the use of
    unsafe materials. But such a confusing and complex supply chain
    makes it difficult to ensure their own rules are being
    followed. Rules are useless if they are routinely being ignored
    or flouted. These companies need to show more active
    involvement and quality control. They need to have sufficient
    numbers of their own people there at plans, monitoring
    contractors and subcontractors to ensure compliance.
         I know today we are talking about lead-tainted imports and
    manufacturing issues abroad, but I think its worth nothing that
    a recent study found that over 75 percent of all toy recalls
    since 1988 have been due to design defects. Just this year, one
    of the Mattel recalls included products which had small
    magnets. The design of the product was so poor that the magnets
    could fall out and be ingested by children, causing serious
    injury. So, not only do companies need to look at manufacturing
    practices, but design practices as well. It is their
    responsibility to design and create products that are safe.
        Simply relying on industry to police itself is also not
    enough. We need third party verification that standards are
    being followed. That is why I have cosponsored H.R. 3499, the
    ``Children's Products Safety Act of 2007'' sponsored by my good
    friend and colleague Representative Hooley. This bill would
    require all products for kids five and under to have a
    certificate, issued by an independent third party lab, that
    these products comply with our safety standards. And, it would
    prohibit imports that do not have such a certificate.
         Finally, there is a significant role for government and
    the Consumer Product Safety Commission (CPSC), which has the
    mandate to protect consumers from harmful products. Of course,
    that is hard task without sufficient resources.
         The CPSC has shrunk over time, declining from 1,000
    employees in 1981 to about 400 today. Its budget is a paltry
    $62 million in fiscal year 2007. Again according to
    Commissioner Moore, this lack of resources is, not
    surprisingly, negatively impacting the ability of the CPSC to
    do its job. For example, it has only 15 people to work in our
    ports and inspect the thousands of products we import every
    day. What was President Bush's solution to this? A budget that
    Commissioner Moore says would cost the CPSC 19 more employees.
    My friends on the other side of the aisle like to talk about
    cutting big government and its wasteful spending, but I think
    saving money at the expense of children's safety is wrong.
         As I was cleaning out my garage the other day, I was
    organizing all of my kids' old toys. After the recalls of this
    past summer, I started to wonder whether or not I needed to
    separate the toys into ones I could give to charity and ones
    that amounted to hazardous waste. Parents should not have to
    wonder whether or not their kids' toys are deadly. America can
    do better.
         I look forward today to hearing from our witnesses and
    discussing how we can get this system back on track. With that,
    I yield back the balance of my time.
                                  ----------

        Mr. Rush. The Chair thanks the gentlelady. The Chair now
    recognizes the gentleman from California, Mr. Radanovich, for 5
    minutes for an opening statement. I want to thank the gentleman
    for waiving. The Chair now recognizes the gentleman from North
    Carolina, Mr. Butterfield, for an opening statement.

    OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN
               CONGRESS FROM THE STATE OF NORTH CAROLINA

        Mr. Butterfield. Mr. Chairman, I, too, want to thank you
    very much for holding this important hearing today on
    protecting our children and protecting our consumers from lead
    tainted imports. The prevalence of lead tainted products has
    been a serious problem in the United States for many, many
    years and this issue has not received the attention it clearly
    deserves and so this hearing today is very timely. I want to
    commend you, Mr. Chairman, and I want to commend the committee
    and my colleagues on both sides of the aisle for your strong
    commitment to protecting this Nation's most vulnerable
    population, our children.
        Research reveals that contact with lead tainted products
    can seriously impact the health of children. Repeated exposure
    to lead is accumulative and detrimental to the blood system.
    Regular contact can cause reduced IQ, learning disabilities,
    attention deficit disorders, behavioral problems, stunted
    growth and impaired hearing and kidney damage. Further, at high
    levels of exposure, a child may become mentally retarded. He or
    she may fall into a coma, may eventually die. Children can come
    in contact with lead through various sources, one of which is
    toys. And so this is a very, very serious issue.
        In reading the material, it appears that 86 percent of all
    toys sold in the United States are manufactured in China. Major
    toy manufacturers rely on their relationships with contractors
    in countries abroad to ensure the product being manufactured
    meets U.S. standards. Sometimes the highest quality components
    do not go into these products manufactured overseas and the
    safety of children is compromised. And it appears that some of
    our manufacturers are knowingly engaging in this conduct and if
    that happens to be true, and these hearings today will help us
    in that quest for knowledge, then they should be held
    accountable.
        In an effort to combat the potential safety issues that
    arise from contractors with little oversight, the Toy Industry
    Association has proposed new testing requirements which require
    all toys manufactured for sale in the United States to be
    tested by our standards and also standardizes procedures to be
    used industry-wide to verify product compliance with U.S.
    safety standards.
        Mr. Chairman, this is a very good step. It is a very good
    first step in ensuring that products used by our children are
    safe. Our constituents demand that we do our part to oversee
    these industries with the help of the Consumer Product Safety
    Commission. The CPSC, who is charged with protecting the public
    from unreasonable risk of serious injury or death for more than
    15,000 types of consumer products under their jurisdiction, is
    experiencing strained resources, that is obvious. They are
    experiencing very significant backlogs. And I support an
    increase in funding for this agency, but also believe that the
    agency needs a strategic plan in place to ensure consumers
    continue to be protected.
        I am particularly looking forward to the testimony of
    Commissioner Moore, who shares my deep concern for the need to
    reinvigorate and better fund the Consumer Product Safety
    Commission. On that note, Mr. Chairman, I would like to welcome
    the witnesses today and commend them on their dedication to
    this issue and their work for the American people. I look
    forward to their testimony and working with my colleagues and
    stakeholders on this and other product safety issues. This is
    an important dialog that must continue. Our children are our
    future and we must protect them.
        Thank you, Mr. Chairman. I yield back my 1 minute and 15
    seconds.
        Mr. Rush. The Chair thanks the gentleman, and now
    recognizes the gentleman from New York, Mr. Towns, for an
    opening statement.

     OPENING STATEMENT OF HON. EDOLPHUS TOWNS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEW YORK

        Mr. Towns. Thank you very much, Mr. Chairman. Let me begin
    by thanking you, Chairman Rush, and Ranking Member Stearns for
    holding this hearing on protecting our children. I have a
    statement; I would like to submit it for the record, but I want
    to make just a few comments. First of all, the blame game is
    not going to be the solution. I think we should have an open
    and honest discussion, recognizing the fact that if it requires
    additional resources, that we put the resources there. We need
    to make certain that we have a solution. I have a lot of
    concerns. First of all, even in the recalls, nobody seems to
    know whether they are successful, unsuccessful or anything.
    They just announce recall and then after they announce recall,
    they go about another recall and then another recall. But
    nobody seems to know, in terms of whether the recall was
    successful, how many happened to have been returned. Nobody
    seems to know.
        I think, in this day and age, in 2007, and I think that we
    should be in a position to assess and to determine, in terms of
    what is really going on. So I am hoping that in this discussion
    today, that we will look at every aspect and be open about it
    and talk about what we can do to make certain that we move in a
    different direction. We are talking about our children, we are
    talking about the safety of our children and we are talking
    about parents who work real hard to try and purchase these toys
    for their children and all of a sudden they find out that the
    toy is creating a problem. And I think that we owe them more
    than that.
        So I am hoping that this committee will come to grips with
    the fact that if more resources are needed, let us make certain
    that they have the resources. And I am hoping the agencies will
    be honest and tell us if they need. Sometimes agencies will
    come here and knowing that they cannot do the job because they
    do not have resources and will sit at the table and never make
    the request. You know why? And I think that the time has come
    that we must get over that, get past that, because this is a
    very serious situation. We are talking about life and death.
    That is what we are talking about today.
        So I am hoping that you understand and that we can move
    forward with that in mind. And on that note, Mr. Chairman, I
    would like to submit my entire statement that I have for the
    record. And I yield back the balance of my time.
        Mr. Rush. The Chair thanks the gentleman for his comments
    and now recognizes the gentleman from Arkansas, Mr. Ross, for
    purposes of opening statements.

       OPENING STATEMENT OF HON. MIKE ROSS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ARKANSAS

        Mr. Ross. Thank you, Mr. Chairman, for holding this
    expansive hearing on the recent recalls of products containing
    lead. These recent recalls of contaminated toys and other items
    highlight the fact that consumer safety is at risk in America.
    It is especially troubling that these items are used by the
    youngest and obviously, most vulnerable members of society. I
    am troubled that we have reached the level of congressional
    hearings to determine why, in this day and age, in this 21st
    century, our children's health has been put at unnecessary risk
    by contaminated toys, of all things.
        We have a responsibility, a duty, to provide our children
    with the best start in life. Parents deserve answers. We know
    that exposure of lead content can prove to be dangerous, if not
    deadly, to individuals, especially children. And it is my hope
    that over the duration of this hearing we gain a better
    understanding of existing Federal and State limits on lead in
    consumer products. We must further explore the role of the
    Consumer Product Safety Commission's activities to establish
    lead limits for children's products.
        And we need other hearings, Mr. Chairman. Today it is the
    Consumer Product Safety Commission, which we have basically put
    this agency in place, as a Congress, to protect consumers. In
    my opinion, this commission has failed our children and we need
    to determine if a legislative remedy is needed. But in fairness
    to them, it is not just this one agency, but we need to look at
    all the agencies that protect us, as consumers. We raise a lot
    of catfish in Arkansas; it is a big part of our economy. And I
    recently learned that for all the fruits, vegetables and
    seafood coming into America, to all the ports in America from
    all over the world, there is something like 70 FDA inspectors.
    Not per shift, not per port, 70 for all the ports in America,
    for all the fish, seafood, fruits and vegetables coming in. So
    it is another example of how, from a consumer advocacy
    standpoint, we are failing consumers.
        I think it is also important that we review how retailers
    have responded to the current toy crisis and how all industry,
    manufacturers and retailers, can work best with the Government
    to ensure that we have the most robust safety systems in place
    in the United States. As both a parent and an elected official
    representing many parents in Arkansas, I remain committed to
    taking steps to prevent further unnecessary exposure of
    dangerous products to our children. Hopefully, the testimony
    and discussions today and tomorrow will provide us greater
    insight towards possible legislative remedies.
        And with that, Mr. Chairman, I yield back the balance of my
    time.
        Mr. Rush. I want to thank the gentleman. The Chair now
    recognizes the gentleman from Utah, Mr. Matheson.

      OPENING STATEMENT OF HON. JIM MATHESON, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF UTAH

        Mr. Matheson. Thanks, Mr. Chairman. I will be brief. I know
    a lot of opening statements have covered the relevant points to
    be made in opening statements here today, but I guess I would
    just point out that globalization creates both opportunities
    and challenges and today we are talking about addressing one of
    the challenges of globalization, and that is you have a much
    wider supply chain and much more complex set of distribution
    channels to come up with how products are in this country now.
        As I would echo comments on this panel, as a parent, I have
    great concern about making sure, when I buy a product in the
    store, that it is safe and I think a lot of people in this
    country are looking to Congress and to the industry to work to
    come up with the solution that ensures the integrity of when a
    consumer in this country buys a product, they can feel like it
    is safe. And that is the objective we all ought to keep in mind
    as we have these hearings today. Mr. Chairman, I really applaud
    you for scheduling 2 days of hearings on this. I know we will
    have additional work on this as we go forward and I look
    forward to working with you to achieve that goal. Thanks so
    much. I yield back.
        Mr. Rush. I want to thank the gentleman. Now, the Chair
    asks for unanimous consent that two members of the full
    committee, but not members of the subcommittee, be recognized
    for opening statements and to participate in this hearing. So
    the Chair asks for unanimous consent. Is there any objection to
    the Chair's request? Hearing none, the Chair now recognizes the
    gentleman from New Jersey, Mr. Ferguson, for the purposes of
    opening statement.

     OPENING STATEMENT OF HON. MIKE FERGUSON, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF NEW JERSEY

        Mr. Ferguson. Thank you, Mr. Chairman. I am glad to be able
    to return to the subcommittee for a brief time. I want to thank
    you and Ranking Member Stearns for holding this hearing to draw
    attention to this issue that affects every parent and every
    child across our country. I want to thank our witnesses for
    coming today, I look forward to their testimony.
        In recent weeks and months we have been bombarded with
    reports of toy recalls from well known toy manufacturers from
    across the country. In recent months, we all know that Mattel
    has recalled millions of toys representing popular and beloved
    children's characters like Dora the Explorer and Barbie and
    Elmo and Thomas the Tank Engine, toys just like this one. We
    have all seen these. My wife and I have four young kids in our
    house. We went through of all of our toy boxes and found some
    toys. My wife reminded me, just yesterday, that some of the
    toys in our very house, we had to go through and clear them out
    and throw them in the trash.
        Millions of parents across the country are doing the very
    same thing that my wife and I are doing in our house and that
    many of our constituents in New Jersey are doing in their very
    homes, as well. In the past 6 months, nearly 21 million
    Chinese-made toys have been recalled. Eighty-six percent of all
    toy and game imports come from China. As I say, I am sure every
    parent in the country had the same reaction that my wife and I
    did when we began reading these news reports. We have toys like
    these, our kids have put toys like these in their mouths all
    the time. No parent in our country should ever have to worry
    about whether their children's toys are toxic or could make
    them sick.
        If toy companies choose to manufacture their products in
    China, they need to take every precaution that those toys meet
    U.S. safety standards. If they don't, I believe Congress must
    give Federal regulators the authority to ensure that our kids'
    toys won't actually harm them. America's moms and dads
    shouldn't be worried that the health of their children could be
    put at risk when they play with something so simple as the
    Thomas the Tank Engine or Dora the Explorer backpacks. They
    expect that established safeguards are in place to protect
    their kids.
        It is our responsibility, as lawmakers and parents and
    educator and law enforcement, to do everything possible to
    protect our children at all costs. We will not settle for un-
    enforced standards or lax inspections when our children's
    safety is at stake. And that is why I, along with my friend
    from New York, Mr. Towns, have introduced H.R. 3477, the Safe
    Toys for Kids Act. This bipartisan legislation would ban
    uncertified imports from entering the United States by
    requiring that all imported children's products be tested and
    certified by an independent group.
        This bill is the House companion to legislation that
    Senators Durbin and Nelson have introduced in the Senate. In
    light of these national recalls, I am pleased to see that
    companies like Toys R Us and Disney have stepped up to announce
    that they intend to recheck and increase checks on products on
    store shelves. Currently, the U.S. Consumer Product Safety
    Commission allows manufacturers to inspect their own children's
    products. However, this is clearly, as we have learned, is not
    enough. Our bill would require an independent group to test
    both imported and domestic toys geared toward children 5 years
    and younger.
        This legislation will go far in ensuring that parents can
    buy toys for their children with the peace of mind that what
    they are bringing into their home is only of the highest
    quality. Now, we know that our parents and our children deserve
    nothing less than that. While this is not a cure-all, I believe
    it is a good framework to begin a discussion on what we can do
    to prevent these dangerous and sometimes even deadly toys from
    falling into the hands of our Nation's children.
        I look forward to hearing our witnesses' testimony. I am
    anxious to hear their ideas on how we can work together to
    solve this problem. I want to thank the committee and the
    chairman and the ranking member once again for holding these
    hearings and again, thank you for allowing me to participate. I
    yield back.
        Mr. Rush. As stated before, the Chair extends the unanimous
    consent request to the gentlelady from California, Ms. Harman,
    who is recognized for 5 minutes for an opening statement.

      OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Ms. Harman. Thank you, Mr. Chairman, and thanks to Mr.
    Stearns for extending me this privilege. I am a member of the
    full committee and I have watched attention paid to this issue
    with great interest. There were Senate hearings last week and
    the hearings that you are planning for today and tomorrow are
    obviously critical. I came down here for several reasons. Like
    many on this committee, I am a mother, in my case, of four
    children. I am a grandmother of one with two more on the way.
    My granddaughter, Lucy, is a fanatic for Elmo, her favorite
    toy, who is all over her room and in my own office upstairs, I
    have a collection of Barbie dolls, one of them is Barbie for
    President. Why not?
        My other reason for being here, however, is that in my
    district is El Segundo, CA, the home of Mattel, and we will
    hear from Bob Eckert on the second panel. He is, in addition to
    the chairman and CEO of the largest toy manufacturer in the
    United States, he is also the employer of 2,000 or so of my
    constituents and it is of great interest to me that they
    continue to be productively employed in a company that
    continues to be the largest manufacturer of toys in the United
    States.
        Kids die from lead. Everyone has made this point. That is
    our first obligation. But employees lose jobs if manufacturers
    don't behave responsibly and I believe that Mattel is complying
    with the requests of this committee and going to make even more
    efforts to behave responsibly and this mother is on the case to
    assure you that that happens.
        Let me just make a couple of additional comments. In my
    personal conversation with Bob Eckert last week, I was
    impressed by the steps he wants to take. I did listen to his
    Senate testimony where he said he took personal responsibility
    on behalf of his company for the actions it had taken and the
    actions that it will take. I applaud that. I think those steps
    that he wants to take are useful. I also suggested that he
    consider taking over ownership of all of Mattel's plants in
    China; Mattel owns 50 percent of those plants, but taking over
    ownership of all of them so that he can more effectively
    monitor the paint used and other safety issues, but also
    consider moving some of his manufacturing back to the United
    States.
        It occurs to me that that could be a win-win since, as we
    all know, the United States and the Consumer Product Safety
    Commission has banned lead paint on toys and children's
    furniture since 1978 and it is obviously easier to make sure
    those standards are observed here. My bottom line is that this
    hearing matters. Additional Federal regulation matters. But the
    taking of responsibility by those who run America's big
    corporations is also central to solving this problem and I am
    watching closely, as we all are, to make certain that Mattel,
    in particular, takes personal responsibility and does the most
    it can do to solve the problem that will protect the
    professional livelihoods of its workers and it will certainly
    guarantee that Lucy Peck, my granddaughter, can buy more Elmo
    dolls and enjoy the toys that she obviously loves.
        And it will finally protect this enormous legacy of Barbie,
    which I think has in, a kind of interesting way, been a symbol,
    both for some of the excesses of America, but also some of the
    goals of American girls and women, and I am pleased that we are
    having this hearing and look forward to participating.
        Mr. Rush. I want to thank the gentlelady. There is a vote
    that has been called on the floor. We have one 15-minute vote
    and two 5-minute votes. It is the intent of the Chair to ask
    our two witnesses of panel I to come and give us an opening
    statement and that after they conclude their opening statement
    of 5 minutes apiece, we will recess to go to vote and then we
    will come back for questioning.
         So now the Chair invites the two witnesses, the one
    witness, the Honorable Nancy A. Nord, the Acting Chairman of
    the Consumer Product Safety Commission; the other witness on
    panel I is the Honorable Thomas H. Moore, the Commissioner of
    the Consumer Product Safety Commission.
        We certainly thank you for appearing before this
    subcommittee, taking the time out from your busy schedule to
    engage in this deliberation. Please keep your opening
    statements to 5 minutes because we do have to get over for this
    vote. The Chair now recognizes the Acting Chairman of the
    Consumer Product Safety Commission, Ms. Nord, for 5 minutes.

     STATEMENT OF NANCY A. NORD, ACTING CHAIRMAN, CONSUMER PRODUCT
                           SAFETY COMMISSION

        Ms. Nord. Chairman Rush, Congressman Stearns, thank you for
    the opportunity to again come before the subcommittee, this
    time to discuss the important issue of lead exposure to
    children. Lead poisoning in children can cause learning
    disabilities and behavioral problems and because it often
    occurs with no obvious symptoms, it frequently goes
    unrecognized. In high enough concentrations, lead can also be
    fatal. While it is critical to understand the dangers of lead,
    it is also important to recognize that the United States has
    made tremendous progress in reducing the blood lead levels of
    children.
        The percent of children aged 1 to 5 having excessive blood
    lead levels declined from an astonishing 78 percent in the mid-
    1970s to just under 1.6 percent in 2002. This achievement was
    due primarily to the phasing out of leaded gasoline and the ban
    on lead-based house paint in the 1970s. Still, an estimated
    300,000 children continue to have excessive blood lead levels
    and many of them are low-income and minority children. In fact,
    the overwhelming source of lead exposure to children today is
    lead house paint and lead contaminated dust found in old,
    deteriorating buildings.
        As outlined in my written statement, the CPSC has a long
    and active history in eliminating lead exposure from consumer
    products. But it is important to recognize that the CPSC must
    have a legal basis for taking action to remove any product from
    the marketplace. Our governing statutes set out certain
    criteria that we must, by law, follow. With respect to the
    Federal Hazardous Substances Act, which governs most children's
    products. The law requires a finding that the lead in the
    product is accessible to the child before we can legally act.
    That is not merely that the lead is present, but there is
    actual exposure to the lead in the product.
        An example of where we have found the needed exposure to
    justify regulatory action is children's metal jewelry. This is
    because when it is ingested, the lead in the jewelry can leech
    into the child's system. In 2005 the CPSC issued an enforcement
    policy stating that we would recall any children's jewelry
    containing more than trace amounts of lead and setting out how
    we would test for that lead. This was followed last year by the
    initiating of a rulemaking to permanently effect a ban. In the
    meantime, we have initiated an aggressive market surveillance
    testing and recall program for children's jewelry containing
    lead that since 2004 has resulted in over 170 million units
    being removed from the marketplace, more than any other product
    category in the history of the agency.
        Now, Mr. Chairman, I would like to briefly address the
    topic that has thrust our small agency into the spotlight and
    that is this summer's recalls due to lead-based paint. Here we
    are not so much concerned about exposure to the lead, because
    there is a statutory ban on lead-based paint, so it is a per se
    violation, regardless of exposure. What happened, why the
    sudden rash of recalls for violation of this ban. Well, the
    first point is that this year's recalls are not unique. Every
    year there are at least a few lead-based paint recalls.
        This June, however, we had an unusually large recall of the
    popular Thomas the Tank Engine toys manufactured in China. This
    came on the heels of some very high profile recalls of Chinese-
    made pet food, toothpaste and other food and drug products. But
    even before the media attention began, due to the size and the
    scope of the Thomas recall, we immediately began a sampling
    program to test for lead paint on other toys. This, coupled
    with the publicity of the toy train recall, caused Mattel and
    other companies to closely examine their own toy inventories.
    The result were the additional recalls that we announced over
    the last 2 months.
        While it may appear that we are undergoing an epidemic of
    lead paint on toys, these recalls have served their intended
    purpose. Not only are they getting violated products off the
    shelves and out of consumers' hands, but they have caused the
    entire toy industry to change practices to prevent such
    violations from occurring in the future.
        But finally, Mr. Chairman, as members of the subcommittee
    have pointed out, it is really critical to prevent unsafe
    products from reaching consumers in the first place and our
    China program is an important step. And last week we signed an
    agreement with the Chinese Government which pledged, for the
    very first time, to undertake a series of concrete steps to
    reduce the export of unsafe consumer products to the United
    States. While I am cautiously, and I underscore the word
    cautiously, optimistic that this agreement will help reduce
    violations of our standards, I also recognize that follow-up is
    critical.
        I note that the agreement is not a one-way street. The CPSC
    has also agreed to undertake a number of educational, training
    and communication activities to make sure that the Chinese
    Government and exporters fully understand and adhere to U.S.
    safety requirements. These activities, if they serve their
    intended purposes, I think the effect will be much more
    significant and much more long-lasting than simply putting a
    few more inspectors at the U.S. ports.
        Mr. Chairman, far from shrinking from the recent publicity
    that the CPSC has faced, sir, I welcome it. Our small agency, I
    think, has been ignored by the Hill and by the public for way
    too long. I have sent to you some proposals and I would again
    ask that you seriously the legislative proposals I have made
    because I think they would significantly strengthen our
    responsibilities. Sir, everyone at the CPSC, myself, we are all
    parents and we take our responsibilities very seriously. I
    applaud you on this hearing. I look forward to helping you.
        [The prepared statement of Ms. Nord follows:]

                           Statement of Nancy A. Nord

        Mr. Chairman:
        Thank you for inviting me to testify today on the critical
    issue of protecting the American public from unsafe consumer
    products, including imported children's products that contain
    lead. Eliminating children's exposure to lead in consumer
    products has consistently been among the highest priorities of
    the U.S. Consumer Product Safety Commission (CPSC) and has been
    part of our core mission since the inception of the agency in
    1973.
        The history of the CPSC'S actions to abate lead hazards is
    well-known and well-respected. When products that expose
    children to lead are discovered in U.S. distribution channels
    in violation of our laws, the CPSC acts decisively. We have a
    very active lead program, both to enforce the statutory ban on
    lead paint for home use and to analyze and act upon accessible
    lead in a variety of other products.
        While the issue of lead exposure to children unquestionably
    continues to be a serious one, the United States has made
    dramatic progress on this front. A Federal study of the issue
    estimated that the percentage of children aged 1 to 5 years old
    with blood lead levels in excess of 10 micrograms per deciliter
    had declined from 77.8 percent for the 4-year period starting
    in 1976 to 1.6 percent for the period 1999 to 2002.
        While the phase-out of leaded gasoline and the CPSC ban on
    lead paint are key factors behind this progress, deteriorating
    lead paint in older dwellings remains the primary source of
    lead intake for children. The CPSC has been and continues to be
    ever vigilant and assertive in this ongoing war against
    children's exposure to lead in products under our jurisdiction.
        Examples of the actions that the CPSC has taken over the
    last decade include:

        1996--CPSC staff found that certain vinyl mini-blinds
    deteriorated when exposed to heat and sunlight, creating lead
    dust that could be ingested. At the Commission's insistence,
    the industry ceased manufacture of vinyl mini-blinds that posed
    the risk.
        1998--The Commission issued a policy statement urging
    manufacturers to eliminate lead in all children's products and
    published this guidance in the Code of Federal Regulations.
        2000--CPSC staff discovered lead in certain candy wrappers
    on candy imported from Mexico, and at CPSC'S insistence, the
    importation of such candy was terminated.
        2003--The Commission promulgated a regulation banning
    candles having candlewicks containing more than 0.06 percent
    lead.
        2004--CPSC'S lead hazard reduction efforts were further
    expanded with an initiative focused on children's metal jewelry
    after staff tested samples and found a significant number
    contained high levels of accessible lead. That initiative
    resulted in the recalls of more than 150 million pieces of
    inexpensive children's metal jewelry.
        2005--The CPSC issued a new enforcement policy and testing
    protocol specifying how to test for accessible lead in
    children's metal jewelry and recommending screening under CPSC
    test procedures. Since that time, importers and retailers have
    recalled millions of additional potentially unsafe children's
    metal jewelry products.
        2006--The Commission commenced a rulemaking that may result
    in a regulation effectively banning lead in children's metal
    jewelry.
        2007--The CPSC is currently engaged with ASTM, a standards
    development organization, to develop a new product safety
    standard to eliminate or significantly reduce children's
    exposure to lead in children's vinyl products.

        The Commission acts on a product hazard, whether through
    recalls or regulation, under the legal authority that Congress
    has provided in our governing statutes. The Commission banned
    lead paint on toys and children's furniture in 1978. The agency
    has vigorously enforced that ban ever since, including through
    the highly publicized toy recalls this summer.
        This ban on lead paint contrasts with our statutory
    authority for dealing with lead and other heavy metals that
    might be found in children's products. The popular notion that
    CPSC has the authority to issue a rule that bans any lead in
    all ``children's products'' is erroneous; the law requires that
    the agency consider exposure and risk by the product.
        The Federal Hazardous Substances Act (FHSA) does not
    authorize CPSC to regulate lead in a product unless it may
    cause ``substantial personal injury'' or ``substantial
    illness'' under ``reasonably foreseeable'' conditions of use.
    That statute itself bans ``any toy or other article intended
    for use by children, which is a hazardous substance, or which
    bears or contains a hazardous substance in such manner as to be
    susceptible of access by a child to whom such toy or other
    article is entrusted.''
        I underscore this distinction because the significant
    recalls that the CPSC has announced this summer with regard to
    lead involve two distinct classes of children's products, that
    is, those that bear banned lead paint, such as Thomas the Tank
    Engine, and those that have accessible lead content, such as
    children's metal jewelry. As noted above, lead paint in
    children's products has been banned since 1978, and the
    Commission has initiated a rulemaking to ban on lead in
    children's metal jewelry.
        The Congress was farsighted when it crafted the CPSC'S
    governing statute. When the law was written in 1973 (and I
    would note Chairman Dingell's key role in authoring and
    enacting this important legislation), Congress recognized that
    this new agency could not impose U.S. law on foreign
    manufacturers, so our statutes hold everyone in the stream of
    commerce in the U.S. responsible and potentially liable. In
    brief, the American importer, as well as the domestic
    distributor and retailer, is held responsible for complying
    with U.S. rules.
        However, what the Congress could not foresee 34 years ago
    was the reliance on imports that we are now facing. That is one
    reason that I believe it is in the best interests of consumer
    product safety to modernize CPSC'S statutes and to strengthen
    the agency's hand in protecting the American public.
        As you know, the CPSC was last reauthorized by Congress in
    1990 for a period of two years. The marketplace has changed
    dramatically in the seventeen years that have passed since
    Congress last revised our statutes. Not only are there new
    technologies that have emerged, and continue to emerge, in
    creating and manufacturing products, but also technology has
    significantly changed the way that consumers shop and purchase
    goods and the way that the public receives information. Most of
    America's consumer products, not just toys, now come from
    overseas manufacturers. Much has changed in the marketplace, in
    technology and in communications since 1990.
        The result is that the inspection and enforcement tools at
    the agency's disposal with respect to imported products are not
    as strong as they need to be. This is one of the key reasons
    that several months ago I sent to Congress legislative
    proposals aimed at improving the safety of both imports and
    domestically produced products through a variety of means. Many
    of these proposals are reflected in various bills that have
    been introduced in both the House and the Senate.
        In addition to the dramatic shift from domestically
    produced consumer goods to imports, other challenges require
    the modernization of the CPSC'S statutory authorities. For
    example, I have proposed that in instances of direct-to-
    consumer sales from overseas manufacturers (including those via
    the Internet), the foreign manufacturer or exporter be the U.S.
    importer of record.
        My legislative proposals are the first part of a multi-
    pronged approach that the agency is pursuing to address the
    issue of Chinese imports. In addition to modernization of our
    governing statutes, the CPSC'S initiative includes dialogue and
    initiatives with the Chinese government; working with the
    private sector including Chinese manufacturers directly; and
    increased surveillance and enforcement activities at the
    borders and within the marketplace.
        Historically, CPSC has not actively engaged in
    international activities. However, in 2004, recognizing the
    continuous and significant increase in the number of imported
    consumer products entering the American marketplace from China,
    my predecessor became the first Chairman of the CPSC to travel
    to that country. That first step was the genesis for a formal
    relationship between the CPSC and the General Administration of
    Quality Supervision, Inspection and Quarantine (AQSIQ), our
    counterpart agency in China, and it resulted in the signing of
    a Memorandum of Understanding (MOU) between our two nations
    later that year. Since becoming Acting Chairman last year, I
    have viewed the task of building upon that foundation as one of
    my highest priorities.
        In 2005, at the first U.S.-Sino Product Safety Summit, the
    CPSC signed an Action Plan on Consumer Product Safety with
    AQSIQ. The Action Plan created Working Groups to address issues
    in four priority areas' fireworks, lighters, electrical
    products and toys.
        The tasks of the Working Groups are to develop strategies
    to address safety problems; to be able to respond quickly to
    urgent product safety issues; to exchange information on
    changes to safety standards; and to exchange laboratory and
    inspection personnel in each other's respective facilities.
        At the beginning of this year, we identified and
    communicated to our Chinese counterparts specific problems and
    proposed actions to address these problems with respect to each
    of the four product categories covered by the Working Groups.
    One of the problems we flagged was the use of lead paint on
    toys in contravention of our ban. In May 2007, I traveled to
    China with a delegation of top CPSC officials for in-depth
    discussions of the issues identified by this process.
        This hard work culminated last week at the U.S.-Sino
    Product Safety Summit held here in Washington between the CPSC
    and our Chinese counterpart agency, AQSIQ. I am pleased to
    report that we reached an important agreement with AQSIQ, under
    which China will immediately implement a plan to eliminate the
    use of lead paint on Chinese manufactured toys exported to the
    United States. They are going to make sure there is no lead in
    the paint through inspections of U.S. destined toys and a
    certification system for paint suppliers.
        Since China has a weaker standard for lead paint than the
    United States, it is really quite extraordinary that the
    Chinese agreed to enforce the stricter American standard.
        China also agreed to broad cooperation with the CPSC in the
    four major product areas that I mentioned above. In each of the
    four work plans, China has agreed to cooperate with the CPSC to
    ensure that its producers understand and comply with U.S.
    safety standards for all of their exports to the United States.
    The work plans provide a roadmap to improve the safety of these
    products through five main avenues:
        First, in cooperation with the CPSC, AQSIQ has agreed to
    increase its inspections of products destined for the U.S. and
    to undertake other activities to ensure that exports meet all
    applicable safety standards. They have even pledged to
    encourage Chinese manufacturers to meet UL ``voluntary''
    standards for electrical products.
        Second, AQSIQ, again in full cooperation and participation
    with the CPSC, will expand the knowledge and understanding of
    U.S. product safety standards among Chinese manufacturers and
    exporters.
        Third, the CPSC and AQSIQ have agreed to various technical
    personnel exchanges and training activities to ensure full and
    mutual understanding of our respective laws and systems,
    including product testing methodologies.
        Fourth, we have respectively agreed to establish regular
    and systematic exchanges of information about emerging product
    safety issues, including monthly discussions of recall
    activities and trends.
        Fifth, AQSIQ has agreed to specific steps to assist the
    CPSC in tracing products with identified safety problems to
    those Chinese firms involved in their manufacture, distribution
    and export. This will enable both of our agencies to better and
    more quickly address safety issues as they arise.
        This is significant achievement, and while it is in China's
    economic interest to enforce U.S. safety standards, we will
    nonetheless be following up to assure that the Chinese
    government fully implements this commitment. The CPSC will need
    to stay engaged with the Chinese in order to get the follow
    through that we are looking for. I am committed to that.
        The third prong of our plan to address Chinese imports is
    to work with the private sector, both here in the U.S. as well
    as in China, to educate the Chinese manufacturers and exporters
    not only of the content of U.S. product safety standards, but
    also the importance of adhering to those standards, including
    adhering to consensus or what we commonly call ``voluntary''
    standards.
        As part of our plan to address this problem, in 2005 the
    CPSC published the Handbook for Manufacturing Safer Consumer
    Products underscoring our message that safety must be designed
    and built into consumer products in conformance with safety
    systems planned, established and implemented at the direction
    of executive management. The Handbook presents a comprehensive
    systematic approach to manufacturing safe products and has been
    published in Chinese and distributed throughout China.
        In 2006 CPSC facilitated the translation of the summary
    provisions of nearly 300 U.S. mandatory and voluntary consumer
    product safety standards into Chinese to assist Chinese
    manufacturers in understanding what U.S. product safety
    standards require when manufacturing various products. CPSC
    determined which standards would be translated primarily by
    analyzing what imported Chinese products were recalled in the
    largest numbers and selecting the corresponding U.S. mandatory
    or voluntary standards for translation. The translation of
    these provisions of U.S. product safety standards facilitates
    Chinese manufacturers' understanding of what is required of
    them when they manufacture products for the U.S. market.
        The CPSC has also conducted industry-specific safety
    seminars and retail and vendor training seminars in China.
    Staff has conducted a number of other safety training
    activities in China dealing with toy safety, electrical product
    safety, fireworks safety and a supplier safety seminar for
    retailers.
        Finally, we are undertaking conversations with specific
    industry groups to encourage testing and certification
    programs. For example, ANSI and other standards, industry and
    retail groups are considering the development of testing and
    certification programs. The toy industry has already announced
    plans to move forward with such a program.
        The fourth prong of our plan of action for Chinese imports
    is increased surveillance and enforcement activities. Although
    the Commission was without a quorum for over six months, the
    agency has been active in addressing the challenge of imported
    products, not only directly with the Chinese government, but
    also here in the United States. In Fiscal Year 2006, the CPSC
    announced an all-time record number of recalls of defective
    products. These recalls represented a wide range of consumer
    products and product hazards. Over two-thirds of these recalls
    were of imported products, primarily from China.
        CPSC'S Compliance staff working in conjunction with U.S.
    Customs and Border Protection (CBP) undertakes both routine and
    targeted surveillance and sampling of products at U.S. ports of
    entry. CPSC recently began participating in the Automated
    Commercial Environment (ACE). ACE is the new U.S. CBP
    processing system that strengthens our ability to identify
    likely shipments of non-compliant products before they arrive
    at U.S. ports. Our early experience with using the ACE system
    indicates that it will provide us with better data at an
    earlier point in the process so that our port inspection
    activities can be precisely targeted and thus more effective.
        CPSC obviously attempts to keep dangerous products from
    entering into the country in the first instance. However, in
    the event a defective product does enter the stream of
    commerce, CPSC has been taking stronger measures to effectively
    remove such products from the marketplace. For example, after a
    product has been recalled, CPSC has stepped up the number of
    recall verification inspections of the recalling firms to
    ensure the product is being removed from the marketplace. CPSC
    has also adopted a new practice of notifying major retailers of
    all CPSC recalls, as well as routinely conducting internet
    searches for sales of recalled products.
        In contrast to the Food and Drug Administration or the
    Department of Agriculture, the CPSC is a small agency without
    the resources or authority to perform overseas pre-inspections
    or large-scale port screening for all of the items under our
    jurisdiction. In fact, CPSC has no direct authority to handle
    imported products at the ports, much less to detain or seize
    them. Our statutes recognize that Customs and Border Protection
    has the direct authority to deal with imported products at the
    ports of entry.
        We are committed to our mission, and within the constraints
    of our authorities and resources, the staff at the CPSC
    enforces the law aggressively. In view of the recalls that the
    CPSC has announced this year, parents and caregivers are
    understandably concerned. The Commission and the CPSC staff
    respect this concern, and whether the product is manufactured
    overseas or here in the United States, our goal is to keep
    unsafe products out of the stream of commerce and out of
    America's homes, yards and recreation areas.
        Thank you for this opportunity to testify this morning and
    I look forward to answering your questions.
                                  ----------

        Mr. Rush. The Chair thanks the acting chairperson. Now, the
    Chair recognizes the Honorable Thomas H. Moore, a commissioner
    of the Consumer Product Safety Commission for 5 minutes.

     STATEMENT OF THOMAS H. MOORE, COMMISSIONER, CONSUMER PRODUCT
                           SAFETY COMMISSION

        Mr. Moore. Thank you, Mr. Chairman. Mr. Chairman and
    ranking member and members of the subcommittee, thank you for
    providing me with this opportunity to present testimony at this
    hearing on the important issues surrounding protecting children
    from lead-tainted imports. Recalls of children's products
    containing lead or lead paint have received an enormous amount
    of attention. It is very encouraging for me to see that our
    lawmakers are dedicating themselves to working with the
    commission to define real solutions to resource and authority
    issues that may be at the root of these kinds of and other
    product safety problems finding their way into the stream of
    commerce in our country.
        The key to an effective regulatory and enforcement body is
    sufficient resources to carry out its responsibilities and
    mission. The CPSC is a staff-intensive organization. I have
    always expressed that at the heart of CPSC's operation is its
    staff, without question, our greatest and most important asset.
    Over the last few years, because we have achieved our budget
    required staff reductions through non-targeted means, such as
    attrition, early outs and buy-outs, we have lost some very key
    staffers. Over time, we hope to be able to train replacements,
    but the experience that we have lost will take years to
    recover. Moreover, the lack of sufficient resources has
    severely limited our ability to do succession training,
    planning and severely limited our ability to have depth of
    personnel behind our key positions.
        This summer has most definitely been the summer of the
    recalled toys made in China. There have been several highly
    publicized recalls of children's products made in China for
    importation and sale by well-established and long trusted
    domestic toy manufacturers. The safety issues associated with
    the increase in imports have created new challenges for our
    commission. The commission is currently looking at ways to
    address the developing issues surrounding imported consumer
    product safety. We are involved in some activities, such as
    dialog and initiatives with foreign governments and the private
    sector, including domestic and foreign manufacturers.
        For example, last week the commission signed a joint
    statement in which our product safety counterparts in the
    Chinese Government proposed to stop the use of lead paint in
    the manufacture of toys they export to the United States.
    However, we must be cautious in our dependence on foreign
    governments to make sure that products exported from their
    countries comply with our safety standards. Other countries
    expect, as we do, that the receiving country's regulators of
    the marketplace will find and address problems with products
    within their own borders.
        Our own statute makes it clear, as does legislative
    history, that it is not the commission's concern whether a
    product made in the U.S. for export meets the mandatory or
    voluntary product safety standards of other countries. It may
    be a bit unreasonable for us to realistically expect more from
    other countries than that which we expect of ourselves. We, at
    the commission, are also working with interested Members in
    both the House and the Senate to modernize our governing
    statutes to give us more leverage through the regulatory
    process and our enforcement activities.
        This subcommittee, in particular, has been tremendously
    engaged in our issues from the very beginning of this Congress
    and must be given credit for providing the impetus for
    recommendations for legislative action submitted by members of
    the commission to the House, the Senate and the administration.
    Some of the highly publicized recalls this summer have involved
    children's products that contain lead or contain paint that has
    lead in it. Toys or other articles intended for use by children
    that bear lead containing paint are banned, hazardous products.
        It is a prohibited act to introduce or deliver this
    introduction into interstate commerce of banned, hazardous
    substances. Any person who violates this law could be subject
    to both criminal and civil sanction. As far as children's
    products, such as jewelry or vinyl babies bibs containing
    accessible lead, I wish that the commission had the authority
    to find it unacceptable for any amount of lead or any other
    toxic substance to be in a children's product. However, our
    statute requires us to assess the accessibility of the lead and
    this is the key measure under the Federal Hazardous Substances
    Act, the FHSA.
        We know that exposure to lead can elevate blood lead levels
    and that such exposure could bring about developmental----
        Mr. Rush. Commissioner, we do have a vote and the time is
    up, and we have got a little over a hundred Members who haven't
    voted and that is what I am looking at, so if you could bring
    your comments to a close so we can run over to vote, I
    certainly would appreciate it and I apologize for the
    inconvenience.
        Mr. Moore. That is all right. I am hopeful that we see
    significant results from all of our efforts and I thank you
    very much for this opportunity.
        [The prepared statement of Mr. Moore follows:]

                          Statement of Thomas H. Moore

         Mr. Chairman, Ranking Member, and Members of the
    Subcommittee, thank you for providing me with this opportunity
    to present testimony at your hearing today on the important
    issues surrounding ``Protecting Children from Lead-Tainted
    Imports.'' Recalls of children's products containing lead or
    lead paint have received an enormous amount of attention during
    recent times. It is very encouraging for me to see that our
    lawmakers are dedicating themselves to working with the
    Commission to define real solutions to resource and authority
    issues that may be at the root of these kinds of, and other,
    product safety problems finding their way into the stream of
    commerce in this country.
         As I have indicated to this House subcommittee and to the
    Senate, I am gratified by the very clear signals given by both
    the House and the Senate Authorizers and Appropriators that
    they understand the very difficult position that the Consumer
    Product Safety Commission (CPSC) finds itself in. For the first
    time since I came to the Commission, over twelve years ago, I
    have the sense that there is a realization of the need for both
    a substantial and sustained increase in our funding level as
    well as the need for real and important changes to our statutes
    which could give us new authorities and clearer direction in
    achieving our mission.
         In March of this year, in a written statement to the
    Senate Committee on Commerce, Science, and Transportation, I
    spoke about the problems associated with any perception of our
    modern, sophisticated marketplace of today effectively
    regulating itself for product safety. ``Simply stated,
    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.''
         As if on cue, we now sit here less than 6 months later
    facing the growing alarm about possibly unsafe consumer
    products, some produced in violation of current, longstanding
    regulations, cheaply manufactured in foreign facilities and now
    flooding our marketplace and providing a risk of harm to those
    consumers who purchase them. I think it is extremely important
    that you have engaged the importer community in the discussion
    of this problem. I will be very interested in their response as
    I believe that they are a key link in protecting consumers.
         Everyone wants to know who is to blame and what steps we
    can now take to address this problem. The short and easy answer
    to the first question is that we are all to blame - the
    Administration, the Congress, the Regulators, the
    manufacturers, importers and retailers, and anyone else who may
    have been active or inactive participants in enabling the
    policy decisions and priorities that have led us to this point.
    And certainly, those who stood by and quietly acquiesced while
    the Commission was being reduced to a weakened regulator,
    largely relying on the regulated to regulate themselves, must
    examine and correct the role that they played in putting the
    Commission in its current state. The only blameless ones are
    the unsuspecting consumers who unwittingly place their
    confidence in a system designed to protect them from the
    unreasonable risk of harm from the products that they find in
    their marketplace.
         The second question does not have as short or easy an
    answer.

                        Resources, Resources, Resources

         The key to an effective regulatory and enforcement body is
    sufficient resources to carry out its responsibilities and
    mission. The CPSC is a staff intensive organization. I have
    always expressed that at the heart of CPSC's operation is its
    staff, without question, our greatest and most important asset.
         Over the last few years, because we have achieved our
    budget required staff reductions through non-targeted means
    such as attrition, early-outs and buy-outs, we have lost some
    very key staffers. We did not want to have to do a reduction-
    in-force (RIF) to accomplish the staff reductions and, having a
    number of older employees, we felt it was likely we would have
    enough employees willing to take advantage of incentives to be
    able to avoid a RIF, which was in fact the case.
         Over time we hope to be able to train replacements, but
    the experience that we have lost will take years to recover.
    Moreover, the lack of sufficient resources has severely limited
    our ability to do succession planning and severely limited our
    ability to have depth of personnel behind our key positions. In
    addition, dwindling resources and staff reductions have had
    some negative impact on our agency's ability to attract high
    level qualified candidates for our critical vacancies as well
    as our ability to retain some of our own top level employees.
         The result is that the Commission is at a crossroads. Any
    additional reductions in staff or resources will ultimately
    place the Commission in a position where it will no longer have
    any effective force in consumer protection. The first step that
    must be taken is to reject the administration's staffing and
    budget proposal for fiscal year 2008 which requires an
    additional reduction of 19 FTEs. Fortunately, Congress, both
    the House and the Senate, have done just that. This Congress
    has sent clear signals that it understands that the Commission
    needs more funding to increase its staff and to be able to do
    work on rulemakings and other projects that have been shelved
    or slowed down because of lack of resources. It is crucial that
    we have a period of stability, to move away from what has been
    a pattern of trying to see how we can manage with less and to
    begin a process of determining what more we need to have in
    order to ensure that we do our job more effectively.
         However, I must point out that it would not serve the
    Commission or the public well to just indiscriminately throw
    resources at the Commission in response to the public alarm
    surrounding some highly publicized recalls. It has taken years
    for the Commission to get to its present position and it will
    take years to correct. I support an incremental approach to
    increasing our budget and staff. Since we require a yearly
    increase of about three to four percent to keep current with
    increases in salaries, rents and other operating costs, yearly
    increases in the range of 10 to 15 percent would, in my mind,
    provide the Commission with a good growth pattern. This growth
    pattern would also allow the Commission to do a yearly
    assessment of where the areas of needs most exist at the
    Commission therefore allowing the Commission to address its
    needs in the light of the current consumer product safety
    problems.

                             Import Product Safety

         Again, in March of this year, I informed the Senate
    Committee on Commerce, Science and Transportation about my
    concerns with the growing numbers of possibly harmful imported
    consumer products coming into our country. ``In the future, the
    problems associated with increasing numbers of possibly
    dangerous imported products will present the Commission with
    more and more of a challenge. Increasing numbers of U.S.
    companies are either importing finished products or component
    parts made in other countries or establishing their own
    production plants outside of the U.S. In most cases, domestic
    companies are not going to have the same degree of control over
    these products as they would have if their products were being
    made in this country. This inability to have constant hands-on
    supervision can result in products entering this country that
    do not meet U.S. safety standards.''
         This summer has most definitely been the summer of the
    recalled toy made in China. There have been several highly
    publicized recalls of children's products made in China for
    importation and sale by well established and long trusted
    domestic toy manufacturers. Thus far in 2007, CPSC has recalled
    a record number of hazardous imported products from China
    including a wide variety of toys and children's jewelry. The
    safety issues associated with this increase in imports have
    created new challenges for our Commission. The Commission is
    currently looking at ways to address the developing issues
    surrounding imported consumer product safety. We are involved
    in some activities such as dialogue and initiatives with
    foreign governments and the private sector, including domestic
    and foreign manufacturers.
         For example, last week the Commission signed a joint
    statement in which our product safety counterparts in the
    Chinese government proposed to stop the use of lead paint in
    the manufacture of toys they export to the U.S. However, we
    must be cautious in our dependence on foreign governments to
    make sure that products exported from their countries comply
    with our U.S. safety standards. Other countries expect, as we
    do, that the receiving countries' regulators (or the
    marketplace) will find and address problems with products
    within their own borders. While our agency's attempts to go to
    the source before the problem products arrive on our shores are
    necessary and admirable, our own statute makes it clear (as
    does the legislative history) that it is not the Commission's
    concern whether products made in the U.S. for export meet the
    mandatory or voluntary product safety standards of other
    countries. It may be a bit unreasonable for us to realistically
    expect more from other countries than that which we expect of
    ourselves. We should consider whether this policy is still
    appropriate today. If we export our safety standards along with
    our products, we take an important step in harmonizing
    standards in what is increasingly a global marketplace.
         In addition, to engaging in activities intended to elicit
    cooperation from manufacturers and foreign governments, the
    Commission must advocate for additional resources to increase
    surveillance and enforcement activities at the borders and in
    the marketplace. I note here that in a recent Time Magazine
    article it stated that the Food and Drug Administration has
    1,317 field investigators and inspects just 0.7% of all imports
    under its jurisdiction. CPSC has perhaps a total of 15 people
    (out of a total field investigative staff of less than 90) to
    visit those same ports of entry to inspect for the more than
    15,000 product types under our jurisdiction. I think those
    numbers speak volumes about why products under our jurisdiction
    that violate our mandatory safety standards keep finding their
    way into the marketplace.
         We at the Commission are also working with interested
    Congressional members in both the House and Senate to modernize
    our governing statutes to give us more leverage through the
    regulatory process and our enforcement activities. This
    subcommittee, in particular, has been tremendously engaged in
    our issues from the very beginning of this Congress and must be
    given credit for providing the impetus for recommendations for
    legislative action submitted by members of the Commission to
    the House, the Senate and the Administration.
         However, I think that it is very important that in
    whatever we do collectively--through efforts at the
    Administration level, Congress and the Commission--to address
    import product safety, we must send a clear, unequivocal
    message to manufacturers, importers and retailers who bring and
    offer for sale in this country products which present a
    substantial product hazard or that do not comply with a U.S.
    product safety standard. That message should be that, ``your
    actions are unacceptable and you will be held accountable.''
    The Commission must have the sufficient resources, the adequate
    authority and the internal willingness to deliver that message
    with no hesitation.

                       Statutory and Other Modernization

         Some of the highly publicized recalls have involved
    children's products that contain lead or lead containing paint.
    Toys or other articles intended for use by children that bear
    ``lead containing paint'' are banned hazardous products. It is
    a prohibited act to introduce or deliver for introduction into
    interstate commerce a banned hazardous substance. Any person
    who violates this law could be subject to both criminal and
    civil sanctions. Prior to 2007, we had been averaging four
    recalls a year for children's products with ``lead containing
    paint.'' This year we have already had 15. This regulation
    banning children's products that have ``lead containing paint''
    has been on the books for 30 years and there is absolutely no
    excuse for a violation of this regulation. Violators should be
    held accountable to the maximum extent for their non-
    compliance.
         As far as children's products such as jewelry or vinyl
    baby's bibs containing accessible lead are concerned, I wish
    that the Commission had the authority to find it unacceptable
    for any amount of lead to be in a children's product. However,
    our statute requires us to assess the accessibility of the lead
    and this is the key measure under the Federal Hazardous
    Substances Act (FHSA). The Commission did issue a guideline
    document back in January of 1998, which went so far as to urge
    manufacturers ``to eliminate lead in consumer products.'' In
    response to that guidance, in August of 1998, the Toy
    Manufacturers of America pledged to eliminate lead from their
    products. Yet here we are, nearly 10 years later, facing the
    same problems.
         We know that exposure to lead can elevate blood lead
    levels and that such exposure could bring about developmental
    problems in children. I am absolutely certain that parents
    would agree that if we could require the elimination of lead in
    children's products, we should. I understand that some members
    of Congress are interested in this issue and I hope that
    through their efforts we can address this problem and get it
    resolved in favor of thoroughly protecting our children from
    unnecessary exposure to products containing lead.
         Testing of products on the market to determine compliance
    with safety standards is also an important part of our
    responsibilities. I can't tell you how troubling the picture of
    our toy testing facility in the New York Times article was to
    me. We have been trying to obtain funds to modernize our lab
    since before I arrived at CPSC in 1995, yet we have never
    received any significant funding for that goal. We have been
    working with GSA on a modernization plan since at least 1999.
    The Lab Modernization Feasibility Study, completed jointly with
    GSA in 2005, formed the basis for a capital project submitted
    to OMB by GSA as part of their FY 2007 Budget. However, other
    national priorities precluded the project from being funded.
    There certainly has been a level of frustration associated with
    the process. We have been forced to accept a band-aid approach
    to fixing the lab, when what we really need is a major
    modernization commitment.
         I have seen other testing labs, such as those at
    Underwriters Laboratories, which are much more sophisticated,
    spacious and up-to-date than our lab. Given that we are the
    Federal agency designated to protect consumers from product
    hazards and that our laboratory testing plays a key role in
    making hazard determinations, I think the state of our lab
    should concern everyone. However, whenever I go to our lab I am
    constantly amazed at the ingenuity of our lab staff in
    overcoming space and resource limitations. We often talk about
    the agency making do with what it has and nowhere can that be
    seen more strikingly than at the lab. I would like to see a
    real investment made in upgrading our lab so that we can do
    more testing in our own facility rather than having to contract
    the work out and so that tests don't stack up because of a lack
    of adequate space or other resources, which prevent us from
    doing simultaneous testing on various products.
         We are currently looking at different ``real estate''
    solutions with GSA that would give us a better physical plant.
    However, these solutions may or may not allow us to function at
    the same capability we currently have and they would not
    include any modernization of equipment. It was estimated back
    in 2005, that the cost to truly modernize our lab, if we were
    to stay on the current site, would be somewhere around thirty
    million dollars. This would expand our capabilities plus give
    us new equipment and a physical plant that is both energy
    efficient and an effective use of space. A modern facility
    would also put us in a better position to deal with emerging
    technologies, such as nanotechnology. It is difficult for us to
    even contemplate how we would assess potential product-related
    nanotechnology hazards when we struggle to provide the basic
    lab capabilities to meet our current needs.
         Even before several recent highly publicized recalls,
    members of both the House and the Senate had indicated an
    interest in reinvigorating the Commission through the
    reauthorization process. I have strongly supported increasing
    our staff and facilities resources and various changes to our
    statutes over the years. I have submitted to both the House and
    the Senate proposals for consideration during this process of
    looking at reauthorization of the Commission. Acting Chairman
    Nord has also put forth her proposals, many of which I agree
    with, some of which (in one form or another) I have advocated
    for years. Thus, for the first time in a long time, there is
    bi-partisan support on the Commission to make major changes to
    the Commission's statutes. Some of the suggested changes could
    help the Commission's enforcement efforts with respect to the
    type of problems we have been seeing with the safety of
    imported products.
         Last week, Senator Mark Pryor introduced legislation with
    Commerce Committee Chairman Senator Daniel Inouye that will
    severely test the real will of Congress to provide the
    Commission with the necessary tools it needs to be an effective
    force in protecting consumers from product safety hazards. Many
    of the provisions of the legislative package come from the
    recommendations submitted by Acting Chairman Nord and myself.
    The CPSC Reform Act of 2007 authorizes additional funding to
    increase staff levels to 500 employees by 2013, improve our
    antiquated testing facilities, engage in nanotechnology
    research and increase our staff's presence at U.S. ports of
    entry. The legislative package also strengthens the agency's
    enforcement powers by increasing civil and criminal penalties,
    requiring third party certification on all children's products,
    banning the use of lead in children's products, requiring
    labeling of children's products with tracking information to
    facilitate recalls, making it unlawful to sell recalled
    products and by streamlining the product safety rulemaking
    process. There are other provisions as well and, as I said,
    most of which were endorsed by me or Acting Chairman Nord.
         This House subcommittee has also addressed some of these
    issues and, I understand, is working on its own comprehensive
    reauthorization bill. I am gratified by the attention that
    Congress is paying to the Commission and I am hopeful that we
    see significant results from all of our efforts.
        I know that the American public, especially parents and
    their children, will be thankful.
                                  ----------

        Mr. Rush. Thank you so much, Mr. Commissioner. The Chair
    intends to reconvene this subcommittee immediately,
    immediately, I might add, emphasize, after the last vote takes
    place on the floor. The subcommittee stands in recess.
        [Recess]
        Mr. Rush. The committee will reconvene. The Chair will
    recognize himself for 5 minutes of questioning, and the Chair
    wants to ask Chairman Nord the following question.
        Chairman Nord, I have actually four questions and I have 5
    minutes and I want to kind of keep these questions and answers
    as succinct as possible. And during the year 2007, this current
    year, the CPSC has issued approximately 30 recalls for lead
    content in approximately seven million pieces of children's
    jewelry, overwhelmingly manufactured in China.
        Pertaining to the joint agreement that you signed with the
    Chinese last week, this agreement only covers lead paint on
    toys. Why doesn't it also cover lead content? What exactly do
    you expect to get out of the agreement with the Chinese? Can
    you provide to the subcommittee copies of the ``work plans''
    that detail the initiatives that is encompassed in this
    agreement? And how will you know if these efforts with the
    Chinese are really bearing fruit?
        Ms. Nord. OK. With respect to the agreement with the
    Chinese, first of all, understand that there was an overarching
    general agreement that the U.S. Government and the government
    of China reached, whereby the Chinese Government agreed to
    implement a plan to take immediate steps to eliminate lead
    paint from products destined to the United States, and they did
    that because we asked them to do that. And we have put in place
    a number of processes or we will put in place a number of
    processes to monitor how they comply with that. But sir, the
    lead paint agreement is not the extent of our agreement with
    China. Please understand that this effort started in 2004 and
    it has been ongoing. We identified four areas where we were
    concerned about imports and those areas were lighters,
    fireworks, electrical products and toys.
        So what we did was reach agreement with the Chinese on a
    number of very specific things in each of those four product
    categories, in addition to lead paint. Now, the question of how
    do we know whether they will be complying with the agreements
    that they made with us, sir, that is like the critical question
    here, because if they don't comply, then what we have done
    isn't particularly meaningful. But right now the Chinese
    Government has indicated that they want to work with us to
    solve this problem and believe me, our agency is going to take
    advantage of that. We have put in place a system whereby we are
    going to be closely monitoring the implementation of the
    specifics in each of the various work plans, and if we see
    divergence from what they agreed to, then we will be going back
    to them and calling them on it. Part of what we also did was
    set up a process for having very close, actually monthly,
    consultations with them so that we could bring to their
    attention issues that we see if things are not going the way we
    would like to see them go.
        Mr. Rush. I wanted you to specifically address the work
    plans.
        Ms. Nord. Yes.
        Mr. Rush. All right. Will you extend to the subcommittee
    the details or the copies of the work plan?
        Ms. Nord. Well, of course I will and in fact, I have got a
    fairly extensive summary of the work plans here and I would be
    more than happy to submit that as part of my formal statement
    to you.
        Mr. Rush. From your testimony you seem to rely solely on
    the ``goodwill of the Chinese Government.'' Presently, the
    Chinese standards for lead is much greater, much more stringent
    than the American standards. However, the issue is one not of
    the standards, not of the willingness, but the enforcement of
    the standards and the enforcement of the regulations. How can
    you assure the American public and the members of this
    subcommittee that you and the CPSC will engage the Chinese
    Government and demand that they enforce, not only the elements
    of the agreement, but also that they will live up to their own
    standards, in terms of lead content?
        Ms. Nord. The Chinese, as I understand, the internal
    Chinese standards with respect to lead paint are not
    necessarily more stringent than the U.S., but Mr. Chairman,
    they are different from the United States. They are much akin
    to what the European Union has, in that they go to the whole
    question of accessibility of the lead to the person using the
    product, whereas ours just have a flat-out ban.
        But be that as it may, obviously enforcement of any
    standard is the key here. What the Chinese and the U.S.
    Government have agreed to do, or what the Chinese Government
    has agreed to do is insist on increased testing and inspections
    of the facilities where the products are being made. They have
    also agreed to qualify paint suppliers to the U.S. market, so
    that those paint suppliers are going to have to register with
    the Chinese Government, and if we find products, then the
    Chinese Government will have an administrative way to deal with
    that.
        As I mentioned, the Chinese standard is much closer to the
    European standard than it is to the U.S. standard, so they
    agreed to try to put in place a system which will distinguish
    between products that are being exported to the United States,
    as opposed to those products that are destined for export to
    Europe, so that we don't end up getting our various standards,
    products meeting various standards going to the wrong place.
    And then, finally, we have agreed to have regular status
    discussions to assure that the program is indeed being
    implemented. Part of that involves, of course, doing checks
    here in the United States and I will tell you that we have
    underway right now what we refer to as a blitz, looking at
    incoming product and examining it very, very closely to make
    sure that the leaded paint is not on those products.
        Mr. Rush. Chairman Nord, I am really kind of confused and
    you can help me. In your opening statement, you seem to put a
    lot of emphasis on devaluing the need for inspectors. OK. But
    now, in response to the questions, you are switching now and
    saying that we really want to concentrate on inspectors. Which
    one is it? Do we need more inspectors or do we need less
    inspectors? Give us a clear picture of what it is that you are
    intending to do in terms of implementing this agreement?
        Ms. Nord. Surely. I think that inspecting, doing our spot-
    checks, our blitzes, if you will, are important to make sure
    that the Chinese are complying with the lead paint agreement.
    But stepping back, sir, with respect to the question of how do
    you do effective inspections, I think it is very, very
    important for the committee to have a context here. At the end
    of the day, the very best thing we could have for the American
    public is to make sure that the product is manufactured in the
    first place and we have got underway a program, which I
    described in my written statement. It is a four-part program.
    We have to work with the Chinese manufacturers in China. We
    have to work with the Chinese Government and that is the point
    of these agreements.
        Mr. Rush. Chairman Nord, do you foresee a time in the
    immediate future where there will be American inspectors, who
    are authorized by the CPSC or some other Governmental entity,
    to go to China at the manufacturing level, at the factory, and
    be able to inspect the production of the manufacturing of these
    toys, and other products, to ensure the American public that
    lead is not in, is not a part of the paint? Can you assure us
    of that at this point in time?
        Ms. Nord. Sir, that is not what the CPSC is doing. We have
    never done that. If that is what the Congress wishes us to do,
    then you are talking about a very, very different agency. You
    are talking about an agency that is larger than what we are
    right now in orders of magnitude. You are talking about an FDA,
    USDA-type agency and if indeed that is something that you wish
    to see accomplished, then that is fine. We will work with you
    to accomplish that. But our agency has never had personnel
    overseas. We don't have that capacity. If you are talking about
    CPSC inspectors in foreign ports, sir, that would be a very,
    very significant departure from the operations of this agency,
    as they have existed up to this point.
        Mr. Rush. My time is up. I recognize now the ranking
    member, Mr. Stearns.
        Mr. Stearns. Thank you, Mr. Chairman. I think I have just
    basically two questions for the chairlady. I think we all are
    trying to understand an ounce of prevention prevents a pound of
    cure here. And in this case, the two questions I have are based
    upon what has happened, the toy recalls this past summer. The
    companies themselves, as I understand it, quickly recognized
    the potential problem. You folks got involved. The Canadian
    Government was also involved. I understand they detected some
    of these problems. We have hearings today. And to put that in
    perspective, that Mattel makes 800 million toys this year and
    that is just one toy manufacturer. So with that kind of volume
    from Mattel, not to mention the other ones, is it more
    effective to have the manufacturers ensure the products are
    tested or the CPSC?
        Ms. Nord. Well, the CPSC has never done pre-market testing
    of products entering the marketplace. In fact, I think, in the
    very, very early days of the agency, there was a provision like
    that and Congress specifically removed it because it was really
    unworkable.
        Mr. Stearns. Right now that is not your mission?
        Ms. Nord. That is not what we do, but----
        Mr. Stearns. But you will promulgate standards?
        Ms. Nord. Absolutely.
        Mr. Stearns. Now, the ASTM standard, the industry-wide
    standard, regarding the use and abuse of toxic substances, when
    the industry develops the standards, do you believe that that
    standard is sufficient to conform with a national standard? In
    your mind is the ASTM standard satisfactory?
        Ms. Nord. No. What happens is that the CPSC, in the case of
    toys, has issued a toy standard which sets out certain
    requirements. The ASTM standard has been layered on top of the
    CPSC standard to give added protection.
        Mr. Stearns. Yes. And so in your opinion, then, the
    standard is satisfactory? It is your standard plus, and do you
    think it is being implemented across the board, adequately?
        Ms. Nord. Well, that is what our job is, is to make sure
    that that happens.
        Mr. Stearns. And do you think it is being done? Maybe
    another question would be, looking at your employees, you have
    about 400.
        Ms. Nord. Yes.
        Mr. Stearns. When this agency was actually put in place, I
    guess, in 1972, you had more employees in 1972.
        Ms. Nord. Yes.
        Mr. Stearns. In 1981 you had a thousand employees, but it
    is cut down to a little more than 600 employees 2 years ago and
    now you are at 400, with a budget of $62 million. So the
    question is, do you have enough people to enforce the mission
    of the Consumer Product Safety Commission, in your opinion?
        Ms. Nord. I would always like more.
        Mr. Stearns. So you don't have enough people is what you
    are saying?
        Ms. Nord. I would prefer to have more people.
        Mr. Stearns. OK. The other question I have is, how serious
    a problem is this now? On the basis of lead in the paint and
    these magnets and the lead in the jewelry, how many children
    have actually been affected by this? Do you have any statistics
    to show? We all know what the standard is, but I am trying to
    understand how significant the problem is in terms of actual
    fatalities or injuries or sickness. Can you give us some kind
    of broad perspective on this?
        Ms. Nord. Surely.
        Mr. Stearns. I say this in light of the fact that there was
    lead in houses before 1978 and there is lead in the ground. And
    I just wondered, should the American people, the families, the
    mothers and fathers of children be alarmed, yes, but is this a
    problem that historically is very serious or is it something
    that we are still monitoring?
        Ms. Nord. With respect to the lead in the toys, we are not
    aware of any injuries flowing from the products that have been
    recalled. However, saying that, we also recognize that lead
    exposure is cumulative, so we don't want children being exposed
    to lead. However, Congressman, as I said in my opening
    statement, and I would like to reemphasize here in the
    strongest possible terms, the most effective, the best way to
    address lead poisoning in children is to look at old
    deteriorating paint in houses and lead contaminated dust. That
    is where the bulk of the problem is. Now, the CPSC deals with
    consumer products and when we find consumer products like the
    children's jewelry, we act and the children's jewelry is a good
    example of where this agency stepped up to a problem and took
    very, very aggressive action, is taking aggressive action to
    deal with it.
        Mr. Stearns. Commissioner Moore, I just have a question for
    you, if I could. You stated that the Commission has been
    weakened, I think, in some of your testimony, if I am not
    correct. And has any violator avoided punishment, any reduction
    in the Commission's authority, in your opinion?
        Mr. Moore. I can't say specifically that I can identify a
    particular violator, but the fact that there is this
    possibility and it does happen over time, that is a risk that
    we prefer not to take, in terms of trying to protect the
    consumers' interest.
        Mr. Rush. The gentleman's time has expired. The Chair now
    recognizes the gentlelady from Illinois, Ms. Schakowsky, for 5
    minutes.
        Ms. Schakowsky. Thank you, Mr. Chairman. As one who has
    been working with a constituent of mine for a long time to deal
    with yo-yo balls, I just want to say that aggressive is about
    the last word I would use for the CPSC. The question I have,
    Commissioner Nord, the Wall Street Journal this month had an
    article, safety agency and Mattel clash over disclosures, and
    it listed multiple times when Mattel has defied the
    Commission's reporting rules, and that was a quote; failing to
    disclose hundreds of consumer complaints about the hazards
    their toys pose to children, including magnets and fire hazards
    and motorized cars. So what can we do to make sure that no one
    feels free to flout the law continuously? And if Mattel feels
    free to flout the law, then why should we think that China is
    going to comply with this agreement?
        Ms. Nord. Well, I read that article as well, with a great
    deal of interest and I have to say I scratched my head. I think
    that if that is correct report of what the Mattel CEO said,
    that is an incredibly reckless thing to say. I can also assure
    you that we have an ongoing investigation open into this matter
    and if a company feels that they can flout the law or if they
    think that we are not going to take action, they are sadly
    mistaken.
        Ms. Schakowsky. Well, how would we know that, if hundreds
    of customer complaints have been sent? What evidence would
    consumers see at the CPSC to convince them that you really
    aren't going to let that happen? Has the 24-hour reporting
    requirement been met by Mattel, by other manufacturers?
        Ms. Nord. Again, when we do a recall, that is in and of
    itself an example of the fact that we are serious about our
    job. If the company does not report to us in a timely manner,
    then we bring an enforcement action against them and if you
    look at----
        Ms. Schakowsky. And has that been done?
        Ms. Nord. Oh, absolutely.
        Ms. Schakowsky. Absent Mattel?
        Ms. Nord. It has been done to Mattel in the past.
        Ms. Schakowsky. How many times?
        Ms. Nord. Gosh, Mattel paid a fine, I believe, in 2006 or
    2005. I don't recall the year where they paid a considerable
    fine for doing exactly----
        Ms. Schakowsky. If you could provide to me, and the rest of
    the committee, examples of Mattel, what happened.
        Ms. Nord. Indeed. Why don't I give you a whole list of all
    our enforcement actions, really.
        Ms. Schakowsky. OK. And you said in your testimony, since
    China has a weaker standard for lead point than the United
    States, it is really quite extraordinary that the Chinese
    agreed to enforce the stricter American standards. Then is the
    report in the New York Times on September 11, it says, on the
    books, China's paint standards are stricter than those in the
    United States, it has 90 parts of lead per million. By
    comparison, American regulations allow up to 600 parts per
    million.
        Ms. Nord. Yes, I think that the standard is a different
    standard and it is my understanding that the Chinese standard,
    it is 90 parts per million, but it goes to the accessibility.
    Is the person exposed to the lead? Our standard is a bright
    line per se standard, so we don't look at, with respect to lead
    paint, whether there has been exposure. We just look to see if
    the lead paint is there and if it is, it is a violation. So the
    standards are different.
        Ms. Schakowsky. But you say ours are stronger? The
    difference between 90 and 600, I understand that you do this
    kind of accessibility issue. But you know, there is a
    constituent of mine, a Marilyn Furer, who actually went to the
    trouble of doing her own testing on bibs that she had bought
    for her grandchildren and reported this excessive amount. Is
    that how we rely on getting this information? Who is supposed
    report?
        Ms. Nord. Well, under the law, the company has an
    obligation to report to us if they have reason to think that
    one of their products contains a defect that will cause
    substantial harm, and that is section 15(b) and that is a
    section that we vigorously enforce. Also the agency goes into
    the marketplace and does investigations in order to try to find
    violators as well.
        Ms. Schakowsky. I have been interested to know that you
    have, let us see, we have--978 as the number of the former CPSC
    staff. It is now down to 401. The budget is half of what it was
    three decades ago, in inflation adjusted terms. Its toy testing
    department, I understand, consists of one man, Bob, who drops
    toys on the floor in his office.
        Mr. Rush. Will the gentlelady please bring her----
        Ms. Schakowsky. Well, if I could just finish this question,
    I would appreciate it.
        Mr. Rush. Sure, sure.
        Ms. Schakowsky. So, what if Bob takes a day off?
        Ms. Nord. May I answer that question?
        Mr. Rush. Sure.
        Ms. Nord. The toy testing that goes on in the CPSC
    laboratory is not limited to one person who drops toys. That
    has been widely----
        Ms. Schakowsky. How many?
        Ms. Nord. There is an agency staff at our laboratory and I
    guess it is, at this point, 34 people, perhaps, in our
    laboratory and many of them have different responsibilities
    with respect to lead testing of toys. We have a number of
    people who do lead testing of toys. With respect to testing for
    electrical issues, we have a number of other people that do
    testing for that.
        With respect to Bob, as I mentioned to Congressman Stearns,
    one of main parts of our toy standard is labeling to assure
    that it doesn't have small parts. The way you determine whether
    the small parts exist is to do a drop test to see if the
    product breaks apart. Bob does drop tests. If the agency
    laboratory director tells me he needs other people to do drop
    tests, then we will take that request under advisement and try
    to fulfill it. But he has not done that and frankly, I would
    like our resources to be focusing on testing for lead and
    testing for other substances and that is where we have----
        Ms. Schakowsky. Well, if I could----
        Mr. Rush. The gentlelady's time is up. The chairman
    recognizes now the gentleman from Texas, Mr. Barton.
        Mr. Barton. I thank the chairman. I would be happy to yield
    a little of my time to Ms. Schakowsky, if she has got one more
    question.
        Ms. Schakowsky. Is that all right, Mr. Chairman?
        Mr. Rush. Yes.
        Ms. Schakowsky. If I could get a breakdown, in writing, of
    the toy testing department and who does what.
        Ms. Nord. I would be happy to supply that to you. Surely.
        Ms. Schakowsky. Thank you.
        Mr. Barton. Is it the CPSC's view that the Chinese
    Government is as cooperative as it could be on this issue?
        Ms. Nord. We are aware that the Chinese Government now
    thinks it is in their best interests, economic and otherwise,
    that they address this problem and we were very pleased that
    they were willing to come to the table and negotiate a set of
    pretty specific agreements. Congressman, the proof is in the
    pudding. What we need to do on a going forward basis now is
    hold their feet to the fire. We negotiated the agreement last
    week. Our next meeting with them is scheduled for early October
    and we have got meetings scheduled month after month after
    month with them. And what we are going to be doing is saying to
    them, OK, you agreed to do this. Let us see the results. And
    frankly, if we don't get results, then we will know something,
    but we have got to try to it. They are part of the key to the
    solution here, so we really need to----
        Mr. Barton. Well, how do you guarantee compliance if you
    don't have something close to full inspection? The Chinese are
    past masters at taking the heat off and good intentions, but
    not really following through. So what is the way that the
    administration and the Congress can work together to be sure
    that they comply with whatever the agreement is that they have
    agreed to?
        Ms. Nord. Well, again, the Chinese manufacturer of the
    product, the exporter, and the American importer have the
    obligation to assure that the product that comes into this
    country is safe. The Chinese Government has said that they will
    step up and increase inspections, require licensing, a number
    of thing like that to assure that the Chinese----
        Mr. Barton. But they wouldn't let our staffs, Chairman
    Dingell and Chairman Stupak, send an oversight committee group
    to China in August, with minority support and participation and
    they gave us the run around, that something with the visas were
    improper for what they wanted to do.
        Ms. Nord. That is what I understand.
        Mr. Barton. That doesn't show me too much good faith. I
    used to be the Oversight Subcommittee chairman and we had
    problems with the Chinese, in terms of FDA drug issues. You had
    to schedule an inspection 6 months in advance and by the time
    the inspectors got there, everything looked like it was ready
    for a chief of state visit or something. So how do we ensure
    that they really do follow through?
        Ms. Nord. I think that the very best way that our agency
    and the Congress can ensure that is to amend our statutes to
    require that product sellers certify that the products that
    they sell comply with U.S. safety standards, because what that
    does----
        Mr. Barton. So you want a change in Federal law?
        Ms. Nord. Yes.
        Mr. Barton. OK. What about the U.S. manufacturers that
    license their products? Chairman Dingell, in his opening
    statement, was somewhat less than positive about Mattel. How
    have they reacted to this latest rash of recalls and problems?
        Ms. Nord. Well, the toy industry seems to be very
    interested in addressing this and they are stepping up to the
    plate. The toy industry, as an industry, is now, as I
    understand it, putting in place a process that would require,
    in licensing, license testing facilities to make sure that the
    tests were done properly. I have also noted that Disney and
    some other large leaders in the industry have indicated that
    they will be doing third-party independent testing of their
    products as well.
        But I think you put your fingers on an important issue
    here, sir, in that we have got to address this from a number of
    different perspectives. It is very, very important that U.S.
    companies that sell products here, insist on compliance from
    their Chinese exporters. And the examples I just gave you are
    at least two examples of where they are doing that. We, as a
    government, need to be talking to the Chinese Government to
    make sure they understand their obligations and then we need to
    be able to police the marketplace.
        Mr. Barton. And now my time has expired, but my last
    question and I don't know if this is literally true, but I
    read, in some press report, that your organization, the CPSC,
    only has one inspector to inspect toy imports. Is that true?
        Ms. Nord. No, the press that you may have read is that we
    have one toy tester or one toy safety inspector and that is not
    correct. That references the same individual that I was just
    discussing with Congresswoman Schakowsky. We have an individual
    whose responsibility it is to do the testing for small parts
    and labeling requirements. There are other people that do
    testing. But with respect to inspections, we have a field staff
    that goes out into the marketplace.
        Mr. Barton. I believe that this committee and the Congress
    would come together and scrounge a few more dollars to
    compliment and beef up. We are putting thousands of people on
    the border between the United States and Mexico. We ought to be
    able to put a reasonable increased number of people to make
    sure that the toys our children play with are what they are
    supposed to be.
        Ms. Nord. Right now we have, oh, between 85 and 95 field
    investigators and a number of them do go to the ports on a
    regular basis. Congressman, the CPSC has never had people
    stationed at the ports full time. We have just never done that.
    And obviously, we would like to be spending more time
    concentrating on what is coming in from outside the United
    States, but having a person at the port is not going to make a
    dent on this issue. The issue is huge. There are just thousands
    and thousands of containers of consumer products coming into
    this country from overseas.
        Mr. Barton. Well, let us be creative and think of a way to
    use the resources and complements so that we target--if you
    ship a piece of clothing, sportswear for adults, into the U.S.
    market and the seams aren't straight, it is really no big deal.
    It is a quality problem, but nobody is going to die from it. If
    you ship toys that have contaminated lead product and five
    children put them in their mouths and get lead poisoning; in
    one child it is so severe that it hurts them mentally or
    perhaps they have an impairment that is life threatening, that
    is a little bit different. I understand the need to be
    competitive in world markets, but I do think we can put more
    resources into protecting the safety of our children and I
    think, I am in the minority, but I think I am in the majority
    on the committee and in the Congress in saying we will work to
    do that. You help us come up with the plan.
        Ms. Nord. I would welcome that and I think you are
    absolutely right, we need to be creative. Part of this is----
        Mr. Barton. My time is expired.
        Mr. Rush. I just want to say, Mr. Ranking Member, I have
    been really----
        Mr. Barton. You were very generous for letting me have that
    time.
        Mr. Rush. And we will have a second round, but right now
    your time has expired.
        Mr. Barton. I understand.
        Mr. Rush. And we need to move on to the full committee
    chairman, Congressman Dingell, for questions. Congressman
    Dingell is recognized. Chairman Dingell.
        Mr. Dingell. Mr. Chairman, I thank you and I want to
    commend my good friend and colleague, Mr. Barton, for his very
    helpful questions.
        Chairman Nord, welcome to the committee. Your agency, in
    its budget this year, requested a 2 percent increase in net
    funds and a reduction in full-time equivalents amongst the
    employees, from 420 to 401. Would you tell us, please, if that
    is true?
        Ms. Nord. I believe so, yes.
        Mr. Dingell. OK. What was your agency's request for funds
    and personnel to the Office of Management and Budget? How many
    people did you ask?
        Ms. Nord. I cannot tell you that off the top of my head. I
    would need to respond in writing.
        Mr. Dingell. All right. If you don't know it, we will wait.
    I want it to be known that we are submitting to you a letter,
    on which I will expect a prompt response. And Mr. Chairman, I
    ask unanimous consent that that letter be inserted into the
    record, as well as the response, when received.
         We need to know what your request was for funds and
    personnel. Now, Madam Chairman, would you tell us how many you
    are going to need to meet the agreement which you have recently
    concluded with the Chinese General Administration for Quality
    and Supervision, et cetera?
        Ms. Nord. I am not asking for any additional staff to do
    that.
        Mr. Dingell. I understand that. What do you need to do that
    job? Obviously, you have seen a reduction from 420 to 401. That
    is a total of 19 personnel lost. How are you going to get the
    personnel that you are going to need to see to it that this is
    properly enforced and to address your business at the border so
    we don't have any more lead painted toys and things like that
    coming in from China?
        Ms. Nord. From the standpoint of the administration of the
    agreements, within the CPSC, we have created an office of
    international programs, which we are increasing the staff of by
    at least one individual. The responsibility of that office is
    to monitor this program. We will be working very closely with
    Customs and Border Protection to make sure that any----
        Mr. Dingell. This is fine, but it is not answering. I am
    asking how many you need and this is not answering my question.
    Now, please inform me of what cooperative agreements you have
    with other agencies to put personnel at the borders to see to
    it that your regulations, with regard to safety of products
    entering this country, are properly enforced? Do you have any,
    for example, with Customs, with Food and Drug, with Immigration
    or with any other agency that is charged with these
    responsibilities?
        Ms. Nord. We have a longstanding memorandum of----
        Mr. Dingell. Would you submit those agreements to the
    committee?
        Ms. Nord. Of course. I would be happy to, sir.
        Mr. Dingell. How many people do you have at the borders who
    are responsible and seeing to it that goods that come into this
    country are safe and meet the standards of your agency? How
    many?
        Ms. Nord. As I indicated, the Commission has never had----
        Mr. Dingell. You don't have any?
        Ms. Nord. No.
        Mr. Dingell. OK.
        Ms. Nord. We have inspectors that go to the border.
        Mr. Dingell. I am beginning to understand why it is that
    you are having these difficulties in seeing to it that the
    Chinese don't bring in lead painted toys and other things of
    questionable safety. Now is it your understanding that the
    Chinese regulations, with regard to consumer safety and exports
    and things of that kind, are adequate to protect American
    consumers? Yes or no.
        Ms. Nord. I don't know.
        Mr. Dingell. You don't know?
        Ms. Nord. I am sorry.
        Mr. Dingell. Very well. Would you please inquire and come
    back and give us a report as to whether or not those laws are
    adequate to protect American consumers? Would you also tell us,
    then, when you make that submission to us, what it is that you
    propose to do to ensure that we get the necessary assured
    safety for our consumers, with regard to imports from China?
        Ms. Nord. I will be happy to.
        Mr. Dingell. Would you submit that to us?
        Ms. Nord. Of course.
        Mr. Dingell. Now, I would note that you have said that the
    Chinese are going to make sure there is no lead in the paint,
    through inspections of U.S. destined toys and a certification
    for paint suppliers. What is going to happen to ensure that
    that takes place? And what concrete steps have the Chinese
    taken to ensure that this promise will be kept?
        Ms. Nord. They made the promise last week.
        Mr. Dingell. They did, but promises are wonderful. We got a
    fistful of promises from the Chinese on safety and they don't
    seem to do anything. It reminds of the song we used to sing
    when I was in the Army: ``I am always signing the payroll, but
    I never get a goddamned cent.'' So what are the Chinese going
    to do to ensure that this is essentially a self-enforced
    agreement?
        Ms. Nord. They have indicated that they will increase
    testing and inspections. They have indicated that they will be
    licensing paint suppliers who handle products destined for the
    United States and we will be going back to them to ask them how
    they intend to do that.
        Mr. Dingell. All right. Now, what steps are you, at the
    Commission, taking to ensure that the Chinese are going to
    honor this agreement in a full and effective and proper
    fashion? And what are you doing to ensure that you will have A,
    the resources, and B, the regulations and personnel that you
    need to do that? I will ask that you submit this to the
    committee, for purposes of the record.
        Ms. Nord. OK.
        Mr. Dingell. And that will be included in the letter, which
    you will be shortly submitting to us. Now, I am informed that
    CPSC has prevented approximately 83 shipments of noncompliant
    toys from entering the United States' stream of commerce with
    them. Would you give us a statement of what those 83 rejections
    were and why? Would you also submit to the committee what
    percentage of the shipments sent to the United States by China
    were? And would you also please submit to us why it was that
    these were rejected and whether or not they constitute all of
    the shipments that should have, in fact, been rejected?
        Ms. Nord. I would be delighted to.
        Mr. Dingell. All right. And Madam Chairman, does CPSC have
    data about the number of toy shipments, either of compliant or
    noncompliant products which are stopped at U.S. ports of entry,
    so far in 2007, by CPSC?
        Ms. Nord. I am sure if we do, I will be happy to submit it.
        Mr. Dingell. Would you please submit that to the committee?
        Ms. Nord. Yes.
        Mr. Dingell. Now, does CPSC have performance goals for
    scrutinizing the number of shipments at the borders and for
    halting those at the border, for 2000 and beyond, if and when
    necessary? Do you have any rules, regulations or anything of
    that sort, with regard to assuring that these things are done?
        Ms. Nord. Our rules require compliance with U.S.----
        Mr. Dingell. Would you submit that then, please, for the
    record, to the committee? Mr. Chairman, I note that I am 2
    minutes and 44 seconds over. I thank you for your courtesy to
    me. And I thank you, Madam Chairman.
        Mr. Rush. The Chair recognizes the gentleman from Nebraska,
    Mr. Terry.
        Mr. Terry. Thank you, Mr. Chairman. Following up on the
    ranking member and full committee chairman's comments on how we
    can assure that the product that is being put on shelves in
    America meet your criteria, the safety criteria. I think we
    have to start with China and we have to make sure that the
    product that is being produced there, manufactured there, meets
    the standards at that exact point in time when that product is
    finished. As I understand, just in trying to educate myself for
    this hearing, that some manufacturers or companies like
    Mattel--I am not sure they are the exact manufacturer or if
    some entity manufacturers it for them. But they do their own
    inspections there on site. I don't know the frequency of which,
    but we will ask. I will ask. And the other companies choose to
    hire outside entities, private sector companies. I think they
    are all European-based, like Norske Veritas, Intertech, and
    SGS, to do the testing for them. Do you have an opinion, from
    your experience with CPSC, about whether these three companies,
    independent companies that do the testing and verifications and
    certifications, are more reliable than companies that do their
    own inspections?
        Ms. Nord. I would hesitate to say that a company that does
    its own inspection is not going to do it in a reliable way. I
    don't know that to be true and I think that paints a blanket or
    makes a blanket statement that I am not willing to make.
    However, having said that, I do believe that third-party
    independent testing is the best way to assure that the testing
    is done credibly, reliably and competently, so I am a big fan
    of that. Also, especially with respect to smaller companies
    that don't have the resources to do testing, independent third-
    party testing is a very good tool. And please understand that I
    said independent. I did not say governmental. I don't think
    that the United States or the government of China should be
    doing testing that would then be what we would rely on.
        Mr. Terry. Are you aware of those three firms that I read
    off, Norske Veritas, Intertech, and SGS?
        Ms. Nord. Yes, of course.
        Mr. Terry. What is your opinion of the companies?
        Ms. Nord. They all do very credible jobs.
        Mr. Terry. Those are private sector companies. Like I said,
    they are European-based. Am I correct in that understanding?
    That is all right. That is kind of trivia, anyway.
        Ms. Nord. Yes.
        Mr. Terry. You are well aware of the work of these
    companies?
        Ms. Nord. Absolutely.
        Mr. Terry. I would tend to agree with your observation, and
    no offense to companies that do their own inspections, but
    there seems to be, for me, a little bit more credibility when
    an independent company does the testing and then the
    certification. What would you think of adopting rules or maybe
    even Congress adopting legislation that would require the
    independent third-party testing?
        Ms. Nord. I think independent third-party testing should be
    done. In my proposal, I have asked for certification, a
    requirement that companies certify.
        Mr. Terry. Yes, testing and certification. The
    certification is a key point. Thank you.
        Ms. Nord. And what I had in mind there was an independent
    testing regiment. I know that Congressman Ferguson, Congressman
    Towns, some members of the Senate, have introduced legislation
    along those lines and again, I think any way that we can
    encourage companies to test and verify the results of those
    tests is a very good thing.
        Mr. Terry. All right. Thank you very much. I will yield
    back my 20 seconds.
        Ms. Nord. Thank you.
        Mr. Rush. The Chair now recognizes the gentleman from
    Texas, Mr. Gonzalez.
        Mr. Gonzalez. Thank you very much, Mr. Chairman. Chairman
    Nord, my impression from your testimony in the past and today
    is that you are working with what you have. Unfortunately, I
    don't think it really is adequate and I am talking about the
    model itself. And one very telling statement you made was, in
    responding to some questions about expanding your
    responsibilities and meeting them, you said you would be
    looking at a very, very different agency. That is for Congress
    to determine, actually. I don't think that is what you are
    going to be able to create and I think you have to do the best
    you can with what you have. I want to ask, rather, some
    practical questions regarding the agreement that you reached
    with AQSIQ, which is your counterpart or compliment in China.
    It is still going to be up, basically, to the Chinese to
    conduct the inspections and make determines as to compliance.
    It is a yes or no.
        Ms. Nord. Yes.
        Mr. Gonzalez. OK. So there is no way for us, because there
    is no mechanism in place, within this agreement, that allows
    for a representative of the United States to be part of that
    inspection compliance and so on.
        Ms. Nord. The agreement doesn't contemplate that U.S.
    employees would be inspecting Chinese manufacturers, no. What
    the agreement does, though, is it tries to get at it in a
    number of ways. For example, if we have concerns about a
    particular type of product, we would be notifying the Chinese.
    They would then be coming back to us with what they intend to
    do about it and then, obviously, as a part of the
    conversation----
        Mr. Gonzalez. We are not part of that process. We don't
    grade their papers. It is one of those things. It just has to
    be good faith. And in this respect, maybe blind faith. But
    regardless, that is what we are going to have here. What is the
    consequence if they fail? Let us say you identify a product,
    you put them on notice, they go through their process and we
    have something coming into the United States that harms a
    consumer. Now, they clearly have failed. Now, we don't know if
    it was intentional or otherwise, negligence, whatever. What is
    the consequence to them?
        Ms. Nord. The consequence to them is what has been
    happening in the marketplace. People don't buy their products.
    They are very concerned about that and frankly, at the end of
    the day, economics counts for everything.
        Mr. Gonzalez. So it is just going to be market forces.
    There is no mechanism there that there is any penalties. I
    think that, basically, everything is just based on good faith
    and good intentions. My experience has always been, if you
    don't have consequences, you probably don't have responsible
    behavior. And that is human nature, whether it is in the United
    States or in China. But again, I commend you for doing as much
    as you can with the limited resources that you have.
        But Commissioner Moore, in his testimony--I will read it.

         For example, last week the Commission signed a joint
    statement, in which our product safety counterparts in the
    Chinese Government propose to stop the use of lead paint in the
    manufacture of toys they export to the United States. However,
    we must be cautious in our dependence on foreign governments to
    make sure that products exported from their countries comply
    with our United States safety standards.

        So I will ask you, Commissioner Moore, what is the
    alternative to the agreement that was reached by CPSC with its
    equivalent in China, if you are saying that can only go so far,
    and I agree with you, but I am just saying OK. Well, what would
    be the alternative under the present configuration of the
    Commission and your resources?
        Mr. Moore. We would have to focus on enforcing our
    standards with the companies based on the United States. Those
    who order the products, those who import the products, we have
    to rely on them not to bring products into our country. Not so
    much the Chinese, but you rely on them.
        Mr. Gonzalez. Well, in theory I am going to agree with you.
    I am just not sure how we do that in practice and I think we
    are going to learn more from Mr. Eckert and maybe explore what
    is the responsibility of the United States-based toy
    manufacturer/distributor to the consumer, and that is going to
    be a really interesting topic, I promise you. Well, I am over
    my time and I yield back. Thank you very much, Mr. Chairman.
        Mr. Rush. The Chair now recognizes the gentleman from
    Texas, Mr. Burgess, for a round of questions.
        Mr. Burgess. Thank you, Mr. Chairman. Chairwoman Nord, can
    you expand a little bit on the difference between voluntary and
    mandatory recalls and what that means to you and your agency?
        Ms. Nord. Surely. The vast majority of our recalls are what
    we call voluntary recalls and when I say voluntary, what that
    means is that we haven't gone in and ordered that a recall take
    place. Instead, the company has worked with us and the two, the
    agency and the company, jointly agree that a recall will take
    place and it does.
        Mr. Burgess. And over what period of time will that happen?
        Ms. Nord. Well, about half of our recalls are what we refer
    to as fast-track recalls and with fast-tracks, basically, we
    try to get the recall accomplished within 20 days of being
    informed that there is an issue. And that is rather
    extraordinary. No other Government agency is able to act that
    quickly to effect a recall. Twenty days is a very short period
    of time, but----
        Mr. Burgess. I would agree, 20 days is extraordinarily fast
    for any Government agency, in my short tenure here.
        Ms. Nord. But the point is, is to get the recall out there
    to get the consumer informed of what is happening and then try
    to get the product out of consumers' hands. So it is important
    that we act quickly.
        Mr. Burgess. But if you go to a mandatory, how long will
    that take to accomplish the same goal?
        Ms. Nord. The last time we did that, it was several years.
        Mr. Burgess. Well, now, in a voluntary recall, do people
    generally comply? If you are notified, and I assume I am
    correct on this, the manufacturer is under an obligation to
    come to you and say, we have discovered a problem.
        Ms. Nord. Yes.
        Mr. Burgess. And you say, you better get that thing back
    from the public. Does that work? Do people come forward and
    confess the sin, admit the problem and then get on about fixing
    it, or do people tend to hide and obscure it?
        Ms. Nord. I think our recall process works very well.
    People do take their responsibilities seriously. They come
    forward and we work together to effect a recall. If for some
    reason a company, though, is recalcitrant, is not willing to
    help us work through a solution to this, then we do have some
    tools in place that we can bring to bear to achieve a result. I
    think that our last tool of resort is to go into a judicial
    proceeding to order a recall. That just takes a lot of time.
        Mr. Burgess. Can you think of any examples of where it
    hasn't worked, where there has actually been a bad actor who
    has refused to participate in the process?
        Ms. Nord. Yes, the last time we did a mandatory recall was
    in the Daisy air rifle case. That was back in 2001 and I think
    it extended for 2 years.
        Mr. Burgess. OK. Commissioner Moore, in your testimony you
    state that you need an additional 10 to 15 percent in funding
    every year to make up for the shortfall. Currently you get 3 to
    4 percent, but because of the increase in the cost of living
    and the cost of doing business, that 3 to 4 percent is
    essentially consumed in the increased expenditure for doing
    business every year. But I notice in this year's appropriation
    bill that was passed out of Financial Services, the increase
    was about 6 percent. Did you talk with the Subcommittee on
    Financial Services? Did you converse with Subcommittee Chairman
    Serrano on what you felt the budgetary requirements of your
    agency would be?
        Mr. Moore. I am afraid not. That is not a part of my role
    at the Commission.
        Mr. Burgess. OK. So do you all then develop a budget
    internally that is voted on by the commissioners? How do we in
    Congress get that number from you? Do we just make this up
    every year?
        Mr. Moore. The budget comes through the Commission's budget
    comes through the chairman's office. Yes, it is the Commission
    and we see it after it is done, but we don't really--and we can
    have some input in the process, but we don't directly control
    the amount of the--what the numbers are.
        Mr. Burgess. Did you vote for the budget, in favor of the
    budget that passed for this year, for example?
        Mr. Moore. Yes.
        Mr. Burgess. When you say you have an opportunity for
    input, did you recommend that, instead of a 6 percent increase,
    that this year we might want to, with perhaps a more favorable
    climate in the subcommittee, appropriations?
        Mr. Moore. I have asked for more, yes.
        Mr. Burgess. And give us kind of an idea of the dollar
    figure that you would have liked to have seen for this year.
        Mr. Moore. At least----
        Mr. Burgess. I guess, at some point, what I am saying is--
    and I am not trying to pick on you, but at some point----
        Mr. Moore. Yes.
        Mr. Burgess. And I don't sit on the Committee on
    Appropriations, but I understand very completely the difference
    between an authorizer and an appropriator. When you go out to
    the NIH, the buildings are named for appropriators. There is
    not a single one named for an authorizer. So I understand what
    the difference is and I am sensitive to that.
        Mr. Moore. Yes.
        Mr. Burgess. But we, as the authorizers, need you to help
    us identify what is the funding level and if you say you need
    an increase of 10 to 15 percent a year but you have been living
    with 4 percent a year for a while, I got to believe that there
    is going to have to be an initial plus-up that is perhaps in
    excess of 10 to 15 percent. And I don't like to spend money any
    more than the next person, but if this Federal agency is going
    to function properly, then we are obviously going to need to
    fund it at a level where it can function, otherwise, what is
    the point?
        Mr. Rush. The Chair would like to inform the gentleman that
    his time is up. The witness will be allowed to answer his final
    question.
        Mr. Burgess. I thank the chairman.
        Mr. Moore. Well, we try to get the most effective number.
    So for instance, right now we certainly favor the increases
    that are being talked about over here. I think it is somewhere
    around $68 million or $69 million.
        Mr. Burgess. It is $68 million.
        Mr. Moore. OK, $68 million. And then the Senate is talking
    about $70 million. Certainly that would help us to be more
    effective in terms of increasing our staff and reaching the
    needs of consumer safety protection at a higher level, and that
    is the point. We have to adjust to it. If the money is not
    there, then we have to make that adjustment. We have to cut
    back. And that is not always the best service presented to
    consumer safety interest, but we have to deal with it. That is
    the best we can do.
        Mr. Rush. The gentlelady from Oregon is recognized.
        Ms. Hooley. Thank you, Mr. Chair. Thank you, Chairman Nord
    and Commission Moore, for being in front of our committee
    today. I have a series of very short questions and I would love
    short answers. What percent of the toys that you have recalled
    this year have been due to dangerous lead content? OK. While
    you are getting that answer, what other the toys and children's
    products have been recalled?
        Ms. Nord. Thirty-two percent of our total recalls have been
    because of lead. What was the second piece?
        Ms. Hooley. And what is the other reason for toys and
    children's products being recalled?
        Ms. Nord. Oh, many. Suffocations, small parts violations,
    choking hazards, frankly, are the biggest. The most dangerous
    product with respect to children, in terms of fatalities, is
    balls, children choking on balls.
        Ms. Hooley. A couple people have mentioned Bob in your
    testing lab that tests for toys and you said you have got 34
    other people testing in the laboratory. I am assuming that is
    testing for all products not just toys.
        Ms. Nord. Yes.
        Ms. Hooley. And so Bob really is the only toy tester?
        Ms. Nord. No. No, that is not correct.
        Ms. Hooley. He is the only designated toy tester. They
    test----
        Ms. Nord. No.
        Ms. Hooley. You have 34 people testing on toys?
        Ms. Nord. No, what I said was Bob is not the only
    designated toy tester.
        Ms. Hooley. OK. But you said you had 34 people in the lab.
        Ms. Nord. In the laboratory.
        Ms. Hooley. And they test for everything?
        Ms. Nord. Yes.
        Ms. Hooley. OK. You have labs that are fairly old and you
    have got 34 people working in the labs.
        Ms. Nord. Yes.
        Ms. Hooley. We have hundreds of millions of consumer
    products. Is that adequate?
        Ms. Nord. Our laboratory desperately needs to be modernized
    and we have had a number of conversations with this committee
    and our appropriators about that problem. We need to modernize
    our laboratory.
        Ms. Hooley. Chairman Nord, in your talks with the Chinese
    officials, in terms of banning lead in toys, what exactly did
    they agree to?
        Ms. Nord. I am sorry?
        Ms. Hooley. What exactly did the Chinese agree to in your
    talks with lead in toys, banning lead in toys?
        Ms. Nord. The general agreement that we reached, they
    agreed to implement a plan that would immediately eliminate
    lead from products, children's toys destined for the United
    States.
        Ms. Hooley. We talked a little bit and it has been brought
    up by other people, realistically, if you are given the
    resources, how quickly could the CPSC expand? How long does it
    take to hire and train an employee?
        Ms. Nord. It takes an awful long time and I am afraid I
    can't, sitting here, tell you an average amount of time, but it
    takes several months, because once we go through the hiring
    process, which is highly regulated, we have to also go through
    a security clearance process.
        Ms. Hooley. Do you have any idea of how many employees you
    think it would take to fulfill the mission of the CPSC? How
    many employees would it take?
        Ms. Nord. Well, we put a budget in. The Appropriations
    Committee has upped it and told us to hire up to 420, so that
    is what we are going to be doing, assuming that the
    appropriations bill passes.
        Ms. Hooley. Do you think that will fulfill your mission?
        Ms. Nord. That will be better than 400.
        Ms. Hooley. Have you ever requested additional resources or
    authority?
        Ms. Nord. I have only gone through this process once and
    yes indeed, I have got standing before the committee a long
    comprehensive list of proposals of things I would like to see.
        Ms. Hooley. How long has the CPSC been in direct contact
    with the Chinese Government regarding unsafe products being
    exported to the United States?
        Ms. Nord. We signed a memorandum of understanding in 2004.
    In 2005, we had the first U.S.-Chinese safety summit in
    Beijing. We have been in contact with them, in regular contact
    since then. That contact has really intensified at the
    beginning of 2007 and it culminated in the second U.S.-China
    safety summit last week.
        Ms. Hooley. So 3 years?
        Ms. Nord. Yes.
        Ms. Hooley. OK. And 3 years before you got an agreement
    with them, too, is that right?
        Ms. Nord. We signed a memorandum of understanding in 2004.
        Ms. Hooley. OK. It has been reported that the Chinese
    Government has 210,000 people and 1,800 labs dedicated to
    product safety. In your estimation, are the lab and employee
    figures accurate?
        Ms. Nord. I have no reason to think that they are
    inaccurate. That is what the Chinese told us.
        Ms. Hooley. Have you visited any of their labs?
        Ms. Nord. I have been to their headquarters. I have not
    visited an AQSIQ lab. I have visited other laboratories in
    China.
        Ms. Hooley. Can you speak to the quality of their
    facilities and their testing methodology?
        Ms. Nord. I really can't.
        Ms. Hooley. OK. All right. I am looking forward to getting
    your answers from the different requests that committee members
    have made. Thank you.
        Mr. Rush. The Chair recognizes the gentlelady from
    Tennessee, Mrs. Blackburn.
        Mrs. Blackburn. Thank you, Mr. Chairman. And Ms. Nord and
    Mr. Moore, I thank you for patience and your endurance this
    morning. When you get down to Ms. Hooley and you are getting
    kind of toward the end of the line on these questions that are
    coming at you. Ms. Nord, I want to be certain that have a good
    understanding of basically what you have presented to us. You
    have a problem or your work basically should be constituting
    pre-market, which is your offshore work, and post-market, which
    would be onshore work. Pre-market would be as they are tested
    as they are manufactured and then tested and then products are
    labeled that they are safe for transport to the U.S.
        And then your post-market is what you are dealing with once
    a product makes it into our product stream, into the market
    stream and a problem arises. And if I am understanding you
    correctly, what you have said is, pretty much, the current
    structure of the CPSC doesn't meet the current needs; that you
    need to do some changing with your structure; that just putting
    more people in is not going to necessarily solve the problem.
    And then I think I heard you say that--we talked about the
    three companies that primarily do much of the private sector
    testing and you mentioned the testing and certification and
    then you alluded to having penalties that go with that so that
    there is a stated consequence for companies that continually
    violate the law.
        So very quickly, just to be certain I have understood, in
    trying to define the problem and put the laser on the problem
    and get this so that we don't have bad products, we don't have
    43 recalls in a summer, that we, as a committee, have a good
    understanding of basically where you are and then begin to look
    at how we best fix this for you.
        Ms. Nord. OK.
        Mrs. Blackburn. So am I right? Is my understanding pretty
    much right? Would you contest any of that or agree with that?
        Ms. Nord. Well, I think you, as you set it out, pre-market
    and post-market, I think that is a very apt description of the
    process. Now, with respect to pre-market, please understand
    that the Commission's authorities and existing regulations are
    not as comprehensive as perhaps the committee thinks.
        Mrs. Blackburn. Correct. I understand that and that is why
    I said your current structure doesn't necessarily accommodate
    your current needs.
        Ms. Nord. But one of the things that I think would address
    this issue, both on a pre- and a post-market basis, is
    requiring that product sellers certify that they are meeting
    U.S. safety standards. That requires them to pre-market test
    and it gives us an ability to do a better sense of inspection
    because we would have the documentation.
        Mrs. Blackburn. Right. They would test, they would certify
    and then tie a penalty to that. OK. Now let me ask you
    something. Voluntary product recalls. How often does that
    happen with a company, that they just have a voluntary product
    recall and have you ever had to fine somebody for initiating a
    voluntary recall without working with you?
        Ms. Nord. Companies are supposed to work with us.
        Mrs. Blackburn. OK.
        Ms. Nord. I am not aware that we have ever fined anyone for
    doing that on their own.
        Mrs. Blackburn. All right. Now let me ask you this. Mattel
    is going to make nearly 800 million toys this year and other
    manufacturers, large and small, are going to make toys that are
    coming into the market. So is it the most effective thing, is
    it to have these manufacturers test their products for safety
    and then report this to the CPSC? Or do you need to develop
    something new, where you all would be the one that would be
    testing and then certifying these? Is it better to leave that
    with the private sector?
        Ms. Nord. I believe that if you were to require our agency
    to do the actual testing, again, you would be creating a very
    different agency than the one that exists now. If we have a
    requirement that the company certifies that they meet U.S.
    safety standards, that will force them to do pre-market
    testing, and I believe that independent third-party testing is
    the best way to go. The other thing that is very important here
    is who is doing the testing and we need to make sure that the
    laboratories that do the testing are certified to a standard
    that we would set, so that you have got real accredited
    laboratories doing high-quality testing. If you have that and
    then you have a certification process, I think that really goes
    a long way to addressing this problem.
        Mrs. Blackburn. Excellent. Thank you. I yield back, Mr.
    Chairman.
        Mr. Rush. The Chair recognizes the gentleman from
    Massachusetts, Mr. Markey.
        Mr. Markey. Thank you, Mr. Chairman. Chairman Nord, the
    situation at the Consumer Product Safety Commission that you
    find yourself in reminds me of the beloved children's story,
    The Little Engine That Could. But in this case, the CPSC is
    unfortunately the little agency that can't. The CPSC can't
    ensure that children are safe from harmful substances, like
    lead in toys. The agency's failures are not the result of poor
    performance by CPSC's dedicated employees. They are dedicated.
    They are diligent. They are hard working. But the Bush
    administration has starved the agency of the resources it needs
    to perform its important work. That little engine in the
    children's book kept chugging, I think I can, I think I can, I
    think I can. But the Bush administration has put the CPSC in an
    impossible situation. The challenge is just too steep for an
    undersized, under-resourced agency. And as a result, American
    consumers are put at risks and parents are left to wonder
    whether the toys they buy for their children are toxic. The
    parents play toy box roulette with each toy, wondering whether
    or not it has lead in it. Let me begin by asking, when was the
    last regulation that your agency promulgated?
        Ms. Nord. Last week.
        Mr. Markey. Last week?
        Ms. Nord. Yes. We have got a vote out there for another one
    as soon as the commissioner votes. I have already voted.
        Mr. Markey. Excellent. So your budget is small. The Bush
    administration doesn't really want to increase the agency's
    budget in a significant way, historically. But on the other
    hand, you can promulgate regulations. You don't have a lot of
    money, but you have a lot of power. You can promulgate
    regulations. So inspecting such a tiny percentage of toys
    overseas leaves children dangerously vulnerable to injury or
    death from toxic toys and other products. Now, this is a hand-
    held analyzer made by a company in my congressional district,
    Thermo Scientific, which, in just a few seconds, has the
    capacity to analyze whether or not a toy has lead, which can
    endanger children in our country.
        Ms. Nord. Yes.
        Mr. Markey. How many of these types of devices does the
    CPSC own?
        Ms. Nord. We have an open procurement right now to buy a
    number of them.
        Mr. Markey. And how many are you attempting to buy?
        Ms. Nord. I think, at this point, I am not sure. Can I get
    back to you?
        Mr. Markey. Are you talking about a hundred or you talking
    about two?
        Ms. Nord. No, we are not talking about a hundred. These
    things cost like $25,000. We could never afford that.
        Mr. Markey. Not under the Bush administration you can't.
        Ms. Nord. No.
        Mr. Markey. So if you get two of these guns, China is a big
    country. This is a big country. Two analyzer guns to determine
    whether or not there is lead in toys really isn't a lot that
    your agency will have.
        Ms. Nord. No, of course it isn't.
        Mr. Markey. But in turn, you could pass a regulation and
    you could mandate that every company in the United States that
    imports toys has to buy analyzer guns and has to deploy them.
        Ms. Nord. This is from your district.
        Mr. Markey. Not this one particularly, any analyzer gun.
        Ms. Nord. OK.
        Mr. Markey. Anything that advances the ability to serve as
    a deterrent, a detector. I don't care which one you mandate,
    although this seems to be a very good product. I just wonder,
    would you consider promulgating a regulation that every company
    has to purchase these kinds of technologies so that you can
    just zap in a second the little toy duck and determine whether
    or not it is dangerous for children?
        Ms. Nord. We would not have that authority under out
    statute and indeed, Congress has specifically said we can't do
    that.
        Mr. Markey. You can't do what?
        Ms. Nord. Specify that kind of a procurement. The Congress
    has said that our standards have to be cast in performance
    terms rather than in that specific a way. So what we can do is
    say that you can't have lead. What I would like us to have the
    authority to do is say a company needs to certify that there is
    no lead. Right now that authority doesn't exist for us. And
    then the company needs to figure out how they are going to go
    about certifying to the fact that there is no lead in their
    products and that is where----
        Mr. Markey. Are you presently testing by scrapping?
        Ms. Nord. I assume so, yes.
        Mr. Markey. You assume so or you don't know?
        Ms. Nord. Yes, we are doing x-ray fluorescents and
    scrapping.
        Mr. Markey. I think you should learn a lot more about what
    your agency is doing and exactly how you are testing, otherwise
    I think we are going to wind up in a situation where it is
    heads, the Bush White House wins, and tails, the children of
    America lose. There is no regulation and at the same time,
    there is no funding. And so inside of the regulatory black hole
    play all of the children of America and I just don't think it
    is something that should be allowed to continue and I would
    recommend very strongly that you begin a regulatory process to
    put, as specifically as possible, the protections for the
    children of our country. I thank you, Mr. Chairman, very much.
        Mr. Rush. Thank you. The Chair wants to inform the members
    of the subcommittee that we will engage in an additional round
    of questioning, one additional question per member, for those
    who have a question. Then, at the conclusion of this round, we
    will recess because there will be four votes on the floor. And
    at the conclusion of those four votes, we will return,
    reconvene and we will have testimony from Mr. Eckert from the
    Mattel toy company.
        Commissioner Moore, you have told this subcommittee that
    you are concerned that the law allows U.S. companies to export
    products that are not compliant with U.S. safety standards and
    I share that concern. It is like recycling the recalls. And
    what should we do about it? Do you have any recommendation for
    legislative reforms in that particular area?
        Mr. Moore. I think we might want to give some consideration
    to requiring them to at least inform the CPSC of their
    intentions to ship these products abroad and then we can
    determine whether that is permissible in a particular case.
        Mr. Rush. Are you aware of a current practice now? Is that
    current problem that we have in terms of recall?
        Mr. Moore. A problem?
        Mr. Rush. Yes.
        Mr. Moore. Yes, it is a problem.
        Mr. Rush. It is a problem?
        Mr. Moore. Yes, it is a problem, and in fact, some
    companies do tell us that they are exporting. Some of them do.
        Mr. Rush. They are exporting defective and dangerous----
        Mr. Moore. No, they don't tell us that. But if the products
    turn out to be defective, we try to prevent it as best we can.
    I don't think we have sufficient authority at this point.
        Mr. Rush. Thank you. The Chair recognizes the gentleman
    from Texas for one additional question.
        Mr. Burgess. OK, one question. It is going to have five
    parts.
        Mr. Rush. One question and one part.
        Mr. Burgess. I would like to make the observation, Chairman
    Nord, that I agree with you completely that it is the consumer
    ultimately who will punish any manufacturer or any importer who
    brings something into this country that ultimately is proved as
    unsafe, and I know. I talk to people in my district every day
    who feel just as I do, that no longer can they trust the safety
    of products when it says made in the People's Republic of
    China, and they are not purchasing those products.
        So I hope the manufacturers and importers are listening to
    that message and hearing that message from the consumers. On a
    very local level back in my district, there has been a news
    story about some sandals, flip-flops that have been sold in one
    of the big chains down there, that have caused a really
    significant dermatitis in the people that have worn them and it
    is obvious, just in the configuration of the strap itself,
    where the contact has occurred. Are you aware of this? Has the
    manufacturer contacted you with this information and have you
    issued the voluntary recall for this product?
        Ms. Nord. Yes, we are aware of it. We actually are in the
    process now of testing that. Unfortunately, we haven't been
    able to get the actual consumer sample that caused the problem.
    That would be very useful if we could see the actual product
    involved. But we do have testing underway and I would like to
    be able to come back to you with what our tests show.
        Mr. Burgess. OK. Well, this is one of those examples where
    things should proceed expeditiously. And I all I knew was what
    I saw on the news report, but it looks pretty dreadful and they
    seem to have a variety of feet that were affected and if it is
    that pervasive with one retailer, it would just seem to me that
    it would behoove us to act quickly and get this product off the
    shelves until we find out the relative safety or the commission
    of non-safety of this product.
        Ms. Nord. OK.
        Mr. Burgess. I thank the chairman for his indulgence and I
    will yield back.
        Mr. Rush. You have remarks?
        Ms. Nord. Well, I wanted to just expand or answer the
    question that you had asked Commissioner Moore, if I might,
    because I think it is important, it is a terribly important
    issue and I think it deserves if I could give an answer as
    well.
        Mr. Rush. Sure.
        Ms. Nord. The Consumer Product Safety Act addresses the
    export of consumer products and the Commission put in place a
    number of years ago, gosh, in the late 1970s or early 1980s, a
    policy statement and regulations setting on how we deal with
    exports. It has in there a blanket statement that says that if
    a company manufactures a product and it is distributed in the
    United States and it does not meet U.S. safety standards, it
    may not be exported out of the United States.
        So there is that blanket policy statement that the
    Commission adopted. Now, with respect to products that are
    manufactured in the United States for export that do not meet
    U.S. safety standards, there is a requirement that the
    companies notify the CPSC of their intent to do that and then
    we notify the country that is destined to get the product and
    we do that on a regular basis.
        So if, for example, Mr. Chairman, you have got a U.S.
    company that might be manufacturing a toy for export to the
    European Union, which has a different toy standard than we do,
    by definition, it wouldn't meet our safety standard. They would
    notify us we would notify the EU and the export would take
    place. We get those notifications at least once a week and we
    do have a process in place that notifies the country in
    question. I might add, Mr. Chairman, we are the only country
    that I know of that does that with other countries. We do not
    get similar kinds of notices from other countries.
        Mr. Rush. The subcommittee submitted a letter to the CPSC--
    --
        Ms. Nord. I am aware of that.
        Mr. Rush. You are aware of the letter regarding this
    particular issue?
        Ms. Nord. It just arrived yesterday.
        Mr. Rush. Yes. Would you respond to us by Tuesday, if you
    can?
        Ms. Nord. We will give it our very best efforts.
        Mr. Rush. The Chair now recognizes the gentlelady from
    Illinois, Ms. Schakowsky.
        Ms. Schakowsky. Let me just clarify that. If a product is
    recalled in the United States, recalled for being defective and
    it is supposed to be either destroyed or it can be exported if
    it is recalled, no?
        Ms. Nord. No, the statute says that if it is distributed in
    the United States and it doesn't meet a U.S. safety standard,
    it cannot be exported. With respect to recalls, what we do when
    we negotiate the recall is put in place a disposal plan. On
    occasion you will have the company, and we will agree to allow
    them to export it for disposal purposes, not for resale.
        Ms. Schakowsky. Only for disposal if it is recalled. OK. I
    wanted to ask about preemption and understand a little better
    what States can do.
        Ms. Nord. Yes.
        Ms. Schakowsky. The CPSC guideline is 600 parts per million
    on jewelry.
        Ms. Nord. Yes.
        Ms. Schakowsky. Illinois passed a law that just prohibits
    the sale of jewelry that doesn't meet that standard. Do you
    believe that the Illinois law should be preempted?
        Ms. Nord. No, the Illinois law is not inconsistent with the
    Federal laws.
        Ms. Schakowsky. What if Illinois set a lower standard, that
    is, there were fewer parts per million that were allowed?
        Ms. Nord. I am sorry.
        Ms. Schakowsky. If Illinois said, we are not going to allow
    anything that is 500 parts per million in jewelry.
        Ms. Nord. OK, in jewelry. Well, at this point, we only have
    an enforcement policy, so it would not be preempted. If we were
    to go ahead and do a ban and issue a regulation, then anything
    that was inconsistent with our regulation would be preempted
    unless the State came in and asked for us to waive the
    preemptive effect and there is a process in our statute that
    allows that.
        Ms. Schakowsky. So on the one hand you are saying, though,
    that the Commission doesn't have a lot of resources to do a lot
    of things and yet, when States move ahead, it is possible that
    they would be preempted. California and Vermont are considering
    more stringent standards.
        Ms. Nord. Actually, I would really disagree with, I guess,
    the underlying sense of that question, because we view the
    States as very, very critical partners here. And in fact, we
    have got State employees on our payroll that we pay to go out
    and do inspections and really be our feet on the ground. We
    have got several Illinois State employees who receive money
    from the CPSC.
        Mr. Rush. The gentlelady's time is up.
        Ms. Nord. So we look to the States to be----
        Mr. Rush. Mr. Markey is recognized.
        Mr. Markey. I thank the chairman very much and I love your
    innovation, this whole concept of final jeopardy. One question
    is just absolutely innovative, it is a breakthrough concept and
    I love it. Let me again reiterate that the workers at the
    agency, they do a great job. They work very hard. They are
    under tremendous constraints that come down from the Bush White
    House, and I appreciate all the work of all of you who are at
    CPSC. Let me ask you this, Commissioner Moore. Should the
    Commission be cutting staff in the midst of this children's
    products crisis?
        Mr. Moore. Absolutely not.
        Mr. Markey. Absolutely not. And how many new staff would
    you like to see, Commissioner Moore?
        Mr. Moore. I would like to see us have 500 or more
    staffers.
        Mr. Markey. Five hundred or more staffers. And how many
    would you dedicate to this issue of children's toys?
        Mr. Moore. That is a difficult one to answer. I would have
    to get back with you on that one.
        Mr. Markey. OK. Thank you. Thank you, Mr. Chairman, I
    appreciate it.
        Mr. Rush. Thank you and I want to thank the witnesses. You
    have been more than generous with your time and we certainly
    will be communicating with you again. The subcommittee now is
    in recess. We have four votes on the floor and we will
    reconvene with the president of Mattel as soon as we have
    completed our voting. This subcommittee will reconvene promptly
    at the conclusion of the four votes on the floor. Thank you.
        [Recess]
        Mr. Rush. Call to order. We want to welcome the second
    panel of this hearing. We want to welcome Mr. Robert Eckert,
    who is the CEO of Mattel, Incorporated. Mr. Eckert, would you
    please be seated at the witness table. Mr. Eckert, first of
    all, on behalf of the subcommittee, we want to thank you for
    the generous use of your time. You have been here for quite a
    while. I think I saw you when you first came into the room and
    that was hours ago and you are still here and so we really
    appreciate it. We will ask that you give us an opening
    statement, if you have an opening statement, and we ask that
    you confine it to 5 minutes, please. So you can begin at your
    convenience.

     STATEMENT OF ROBERT A. ECKERT, CHAIRMAN AND CEO, MATTEL, INC.

        Mr. Eckert. Thank you, Mr. Chairman, for inviting me to
    appear before the committee today. My name is Bob Eckert and I
    am the chairman and CEO of Mattel. I am the person responsible
    for making sure all our systems and all our people are
    dedicated to safe toys for our kids to enjoy without worry or
    concern.
        These recalls should never have happened, especially at
    Mattel. Our standards were ignored and our rules were broken.
    We were let down and we let you down. My job is to find out
    what happened and make sure it never happens again. We have
    worked tirelessly for the past 7 weeks to address these
    recalls. We are still investigating and we are still testing
    toys. If there is a needle in the proverbial haystack, we aim
    to find it.
        Mr. Chairman, I know your staff has also been working hard
    to investigate product safety and I am aware that they didn't
    get access, the access that they wanted, when they were in
    China. I can assure that, going forward, Mattel will do
    everything in its power to make information and people
    available to you. My written testimony discusses in detail the
    sequence of events. We know which manufacturers violated their
    contracts with us. We know which paints were contaminated and
    we know when they were used and on what toys. We have already
    fired several manufacturers that purposefully violated our
    rules and we continue to investigate others.
        I want to use this afternoon to tell the committee how we
    plan to ensure that our rules are followed, our standards are
    met and our toys are safe. First, Mattel has instituted a
    three-stage lead paint safety check. All products, not just
    those sourced in Asia, are subject to lead paint rules
    throughout the production cycle, before, during and after any
    paint application. Prior to painting, every batch of paint must
    be purchased only from a certified paint supplier and retested
    before it is used. Second, we have increased the number of
    auditors who are now in every major manufacturer, every day, to
    monitor compliance with our standards, and Mattel employees
    will conduct surprise inspections as well. Third, once the
    product is manufactured, each batch must pass a lead test prior
    to reaching store shelves, for an extra layer of redundancy.
        But we are not stopping there. We have created a new
    organization, reporting directly to me, that will combine all
    of Mattel's principal safety compliance and reporting
    functions. We believe this action will focus even more
    attention on safety and quality as well as standards and
    processes. For the past 7 weeks, I have been focused on
    steering the Mattel organization through these issues. Now,
    because I want to be able to personally assure our customers
    that our processes are right and our systems are working, I
    will travel back to China this month to inspect the
    implementation of the new procedures, to discuss our action
    plans with local managers, and to make clear my expectation for
    the safety of Mattel's toys.
        I am confident the steps we have taken so far will
    strengthen our procedures, but I won't rely on Mattel internal
    audits alone. This is one of the matters that I have discussed
    with Congresswoman Harman. We are putting in place third-party
    audits of our product safety and quality systems, led by an
    outside expert who will review Mattel's compliance with its
    safety protocols and report back to me with the findings. We
    expect tough reviews and we are ready for them.
        Mattel has taken extraordinary steps to notify parents
    about these recalls, including extensive advertising, Web
    outreach and media interviews. But we recognize that not
    everyone reads the morning paper or tunes into the nightly
    news, so we are working with State attorneys general and public
    health officials and we will reach out to other government and
    community organizations to communicate with even more people. I
    have said many times in the past that Mattel doesn't compete on
    safety. I can assure this committee that we will share with
    other toy companies what we have learned to help improve
    industry practices overall, and to ensure that children play
    with safe toys regardless of who made them or where they are
    made.
        Mr. Chairman, recent questions about the safety of Mattel
    toys have been a personal and bitter disappointment to me, as
    well as to the men and women at Mattel who take great pride in
    their work. I would like to conclude by reiterating my personal
    apology. Parents expect the toys carrying the Mattel brand are
    safe. For decades they have trusted this company to make
    certain that they are, and we intend to earn back that trust,
    not just with words, but with out deeds. Thank you.
        [The prepared statement of Mr. Eckert follows:]

                           Statement of Ronert Eckert

         Thank you for your invitation to appear before the
    subcommittee to address Mattel's recent lead-paint related
    recalls and for the opportunity to reinforce our commitment to
    efforts that will result in effective improvements in toy
    safety.
         While I am the Chairman and CEO of Mattel, I am also a
    parent of four children. And like you, I and the more than
    30,000 other employees at Mattel know that nothing is more
    important than the safety of our children. Mattel has worked
    hard through the years to earn the trust of parents worldwide,
    and we know full well that we have disappointed those parents
    by the recalls you have seen over the past several weeks. For
    that, we are very sorry. I am proud to say, however, that
    Mattel has faced up to these issues and to our
    responsibilities. We have been open and forthright about them,
    and we have moved vigorously to take steps to prevent these
    problems from re-occurring.
         In my testimony, I would like to start by providing you
    some important background facts regarding Mattel and our
    production of toys before the recent recalls. I will then turn
    to a description of what we now know about the specific
    circumstances that led to each of the recalls. Finally, I will
    address the steps that Mattel has taken to prevent this kind of
    problem in the future.

                               Mattel Operations

         Founded in 1945, Mattel designs, manufactures, and markets
    a broad variety of toy products. Our toys are enjoyed by
    children in over 150 countries. We manufacture toys in both
    company-operated facilities and through third-party contract
    vendors. Mattel has been manufacturing products and using
    contract vendors in China successfully and without significant
    manufacturing related safety issues for more than 20 years.
         Mattel and its vendors manufacture almost 800 million
    products a year. Approximately fifty (50) percent of all the
    toys we sell are manufactured at our own plants, a higher
    proportion than other large toy makers. When Mattel does
    contract with vendors to manufacture toys, our contracts
    require that the vendors comply with Mattel's quality and
    safety operating procedures and Global Manufacturing Principles
    (GMP), which reflect the company's commitment to responsible
    practices in areas such as employee health and safety,
    environmental management and respect for the cultural, ethnic
    and philosophical differences of the countries where Mattel
    operates. The contracts and accompanying documents also require
    that vendors comply with all applicable safety standards, and
    Mattel specifies, for each toy, the standard that applies. As
    to each standard, Mattel generally specifies the most stringent
    requirement that applies anywhere in the world. The contracts
    and accompanying documents also specify the tests that must be
    performed to ensure compliance.
         In China, Mattel, through its subsidiary Mattel Asia
    Pacific Sourcing (MAPS), has contracts with approximately 37
    principal vendors making our toys. Additional vendors are
    involved in the production of paper products, like board games
    and cards, cosmetics, inflatables, and our American Girl and
    Corolle dolls and accessories. Mattel's policies provide that
    approval to be a vendor for MAPS requires both a production
    facilities review and an audit under Mattel's GMP.

                   Mattel's Pre-August 2007 Safety Procedures

         We believe that, prior to August 2007, Mattel already had
    some of the most rigorous safety standards and procedures in
    the toy industry. With respect to paints, vendors could
    purchase coatings from one of MAPS' qualified paint suppliers,
    all of which had implemented pigment traceable control programs
    to ensure that pigments met heavy elements requirements,
    including for lead, before being released to production and
    could be traced to specific containers of paint on the factory
    floor. The qualified suppliers were required to test pigments
    before delivery and, with each delivery of paint, provide
    traceability records to the vendors linking the pigment in that
    paint to pigment certificates. In addition, each container of
    paint had to have a label with a date code and batch/lot
    number. The vendor was contractually obligated to match each
    incoming shipment with a corresponding pigment certificate and
    sticker each container with traceability information. Records
    demonstrating compliance with these procedures had to be
    maintained and kept available for periodic audit by MAPS
    auditors, which occurred approximately monthly.
         If vendors needed to buy paint from other suppliers, they
    could only do so if they complied with additional rules.
    Incoming shipments of paint from the supplier had to be
    quarantined. Samples from the shipment had to be submitted to a
    MAPS-approved lab for a heavy elements test. Again, paints that
    passed the test had to have a label affixed with batch number,
    test number, and other required information. As with approved
    suppliers, records demonstrating compliance with these
    procedures had to be maintained and made available for periodic
    audit by MAPS auditors.
         If a vendor used a subcontractor to assist with any of its
    production, our contracts required that the vendor identify
    that subcontractor to MAPS. Vendors also were required to
    identify all facility locations. Vendors were required to
    supply all paint, obtained as described above, to be used by
    any subcontractor on Mattel products.
         The above procedures were designed to protect the
    integrity of the paints to be used on Mattel products. In
    addition, there were a number of checks built into the system
    prior to August 2007 to verify that finished toys did not have
    paint with lead in amounts above applicable standards. Under
    the procedures imposed by our agreements with vendors, at the
    commencement of production, before any product could be
    shipped, samples had to be tested for compliance with all
    facets of Mattel's product requirements, including the
    standards for lead and other heavy elements. Product could be
    shipped only after a certificate of compliance was issued.
         In addition to all this testing, a majority of Mattel's
    direct import customers required periodic testing of products
    before export. In those circumstances, the direct importer
    determined the nature or scope of the tests, including tests
    for heavy elements. The testing for direct importers was
    sometimes done by MAPS and sometimes done by independent labs.
    In addition, recertification testing was required for products
    made for direct import if production continued for more than
    one year. Finally, after certification, vendors were not
    permitted to change manufacturing locations, materials,
    components or material sources without approval from MAPS and
    recertification.

                                  The Recalls

         Mattel's safety standards and procedures had functioned
    successfully for many years prior to this summer's recalls.
    Clearly, however, something new arose that we had to address.
    When Mattel discovered toys with noncomplying paint, we
    initiated an exhaustive investigation to get to the root cause.
    What that ongoing investigation has revealed so far is that a
    few vendors, either deliberately or out of carelessness,
    circumvented our long-established safety standards and
    procedures. As a result, MAPS has terminated its business
    relationships with some of the entities involved and is
    continuing to investigate others. Let me provide you the
    details of what we have discovered so far.

                           The August 2, 2007, Recall

         The August 2, 2007, recall had its genesis in a direct
    importer's pre-shipment test for lead in paint on a sample of
    product bound for France. Specifically, Intertek, an
    independent laboratory, performed the pre-shipment lead test
    for Auchan, a French direct importer. On June--8, 2007,
    Intertek reported noncompliant paint on a sample of toys
    manufactured for MAPS by Lee Der Industrial Company, Ltd.
    Mattel Product Integrity employees in Asia stopped shipment of
    the item and contacted the vendor, Lee Der, requesting that it
    immediately remedy the problem and provide another sample of
    the corrected production for testing. On or about June 29,
    2007, Mattel Product Integrity employees in China were notified
    of an Intertek lead test result on another sample of the same
    toy previously tested on June 8 for Auchan. The product passed
    the lead test. At that point, Mattel Product Integrity
    employees in Asia had reason to believe that Lee Der had solved
    any lead paint issue that it had.
         Independent of the test failure in China, but during the
    same time period, on June 27, 2007, a consumer reported to
    Mattel's call center in the U.S. a home test kit finding of
    lead paint on a product also manufactured by Lee Der, a result
    which Mattel was subsequently unable to replicate when testing
    several samples of the same product. On June 28, 2007, Mattel
    Product Integrity employees in China took additional samples of
    Lee Der's products and sent them to MAPS' laboratory in China
    for testing.
         On July 3, 2007, a third lead test report for Auchan,
    performed by the same independent laboratory, Intertek, found
    noncomplying lead levels in paint on another sample of the
    originally-tested toy in a different assortment made by Lee
    Der. Shipment of that product was held and, on July 5, MAPS
    picked up samples of 23 additional Lee Der products to test. On
    July 6, 2007, MAPS' laboratory in China reported results of its
    testing of the five samples of Lee Der toys that MAPS had taken
    on June 28. Nonconforming levels of lead were found in the
    paint on portions of three of five samples of the toys made by
    Lee Der. That same day, July 6, immediately following receipt
    of these results, MAPS notified Lee Der that MAPS would accept
    no more toys made by Lee Der. On July 9, MAPS' laboratories
    reported that 9 of the 23 additional samples of Lee Der toys
    taken on July 5 contained some paint with nonconforming lead
    levels.
         In light of these additional test results, Mattel's
    employees in Asia notified senior management at Mattel of an
    issue with Lee Der products for the first time on July 12,
    2007. Mattel management ordered an immediate freeze of all
    shipments of suspect Lee Der products on July 13, 2007, and
    expanded the freeze to apply to all Lee Der products on July
    17, 2007. Mattel also launched an investigation to identify
    both the root cause and potential scope of the lead paint
    problem, including what toys might be affected, what dates of
    production might be affected, and whether any of the affected
    toys may have been shipped and, if so, to what locations.
    Mattel traced the nonconforming lead levels to yellow pigment
    in paint used on portions of certain toys manufactured by Lee
    Der at a previously undisclosed plant located in Foshan City,
    China.
         Mattel filed an Initial Report with the Consumer Product
    Safety Commission (CPSC) on July 20, 2007, and a Full Report on
    July--26, 2007, indicating Mattel's desire to institute a fast
    track recall. Mattel recalled all products that we believed
    potentially could contain some paint with impermissibly high
    lead levels. Thus, the recall covered 83 different stock
    keeping units (SKUs) made by Lee Der between April 19, 2007
    (the date when Lee Der took delivery of the paint containing
    lead from its supplier) and July 6, 2007 (the date when Mattel
    stopped taking delivery of Lee Der's products).
         Lee Der's use of an unregistered facility to produce
    Mattel product was a violation of its manufacturing and
    procurement agreement with MAPS, as was its failure to test
    every batch of paint received from its paint supplier for use
    on Mattel product.

                          The August 14, 2007, Recall

         On July 30, 2007, just prior to the announcement of the
    August 2 recall, a test conducted by Mattel on paint on a
    different toy, the Sarge car, made by a different vendor,
    failed the lead test. The test was part of Mattel's routine
    recertification testing for direct importers described above.
    Mattel immediately began an investigation to verify the result,
    locate potentially affected product, and determine the cause
    and scope of the problem. In light of the test result on the
    Sarge car and the lead test results on the Lee Der-made toys,
    on August--1, 2007, Mattel decided to detain from distribution
    all finished products in Asia, whether made by Mattel or our
    vendors, until test samples proved the toys to be in compliance
    with lead standards.
         On August 6, 2007, Mattel concluded that the excess lead
    on the Sarge car was due to yellow pigment used by an
    undisclosed subcontractor on the olive-green top. That same
    day, Mattel filed an Initial Report with the CPSC. The next
    day, August 7, Mattel filed a Full Report with the CPSC asking
    for a fast track recall of the toy. The Sarge car was recalled
    on August 14, 2007.
         The olive-green top of the Sarge car that contained lead
    paint was painted by Hon--Li Da Plastic Cement Products Co.,
    Ltd. located in Shenzhen City, China. Hon Li Da was a
    subcontractor of Early Light Industrial Company, Ltd. in Hong
    Kong. Early Light incorporated the top painted by Hon Li Da in
    the finished Sarge car made in its manufacturing facility
    located in Pinghu, China. Early Light had not identified its
    subcontractor, Hon Li Da, though it was required to do so by
    its agreement with MAPS. It is not clear at this time whether
    Early Light supplied Hon Li Da with certified paint, whether it
    supplied an insufficient quantity of certified paint, or
    whether Hon Li Da sold the certified paint it was provided by
    Early Light and bought and used other paint containing lead.

                         The September 4, 2007, Recall

         When Mattel detained all finished product in Asia on
    August 1, we began to test for lead in paint on samples of each
    toy. This exhaustive testing program resulted in identifying
    certain parts of some additional toys with paint containing
    lead in excess of the applicable standard. Specifically, Mattel
    obtained some test results indicating that a few parts of
    certain Barbie accessory sets (7 SKUs), a Geo Trax vehicle (2
    SKUs), and the Fisher-Price 6-in-1 Big World Bongos Band (1
    SKU) also had paint on some portions of the toys with lead
    levels in excess of the applicable standard.
         The nonconforming paint on portions of certain plastic
    Barbie accessories was first detected on or about August 9 and
    11, 2007. The CPSC was notified of the results of Mattel's
    testing and investigation by letters delivered on August 10
    and--17, 2007. A Full Report was filed with the CPSC on August
    27, 2007, again requesting a fast track recall. As in the prior
    two recalls, Mattel was over-inclusive in the toys we included
    in the recall. In fact, the recall included some Barbie
    accessories that, when sample tested, complied with the
    applicable lead standard.
         The affected Barbie accessory products were painted by one
    or both of two related subcontractors, Dong Lian Fa Metals
    Plastic Produce Factory and Yip Sing. Dong Lian's factory is
    located in Huizhou City, China. Yip Sing's factory is located
    in Shenzhen City, China. The lead paint affected parts were
    incorporated into finished product manufactured by MAPS'
    vendor, Holder Plastic, at its factory in Shenzhen, China.
    Holder failed to identify its subcontractors to MAPS as it was
    required to do. Holder appears to have supplied Dong Lian Fa
    and Yip Sing with approved paint, and it is not yet known why
    paint containing lead was applied to the toys.
         The nonconforming paint lead levels on the Geo Trax
    vehicle's small yellow ladder and headlights were discovered on
    or about August 16, 2007. The CPSC was notified on August 20,
    2007, of the Geo Trax test result, and a Full Report was filed
    on August--27,--2007, asking for a fast track recall. Mattel's
    recall of approximately 89,000 Geo Trax included a significant
    number of compliant toys because the toys with noncompliant
    ladders and head lights painted by Apex Manufacturing Co.,
    Ltd.'s subcontractor, Boyi Plastic Products Factory, between
    July 31, 2006, and September 4, 2006, had been mixed with
    pieces of compliant production in Apex's inventory. Mattel has
    recalled all 89,000 finished products that were made from the
    mixed inventory.
         Certain of the Geo Trax products included in the recall
    were painted by Boyi in Dongguan City, China. These toys were
    intermingled with other finished products manufactured by MAPS'
    vendor, Apex, in Dongguan City, China. Apex violated its
    agreement with MAPS by failing to identify its subcontractor,
    Boyi. Apex claims that it provided compliant paint to Boyi, but
    that has not been confirmed.
         Nonconforming paint lead levels on portions of some 6-in-1
    Big World Bongos Band were found initially on or about August
    20 and confirmed in retests on August 27, 2007. Even though the
    noncomplying paint is located on the underside of the Bongos'
    plastic skin, Mattel decided to recall the toys by notifying
    the CPSC on August 27, 2007, and by filing a Full Report on
    August 28, 2007, also requesting fast track treatment. Our
    current understanding, based on our ongoing investigation, is
    that the affected 6-in-1--Big World Bongos Band were painted at
    the request of a subcontractor, Wo Fong Packaging Co., Ltd.,
    located in Dongguan City, China. The components made at the
    request of Wo Fong were incorporated into finished product
    manufactured by MAPS' vendor, Shun On Toys Co., Ltd., at its
    factory in Dongguan City, China. Shun On violated its agreement
    with MAPS by failing to identify its subcontractor, Wo Fong,
    and by failing to provide Wo Fong with the paint to be used on
    a Mattel product.
         Mattel's exhaustive testing program to identify any lead
    paint on any part of our toys continues to this day. I am
    pleased to report that, thus far, this testing has revealed no
    other products, beyond those subject to the September 4, 2007,
    recall, that should be recalled for lead in paint in excess of
    the applicable standard.

                     Mattel's Follow-Through on the Recalls

         All of these recent recalls were initiated by Mattel as
    voluntary recalls. In addition, in order to expedite the
    recalls, Mattel requested that each recall be implemented
    pursuant to the CPSC's ``fast track'' program. Mattel and the
    CPSC have worked together closely and cooperatively to plan the
    recalls and to make sure that the recalls are being clearly
    communicated to parents. Thus, in agreement with the CPSC,
    Mattel staffed its call center with adequate numbers of
    properly trained operators, developed a CPSC-approved script,
    prepared a CPSC-approved portion of the company's Web site
    addressing the recall, explored means by which consumers could
    be contacted directly by mail using Mattel's consumer data
    base, prepared and sent to retailers a CPSC-approved notice for
    retail stores, prepared CPSC-approved posters to be displayed
    in retail stores, and finalized the terms of the recall. Mattel
    also gave retailers advance notice of the recall, as permitted
    by the CPSC, so that they could remove recalled products from
    their stores even as preparations for the implementation of the
    recall were being finalized.
         With the CPSC's assistance, permission and approval,
    Mattel also:

        Issued a joint press release with the CPSC;
        Set up a toll-free, multi-lingual, interactive voice
    response phone line that assists consumers in determining
    whether their product is subject to the recall and that allows
    registration for the recall;
        Placed a notice on the Mattel web site that includes a web
    tool, in more than 20 different languages, that aids consumers
    in determining whether their product is subject to the recall
    and that allows for on-line registration for participation in
    the recall;
        Produced and placed prominently on our website two
    specially-made videos in which I addressed these issues
    directly with parents;
        Mailed letters to individual consumers whose contact
    information was in the Mattel Consumer Relations database by
    virtue of their having called Mattel previously about any toy
    that is subject to the current recalls; and
        Formally notified retailers of the recalls by letter.

         In order to get the news out to as many consumers as
    quickly as possible, Mattel also took the initiative and ran
    full-page newspaper ads in major newspapers on August 14 and
    September 5, 2007. Among the newspapers that carried the ads on
    one or both of those dates were USA Today, the New York Times,
    the Los Angeles Times, the Chicago Tribune, and the Washington
    Post. We gave satellite interviews to numerous television
    programs, which appeared on global, national and local
    broadcasts. We also did many print and on-line interviews. In
    addition, Mattel placed ads on various web sites, especially
    those that we believed were likely to be visited by parents.
    These websites included Yahoo!, Disney, Nickelodeon, and the
    Cartoon Network. This combination of the CPSC's prescribed
    measures and Mattel's further independent efforts resulted in
    intense media coverage of the recalls.
         With respect to the procedures for returns of recalled
    products, retailers may return all recalled products in their
    inventory to Mattel for full credit. Consumers are provided a
    postage prepaid ``mailing label'' to use to send recalled
    product back to Mattel. In most cases, when Mattel receives
    recalled product from consumers, we issue vouchers redeemable
    for Mattel products in an amount that is intended to be equal
    to or greater than the retail price actually paid plus tax. In
    some cases, we issue replacement parts rather than a voucher.
    If any consumer has a proof of purchase at a higher price than
    the voucher amount, Mattel will issue a voucher for the higher
    price.

               Mattel's Enhanced Procedures To Ensure Compliance

         Mattel has acted quickly to implement new procedures
    designed to provide enhanced protections against potential
    future violations of our manufacturing standards and
    procedures. For example, after the August 2 recall, we
    immediately supplemented our contractual requirements with a
    three-stage safety check related to the paint used on our toys.
    The three-stage safety check applies to all plants that
    manufacture toys for Mattel, not just those located in Asia.
         First, every batch of paint must be purchased only from a
    certified paint supplier. Even though the supplier is already
    certified, samples of the paint must still be tested before use
    to ensure compliance with lead standards. Those sample tests
    must be performed either by Mattel's own laboratories or by
    laboratories certified by Mattel. Copies of the test results
    must be made available to Mattel.
         Second, paint on samples of finished product from every
    production run must be tested for lead by either Mattel's own
    laboratories or by laboratories certified by Mattel.
         Third, we have increased the frequency of random,
    unannounced inspections of vendors and subcontractors for
    compliance with these new procedures. In addition, Mattel has
    been conducting unannounced inspections of every one of our
    vendors and subcontractors worldwide.
         Beyond this three-stage safety check, Mattel's vendors
    must disclose to Mattel the identity of any subcontractor that
    a vendor proposes to use before that subcontractor is allowed
    to work on Mattel products, and any such subcontractor must be
    open to audit by Mattel. Those subcontractors are not permitted
    to further subcontract the work on Mattel's products. Vendors
    must supply all paint to the subcontractors, and the vendors
    and subcontractors must segregate all production for Mattel,
    including having dedicated storage for paint used on Mattel
    products. Mattel's vendors also must test the paints on a
    sample of all components produced by any subcontractor for lead
    before using the subcontractor's components in a Mattel
    product. Review of compliance with these additional
    requirements will also be part of the unannounced inspections
    of vendors and subcontractors.
         Through the above steps, Mattel has now implemented a
    system of multiple and redundant safety checks. We certify
    paint suppliers to ensure the paint they supply is good paint.
    We require tests of the paint from the certified paint
    suppliers before it is used, and if it fails, it doesn't go on
    our product. We have increased random inspections of vendors
    and subcontractors during production to make sure they are
    testing paint. We require that vendors test samples of any
    components that they get from subcontractors before they go
    into our products. We test samples of the finished products on
    a regular basis to verify that the process has worked. At the
    same time, our direct importers are continuing to perform their
    own testing of our products.

                                 Other Measures

         In addition to these many safeguards, we are continuing to
    evaluate and, where appropriate, adopt further measures to
    enhance the safety of our products and the effectiveness of the
    recalls. We have made some recent announcements that will have
    a direct impact on how we do business. For example, we have
    created a new organization, reporting directly to me, that will
    combine, in one operation, all of Mattel's principal safety,
    compliance and reporting functions.
         While Mattel is confident that the measures we have
    adopted will go far in preventing these lead-paint problems
    from re-occurring, we agree that others, including Congress,
    the CPSC and foreign regulatory bodies and governments, can and
    should play an important role in what we believe should be a
    joint and cooperative effort with a shared objective--the
    safety and well-being of our children.
         Mattel supports the Consumer Product Safety Act and the
    mission of the Consumer Product Safety Commission. We are
    committed to working with members of Congress to strengthen the
    Commission. We believe that more resources are needed for the
    organization to carry out its important duties most
    effectively. Mattel further supports proposals that would
    ensure laboratories used for testing toys, wherever produced,
    are fully qualified and are accredited by independent
    organizations.
         These recent lead recalls have been a personal
    disappointment to me and, I am sure, to all of the men, women
    and parents who take great pride in working at Mattel. But, as
    I said at the start of my remarks, these events have also
    called for us to act, and we have. As an industry leader often
    deeply involved in setting standards for our industry, we have
    adopted safety standards and procedures that we hope will be a
    model for all toy companies.
         I would like to conclude by reiterating my personal
    apology on behalf of Mattel and to emphasize my commitment to
    parents. Parents expect that toys carrying the Mattel brand are
    safe. I believe the steps we have taken and continue to take
    will strengthen the safety of our products and earn their
    trust.
         Thank you for the opportunity to address these important
    issues with you today. I would be happy to answer any questions
    that you may have.
                                  ----------

        Mr. Rush. Thank you for your opening statement. The Chair
    recognizes himself for 5 minutes for questioning.
        Mr. Eckert, you and your company have apologized to the
    American public for the toys with the lead paint, and you have
    just recently done so in this hearing. I have a concern that in
    the past Mattel has not been so forthcoming with the public.
    The CPSC has twice, in 2000 and earlier this year, fined Mattel
    for failure to report serious safety defects in toys, including
    Power Wheels, Little People Animal Farms, et cetera. Given this
    recent history, how is the public to trust your assurances and
    how is it to read your apologies?
        Mr. Eckert. I believe, sir, the timeliness with which we
    have executed the recalls this summer are a good example of our
    understanding of our obligations and our willingness to comply
    with them. And if I might add, when we go backwards in time and
    look at recalls like the 1998 recall of Power Wheels that
    occurred before I was even with the company, and what we try
    and do is not dwell on those issues but learn from them and
    apply them to our situation today. And I might add, not only do
    I believe our recalls were timely this summer, and I would add
    that the CPSC worked very hard to execute these recalls on very
    short notice. They did work evenings, they did work on weekends
    and they did work over holidays to help us effect these fast-
    track recalls. We had initiated a dialog with the Commission,
    prior to this summer's recalls, to put in place a new system
    that I believe will be gold standard for manufacturing
    companies to take out these disputes of timeliness and to
    automate a system and to make sure the Consumer Product Safety
    Commission gets the information when they need it.
        Mr. Rush. On the issue of time and timeliness, can you
    comment on the recent reports in the press earlier this month
    that stated that Mattel will disclose problems ``on its own
    time table,'' and that the CPSC's enforcement practices are
    ``unreasonable.'' Should Congress interpret this as saying that
    your company is above the law?
        Mr. Eckert. That is not what I said.
        Mr. Rush. That is not what you said.
        Mr. Eckert. It is not in quotes. That is not how I feel.
    And again, I believe our actions demonstrate the contrary. I am
    sure you have faced situations, as have other Members of
    Congress, where you might say something in a media report and
    it comes back being something entirely different than what you
    might have said.
        Mr. Rush. I don't want to comment on that. Well, what did
    you mean when you made those statements?
        Mr. Eckert. I didn't make those statements in the body of
    that interview.
        Mr. Rush. You didn't make those.
        Mr. Rush. Right.
        Mr. Eckert. What I tried to communicate was what I
    understand our requirements to be. First of all, I absolutely
    understand the prompt notification requirement, that is, 24
    hours to notify the agency when you have a reasonable
    conclusion that a defect may pose, could pose a serious hazard.
    What hasn't received as much attention is the provision in the
    regulations which gives companies 10 business days or more to
    determine if they have a reportable incident. For example, is
    the product in distribution, what product is it and where is
    it? We do use time, from when we first hear of a problem, to
    make sure we know what products are involved. We go to the root
    cause of the situation so that we recall the right products on
    the right days.
        Mr. Rush. Right. I have just a few more seconds and have a
    couple of other questions. Mattel announced three recalls in
    August and September. Are there any more coming?
        Mr. Eckert. I certainly hope not, but I have learned never
    to say never. And I said in my remarks, we are looking for the
    needle in the haystack and if there is another needle in the
    haystack, we will find it, if we at all can, and we will report
    it in a timely fashion and we will have another recall. The
    fact is the system worked, because we recalled these products.
        Mr. Rush. Can you personally assure parents that the Mattel
    toys that they might be considering buying for this upcoming
    Christmas season for their children, can you assure them that
    they will be safe?
        Mr. Eckert. My No. 1 goal is to make sure that this holiday
    season's toys are the safest ever.
        Mr. Rush. The Chair now recognizes the ranking member, Mr.
    Stearns.
        Mr. Stearns. Thank you, Mr. Chairman. Mr. Eckert, let me
    just start from the beginning. How many products do you make
    every year? How many toys do you make? What is the volume?
        Mr. Eckert. We make roughly 800 million toys a year.
        Mr. Stearns. And what percentage of those products have
    been recalled?
        Mr. Eckert. Due to lead paint, we have recalled about one
    and a half million products here in the United States. It is
    about one-half of 1 percent.
        Mr. Stearns. OK, one-half of 1 percent.
        Mr. Eckert. It is one-half of 1 percent.
        Mr. Stearns. Yes. It is a very small percentage. And the
    idea is that most of these recalls came from a certain area.
    And where was that? They were manufactured in----
        Mr. Eckert. They were manufactured in the southern part of
    China.
        Mr. Stearns. And this is not in the United States, the
    recalls, they were products that were manufactured in the
    southern part of China?
        Mr. Eckert. That is correct.
        Mr. Stearns. OK. And how many plants were involved?
        Mr. Eckert. There were several different plants, five
    different, what we call primary vendor plants out of the
    roughly 37 or so vendors that we use in China, and then several
    subcontractors of theirs.
        Mr. Stearns. And it is your intent now to have
    subcontractors in there working for you, testing, on a
    statistical basis, these toys in the future to prevent this
    from happening again?
        Mr. Eckert. No, sir. Again, the rules are very clear to
    prevent this from happening again. One, you can only use
    certified paint from one of our eight certified suppliers that
    have pigment tracing and have documentation on every can of
    paint. Two, you must retest the paint before you use it, to
    make sure it is good. Three, we now have auditors in every one
    of these primary vendors every day of the week to watch what
    they are doing. And four, for even more redundancy, we are
    testing every batch of finished toys, samples from every batch
    before they go to store shelves.
        Mr. Stearns. Now, do you own these plants? Do you have 100
    percent ownership of these plants?
        Mr. Eckert. We do not. We own some plants. Of the toys we
    make in China, about half of them come from Mattel plants and
    half come from what we call vendor plants.
        Mr. Stearns. The ones that were recalled, those plants, how
    many of those plants did you own?
        Mr. Eckert. None.
        Mr. Stearns. None. So all of these are from plants you do
    not own?
        Mr. Eckert. That is correct.
        Mr. Stearns. Do you have a 10 percent interest, a 50
    percent interest?
        Mr. Eckert. We have no interest. But with some of these
    plants, we have had long relations.
        Mr. Stearns. But how could you be sure that you are going
    to be able to control the product in a company in southern
    China that you have no ownership in, that is owned by ``the
    communist government?'' How can you assure us that you are
    going to have any control on any plant that you don't own and
    you can't assure access to?
        Mr. Eckert. Well, we do have access to all of those plants
    and we are in those primary vendors every day and I think our
    redundant level of tests provides assurance.
        Mr. Stearns. But don't you think it would be better that
    you own these? You say you own some plants in China.
        Mr. Eckert. That is correct.
        Mr. Stearns. OK. So wouldn't it be advisable for you to own
    the plants where these problems were?
        Mr. Eckert. I am not sure it is a question of who owns the
    plants, it is: Are people following the rules?
        Mr. Stearns. But the plants you own, you have had no
    trouble with.
        Mr. Eckert. That is correct, but again----
        Mr. Stearns. So why not take the next logical step and say,
    why don't we transfer this to plants we own, rather than plants
    we have no ownership in?
        Mr. Eckert. We are putting the same redundancies in the
    plants that we do own. Again, I am not sure this is----
        Mr. Stearns. So ownership is not a relevancy?
        Mr. Eckert. I think what is important here is that our
    people follow the rules and what got us into these recalls this
    summer is that a handful of people violated our rules. They
    circumvented the rules.
        Mr. Stearns. I know, but you didn't own the plants, you had
    no huge authority there, whereas, in the plants you own, you
    did. So you are saying you are going to continue to manufacture
    there and hope these subcontractors get in there and you have
    no ownership in these plants, so I am not sure the guarantee is
    there. Let me move along here. Why don't you manufacture these
    toys in United States?
        Mr. Eckert. We manufacture in markets outside of China.
    First, we are one of the few toy companies that owns toy
    facilities, toy-making facilities, and we manufacture in other
    markets, including Malaysia, Thailand, Mexico, Indonesia.
        Mr. Stearns. Are you manufacturing in China because it is
    inexpensive?
        Mr. Eckert. We have been manufacturing there since, I
    believe, 1983.
        Mr. Stearns. Yes.
        Mr. Eckert. It is a good combination of quality, cost and--
    --
        Mr. Stearns. Inexpensive labor is primarily the reason,
    wouldn't be?
        Mr. Eckert. Not necessarily. We also have worked in China
    for decades and had very high quality toys.
        Mr. Stearns. You see a lot of Toyota or BMW come back in
    the United States and they go into parts of the United States
    where the standard of living is not as high as New York City,
    Westchester County, Greenwich, Connecticut. Is it possible that
    a lot of these companies where you manufacture in southern
    China, you could come back in the United States and in some of
    the regions of this country we could create jobs for Americans?
        Mr. Eckert. We are always looking at where we manufacture
    toys and we will continue to look. Since I have been at Mattel
    for the last 7 years, we have rotated plants and made changes
    several times and we will continue to do that.
        Mr. Stearns. The last question, Mr. Chairman. How much of
    this failure in this detection of the lead in paint is due to
    fraud or to process failure?
        Mr. Eckert. It is hard for me to answer. The investigation
    is still ongoing. My sense is that some people made honest
    mistakes and some carelessness. For example, when a vendor
    outsources to a subcontractor a part, the requirement is the
    vendor takes the paint that follows our rules and it goes to
    the subcontractor with the part. I believe there may have been
    instances where the paint went to the wrong place or not enough
    paint went to the right place. That may be an issue. I also
    believe there were clear cases of people intentionally
    circumventing the system and those are the people we no longer
    do business with.
        Mr. Stearns. And I submit, Mr. Chairman, that a lot of
    fraud did occur and without ownership of this, the possibility
    of fraud could occur, so I think that is a relevant point.
        Mr. Rush. His time is up. The Chair now recognizes the
    gentleman from Texas, Mr. Burgess, for 5 minutes of
    questioning.
        Mr. Burgess. Thank you, Mr. Chairman. And Mr. Eckert, I
    thank you also for staying with us all day. It has been a
    pretty long hearing. You may have heard me. It has been so many
    hours ago, now you may have forgotten. When you do a product
    recall, what do you do with all of the stuff that you get back?
    Does the stuff come back to you?
        Mr. Eckert. Yes. Not everything comes back, unfortunately,
    which is why we work so hard with the CPSC, why we have taken
    out advertising to announce the recalls, which, again, I
    believe is unprecedented in our industry. We have been on
    television with media interviews. We took out full-page ads in
    newspapers. We bought advertising on Internet sites, like
    Google and Yahoo, to make sure people were aware of it. When we
    do get toys back, we quarantine them. We do not release them.
    We do not export them. We do not ship them out of the country.
    In the case of this summer, this is the first time we have had
    lead paint on toys, so this is new to us. We are working with
    environmental consultants to try to devise a plan to dispose of
    them. I know one of the things we are looking at is can they be
    used in cogeneration, complementing ingredients in cogeneration
    or something like that. But we do not allow those products to
    leave our control.
        Mr. Burgess. Very well. So they are not going to end up in
    a landfill or just burned in a regular furnace?
        Mr. Eckert. No, they are not.
        Mr. Burgess. What do we do to make sure that if you had a
    product in the pipeline over in China, obviously, now that
    pipeline is stopped, how do we be sure that someone doesn't,
    before that product even gets to this country and gets under
    your command and control, how are we sure that it is not
    diverted and perhaps shows up on an eBay site? With the
    interconnectivity that we have with the Internet today, you can
    buy things from other countries. Are we doing anything to
    monitor that? Or if someone in this country said, I better dump
    my Tommy the Tank, or whatever it is, quickly and sell that on
    eBay, is anyone----
        Mr. Eckert. That is a concern. I don't know the answer. I
    talked to a Senator just last week about that. It is a big
    concern of mine. If someone were to take a toy that is not safe
    for children and donate it to the Salvation Army or one of
    those things, that to me is wrong and I don't know the answer
    to how to prevent that, but I believe we should work and figure
    out a way to do that.
        Mr. Burgess. Now, Chairwoman Nord, when she was here, I
    think testified that the current standard, acceptable standard
    for lead in paint had to be less than 0.06 percent.
        Mr. Eckert. Yes.
        Mr. Burgess. I believe that is the figure that was quoted.
    How high were the levels in some of the paint that you tested
    that was ultimately found to be at risk?
        Mr. Eckert. It varied tremendously. For example, I saw
    media reports today of the toy that we identified in the letter
    to the chairman and to the staff, that had 11 percent lead. On
    that particular toy, the range was from 0.26 percent to 11
    percent, depending on which product was sampled. But that was
    the single highest number we got.
        Mr. Burgess. Now, would the whole toy have been painted
    with that?
        Mr. Eckert. Not at all. No, what happens in this
    particular, it was a stamp on the underside of a membrane, so
    not exactly accessible in normal use and it is just that small
    portion of the toy. In fact, in all of these toys, it is not
    the big toy that is affected, it is some component. And when I
    cite percentages, it is percentage of lead on the paint on that
    small component. The average has been or a typical number has
    been closer to 1 percent. It is still too high.
        Mr. Burgess. Are you aware of any testing that has been
    done on children who have been, say, in a household or an area
    where they may have been exposed? Has there been any clinical
    documentation that, in fact, this resulted in a higher than
    expected lead level in children who may have been in an
    environment where these toys were?
        Mr. Eckert. No. In fact, I have read media reports
    throughout this ordeal, that have suggested, from people who
    are experts and--I am not a toxicologist and the like, that say
    this really isn't a concern from a public health standpoint.
    That being said, that is not my job.
        Mr. Burgess. No. Right.
        Mr. Eckert. My job is to get these toys back. They don't
    meet our standards. It is not a question of how much. I want
    the toys back.
        Mr. Burgess. Yes, it would be interesting to see what our
    water in these pitchers has as a concentration of lead, Mr.
    Chairman. I tried to get Ed Markey to aim that little gun at my
    pitcher, but he wouldn't do it. Ranking Member Stearns asked a
    very good question. Why even manufacture overseas, because it
    would seem to me, with all of the counterfeiting that goes on
    nowadays and we sit everywhere, from pharmaceuticals to
    Brittany Spears CDs. Don't you put your trademark at risk
    somewhat by moving your production facilities overseas?
        Mr. Eckert. We do manufacture in several markets. Almost
    half of the toys we sell every year are not sold in the United
    States, so we are a company that has operations in both sales
    and marketing and manufacturing overseas.
        Mr. Burgess. Well, Mr. Chairman, I think Ranking Member
    Stearns also recognized that we are up to the Christmas selling
    season, everything after July 17. I know, in the old days, if I
    hadn't taken my Christmas lights down by July 17, I was early
    for the next year and not late for the last year. So everything
    that happens after July 17, now we are getting ready for the
    next Christmas season. It just seems to me, with the volume of
    toys that you expect to sell over the Christmas season in this
    country, There has got to be people who are looking for a made
    in America label on a product that they can believe. And you
    heard my testimony earlier. I, for one, the only way I feel
    that I have the control bringing an unsafe product into my home
    is to not buy a product that is manufactured in a country where
    the standards are so lax, and I have got to believe that other
    people feel the same way. In fact, I have heard from a number
    of my constituents during the town halls that we did during
    August recess, that that was the case. So are you looking at
    all to move manufacturing back into this country? As Mr.
    Stearns suggested, there are lots of areas where this could be
    considered and putting that made in America label, a little
    American flag on the toy, I got to believe that would help
    recover the branding process that you talked about.
        Mr. Rush. The gentleman's time is up. The witness will be
    allowed to answer this question.
        Mr. Eckert. As I said earlier, we continue to look
    regularly at where we make toys and what is made where and what
    is made in our facilities and what is made in outside
    facilities all over the world. We will continue to do that.
        Mr. Rush. The Chair will allow one additional question from
    each member who requested it. The Chair has one additional
    question here. Mr. Eckert, I have heard the word certification
    kind of bantered around the room. What do you mean by
    certification and what kind of assurances will your
    certification provide, and what is the process for the
    certification to take place?
        Mr. Eckert. If you are referring to the laboratories, that
    hasn't been an issue. The issue isn't the test or the
    procedures. The issue is products failed the test. My belief is
    all toys, representative samples of all toys should be tested
    in accredited labs. Outside parties can accredit the labs,
    which the Toy Industry Association has recently proposed, have
    outside parties accredit the labs and the sampling protocols
    and I think that will add a level of assurance to consumers.
        Mr. Rush. So are you suggesting, then, that each toy that
    Mattel places on the shelves in the stores, that there will be
    something to inform the buying consumer that this product has
    been certified as safe?
        Mr. Eckert. There may be something. I don't know. I think
    the industry needs to look at that and others need to look at
    that. But I do feel that I would like to see the entire toy
    industry step up to the level of testing that we are doing.
        Mr. Rush. The Chair recognizes the ranking member for an
    additional question.
        Mr. Stearns. Thank you, Mr. Chairman. Mr. Eckert, I am just
    going to give you a chance to reply. During the opening
    statements, members on that side indicated that staff was over
    there in China and they were prevented from going into your
    plants and the indication was that there was obstruction, there
    was intentional hiding of the ability to have access to your
    plants, and I thought I would give you an opportunity to
    respond to some of the opening statements where they made this
    claim against Mattel. Were you here? Did you listen?
        Mr. Eckert. Yes.
        Mr. Stearns. And I thought you might want to take an
    opportunity to give your side of the picture.
        Mr. Eckert. Well, as I said, I am aware of situations where
    the staff didn't feel like they had adequate access. We tried
    very hard to provide them access to our facilities, to our
    testing labs. We have flown people in from California to here,
    our lead investigator, to interview with the staff, but I am
    not here to quibble about that. I am also aware that they
    didn't feel like they got everything they needed. And so Mr.
    Chairman and Mr. Ranking Member, I am here to assure you, you
    will get everything you need. I will try my very hardest to
    accommodate that.
        Mr. Stearns. Well, that is good to hear, Mr. Chairman. I
    know my staff was in China, too, so I thought I would give you
    that opportunity. Thank you.
        Mr. Eckert. Thank you.
        Mr. Rush. Mr. Burgess.
        Mr. Burgess. Thank you, Mr. Chairman. Probably not a
    question, but I guess I will just conclude with a statement,
    Mr. Chairman. I know I can't help but feel, as we sit here and
    certainly not that I think that Mattel would necessarily be
    involved, but I can't help but feel that we are just on the
    verge of the cusp of yet one more round of bad headlines from
    somewhere in this process and I just think it is so incumbent
    upon each one of us. We have heard from the people from the
    Consumer Product Safety Commission today and certainly this
    committee takes its job very seriously. I know the Senate is
    working on things as well. I just don't think there is enough
    we can do to restore that consumer confidence. Mr. Eckert, I
    will just tell you, my party used to be in the majority here
    and a lot of us feel that one of the reasons we are no longer
    is because our brand suffered and it is a real challenge to get
    your brand back after your brand has been tarnished. So I
    appreciate the job that you are up against and the work that
    you have taken on and certainly wish you every success in that.
    I would just end with, don't overlook the manufacturing
    capability that exists right here. And Mr. Barton, I think,
    pointed it out well. Texas has got a great workforce ready to
    go make those toys for you and have them on the shelves by this
    Christmas and we will even let you put a little Texas flag on
    them and I think they will sell like hot cakes. I will yield
    back my time.
        Mr. Eckert. Thank you.
        Mr. Rush. Again, the Chair wants to thank the witness for
    his generous use of his time. We thank you for bearing with us
    today, as we have conducted this hearing. I want the committee
    members to be reminded that the record will remain open for 30
    days in order to accept official statements for this hearing. I
    want to also state that Chairman Dingell is detained in a
    meeting at the Capitol and will submit written questions to
    Mattel, for the record, and will appreciate a prompt response.
    This concludes panel No. 2 and the committee, without
    objection, will be recessed until tomorrow morning at 10
    o'clock.
        [Whereupon, at 3:40 p.m., the subcommittee recessed, to
    reconvene at 10:00 a.m., Thursday, September 20, 2007.]
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                 PROTECTING CHILDREN FROM LEAD-TAINTED IMPORTS

                                  ----------

                          THURSDAY, SEPTEMBER 20, 2007

                  House of Representatives,
                Subcommittee on Commerce, Trade
                               and Consumer Protection,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:15 a.m., in
    room 2123 of the Rayburn House Office Building, Hon. Bobby L.
    Rush (chairman) presiding.
        Members present: Representatives Schakowsky, Gonzalez,
    Hooley, Matheson, Stearns, Pitts and Burgess.
        Staff present: Judith Bailey, Consuela Washington,
    Christian field, Andrew Woelfling; Valerie Baron, Will Carty,
    Shannon Weinberg, Brian McCullough, and Chad Grant.

     OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Mr. Rush. The subcommittee hearing will come to order.
        We want to thank our witnesses for appearing before us
    today on this second panel for this hearing subject titled
    ``Protecting Children from Lead-Tainted Imports.'' I want to
    take a moment to welcome again our witnesses and to invite them
    to come to the witness table. Our witnesses are for this second
    panel Dana Best, who is a fellow at the American Academy of
    Pediatrics. Dr. Best is on the faculty of George Washington
    University School of Medicine and attends pediatrics at
    Children's National Medical Center in Washington, DC, Dr. Best,
    please join us at the table. Thank you so very much for being
    here.
        Our next witness will be Ms. Olivia D. Farrow. She is the
    assistant commissioner of the Division of Environmental Health
    for the city of Baltimore. Ms. Farrow was instrumental in
    drafting regulations banning lead in children's jewelry in
    Baltimore. Welcome, Ms. Farrow.
        The third witness is Mr. Michael Green. He is the executive
    director for the Center for Environmental Health in Oakland,
    California. The Center is a nonprofit organization that
    promotes alternatives to toxic chemicals commonly used by
    children and parents. Welcome, Mr. Green.
        Our next witness on the panel is Ms. Mary Teagarden of
    Global Strategy, Thunderbird School of Global Management in
    Glendale, Arizona. Professor Teagarden has expertise in the
    area of strategic management of technology and innovation and
    strategic human resource management. Welcome, Ms. Teagarden.
        And our final witness for today is Ms. Lori Wallach. She is
    the director of Global Trade Watch located here in Washington,
    DC Global Trade Watch is a division of Public Citizen and
    focuses on issues surrounding globalization including jobs,
    wages, the environment, public health, safety, social justice
    and democratic accountability. That is a tall order, but thank
    you and welcome to the hearing.
        I will ask the witnesses if they have opening statements,
    please take up the 5 minutes, no more than 5 minutes for your
    opening statement, and we will begin from my left, your right,
    with our first witness, Dr. Best.

       STATEMENT OF DANA BEST, M.D., M.P.H., AMERICAN ACADEMY OF
                               PEDIATRICS

        Dr. Best. Good morning. My name is Dr. Dana Best and I am
    proud to represent the American Academy of Pediatrics at this
    important hearing on lead in children's products.
        Because of its widespread use, lead has been concentrated
    in our environment where it poses a serious threat to
    children's health. Lead cannot be identified easily even when
    present at high levels in paint, dust or dirt, meaning that
    children can be exposed without our knowledge. It is an
    invisible poison.
         Damage done by small amounts of lead may be hard to
    measure and even harder to understand. Most children who
    accumulate lead in their bodies do not have physical symptoms.
    Instead, they suffer a wide array of negative effects including
    cognitive, mood or behavioral and physical harm.
         There is no safe level of lead exposure. The vulnerability
    of children to lead poisoning during development of their brain
    and nervous system has been amply demonstrated and the
    literature is very consistent. On average, children whose blood
    lead levels rise from 10 to 20 microgram per deciliter lose 2
    to 3 IQ points. More recent studies have shown an even greater
    impact on IQ of blood lead levels under 10 micrograms per
    deciliter, a loss of 4 to 7 IQ points at that level.
    Furthermore, the effects of lead do not stop once the
    children's brain and nervous system mature or the blood lead
    level falls.
        Another important effect of lead exposure is on behavior
    with higher rates of behavioral problems reported in teens and
    adults exposed to lead during child during childhood. Children
    with elevated lead levels are more likely to have problems with
    attention deficit and reading disabilities and to fail to
    graduate from high school. Investigators have identified
    associations between lead exposure and increased aggression,
    commission of crime and antisocial or delinquent behaviors.
    Studies have suggested that several nations that began reducing
    lead exposure aggressively in the 1970s experienced
    corresponding decreases in crime two to three decades later.
    Other effects include abnormal balance, poor eye-hand
    coordination, longer reaction times and sleep disturbances.
        Lead is easily absorbed by ingestion or inhalation. The
    most common route of exposure of children is through ingestion,
    usually by putting their hands or other objects in their mouth.
    Studies using video to record hand in mouth or object in mouth
    behaviors recorded 20 or more activities an hour--20 or more
    times an hour that a child puts their hand or an object in
    their mouth. If the dirt on their hands or the dust on the
    floor contains lead, every one of those activities delivers a
    dose. Since children absorb 5 to 50--that is five-zero--percent
    of any lead that they ingest compared to adults who only absorb
    5 to 15 percent, they are at high risk of lead poisoning every
    single time they are exposed.
         Once lead enters the body, it remains there for years.
    Lead is similar to calcium from the elemental perspective. This
    means that our bodies ``see'' lead as calcium, absorb it into
    our blood as if it were calcium, and then store it in our bone
    as if it were calcium. These stores of lead can be released
    years later when bone changes occur or demand on calcium stores
    are made.
        In recent years, parents have found a new source of anxiety
    regarding lead exposure: children's toys and other products,
    particularly those imported from China. Since July 2006, the
    Consumer Product Safety Commission has issued at least 11
    recalls affecting more than 6.7 units of children's jewelry due
    to lead content. Since 1998, CPSC has issued at least 29
    recalls involving 157,962,000 pieces of toy jewelry due to high
    lead levels. Other products recalled because of lead
    contamination include game pieces, sidewalk chalk and art kits.
    Consumers are acutely aware of recent recalls of popular toys
    that contain lead paint, including Thomas the Tank, Barbie, and
    Dora the Explorer. The risk of harm to children from these toys
    is real. In 2006, a 4-year-old Minnesota boy died after
    ingesting a small shoe charm that was later found to be 99
    percent lead.
        Mr. Rush. Dr. Best, your time is up. Would you please
    conclude your testimony?
        Dr. Best. In conclusion, the charm he ingested dissolved in
    his stomach, releasing the lead into his bloodstream. To
    protect the health of our Nation's children, non-essential uses
    of lead, particularly in products to which children may be
    exposed, must be prohibited. The American Academy of Pediatrics
    recommends the following: (1) The CPSC should require all
    products intended for use by or in connection with children
    contain no more than trace amounts of lead. (2) The Academy
    recommends trace amounts of lead be no more than 40 parts per
    million, which is the upper range of lead in uncontaminated
    soil. This standard would recognize that contamination with
    minute amounts of environmental lead may occur but can be
    minimized through good manufacturing practices. (3) Children's
    products should be defined in such a way as to ensure it will
    cover the wide range of products used by or for children. This
    standard should cover toys intended for use by or with children
    under the age of 12 years.
        Mr. Rush. Thank you.
        Dr. Best. Four: The limit on lead contact must apply to all
    components of the item or jewelry and other small parts that
    could be swallowed, not just the surface. Legislation or
    regulations should limit the overall lead content of an item
    rather than only limiting the lead content of its components.
        Mr. Rush. I must apologize, Dr. Best, but we have to hear
    testimony from the others. Would you please have one concluding
    statement, please?
        Dr. Best. It is important to note that while limiting lead
    is an important aspect of guaranteeing the safety of children's
    products, numerous other aspects of this issue should be
    considered.
        Mr. Rush. Thank you.
        Dr. Best. There are no known safe levels of lead.
        [The prepared statement of Dr. Best follows:]

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        Mr. Rush. Thank you so very much. I apologize but we must
    move on.
        Ms. Farrow, please.

    STATEMENT OF OLIVIA D. FARROW, ASSISTANT COMMISSIONER, DIVISION
       OF ENVIRONMENTAL HEALTH, BALTIMORE CITY HEALTH DEPARTMENT

        Ms. Farrow. Good morning, Mr. Chairman.
        Mr. Rush. Before you begin, I just want to let all the
    witnesses know that all your written statements will be for the
    record. Your entire written statement will be in the record, so
    I want to remind you of that. Thank you so much. Please begin.
        Ms. Farrow. Good morning, Mr. Chairman, Ranking Member
    Stearns and members of the committee. On behalf of the
    Baltimore City Health Department, I would like to thank you for
    this opportunity to testify on the need for stricter Federal
    regulations to reduce exposure to lead hazards from lead-
    tainted imports. My name is Olivia Farrow and I am the
    assistant commissioner for environmental health for the
    Baltimore City Health Department.
        Lead poisoning is the most common environmental hazard
    facing American children today. It is also one of the most
    preventable. Children are frequently exposed to lead by
    ingesting lead dust from deteriorating lead-based paint,
    exposure from lead in soil, drinking water or lead-tainted
    consumer products such as food and jewelry. While lead
    poisoning can affect children across socioeconomic spectrum, we
    have found that often exposure is concentrated in low-income
    urban areas. In March 2006, a 4-year-old child in Minneapolis
    died from lead intoxication after swallowing a piece of
    children's jewelry that was sold with a new a pair of shoes.
        In response to this tragic event, the Baltimore City Health
    Department began testing samples of children's jewelry sold
    within its jurisdiction. Our tests found excessive levels of
    lead in children's jewelry in Baltimore. The products were
    being sold in stores that operate throughout the country
    including Clair's and Wal-Mart. To respond under the authority
    of the Commissioner of Health, the Baltimore City Health
    Department proposed and then promulgated regulations on
    children's jewelry on December 7, 2006. The city regulation
    requires that the Health Department collect monthly samples of
    children's jewelry and test for lead content. In order to give
    city retailers an opportunity to come into compliance, the
    regulation initially banned children's jewelry containing more
    than 1,200 parts per million. Effective September 1, 2007, we
    further reduced the acceptable level of lead, banning all
    children's jewelry with metal components containing in excess
    of 600 parts per million. Once a product is found to contain an
    excessive amount of lead, a violation notice is issued. The
    notice declares all items of the same style and from the same
    manufacturer to be a nuisance and orders the retailer to stop
    sale within 24 hours. An owner can be charged with multiple
    misdemeanor offenses and fined should he or she fail to comply
    with the notice.
        The city began the mandatory monthly testing of children's
    jewelry in February of this year. Out of the 7 months we have
    tested, we have found excessive lead levels in 4 of those
    months. Our testing has revealed that the majority of the
    products found with excessive levels of lead are sold in
    discount stores that cater to a lower income clientele.
    Furthermore, the majority of the samples of jewelry that are
    found to be poisonous are ones that are sold for a dollar or
    less. For example, in February 2007 the Health Department
    collected a necklace and bracelet set for testing. The set was
    made in China and purchased at a locally owned children's
    discount store for $1. Both the necklace and bracelet were
    found to contain approximately 2.4 percent lead by weight. In
    March 2007, three rings that were manufactured in India and
    sold in a city vending machine operated by Cardinal Novelty
    tested approximately 5 percent lead by weight. Now, these exact
    three rings were previously subject to a product recall in July
    2004 by the Consumer Product Safety Commission. Last month our
    Health Department found that a Spiderman 3 ring which sold for
    $1 contained 12.8 percent lead by weight. This ring was sold at
    a Dollar Tree store and was imported from China.
        Our experience in Baltimore city has proven that many of
    these imported products are not adequately regulated by the
    Federal Government. The failure of the CPSC product recall
    system exemplifies the Federal Government's failure to protect
    the public from imported goods. As I previously stated, the
    CPSC recalled three rings in July 2004 because of high lead
    content yet almost 3 years later, Baltimore city finds these
    rings are still available for sale to the public. Cardinal
    Novelty would have been free to continue to redistribute this
    poisonous product had Baltimore city not enacted his
    regulations.
        A local jurisdiction's authority can only extend so far.
    Federal agencies need to aggressively take the lead in
    preventing the sale of these contaminated products. Current
    Federal regulations are obviously insufficient in protecting
    children from lead in imported products.
        I would like to conclude by stating that this country has
    made tremendous progress in the fight to eliminate childhood
    lead poisoning but even one child poisoned is one too many and
    stricter Federal regulations on products for children are
    urgently needed. On behalf of Baltimore city's Health
    Department and Mayor Sheila Dixon, I thank you for the
    opportunity to offer comments today.
        [The prepared statement of Ms. Farrow follows:]

                           Statement of Olivia Farrow

        Mr. Chairman, Ranking Member Stearns and members of the
    committee, on behalf of the Baltimore City Health Department, I
    would like to thank you for this opportunity to testify on the
    need for stricter Federal regulations to reduce exposure to
    lead hazards from lead-tainted imports. My name is Olivia
    Farrow and I am the Assistant Commissioner of the Environmental
    Health Division of the Baltimore City Health Department.
        Lead poisoning is the most common environmental hazard
    facing American children today. It is also one of the most
    preventable. Children are frequently exposed to lead by
    ingesting lead dust from deteriorating lead-based paint.
    Exposure may also come from dirt that contains lead, drinking
    water or lead-tainted consumer products such as food and
    jewelry. While lead poisoning can affect children across the
    socioeconomic spectrum, we have found that often exposure is
    concentrated in low-income, urban areas.
        On March 23, 2006, a 4-year old child in Minneapolis died
    from lead intoxication after swallowing a piece of children's
    jewelry that was sold with a new pair of shoes. In response to
    this tragic event, the Baltimore City Health Department began
    testing samples of children's jewelry sold within its
    jurisdiction. Our tests found excessive levels of lead in
    children's jewelry in Baltimore. The products were being sold
    in stores that operate throughout the country, including
    Claire's and Wal-Mart (Attached are the lab results).
        To respond, under the authority of the Commissioner of
    Health, the Baltimore City Health Department proposed and then
    promulgated regulations on children's jewelry on December 7,
    2006. (Attached is the final regulation).
        The city regulation requires that the Health Department
    collect monthly samples of children's jewelry and test for lead
    content. In order to give city retailers an opportunity to come
    into compliance, the regulation initially banned children's
    jewelry containing more than 1,200 parts per million. Effective
    September 1, 2007, we further reduced the acceptable level of
    lead, banning all children's jewelry with metal components
    containing in excess of 600 parts per million of total lead.
    Once a product is found to contain an excessive amount of lead,
    a violation notice is issued. The notice declares all items of
    the same style and from the same manufacturer to be a nuisance
    and orders the retailer to stop sale within 24 hours. An owner
    can be charged with multiple misdemeanor offenses and fined
    should he or she fail to comply with the notice.
        The city began the mandatory monthly testing of children's
    jewelry in February of this year. Out of the 7 months we have
    tested, we have found excessive lead levels in 4 of those
    months. Our testing has revealed that majority of the products
    found with excessive levels of lead are sold in discount stores
    that cater to a lower-income clientele. Furthermore, the
    majority of the samples of jewelry that are found to be
    poisonous are ones that are sold for a dollar or less.
        For an example, in February 2007, the Health Department
    collected a necklace and bracelet set for testing. The set was
    made in China and purchased at a locally owned children's
    discount store for $1. Both the necklace and bracelet were
    found to contain approximately 2.4 percent lead by weight.
        In March 2007, three rings that were manufactured in India
    and sold in a city vending machine operated by Cardinal Novelty
    tested approximately 5 percent lead by weight. These rings were
    previously subject to a product recall in July 2004 by the
    Consumer Product Safety Commission (CPSC).
        Last month, our Health Department found that a Spiderman 3
    ring, which sold for $1, contained 12.8 percent lead by weight.
    This ring was sold at a Dollar Tree and was imported from
    China.
        Our experience in Baltimore city has proven that many of
    these imported products are not adequately regulated by the
    Federal Government. The failure of the CSPSC product recall
    system exemplifies the Federal Government's failure to protect
    the public from imported goods.
        As I previously stated, the CPSC recalled three rings in
    July 2004 because of high lead content. Yet, almost three years
    later, Baltimore city finds that these rings are still
    available for sale to the public. Cardinal Novelty would have
    been free to continue to redistribute this poisonous product
    had Baltimore city not enacted its regulations.
        A local jurisdiction's authority can only extend so far.
    Federal agencies need to aggressively take the lead in
    preventing the sale of these contaminated products. Current
    Federal regulations are obviously insufficient in protecting
    children from lead in imported products.
        I would like to conclude by stating that this country has
    made tremendous progress in the fight to eliminate childhood
    lead poisoning. But even one child poisoned is one child too
    many. Stricter Federal regulation on products for children is
    urgently needed.
        On behalf of Baltimore city's Health Department and Mayor
    Sheila Dixon, I thank you for the opportunity to offer comments
    today.
                                  ----------

        Mr. Rush. Thank you very much.
        Mr. Green.

      STATEMENT OF MICHAEL GREEN, EXECUTIVE DIRECTOR, CENTER FOR
                          ENVIRONMENTAL HEALTH

        Mr. Green. Thank you, Mr. Chairman. Thanks for holding
    these hearings and for this opportunity to testify.
        For 10 years, the Center for Environmental Health has been
    protecting children from lead poisoning and other hazardous
    children's products. In this work, we primarily use a State
    law, California's Safe Drinking Water and Toxic Enforcement
    Act, locally known as Proposition 65. We use this law as an
    innovative tool to protect children and families not only in
    California but throughout the country, often protecting
    children from unnecessary exposures to toxic chemicals. In some
    of our early work, we won legal agreements to eliminate lead
    threats to children in diaper creams, children's medicines and
    even home water filters that were leaching lead. We also won
    agreements with dozens of makers of playground structures that
    were made of arsenic-treated wood, eliminating threats to
    children from cancer-causing levels of arsenic. In just the
    past 2 years, we discovered lead threats to children and have
    won legal agreements eliminating these risks in imported candy,
    vinyl lunchboxes, vinyl baby bibs and in vinyl metal and
    jewelry, among many other products. These are all children's
    products.
        In the process of uncovering these hazards and working to
    get these products off the market, we have discovered that the
    Consumer Product Safety Commission is paralyzed by a lack of
    the political will to protect children. This lack of political
    will has major consequences. We have seen the CPSC issue
    misleading statements about the safety of a high-lead Disney
    bracelet, like actually this one, and then take no action for
    nearly 6 months. This Disney jewelry had painted pearls that
    had lead content that was 275 times the legal limit for lead
    paint. Eventually they recalled the item with little publicity.
    We have seen the CPSC act in direct contradiction of the Food
    and Drug Administration about lead hazards in vinyl lunchboxes.
    The FDA said that it was reasonable to expect that lead from
    lunchboxes would leach into kids' food while CPSC took no
    action because the food might be wrapped. We have obtained CPSC
    memos showing that the agency changed its test protocols so
    that its testing of lunchboxes would find less lead. They
    changed their protocols. We find this absolutely shocking. One
    of these memos is copied in my written statement and I would
    encourage you to look at that. And throughout all of these
    incidents, the CPSC has relied on an outdated standard or
    ``acceptable'' lead exposures that ignore the vast body of
    research over the last decade showing that even small lead
    exposures are problems for children. For example, the CPSC
    standard is 350 times higher, and therefore 350 times less
    protective than the California standard under Proposition 65.
        The lead problem in children's toys is a systemic problem.
    Retailers push manufactures for ever lower prices. Their
    priority is not the safest product but the cheapest products
    possible, at least sometimes. Congress needs to turn that
    priority around. The Center for Environmental Health recommends
    Congress take the following steps to ensure that toys are just
    toys and not exposures to toxic chemicals.
        First, as a supplement to our work in lead in jewelry,
    Congress should enact a comprehensive ban on lead in toys. For
    toys, we recommend following the model of the Toxins in
    Packaging Act already adopted by 19 States. This law requires
    over a 4-year period that the concentrations of four toxic
    metals, one of which is lead, be reduced to less than 100 parts
    per million. Surely the toys that our children play with, chew
    on and sometimes accidentally swallow deserve at least the same
    level of safety as packaging materials.
        Second, such legislation must hold distributors, retailers
    and manufacturers accountable for the safety of the products
    they sell through mandatory pre-market testing and strong
    disincentives for violators.
        Third, Congress should ensure that CPSC and other Federal
    regulatory agencies are using testing and standards based on
    the most up-to-date science.
        Finally, we strongly urge that Congress ensure that CPSC is
    adequately resourced to manage the massive task of protecting
    children from hazardous products but we must also note that the
    current problem at CPSC is not only a resource problem. Our
    experience suggests that often the bias of current CPSC
    leadership is to protect industry at the expense of the health
    of America's children. CPSC is using unrealistic testing
    procedures and outdated health standards. This could be
    corrected with strong legislation. However, the evidence from
    CPSC's own internal documents, which we got through a FOIA
    request, that the agency modified its testing procedures to
    reduce its estimates of lead exposure from children's
    lunchboxes, demonstrates an extreme willingness of the current
    CPSC leadership to put industry's convenience ahead of
    children's health. This problem results not from a lack of
    resources or statutory authority but from leadership decisions
    that have failed to make children's health the first and most
    important priority. Our children's health should not be a
    partisan political issue like that, and I look forward to your
    questions. Thank you for this opportunity.
        [The prepared statement of Mr. Green follows:]

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        Mr. Rush. Thank you very much.
        Ms. Wallach.

        STATEMENT OF LORI WALLACH, DIRECTOR, GLOBAL TRADE WATCH

        Ms. Wallach. Thank you, Mr. Chairman and members of the
    committee. On behalf of Public Citizen's 200,000 members, thank
    you for the opportunity to discuss some of the root causes of
    the serious safety problems with various imports including
    toys.
        I have four main points which are spelled out in my written
    testimony, which I will summarize. First, the imported product
    safety crisis has a root cause in U.S. trade policy, trade
    pacts, and tax and other incentives that have promoted the
    export of wide swaths of the U.S. manufacturing base to nations
    with effectively no regulatory systems to ensure safety in
    production while the trade agreements simultaneously impose
    limits on import safety standards and inspection rates. Our
    current trade agreements prioritize, ensuring the favorable
    investment climate for U.S. firms seeking to relocate overseas
    and then facilitating access for the things coming back over
    consumer safety. That more than 80 percent of U.S. toys are now
    made in China is not an inevitability or random. As the chart
    on page 4 of my testimony shows, the production of toys
    destined for the U.S. zoomed into production in China
    immediately after Congress passed permanent normal trade
    relations for China and China joined the WTO. Right there,
    zoom, and the WTO provided investment protections, under the
    Trade-Related Investment Measures cut tariffs and literally
    facilitated the industry leaving. Prior to that, 1993, zoom,
    NAFTA passes, immediately production moves to Mexico. The
    choice of the U.S. toy industry to relocate production to low-
    wage, under-regulated venues is one of those rare cause-and-
    effect moments in the trade world where you can literally see
    trade agreements, action. In 1993, before NAFTA, was the peak
    of U.S. employment in the toy sector, 43,000 workers. Now it is
    down 75 percent. The hemorrhage starts directly after the trade
    agreements pass. Point 1.
        Point 2: The safety of imported products is directly linked
    to the lack of safety regulations in some of the offshore
    venues where the toys are now being produced. Add to that the
    laissez-faire attitude of the Consumer Product Safety
    Commission and domestic safety policies that are still premised
    on the notion that a lot of product is made here and not
    overseas and the American public is left having to rely on
    foreign regulatory systems to ensure the safety of the things
    that are in our homes. Sadly, recent experiences highlighted
    that many foreign regulatory systems are simply not up to the
    task. With 80 percent of U.S. toys now coming from China, whose
    regulatory structure has been likened by U.S. producers
    operating there as the wild, wild east, the imported toy safety
    problem is probably more pervasive than the recent recalls
    show.
        Point 3: Now, thankfully, Congress is seeking to address
    the problem, but perversely, the same trade agreements that
    have created the incentives that have led to the shift of
    production to unsafe venues also impose limits on the safety
    standards that can be imposed on imported products as well as
    the amount of inspection. Most people are very surprised when
    they learn that the actual trade between countries is only part
    of WTO, NAFTA and other U.S. trade agreements. Those agreements
    set regulatory constraints with which all countries must
    conform their domestic laws. The binding provision in this
    country shall ensure conformity of all domestic laws,
    regulations and procedures with the trade agreement rules. The
    agreement in the WTO that applies to toy safety is called the
    Technical Barriers to Trade Agreements. The name says it all.
    Any domestic regulation that might keep out a product because
    it is unsafe is presumed to be a technical barrier to trade. If
    the U.S. does not conform its domestic laws to the WTO rules,
    the U.S. is subject to challenge. Amongst the rules: imported
    and foreign goods must be treated the same. That means that
    under WTO rules, imports are not allowed to be inspected at a
    higher rate. All domestic laws are judged in a panel of trade
    lawyers meeting in secret in Geneva as to whether they are
    least trade restrictive, not most safety protective, and
    whether or not they are an unjustified, unnecessary obstacle to
    trade, very subjective standards. As well, the U.S. is required
    to allow free passage into our country of toys made with
    equivalent standards. If we do not conform these laws, we can
    be challenged and we face trade sanctions if we do not change
    them. China, as a WTO member, could challenge U.S. improvements
    to toy safety unless also changes are made to our trade
    agreement as well as the important changes to domestic policy.
        So in conclusion, my testimony lays out a list of 10
    particular changes to domestic law, particular changes needed
    to our trade agreements to make sure Congress has the space to
    make the domestic changes, and the final point is, right now
    Congress is considering expanding this model, a NAFTA expansion
    to Peru and Panama, and Public Citizen urges Members of
    Congress not to make the problem worse by expanding our current
    failed, unsafe trade model. Thank you.
        [The prepared statement of Ms. Wallach follows:]

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        Mr. Rush. Thank you very much.
        Ms. Teagarden.

       STATEMENT OF MARY TEAGARDEN, PROFESSOR, GLOBAL STRATEGY,
                THUNDERBIRD SCHOOL OF GLOBAL MANAGEMENT

        Ms. Teagarden. Good morning. Thank you for inviting me to
    speak this morning. I am really humbled and honored to be here.
    I am a professor of global strategy at Thunderbird Graduate
    School of International Management. I am a grandmother of small
    boys who play with toys and I have been studying offshore
    manufacturing in China and several other countries for over 30
    years trying to understand how to do it well. I spend 20
    percent of my time on the ground in China and it is from this
    perspective that I am offering my comments.
        Protecting children from lead-tainted imports brings our
    attention to toys in China. I have several points to make
    regarding lead-tainted imports. First, there are many factors
    contributing to lead-tainted imports. Second, there are many
    actions that China can take to help resolve the problem. Third,
    there are many actions that importers can take to help resolve
    the problem. Fourth, government has a very important role to
    play in solving this problem.
        Instead of simply blaming China, we must take a hard look
    at what we can control. American big-box retailers and their
    unrelenting pressure on suppliers for ever-lower prices bear
    part of the responsibility in this problem. American importers
    focusing on cost and investing in brand rather than quality,
    supply chain integrity and product integrity bear part of the
    responsibility. American parents and grandparents demanding
    ever-lower-priced toys to respond to children's requests bear
    part of the problem. And finally, American government's choice
    to chronically underfund watchdog agencies like CPSC is part of
    the problem.
        China can certainly do a lot more to control the problem of
    lead-tainted products. However, we don't control China. But we
    must do our best to control us. There are many opportunities
    for control within this complex commercial system. American
    companies have played a major role in making China the workshop
    of the world. These companies are behaving rationally. They are
    playing by the rules of the game, focusing on profit and
    growth. Wal-Mart might be the best example of this rational
    behavior. They are the biggest big-box retailer and the world's
    largest company. They squeeze their suppliers to lower costs.
    Their suppliers in turn squeeze their suppliers to lower costs.
    As a consequence, there is a risk of slippage, quality
    slippage, use of inferior products and less supervision in the
    manufacturing process among suppliers. Extending responsibility
    for product compliance with U.S. laws to retailers would be an
    important safeguard against lead-tainted imports.
        In conversations I have had with Chinese officials, they
    estimate that 50 percent of their exported products don't
    comply with Chinese laws. We must insist that imports into the
    United States comply with U.S. laws. China is large and
    industrialization has grown at a mind-bogging pace. This makes
    control harder. Lead-tainted products are fundamentally a
    control problem. Companies must be held accountable for
    compliance of products they sell in the United States.
    Regulations governing imports are substantial and do an
    adequate job addressing lead-tainted products but the system
    relies on self-regulation and we have seen that self-regulation
    doesn't work. Punitive fines or import sanctions for importers
    that don't report problems immediately would drive faster
    reporting and keep lead-tainted products off or our shelves.
    The CPSC doesn't have enough people. A well-funded, adequately
    staffed and robust inspection system is part of the solution.
        There are many actions China can take to help resolve the
    problem. We must encourage China to enforce their export
    regulations. We must seek a government-to-government reporting
    hotline to warn our Chinese counterparts about errant
    manufacturers. We have to keep pressure on the Chinese
    Government to help make positive progress on this issue.
    Working with them instead of against them will bear fruit. We
    have to realize that if we block imports from China, production
    will shift to other low-cost countries. The problem is not
    going to go away.
        Companies can directly control the products through
    testing. We should require importers to use independent testing
    where risk for lead-tainted imports is high before the products
    are shipped to the U.S. to prevent entry into our distribution
    streams.
        Finally, Government must fund oversight agencies to enable
    an appropriate level of inspection, given the proliferation of
    imported goods sold in the United States. And the CPS should
    continue to identify and sanction companies that import lead-
    tainted products. I encourage the Commission to look at the
    entire system to understand where there are opportunities for
    improvement. Learning from this assessment should be shared
    with industry to help everyone get better. Surely business and
    government working together can solve this problem.
        My grandsons, Mike and Evan, would thank you all for your
    efforts in making these things happen, and I thank you for the
    opportunity to provide my testimony on this important topic.
        [The prepared statement of Ms. Teagarden follows:]

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        Mr. Rush. Thank you very much. I want to announce, there is
    a vote that is occurring on the floor right now. We have 5
    minutes to get over and vote. There are three votes, so it
    probably involves a half an hour, so we will recess for about a
    half an hour and return for questioning by the committee as
    soon as the vote is over with, so please forgive us. We are
    going to stand in recess until the completion of the vote.
    Thank you.
        [Recess.]
        Mr. Rush. I will state to the witnesses that we thank you
    so much for your patience. I am going to recognize myself for 5
    minutes of questioning, and I will begin with Ms. Farrow.
        Ms. Farrow, you state that the majority of children's
    jewelry with excessive lead is found in discount stores with
    lower-income clientele. Are any of these discount stores chain
    stores? Can you provide us with a list of the stores where you
    have found this poisonous jewelry?
        Ms. Farrow. Yes, Mr. Chairman, many of them are chain
    stores. I can provide the committee with a list today if you
    would like.
        Mr. Rush. Yes. With your oral testimony, can you provide us
    with a----
        Ms. Farrow. Of the products that we found positive,
    Clair's, Wal-Mart, the Children's Place. Those are chains.
    Dollar Tree and another Dollar Tree and then the vending
    machine rings, they were found at a Foodarama. However, the
    distributor, Cardinal Distributing, vends product throughout
    the State of Maryland.
        Mr. Rush. Did your research locate any Dollar General
    stores or do you know, Dollar General, do they own any of the
    other discount stores?
        Ms. Farrow. We have not found any at a Dollar General at
    this time. We have been to Dollar Tree stores, which are a
    national chain.
        Mr. Rush. Thank you very much. The Chicago Department of
    Public Health has found imported Mexican candy in stores
    throughout Chicago that had high lead content in the wrapper.
    Has your city, the city of Baltimore, does it have similar
    problems?
        Ms. Farrow. Yes, back in December 2005, we conducted a
    random survey of some of the stores in the Hispanic community
    and we did find some products that were high. We referred it to
    the FDA and they conducted testing and did find that some of
    the candy and products were high lead.
        Mr. Rush. Is this the candy or the wrappers?
        Ms. Farrow. Well, this was the candy itself.
        Mr. Rush. Mr. Green, is there any reason that there should
    be lead in vinyl baby bibs or vinyl lunchboxes?
        Mr. Green. The short answer is absolutely not. So why is
    there lead in vinyl? There is lead in vinyl for two reasons.
    One reason may be, vinyl is a junk plastic. PVC and vinyl are
    the same thing. It is a junk plastic and it has all these
    different chemicals and then it needs something to hold all
    those chemicals together, and the thing that holds it all
    together is usually a metal. More often than not when it is
    manufactured, especially here in the U.S., that metal is tin,
    organotin. Sometimes especially when standards are not as high,
    they will use a more toxic metal, cadmium or lead. So the first
    reason that it would be in there is as what is called a
    stabilizer, to hold all of the different chemical constituents
    together and you can do it with tin just as easily, so that is
    the first reason. The only other reason there would be lead in
    vinyl besides some kind of contamination that was unintentional
    is in the pigment. So obviously we have gone through this lead
    paint story, culminating in 1978 with the ban in lead paint.
    There is no problem with having pigments that don't contain
    lead. So the two reasons there would be lead in there are both
    very easily solved and are usually solved. I also just want to
    say real quickly about the candy from Mexico----
        Mr. Rush. That was going to be my next question to you.
        Mr. Green. The Center for Environmental Health, and then
    later joined by the California attorney general, brought suit
    against a subsidiary of Hershey's, a subsidiary of Mars and
    then a large Mexican-owned company for this problem. We found
    that the two principal sources of the lead were paint on the
    wrapper sometimes, and then drying the chiles that are actually
    in the candy near a generator that is burning leaded gasoline
    in Mexico. Then it basically lands on it, which is an easy
    thing to solve. You dry the chiles, inside, or not with a
    generator with lead nearby, at least. So I just wanted to sort
    of give that information.
        Mr. Rush. Is this problem more apparent in U.S. communities
    with high Hispanic population? And my second part of this
    question is, is this something that the general American public
    and particularly Hispanic citizens should be concerned about as
    we head into the Halloween season?
        Mr. Green. Yes. One of the concerns that we got from
    Hershey's and Mars' subsidiaries and this third large company
    was, well, if we fix our problem and there continues to be
    smaller companies still have these same problems, the drying of
    the chiles or the paint on the wrappers, if we come to an
    agreement with you, Mr. Attorney General, and you, the Center
    for Environmental Health, what is going save our brand from
    continuing to be criticized as this is found, and so we came to
    an agreement. As part of the agreement, they would help fund
    their smaller competitors to address these problems, which is
    very creative. But I am skeptical about how well it will--I
    think things will continue to slip through the cracks on this
    issue unfortunately. That is the first thing. And then the
    second part of your question is, there is definitely a
    disproportionate impact on Latino children from this problem.
        Mr. Rush. Thank you.
        Mr. Stearns.
        Mr. Stearns. Thank you, Mr. Chairman.
        Dr. Best, what is the naturally occurring levels of lead in
    the body for adults and children, if there is a difference?
        Dr. Best. Naturally occurring is probably a misnomer. In an
    environment where we don't have contamination, the natural
    level, the normal level of lead would be zero.
        Mr. Stearns. What is it in the average adult?
        Dr. Best. In the United States?
        Mr. Stearns. Yes.
        Dr. Best. I can give you the median level of----
        Mr. Stearns. Yes, that is fine.
        Dr. Best. OK. This is a level for children. As a
    pediatrician, those are the numbers that I think about. It is
    in the 1.2 to 2.0 microgram per deciliter level.
        Mr. Stearns. What is that in terms of parts per million
    like we have here? We have someone advocating 100 parts per
    million.
        Dr. Best. Well, that is difference between biological and--
    --
        Mr. Stearns. Can you give me a----
        Dr. Best. I might. I can tell you that it translates----
        Mr. Stearns. What I am trying to see, if I give a toy to a
    child and it has 600 parts per million, is it possible that
    child already has 600 parts per million in his system?
        Dr. Best. Yes, and that is one of the concerns we have is
    that lead isn't just a one-time acute event, it is an
    accumulation, so the lead you got from your toy and the lead
    you got from the paint----
        Mr. Stearns. Can you just approximate in your mind an
    average adult and an average child today, how much lead do they
    have in their body, parts per million?
        Dr. Best. No, I can't do it in parts per million because we
    don't measure it in that way. The parts per million translated
    into what is in your bloodstream, it is like an apple and
    orange measurement.
        Mr. Stearns. You just can't say parts in the bloodstream,
    it is so much. You can't do that then?
        Dr. Best. I can't.
        Mr. Stearns. I understand that. I appreciate that. One
    other question is, you look at all the adults, some of them are
    living to 95 and 100, and how did they escape this lead
    poisoning when growing up with lead-based gasoline we had in
    this country for many, many years, lead-based paint until 1978.
    We had lead pipes in our plumbing and so we had all this lead
    that was omnipresent. How did these people grow up and----
        Dr. Best. We didn't escape it.
        Mr. Stearns. So you are saying you think----
        Dr. Best. I think I would have been a lot smarter.
        Mr. Stearns. Here you have got an M.D., a Master's in
    public health. I am not sure what----
        Dr. Best. Just think of what I could have done.
        Mr. Stearns. What is an FAAP?
        Dr. Best. I am a fellow of the American Academy of
    Pediatrics.
        Mr. Stearns. Well, you are pretty smart as it is. But you
    see, my point is that we have eliminated the lead in the paint,
    we have eliminated it out of the pipes, we have eliminated it
    out of the gasoline and now we are just talking about just 100
    parts per million so----
        Dr. Best. Well, the point that I think is important to
    bring out is that as we have eliminated these kind of gross
    sources, meaning gross as a large source of environmental lead,
    we have lowered the lead level in our population, and that is a
    great thing because we have less renal disease, we have lower
    blood pressure because of that, we are smarter.
        Mr. Stearns. Maybe a longer life span?
        Dr. Best. Longer life span and because it is a gene-
    environment-education kind of mixture, it is hard to point out
    which of that contribution was lead. But we know that as we
    have decreased the level of lead in our bodies, we have also
    found that even though we keep lowering the level of lead to
    which we pay attention, it still is harmful, even below what is
    now currently the level of concern.
        Mr. Stearns. OK. Let me move on. Mr. Green, I was on C-SPAN
    talking about this the other day and a lot of people were
    calling in, should I throw out all my toys that are in my
    closet that have possibly lead or lead paint. What is the
    proper disposal that should be done of these toys? Just
    quickly, and then I have a question for Ms. Wallach. Go ahead.
        Mr. Green. Well, first of all, no one has really looked at
    this so that question needs to be solved, but if it is a high
    level, then the right thing to do would be to take it to the
    local hazardous waste facility that you would take paint that
    is in your garage or the computer that is in your garage.
        Mr. Stearns. Your testimony described the CPSC leadership
    as simply political appointees who are protecting industry. Do
    you have any evidence of this or is this purely your opinion?
        Mr. Green. It is my opinion and I have evidence.
        Mr. Stearns. Ms. Wallach, do you believe the United States
    should ban all imports of toys from China? Why or why not? If
    so, from what other countries should we not allow toys?
        Ms. Wallach. I think that we need to do two things. We
    either need to keep out toys produced in countries that don't
    have safe regulatory regimes or we need to figure out a system
    to make sure that the way things are being produced overseas
    are safe and they don't get into our market in the first place
    because recalls only get a small part of it, and we could go
    either way. And in part, it is going to rely on the decision of
    Congress, what your judgment is, is the most efficacious. In
    the short term, should there be a ban on all lead in toys
    coming from anywhere? Absolutely. If in fact there are rules,
    for instance, new authority to have inspection overseas, which
    I think is going to be necessary in countries that don't have
    strong regulatory systems of their own, then you are going to
    give that authority, you are going to try and get the act
    cleaned up, you are going to have more inspection on the
    border, I hope. But then if that doesn't work, yes, we are
    going to have to consider what products are the highest risk
    products that we shouldn't be importing and it would be a real
    tragedy if between improved government regulation, U.S.
    industry action and Chinese Government action we couldn't clean
    up the situation.
        Mr. Rush. Thank you.
        The gentleman from Utah is recognized for questioning.
        Mr. Matheson. Thank you, Mr. Chairman.
        First, Ms. Teagarden, I wanted to ask you, in your written
    testimony I think you mentioned you have spoken with officials
    in China who estimate that 50 percent of their exported
    products do not comply with existing Chinese law. I was
    wondering if you could tell me who these folks in Chinese,
    these officials work for. Do you know which agencies they work
    for that you talked to?
        Ms. Teagarden. The only reason that you get that kind of
    disclosure is with expectation of confidentiality, and with all
    due respect, I couldn't remember their names if I tried but----
        Mr. Matheson. Well, let me ask you this. Do you know what
    types of products they are referring to when they estimate the
    50 percent noncompliance?
        Ms. Teagarden. The discussion was wide-ranging. We looked
    at a wide range of manufactured products, not specifically
    toys, a wide range of products.
        Mr. Matheson. Do you know if they have taken any steps
    within the country to reduce this rate of noncompliance?
        Ms. Teagarden. If you read the Chinese media, the Chinese
    Government has been quite aggressive relative to historical
    behavior in trying to bring these issues into compliance.
        Mr. Matheson. Do you know of any particular steps they have
    taken to reduce this noncompliance?
        Ms. Teagarden. They have arrested people. They have
    executed people.
        Mr. Matheson. All right. Let me ask you this. I will try a
    new line of questioning.
        Ms. Teagarden. The 35-cent solution.
        Mr. Matheson. In your testimony, you talk about a need for
    more inspectors in the Consumer Product Safety Commission. I
    think that there is general consensus that that is appropriate.
    Do you think that the commission--do you have recommendations
    for any expanded authority within the CPSC to address the toy
    safety issue?
        Ms. Teagarden. I don't have expertise there. What I would
    look at is the provision of more people making sure that
    companies are doing what they say they are doing.
        Mr. Matheson. I guess I would ask Mr. Green, do you have
    thoughts about should there be expanded authority of the CPSC?
    Do you have thoughts about that?
        Mr. Green. I do think that we need to expand the authority
    of the CPSC while also increasing their budget and while----
        Mr. Matheson. And how would you expand the authority? Do
    you have thoughts on that?
        Mr. Green. Well, a lot of it is about political will of
    using some of the authority they already have but I have spoken
    about that. I have some stuff in my written testimony about
    this. But the most important thing is to give them some more
    specific authority on lead, less ambiguous authority to deal
    with lead in a way that all the other agencies are looking at
    it so right now they are saying well unless it is in paint, we
    don't have any authority over that. Well, that doesn't
    necessarily make sense if a child is chewing on something, for
    example.
        Mr. Matheson. Right. That is helpful.
        I want to ask a question of Ms. Farrow. In your testimony
    you raised the issue about you found toy jewelry 3 years after
    it was subject to the recall process.
        Ms. Farrow. That is correct.
        Mr. Matheson. And you raised the issue about the adequacy
    of the Federal Government regulating imported toy jewelry. Do
    you have thoughts about what else the CPSC can do to assist
    local government agencies in improving the safety and the
    recall process?
        Ms. Farrow. Well, I think if the CPSC would notify the
    local jurisdictions that a recall has occurred and then maybe
    seek our assistance in making sure that the product is
    destroyed and permanently removed from trade.
        Mr. Matheson. And do you feel like we need to make
    improvements on that?
        Ms. Farrow. Yes, clearly we have that example of this
    product that was sitting in a backroom somewhere for 3 years
    and then placed back out in the marketplace.
        Mr. Matheson. OK. Mr. Chairman, that is all the questions I
    have. I will yield back. Thanks.
        Mr. Rush. The Chair recognizes the gentleman from
    Pennsylvania, Mr. Pitts, for 5 minutes of questioning.
        Mr. Pitts. Thank you, Mr. Chairman.
        Dr. Best, we understand that children can ingest lead, they
    can swallow chips of paint. Would licking a toy be enough to
    ingest or absorb lead to affect increase in blood lead level?
        Dr. Best. It is a hypothetical question. I will give you a
    hypothetical yes. The issue that we almost universally
    encounter is lead dust. It is on the floors and on children's
    hands and on toys, so that is an important issue about licking
    items. It would depend on how bioavailable the lead is, whether
    the paint had been chipped or harmed, if there was paint on the
    outside, if the item had been chewed on before and had
    deteriorated in a way so that lead was available.
        Mr. Pitts. And what are the procedures for treating someone
    with too much lead in their blood?
        Dr. Best. It depends. The first step is to make sure that
    continued exposure does not happen. That means you need to
    remove the source of lead or the child from the source of lead,
    whichever is more appropriate. If the child is living in a
    lead-painted house, we remove the child from the house. If the
    child has swallowed a lead charm, we remove the charm from the
    child. Then depending upon the level of lead, we will make sure
    that they are nutritionally adequate so that they have a good
    source of calcium and iron and vitamin C in their diet so that
    they don't continue to absorb more lead from whatever other
    sources there are in their environment. And then finally, if it
    is above a certain level, we will institute chelation, which is
    a medical procedure that reduces lead, although it has its own
    consequences.
        Mr. Pitts. Are you aware of any children that have become
    injured or sick by this summer's recalled toys with lead paint?
        Dr. Best. No, I am not, but my pediatric practice is local.
        Mr. Pitts. Ms. Farrow, roughly how many products made with
    lead are in a typical person's home today? How much lead is a
    person exposed to in their own home from products made with
    lead?
        Ms. Farrow. Well, clearly in older homes that were built
    prior to 1978, the primary exposure is from the lead paint in
    the home. As far as products, I think at this point it might be
    hard to determine. We haven't tested all the products, all the
    children's toys. They are not all being tested. Maybe Mr. Green
    might have a better idea.
        Mr. Pitts. Go ahead.
        Ms. Farrow. There are toys, vinyl products, potentially as
    we've identified earlier, potential candies, other food
    products.
        Mr. Pitts. And what can be done about those products, older
    products that are still in circulation, or in the home?
        Ms. Farrow. Well, I think it is a matter of getting the
    word out to communities that products can potentially be
    poisonous but the key is really identifying what those products
    might be and providing testing and scrutiny of all the products
    that are out there in the marketplace.
        Mr. Pitts. Mr. Green, did you want to add something?
        Mr. Green. Well, I was just going to say that more often
    than not, these are cheaper products and frequently products
    made out of vinyl, out of PVC, and so I think that parents--and
    we already talked about how to dispose of them but parents, if
    they are concerned and they really want to go to the mat and do
    everything they can, could basically take all products that are
    made for their children to play with that are made out of PVC
    vinyl and get rid of them.
        Mr. Pitts. Now, Mr. Green, you said that you felt the CPSC
    leadership were political appointees who are protecting
    industry, that you thought you had evidence. Do you think the
    record recalled number of products this year is evidence of
    them protecting industry?
        Mr. Green. Thanks for that question. That is a good
    question. So first of all, I didn't say that they always do. I
    just said that there have been situations where we have seen
    that, and then for the previous question, in my written
    testimony there is some very specific evidence including a
    document that we received from a FOIA request, sort of the
    proverbial smoking gun related to the lunchboxes about that. As
    far as the question about the increased number of recalled
    items, I think that we also have to look that the world has
    changed and so globalization is causing increasingly large
    number of the products that are for sale in the U.S. to be made
    in places that don't have the sort of American regulatory and
    enforcement provisions to ensure that there are not toxic
    materials or dangerous aspects to products. And so I think that
    it would be only natural as there is more international trade
    for us to have more dangerous products in the U.S. because our
    standards are currently higher--safety standards.
        Mr. Pitts. Thank you, Mr. Chairman.
        Mr. Rush. The Chair recognizes the gentlelady from Oregon,
    Ms. Hooley, for 5 minutes.
        Ms. Hooley. Thank you, Mr. Chairman. Dr. Best, as you
    stated in your testimony, there are no safe levels of lead for
    children. Does this mean that you think the CPSC's limit on
    lead paint to 600 parts per million is insufficient?
        Dr. Best. I do.
        Ms. Hooley. And what would you have it in?
        Dr. Best. I want to sure I get my decimal point correct.
    Yes, 40 parts per million in any component of the item.
        Ms. Hooley. Do you know how CPSC came up with that figure,
    600 parts per million?
        Dr. Best. I believe that they divided a dose of lead that
    can be attributed to a specific rise in blood lead, a dose of
    external lead into your blood, and then divided that by enough
    lead to cause a loss of 1 IQ point, and I actually I have that
    written down. It is a fairly convoluted structure but we can
    show it to you.
        Ms. Hooley. Thank you. Dr. Best and Mr. Green, a question
    for both of you. Are you aware that there are water hoses, some
    with or without warning labels, that if you actually put the
    water through them, they are producing a high level of lead
    than you would get from your faucet if you had lead in your
    pipes? And that is the water sometimes we drink out of that
    hose or give our children a drink out of that hose or we water
    our fruits and vegetables. Can you talk to me about that and
    how important that it and do we need to do something about it?
        Dr. Best. Well, the good news is that vegetables don't
    absorb lead out of the water as well as humans do, for
    instance. So washing your vegetables or growing your garden
    using water from that hose is less of a concern. I am not going
    to say it is no concern but----
        Ms. Hooley. But less of a concern.
        Mr. Best. The other news is that you really shouldn't be
    drinking out of your hose because there is lots of other things
    besides lead including some phthalates and other things that we
    know are harmful.
        Mr. Green. The Center for Environmental Health came to an
    agreement with hose manufacturers, the largest hose
    manufacturers, the ones that were selling in California, and
    the agreement basically said that they had to comply with the
    California Toxics Act and they have chosen to comply in one of
    two ways: Either to reduce the lead to such a low level, to an
    extremely low level or to put a warning on it. Obviously we
    were trying to encourage them to just eliminate the lead and
    the reason the lead is in there is because the hoses are made
    out of vinyl and so they are sourcing vinyl sometimes that have
    lead in them and in my opinion is not nearly as dangerous a
    health hazard as jewelry or bibs or lunchboxes because it is
    not designed for a child to use it on a regular basis. However,
    when the sun sits on the hose and like in my yard where I got
    one of those little handles at the end, the water sits in there
    in the sun, the vinyl breaks down and the lead dust that Dr.
    Best described goes into the water and then the kids play in
    the yard and they get thirsty and they drink out of the hose.
    That possibility does exist.
        Ms. Hooley. I understand, for any of the panelists, that
    some western European countries like Germany have dealt with
    the issue of dangerous substances in products more effectively.
    Do any of you have any knowledge of what is happening in other
    countries? You can volunteer, any one of you.
        Mr. Green. At the risk of monopolizing the conversation, my
    Treo would be illegal in the E.U. so they are making a
    different Treo for the EU that doesn't have the heavy metals
    that this one has, as an example. I have an example here in my
    pocket so I am sharing it with you.
        Ms. Wallach. And to that end, the Europeans have gone
    through a process of finding a whole new regulatory system for
    toxics. Its acronym is REACH, and gruesomely, the United
    States, has been one of the countries that has threatened to
    drag that new standard for raw toxics, not just in toys, to the
    WTO as an illegal trade barrier. So there are a set of memos
    that came out of the State Department during the period of
    Colin Powell as Secretary of State that lay out orders
    basically of our all our embassies in Europe as well as various
    memos describing how their improvement in the toxic exposure
    would be a violation of the World Trade Organization's
    Technical Barrier to Trade Agreement. We threatened in what is
    called a demarche, which is before you file the actual suit, we
    threatened a WTO suit and they weakened that standard though
    they are starting to implement the weakened version so it is a
    rollback. It is a chilling effect already without a challenge
    and we are still apparently--the U.S. Trade Representative's
    office is still chewing on the idea of going after that because
    it is a better standard. The Treo would be bad and there are a
    whole set of products--now there are two scales of production,
    one for the U.S. market and one for Europe, to meet these
    standards that are higher safety.
        Ms. Hooley. Mr. Chairman, do I have time for one more
    question, Mr. Chairman?
        Mr. Rush. Mr. Gonzalez is recognized for 5 minutes.
        Mr. Gonzalez. Thank you very much, Mr. Chairman
        My first observation, and I appreciate what Mr. Green said.
    He said the world has changed and I am afraid we are still
    dealing when it comes to safety of products with a design and a
    model that is outdated but I am going to cover something that
    was discussed yesterday as to what the CPSC is doing regarding
    the issue at hand. The other observation I have is simply, I
    understand the interests of lead levels and maybe other sources
    but we are where we are and I think that we don't have to
    debate the fact that lead is bad and the best test of that is
    whether a manufacturer or a retailer of a product containing
    lead, would they purchase it and allow their children or their
    grandchild to use it. I think that is always the test, and I
    guarantee you, the answer to that would be no.
        But yesterday Chairman Nord indicated the following:

         I am pleased to report that we reached an important
    agreement with AQSIQ, which is the counterpart in China of the
    CPSC, under which China will immediately implement a plan to
    eliminate the use of lead paint on Chinese manufactured toys
    exported to the United States. They are going to make sure
    there is no lead in the paint through inspections of U.S.-
    destined toys and a certification system for paint suppliers.

         When I asked her, is that realistic because we don't have
    any oversight, we have no inspectors, we are not going to have
    anyone over there assisting the Chinese or maybe even looking
    over their shoulder as to whether they are really complying
    with the terms of this particular agreement? So very briefly, I
    would like the witnesses to tell me whether this is realistic.
    I am not criticizing Chairman Nord. I think she inherited what
    she has inherited by resources and through authority and she is
    going to do the best she can under the circumstances. We are
    going to be introducing legislation that may address some of
    the shortcomings.
        The second point, and I want, again, even though I am going
    to cite the testimony of a couple of the witnesses, I want the
    other witnesses to also chime in on what I believe is so
    important, and that is the shared responsibility of different
    sectors in addressing the problems, whether is lead or other
    unsafe products, and that is the role of the manufacturer and
    their liability, the retailer and their liability and of course
    just good consumer due diligence, and I think some of the
    witnesses may have touched on that in their testimony. But what
    I want to point out is the comment here, first of all, I
    believe it is Mr. Green in his summary

        Second, such legislation must hold distributors, retailers
    and manufacturers accountable for the safety of the products
    they sell through mandatory pre-market testing and strong
    disincentives for violators.

         I have got Ms. Teagarden, I believe

        Direct responsibility for product quality would encourage
    retailers to focus beyond relentless cost pressure to product
    quality. Extending responsibility for product quality to
    retailers would be an important safeguard against lead-tainted
    imports.

        So the first question is what Chairman Nord has put in
    place as far as the international agreement, and secondly,
    where do we get the manufacturer and the retailer to share some
    of that responsibility and why do you think that they are not
    doing that at the present time? And we will start with Dr.
    Best.
        Dr. Best. As a medical professional, I must admit that that
    is not my field of expertise but I can say that there is no
    reason for lead to be in any product. It is used in a product
    because it is cheaper than its alternative or because of lack
    of knowledge, so I would hope that our standard is set very
    high no matter what the source is.
        Ms. Farrow. I would say that despite what China may or may
    not do in the future, we still need to have some type of
    regulatory framework here in the United States to actually
    inspect the product as it enters this country because even
    though China might say they are stepping up, we have got to
    make sure that we can close any kind of loophole that might be
    there. Clearly we have identified the problem. The product has
    been identified by CPSC and they still allow the product to
    remain on the marketplace, in the marketplace, and there has
    got to be a better mechanism for destroying, destructing the
    property that the toys, jewelry, other products that are found
    to contain lead and I think we just need to step up our
    enforcement on our border.
        Mr. Gonzalez. Mr. Green?
        Mr. Green. In regard to the first question, it is my
    understanding that last week on the Senate side, one of the
    Senators said that he had been told by a Chinese
    representative, oh, we have already been doing what is in that
    new agreement for years. So that is hearsay but it is at least
    a good source. And then so that implies that it is not
    necessarily a very optimistic opportunity. It is not
    necessarily, OK, we got a done deal here. Second thing about
    that is that it is not just about China. In fact, the largest
    recall, the 150 million pieces of the very, very cheap jewelry
    that was in the gumball machines, that that recall happened
    just a month after the Center for Environmental Health, 2
    months after we sued some of the other jewelry manufacturers
    and sellers, those were all made in India. So I think we can't
    necessarily only say oh, the problem is China. Actually the
    problem is us. We are responsible for protecting our kids. And
    then as far as the second half of your question, what can we do
    about whether retailers, what their role is, so it shouldn't be
    the place of a small nonprofit like the Center for
    Environmental Health to have to bring litigation against these
    large retailers. It should be the place of government to hold
    the retailers accountable because these very large retailers
    have the resources to check out what is happening, what they
    are selling, and they should be held accountable for what they
    are selling.
        Mr. Gonzalez. Thank you.
        Mr. Rush. The Chair recognizes the gentleman from Texas,
    Mr. Burgess, for 5 minutes.
        Mr. Burgess. Thank you, Mr. Chairman.
        Dr. Best, I actually very much appreciated your comments
    about what you could have been had there not been lead in the
    gasoline. I struggled with that question myself for the last 24
    hours since I read your testimony, and maybe I would have been
    smart enough not to run for Congress. But nevertheless, you
    made a statement somewhere along the line, there is no reason
    for any lead to be in any product, and certainly a standard
    that perhaps we should strive for. In fact, you have been very
    specific in your prepared testimony of what you outlined as a
    definition of a trace amount of lead and how we should strive
    to make there were no more than trace amounts of lead. You are
    here in the committee room. You have got probably the most
    powerful subcommittee chairman in a sitting committee in the
    Western world today in Mr. Rush. What would you instruct Mr.
    Rush, how would you achieve this ideal? The other
    recommendations you have down here, they don't seem as
    substantive as the first two, defining the trace amount and
    recommending that there be no more than a trace amount. So how
    if you were going to guide our chairman as to how to craft the
    legislative product to end up with that ideal or even maybe to
    put it more simply, if you could have your wish as an ideal
    legislative product, how would you advise Chairman Rush to
    proceed?
        Dr. Best. That we set the internal and external standards
    for products to be defined very broadly for children, that we
    not just limit things to the younger children for whom the
    product is intended but that we remember that a 12-year-old
    probably has a 6-year-old or a 3-year-old sibling and those
    siblings want nothing more than to play with the 12-year-old's
    toys. I would set the standard high in terms of age and be very
    broad in terms of what is a children's product, meaning not
    just toys or jewelry that is intended for children, but car
    seats and easels and many, many other products. One of the
    things that is wonderful about children is they are very smart
    and they are exploring. They explore through their mouths and
    their hands and they ingest lead that is absolutely not
    intended to be ingested.
        Mr. Burgess. So you would make the criteria quite stringent
    but again, as far as developing the product that would then
    cover things made in this country, things made in other
    countries, the air we breathe. Where is the greatest return on
    investment for Chairman Rush's legislative work on this?
        Dr. Best. In terms of the greatest return on health, which
    I think is what we are all looking for, is that I would make
    sure that when we think about products now from a global
    market, that every item that we allow into our country or allow
    to be sold in our country be acceptable to my own child or my
    own grandchild. I think that is the best standard of care that
    we can give. The children in China don't need any lead in their
    products any more than the children here.
        Mr. Burgess. Let me ask you this, and I am certainly not an
    expert in this, and my only background knowledge is the
    knowledge I have gleaned from reading journals like the
    Washington Post, but it is my understanding that lead content
    in our city water--you list a Washington address on our witness
    sheet--our tap water here in Washington, DC--in fact, we have
    signs posted in the restrooms, don't drink the water, which is
    kind of a strange sign to see in the bathroom but we have to be
    concerned about things like our city water supplies?
        Dr. Best. Absolutely.
        Mr. Burgess. What is the level of lead in our city water
    here in Washington, DC?
        Dr. Best. I don't know what it is now. I know that we had a
    problem with it starting in 2002. I think that----
        Mr. Burgess. I arrived in 2003 and I remember being advised
    to get a water filter.
        Dr. Best. Right, and the problem there was similar in that
    the regulatory and--the rules were there but they weren't
    followed, and that is the same problem we are having now is,
    the rules, they are not the best rules that I think we should
    get but the existing rules weren't even followed. And so I
    can't tell you what is in the water in the city tap. I do know
    that the city also has said that it has improved but I am not
    going to----
        Mr. Burgess. Yes, and that is part of what is bothering me
    intellectually about this. We could go to great trouble and
    expense to clean up a problem overseas but if we haven't even
    done it in our own backyard--I thought it was a given that we
    had. I was a little surprised to come here and find that it was
    a problem.
        Dr. Best. I think your point is well made. One of the
    concerns that I have about an issue like this is that it brings
    to the attention of the public toys and lead. Well, that is
    good because we need the public to be aware that this is a real
    risk. It is not pretend. It is not rare. It is a real risk. We
    also need to think about the fact that there is lead paint in
    houses still. There is a lot of lead paint still out there and
    it is always in the poor neighborhoods where the paint isn't
    well maintained, the apartment building isn't well maintained.
    There are many other environmental toxins that we need to be
    aware of and we need to remember that every time we allow our
    children to be exposed to those toxins, when they grow up to be
    the adults that we are now, they might have been smarter.
        Mr. Burgess. Yes, they might have been smarter.
        Mr. Green, what do we do with all the stuff we get back on
    those recalls?
        Mr. Rush. Time is up.
        Mr. Burgess. Can Mr. Green answer that question?
        Mr. Rush. No. We will have a second round.
        Mr. Burgess. You are very kind. Mr. Chairman, did you get
    all that stuff that the doctor gave you for crafting
    legislation?
        Mr. Rush. I certainly did.
        Mr. Burgess. I will yield back.
        Mr. Rush. The chairman recognizes himself for one
    additional question and will allow the other members of the
    subcommittee to have one additional question.
        Professor Teagarden, you state in your written testimony
    that ``knowing how to produce products that are lead-free is
    not the problem. It is a question of constant process and
    material vigilance throughout the supply chain.'' Thus, would
    you recommend that U.S. manufacturers require their own full-
    time audit personnel to be present and their contractors,
    factories in China to monitor compliance with quality control
    and safety standards, and would this be financially feasible
    for most companies?
        Ms. Teagarden. I believe that that is best practice. I
    believe that the research shows that that ensures integrity in
    the system, and yes, it would increase costs. Relative to toys,
    I would say so what. The tradeoff is worth making.
        Mr. Rush. Thank you very much.
        Mr. Burgess is recognized for one additional question.
        Mr. Burgess. Well, I will repose the question. Mr. Green,
    what do we do with all the stuff that gets recalled? I asked
    that question of CEO of Mattel yesterday. You can't burn it,
    you can't put it in the landfill. I hope we are not reselling
    it on eBay. So what do you do with it?
        Mr. Green. Are you reselling yours on eBay? I am just
    kidding.
        Mr. Burgess. My children are older and I am too young for
    grandchildren so I am kind of in that awkward in-between age,
    so I am not buying toys right now.
        Mr. Green. Well, the first thing is that yesterday the CEO
    from Mattel talked about using it for co-generation. So first
    of all, that would be a very bad thing to do because if it is
    vinyl, then it has chlorine in it, and if it has chlorine in it
    and you burn it, it will by definition create dioxin, which is
    one of the most toxics known to science. So we shouldn't be
    burning it, that is for sure, if it is vinyl, and in addition,
    if it is metals, you can't burn the metals anyway so you are
    just getting rid of the rest of the stuff and you may even, if
    it is not being burned well, just distributing the metals like
    the lead into the air. So we shouldn't be burning it. That is
    clear. In the county where my office is, Alameda County, and
    where I live, they actually had set up drop-off points for
    people who are concerned about this. So the stuff that has a
    lot of lead in it, you may--and we talked about this a little
    bit earlier today, people may think that the right thing to do
    is to do the same thing you would do with the paint that you
    have in your garage that you are not using, which is take it to
    the local hazardous waste drop-off spot that is in every
    county.
        Mr. Burgess. Is there any way to leach the lead out of
    those products so that they can at some point be reclaimed or
    used for co-generation or some other process?
        Mr. Green. Technically, there would be a way but it
    wouldn't make sense. It would be, one, too expensive, and two,
    it just wouldn't make sense by the nature of those materials.
        Mr. Rush. The gentlelady from Oregon is recognized for one
    additional question.
        Ms. Hooley. Thank you, Mr. Chairman.
        Ms. Teagarden, in your testimony you find fault with the
    big-box retailers applying pressure on suppliers for lower and
    lower prices. What do you suggest be done about this? Anything?
        Ms. Teagarden. I think that is good business practice for
    them to do that but meeting their profit obligations can be
    balanced with the need to meet their obligations to consumers
    to sell products that are lead-free to children.
        Ms. Hooley. And how would you do that?
        Ms. Teagarden. I would make them responsible for the
    compliance--also responsible for the compliance of products
    they sell.
        Mr. Rush. The gentleman from Texas is recognized for one
    additional question.
        Mr. Gonzalez. Thank you very much, Mr. Chairman. I am just
    going to follow up on Ms. Wallach and Ms. Teagarden on the
    question I had posed earlier and you were not able to respond,
    but I think Ms. Teagarden answered the second part. One was on
    the agreement with the Chinese Government and whether that is
    practical and effective and the other about retail liability,
    that aspect of it and how would that be accomplished?
        Ms. Wallach. First of all, on the agreement, in 2005 China
    immediately implemented the previous agreement on lead in
    products, and we have seen with the current spate of problems,
    nothing happened, so I think to answer your question yes or no,
    no, that agreement is not going to fix the situation. The
    things that need to happen I believe are third-party
    certification within the plants, not the Chinese Government, to
    do the inspections. It is the same reason we have Government
    inspectors of meat inside meat plants instead of the company
    inspectors. It is a matter of conflict of interest. Number 2,
    higher fines for importers because the liability as Ms.
    Teagarden has said the incentives need to be set up such that
    actually you want a safe product or it is going to be a
    business mistake and cost you profitability. Number 3, we need
    to figure out how we subject to liability in U.S. courts in the
    civil justice system for injured consumer the producers, not
    just the importers so you create actually an incentive for the
    producers as well because they could be then losing a lot of
    money. And No. 4, we need to increase inspection. We need to
    have authority given, which doesn't exist but does exist in the
    USDA statutes for imports of meat to allow U.S. inspectors to
    go and ensure that those third-party certifications actually do
    meet U.S. law and have plant inspection overseas as well as
    greatly increased inspection at the border. The fifth piece of
    it though is who pays for that, and in my testimony I describe
    how and why those companies, those U.S. toy producers who have
    moved overseas to take benefit of cheap wages should be the
    ones who have to fund the additional costs to the U.S.
    Government to ensure that the products they bring back here are
    safe as well as profitable to them. Thank you.
        Ms. Teagarden. And I concur with Ms. Wallach on that one. I
    think she covered everything I would say.
        Mr. Gonzalez. Thank you, Mr. Chairman.
        Mr. Rush. Thank you very much. I want to again thank this
    panel of witnesses for your time and for your testimony, and
    you have really helped this subcommittee out a lot in terms of
    as we proceed into the future. Thank you so very, very much for
    your time.
        We will now ask the following witnesses to come forward now
    for panel two. Thank you to the witnesses who are the witness
    table now for your generous use of your time. You have been
    quite patient with us as we have proceeded through today's
    hearing.
        I want to introduce the witnesses. Mr. Carter Keithley is
    the president of the Toy Industry Association. TIA is the
    primary trade association for toy manufacturers and importers,
    representing 85 percent of sales in North America. Mr. Allen
    Thompson is the vice president for Global Supply Chain
    Management, Retail Industry Leaders Association. RILA
    represents over 600 member retail companies including large
    chains such as Wal-Mart and Target. Mr. Michael Gale is the
    executive director of the Fashion Jewelry Trade Association.
    This association represents over 200 companies in the costume
    jewelry industry. And next is Gary E. Knell, who is the CEO and
    president of the Sesame Street Workshop. The Sesame Workshop is
    a nonprofit media organization which produces the popular
    Sesame Street television show on public television, and lastly,
    Ms. Kathie Morgan is the vice president of Technical Committee
    Operations, ASTM International. ASTM International is one of
    the largest voluntary standards development organizations in
    the world.
        Again, I want to welcome you. You will have 5 minutes for
    opening statements. We will begin with Mr. Keithley.

         STATEMENT OF CARTER KEITHLEY, PRESIDENT, TOY INDUSTRY
                       ASSOCIATION, INCORPORATED

        Mr. Keithley. Good morning, Mr. Chairman and members of the
    subcommittee. I am very pleased to come before the subcommittee
    this morning on behalf of the Toy Industry Association to talk
    about toy safety. The TIA is in fact the leading toy industry
    association in the world. Our 500 member companies provide, as
    you observed, Mr. Chairman, more than 85 percent of all toys
    sold in the United States each year. TIA has been a leader in
    developing and implementing toy safety measures for more than
    seven decades. We are very proud of our accomplishments in
    ensuring that toys sold in America are the safest of any in the
    world. Our toy safety standards have bee modeled for other
    nations and records show that toy-related injuries in the
    United States are relatively rare despite the sale of nearly 3
    billion new toys every year.
        The recent recalls of a few models of toy products in the
    U.S., however, have given our industry and opportunity to make
    further progress in the continuous process of safety
    improvement. These recalls demonstrated to us that we needed to
    apply some new safety assurance measures in the toy production
    process. It is important to point out that the recalls account
    for a tiny proportion of the total of nearly 3 billion toys
    sold in the U.S. each year. So far this year there had been
    lead paint-related recalls of 14 models of toy products
    imported into the U.S. by 11 companies. Two of those companies
    are among our 500 manufacturing members and it also should be
    remembered that to their credit, these recalls were initiated
    by the manufacturers themselves when they identified the
    problem. But because the recalls this year related to lead
    paint on toys, something which has been prohibited by our
    safety standards for decades, we believe it is important for us
    to strengthen new measures to prevent such occurrences in the
    future.
        Here are the fundamentals of the new initiatives that we
    are undertaking. First, we are developing standardized
    procedures that will be used industry-wide to verify that
    products comply with U.S. safety standards. Second, we are
    establishing criteria to certify that testing laboratories are
    qualified to perform testing to U.S. standards using these
    industry-wide protocols, and third, we are encouraging the
    Federal Government to adopt a requirement that all toys sold in
    the United States undergo inspection to assure that they
    conform to our standards. We have modeled our initiatives in
    this area after measures utilized in many American industries.
    We are working with the American National Standards Institute
    to develop these procedures and we are communicating closely
    with the CPSC throughout the process.
        The safety system in the U.S. is a characteristically
    American approach to solving problems. It is a robust
    pluralistic system that employs the talents, expertise and
    speed of the consensus process, working with industry,
    government and consumers to address safety issues. We are very
    proud to be working with ANSI in developing these measures
    because ANSI is the premier nonprofit organization whose
    mission is to enhance the American quality of life by
    promoting, facilitating and safeguarding the integrity of
    consensus driven safety standards in the United States. In
    contrast to a top-down government-driven approach to safety,
    our system involves all stakeholders in a consensus process
    that allows tens of thousands of new products and new
    technology to come to market for the enjoyment of our
    consumers. Clearly, there is an important role for government
    to play as a watchdog and an enforcer of conformance with
    private-sector standards but history has proven the success of
    our reliance upon private-sector safety initiatives.
        Finally, I would like to point out that our proposals are
    not specific to toys made in any particular area of the world.
    The new requirements will apply to toys made in any nation. For
    more than 30 years working with our suppliers in China, our
    industry has produced billions and billions of high-quality
    toys that fully conform to our toy safety standards and we are
    confident that our suppliers in China will embrace these new
    safety requirements. We enthusiastically applaud the new safety
    agreement signed last week between the U.S. CPSC and AQSIQ and
    we welcome the agreement by the Chinese authorities to take
    immediate action to eliminate the use of lead paint on Chinese-
    manufactured toys. We recognize and accept, however, that the
    ultimate responsibility resides with our industry to assure
    that toys imported into the U.S. conform with our safety
    standards. We do not shrink from this responsibility and we
    pledge to you and to the American public that we will do
    everything in our power to make sure that toys sold in America
    are safe for our children to play with. I am honored to be here
    representing the toy industry among my distinguished colleagues
    here on this panel, and I look forward to responding to your
    questions.
        [The prepared statement of Mr. Keithley follows:]

                          Statement of Carter Keithley

        Good morning Mr. Chairman, members of the subcommittee.
        I am very pleased to come before the subcommittee this
    morning on behalf of the Toy Industry Association to talk about
    toy safety.
        The TIA is the leading toy industry association in the
    world. Our 500 member companies provide more than 85 percent of
    all toys sold in the United States each year. TIA has been a
    leader in developing and implementing toy safety measures for
    more than seven decades. We are very proud of our
    accomplishments in assuring that the toys sold in America are
    the safest of any in the world. Our toy safety standards have
    been the model for other nations, and records show that toy
    related injuries in the U.S. are relatively rare, despite the
    sale of nearly three billion new toys every year.
        The recent recalls of a few models of toy products in the
    U.S., however, have given our industry an opportunity to make
    further progress in the continuous process of safety
    improvement. These recalls demonstrated to us that we needed to
    apply some new safety assurance measures in the toy production
    process.
        It is important to point out that we that the recalls
    account for a tiny portion of the total of nearly three billion
    toys sold in the U.S. each year. So far this year there have
    been lead paint related recalls of 14 models of toy products
    imported into the U.S. by 11 companies. Two of those companies
    are among our 500 manufacturing members. And it should also be
    remembered that, to their credit, these recalls were initiated
    by the manufacturers themselves when they identified the
    problem.
        But because the recalls this year related to lead paint on
    toys, something which has been prohibited by our safety
    standards for decades, we believe it is important for us to
    strengthen new measures to prevent such occurrences in the
    future. Here are the fundamentals of the new initiatives that
    we are undertaking:

         First, we are developing standardized procedures
    that will be used industry-wide to verify that products comply
    with U.S. safety standards;
         Second, we are establishing criteria to certify
    that testing laboratories are qualified to perform testing to
    U.S. standards using industry-wide protocols; and
         Third, we are encouraging the federal government
    to adopt a requirement that all toys sold in the U.S. undergo
    inspection to assure that they conform to our standards.

        We have modeled our initiatives in this area after the
    measures utilized in many American industries. We are working
    with the American National Standards Institute (ANSI) to
    develop these procedures, and we are communicating closely with
    the Consumer Product Safety Commission throughout this process.
        The safety system in the United States is a
    characteristically American approach to solving problems and
    meeting needs. It is a robust, pluralistic system that employs
    the talents, expertise, and speed of the consensus process--
    working together with industry, government and consumers--to
    address safety issues. We are very proud to be working with
    ANSI in developing these new measures. ANSI is the premier non-
    profit organization whose mission is to enhance the American
    quality of life by promoting, facilitating and safeguarding the
    integrity of consensus-driven safety standards and conformity
    assessment systems in the United States.
        In contrast to a top-down, government driven approach to
    safety, our system involves all stakeholders in a consensus-
    process that allows tens of thousands of new products and new
    technology to come to market for the enjoyment of our
    consumers. Clearly, there is an important role for government
    to play as a watchdog and an enforcer of conformance with
    private sector standards, but history has proven the success of
    our reliance upon private sector safety initiatives.
        Finally, I would like to point out that our proposals are
    not specific to toys made in any particular area of the world.
    The new requirements will apply to toys made in any nation. For
    more than thirty years, working with our trusted suppliers in
    China, our industry has produced billions of high quality toys
    that fully conform to our toy safety standards. We are
    confident that our suppliers in China will embrace these new
    safety requirements.
        We enthusiastically applaud the new safety agreements
    signed last week between the U.S. CPSC and the General
    Administration of Quality Supervision, Inspection and
    Quarantine in China. And we welcome the agreement by the
    Chinese authorities to take immediate action to eliminate the
    use of lead paint on Chinese manufactured toys exported to the
    United States. We recognize and accept, however, that the
    ultimate responsibility resides with our industry to assure
    that toys imported into the U.S. conform to our safety
    standards. We do not shrink from this responsibility, and we
    pledge to you and to the American public that we will do
    everything in our power to make sure that toys sold in America
    are safe for our children to play with.
        I am honored to be here representing the toy industry among
    my distinguished colleagues on this panel, and I look forward
    to responding to your questions.
                                  ----------

        Mr. Rush. Thank you very much.
        Mr. Thompson, you are recognized for 5 minutes.

      STATEMENT OF ALLEN THOMPSON, VICE PRESIDENT, GLOBAL SUPPLY
           CHAIN POLICY, RETAIL INDUSTRY LEADERS ASSOCIATION

        Mr. Thompson. Thank you, Mr. Chairman and members of the
    subcommittee. Before I begin my prepared remarks, I want to
    stress that retailers contribute to, not detract from,
    consumers' access to safe and affordable products, and in my
    remarks this afternoon, I will describe the steps that
    retailers have taken and are taking to protect consumers.
        My name is Al Thompson and I am the vice president of
    Global Supply Chain Policy of the Retail Industry Leaders
    Association, but more importantly, I am the father of two young
    children, and so the issue of toy safety is one that carries
    personal importance to me. RILA represents the largest and
    fastest-growing companies in the retail industry and provides
    millions of jobs and operates more than 100,000 stores and
    distribution centers domestically and abroad. As you consider
    how to protect consumers, particularly children, from dangerous
    products. I want to outline some of the public policies under
    consideration that RILA supports.
        First, we support increased funding for the Consumer
    Product Safety Commission, or CPSC, as well as mandatory recall
    authority for the CPSC and a legal prohibition against
    knowingly selling a recalled product. Second, we support
    Federal legislation to promulgate lead standards for all types
    of jewelry similar to those enacted in the State of California
    as well as efforts to enhance product traceability for
    children's products. Third, we support the establishment of
    clear and predictable safety standards for toys and children's
    products that are uniform nationwide. While no two RILA members
    sell exactly the same merchandise, they are equally committed
    to the safety and integrity of their supplier operations as
    well as the safety of products on their shelves.
        In light of recent incidents, many of our members have
    enhanced product testing. For example, some retailers now
    require testing for all toys regardless of manufacturer. Others
    are implanting more rigorous protocols to confirm the safety of
    their toys through multi-layer testing and documentation. Our
    members have also reviewed and strengthened their internal
    policies and procedures for product testing, supplier
    compliance and the sanction for noncompliant suppliers and
    manufacturers. Furthermore, our members have joined with other
    allies seeking better Government standards and guidelines for
    product safety with a particular focus on products manufactured
    for children.
        While members have taken aggressive steps, RILA believes
    that ensuring product safety is a shared responsibility.
    Retailers have rigorous quality assurance requirements and
    enforcement mechanisms for their suppliers that manufacture
    goods for their stores. RILA members require their suppliers
    and manufacturers to understand and adhere to U.S. Government
    standards and regulations for toys and other products. They
    require that their suppliers operate factories in secure
    environments and rely on known and approved subcontractors to
    produce safe quality products. They require suppliers to
    maintain and document production processes that conform to
    safety standards beginning at the design phase and continuing
    through the completion of a finished product. And finally, they
    require manufacturers to open their factories and production
    processes to periodic quality and safety inspections.
        When a product is recalled, either at the insistence of
    government or a supplier, retailers take action. They
    immediately remove the product or products from the stream of
    commerce and properly dispose of them so they are not resold.
    They also notify purchasers when possible that they should
    return the product for a refund or replacement. These prompt
    actions are the result of protocols that virtually every RILA
    member has in place to respond to recalls and protect
    consumers. As soon as a product is recalled--as soon as a
    product recall is initiated, RILA members implement existing
    recovery plans to remove the subject merchandise. Retailer
    inventory systems produce an error message at the point of sale
    if such products reach checkout registers, and after
    implementing the recall, our members review their suppliers'
    testing protocols to minimize the potential for future problems
    and take appropriate actions or levy sanctions as needed.
        A successful product safety regime requires a close
    partnership between the private sector and U.S. Government as
    well as other governments that may be responsible for ensuring
    the quality of goods leaving their shoes. RILA stands ready to
    work with government policymakers to enact policies that
    strength consumer confidence and advance the production of
    safe, high-quality products that are affordable and readily
    available for customers.
        Thank you for the opportunity to testify today, and I look
    forward to answering your questions.
        [The prepared statement of Mr. Thompson follows:]

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        Mr. Rush. Mr. Gale.

      STATEMENT OF MICHAEL GALE, FASHION JEWELRY TRADE ASSOCIATION

        Mr. Gale. Mr. Chairman, members of the committee, thank you
    for inviting the Fashion Jewelry Trade Association to discuss
    today how to ensure that jewelry for children, indeed for all
    consumers, adequately limits lead exposure. The FJTA represents
    250 manufacturers and suppliers of children's and adult jewelry
    to retailers. Our members range from small family-owned
    businesses, some of those doing less than $1 million annually,
    to large branded national firms supplying department stores,
    chain stores and specialty chains. Trade Press has estimated
    that the fashion jewelry industry in 2005 was an $8.3 billion
    industry.
        I would like to start off by describing what we mean by
    fashion jewelry. Fashion jewelry is not trinket jewelry. It is
    not jewelry sold through vending machines or given away as
    premiums. Our members do not make those products. It is also
    not fine jewelry or jewelry made primarily of precious or
    semiprecious metals or gemstones. Fashion or costume jewelry is
    an everyday fashion item. Fashion jewelry can be made from a
    variety of materials. Most often the metal components of
    jewelry are made from a base metal that is plated with copper
    and nickel or another metal and then a finish coat of silver or
    gold. Glass, crystal, ceramic, plastic, wood and other natural
    and synthetic components are frequently used. Fashion jewelry
    can be embellished with paints, enamels and other such
    materials.
        FJTA and its members care deeply about all consumers and
    support a national preemptive standard for lead in jewelry
    components based on the existing comprehensive California law.
    The law was adopted in the aftermath of the Prop 65 lawsuit.
    The standards were agreed to by the California attorney
    general, environmental groups, industry and after exhaustive
    testing and detailed assessments of testing methodologies and
    discussions about the role of lead in various components of
    jewelry. The California law known as AB-1681 establishes
    specific limits on lead in the various components used in
    fashion jewelry for young children and different, sometimes
    higher limits for materials used to fabricate jewelry intended
    for other consumers. The standards for metal used in children's
    jewelry, for example, is 600 part per million. That limit is
    based on longstanding toxicology and evidence about the risks
    of lead exposure. In contrast, the lead limit for metal used in
    jewelry not intended for children varies depending on whether
    the metal is properly plated, and for the record, we have put
    in a chart which is an overview of the California law on a
    material-by-material basis applicable to jewelry materials
    intended for use in children's jewelry and jewelry intended for
    adults.
        There are two basic reasons the separate standards were
    adopted for the different materials and for children's versus
    other jewelry in California. First, there is a recognized
    difference in risk between adults and children. The generally
    agreed upon concept of accessibility has been a foundation of
    decisions about how to reduce or limit children's exposure to
    lead. In other words, whether because lead is encapsulated in a
    material, for example, crystal and glass, or access to lead is
    restricted through other barriers as in the case when metal is
    properly plated, differences in the limits of allowable lead
    are justified based on accepted science. Intensive testing and
    analysis have shown that the levels adopted in AB-1681 are safe
    for children's and other jewelry and we also attach for the
    record a copy of an analysis conducted by a toxicologist with
    extensive experience in the issue. Second, as we have seen,
    there are differences in the materials used for jewelry. A one-
    size-fits-all standard for lead was agreed to be inappropriate
    during the California discussions. Lead imparts useful and
    desirable properties to metal used in fashion jewelry. It
    allows for improved flow properties at lower temperatures,
    facilitates casting, especially of intricate parts, and of
    finishing.
        The total elimination of lead in jewelry, particularly
    jewelry that is not intended for young children, would impose
    difficulties and cost on the industry and adversely affect
    quality and cost to consumers. Reducing the lead content in
    metal too much can result in higher rejection rates for
    intricate cast pieces, a shorter life of molds and other
    equipment, higher breakage because of increased brittleness in
    the metal, and potentially higher consumer complaints because
    of poor quality, to name a few. The standards reflected in AB-
    1681 have been adopted as a model by our industry. We are
    proactively supporting a common national standard, educating
    our members to expand awareness about the issue and we have
    also reached out to the international fashion jewelry
    community, especially in China. We have been participating with
    the CPSC in proceedings on children's jewelry and supporting
    national preemptive standards. We met recently with the CPSC
    staff to provide further background and information on our
    industry.
        Mr. Rush. Mr. Gale, would you please bring your commentary
    to a close?
        Mr. Gale. I thank you very much, and if there are any
    questions about what our industry has done, I will be glad to
    answer them.
        [The prepared statement of Mr. Gale follows:]

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        Mr. Rush. Mr. Knell.

     STATEMENT OF GARY E. KNELL, CEO AND PRESIDENT, SESAME WORKSHOP

        Mr. Knell. Mr. Chairman, thank you and members of the
    committee so much for holding these hearings. It shows indeed
    that you care about children, and I would like to submit our
    written testimony for the record.
        Sesame Workshop was formed in 1969 as a nonprofit
    organization which was there to use the media to help children
    reach their highest potential, and I am sure many of you know
    our characters who happen to work for us--Big Bird, Elmo and
    Bert and Ernie and other folks who have been known to walk the
    halls of Congress at times as well. But Big Bird and Elmo are
    really indeed part of our army of teachers who try to reach
    kids and teach kids about letters and numbers, about health and
    hygiene, about trust and respect, so we wanted to come here
    today to express our concern as licensors about the recent
    recalls and what we need to do about it because several Sesame
    Street items were part of Mattel's first recall.
        First, the committee should know why Sesame Street licenses
    its characters for toys, games, books, videos, et cetera. We do
    so for two reasons. One is, that we extend the educational
    experience of the television program to promote the most
    important experience of learning for a young child and that is
    play through these types of products, and second, these
    products do generate an important source of royalty income for
    Sesame Workshop which pays for the educational research and
    television production of what we do. A program such as Talk,
    Listen, Connect which we just completed for 400,000 preschool
    children of active-duty military Guard and Reserves who are
    dealing with deployment, redeployment, unification, this the
    kind of program that we do, and ironically, sort of the
    ultimate irony is that we had produced a lead prevention kid
    using the Sesame Street characters called Lead Away which went
    out to 460,000 pediatricians' offices and now that we are
    involved with this, we are going to update this and get this
    out to another half million in all 50 States, and we would love
    to work with the committee to figure out ways to expand that.
    We are in the teaching business so when our characters are
    subject to an intentional or a careless design or a
    manufacturing flaw that is in violation of our contracts, we
    get hurt. Our reputation suffers and we need to regain any
    trust that we may have lost with parents.
        So what steps need to be taken? In our view, it is a
    public-private response. We need privately to strengthen
    industry standards and testing procedures. We know that Mattel
    will tighten them. Chairman Eckerd of Mattel apologized to me
    personally for the recall and we do believe that Mattel is
    going to take steps. They happen to be in many ways the best in
    class in the toy business. They have been very rarely subject
    to recalls. We need to make sure that everyone in this industry
    is doing whatever is necessary to ensure safety and tighten up
    those gaps that exist. As an extra protection, Sesame Workshop
    is going to spend its own resources to hire third-party
    auditors to test at the manufacturing shipping and retail
    levels so that we continually prove to parents that we stand
    for quality and learning.
        And finally, we also support the committee's move to
    strengthen the public sector so that the Consumer Product
    Safety Commission has a final safety net, so to speak, which
    will do things like requiring warranty cards with online easy
    access for parents, mandatory safety testing. We need to move
    toward a goal of zero lead, to make our chain of supply turn
    into a chain of safety, as it should be referred to. So we
    believe a swift response by all parties, private and public, is
    appropriate.
        We will be an enthusiastic supporter of legislation, Mr.
    Chairman, which you decide to propose here and hopefully enact,
    and as parents, grandparents, uncles and aunts of many young
    children, we must not settle for anything less. Thank you very
    much.
        [The prepared statement of Mr. Knell follows:]

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        Mr. Rush. Thank you.
        Ms. Morgan for 5 minutes.

    STATEMENT OF KATHIE MORGAN, VICE PRESIDENT, TECHNICAL COMMITTEE
                     OPERATIONS, ASTM INTERNATIONAL

        Ms. Morgan. Thank you, Chairman Rush and members of the
    subcommittee, for the opportunity to participate today. I am
    Kathie Morgan. I am vice president of technical committee
    operations for ASTM International. In brief, ASTM is a
    nonprofit organization with 34,000 members devoted to the
    development of international standards in over 90 different
    industry sectors. ASTM utilizes a consensus-based approach to
    develop standards that promote health, safety and improve the
    quality of life. ASTM does not offer testing and accreditation
    services nor do we license a certification mark.
        The U.S. system of standardization is one of the most
    dynamic in the world. It significantly reduces or often
    eliminates the cost to the Federal Government of developing its
    own standards. For consumers, it provides the technical
    underpinnings on which a broader conformity assessment process
    can be based. And most importantly, it allows technical
    experts, consumer advocates and regulators to engage together
    and directly in the development process. This process can
    result in new standards or revisions to existing standards that
    reflect changing technology and emerging issues in less time
    than regulatory action.
        ASTM Committee F-15 on Consumer Products with a membership
    of 850 professionals has 50 subcommittees in different product
    areas including toy safety. ASTM F-963, the specification for
    toy safety, establishes safety requirements for toys used by
    children under 14 years of age. All Federal regulations
    applicable to toys are referenced in F-963, and in addition
    there are more than 100 separate tests, design specifications
    and other requirements. Section 4.3 of the standard addresses
    lead and other materials that are toxic, corrosive or
    irritants. The requirements on lead restriction are from 16
    C.F.R. 1303 referenced in section 4.3.5. The regulation
    prohibits the use of paint or similar surface coating materials
    in which the total lead content is in excess of 600 parts per
    million. In addition, the lead content of the soluble material
    lead which can migrate from the toy and therefore be ingested
    by the child may not exceed 90 parts per million. The soluble
    level is determined by a method that is also detailed in F-963
    that extracts the soluble elements from the toy under a
    condition that would simulate the situation in which the
    material stays 4 hours in the alimentary tract after
    swallowing.
        Earlier this year, the Consumer Product Safety Commission
    requested Committee F-15 to coordinate the development of a new
    standard addressing lead in children's vinyl products. A new
    subcommittee on F-15 was just established last month that will
    initially focus on the identification of lead content in vinyl
    children's products such as baby bibs and lunchboxes, although
    certainly the scope could be broadened in the future. ASTM is
    currently soliciting participation for this activity and we
    will certainly ensure that all the witnesses involved in this
    hearing are invited, if they are not already involved.
        The participation of consumers and safety advocates in the
    standards process is paramount. To overcome funding obstacles,
    ASTM provides travel assistance for consumers to attend
    meetings. The annual administrative fee is waived for
    consumers, and electronic initiatives are in place that allow
    individuals to participate remotely from their own computer
    desktop.
        Much of the focus today is on toys imported from China.
    ASTM has agreements with the Standardization Administration of
    the People's Republic of China, the Chinese National Institute
    of Standardization and the Shanghai Institute of
    Standardization. Through these agreements ASTM provides access
    to all ASTM standards for these organizations. We sponsor joint
    training programs and we provide participating memberships to
    Chinese representatives on the ASTM technical committee. In
    return, the Chinese standards bodies promote the utilization of
    ASTM standards in China and the development of Chinese national
    standards based on the ASTM standards. We will continue efforts
    with China to raise awareness and understanding of ASTM
    standards.
        While we have had success working cooperatively to develop
    standards like F-963, the global value chain is critical to
    meet safety challenges of the future. ASTM will participate
    next week in ANSI'S building consumer confidence conference.
    Long-term solutions include a conformity assessment system that
    begins with developing the most diligent standard possible
    followed by testing and compliance processes that will
    cultivate consumer confidence. ASTM will support to the maximum
    extent possible any standard development needs that surface to
    compliment the initiatives announced by ANSI and the Toy
    Industry Association, but for our part, our efforts will
    continue to focus on the elements critical to the standard
    development mission ensuring an inclusive process, providing an
    environment of structure, technology and tools for stakeholders
    and a distribution system that ensures the standards are in the
    hands of those who need them.
        Thank you for the opportunity to participate and I look
    forward to answering your questions.
        [The prepared statement of Ms. Morgan follows:]

                         Testimony of Katharine Morgan

         Thank you Chairman Rush, Ranking Member Stearns, and
    members of the subcommittee for the opportunity to participate
    in this important hearing. I am Katharine Morgan, vice
    president of Technical Committee Operations with ASTM
    International.
         ASTM International is a leading non-profit organization
    devoted to the development of international standards. For more
    than 100 years, ASTM has served society as a leading venue for
    consumers, industry and regulators to work collaboratively
    under a balanced and consensus-based process to craft standards
    that promote health, safety and improve the overall quality of
    life.
        Unlike other standards development organizations, ASTM
    focuses almost exclusively on standards development. We do not
    offer testing and accreditation services, nor do we license a
    certification mark. As a result of our steadfast focus on
    standards development, ASTM standards are well known and valued
    for their technical quality and relevance.

                 The U.S. Voluntary Consensus Standards System

         As this committee knows very well, the Consumer Product
    Safety Act and its subsequent amendments establishes a Federal
    policy directing the CPSC to defer to a voluntary consumer
    product safety standard in lieu of promulgating its own
    requirements if important criteria are likely to be met through
    the use of the voluntary standard. This criteria includes a
    CPSC determination as to whether the utilization of a voluntary
    standard would eliminate or adequately reduce the risk of
    injury addressed and whether it is likely that there will be
    substantial compliance to the standard by industry. The CPSC
    retains the ultimate authority to promulgate mandatory
    standards in the event such standards are not effective or
    substantial compliance is not widespread. Other important
    Federal laws exist such as the National Technology Transfer and
    Advancement Act (NTTAA) which direct all agencies to use
    voluntary consensus standards and to participate in their
    development where it makes sense to do so.
         The United States has a very decentralized voluntary
    consensus standards system that is driven by the needs of
    stakeholders. The government is a major participant. But the
    process requires participation and cooperation of all
    stakeholders and a commitment towards reaching a consensus. To
    guide the process, ASTM and many standards development
    organizations are accredited by the American National Standards
    Institute and adhere to procedures for due process, openness,
    balance and transparency. If it is suggested that these
    procedures are not being met, there are protective actions such
    as a right of appeal to preserve the integrity of the process.
        The U.S. system of standardization is the most dynamic
    system in the world. It significantly reduces or often
    eliminates the cost to the Federal Government of developing its
    own standards. For consumers, it provides an important
    standards foundation which, when used in conjunction with an
    effective testing and compliance program, can build consumer
    confidence in the products that are purchased. But most
    importantly, the system allows stakeholders--technical experts,
    consumer advocates and regulators to engage directly in the
    development process. Led by the private sector, new standards
    and revisions to existing standards can often be made and
    incorporated into the marketplace much faster than by an agency
    rulemaking or other regulatory action. This nimbleness of the
    system allows timely revisions to standards to reflect changing
    technology and that establish requirements to address changing
    hazard patterns or emerging issues. This also enables the
    government to leverage both expertise and resources to rapidly
    elop effective standards that address emerging hazards.

                         ASTM Standards and Toy Safety

         Of particular interest to today's hearing, ASTM standards
    are widely used to make toys safer for children to play with
    and to assist manufacturers in testing components and products
    to determine levels of lead and other declarable substances.
         ASTM Committee F15 on Consumer Products has played an
    important role in consumer product safety standards for over 30
    years. The committee has a broad global membership of
    approximately 900 professionals, including staff of the
    Consumer Product Safety Commission (CPSC), consumers, safety
    advocates, retailers, researchers,--medical professionals,
    academics, test laboratories and representatives of the
    consumer products industry. Committee F15 encompasses 50
    standards-writing subcommittees in different product areas and
    will form new subcommittees as urgent safety issues and new
    hazards are identified that lend themselves to a standards
    solution.
         One of the most critical areas of focus for Committee F15
    is toy safety. With thousands of new toys introduced to the
    marketplace each year, ASTM plays a vital role in protecting
    the safety of children. An important contributor to that safety
    is ASTM F 963, Consumer Safety Specification for Toy Safety,
    which establishes recognized safety requirements for toys
    intended for use by children under the age of 14. ASTM F 963
    helps to protect children in countless ways as it relates to
    possible hazards that may not be recognized readily by the
    public, but that may be encountered in the normal use for which
    a toy is intended or after reasonably foreseeable abuse.
         Federal toy safety regulations in the U.S. Code of Federal
    Regulations are referenced in ASTM F 963. In addition, there
    are more than 100 separate tests, design specifications and
    other requirements included. These tests and specifications
    include use-and-abuse tests, testing for accessible sharp
    points and edges, and measuring for small parts, wheel-pull
    resistance and projectiles. There are also tests for
    flammability, toxicity, electrical and thermal requirements,
    and noise. Manufacturers design products to achieve conformance
    with such requirements.

                          ASTM F 963 and Lead in Toys

         First drafted in 1971 (and later adopted under ASTM), ASTM
    F 963 has been enhanced over the years to address new product
    technology and changes in regulation. Section 4.3 of F 963
    addresses lead and other materials that are either toxic,
    corrosive or irritants. The requirements related to lead
    restriction are from 16 CFR 1303 which is referenced in F 963,
    Section 4.3.5. This requirement has been in the standard since
    mandated. There have not been any revisions to this section in
    recent years. Accordingly, the existing ASTM standard and
    Federal regulations address the key issue of lead in paint on
    toys.

                        ASTM F 963 and Magnet Ingestion

         ASTM standards are required to be reviewed every five
    years at a minimum. F 963, due to its comprehensive nature and
    the dynamics of an evolving industry is under constant
    evaluation to address changing needs from both a product and
    emerging hazard standpoint. Recent revisions made to ASTM F 963
    include the addition of safety requirements and test methods
    for yo-yo elastic tether toys; the addition of requirements
    related to cord, straps and elastics; and revisions to sections
    that address packaging film, age requirements as they pertain
    to use and abuse testing, and hemispheric shaped objects.
         As this subcommittee knows all too well, there have been
    incidents in recent years of children swallowing small magnets
    that were built into toys or that were part of a building play
    set with small parts intended for older children. These
    incidents of magnet ingestion drove a recent revision to ASTM F
    963 requiring that magnets and magnetic components be reliably
    contained within a toy or carry a warning describing the
    dangers posed by functional small ingestible magnets. The
    subcommittee is further developing the magnets section of F963
    and is working on a web based training program to educate the
    industry, retailers, testing laboratories and others on the new
    requirements.
         The revision of ASTM F 963 containing the initial
    provisions to address magnets was approved March 15, 2007, nine
    months following the initial establishment of the task group in
    June 2006. ASTM members involved in this effort recognized the
    urgency of the need and diligently worked together to develop
    the new safety requirements. Nine months of development time,
    given the complexity of the task in a full consensus
    environment, is evidence of the high priority that the various
    interest groups involved placed on finding a solution.

                       Lead in Children's Vinyl Products

         Requests for new activities as well as the development of
    new or the revision of existing ASTM standards are received
    from a variety of sources. Earlier this year, CPSC requested
    that Committee F15 coordinate the development of a new standard
    for mitigating lead in certain children's vinyl products.
    Accordingly, a new F15 subcommittee was created last month
    regarding ``Lead in Children's Vinyl Products''. The initial
    activity as approved at the organizational meeting will focus
    on the identification of accessible lead in vinyl children's
    products such as baby bibs and lunch boxes. The scope of the
    activity could be broadened in the future should it be
    determined based upon hazard data and risk assessments that it
    is necessary to do so.

                       Consumer Participation in ASTM F15

         Most major manufacturers of toys, juvenile and related
    consumer products participate in ASTM F15 as do many major
    retailers. These individuals are classified as ``producers''
    for the purposes of committee operations and standards
    development work. Representatives of consumer groups, safety
    advocates, testing laboratories, academics and government
    agencies are classified as ``non-producers'' since they
    represent a consumer, user or general interest. ASTM's
    regulations require a balance of interests in two ways--first
    by allowing only one voter per organization and second by
    ensuring that the number of voting producers never exceeds the
    number of voting non-producers. Thus, no single person or
    entity can control an ASTM standards committee, its agenda or
    the content of an ASTM standard.
         Staff of the CPSC is actively engaged in the work of ASTM
    F15, particularly in key subcommittees on toys and related
    juvenile products. While CPSC attends meetings and actively
    participates in the standards development process, a Commission
    policy requires that staff maintain non-official voting status.
    However, CPSC staff regularly returns abstention ballots with
    technical comments that are very significant to F15
    deliberations.
         Consumers and safety advocates continue to play an
    important role in F15 and other ASTM technical committees by
    raising awareness of issues, providing valuable input regarding
    consumer behavior and preferences and recommending entire new
    subject areas for standardization. These individuals share
    their experiences and knowledge to create better standards and,
    ultimately, better products. One of the greatest barriers to
    participation by consumers has been a lack of financial
    resources. Recognizing the need to assure that the interests of
    the public are protected and represented in our standards
    activities, ASTM provides a level of travel and participation
    assistance for consumers to attend subcommittee meetings and
    Committee F15 has a policy of waiving the annual administrative
    membership fee to encourage a broader participation of
    consumers. ASTM has also reduced barriers to participation with
    a full range of electronic initiatives that allow individuals
    to participate in the standards development process from their
    computer desktop without ever having to physically attend
    meetings.
         While taking steps to encourage more active consumer
    participation, Committee F15 is proud of the fact that many
    leading consumer organizations--including, among others, Kids
    In Danger, the Consumer Federation of America, Safe Kids, the
    American Academy of Pediatrics, Consumers Union, Good
    Housekeeping, and Keeping Babies Safe--are engaged and are
    making a difference. Individuals and organizations that do
    participate--in--standards--development should be applauded for
    their contributions of time, talent and resources. I wish to
    thank them for their important efforts and numerous
    contributions to the development of ASTM safety standards.

                             ASTM Outreach to China

        Much of the focus of today's hearing is on toys imported
    from China. ASTM has has cooperated with the standards bodies
    in China on numerous initiatives. Major activities include the
    signing of a cooperation agreement with the Standardization
    Administration of the People's Republic of China (SAC) and
    similar agreements with other prominent standards organizations
    including the Chinese National Institute of Standardization
    (CNIS) and the Shanghai Institute of Standardization (SIS).
         Through our relationships with China's leading standards
    bodies, ASTM provides our partners in China with access to the
    full volume of 12,000 ASTM standards; jointly sponsor standards
    and training programs; provide participating membership to
    Chinese representatives on ASTM technical committees; and
    sponsor a professional exchange program encouraging Chinese
    standards experts to visit ASTM International's Global
    Headquarters in Pennsylvania for extended study of ASTM and the
    U.S standards development process.
         In return, the Chinese standards bodies promote the
    acceptance and use of ASTM standards in China; utilize the
    resources of ASTM to develop Chinese National Standards and
    reference ASTM standards where applicable in Chinese National
    Standards (China currently uses over 450 ASTM standards as the
    basis of--their national standards); and to facilitate
    connections between Chinese technical experts and ASTM
    technical committees to ensure that ASTM standards reflect the
    specific needs of Chinese industry.
         ASTM is one of four U.S.-based international standards
    development organizations that have jointly established the
    Consortium for Standards and Conformity Assessment (CSCA) in
    China. Located in Beijing, the CSCA office helps to build
    cooperative and enduring relationships with Chinese
    governmental and industry standards associations. It also
    promotes the understanding and use of ASTM standards and of
    other U.S.-domiciled SDOs in China. The other members of the
    consortium are the American Petroleum Institute, ASME--
    International, and CSA America. In addition, ASTM officially
    opened an office in Beijing earlier this year. The ASTM
    International Board of Directors met last October in Beijing
    and also sponsored a day of outreach visits with Chinese
    industry and government organizations. Follow-up from that
    event continues.
         Through our offices in China, we look forward to working
    with representatives of Chinese government and industry to
    raise a greater awareness and understanding of ASTM standards,
    including F 963. ASTM also looks forward to assisting CPSC and
    other U.S. government agencies as it engages China on issues
    involving standards, product safety and international trade.
         Consensus standards such as ASTM F 963 exist to address
    toy safety issues and reduce threats to children from acute
    mechanical and chronic hazards involving lead and other toxic
    substances. While we have had great success in working
    cooperatively with representatives from the CPSC, industry,
    consumer groups and other interested stakeholders to develop
    ASTM standards, enhanced awareness, understanding, and
    adherence through out all aspects of the global supply chain
    will be critical in meeting emerging safety challenges of the
    future. Long term solutions include a conformity assessment
    system that begins with the development of the most diligent
    technical standard possible and then is followed by a testing
    and compliance process that affords consumers the ability to
    purchase products with a confidence that those products meet
    the applicable technical and safety standards. For ASTM
    International, where standards development is the core
    competency, our efforts will continue to focus on those
    critical elements needed for responsive and effective standards
    development--ensuring an inclusive process that engages the
    most balanced and complete representation of stakeholders and
    providing the structure, technology and tools needed for those
    stakeholders to efficiently work and develop the standards that
    are needed.
         I thank you for the opportunity to participate in today's
    hearing and I look forward to answering your questions.
                                  ----------

        Mr. Rush. Thank you.
        The Chair recognizes himself for 5 minutes of questioning.
    Mr. Gale, your group has reached out to the international
    community on lead standards. What is the standard for
    children's jewelry in other parts of the world, especially
    Europe.
        Mr. Gale. Europe does not have any standards pertaining to
    the lead content in jewelry, either children's or adult. The
    only standards in Europe are that products shall be safe and
    that they shall not contain nickel, because nickel is a metal
    that causes allergic reaction in many individuals.
        Mr. Rush. Thank you.
        Mr. Keithley, Professor Teagarden in her testimony stated,
    and I quote, ``Knowing how to produce products that are lead-
    free is not the problem. It is a question of constant process
    and material vigilance throughout the supply chain.'' First, do
    you agree with this statement? Second, would you recommend that
    U.S. manufacturers require their own full-time audit personnel
    to be present in their contractors' factories in China to
    monitor compliance with quality control and safety standards?
        Mr. Keithley. Well, Mr. Chairman, I do agree with Professor
    Teagarden's statement. Indeed, the issue----
        Mr. Rush. You do agree with it?
        Mr. Keithley. I do agree with it. It is one of product
    production processes and monitoring that to assure that the
    toys coming off the line conform with the standard which
    prohibits lead in paint on those toys. As far as whether or not
    the appropriate solution to achieving that end is having each
    company have its own full-time inspector on site, I think we
    should let the ANSI process work to figure out what the optimal
    solution to achieving that end is. Many of our members, a large
    majority of our members, are small companies, small businesses,
    and they rely heavily on the inspection processes of third
    parties, laboratories who are expert in this. That is why part
    of our proposal is to make sure that those third parties are
    qualified to do this testing and then assigning them the
    responsibility to go in pursuant to procedure established by
    ANSI is to how much do we need to do to get to that optimal
    safety.
        Mr. Rush. Mr. Knell, what pressures can Sesame Workshop
    bring to bear on the companies such as Mattel that manufacture
    toys with your licensed characters? Could you insist on even
    more stringent manufacturing and testing that they are
    currently proposing? Would you consider requiring manufacturers
    of your licensed toys only in company-owned plants? Could they
    be manufactured only in company-owned plants or in contract
    plants with constant supervision by an American employee of the
    company?
        Mr. Knell. We will consider all of those, Mr. Chairman. Our
    contracts with licenses like Mattel do not have extended lives
    that go on for years and years. Our contract with them will be
    up in the next 2 years and we plan to have a very extensive
    negotiation regarding all safety prospects which include these
    kinds of audits that you have discussed, moving them more
    towards owning the plants. I think everything should be on the
    table and what I think we will look for them so that just
    doesn't happen again is some protocol that will ensure that we
    move toward a lead-free environment. I want to live for the day
    when we can stamp all these toys ``lead-free'' and assure
    parents that indeed they have nothing to worry about when they
    are making that purchase.
        Mr. Rush. There was some testimony yesterday about
    domestically locating manufacturing companies or plants here
    within the United States. Would that be one of the aspects of
    negotiation?
        Mr. Knell. Well, it may be. Sesame Street, you should know,
    is in 120 countries around the world. We are working in all
    kinds of places including the Middle East trying to teach
    tolerance and aspect, in South Africa, around HIV and AIDS
    issues, so we are very active in all parts of the world and it
    is really a global franchise in many ways. With that said, we
    all know that 80 percent of the toy business has moved over to
    China. We have got to make sure that we are picking the best in
    class toy and other game and apparel manufacturers who are
    going to put in not only safety standards for children but
    safety standards for workers as well so we have something that
    we can feel is an assurance that will work.
        Mr. Rush. Thank you.
        The Chair recognizes now Ms. Hooley from Oregon.
        Ms. Hooley. Thank you, Mr. Chairman. I just have a few
    questions.
        Mr. Thompson, roughly how many contractors do large toy
    producers like Hasbro and Mattel have in China?
        Mr. Thompson. Ma'am, I wouldn't know the exact number of
    Hasbro and Mattel, their presence in China. I do know that our
    stores do sell a lot of their products.
        Ms. Hooley. Do you have any idea how many subcontractors
    the contractors have?
        Mr. Thompson. We can reach out to our companies and see if
    they have that knowledge. I do that what we do do is, we
    require that when we do contracts with Mattel or Hasbro, that
    they use known and approved contractors and subcontractors to
    produce toys for our stores.
        Ms. Hooley. Mr. Keithley, do you have a ballpark figure of
    how many toys your members expect to sell this Christmas?
        Mr. Keithley. Typically annually, it is about 3 billion
    toys each year. On a Christmas basis, I am sorry, in the
    holiday season, about 45 percent of our product is sold during
    that holiday season.
        Ms. Hooley. During the holiday season?
        Mr. Keithley. Right.
        Ms. Hooley. Of those toys, how many have already been or
    are in the process of being manufactured? Are we ready for the
    holiday season? Those toys are in the distribution system now,
    right?
        Mr. Keithley. Right, and I can't give you a percentage but
    I can tell you that I am confident that a very substantial
    proportion of the toys for this coming holiday season are
    either already in distribution centers in the United States or
    on the water on the way over here. That is why our
    manufacturers have told us that they are in the process of
    retesting all of the toys either before they leave China if
    they haven't left yet or when they reach their destination
    point, point of entry here in the United States, to be sure
    they don't have lead on them because what has happened has
    frankly--it should not have happened and so these manufacturers
    want to be sure--all the manufacturers want to be sure that it
    is not going to happen to their products.
        Ms. Hooley. So how can the people be assured? I assume that
    again most of the toys for the holidays, knowing how far in
    advance you have to make things, and then the distribution
    process, how can people be assured that when they go buy their
    children a toy this holiday that it is going to be safe? What
    are you doing to reassure them that that is actually going to
    be happening or are they going to have to sort of figure it out
    themselves?
        Mr. Keithley. What we have recommended to all of our 500
    manufacturers is to go back and do retesting and we have been
    told by the manufacturers that they are and the laboratories
    have told us that they are inundated with requests to go in and
    take products out of the cartons that have arrived here in the
    United States, retest them to be sure there is no lead paint
    content on them. Once that is done--and I should say also, many
    of our retail partners are doing the same thing. So once that
    it is done, it is our responsibility to get the word out that
    in fact the retesting has been done so if a product is on the
    shelf, it is because it has been retested.
        Ms. Hooley. You will retest it before it goes on the shelf?
        Mr. Keithley. Exactly.
        Ms. Hooley. And I have heard these numbers and I just want
    you to verify them. It has been reported that the Chinese
    Government has about 210,000 people in 1,800 labs dedicated to
    product safety. Do you know how often they are inspecting and
    testing the products from the facilities your members use
    there? Is that sort of a ballpark figure?
        Mr. Keithley. I do not know whether those figures are
    accurate or just how much safety testing they are doing,
    Congresswoman.
        Ms. Hooley. Have you visited any of the labs?
        Mr. Keithley. I have. I have visited labs in China, both
    Chinese Government labs and private labs that do testing under
    contract to our manufacturers, and let me simply say that we do
    not rely or we cannot suppose to offload the responsibility for
    safety testing to the Chinese authorities at all. It is our
    responsibility so our companies pay for these contractors to go
    in there and do it and don't rely on the Chinese labs.
        Ms. Hooley. OK. Thank you very much.
        I have one question for Mr. Gale and I will try to get this
    done in 22 seconds. In the fashion jewelry trade, you talked
    about the difference between what you put in a child's jewelry
    versus an adult's jewelry. I don't know but I have held a lot
    of babies and seen a lot of kids that chew on their mom's
    jewelry or that it is a really great thing that kids love to
    play, especially little girls like to play dress up and they
    wear that jewelry or that jewelry is passed down and then all
    of the stuff you don't want anymore, you give it to the kids.
    Is that a good thing to do a bad thing or do, or how can we
    assure parents that all this wonderful jewelry, at least that I
    thought was wonderful at some point in my life that I have
    given away to children so they can play dress up, I am sort of
    feeling bad about that.
        Mr. Gale. Great question, and the answer is the jewelry
    that is made today to the California standards, even the adult
    jewelry has been proven to be totally safe for children. Tests
    have been done and----
        Ms. Hooley. How long has that been going on, because I have
    got some really old stuff that I gave away.
        Mr. Gale. Some of the old stuff might have a high lead
    content.
        Ms. Hooley. So that was a bad thing to do?
        Mr. Gale. Well, from what we know now, it would be bad to
    let children have access to that.
        Ms. Hooley. And how long have the California standards been
    in place?
        Mr. Gale. About a year.
        Mr. Rush. Your time is up.
        Ms. Hooley. Thank you.
        Mr. Rush. The gentleman from Texas.
        Mr. Gonzalez. Thank you very much, Mr. Chairman.
        My first question would be directed to Ms. Morgan, and I am
    going to ask some fundamental questions here. The ASTM
    International, how is that funded? Dues, subscriptions? How is
    that funded?
        Ms. Morgan. Seventy-five percent of ASTM is funded by the
    sale of our publications which predominantly is ASTM standards.
    About 10 percent is from membership fees and the balance is
    miscellaneous sources including investment income.
        Mr. Gonzalez. I was just curious as to who all the actors
    that take advantage of your information but again, just how
    much input do they have? You indicate in your testimony, ``As
    this committee knows very well, the Consumer Product Safety Act
    and its subsequent amendments establishes a Federal policy
    directing CPSC to defer to a voluntary consumer product safety
    standard in lieu of promulgating its own requirements if
    important criteria are likely to be met through the use of
    voluntary standards.'' You are going to people seizing on that
    as maybe a source of the problem of government not being more
    active and allowing others that may be in certain enterprises
    to establish standards and I am not real sure that we are going
    to have a huge argument on standards. ``The United States
    system of standardization is the most dynamic system in the
    world.'' That is on page 3 of your testimony, and we probably
    would agree, but I think what we are getting into is really
    inspection and compliance, and we still may have an issue about
    lead levels and so on and I believe that you do a good job. I
    don't know that really is the issue today but I appreciate your
    participation. One of the things you point out, representative
    of consumer groups and safety advocates, testing laboratories,
    academics and government and so on are the non-producers but
    obviously are part of your process. Is that correct?
        Ms. Morgan. That is correct.
        Mr. Gonzalez. So would like Mr. Green, who is sitting
    behind you, would he be involved?
        Ms. Morgan. We would be delighted to have Mr. Green
    involved in the organization.
        Mr. Gonzalez. Do you have a list of, let us say, those that
    are concerned with safety, health, environment and so they
    constitute members or contributors to your organization? That
    would not be retailers, that would not be manufacturers and so
    on.
        Ms. Morgan. Yes, we do have those lists of those kinds of
    participating organizations in ASTM. Also, whenever we begin
    any new activity, we take every measure possible to solicit the
    names of those organizations that would have an interest and a
    bearing in that activity.
        Mr. Gonzalez. I appreciate if you would provide me at a
    later date a list of what I refer to again your contributors or
    participants. I just want to see how it all comes out in the
    way of percentages as far as the different sectors of the
    industry and the consumer groups.
        To Mr. Knell, I really do want to commend you, and again,
    it is about reputation and about your good name and such, but
    it appears that you yourself in a licensing agreement feel that
    it is incumbent for you to provide for a third-party
    independent disinterested audit. Is that correct?
        Mr. Knell. That is what we are going to implement because
    our faith I guess in the system has been a bit ruptured and
    these acts were something that obviously made the system not
    work so in order to reassure parents that our toys and the toys
    that we license are safety, because we are not in the toy
    manufacturing business, we believe bringing in an independent
    auditor such as a Veritas or an Intertech or some independent
    third-party company which can go to a factory in China
    unannounced, if necessary, to reassure that those products are
    safe is something that we have got to do. I think the Walt
    Disney Company made a similar announcement as well.
        Mr. Gonzalez. And again, I commend you and I think Ms.
    Hooley is going to have a bill regarding certain toys at
    certain ages that actually take that whole aspect and make it
    into law, and we will see what happens with that.
        My last question, I have about 40 seconds, I am going to be
    real quick here to Mr. Keithley and Mr. Thompson to kind of go
    through step by step is to members of your organizations and
    say how do you feel, what is their responsibility to assure
    that what is being manufactured pursuant to their design or
    what is being sold in their stores as far as their
    responsibility to make sure that that product that is placed in
    the stream of commerce is safe for use by the American
    consumer?
        Mr. Keithley. Congressman, it is our manufacturers'
    responsibility to assure that, and our companies have been
    doing really a terrific job for many, many years doing just
    that, and I think the record shows that toy safety issues have
    not been just overwhelming over these past years and so when
    something like this does happen that lead paint gets through on
    a toy, it is a particularly damaging thing and that is why we
    are now proposing a new system to try and close whatever gaps
    there may be remaining in our safety system.
        Mr. Rush. The gentleman's time is up.
        The Chair now recognizes the gentleman from Texas, Mr.
    Burgess, for 5 minutes.
        Mr. Burgess. Thank you, Mr. Chairman.
        Mr. Gale, I apologize for not being here during your
    earlier testimony but educate me, if you can, I am walking
    through downtown Lewisville, TX, the other day and passed by a
    jewelry store and they have got a big sign up that says we now
    have the Higas magnets I guess for costume jewelry. I assume
    they are talking about a more potent magnet, a more attractive
    magnet. Are these the same type of devices that pose the
    difficulty for children, the magnetic toys when they were
    ingested?
        Mr. Gale. My understanding is that any magnet that a child
    would ingest, if there is more than one, can cause problems and
    blockages and yes, it could conceivably do so.
        Mr. Burgess. Now, with your professional organization, what
    are you doing to alert people to this possible danger? Because
    I didn't see a similar sign up in the window that said caution,
    magnets if ingested could cause intestinal obstruction or
    blockage and consult your pediatrician at your earliest
    convenience.
        Mr. Gale. What we are doing is first of all informing our
    members that there is a potential problem and then we are
    creating--we a relatively new organization. We have been in
    business for a year and a half. We have established a Web site
    and we are in the process of putting information on the Web
    site for the consumers.
        Mr. Burgess. I guess one of my biggest concerns about this
    problem, I was not aware of it until sitting on this committee
    after practicing medicine for 25 years. Somebody called me up
    and said I have got a child that swallowed a magnet and I said
    just be patient, you will get it back. And it turns out that is
    what a lot of people thought but it wasn't correct and some
    children suffered significant injuries as a consequence. So I
    am most concerned about the education of the public who might
    be purchasing these things and obviously we are not expecting
    3-year-old children to be purchasing that type of jewelry, but
    their mothers might--hopefully not in Texas it wouldn't be
    their fathers--but their mothers might and they would be
    exposed or potentially exposed to the danger. I am just
    extremely concerned about people being made aware of this
    problem because, again, I don't think there is widespread
    recognition. I know there is not widespread recognition in the
    medical community and the public service or the public
    education is so critical in this regard because from Mr. Rush's
    earlier witness panels, this is one of the most disturbing
    things I had ever heard sitting here and listening to witnesses
    testify.
        So for what it is worth from me, I think it would be a very
    useful trade that your trade association could do to publicize
    the potential dangers of these magnets. It doesn't really
    matter in this case whether they are made in China or India or
    anywhere. It is the attractive capabilities of the magnet and
    the ability to cause the bowel to adhere to cause the
    obstruction which again never in my years of practice would I
    have considered that as being a potential problem. So again,
    for what it is worth, I would encourage your trade association
    to make that information readily available to the people who
    purchase the jewelry and we will just gradually increase public
    awareness of that because the other efforts that the consumer
    protection agency was utilizing at least in my experience
    hadn't been filtering down to the level of the community and
    certainly not the level of the community physician.
        Mr. Chairman, it has been an outstanding group of witnesses
    you have had over the past 2 days and I just want to thank you
    for doing this. I really don't have any other questions and I
    will yield back the balance of my time.
        Mr. Gale. Excuse me, Mr. Chairman. May I answer? Thank you
    for that observation, and I want to compliment the toy industry
    because they have done a very good job on informing the public
    about the problem of magnets and magnets coming loose and
    dislodging and therefore children being able to swallow them,
    and so that is very important in the jewelry field as well that
    we must make sure that if magnetic clasps or any magnets are
    used, that they be absolutely secured, mechanically secured so
    that there cannot be any ingestion by children.
        Mr. Rush. At this point the Chair wants to issue a sincere
    apology to the gentlelady from Illinois for abruptly cutting
    her off during her sentence in yesterday's hearing. I hope the
    gentlelady will please accept my apology.
        The Chair recognizes the gentlelady from Illinois for 5
    minutes.
        Ms. Schakowsky. Of course I accept your apology and I thank
    you for your making it. I appreciate that very much.
        In the first panel, Lori Wallach, director of Public
    Citizen's Global Trade Watch, said that--and this is really I
    think a question for Mr. Thompson, that the United States would
    need to alter various provisions of U.S. trade agreements
    including the WTO Technical Barriers to Trade Agreement whose
    rules currently set limits on the level of safety protection
    and the rate of border inspection. She says absent such
    changes, the improvements that Congress may make to improve
    import safety would be exposed to challenges as non-tariff
    trade barriers before trade tribunals, and so I wanted to get
    your view of that. I think that is a serious concern because we
    suspect are going to take action in response to the crisis that
    has emerged and that is an area of your expertise, I guess.
        Mr. Thompson. Congresswoman, I am probably not the right
    person to address the WTO component of this. I would be more
    than happy to get the appropriate people in front of your
    staff. What I can address, particularly probably in relation to
    the previous panel, is, one, we are responsible for what is
    sold on our store shelves and we take that responsibility very
    seriously. We invest heavily in actually entire departments
    that deal with toy safety and that includes using independent
    certified third-party labs to test toys made exclusively for
    us. That includes using third-party and our own employee
    auditors to go out and check the factories regardless of which
    country we source and make products out of to ensure that there
    are safe manufacturers' practices in place. And so we will
    always use our leverage to ensure that----
        Ms. Schakowsky. Well, these are all things after the
    products have come into the country. Do any of you advocate the
    notion that there ought to be safety inspections at the plants
    as well as at the borders and what is actually happening in
    that regard? And I am talking both about plants that are owned
    by the company but I guess more particularly plants that are
    contracting with the companies. Mr. Keithley, you are nodding.
        Mr. Keithley. Yes, ma'am, absolutely. There needs to be
    inspection in those plants and our companies who are sourcing
    the product from those Chinese producers need to have their
    inspectors in those plants inspecting the product coming off
    the line, and by their inspectors, most likely third-party
    contracted inspectors because as I said, many of our
    manufacturing companies are small businesses.
        Ms. Schakowsky. They would be chosen by you and chosen by
    the company and work for the company?
        Mr. Keithley. Well, they would most likely be an
    independent third-party laboratory that had been accredited
    under our proposal by the American National Standards----
        Ms. Schakowsky. This is our legislative proposal you are
    speaking of?
        Mr. Keithley. Well, we are working with ANSI to develop the
    protocols and the procedures. It would be an ANSI-sponsored-
    and-driven set of procedures. We are asking for a Federal
    requirement that the inspection be done pursuant to those
    procedures.
        Ms. Schakowsky. There was some talk about this. What kind
    of consumer input as opposed to only industry-driven input
    would go into that?
        Mr. Keithley. Right. ANSI, like ASTM, has a very robust
    system for including all stakeholders including consumers and
    academics and media and government.
        Ms. Schakowsky. Let me ask under a different topic. I am
    not sure who best can answer this, but how long, I guess the
    retailers, after a recall is issued does it take a retailer to
    remove all recalled products from the shelves and does it make
    a difference if it is a mandatory or a voluntary recall?
        Mr. Thompson. First, ma'am, it does not make a difference
    whether it is a mandatory or voluntary recall.
        Ms. Schakowsky. And you know that because?
        Mr. Thompson. Because once we are notified by the CPSC that
    a product is going to be recalled, our retailers take immediate
    steps to remove that product from the shelves and dispose of it
    and find the best way to notify our consumers to return that
    product and also ensure that our systems have that, the fact
    that that product has been recalled.
        Ms. Schakowsky. So you don't a different procedure for
    mandatory or voluntary. Do your retailers?
        Mr. Thompson. No, ma'am. Once we are notified of a
    voluntary or mandatory recall, we remove that product from our
    shelves and ensure at the register that that sale is blocked.
        Ms. Schakowsky. Thank you.
        Mr. Rush. The Chair will allow one additional question from
    each member. He recognizes himself for one additional question.
        Mr. Thompson, your testimony states that RILA retail
    association members review their suppliers' testing methods
    after recall and might levy sanctions if appropriate. Do you
    have an example of such a sanction?
        Mr. Thompson. I don't have a specific example with regard
    to toys. I know that, for example, with some of the recent
    recalls involving pet products that one of our companies
    decided to cease the business relationship with that
    manufacturer, and I think I want to leave with the committee as
    well that a lot of our members conduct multi-stage testing so
    this is not after the product is in the stream of commerce. We
    test pre-production and we test in some cases mid production
    and post-production. Now, they will also pull some samples off
    the shelves but our testing involves all stages of the
    production process and our audits also do occur overseas in
    those factories.
        Mr. Rush. The gentleman from Texas for one additional
    question.
        Mr. Gonzalez. The question will go to Mr. Keithley, Mr.
    Thompson. What is the consumer's individual recourse legally as
    to a retailer and a manufacturer for a product that obviously
    is harmful as you understand it today?
        Mr. Keithley. Well, as I understand it today, Congressman,
    there is no prohibition, nothing under the Consumer Product
    Safety Act or any existing law prevents the consumer from
    seeking redress if they felt they had been injured.
        Mr. Gonzalez. OK.
        Mr. Thompson. Congressman, there is nothing that prohibits
    the consumer from taking action and it is my understanding that
    it will vary State by State depending on their own consumer
    protection laws but we do have a responsibility to our
    consumers for what is sold on our shelves so there is nothing
    that prohibits them from----
        Mr. Gonzalez. The reason I ask that, Mr. Chairman, is that,
    as you know, what Congress in the past few has been doing and
    that we can just go down the line at the Federal level what we
    done with strict liability, joint and several, class action,
    Federal preemption, eliminating certain legal remedies and of
    course restricting damages, and I think that there is a role to
    the civil justice system in this country to also assist our
    private sector to accomplish what we are all attempting to
    accomplish and that is to make sure we don't have harmful
    products out there that will do harm to the American consumer.
    I yield back.
        Mr. Rush. Thank you.
        The gentlelady from Illinois is recognized for one
    additional question.
        Ms. Schakowsky. I could make one comment and then a
    question. In Illinois, there is a $500 per day per violation
    that if a recalled product remains on the shelf, a tool that
    has been very effective in speeding up recalls. It is something
    that I think we ought to consider.
        My question is this to Mr. Keithley. Yesterday I raised
    concerns about Mattel's decision to ignore the 24-hour
    reporting requirement and in the words of the Wall Street
    Journal, defying the Consumer Product Safety Commission. Do you
    believe that toy manufacturers should be required to comply
    with the 24-hour rule of reporting about a hazard in a product?
        Mr. Keith. Definitely, and I think they are required to
    under the present law.
        Ms. Schakowsky. Well, they are required to but Mattel has
    said that they don't like that law so they didn't comply. But
    thank you very much.
        Mr. Rush. The members of this panel, the final panel for
    these particular hearings, thank you so much for your time. We
    will keep the record open for 30 days and subcommittee members
    may submit additional questions to all of our witnesses and we
    ask that you respond to those questions on a prompt basis. We
    thank you so much for coming. Thank you for your time and being
    generous with your time. The subcommittee is adjourned.
        [Whereupon, at 1:30 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]

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