[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.]
    [Material submitted for inclusion in the record follows:]

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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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