[Senate Hearing 110-261]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-261
 
  ENHANCING THE SAFETY OF OUR TOYS: LEAD PAINT, THE CONSUMER PRODUCT 
              SAFETY COMMISSION, AND TOY SAFETY STANDARDS

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            SPECIAL HEARINGS

                     JUNE 18, 2007--WASHINGTON, DC
                   SEPTEMBER 12, 2007--WASHINGTON, DC

                               __________

         Printed for the use of the Committee on Appropriations



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                               __________

                      COMMITTEE ON APPROPRIATIONS

                ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            TED STEVENS, Alaska
TOM HARKIN, Iowa                     ARLEN SPECTER, Pennsylvania
BARBARA A. MIKULSKI, Maryland        PETE V. DOMENICI, New Mexico
HERB KOHL, Wisconsin                 CHRISTOPHER S. BOND, Missouri
PATTY MURRAY, Washington             MITCH McCONNELL, Kentucky
BYRON L. DORGAN, North Dakota        RICHARD C. SHELBY, Alabama
DIANNE FEINSTEIN, California         JUDD GREGG, New Hampshire
RICHARD J. DURBIN, Illinois          ROBERT F. BENNETT, Utah
TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              SAM BROWNBACK, Kansas
FRANK R. LAUTENBERG, New Jersey      WAYNE ALLARD, Colorado
BEN NELSON, Nebraska                 LAMAR ALEXANDER, Tennessee

                    Charles Kieffer, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

       Subcommittee on Financial Services and General Government

                 RICHARD J. DURBIN, Illinois, Chairman
PATTY MURRAY, Washington             SAM BROWNBACK, Kansas
MARY L. LANDRIEU, Louisiana          CHRISTOPHER S. BOND, Missouri
FRANK R. LAUTENBERG, New Jersey      RICHARD C. SHELBY, Alabama
BEN NELSON, Nebraska                 WAYNE ALLARD, Colorado
ROBERT C. BYRD, West Virginia (ex    THAD COCHRAN, Mississippi (ex 
    officio)                             officio)

                           Professional Staff

                             Marianne Upton
                         Diana Gourlay Hamilton
                        Mary Dietrich (Minority)
                        Rachel Jones (Minority)
                       LaShawnda Smith (Minority)

                         Administrative Support

                              Robert Rich


                            C O N T E N T S

                              ----------                              

                         Monday, June 18, 2007

                                                                   Page

Statement of Senator Richard J. Durbin...........................     1
Prepared Statement of Congressman Bobby L. Rush..................     5
Statement of Lisa Madigan, Attorney General, State of Illinois...     6
    Prepared Statement...........................................     9
Statement of Hon. Nancy A. Nord, Acting Chairman, Consumer 
  Product Safety Commission......................................    16
Consumer Product Safety Commission's Record of Achievement.......    17
Prepared Statement of Nancy A. Nord..............................    18
Magnetix Case....................................................    22
CPSC Recall Authority............................................    23
Imported Products................................................    24
Ban on Lead......................................................    25
Section 6(b).....................................................    26
Voluntary Recalls................................................    27
Magnetix Case....................................................    28
CPSC's Quorum....................................................    28
Section 15(b) Reporting..........................................    28
CPSC Recall Authority............................................    29
Spanish Translations for Recalls.................................    30
Knockoff Products................................................    30
CPSC Fines.......................................................    31
Memorandum of Understanding With China...........................    31
CPSC's Civil Penalties...........................................    32
Statement of Sharon Henry........................................    34
Statement of Kyran Quinlan, M.D., M.P.H., F.A.A.P., on behalf of 
  the American Academy of Pediatrics.............................    35
    Prepared Statement...........................................    37
Statement of Nancy A. Cowles, Executive Director, Kids In Danger.    39
    Prepared Statement...........................................    41
Statement of Carter Keithly, President, Toy Industry Association, 
  Inc............................................................    45
    Prepared Statement...........................................    47
The Success of the Consensus Safety Standard System..............    47
Toys are Tested for Safety.......................................    48
The Toy Safety Standard is Extraordinarily Successful in 
  Protecting Children............................................    48
CPSC's Vital Function............................................    49

                     Wednesday, September 12, 2007

Statement of Senator Richard J. Durbin...........................    57
Statement of Senator Sam Brownback...............................    62
    Prepared Statement...........................................    67
Statement of Senator Mark Pryor..................................    68
    Prepared Statement...........................................    69
Statement of Senator Bill Nelson.................................    71
    Prepared Statement...........................................    71
Statement of Senator Amy Klobuchar...............................    72
    Prepared Statement...........................................    74
Statement of Hon. Nancy A. Nord, Acting Chairman, Consumer 
  Product Safety Commission......................................    76
Thomas H. Moore, Commissioner, Consumer Product Safety Commission    76
Consumer Product Safety Commission Modernization.................    77
Prepared Statement of Hon. Nancy A. Nord.........................    77
Initiatives With the Chinese Government..........................    78
Private Sector/Manufacturers Initiatives.........................    79
Increased Surveillance and Enforcement...........................    79
Statutory Modernization..........................................    80
Statement of Thomas H. Moore.....................................    80
Lead in Children's Products......................................    81
Prepared Statement of Thomas H. Moore............................    82
Resources, Resources, Resources..................................    83
Import Product Safety............................................    83
Statutory and Other Modernization................................    84
United States-China Agreement....................................    85
Children's Jewelry...............................................    86
Children's Metal Jewelry Recalls--February 3, 2005 to October 10, 
  2007...........................................................    87
Consumer Product Safety Commission's Laboratory..................    87
Lead Paint.......................................................    88
Enforcement......................................................    89
Changes to the Consumer Product Safety Commission's Statutes.....    90
Consumer Product Safety Commission's Recall Process..............    91
United States-China Agreement....................................    92
Children's Jewelry...............................................    93
International Trade..............................................    94
Consumer Product Safety Commission's Actions.....................    95
Enforcement......................................................    96
Customs and Border Protection....................................    97
Statement of Jerry Storch, Chairman and Chief Executive Officer, 
  Toys ``R'' Us, Incorporated, Wayne, New Jersey.................    98
    Prepared Statement...........................................   100
Statement of Robert A. Eckert, Chairman and Chief Executive 
  Officer, Mattel, Incorporated, El Segundo, California..........   102
    Prepared Statement...........................................   104
Statement of Sally Greenberg, Senior Product Safety Council, 
  Consumers Union, Washington, DC................................   105
    Prepared Statement...........................................   107
Statement of Carter Keithley, President, Toy Industry 
  Association, New York City, New York...........................   113
    Prepared Statement...........................................   115
Statement of S. Joe Bhatia, President and Chief Executive 
  Officer, American National Standards Institute, Washington, DC.   116
    Prepared Statement...........................................   118
Additional Committee Questions...................................   138
Questions Submitted to Hon. Nancy A. Nord........................   138
Questions Submitted by Senator Richard J. Durbin.................   138
Risk Analysis....................................................   138
U.S.-China Agreement.............................................   139
Publication of Recall Rates......................................   141
Penalties........................................................   141
Section 6(b).....................................................   141
Accountability...................................................   142
Lengthy Recall Process...........................................   142
Questions Submitted to Thomas H. Moore...........................   149
Questions Submitted by Senator Richard J. Durbin.................   149


  ENHANCING THE SAFETY OF OUR TOYS: LEAD PAINT, THE CONSUMER PRODUCT 
              SAFETY COMMISSION, AND TOY SAFETY STANDARDS

                              ----------                              


                         MONDAY, JUNE 18, 2007

                           U.S. Senate,    
         Subcommittee on Financial Services
                            and General Government,
                               Committee on Appropriations,
                                                       Chicago, IL.
    The subcommittee met at 9:30 a.m., in room 2525, Ceremonial 
Courtroom, Everett McKinley Dirksen U.S. Courthouse, Hon 
Richard J. Durbin (chairman) presiding.
    Present: Senator Durbin.
    Also present: Congressman Rush.


                 statement of senator richard j. durbin


    Senator Durbin. Welcome to the field hearing of the 
Financial Services Subcommittee on Appropriations.
    This Financial Service and General Government Subcommittee 
is a new creation, and it has some 28 different Federal 
agencies under its jurisdiction, including the Consumer Product 
Safety Commission (CPSC), which is the lead agency today on a 
very important consumer safety issue.
    I want to thank our friends in the Federal courthouse here 
for allowing us to use these beautiful chambers, and it's my 
understanding that they're going into a trial as soon as we 
finish, so we'll try to clear out and let them get down to 
business.
    I also wanted to acknowledge that my colleague, Congressman 
Bobby Rush, will be here in just a moment. I wanted to start on 
time. I'm not sure which clock to follow here because I notice 
that they're kind of giving you different starting times, but 
I'm going to use this one. I want to thank Bobby Rush for co-
chairing this hearing this morning and our witnesses in 
particular for being here, Attorney General Lisa Madigan who 
will lead off, Acting Chairman of the Consumer Product Safety 
Commission, Nancy Nord, who is also here.
    Nancy, thank you very much, and our outside experts who 
came here on very short notice. I want to thank all those 
who've participated. I called today's hearings because I have 
concerns about consumer product safety and the ability of our 
agencies at the Federal and State level to respond. I was 
alarmed to read about the magnetic toys that we'll discuss 
today causing the death of children in dozens of cases of life-
threatening injuries, and yet, for a variety of reasons, 
consumers were not warned, and many of these products stayed on 
the shelf far longer than they should have.
    Our exposure to this type of issue was recently heightened 
by the pet food recall in March and April of this year. In the 
pet food case there's an interesting parallel. The combination 
of weak regulatory systems, an underfunded Federal agency, 
tainted products made in this case by irresponsible Chinese 
manufacturers led to the sickness and death of many household 
pets and a massive recall of pet food all across America.
    In early May I was reminded of the lessons learned from the 
pet food recall when I read a Chicago Tribune series on the 
recall of Magnetix toy products. In this recall, the Consumer 
Product Safety Commission worked to recall the very popular 
children's toy Magnetix but was confronted with a firm which 
refused to cooperate. Just like the pet food recall, the 
product being recalled was produced by a Chinese manufacturer. 
Now, here's a statistic which bears remembering as we go 
through this hearing.
    At the Consumer Product Safety Commission, nearly two-
thirds of the products that they deal with are imports, and 
two-thirds of those are from one country: China.
    Do the math. Half of the work of the Consumer Product 
Safety Commission deals with products that are made in China. 
Over the past week, we have seen similar parallel stories 
emerging.
    Another popular children's toy: One and one-half million 
units of Thomas the Train cars that contain lead paint also 
made in China subject to recall. The news is part of a larger 
picture we've observed in recent months. Chinese toothpaste 
adulterated with diethylene glycol, a common ingredient in 
antifreeze, but certainly not a common ingredient in 
toothpaste. Recalled. Shoddily produced magnetic toys and 
wooden train cars coated in lead paint.
    In the case of Magnetix, the toy, the plastic casings that 
encapsulated the powerful rare earth magnets were not properly 
made in the first place. When the pieces broke, as they can, 
tiny little magnets fell out. The CPSC and the firm Rose Art 
Industries received reports of these magnets falling out and a 
possible health risk associated with swallowing them.
    When more than one of these magnets was ingested, we know 
how many children are prone to putting toys in their mouths and 
picking up little pieces and swallowing them, these magnets, 
when they were swallowed, attached in their intestines causing 
serious injury in many cases, in some cases even death. More 
than a dozen serious surgeries associated with this risk were 
reported. One family tragically lost their child, a 20-month-
old boy named Kenneth Sweet, who swallowed these tiny little 
magnets that almost look like candy, and died a tragic death.
    Unfortunately, these injuries and deaths could have been 
prevented by a series of steps that never occurred. They never 
occurred because the evasive nature of the uncooperative firm 
and the limitations on the authority of the Federal agency, 
Consumer Product Safety Commission, to protect consumers. 
That's the reason we're here today for this hearing.
    I hope we'll let the experts tell us how we can make the 
laws better in America, how we can protect consumers, children 
and families even more. From the moment this risk was 
perceived, the Consumer Product Safety Commission and the 
company in question here should have acted quickly to remove 
these products from store shelves and alert consumers of the 
risk.
    Unfortunately, it didn't happen. I want to know why it 
didn't happen. I want to know what we can do to be better 
prepared in the future.
    There are three areas I'll then focus on in today's hearing 
with Congressman Rush.
    First, timing: The CPSC first learned of the health risk 
supposedly by these magnets on May 12, 2005, when a 5-year-old 
child underwent intestinal surgery for swallowing magnets.
    However, it wasn't until March 31, 2006 that the first 
recall was announced, and it wasn't until May 2007, 2 years 
after the first child was operated on that a full, clear recall 
was established by Rose Art/Mega Brands and the Consumer 
Product Safety Commission. Why? Why did it take so long? Could 
the CPSC have issued the subpoena sooner? Could the firm have 
been held responsible earlier? What regulatory authorities did 
CPSC lack that could have expedited this case? It's clear what 
penalties a company faces. When it delays it isn't clear what 
penalties are going to be faced if there's a delay. Should 
these penalties be increased? It's my thought that companies 
that unnecessarily delay reporting and endanger human health 
should face serious penalties. We ran into exactly the same set 
of circumstances when it came to pet food.
    A Canadian company importing this pet food found that the 
animals weren't eating it, were getting sick and dying and 
waited over 3 weeks to report it. Meanwhile millions of cans of 
this product were spread across the United States and North 
America. What was the penalty for the company? Very little, if 
any. Second, I'm concerned by a string of media reports that 
detail lax Chinese standards as a source of risk for American 
families.
    In the Magnetix case and Thomas the Train engines, 
toothpaste situation, irresponsible manufacturers in China are 
putting families at risk. It is sad to report that the ``Made 
in China'' label has become a warning label to many families 
across America today. I want to know what we can do to 
establish good international standards through testing 
organizations like ASTM International or through memorandum of 
understanding to establish clear guidelines and priorities, 
penalties and systems for information exchange.
    Third, why should our regulatory agency, Consumer Product 
Safety Commission, not have the authority it needs to deal with 
uncooperative firms? I want to know what changes in authority 
or funding will be necessary to give this agency the tools it 
needs to protect us. There are many questions clearly that need 
to be asked and answered.
    When Congressman Rush arrives, we'll allow him to make an 
opening statement at that time. I certainly understand his 
situation trying to fight traffic and get in here. I know he'll 
be here very shortly, but I'd like at this point to call as our 
first witness the Attorney General of the State of Illinois, 
Lisa Madigan. I want to thank her for being here. She has, of 
course, in the time that she's been in office, been a leader on 
consumer products safety. She's here today to talk about 
efforts that are being made at the State level. I'm hoping--
Congressman Rush is here. Let me give him a chance to open. 
Just started. Just finished my opening statement.
    Mr. Rush. I want to thank you, Senator Durbin, for 
recognizing me and for inviting me to participate in this 
Senate field hearing. As chairman of the Subcommittee on 
Commerce, Trade and Consumer Protection, I've held two hearings 
on children's safety and the Consumer Product Safety 
Commission, including one that addressed the Magnetix case.
    My subcommittee's jurisdiction is multifaceted and covers a 
broad area, but there is nothing more important than our 
mission to look out for our children. If the Federal Government 
cannot deliver on this basic responsibility to help parents 
keep their children away from hazardous products, then we're 
not doing our job.
    The Tribune's articles on Magnetix are disturbing to say 
the least, and they depict the worst nightmare of any parent 
come true. Twenty-month-old child, Kenny Sweet, Jr., swallowed 
numerous powerful tiny magnets that fell out of a popular toy 
kit called Magnetix. Inside the toddler's stomach these magnets 
stuck together and cut a hole through his bowels. Unbeknownst 
to his parents, these tiny magnets were in the carpet only to 
be found and swallowed by young Kenny. Kenny died on 
Thanksgiving Day, 2005. He died from what was the equivalent to 
a gunshot wound to the stomach. This child's death was tragic. 
What is even more tragic is the possibility that Kenny's death 
was preventable.
    According to the Tribune article both the company that 
manufactures Magnetix, Rose Art, and the Consumer Product 
Safety Commission were notified of those loose magnets and the 
possible dangers they pose to young children, but neither acted 
in time and in a manner to prevent Kenny's death.
    In my hearing on this subject matter, we tried to discover 
why it took the Chicago Tribune to do a thorough investigative 
story on Magnetix to finally get this product off the shelves. 
The story made clear that toys were still in some stores as it 
went to press, and subsequent editions of the Chicago Tribune 
reported that the product was still on store shelves.
    I want to know why it wasn't the Rose Art company or CPSC 
that was taking the necessary steps to protect our children. I 
don't believe we should engage in a blame game, and I don't 
believe we should initiate a consumer product, ``witch hunt''. 
I fully appreciate efforts of the Consumer Product Safety 
Commission, and I'm not attributing incompetence, nor 
negligence to the Acting Chairman Nancy Nord. The Commission 
did its best given the resources that they had. However, I do 
think that we should determine how the system broke down, and, 
more importantly, how to fix the problem. From this Senate 
field hearing as well as from hearings we have held in my House 
subcommittee in the District of Columbia, hopefully we will 
come away with an idea of what steps Congress should take to 
ensure that something like this doesn't happen to our children 
again, and I'm not naive to think that we can protect all 
children from all the dangers that lurk in the world, but I do 
know that the regulatory regime we have in place under the CPSC 
can be improved. I certainly look forward to working with my 
friend, my former colleague Senator Durbin and other members of 
this subcommittee to make the necessary reforms to the Consumer 
Product Safety Commission so that the number of preventable 
future deaths are minimized. I've already said publicly that 
one of my priorities as chairman is to write a reform bill that 
overhauls the CSPC's underlying enabling statute. Kenny Sweet 
should be alive today.
    Again, Senator Durbin, I want to thank you for graciously 
inviting me to participate in these hearings.
    [The statement follows:]

            Prepared Statement of Congressman Bobby L. Rush

    I want to thank my friend for recognizing me and for inviting me to 
participate in this Senate field hearing. As Chairman of the 
Subcommittee on Commerce, Trade and Consumer Protection of the House 
Energy and Commerce Committee, I have held two hearings on children's 
safety and the Consumer Product Safety Commission, including one that 
addressed the Magnetix case. My subcommittee's jurisdiction is multi-
faceted and covers a broad area. But there is nothing more important 
than our mission to look out for our children. If the federal 
government cannot deliver on this basic responsibility to help parents 
keep their children away from avoidable hazards, then we are not doing 
our job.
    The Chicago Tribune articles on Magnetix are disturbing--to say the 
least--and they depict the worst nightmare of any parent come true. A 
20-month old child, Kenny Sweet, Jr., swallowed numerous, powerful tiny 
magnets that fell out of a popular toy kit called Magnetix. Inside the 
toddler's stomach, these magnets stuck together and cut a hole through 
his bowels. Unbeknownst to his parents, these tiny magnets had blended 
in with the carpet, only to be found and swallowed by the young 
toddler. Kenny Sweet, Jr., died on Thanksgiving Day, 2005. He died of 
what was equivalent to a gun shot wound to the stomach.
    This child's death is tragic. What is even more tragic is the 
possibility that Kenny's death was preventable. According to the 
Tribune articles, both the company that manufactures Magnetix, Rose 
Art, and the Consumer Product Safety Commission were notified of the 
loose magnets and the possible dangers they posed to young children. 
But neither acted in time and in a manner to prevent Kenny's death.
    In my hearing on this subject matter, we tried to discover why it 
took the Chicago Tribune to do a thorough, investigative story on 
Magnetix to finally get this product off the shelves. The story made 
clear that the toys were still in some stores as it went to press--and 
subsequent editions of the Tribune reported that the product was still 
on store shelves. I want to know why it wasn't the Rose Art company or 
the CPSC that was taking the necessary steps to protect our children.
    I don't think we should engage in a blame game, and I don't believe 
we should initiate a consumer product ``witch hunt''. I fully 
appreciate the efforts of the Consumer Product Safety Commission, and I 
am not attributing incompetence or negligence to their staff or to 
Acting Chairman, Nancy Nord. The Commission did the best it could do 
given the resources they have. However, I do think we should determine 
how the system broke down, and more importantly, how to fix the 
problem. From this Senate field hearing as well as the hearings we have 
held in my House subcommittee, hopefully we will come away with an idea 
of what steps Congress should take to ensure that something like this 
doesn't happen again.
    I am not naive to think that we can protect all children from all 
the dangers that lurk in the world. But I do know that the regulatory 
regime we have set up under the CPSC can be improved.
    I look forward to working with my friend, Senator Durbin, and the 
other members of this subcommittee to make the necessary reforms at the 
Consumer Product Safety Commission so that the number of preventable, 
future deaths are minimized. I've already publicly said that one of my 
priorities as chairman is to write a reform bill that overhauls the 
CPSC's underlying, enabling statute. Kenny Sweet should still be alive 
today.
    Again, I want to thank Senator Durbin for graciously inviting me to 
this hearing, and with that, I yield back the balance of my time.

    Senator Durbin. Thank you, Congressman Rush. Let me just 
put a personal note in here. My grandson Alex loves this toy. 
He has a huge plastic container filled with Magnetix pieces and 
spends hours quietly playing. I didn't realize until the 
Tribune series came out that he was dealing with a deadly 
product. Luckily, he's old enough to know a little better, but 
in terms of smaller children, 20-month-old children, that tiny 
little magnet looks just like a piece of candy, and it's 
natural for kids to pick these up and be in danger because of 
the situation that Bobby Rush is describing.
    I want to thank again Lisa Madigan for coming here. As our 
attorney general at this point I invite you to give your 
testimony, and we'll ask a few questions afterward.
STATEMENT OF LISA MADIGAN, ATTORNEY GENERAL, STATE OF 
            ILLINOIS
    Ms. Madigan. Well, let me start by thanking you, Senator 
Durbin and Congressman Rush, for giving me the opportunity to 
testify today on an issue that is of vital importance to 
parents and caregivers across the country, and that is 
protecting our children from dangerous and deadly toys. As 
attorney general, I serve as the State's chief consumer 
advocate. In that role we do a lot of work to protect children 
from dangerous products.
    Over the past few years my office, along with some 
wonderful children's advocacy organizations, especially Kids In 
Danger and its executive director Nancy Cowles, have worked to 
pass the toughest laws in the country concerning recalls of 
dangerous children's products. As a result of these 
collaborative efforts, we now have the Illinois Children's 
Product Safety Act.
    It is a law that requires manufacturers and retailers to 
post notices of product recalls in their stores as well as on 
their websites. The law also requires that manufacturers and 
retailers alert by mail or e-mail any consumers who have 
already purchased recall items. Illinois was the first State in 
the country to enact such comprehensive child safety 
notification measures, and we remain one of only a handful of 
States that requires this kind of notification for the 
protection of our children, but our State-level efforts are 
hindered, and they're often undermined by lax laws and lengthy 
procedures that slow action at the Federal level. For State 
efforts to be effective in informing parents and working with 
them to protect children, we need an aggressive and proactive 
Federal partner.
    Unfortunately, the Consumer Product Safety Commission is 
underfunded, understaffed, and seemingly uninterested.
    They are too often unable to protect our children from 
injuries and death. This was certainly the case when it came to 
recalling the Magnetix and Magnetix building sets.
    For those people who haven't seen them, Magnetix are Tinker 
Toys. They're the Lincoln Logs of the 21st century. The obvious 
and crucial difference is that small, powerful magnets are used 
to keep the building blocks together to construct shapes and 
figures. These magnets, as noted, often fall out onto the 
playroom floor where they can be picked up and easily swallowed 
by children with life-threatening and even life-ending 
consequences.
    I believe that we have Dr. Quinlan with us today, who will 
likely give you a detailed medical explanation of how these 
rare earth magnets work, but what I want to talk about briefly 
is how the deadly defect in the Magnetix toy illustrates the 
deadly flaws in the Federal system, flaws that leave our 
children inadequately protected from dangerous products.
    The timeline of the CPSC's response to repeated problems 
with toys containing these small, powerful magnets, and with 
Magnetix in particular, shows the agency's inability to react 
quickly and effectively.
    As early as 2000, an 8-year-old child was forced to undergo 
intestinal surgery after he swallowed magnets that fell out of 
a fast food meal toy. The CPSC investigated and documented his 
case. In late 2003 CPSC investigated and documented another 
case involving intestinal trauma after a child swallowed small, 
powerful magnets.
    In 2003, the Rose Art Company launched the Magnetix product 
marketing it as safe for children three and over. Not long 
after this, in early 2004, a North Carolina grandmother told 
CPSC that small magnets were falling out of the Magnetix toy 
and could be swallowed by a young child. A Colorado mother made 
a similar report to CPSC in February 2005, and during that same 
time period three concerned consumers sent pieces of these 
defective toys to CPSC. Then in May 2005, Sharon Grigsby, an 
Indiana preschool teacher, reported that Magnetix almost killed 
a 5-year-old child who swallowed magnets from the toy and 
survived only after emergency surgery. Even after this report 
CPSC did nothing to alert parents to the danger posed by 
Magnetix, and as we have all gone over painfully, on 
Thanksgiving Day 2005, Kenny Sweet died after swallowing 
magnets from Magnetix.
    Finally, in December 2005, 2 years after the product was 
launched and complaints to CPSC began, a CPSC investigator 
recommended a recall. When it finally decided to respond only 
after a devastating tragedy, the Federal agency charged with 
protecting our children from dangerous products spent another 
unreasonable and quite frankly unimaginable 4 months to finally 
issue the recall. During this period, while CPSC negotiated the 
text of the recall, four more children required hospital 
treatment for injuries caused by Magnetix. Then another year 
passed with more children suffering injuries because they 
swallowed the magnets from this toy until the CPSC in April 
2007 finally issued an expanded recall notice for this product.
    After the initial CPSC recall on March 31, 2006, and after 
the second expanded recall in April 2007, I sent my staff out 
to check stores throughout the State to ensure that the recall 
was being properly implemented.
    To protect unsuspecting parents and caretakers from this 
potentially fatal toy, we wanted to make sure that the product 
was off store shelves and the recall notice was posted. 
Unfortunately, we found a series of problems with the Magnetix 
recall. Of the 80 stores that we checked throughout the State, 
15 still had the toy on their shelves. Five of those stores had 
both failed to post the notice as well as remove the toy from 
their shelves. Ten stores had posted the recall notice but 
hadn't removed the toys from their shelves, and we found 17 
stores where the item had been removed from the shelves, but 
they had failed to post the recall notice so that parents who 
already owned the toy could see it.
    When we talked to retailers, we learned that many of them 
were confused by the recall notice, and they couldn't tell 
which of the Magnetix toys they were required to remove from 
their shelves. We informed CPSC of retailers' concerns on May 
24, and we understand that CPSC knows there are problems with 
the recall and is currently taking steps to provide better 
information to retailers.
    However, the results of our check raise obvious questions. 
If retailers can't understand the recall, how can they 
implement it and actually remove the dangerous product from 
their shelves? And if retailers, those who are dealing and 
selling toys, can't understand the recall, how are parents and 
caregivers supposed to decipher recall notices?
    Clearly, CPSC is struggling to effectively communicate 
recalls to parents and other caregivers, and this problem has 
another aspect. It is our understanding that CPSC has not 
issued recalls in Spanish. That failure creates an unnecessary 
and inexcusable obstacle in the effort to protect children from 
dangerous products. CPSC must do a better job to communicate 
its recalls. During our store compliance checks, we also 
discovered another gaping hole in CPSC's approach to protecting 
children from unsafe products. As we visited stores to check 
for recalled Magnetix, we quickly found knockoff Magnetix toys 
at several dollar stores. These knockoffs are the same toys. 
The only difference is that they are manufactured by a 
different manufacturer, so it stands to reason that these same 
small, powerful magnets in virtually identical toys may pose 
the same threats to children.
    We sent a number of these toys to CPSC on May 24, and we 
asked them to consider recalling these products as well. 
Unfortunately, we received the same response that consumers 
hear every day from the agency:
    CPSC doesn't test products until an incident is reported. 
Waiting for an incident. In other words, waiting to learn that 
a child has suffered an injury or died from the exact product 
at issue before conducting product safety testing is absolutely 
unconscionable. Those knockoff Magnetix sets are still on store 
shelves, not because they are constructed differently or have 
passed safety tests, but simply because they were made by a 
different company. If there are health and life-threatening 
problems caused by these magnets and toys, it doesn't matter 
who manufactures them.
    They pose unacceptable risks and should not be allowed in 
our homes or in children's hands until they have withstood 
thorough testing. Every aspect of CPSC's response to the 
dangerous toy Magnetix is a horrible demonstration that our 
present system is not working. The entire process to protect 
our children from dangerous products is nothing short of a 
disaster. We can and we must do better. As an initial matter, 
most children's products are not subject to any kind of 
mandatory standards before they are sold. Most are not required 
to be tested or certified at all. While some voluntary 
standards do exist, they are created by committees dominated by 
toy industry representatives with little input from children 
and consumer advocates.
    As a result, there is no independent safety review of 
children's products before they are sold. In response to the 
injuries and deaths that the Magnetix building sets have 
caused, I urge you to pass new laws that mandate testing before 
children's products are allowed on store shelves, and 
ultimately in our homes and daycare centers where too many 
children have already been hurt or killed. Our very own 
Congresswoman, Jan Schakowsky proposed a bill, H.R. 1698, that 
would create the Infant and Toddler Durable Product Safety Act. 
That act would require CPSC to promulgate Illinois safety 
standards for durable products intended for infants and 
toddlers.
    It would prevent products that can harm children from 
getting to the market by requiring independent testing before 
products enter the stream of commerce. I know that Nancy Cowles 
of Kids In Danger will speak further about the need for this 
legislation, and there are other issues with CPSC that must be 
addressed, and I urge you to take comprehensive action that 
covers these as well.
    We know that once a product is on the market the CPSC is 
dependent upon the industry to self-report any problems, and, 
as most people in this room probably recognize, any system that 
is based on self-reporting will be inherently flawed, and, as 
is the case with Magnetix, recall notices are so watered down 
and confusing that most retailers, much less parents and 
caregivers, often cannot understand which products are subject 
to the recall.
    CPSC must have more power to investigate possible problems 
with products instead of waiting to hear about them from the 
industry. CPSC also should have the clear power to issue strong 
recalls that adequately and quickly convey the dangers of 
products. They should not have to waste precious time 
negotiating every word of a recall notice with a manufacturer 
while dangerous products are allowed to linger on store shelves 
and enter our homes.
    Additionally, CPSC does not have adequate staff to test or 
investigate the number of complaints it receives each year, and 
the process involved when they do conduct in-depth 
investigations takes far too long. Clearly, they need more 
staff and more resources. The lives of our children depend on 
this agency being able to fulfill its mandate. We cannot cut 
corners or balance tight budgets by taking risks with 
children's safety.
    I certainly hope that the suffering of the families hurt by 
Magnetix and other dangerous children's products will spur 
action which dramatically changes this law and system, and I 
look forward to helping you in any way that I can. Thank you 
very much for this opportunity to testify today.
    [The statement follows:]

                   Prepared Statement of Lisa Madigan

    Thank you, Senator Durbin and Representative Rush, for giving me 
the opportunity to testify today on an issue of vital importance to 
parents and caregivers across the country--protecting our children from 
dangerous and deadly toys.
    As Attorney General, I am the State's chief consumer advocate. In 
that role, I work to protect children from dangerous products.
    Over the past few years, my office and many dedicated children's 
advocacy organizations--especially Kids In Danger and its Executive 
Director, Nancy Cowles--have worked to pass the toughest laws in the 
country concerning recalls of dangerous children's products.
    As a result of these collaborative efforts, we now have the 
Illinois Children's Product Safety Act--a law that requires 
manufacturers and retailers to post notices of product recalls in their 
stores and on their websites. The law also requires manufacturers and 
retailers to alert by mail or email any consumers who have already 
purchased recalled items. Illinois was the first state to enact such 
comprehensive child safety notification measures. And we remain one of 
only a handful of states that requires this kind of notification for 
the protection of our children.
    But our state level efforts are hindered and often undermined by 
the lax laws and lengthy procedures that slow action at the federal 
level. For our state efforts to be effective in informing parents and 
working with them to protect children, we need an aggressive and 
proactive federal government partner.
    Unfortunately, the Consumer Product Safety Commission is 
underfunded, understaffed, and seemingly uninterested, thus they are 
too often unable to protect our children from injury and death.
    This was certainly the case when it came to recalling the Magnetix 
magnetic building sets.
    For those people who haven't seen them, Magnetix are the tinker 
toys and the Lincoln logs of the 21st century.
    The obvious and crucial difference is that small, powerful magnets 
are used to keep the building blocks together to construct shapes and 
figures. These magnets often fall out onto the playroom floor where 
they can be picked up and swallowed by children--with life threatening 
and even life ending consequences.
    Dr. Karyn Quinlan will likely give you a detailed medical 
explanation.
    I want to talk briefly about how the deadly defects in Magnetix 
illustrate the deadly flaws in the federal system--leaving our children 
inadequately protected from dangerous products.
    The timeline of the CPSC's response to repeated problems with toys 
containing the small, powerful magnets used in Magnetix toys--and with 
the Magnetix product in particular--shows the agency's inability to 
react quickly and effectively.
    As early as 2000, an 8-year old child was forced to undergo 
intestinal surgery after he swallowed magnets that fell out of a fast 
food meal toy. The CPSC investigated and documented this case. In late 
2003, CPSC investigated and documented another case involving 
intestinal trauma after a child swallowed a small, powerful magnet.
    In 2003, the Rose Art Company launched the Magnetix product--
marketing it as safe for children 3 and over.
    Not long after this, in early 2004, a North Carolina grandmother 
told CPSC that small magnets were falling out of Magnetix--and could be 
swallowed by a young child. A Colorado mother made a similar report to 
CPSC in February 2005. And during that same time period, 3 concerned 
consumers sent pieces of these defective toys to CPSC.
    Then, in May 2005, Sharon Grigsby, an Indiana preschool teacher 
reported that Magnetix almost killed a 5-year old child who swallowed a 
magnet from the toy and survived only after emergency surgery.
    Even after this report and the other, repeated concerns about 
Magnetix, the CPSC did nothing to alert parents to the dangers posed by 
this children's product--with deadly consequences.
    On Thanksgiving day in 2005, Kenny Sweet, Jr. died after swallowing 
a magnet from Magnetix.
    Finally, in December 2005, two years after the product was launched 
and the complaints to CPSC began, a CPSC investigator recommended a 
recall.
    But even when it finally decided to respond--only after a 
devastating tragedy--the federal agency charged with protecting our 
children from dangerous products took another unreasonable and, frankly 
unimaginable, 4 months (until March 31, 2006) to finally issue the 
recall.
    During this period, while the CPSC negotiated the text of the 
recall, 4 more children required hospital treatment for injuries caused 
by Magnetix.
    Another year then passed--with more children suffering injuries 
because they swallowed the magnets from this Magnetix product--until 
the CPSC in April 2007 finally issued an expanded recall notice for 
this product.
    After the initial CPSC recall on March 31, 2006, and after the 
second, expanded recall in April 2007, I sent my staff out to check 
stores throughout the state to ensure that the recall was being 
properly implemented.
    To protect unsuspecting parents and caretakers from this 
potentially fatal toy, we wanted to make sure that the product was off 
store shelves and that the recall notice was posted.
    Unfortunately, we found a series of problems with the Magnetix 
recall.
    Of the 80 stores we checked throughout the state: 15 still had 
Magnetix on their shelves; 5 of those stores had failed to both post 
the notice and remove the recalled toys from their shelves; 10 stores 
had posted the recall notice but hadn't removed the toys from their 
shelves, and we found 17 stores, where the item had been removed from 
the shelves but they had failed to post the recall notice so that 
parents who already owned the toy could see it.
    When we talked to retailers, we learned that many of them were 
confused by the recall notice and couldn't tell which Magnetix toys 
they needed to remove from store shelves.
    We informed CPSC of retailer's concerns on May 24, 2007, and we 
understand that the agency CPSC knows there are problems with the 
recall and is currently taking steps to provide better information to 
retailers.
    The results of our checks raise obvious questions--if retailers 
can't understand the recall, how can they implement it and actually 
remove the dangerous product from their shelves? And if retailers can't 
understand the recall, how are parents and caregivers supposed to 
decipher it?
    Clearly, CPSC is struggling to effectively communicate recalls to 
retailers, parents and caregivers.
    And this problem has another significant aspect--CPSC does not 
issue recalls in Spanish.
    That failure creates an unnecessary and inexcusable obstacle in the 
effort to protect children from dangerous products.
    CPSC must do a better job to communicate its recalls.
    During our store compliance check, we also discovered another 
gaping hole in CPSC's approach to protecting children from unsafe 
products. As we visited stores to check for the Magnetix toy, we 
quickly found ``knock off'' magnetic toys at several dollar stores. The 
only difference is that these magnetic building sets are made by 
different manufacturers.
    It stands to reason that these same small, powerful magnets--part 
of virtually identical toys--may pose the same threats to children.
    We sent these knock off toys to CPSC on May 24, 2007 and asked them 
to consider recalling these products.
    Unfortunately, we received the same response that consumers hear 
everyday from the agency--CPSC doesn't test products until an incident 
is reported.
    Waiting for an ``incident,''--in other words, waiting to learn that 
a child has suffered an injury or died from the exact product at 
issues--before conducting product safety testing is unconscionable.
    Those knock off magnetic building sets are still on store shelves, 
not because they are constructed differently or have passed safety 
tests, but simply because they were made by a different company.
    If there are health and life-threatening problems caused by these 
children's magnetic building sets, it doesn't matter who manufacturers 
them.
    They pose unacceptable risks and should not be allowed in our homes 
or in children's hands until they have withstood thorough testing.
    Every aspect of the CPSC's response to the dangers posed by 
Magnetix is a horrible demonstration that our present system is not 
working.
    The entire process to protect our children from dangerous products 
is nothing short of a disaster. We can and must do better.
    As an initial matter, most children's products are not subject to 
any kind of mandatory standards before they are sold.
    Most are not required to be tested or certified at all.
    While some voluntary standards exist, they are created by 
committees dominated by toy industry representatives with little input 
from children's and consumer advocates.
    As a result, there is no independent safety review of children's 
products before they are sold.
    In response to the injuries and death that the Magnetix building 
sets have caused, I urge you to pass new laws that mandate testing 
before children's products are allowed on store shelves and, 
ultimately, in our homes and day care centers where too many children 
have been hurt or killed.
    Our Congresswoman, Jan Schakowsky has proposed a bill, H.R. 1698, 
that would create the ``Infant and Toddler Durable Product Safety 
Act.'' That Act would require the CPSC to promulgate mandatory safety 
standards for durable products intended for infants and toddlers. It 
would prevent products that can harm children from getting to the 
market by requiring independent testing before products enter the 
stream of commerce.
    I know that Nancy Cowles, the Executive Director of Kids In Danger, 
will speak further about the need for this legislation.
    There are other issues with the CPSC that must be addressed--and I 
urge you to take comprehensive action that covers these as well.
    We know that once a product is on the market, the CPSC is dependent 
upon the industry to self report any problems. Everyone in this room 
recognizes that any system based on self-reporting will be inherently 
flawed.
    And, as in the Magnetix case, recall notices are so watered down 
and confusing that most retailers, much less parents and caregivers, 
often cannot understand which products are subject to the recall.
    CPSC should have more power to investigate possible problems with 
products--instead of waiting to hear from the industry. CPSC also 
should have the clear power to issue strong recalls that adequately and 
quickly convey the danger of products.
    They should not have to waste precious time negotiating every word 
of a recall notices with manufacturers while dangerous products are 
allowed to linger on store shelves.
    Additionally, the CPSC does not have adequate staff to test or 
investigate the number of complaints it receives each year, and the 
process involved when they do conduct in-depth investigations takes far 
too long.
    Clearly, they need more staff and more resources. The lives of our 
children depend on this agency being able to fulfill its mandate. We 
cannot cut corners or balance tight budgets by taking risks with 
children's safety.
    We hope that the suffering of the families hurt by Magnetix, and 
other dangerous children's products, will spur action that dramatically 
changes this flawed system.
    There are things that we can do to improve this system and make our 
homes safer for our children. I hope you will take these steps--and I 
look forward to working to help in any way that I can.
    Thank you.

    Senator Durbin. Thank you. Let me see if I understand the 
Illinois consumer products safety law. Children's Product 
Safety Act is the formal title. Once a recall occurs, if a 
retailer in Illinois continues to have that product on the 
shelf, they are subject to a fine?
    Ms. Madigan. Correct. It's not a criminal statute. It's a 
civil statute, and we have as the attorney general's office 
enforcement authority which is why we send our people out to 
check the store shelves.
    We can make sure that, one, the toy is off the shelf; two, 
the recall notices are posted; three, to the extent they have 
the information that they're sending out notifications to 
consumers who have already purchased these.
    If there is a failure to do any of those things, then we do 
have the ability to file a cause of action seeking a civil 
penalty which is a monetary fine.
    Senator Durbin. And the maximum penalty is how much?
    Ms. Madigan. It is $500 for each day that the violation 
continues.
    Senator Durbin. And what is the trigger for the Illinois 
law? Is it a formal recall of the Consumer Product Safety 
Commission?
    Ms. Madigan. That's what we use, but ask Nancy Cowles. She 
probably knows in depth how we've constructed this.
    Senator Durbin. So if there's a delay at the Federal level 
as they negotiate with the company, gather information, all of 
that period of time which could be a cure to the danger cannot 
be counted against the retailer for obvious reason.
    Ms. Madigan. Correct.
    Senator Durbin. The retailer has no notice that there's 
something dangerous unless an actual customer makes a 
complaint, and so they wait on the Federal agency to move 
forward, and that's when their responsibility begins.
    Ms. Madigan. Exactly. Consumer Product Safety Commission is 
the lead agency in our country when it comes to recalls, and 
the delays that they take, they're deadly delays, because if it 
takes them 4 months, if it takes them 2 years to get around to 
issuing a recall notice, that amount of time those toys are 
still on the shelves, are still available for purchase, they 
end up in our homes, and then there's nothing that our law can 
do to say to them that they can't have it.
    Now, the only difference in our laws, we have a very, very, 
safe standard when it comes to lead in children's products. 
Again, we would apply strict liability standard, but that's not 
what we're discussing here today unless you want to talk about 
Thomas the Tank engine more.
    Senator Durbin. I'm learning more about that this morning. 
How many times have you imposed fines on retailers in Illinois 
for failure to remove product?
    Ms. Madigan. At this point we haven't used the statute to 
impose a fine.
    We have used it to go out and to make sure that its recall 
notices are posted and that toys are being removed. We have yet 
to find an instance where the retailers are willfully keeping 
these toys on the shelves or are intentionally not abiding by 
the recall that's been put out there. What we found 
specifically in this circumstance is that they simply didn't 
understand which toys were to be removed and which toys weren't 
because the recall notice didn't cover all the Magnetix. It 
only recalled some of them. There were changes made in terms of 
labeling. Still very confusing for parents because now I think 
you might have one of the products with you that we 
intercepted, but notices are just on the cardboard box on the 
outside.
    Once that cardboard is removed, which you will remove, 
there's another--the larger one. Once that cardboard is removed 
the case that remains--you can take that cardboard off if you 
want. We made it impossible for you to do that, but once you do 
that--kids are much better at this than Senators.
    Once you do that, you'll see that the case that the 
Magnetix comes in, there's no labeling on that at all, so that 
gets thrown in the garbage can. A parent then has nothing to 
rely on. Let's face it. Six-year-old kids can't read ``This toy 
should not be ingested.'' It's not typical that they know that 
word, and not all 6 year olds can read as we are aware.
    Senator Durbin. I can just tell you with my glasses I can 
barely read----
    Ms. Madigan. This is another point. So in addition to 
parents who would like to and don't yet need reading glasses, 
although for some of us that's not the case, certainly the 
grandparents, when they're out purchasing toys, if they're not 
actually bringing their reading glasses to read the warnings, 
they may inadvertently bring----
    Senator Durbin. So you read the Tribune series, as we did, 
and learned that despite everything that occurred and all the 
dangerous warnings and all of the bad health consequences the 
product was still on the shelf. Many times without any warning 
whatsoever.
    Did you take action against those retailers when you sent 
out your investigators?
    Ms. Madigan. Well, what we did was make sure they were 
complying, so of the 17 stores that we found that were not in 
compliance, we worked with them to take those toys off the 
shelves. We'd make sure we had the actual recall notices had 
been posted, those notices as well, and we have sent 
investigators out this week around the Thomas the Tank engine 
toys.
    Senator Durbin. Thank you.
    Congressman Rush.
    Mr. Rush. Ms. Madigan, I'm interested. You might have 
covered this before, but please explain to me.
    The State, does it have a comparable commission to the CPSC 
judgment, so the enforcement of consumer product protection 
laws rests solely with your department, your agency?
    Ms. Madigan. It rests with us as well as the Department of 
Public Health, particularly when it comes to lead being found 
not just in toys. We've dealt with lead in bins over the past 
few months. Certainly we find lead in jewelry, children's 
jewelry, again made in China. We had an incident a number of 
years ago with lead being found in what we would refer to as 
those candy. Basically, a Mexican spice of some sort that is 
strictly used as candy, so we often work in conjunction with 
the Illinois Department of Public Health when it comes to 
enforcing safety of those products.
    Mr. Rush. So Illinois does not have a commission.
    Ms. Madigan. No, we do not have a comparable agency to the 
Consumer Product Safety Commission which is why we are reliant 
at the State level, and I believe Illinois is probably 
different than most States.
    We're reliant on CPSC to do their jobs as are parents and 
people throughout our country. If they are not issuing recalls, 
that information is very, very rarely ever going to get out.
    Now, you will hear from Nancy Cowles from Kids In Danger. 
They sometimes are way ahead of the curve when it comes to 
finding out that there are problems with certain products that 
pose a health or life risk to children, and so they oftentimes 
issue informational materials to parents in particular, but, 
really, it's the CPSC.
    Mr. Rush. So it's your contention that other States, no 
other States have a comparable sector government deal with 
product safety, is that what you're saying?
    Ms. Madigan. Well, in terms of testing the ability to issue 
recall notices, I'm not aware. The only State that would have 
the resources, and they're usually way ahead of the curve, 
might be California. I'm sure somebody on my staff would be 
happy to check.
    Mr. Rush. Do you think that Illinois needs that kind of 
agency?
    Ms. Madigan. We would very much like to be able to rely on 
the CPSC to do the testing because this isn't just an issue 
that impacts people in the State of Illinois. It impacts 
consumers across our country, so I think it's reasonable that 
it's at a Federal level.
    Mr. Rush. I just kind of, you know, I'm not trying to take 
the responsibility from the CPSC. I'm not trying to delete 
that. I'm trying to give it more responsibility and more 
resources to deal with this responsibility, but I think this 
issue is of a magnitude that I believe there should be more 
aggressive State action across the board for the children of 
Illinois because we're really concerned about the safety of our 
children in terms of consumer product safety and the flood, the 
absolute flood of these cheap, unsafe toys into our Nation. 
It's incumbent upon the State government to step up to the 
plate also.
    Ms. Madigan. And, Congressman, we do when it comes to lead, 
so it's something that we can easily forward to you, but in 
terms of some of the durability things that need to be done for 
testing other types of products, there's nobody in the State 
that I'm aware of that does that. If I'm wrong, I'm sure 
somebody will be happy to tell me or clarify that.
    Mr. Rush. Can you explain how your office works with the 
CPSC to deal with matters such as this, how to get these 
things, products off the shelves?
    How does your office or is there any interaction at all 
with CPSC?
    Ms. Madigan. There has been some interaction particularly 
around the magnets found in Magnetix. As I mentioned, we did 
reach out to them in May after the second recall was issued so 
we could alert them to problems that we were hearing from 
retailers in addition to asking them if they had this recall 
notice in Spanish because obviously many of the stores that we 
went to were frequented mainly by Spanish speaking parents.
    In addition, as I mentioned, when we went to a lot of these 
stores and we found these knockoff toys, really, the same exact 
magnet's being used, simply a different manufacturer, we 
requested that they expand their recall and were disappointed 
to hear that they looked to see if they had any incident 
reports, but unless they had an incident report they would not 
be issuing a recall on these other toys with the same magnets.
    Mr. Rush. You mentioned toys that are being imported from 
China and the quality and safety of these imported products. Is 
there anything that could be done at the State level to deal 
with this, and is this only a matter that the Federal 
Government can regulate?
    Ms. Madigan. Well, I think obviously the State is happy to 
take any responsibility that it can in terms of making sure 
that we are protecting children and making parents aware and 
making other caretakers aware of these problems. Again, we look 
at CPSC as being a free agency.
    Again, we're happy to have partners here in Illinois, 
wonderful children's acts organization. IRMA, the Illinois 
Retail Merchants Association has been very helpful to us when 
it comes to recall notices and information on it, but we would 
love it if you in Congress would be able to pass some stronger 
measures. Give CPSC not just the responsibility but the 
resources that they need to carry out their mandate to protect 
all of us from dangerous products.
    Mr. Rush. That's one of my chief main objectives as 
chairman of the subcommittee, jurisdiction over CPSC, but I 
would like to get some of your suggestions in terms of how you 
think the CPSC could better serve you and serve the citizens of 
this State, how it might be able to complement what you're 
doing a lot better, where the weaknesses in the Federal 
legislation exist and some suggestions for how we can 
strengthen and correct those weaknesses because I'm very 
interested in trying to now get additional resources, but also 
to strengthen the legislative authority of the CPSC. It's an 
agency that has suffered from a lot of attacks even from--the 
executive branch actually wanted to eliminate this agency.
    So we want to bring it out of the closet and bring it into 
the world of beautiful American people so that the American 
people will make sure that it functions for them, and I would 
certainly encourage you, if you will, to just help us and thank 
you.
    Ms. Madigan. Congressman, thank you very much. We would be 
more than happy to give you any assistance you need in terms of 
suggestions, and we'll make sure that you have that 
information. Again, thank you both of you for bringing this 
matter to more public attention.
    Please do what you can to give CPSC the teeth that it 
really needs to protect our children. I think we need no better 
reminder than the tragic death of Kenny Sweet.
    Senator Durbin. Attorney General Madigan, thank you for 
testifying today. We appreciate your testimony.
    Ms. Madigan. Thank you.
    Senator Durbin. Thanks a lot. I'd now like to call up Nancy 
Nord the Acting Chairman of the Consumer Product Safety 
Commission. I'd like to invite you to make your full statement 
for the record and just open up and summarize. Congressman Rush 
and I will have a few follow-up questions.

STATEMENT OF HON. NANCY A. NORD, ACTING CHAIRMAN, 
            CONSUMER PRODUCT SAFETY COMMISSION
ACCOMPANIED BY:
        GIB MULLAN, DIRECTOR OF COMPLIANCE AND FIELD OPERATIONS
        ERIC AULT, DIRECTOR, EASTERN BRANCH OF THE FIELD INVESTIGATIONS 
            DIVISION, CHICAGO
    Ms. Nord. Thank you very much, Chairman Durbin and Chairman 
Rush. I'm delighted to be here. I've also asked that my 
colleague, Mr. Gib Mullan, our Director of Compliance and Field 
Operations join me at the table here.
    Mr. Rush. Spell his name, please.
    Ms. Nord. Yes, Mullan, M-U-L-L-E-N. First name is John Gib 
Mullan.
    Mr. Rush. G-I-B-B?
    Ms. Nord. G-I-B. M-U-L-L-E-N. I'm sorry. M-U-L-L-A-N.
    Senator Durbin. Proceed.
    Ms. Nord. And I'd also like to recognize another colleague 
who is here in the audience, Mr. Eric Ault. Eric is the 
director of the Eastern Branch of our Field Investigations 
Division. Eric is resident here in Chicago, and I might add 
that we have more CPSC personnel in the Chicago area than we 
have in any other part of the country with the exception of our 
headquarters in Bethesda, Maryland.
    I know that the CPSC has been in the news lately, 
particularly here in the Chicago area, and that it's partially 
why you're holding this hearing today. Mr. Chairman, as I'm 
sure you will agree, public service is truly a wonderful thing, 
and I can tell you that serving on the Commission for the past 
2 years has been one of the most important and rewarding 
experiences of my life, but with public service comes public 
scrutiny, and I think President Lincoln got it quite right when 
he observed that, ``You truly cannot please all of the people 
all of the time.'' From our critics some say that we are too 
aggressive, and others say that we are not aggressive enough.
    But, Mr. Chairman, the CPSC does a tremendous job for the 
American people. Yes, we are constantly striving to improve, 
but for an agency with 400 employees, a budget of just over $60 
million a year and charged with ensuring the safety of more 
than 15,000 types of consumer products across the United 
States, we deliver tremendous value to the citizens of this 
country.
    Since its inception in 1973, the CPSC has worked tirelessly 
to investigate tens of thousands of product-related injuries, 
to recall thousands of dangerous products, to issue dozens of 
mandatory product safety standards and to warn, educate and 
inform literally hundreds of millions of Americans about every 
kind of product safety issue that you can imagine, and we have 
produced results.

       CONSUMER PRODUCT SAFETY COMMISSION'S RECORD OF ACHIEVEMENT

    Since 1973 there has been nearly a one-third reduction in 
the rate of product-related injuries and deaths associated with 
the use of consumer products, and in specific product 
categories our results have been very, very significant. Just 
to give you two examples: An 89 percent reduction in crib-
related deaths, and an 82 percent reduction in the poisoning 
deaths of children from drugs and household chemicals.
    These successes are the direct result of the efforts of the 
CPSC, and they are quantifiable, but what is by far our biggest 
measure of success are the millions of deaths and injuries that 
do not happen because of the work of the CPSC. This agency has 
been and continues to be at the forefront of emerging product 
safety issues. For example, with respect to the health hazard 
to children presented by lead, we have addressed this issue in 
a number of different contexts including most recently 
proposing to ban lead in children's jewelry.
    As another example, for many years there's been on the 
books a mattress flammability standard aimed at reducing fires 
caused by careless smoking. In 2 weeks, Mr. Chairman, our first 
ever major rule will go into effect mandating that mattresses 
also be resistant to open flame ignition such as from candles 
and lighters. We estimate that when this is fully implemented 
it will save close to 300 lives a year. I could go on, Mr. 
Chairman, but the point is this: We are careful. We collect 
data. We analyze issues. We look for patterns of product-
related injury.
    While this year we investigated one-third more incidents 
than we did 10 years ago, we do not investigate every isolated 
incident. We base our decisions on facts in the law, and when 
the facts in the law warrant, we act. I mentioned that we have 
approximately 400 staff nationwide, yet despite our small size 
by any objective standard, we are more effective today than we 
have been in the history of the agency. Is it all perfect at 
the CPSC? Of course it isn't.
    But as a Commissioner for 2 years and as Acting Chairman 
for nearly 1 year, I can tell you that I work every day to find 
better and more efficient ways of doing things, and since 
assuming the role as Acting Chairman, I have initiated a number 
of reforms at the agency that I believe have and will continue 
to bring significant rewards to consumers including efforts to 
increase recall effectiveness, to improve our information 
technology (IT), infrastructure, to decrease investigation 
response times and help ensure that the regulatory process 
proceeds with purpose, direction and efficiency.
    In addition, Mr. Chairman, you and I have spoken about the 
possible revisions to our governing statutes that I believe 
will help remove some of the unnecessary legal hurdles through 
which we must jump to do our jobs while still protecting the 
interest of the public. Since fully two-thirds of our product 
recalls are now of imported products, you also know that we are 
being extremely proactive on the international front, having 
negotiated 12 agreements with foreign governments, and for the 
first time we are discussing concrete steps with the Chinese 
government to reduce the number of defective products. Mr. 
Chairman, I believe that the work of the CPSC over the years 
deserves the respect and recognition that it gets in many 
quarters.
    I look forward to continuing to explore with you the ways 
in which we will continue to improve how we do business and how 
we serve the American public, and toward that end I am happy to 
answer any questions you may have.
    [The statement follows:]

                  Prepared Statement of Nancy A. Nord

    Good morning, Mr. Chairman.
    I am pleased to appear before you today in your capacity as 
Chairman of the Senate Appropriations Subcommittee on Financial 
Services and General Government and to discuss the missions and 
activities of the U.S. Consumer Product Safety Commission (CPSC), of 
which I am presently Acting Chairman.
    We at the CPSC are proud to serve your constituents in Illinois and 
throughout America, and I can tell you that I have never before had the 
privilege to work with a more dedicated group of professionals than 
those at our agency. We truly do care about consumers and we work hard 
every day to ensure that the public is protected from unsafe products 
and empowered with the knowledge they need to reduce the risk that they 
or their families will be injured by using consumer products. After 
all, we, our children, family and friends are consumers as well. We, 
too, have a vested and personal interest in the effectiveness of the 
CPSC.
    As you know, the U.S. Consumer Product Safety Commission (CPSC) is 
an independent, bipartisan federal commission established by Congress 
and charged with protecting the public from unreasonable risks of 
injury and death associated with more than 15,000 types of consumer 
products under the agency's jurisdiction.
    Since its inception in 1973, CPSC's work has contributed 
substantially to the decline in the rates of death and injury related 
to the use of consumer products. We estimate that overall, injury and 
death associated with the use of products under our jurisdiction have 
declined by approximately one-third since the agency began its work. 
These reductions include: A 45 percent reduction in consumer-related 
residential fire deaths; an 89 percent reduction in crib-related 
deaths; a 74 percent reduction in product-related electrocutions; a 47 
percent reduction in consumer-related carbon monoxide deaths; and an 82 
percent reduction in poisoning deaths of children from drugs and 
household chemicals.
    These are absolute reductions. When the increase in U.S. population 
is considered, the rate of these, and many other categories of product-
related injuries that we have targeted, declined even more 
substantially.
    While we are proud of these and the agency's many other 
achievements over the years, there is still much work to be done. Ever 
more technologically complex products, like those utilizing 
nanomaterials, as well as an unprecedented surge of imports, especially 
from China, continue to present the agency with new challenges.
    The CPSC maintains a total nationwide staff of just over 400, has 
an annual budget of just over $60 million and has jurisdiction over 
15,000 types of products, with hundreds of new products entering the 
marketplace virtually every week. Limited resources and ever-changing 
products hazards require that the agency continually reassess 
priorities and increase efficiencies. Nevertheless, we do accomplish 
our missions, and I believe quite well.
    The CPSC has three central missions:
  --To identify existing and emerging product hazards that create an 
        unreasonable risk of injury and to address those hazards by 
        developing mandatory safety standards and by initiating and 
        contributing to dozens of consensus standards every year;
  --To conduct product recalls and to investigate and respond to 
        product-related incidents; and
  --To alert and educate consumers about product-related safety issues.
    We carry out these three main missions by administering and 
enforcing the Consumer Product Safety Act, the Federal Hazardous 
Substances Act, the Flammable Fabrics Act, the Poison Prevention 
Packaging Act, and the Refrigerator Safety Act.
    Before describing each of these three main missions of the CPSC, I 
would like to provide some insight into the process by which we pursue 
certain product safety issues.
Prioritization and Data Collection
    As the comparison of our resources with the sheer number and scope 
of consumer products in the United States would indicate, by necessity 
we prioritize. Issues that were paramount yesterday may not be so 
tomorrow, and as new product incident patterns emerge, they may 
displace earlier priorities. I emphasize the word ``patterns'' because 
this concept is integral to understanding how we conduct our activities 
at the CPSC. We do not now have, and frankly, never have had the 
resources to fully investigate and examine every one of the hundreds of 
thousands of annual product incidents of which we become aware.
    Instead, the agency looks for trends or patterns among product 
incidents to anticipate and respond to emerging hazards. To do 
otherwise would disperse our finite resources in a thousand directions 
at once, dramatically reducing our overall effectiveness for the 
American public.
    Integral to our identification and response to product incident 
patterns is the collection and analysis of product incident information 
and data. The CPSC is a data-driven agency. To adequately understand a 
product hazard and then to respond to it within the bounds of our 
governing statutes, we must have good information.
    One of the primary tools we use to collect this information is our 
widely acclaimed and utilized National Electronic Injury Surveillance 
System, or NEISS system. This system monitors 100 hospital emergency 
rooms nationwide and captures any product-related injuries that 
individuals report. From more than 360,000 such reports received 
annually, we develop statistical estimates of product-related injuries. 
(It is important to understand that these are product-related, but not 
necessarily product-caused injuries).
    CPSC also collects injury data from a number of other sources, 
including through company and consumer reports to our website, 
www.cpsc.gov and via our consumer hotline, medical examiner and coroner 
reports, monitoring media outlets, and through various other means. 
Manufacturers and retailers are also required by federal law to report 
to the CPSC when they become aware of defects in their products that 
could cause or that have caused injury. Many of these reports are 
examined and investigated by agency staff, culminating in ``in-depth 
investigations,'' which are in turn utilized to support regulatory, 
compliance (recall) and/or public education efforts.
    Collectively, this information provides the basic data necessary to 
help guide our standards, compliance, and public information and 
education activities.
Standards Activities
    With regard to regulatory action, it must be first understood that 
in the United States, there is a well-established system of voluntary--
or what we prefer to call consensus--product safety standards. Under 
the guidance of respected groups like the American National Standards 
Institute, ASTM International, and Underwriters Laboratories, who work 
to bring all stakeholders, including consumers and consumer advocates, 
into the process, literally thousands of such standards have been 
written and are continuously being revised. CPSC staff over the last 
year participated in numerous consensus standards activities, including 
those covering magnets in toys.
    There exists a strong preference in our statutes for deference to 
such consensus standards over the promulgation of mandatory CPSC-
drafted regulations, when a consensus standard adequately addresses the 
product safety risk at issue. As a small agency, this consensus 
standards process allows the CPSC to leverage its resources and achieve 
much greater reach to affect the safety of many more products under our 
jurisdiction than would otherwise be possible with our limited 
resources.
    However, in any case where a voluntary standard fails to adequately 
address a product hazard or where there is a lack of substantial 
compliance with an adequate standard, the Commission may promulgate 
mandatory product safety regulations. In fact, we currently have 
underway 14 different rulemakings, more than at any other time in our 
agency's history.
    As I mentioned earlier, the agency is being challenged by a surge 
of imported products. Today, over half of our recalled products were 
manufactured in China alone. This growing number of imported products, 
including those that do not meet relevant mandatory and voluntary 
standards, has strained CPSC's resources and challenged us to find new 
ways to work to ensure the safety of products in the stream of 
commerce.
Imports
    To address the issues presented by imported products, the CPSC has 
negotiated memoranda of understanding with a number of foreign 
countries. These agreements generally call for close consultation on 
product safety issues. Additionally, last month, I went to China along 
with a team from the CPSC to discuss with Chinese officials the need to 
improve the safety of consumer products imported from that country.
    We proposed to the Chinese a number of activities that they might 
undertake, both independently and in cooperation with our agency, to 
address product safety issues in four key product areas: toys, 
electrical products, fireworks, and lighters. It is my hope that these 
discussions will lead to tangible and measurable results. We have also 
organized the second U.S.-Sino Product Safety Summit, to be held this 
September in Washington, to continue this important work.
    But these are by no means the only things that we are doing to 
address imported product-related safety problems. Recognizing the 
continuous and significant increase in the number of imported consumer 
products entering the American marketplace, the CPSC established the 
Office of International Programs and Intergovernmental Affairs to 
provide a comprehensive and coordinated effort to ensure greater import 
compliance with recognized American safety standards.
    Additionally, we undertake both routine and targeted surveillance 
and sampling of products at U.S. ports of entry, working in conjunction 
with the Bureau of Customs and Border Protection. The CPSC is 
determined to make certain that imports meet the same high safety 
standards that products manufactured in America must meet.
Compliance
    Whether manufactured domestically or imported from overseas, once a 
consumer product is found to be unreasonably hazardous, the CPSC's 
primary avenue to remove it from the stream of commerce is through a 
product recall.
    In fiscal year 2006, the CPSC announced 466 recalls of defective 
products, representing over 120 million individual products. This was 
an all-time record number of recalls for the CPSC and demonstrates our 
more efficient and effective use of available resources today than at 
any point in our history. Utilizing efficiencies gained through a 
number of information technology, as well as a number of significant 
management and organizational reforms, we truly are doing more with 
less.
    While the agency has the authority to require a mandatory product 
recall, due to the lengthy and costly nature of the statutorily-
directed legal proceedings that we must undertake in order to issue 
such a recall, the reality is that the overwhelming majority of the 
recalls we oversee are voluntary on the part of the recalling firm. 
Voluntary recalls provide the quickest and most effective way of 
getting products off store shelves and out of consumers' hands. 
Compliance staff negotiates the details of each recall with the subject 
firm, after significant exchange of information between the firm and 
the CPSC.
    Today, approximately half of our recalls take advantage of our 
innovative ``Fast Track'' recall program. Under this program the 
subject firm agrees to initiate a recall or other corrective action 
within 20 days after being contacted by the CPSC, generally in exchange 
for lack of a formal finding by the agency that a substantial product 
hazard exists. This program has been extremely successful at getting 
unsafe products off the market in a faster time frame that simply would 
not otherwise be possible if resorting to litigation were the norm.
Public Information and Education
    CPSC's third important mission is to inform and educate the public 
about product hazards. Recalls and other important safety information 
are disseminated through all forms of media to warn the public of 
specific product hazards and advise consumers on more general product 
use issues. Many of our safety campaigns are directed toward children.
    For example, last year the CPSC conducted public outreach campaigns 
on back to school safety and on the hazards of inflatable pools. The 
2006 Safe Swimming Campaign identified inflatable pools as an emerging 
hazard. This year's Safe Swimming Campaign focuses on the fact that a 
drowning death is a silent death that does not usually involve a child 
thrashing in the water or calling for help. This campaign emphasizes 
that multiple barriers and constant supervision are required when 
children are near pools. In 2006 the CPSC also conducted an information 
and education campaign on the dangers of television and furniture 
tipovers to raise awareness of this risk.
    Additionally, the agency maintains three websites that give 
consumers and others access to all manner of product safety 
information. Those sites are www.cpsc.gov, www.recalls.gov, and our 
newest website, www.atvsafety.gov, which is part of a very significant 
information and education campaign now underway to advise consumers 
about a number of ATV safety issues. Visits to CPSC's websites have 
grown rapidly over the past few years from 200,000 in 1997 to over 20 
million last year.
    In an effort to communicate with hard to reach populations, the 
CPSC initiated the Neighborhood Safety Network (NSN) which is a 
grassroots outreach program that provides timely lifesaving information 
to 5,000 organizations and individuals who in turn share our safety 
message with hard-to-target consumers. Among these groups are 222 from 
Illinois, including fire departments, child care centers, and clinics 
from around the state. These safety messages are often directed toward 
children's safety, such as the poster that we produced and distributed 
through the NSN warning of in-home drowning hazards.
    CPSC's outreach efforts include making our safety information 
available in Spanish, and in fact, CPSC maintains Spanish language 
links on our website. We are also active in signing up Hispanic groups 
to our Neighborhood Safety Network and reaching out through Spanish 
language media outlets such as Telemundo and Univision.
    In 2006 the agency exceeded its goal on topics related to products 
that present children's hazards by generating 57 agency appearances on 
television around the country. Topics included ATV safety, pool 
drownings, furniture and television tipovers and helmet safety. Also in 
2006 we provided almost two million safety alerts, fact sheets and 
other publications through our Web site. The greater-than-expected 
increase in hits on CPSC's Web publications reflects the increased use 
of the Internet since our overall Web hits increased from 13.7 million 
in 2005 to 20.3 million in 2006.
    This increase underscores the critical importance of CPSC's 
Information Technology infrastructure and systems. In addition to our 
data systems, such as the NEISS system that I described earlier, CPSC's 
IT tools allow us to extend our public outreach well beyond where it 
could go ten, or even as little as five years ago. As the numbers and 
types and sources of consumer products continue to grow at a time of 
limited resources for the federal government, maintenance and 
modernization of CPSC's IT infrastructure is more important than ever.
Magnetic Toys
    This morning's hearing agenda also includes the subject of toys 
containing small magnets, a product hazard that the CPSC is 
aggressively working to address. In fact, today at CPSC headquarters in 
Maryland, the agency is conducting a long-planned, comprehensive forum 
to explore and develop new strategies to reduce magnetic toy ingestion 
hazards.
    Following sessions on behavioral factors, incident data, magnet 
technology and medical issues, attendees will be updated on voluntary 
standards work and international efforts. The forum will then address 
design and technical issues for magnetic toys and discuss strategies to 
increase awareness of this hazard in the medical community and the 
public in general.
    I am pleased to talk about this important subject with the 
Committee this morning within the constraints that we have previously 
discussed that are required by Section 6(b) of the Consumer Product 
Safety Act as well as the fact that the CPSC currently has active, open 
and ongoing investigations of incidents with regard to magnetic toys. I 
will note, however, that the agency has already initiated several major 
recalls of toys containing small magnets.
Reauthorization
    Finally, Mr. Chairman, I would like to raise the issue of 
reauthorization of the CPSC and its governing statutes, particularly 
the Consumer Product Safety Act (CPSA). As you know, the last time the 
CPSA was updated by Congress was 1990. While I realize that you chair 
our relevant appropriations subcommittee, and that the Senate Commerce 
Committee has initial jurisdiction over our governing statutes, I 
thought it would be helpful to highlight to you some of the areas which 
I believe warrant attention by Congress generally.
    Although the Commission's statutory authority is generally 
sufficient to deal with the vast majority of safety problems within our 
jurisdiction, I believe it is in the best interests of consumers to 
look to possible modernization of these statutes. In the long run, 
ensuring that the CPSC continues to maintain adequate statutory and 
resource tools not only will help address existing product safety 
issues, but also will enable us to continue to anticipate and 
understand emerging product safety hazards.
    A thoughtful reauthorization could strengthen the agency's ability 
to deal with some of the most vexing consumer product safety problems 
and emerging hazards. For example, I believe that Section 6(b) of the 
CPSA serves a useful purpose in encouraging firms to report unfavorable 
information to the Commission by instilling trust that such information 
will not be unfairly or prematurely disclosed. However, the 30-day 
notice requirement to give firms the opportunity to assure the accuracy 
of the information to be released to the public might be shortened, in 
recognition of the instantaneous nature of modern communications.
    I would also suggest that Congress consider amending Section 19 of 
the Consumer Product Safety Act to make it unlawful for anyone 
knowingly to sell a product that has been recalled. This type of 
provision has been adopted here in Illinois and exists at the National 
Highway Traffic Safety Administration, for example, and would be a 
useful tool for the Commission to have in those rare instances in which 
such willful sales of recalled products occur.
    We are discussing internally whether additional authorities are 
needed to deal with imports and we look forward to discussing this 
subject with our authorizers. You should also be aware that our 
authorities differ under the various acts we administer, sometimes 
leading to differing results. Harmonization between the various 
statutes should also be considered.
    Mr. Chairman, the outstanding work of the CPSC over the years has 
earned the agency the respect and recognition that it deserves--from 
the regulated industries, from advocacy groups and from the general 
public--to accomplish its mission effectively and efficiently. Consumer 
safety is never a completed task but always an ongoing process of 
research, standards development, enforcement and public education. The 
CPSC staff is talented, resourceful and absolutely committed to what 
they do, and I am pleased and proud to serve the American people with 
them.
    Thank you again for your interest in the work of the Consumer 
Product Safety Commission. I look forward to answering your questions.

                             MAGNETIX CASE

    Senator Durbin. Thank you, very much, Madam Chair, and let 
me just make sure I understand for the record the timeline on 
Magnetix between the first notification to the Consumer Product 
Safety Commission of the potential danger, the confirmation of 
the injury or death and the actual recall of the product, can 
you give me the dates on each of those, please?
    Ms. Nord. Mr. Chairman, as I have discussed with you and 
also with Chairman Rush, we are constrained by both our statute 
and the fact that we have an ongoing investigation from getting 
into specifics of this particular incident. I can tell you the 
dates of the recall, but, as you are aware, we have both 
statutory and prosecutorial restraints on what we can discuss 
in an open session. I would be more than happy to sit down with 
both of you and talk with you about this in closed session.
    Senator Durbin. I understand pending litigation in a 
courtroom. I'm a lawyer, but those three dates that I'm looking 
for appear to be matters of public record.
    The first time that the Consumer Product Safety Commission 
was notified that there was a problem of any kind with magnets 
falling out of these products and being ingested was when?
    Ms. Nord. Sir, there is no public record exception to 
section 6(b) of the Consumer Product Safety Act. That is a 
statute that is very clear on what I can say publicly. Again, I 
would be more than happy to sit down and talk with both of you 
in closed session about this particular situation.
    Senator Durbin. Okay. For the record an incident report--
when Magnetix first came out as a product was in April 2004. 
For the record, and I think we can confirm this, at least in 
May 2005 one victim swallowed these magnets from this product 
and going in for surgery. That's May 2005. December 2005 
Kenneth Sweet died; 20-month-old child died ingesting these 
magnets. Now, we've gone from April 2005 to December 2005 to 
the death of this child. When was the first recall of this 
product issued by the Consumer Product Safety Commission?
    Ms. Nord. The recall was March 31, 2006.
    Senator Durbin. 2006. So it was basically 2 years from the 
first Hot Line incident reported before the recall, and it 
appears to have been some 5 or 6 months from the death of a 
child before the first recall was issued.
    Ms. Nord. Mr. Chairman, I am not going to sit here and 
violate the statute, so---
    Senator Durbin. I'm not asking you to.
    Ms. Nord. What I would suggest to you is if we could speak 
in general terms here.
    Senator Durbin. I don't think there's anything general 
about a child dying, and you know the date he died. I am trying 
to figure out how long it took from the date of the death of 
this child to the recall of the product. That is a matter of 
public record, those two facts. I am not disclosing any secret 
confidential information, nor asking you to. Do you dispute 
those two dates?
    Ms. Nord. The recall was March 31, 2006.
    Senator Durbin. Good. And you will concede the date of 
death of Kenneth Sweet is not at issue here.
    Ms. Nord. I have no reason to think that it is.
    Senator Durbin. So my question to you is why would it take 
that long from the death of a child ingesting these magnets 
until the recall is sent out on the product?

                         CPSC RECALL AUTHORITY

    Ms. Nord. Sir, we do not, as you well know, have the 
authority to unilaterally issue a recall.
    In order to do that, the authors of the statute did not 
give us the authority to just say ``This product will be 
recalled.'' They had due process in mind presumably. They have 
a hearing process that you have to go through, so that takes a 
great deal of time.
    In order to protect consumers, in order to try to get 
product out of the hands of consumers and off store shelves as 
quickly as we can, we do things voluntarily. We try to 
negotiate voluntary recalls. That is a much quicker way of 
proceeding than if we were to go through the process that is 
spelled out in our statute.
    Senator Durbin. What is the normal timeline for an 
uncooperative firm? If you believe there's a dangerous product, 
the Consumer Product Safety Commission has been given notice of 
serious injury or death from a product and the firm refuses to 
cooperate, what is the usual and customary due process timeline 
that leads to recall under those circumstances?
    Ms. Nord. The Daisy case would be the best one for you to 
look at. In that instance we started--or it's my understanding 
that the Commission started the proceeding in 2001. We settled 
it in 2004 without a recall.
    Senator Durbin. So in that case 3 years.
    Ms. Nord. That's right, sir.
    Senator Durbin. Of so-called due process.
    Ms. Nord. That's right, sir.
    Senator Durbin. That's certainly justice delayed by any 
perspective from children or in this case getting sick and 
dying.
    Ms. Nord. And as I indicated, in that instance, there was 
no recall.
    Senator Durbin. In the case of Magnetix toys, did this 
firm, this Chinese manufacturing--I think later the company was 
acquired by another company, two companies involved in the 
production of this toy. Were they cooperative with the Consumer 
Product Safety Commission in the recall?
    Ms. Nord. Sir, we have an open investigation ongoing here. 
We may take legal action. Again, I would welcome the chance to 
sit down with both of you gentlemen privately and go through 
all this.
    Senator Durbin. I understand that you have a pending case, 
and there are things that you can't say, and I don't want to 
put you on the spot any more than is necessary to make a record 
that makes sense to the average person.
    We are dealing in our next panel with some people who have 
had personal tragedies because of this issue, so if I'm probing 
you for as much information as possible, it's because they want 
to know and we want to know. I think the public has a right to 
know about what is going on here.
    Ms. Nord. I agree, sir.

                           IMPORTED PRODUCTS

    Senator Durbin. Well, let me get down to another basic 
here. I want to make sure that these facts are clear in the 
record. Two-thirds of all the products that you investigate are 
imports, correct?
    Ms. Nord. Two-thirds of our recalls are of foreign 
products.
    Senator Durbin. And two-thirds of those imported products 
are from China.
    Ms. Nord. That's correct.
    Senator Durbin. There was a suggestion made earlier or at 
least a question raised earlier as to whether the CPSC has the 
capacity to test products coming into the United States. From 
your testimony, 400 employees, $60 million budget. It would 
seem to me to be beyond you to test every product that comes 
into this country.
    Ms. Nord. We don't test every product, no.
    Senator Durbin. So the next question is are there 
organizations that test products? Underwriters Laboratories, 
well-known in this region of the country, that test products as 
to their safety? Are there similar organizations when it comes 
to something as basic as a toy, internationally recognized 
organizations for the safety of a product like a toy?
    Ms. Nord. Yes, sir, I believe there are, but, you know, 
you're going to have a representative from the Toy Industry 
Association, and that would be a good question to put to him, 
but there certainly are testing laboratories that test toys, of 
course.
    Senator Durbin. Is it fair to say that the Consumer Product 
Safety Commission does not investigate a product until the 
Commission receives notice of a problem, an injury or----
    Ms. Nord. No.
    Senator Durbin [continuing]. Concern?
    Ms. Nord. No. We have a whole staff of people who look at 
these issues. They respond to incident reports certainly, but 
we also on our own initiative go out and do investigations and 
acquire products to test, of course.
    Senator Durbin. So you will initiate the investigation even 
if you don't have----
    Ms. Nord. Oh, yes, of course.
    Senator Durbin [continuing]. The report?
    Ms. Nord. Absolutely.
    Senator Durbin. On what basis do you make that 
investigation?
    Ms. Nord. On a number of different bases. First of all, we, 
the agency, has Commission-approved priorities, and those 
priorities direct where we spend our resources, but within 
those priority areas we will go out, and we will investigate 
products to see if we find violations of either mandatory 
standards or issues that indicate to us there needs to be a 
recall or regulatory action.
    We also have something that we informally refer to as a 
program, and at the beginning of each year the compliance folks 
will put together a plan that they bring to the Commission 
which we approve that will have a whole series of activities to 
go out and investigate those kinds of products.

                              BAN ON LEAD

    Senator Durbin. You said that you were just a few weeks 
away from or close to proposing a ban on lead in toys?
    Ms. Nord. No. I said that we have proposed a ban of lead in 
children's jewelry.
    Senator Durbin. Jewelry.
    Ms. Nord. It's now an ongoing rulemaking, but the proposal 
out there is to virtually ban lead in children's jewelry, yes.
    Senator Durbin. Is there a reason why you haven't sought a 
similar ban for lead in children's toys?
    Ms. Nord. Right now there is a ban on lead paint on 
children's toys.
    Senator Durbin. And so this recall of Thomas the Train 
product was it issued voluntarily?
    Ms. Nord. Yes, it was.
    Senator Durbin. So the agreement by the company, the 
Chinese company that made this toy to recall the product.
    Ms. Nord. Yes.
    Senator Durbin. Is that correct?
    Ms. Nord. Yes.
    Senator Durbin. Can you tell me how long that took from 
your first notification that this toy had lead paint on it 
until the recall?

                              SECTION 6(B)

    Ms. Nord. It was not a particularly long period of time, 
but I am advised that I'm going to run into 6(b) again if I go 
into details here.
    Senator Durbin. 6(b). Why don't you explain that so anybody 
who is wondering whether you're avoiding the question----
    Ms. Nord. Section 6(b) of the U.S. Consumer Product Safety 
Act requires that before we disclose to the public information 
that brings out a manufacturer's name and product, we take all 
means necessary to assure it's accurate and fair and that we 
give the company at least 30 days to look at the proposed 
disclosure and come back to us concerning the accuracy and the 
fairness of the disclosure.
    Senator Durbin. So I'm not going to dwell on this other 
than to say as a lawyer I'm troubled by what you just said. 
Here we have a toy with lead paint on it coming in from China 
that is a danger to children which has been widely recognized 
for decades, a company which acknowledges that the lead paint 
is a danger and a company that voluntarily recalls their 
product from the market because of this danger.
    And you say it may prejudice that company for you to tell 
us a timeframe of when this decision was made?
    Ms. Nord. The statute is very, very precise, sir.
    Senator Durbin. It's very, very bad too.
    And clearly, this is our job to change it.
    Ms. Nord. Yes.
    Senator Durbin. And if you cannot provide that basic 
information in the circumstances I just described, then is it 
any wonder that enterprising reporters from the Chicago Tribune 
and people across America think that this system is completely 
in chaos and is not protecting consumers across the country?
    Ms. Nord. Sir, the statute is there. It's been there for a 
number of years, and if it needs to be changed, then you are in 
a position to do that, sir.
    Senator Durbin. Certainly hope we can.
    Congressman Rush.
    Ms. Nord. But sir, if I might just add a note here. Because 
of 6(b) we have been very constrained in what we can say, and I 
am incredibly troubled by the perception that you just 
articulated and the perception that the public might have that 
we are not doing our jobs. I think it's just incredibly unfair 
to the 400 folks at the CPSC who work so very hard to protect 
the public in ways that are hard to count, but we feel very 
constrained, believe me.
    I would be very happy to sit here and tell you the details 
of those proceedings, but I do feel that I must follow the 
statute.
    Senator Durbin. Of course you must, and it's our 
responsibility to make sure those statutes are fair and 
realistic. In this case they clearly are not. If a child dies 
and you cannot even acknowledge that in your answer to a 
question in terms of the time to recall, something's wrong with 
the law or the agency, and it has to change, and if it comes to 
law, it's our job. If it comes to the administration of the 
agency currently as Acting Chairman, it's your job.
    Ms. Nord. Absolutely, sir.
    Mr. Rush. Ms. Nord.
    Ms. Nord. Yes, sir.

                           VOLUNTARY RECALLS

    Mr. Rush. We have had a number of conversations. You've 
testified before the subcommittee, and I'm each time I come 
away from the testimony with really quite a dilemma. I realize, 
and I strongly acknowledge that the 400 employees there at CPSC 
are doing quite well under the existing circumstances and under 
the limitation; the limitation in terms of the laws that govern 
the CPSC and also in terms of the capacity resource-wise, but 
I'm also--it seems to me that, and maybe you could help me 
here, because it seems to me that there is a reliance or over 
reliance on the so-called voluntary system of recall that plays 
out in demonstrating or at least implying that there is some 
kind of cozy relationship between manufacturers and the CPSC. 
Can you explain in detail the voluntary recall authority and 
mechanism and how it operates to this hearing?
    Ms. Nord. Sure. Under the Consumer Product Safety Act, if 
we feel that there is an unsafe product out there and we 
believe a recall is warranted, basically what we need to do is 
start an administrative proceeding which would be a vote of the 
Commission, which I might just as a footnote indicate to you we 
could not have today because we have no quorum, but we start 
with a vote of the Commission. We then assign the case to an 
administrative law judge. The administrative law judge has a 
trial, makes a finding, makes a recommendation to the 
Commission. The company then can appeal to the Commission a 
finding if they don't like it. If we stick with our decision, 
then they can go to court.
    As I indicated, this doesn't happen very often. It last 
happened in 2001.
    We ended up starting this process, and we settled it in 
2004, and, as I indicated, we settled it without a recall. 
Because of that process, we choose to do things in a much more 
streamlined way. Our view is if we can get the company to agree 
to do a recall, we get the product out of the hands of the 
consumers and off store shelves a whole lot more quickly than 
the process I just described, and indeed, sir, what we have 
done in recent years is initiate something that is even a 
faster process. It's called a fast track recall process. I 
think we are the only Government agency that has something like 
this whereby once we start talking with a company, if they 
agree that there is an issue here, we get that recall 
accomplished within 20 days. That is extraordinarily fast for 
the Government to operate, as I assume that you would concede, 
so about one-half of our recalls are these fast track recalls 
where we get the job done within 20 days of the problem walking 
in the door.
    Mr. Rush. How many recalls have actually--I mean can you 
say that this is as a result of fast track we have recalled how 
many products?
    Ms. Nord. Oh, how many products? Well, we've had----
    Mr. Rush. And this is all in the voluntary system?
    Ms. Nord. Oh, yes. Yes. We had last year I think 470 
recalls. About one-half of them were fast track, so I can't 
tell you how many items that involves. I mean millions and 
million, but----

                             MAGNETIX CASE

    Mr. Rush. Okay. And under Magnetix----
    Ms. Nord. Uh-huh.
    Mr. Rush [continuing]. This was not----
    Ms. Nord. No.
    Mr. Rush. This had to be litigated.
    Ms. Nord. Well, no. This was ultimately a voluntary recall. 
They did agree to do it, but, again, if the company does not 
agree that there's a problem or they do not agree with the 
remedy that we are proposing, then we need to negotiate with 
them, which is what happened--well, which is what happens often 
when it's a nonfast track recall. You're looking perplexed.
    Mr. Rush. Well, I'm still at a point where I'm getting more 
and more into this quantity because you say that you laud the 
fast track process, but then with Magnetix it didn't result in 
the 20-day recall.
    Ms. Nord. About one-half of our recalls are when the 
company agrees that there's a problem and that there needs to 
be a recall. That then proceeds under the fast track process 
which takes approximately 20 days at the outside. The other 
one-half of our recalls are much more contentious. They are 
still voluntary recalls because at the end of the day the 
company agrees to do the recall, but it is voluntary in the 
sense that we negotiate with them, we discuss what the scope of 
the recall should be, we discuss what the remedy should be. We 
have to make sure that the remedy is in place so that the 
customers can get something back.
    Mr. Rush. What's the current status of the Thomas toy, 
Thomas the Train?
    Ms. Nord. It was announced last week, and it's ongoing.

                             CPSC'S QUORUM

    Mr. Rush. The CPSC, you don't have a quorum?
    Ms. Nord. No, sir.
    Mr. Rush. That means what?
    Ms. Nord. That means we cannot vote on regulations. It 
means we cannot issue subpoenas. It means we cannot start an 
involuntary recall among other things.
    Mr. Rush. And why don't you have a quorum?
    Ms. Nord. Because there's a vacancy on the Commission. The 
Commission is a three-person Commission, and under our statute 
when there is a vacancy on the Commission, we can operate with 
that vacancy for 6 months, and at the end of 6 months we are 
deemed by statute not to have a quorum. That 6-month period 
expired in the middle of January, so since January we have not 
had a quorum, sir.
    Mr. Rush. How long have you been without a Commissioner?
    Ms. Nord. Since the middle of July.
    Mr. Rush. Of?
    Ms. Nord. Of 2006.

                        SECTION 15(B) REPORTING

    Mr. Rush. Consumer groups have charged that in following 
the interpretive guide issued last July on section 15(b) to 
report immediately any product defects has in fact watered down 
that requirement. Do you agree with that?
    Ms. Nord. Oh, no, sir. I don't agree at all. In fact, I 
think it's just the contrary.
    Mr. Rush. Would you explain what is 15(b)?
    Ms. Nord. Sure. Section 15(b) of the Consumer Product 
Safety Act is the provision that says that a company must 
notify the Commission if they are aware that either they are 
selling a product that doesn't comply with a mandatory standard 
or, more significantly, if a product has a defect that could 
possibly present a substantial product hazard. This language, 
defects that could present a product safety hazard, is not very 
precise statutory language. For example, NHTSA has a similar 
provision, but the language there is much more precise as to 
what the trigger is, so, in any event, we need to have 
interpretive regulations to help describe what is meant by that 
statutory language. We have issued those.
    We have heard complaints over the years that there is still 
a lack of precision as to what triggers that legal 
responsibility, and the regulations that were issued last 
summer were an attempt to give more precision. It was not an 
attempt to make it narrower. It was really an attempt to give 
it more precision, and, indeed, sir, I would suggest to you 
that one of the things that we did in that regulation that I 
think is really, really significant that has been very much 
overlooked is for the first time we recognize officially that 
failure to comply with a voluntary standard indeed could 
trigger a requirement to report under section 15(b) of the act, 
and that I think is something that is very, very significant 
because it really starts to give a lot more teeth to voluntary 
standards. So I suggest to you that what we did last summer was 
significant. It strengthened the act and was very useful.
    Mr. Rush. Returning to the area----
    Ms. Nord. And, sir, if I might just add one more footnote 
to my answer. Since we issued that regulation, we have been 
getting more reports under section 15(b) than we got before, so 
if anyone is saying that somehow 15(b) was watered down by the 
regulation, they are just dead-on wrong. We are getting more 
reports now.

                         CPSC RECALL AUTHORITY

    Mr. Rush. In previous testimony by the attorney general, 
she indicated that in order to trigger a recall CPSC had to 
have an incident report, and I saw you grimace. Does CPSC need 
an incident report?
    Ms. Nord. We can initiate recall discussions. We certainly 
don't need an incident to start a recall.
    Mr. Rush. So I wanted to clarify that. 6(b), you've 
mentioned 6(b), and you don't have unilateral authority under 
6(b) to conduct recalls?
    Ms. Nord. No.
    Mr. Rush. Should you have unilateral authority under 6(b) 
in the case of emergencies?
    Ms. Nord. Well, sir, we've got authority under the act to 
go into court and seek an imminent hazard, but what that does 
is then push the action into a courtroom, and, again, what we 
have found is when we do that, it slows the process down.
    Mr. Rush. Well, should you have unilateral authority to 
initiate a recall such--I mean you mentioned NHTSA, that NHTSA 
has unilateral authority under the emergency conditions to 
initiate recalls. Should the CPSC have the same authority?
    Ms. Nord. I'm not aware that NHTSA has that authority, but 
I'd like to look at the statutory provisions that NHTSA 
operates under and come back to you.

                    SPANISH TRANSLATIONS FOR RECALLS

    Senator Durbin. Thank you. Just a few wrap-up questions. 
Attorney General Madigan said that recalls are not issued in 
Spanish; is that correct?
    Ms. Nord. We issue our press releases absolutely in 
Spanish.
    Senator Durbin. In terms of information given to retailers, 
for example, do you know if that's----
    Ms. Nord. We do not issue--we don't issue recall posters. 
The manufacturer does that.
    Senator Durbin. Do you require of them that they put them 
in languages other than----
    Ms. Nord. We do not require that posters be in Spanish.
    Senator Durbin. Why?
    Ms. Nord. We negotiate that on a case-by-case basis, so we 
could, I mean in appropriate situations.
    Senator Durbin. Can you think of a reason why you wouldn't?
    Ms. Nord. I think we have done that, sir.
    Senator Durbin. Can you think of a reason why you wouldn't 
require them to issue the recall in Spanish?
    Ms. Nord. If there wouldn't be Spanish speakers in the 
area. I mean----
    Senator Durbin. It would seem to me if safety is the goal, 
protecting the public is the goal, that we would concede the 
obvious, and that is that there are many consumers in America 
for whom Spanish is the first language, so I'm hoping that from 
this point that you will think seriously about always requiring 
it. I can't think of a reason why you wouldn't.

                           KNOCKOFF PRODUCTS

    Ms. Nord. We'll certainly take that to Washington.
    Senator Durbin. Now, in terms of the knockoff products 
which look even more dangerous than the Magnetix products, now 
that we have established--and I won't ask you to get into our 
6(b) problems again--that this is a dangerous product that 
needed to be recalled because of these tiny magnets, and 
knockoffs have been produced with different names from 
different companies with the same tiny magnets, is there a 
reason why those knockoff products have not also been recalled?
    Ms. Nord. Yes. Those were sent to us at the end of May. We 
responded to the attorney general within a couple of days 
actually of getting that, and they're being tested right now to 
see if indeed they have the same problems. If they don't have 
the same problems, then they shouldn't be recalled. If they do 
have the same problems, then we will take care of it.
    Senator Durbin. How long will that process take?
    Ms. Nord. They're being tested right now. I can't tell you 
off the top of my head.
    Senator Durbin. Is it a matter of weeks or months?
    Ms. Nord. Weeks.
    Senator Durbin. Let me ask you about adverse event 
reporting. The makers of drugs and of dietary supplements have 
a legal requirement to report to the Food and Drug 
Administration (FDA) if there is a bad result; person gets sick 
or a person dies. Are there any similar requirements for 
manufacturers of goods and products for the CPSC----
    Ms. Nord. Yes. Section 15(b) of the U.S. Consumer Product 
Safety Act has a reporting requirement. In fact, frankly, sir, 
I think that 15(b) probably predates the FDA requirement.
    Senator Durbin. And does it require timely reporting?
    Ms. Nord. Yes.

                               CPSC FINES

    Senator Durbin. And what is the failure or what is the 
penalty for failure to report on a timely basis?
    Ms. Nord. Again, it could go up to $1.825 million.
    Senator Durbin. And how often, if ever, have you imposed 
that kind of a fine for failure to timely report a product?
    Ms. Nord. We impose fines all the time. Right now we can't 
collect fines because of the lack of a quorum, but up until 
that occurred we had collected I think $4, $4.5 million for 
this fiscal year.
    Senator Durbin. What is the ordinary fine? What is the 
range of your ordinary fine for failure to timely report a 
dangerous product?
    Ms. Nord. Oh, you know, I hate to say something is typical 
because every case is different, but it ranges from----
    Senator Durbin. Hundreds of dollars?
    Ms. Nord. No. From $100,000 all the way up to $1.8 million, 
and, sir, you should understand that we have ways to get above 
the $1.8 million. Perhaps I shouldn't admit that to you, but we 
do.

                 MEMORANDUM OF UNDERSTANDING WITH CHINA

    Senator Durbin. You mentioned that you were entering into a 
memorandum of understanding with the Chinese.
    Ms. Nord. We entered into it in 2005.
    Senator Durbin. And what has been the result?
    Ms. Nord. Under the memorandum of understanding the agency 
agreed to do a couple of things with the Chinese.
    First of all, we set up four different working groups to 
look at fireworks, lighters, electrical products, and toys. 
Those working groups have met sporadically since 2005. We had a 
pretty intense session in May in Bejing, a meeting of the four 
working groups. The Chinese are coming back to Washington in 
September, at which point I am hopeful that we will have 
agreements in each of those four areas that will get into how 
the two agencies operate, exchange information and cooperate 
with respect to problems we find.
    Senator Durbin. After the contamination of pet food, 
there's a similar effort underway with the Chinese.
    Pending that kind of agreement the FDA is now inspecting 
every shipment of food exported by China to the United States 
to determine whether it's adulterated, contaminated or 
poisonous. Based on the information you've given us that one-
half of your work deals with Chinese products, can you take in 
any extra effort as an agency to put that kind of surveillance 
on Chinese imports until you're satisfied that they don't pose 
a danger to American consumers?
    Ms. Nord. We're doing a couple of things, sir.
    First of all, we are working very closely with Customs and 
Border Protection. We are in the process of entering into 
something called their ACE system, automated commercial 
environment, which we're negotiating with them right now, and 
that is basically a computerized system whereby we will be 
getting information on the cargo containers, basically the 
incoming product that's coming into the United States so that 
we can see what's coming in as it is leaving China before it 
hits the border.
    Senator Durbin. Okay. Thank you very much.
    Mr. Rush. Mr. Chairman, you hit on an area I really need 
to----
    Ms. Nord. Sir, you've hit on something that really requires 
a lot more conversation. I mean we don't have the authority--we 
don't have the resources to do what you have just described the 
FDA is going to do. We don't have it. We would need much more 
appropriations in order to do that.

                         CPSC'S CIVIL PENALTIES

    Mr. Rush. In the area of resource, Chairman Nord, what are 
the fines to companies? Where do those fines wind up? Do they 
go back to the General Treasury?
    Ms. Nord. Yes, they go back to the General Treasury.
    Mr. Rush. They go back to the General Treasury. Last week I 
had a hearing in the House. You would not testify. Usually 
testify there, but at the hearing I proposed an increase of the 
fines that you could impose from $1.8 million to $10 million, 
and according to your written testimony you were not in favor 
of that increase in fines. Can you give me your reasoning for 
being opposed to an increase in fines?
    Ms. Nord. First of all, let me just clarify, sir. As 
Chairman of the agency, especially since the Commission has not 
voted on an agency position, I did not express opposition for 
or support for any of the bills that you have in front of you. 
I was basically trying to tell you how they would impact the 
agency.
    Mr. Rush. Well, do you support or individual--as a 
Commissioner are you in favor of the increase?
    Ms. Nord. I think it is really inappropriate for me as 
Chairman or a Commissioner to personally individually support 
or oppose legislation. That's I think the prerogative of the 
Commission. I can tell you, however, what the concerns that we 
have are. You know, we've discussed this at the staff level, 
and there are some concerns. The other thing, sir, I think 
you----
    Mr. Rush. Well, what are the concerns?
    Ms. Nord. The concern is that if you increase the penalties 
tenfold, which is what you're talking about in your 
legislation, basically we issue penalties for failure to 
report.
    Mr. Rush. Well, we are increasing the ban, not the cap 
level, the cap.
    Ms. Nord. What I am concerned about, sir, is that we are 
going to be just overwhelmed by reports of things that are not 
problems, and this is something that has happened to us, so 
it's not an unfounded fear, sir. If a company has a $20 million 
liability for failure to report, under that provision that I 
described to you, which is very, very imprecise, then we are 
concerned that the company may just report everything, so we 
are going to get the wheat, we're going to get the chaff, we're 
going to get everything, and that could possibly overwhelm our 
compliance people, and that is a concern that we are very, very 
serious about.
    That has happened to us. The first time we decided to go 
after a major retailer the response was, ``Okay. You want to 
see it all? Here it is,'' and we just got a lot of information 
that was not very useful. Section 15(b) is really an important 
tool for us, so we don't want to see it overwhelmed with 
information that we have to go through that is really not 
relevant.
    The other thing, sir, that I'm concerned about is there are 
some issues with our penalties provisions. They need to be 
monitored, they need to be changed, and I would hope that as we 
talk about changing the penalty cap amount, we could also 
expand the conversation to get into some of the other things 
that I think act as more of an impediment to enforcement of the 
act than perhaps the penalty does.
    For example, we have criminal provisions, they're different 
from statute to statute. Under one of our statutes, one of our 
major statutes, basically we have to give a warning before we 
can bring action under that provision, so I'm saying you've got 
to catch them doing it once, tell them not to do it again and 
then catch them the second time. Sir, that's crazy. That 
shouldn't be the result.
    So something like that could be cured as you're looking at 
this. It would be nice to start talking about some asset 
forfeiture provisions. Plus the penalty provisions in the 
statute are written in a somewhat odd way, and it's unclear 
really how much flexibility we have under section 20 of the act 
dealing with those. Clearly, we can impose penalties, so 
penalties is a complicated topic, and to really give us the 
tools we want, you're going to have to do more than just 
increase the cap, sir.
    Mr. Rush. Thank you, Mr. Chairman.
    Senator Durbin. Thank you, very much Congressman Rush.
    Thank you, Chairman, for your testimony. Appreciate it. The 
third panel today consists of Sharon Henry, who is the mother 
of this boy; Carter Keithly, who is the president of the Toy 
Industry Association; Nancy Cowles. She's from Oak Park, 
Illinois--she's the executive director of Kids In Danger, and 
Kyran Quinlan with the American Academy of Pediatrics.
    The Federal courthouse has been kind enough to let us use 
this courtroom. Judge Zagel told me in advance that there would 
be a trial following this hearing, so we are going to do our 
best to clear the courtroom in time for them to begin, and so 
we would ask those on the panel first thank you for attending.
    If you would submit your written testimony in its entirety 
for the record, and then we will ask you to limit your remarks 
to about 5 minutes if you can, and then Congressman Rush and I 
will do our best to ask you some questions and try to wrap up 
as close to 11:30 as possible. Ms. Henry, if you would be kind 
enough to open up the testimony, I'd appreciate it very much.
STATEMENT OF SHARON HENRY
    Ms. Henry. Hi. I'm here today as a mother to tell the 
frightening story of what happened to my little boy Deron.
    I'm also here as a concerned consumer to ensure that this 
tragedy does not happen to anyone else. My son Deron was very 
excited when he got the box of Magnetix building blocks for 
Christmas 2005. Like any other boy, he was eager to start 
building with these colorful objects.
    During the time we allowed him to play with the toy we 
never suspected that the toy posed a hazard. We did not know 
that these pieces could be swallowed. We did not know that 
hundreds of other children had swallowed them and that the 
company still had not warned parents and consumers, made the 
product safer or taken the toy off the market. Unbeknownst to 
us, Deron played with these attractive magnets. He began to 
swallow them. Apparently the magnets stayed in his stomach and 
began clinging to each other.
    Six months later in June 2006 when Deron complained that 
his stomach hurt we didn't know what was wrong. The vomiting 
and the pain were intense, so we took him to the doctor. X-rays 
revealed the presence of the magnets, that parts had perforated 
Deron's bowels, and he needed emergency surgery. The doctors 
told us that if 24 hours had passed Deron would have died. I 
will live with those words for the rest of my life. If I hadn't 
taken action and did what I did, my son would not be here 
today. Deron required 75 stitches in his bowel, and doctors say 
that he may suffer from bowel obstruction and abdominal pain 
for the rest of his life because of the many sutures. He must 
eat frequently because his bowels do not allow him to retain 
any food. Others have not been so fortunate to still have their 
children here because of this toy. Some children like Deron 
survived but with permanent intestinal problems. We wait to see 
what long-term effects this incident will have on my son.
    Parents would not buy a toy that they knew was potentially 
lethal for their unsuspecting child. I went to Clifford law 
offices last year and decided to file a lawsuit to make others 
aware of this extremely hazardous toy. I want Mega Brands 
Company to understand what they did to my little boy and to our 
family. I am very fortunate to have seen Deron off to school 
today. These little objects are not handy. They are not even 
toys. They are very dangerous objects masquerading as toys. 
This company, this toy is composed of parts that have an 
extremely strong magnetic force. No parent would ever suspect 
that the magnet properties of this game could literally tear 
holes in a child's intestinal tract.
    The company did not take proper precautions, particularly 
when the lives of small children are involved, simply to make a 
profit. Manufacturers must design and test children's toys with 
absolute safety in mind. As consumers we must make sure that 
other similar toys and pieces are not allowed to be put back on 
the market. If my presence here today makes just one more 
parent aware of the dangers of this toy and saves just one more 
child, it is worth it. Thank you.
    Senator Durbin. Thank you for your testimony. Photo of your 
son. Handsome young man. How old is he now?
    Ms. Henry. He's seven.
    Senator Durbin. Off to school today?
    Ms. Henry. Summer school, yes.
    Senator Durbin. Thank you. Mr. Quinlan from the American 
Academy of Pediatrics.

STATEMENT OF KYRAN QUINLAN, M.D., M.P.H., F.A.A.P., ON 
            BEHALF OF THE AMERICAN ACADEMY OF 
            PEDIATRICS
    Dr. Quinlan. Good morning. My name is Dr. Kyran Quinlan, 
and I appreciate the opportunity to present testimony on behalf 
of the American Academy of Pediatrics (AAP). I'm a clinical 
associate in general pediatrics at the University of Chicago, 
and I'm the medical director of the Injury Free Coalition For 
Kids at the University of Chicago. I'm also a member of the 
American Academy of Pediatrics Committee on Injury, Violence 
and Toys.
    The AAP commends the subcommittee and you both, Chairman 
Durbin and Congressman Rush, for holding this hearing calling 
attention to the hazard of rare earth magnets in toys. The 
introduction of these so-called rare earth magnets in 
children's toys have given rise to a new hazard for children. 
Simply stated, these are not your parent's magnets. Rare earth 
magnets are approximately 10 times stronger than even the 
stronger ferrous magnets. As a result, they're able to exert a 
powerful attractive field even through human tissue. A child 
may ingest a single magnet without suffering adverse 
consequences, but if more than one magnet is swallowed the 
results can be disastrous. Magnets can connect to each other 
inside the body through sections of the bowel leading to 
potentially fatal perforations, infection and sepsis.
    In December 2006 the Centers for Disease Control and 
Prevention published a report that documented one death and 19 
cases requiring gastrointestinal surgery after ingestion of 
these small powerful magnets. In April 2007 the Consumer 
Product Safety Commission noted that it was aware of one death, 
one aspiration and 27 intestinal injuries. The injuries caused 
by these magnets are especially pernicious because they're not 
immediately evident. Children present to the doctor's office or 
hospital with abdominal pain, vomiting or diarrhea, and these 
common symptoms may not be ascribed to the correct cause 
quickly, leading to further deterioration of the child's 
condition. These magnets can be so small that parents may not 
even realize that they have fallen out of a toy or been 
swallowed by the child.
    Together these factor in the result in a unique and serious 
health hazard for children. Toys containing small magnets 
continue to proliferate on store shelves. A quick survey 
reveals several varieties of magnetic building sets, dolls with 
magnets embedded in them, numerous forms of jewelry and more. 
These toys are not limited to any particular age group, 
developmental level or geographic area. The AAP has been 
actively engaged in efforts by ASTM International to develop a 
voluntary standard for magnets used in toys.
    The AAP was not satisfied with the proposed standard and 
registered concern with the ASTM regarding the proposal's 
provisions on safety labels, the size and strength of the 
magnets to which those standards would apply and issues 
surrounding the fact that older children as well as young 
children have been documented to ingest these magnets. The AAP 
did not block adoption of the standard in order to allow some 
standards to take effect as soon as possible.
    We are however pressing ASTM to strengthen these provisions 
to ensure that children's safety is a top priority.
    In addition to our work with ASTM, AAP is engaged in 
dialogue with the CPSC about how best to educate families about 
the dangers of magnets in toys and remove unsafe products from 
store shelves. AAP is participating in today's staff learn at 
CPSC headquarters in Washington which was designed to solicit 
input toward possible solutions that could be used to protect 
children from serious magnet ingestion injuries. The American 
Academy of Pediatrics has a number of specific recommendations 
on how to address the emerging hazard of magnetic toys.
    First, recalls must be improved. Current law and procedures 
often result in recalls that are confusing to parents and the 
general public. As a result of these confusing recalls, unsafe 
toys remain in children's homes and are able to continue to 
cause severe preventable injuries. The AAP urges Congress to 
examine the Consumer Product Safety Commission's authority to 
issue clear, compelling effective recalls that are easily 
understood by parents and consumers.
    Second, family and healthcare providers must be educated 
about the hazards of small magnets. The AAP recognized early 
the hazards of small magnets in toys in part due to our strong 
working relationship with the CPSC. Each month our news 
magazine, AAP News, publishes selected CPSC recall notices.
    In January 2007, AAP News published a major article on the 
hazard of small magnets in toys. Pediatric experts discussed 
this issue with members of the media and parent-oriented 
publications. Nevertheless, it was difficult for this issue to 
penetrate the public consciousness. The parents I see are 
almost always unaware of the danger from these toys. Even if 
they have noticed magnets falling out of the toys, it never 
occurs to them that they can pose a health hazard. We must do 
more to assist parents in accessing vital health information on 
product recalls and the steps they can take to protect their 
children from these entirely preventable injuries.
    Third, CPSC must be strengthened. As an agency the CPSC has 
never been given the tools it needs to fulfill its mission. 
Since its creation the agency has been routinely underfunded 
and undermined by successive Congresses and administrations. 
CPSC staff has gone from a high of 978 in 1980 to just 400 
today even as the consumer marketplace has burgeoned with new 
products. The President requested a budget of $63.2 million for 
CPSC in fiscal year 2008 which would require the agency to cut 
an additional 19 employees.
    The CPSC has been without a voting quorum of Commissioners 
since January 2007 as we have heard, meaning it cannot make 
many regulatory enforcement and other actions. The President's 
recent nominee to chair the Commission withdrew from 
consideration after a public outcry regarding his 
qualifications. An appropriately qualified chair must be 
nominated and approved in a timely fashion.
    In conclusion, I appreciate this opportunity to present 
testimony on behalf of the American Academy of Pediatrics. The 
academy applauds the subcommittee's efforts to bring attention 
to this important issue. The AAP will continue working to 
educate pediatricians and families about these magnets and to 
prevent any more needless incidents due to magnet ingestion.
    In addition, we look forward to working with Congress to 
strengthen CPSC and ensure it has all the tools necessary to 
protect children and families from dangerous products. I'd be 
pleased to answer any questions.
    Senator Durbin. Thank you.
    [The statement follows:]

                  Prepared Statement of Kyran Quinlan

    Good morning. I appreciate this opportunity to testify today before 
the Appropriations Subcommittee on Financial Services and General 
Government at this hearing to discuss magnetic toys, the safety of 
consumer products, and proposals to improve the statutory authority of 
the Consumer Product Safety Commission (CPSC). My name is Kyran 
Quinlan, MD, MPH, FAAP, and I am proud to represent the American 
Academy of Pediatrics (AAP), a non-profit professional organization of 
60,000 primary care pediatricians, pediatric medical sub-specialists, 
and pediatric surgical specialists dedicated to the health, safety, and 
well-being of infants, children, adolescents, and young adults. I am a 
member of the American Academy of Pediatrics' Committee on Injury, 
Violence and Poison Prevention. I am a clinical associate in General 
Pediatrics at the University of Chicago and Medical Director of the 
Injury Free Coalition for Kids at the University of Chicago.
Magnetic Toys Pose a Hazard to Children
    The introduction of so-called ``rare earth'' magnets in children's 
toys has given rise to a new injury hazard for children. Simply stated, 
these are not your parents' magnets. Rare earth magnets are 
approximately ten times stronger than even the strongest ferrite 
magnets. As a result, they are able to exert a powerful attractive 
field even through human tissue.
    A child may ingest a single magnet without suffering adverse 
consequences. If more than one magnet is swallowed, however, the 
results can be disastrous. Magnets can connect to each other inside the 
body through sections of the bowel, leading to potentially fatal 
perforations, infection and sepsis. In December 2006, the Centers for 
Disease Control and Prevention (CDC) published a report that documented 
one death and 19 cases requiring gastrointestinal surgery after 
ingestion of these small, powerful magnets.\1\ In April 2007, the 
Consumer Product Safety Commission noted that it was aware of ``one 
death, one aspiration and 27 intestinal injuries.'' \2\ It is notable 
that the age of children affected is higher than typically seen with 
foreign body ingestion--the mean age of affected children is 5.5 years 
and 80 percent are 3 years or older.
---------------------------------------------------------------------------
    \1\ Gastrointestinal Injuries from Magnet Ingestion in Children--
United States, 2003-2006. MMWR Weekly, Dec 2006 55(48); 1296-1300.
    \2\ Consumer Product Safety Commission recall notice, ``Magnetix 
Magnetic Building Set Recall Expanded,'' April 19, 2007, http://
cpsc.gov/cpscpub/prerel/prhtml07/07164.html.
---------------------------------------------------------------------------
    The injuries caused by these magnets are especially pernicious 
because they are not immediately evident. Children present at the 
doctor's office or hospital with abdominal pain, vomiting, or diarrhea. 
These symptoms may not be ascribed to the correct cause quickly, 
leading to further deterioration of the child's condition. These 
magnets can be extremely small, meaning that parents may not be aware 
that they have fallen out of a toy or been swallowed by a child. 
Together, these factors result in a unique and serious health hazard 
for children.
    Toys containing small magnets continue to proliferate on the store 
shelves. A quick survey reveals several varieties of magnetic building 
sets, dolls with magnets embedded in them, numerous forms of jewelry, 
and more. These toys are not limited to any particular age group, 
developmental level, or geographic area. Moreover, many toys designed 
for older children are also accessible to their younger siblings at 
home.
Strong Magnets in Toys Must Be Regulated Appropriately
    The AAP has been actively engaged in efforts by ASTM International 
to develop a voluntary standard for magnets used in toys. The AAP was 
not satisfied with the proposed standard and registered concerns with 
ASTM regarding the proposal's provisions on safety labels, the size and 
strength of the magnets to which the standard would apply, and issues 
surrounding the fact that older children as well as young children have 
been documented to ingest these magnets. The AAP did not block the 
adoption of the standard in order to allow some standard to take effect 
as soon as possible. We are, however, pressing ASTM to strengthen these 
provisions to ensure that children's safety is the top priority.
    In addition to our work with ASTM, AAP is engaged in dialogue with 
the CPSC about how best to educate families about the dangers of 
magnets in toys and remove unsafe products from store shelves. AAP is 
participating in today's staff forum at the CPSC headquarters, which 
was designed to solicit input toward possible solutions that can be 
used to protect children from serious magnet ingestion injuries. A 
number of steps are necessary to improve CPSC's ability to police the 
marketplace for dangerous versions of these toys, some of which would 
require changes to the agency's underlying statute.
Recalls Must Be Improved
    To date, the CPSC has issued at least 6 major recalls involving 
toys with small magnets totaling approximately 6.5 million units. In 
some cases, these recalls produced great confusion among parents. In 
March 2006, CPSC recalled 3.8 million Magnetix building sets due to the 
hazard posed by small magnets coming loose from the plastic building 
pieces. Consumers were instructed to return the sets to the 
manufacturer for a ``free replacement product suitable for young 
children under the age of 6.'' The notice also stated, however, ``The 
replacement program does not include sets at retail.''
    In April 2007, the CPSC expanded the Magnetix recall to cover all 
sets ``except those sold since March 31, 2006'' and those that 
contained a particular cautionary label. It is unclear how that label 
made those sets dramatically safer. It also seems unreasonable to 
assume that all unsafe products had been removed from store shelves as 
of March 31. Consumers were instructed to return sets to the 
manufacturer to receive ``a comparable set.'' Again, it is unclear how 
or why a comparable set might be safer for children than the one being 
returned.
    Similarly, in November 2006, the agency recalled 2.4 million 
``Polly Pockets'' play sets because the tiny rare earth magnets in the 
sets were prone to falling out. CPSC cited 170 reports of the small 
magnets coming out of these recalled toys, including three reports of 
serious injuries to children who swallowed more than one magnet and 
suffered intestinal perforations that required surgery. However, that 
recall also stated, ``Polly Pocket magnetic play sets currently on 
store shelves are not included in this recall.'' It is unclear why the 
unsold versions of these toys were considered safe.
    The upshot of these confusing recalls is that unsafe toys remain in 
children's homes and are able to continue causing severe preventable 
injuries. The AAP urges Congress to examine the Consumer Product Safety 
Commission's authority to issue clear, compelling, effective recalls 
that are easily understood by parents and consumers.
Families and Health Care Providers Must Be Educated About The Hazards 
        of Small Magnets
    The AAP recognized early the hazards of small magnets in toys, in 
part due to our strong working relationship with the CPSC. Each month, 
the AAP publishes selected CPSC recall notices involving toys, 
children's products, and children's clothing in our news magazine, AAP 
News. In January 2007, AAP News published a major article on the 
hazards of small magnets in toys. Pediatric experts discussed this 
issue with members of the media and parent-oriented publications. 
Nevertheless, it was difficult for this issue to penetrate the public 
consciousness.
    The parents I encounter daily are almost always unaware of the 
danger from these toys. Even if they have noticed magnets falling out 
of the toys, it never occurs to them that they could pose a health 
hazard. We must do more to assist parents in accessing vital health 
information on product recalls, health hazards, and the steps they can 
take to protect their children from these entirely preventable 
injuries.
CPSC Must Be Strengthened
    As an agency, the CPSC has never been given the tools it needs to 
fulfill its mission. Since its creation, the agency has been routinely 
underfunded and undermined by successive Congresses and 
Administrations:
  --CPSC staff has gone from a high of 978 in 1980 to just 400 today, 
        even as the consumer marketplace has burgeoned with new 
        products.
  --The President requested a budget of $63.2 million for CPSC in 
        fiscal year 2008, which would require the agency to cut an 
        additional 19 employees. This budget is insufficient to even 
        allow the agency to continue current programs, much less expand 
        its efforts. At its founding, the CPSC budget was $39 million. 
        If the budget had kept pace with inflation, it would be $138.2 
        million today, more than double its requested allocation.
  --The CPSC has been without a voting quorum of commissioners since 
        January 2007, meaning it cannot take many regulatory, 
        enforcement and other actions. The President's recent nominee 
        to chair the commission withdrew from consideration after a 
        public outcry regarding his qualifications. An appropriately 
        qualified chair must be nominated and approved in a timely 
        fashion.
  --The authority of the agency to issue mandatory recalls and provide 
        full information to consumers must be strengthened.
Conclusion
    The American Academy of Pediatrics commends you, Mr. Chairman, for 
holding this hearing today to call attention to the hazards of rare 
earth magnets in toys. The AAP will continue working to educate 
pediatricians and families about these hazards and to prevent any more 
needless tragedies due to magnet ingestion. In addition, we look 
forward to working with Congress to strengthen the CPSC and ensure it 
has all the tools necessary to protect children and families from 
dangerous products. I appreciate this opportunity to testify, and I 
will be pleased to answer any questions you may have.

    Senator Durbin. Nancy Cowles is head of the Kids In Danger 
project, and we'd like you to submit your written testimony and 
be kind enough to try to summarize in 5 minutes so we can ask a 
few questions.

STATEMENT OF NANCY A. COWLES, EXECUTIVE DIRECTOR, KIDS 
            IN DANGER
    Ms. Cowles. Yes, I certainly will. As you mentioned, I'm 
executive director of Kids In Danger which is a nonprofit 
organization that works on children's product safety. We were 
founded in 1998 by two University of Chicago professors after 
the death of their son Danny in a poorly designed, inadequately 
tested and feebly recalled portable crib. Our mission is to 
promote the development of safer children's products, to 
advocate for children and to educate the public about 
children's product safety. We're doing all we can to protect 
children and welcome this opportunity to speak to you about 
this issue.
    When we first learned of the death of Kenny Sweet in 
December 2005, I have to say that as a mother of three and 
safety expert, I thought I had heard of every possible way that 
a child could die from a dangerous product, yet this particular 
gruesome and specific danger of magnets was not one that I was 
aware of, but as the Chicago Tribune series published in May 
revealed, both the company and the CPSC had heard of potential 
injuries by the time Kenny died, and they could have taken 
earlier action to prevent his death and scores of other 
injuries.
    As soon as Kids learned of Kenny's death, we brought it to 
the attention of the ASTM Committee on Toy Safety. Why CPSC or 
the toy industry didn't raise the issue when they first learned 
of it to that group is a mystery. This spring ASTM published a 
standard 1\1/2\ years after Kenny's death and almost 2 years 
after the Indiana childcare provider called to warn the CPSC.
    Unfortunately, this is quick in the world of standard 
setting. The new standard is simply voluntary, includes a 
requirement that toys with swallowable magnets have a warning 
label about the dangers of magnets, and that toys be tested to 
make sure that the magnets don't fall as they did with Magnetix 
in the recall.
    However, the standard is not required to make warnings on 
toys with larger magnetic components and still allows toys with 
loose, swallowable magnets to be sold. Read the stories of the 
children who survived as you heard here from Ms. Henry, and 
you'll see what a devastating injury these little magnets 
cause. Most of the children injured were well above the age 
limit on the toy. Those that weren't usually got their magnets 
when they broke loose from the toy, not from lack of 
supervision. When CPSC took action, it was too little too late. 
They recalled some of the Magnetix sets but left ones on the 
store shelves even though they had no proof there was any 
difference between those two items, but apparently they could 
do nothing more, and that recall stood for 1 year while 
children continued to get hurt from those old Magnetix, the 
supposedly new and improved Magnetix, other Magnetix toys and 
jewelry.
    As the Tribune article put it, this isn't just the story of 
this one family's grief or this one product. It's emblematic of 
how this Federal agency is unable to carry out its mandate.
    First of all, look at the fact that early reports of the 
dangers were overlooked or ignored from CPSC and the 
manufacturers. As the injuries piled up, no effort was made to 
reach out to the public to highlight this emerging risk.
    Second, when a recall was announced, the resulting release 
and replacement program was so confusing it's amazing that any 
parent took advantage of it. CPSC must have the power to draft 
their own press releases about dangerous products without the 
red pen of the manufacturer scratching out their every attempt 
to get the danger across.
    Third, I would like to commend the dedicated engineering 
staff and career staff at CPSC. They worked hard both with the 
ASTM Committee and with others to continue to push the danger 
of this. It was the CPSC staff along with consumer 
representatives in the AAP who kept pushing the group for 
stronger and stronger regulations.
    And finally, not enough is done in this case or many others 
to make sure the products are off the shelves. As we heard here 
in Illinois, we have the work of our attorney general to 
continue to get them off, but that simply should not be her 
job. That should be done nationally. If a manufacturer--they 
know how to reach us to sell us these products. They should 
know how to get them off the shelves and out of our homes after 
they've proved to be dangerous.
    So I have some suggestions, our wish list for children's 
product safety. First to manufacturers, simply test your 
products. Make sure they meet all voluntary mandatory standards 
before they're sold, and test for likely hazards not yet 
addressed by a standard. If you can't guarantee the safety of 
products you may have manufactured overseas, then bring your 
factories back here to the United States. The Thomas the Tank 
engine recall that you mentioned, while it was made in China, 
the company who makes it is based right here in Oak Brook, 
Illinois.
    The Technon Laboratory that you also asked about have more 
staff overseas than they have here in the United States. There 
is simply no excuse for a product that's sold in America not to 
be tested to the same standards no matter where it's made. 
Consider how the product is actually going to be used, not your 
ideal circumstances. Expect your designers and engineer to 
think about safety as they develop a product, not simply as an 
afterthought. For CPSC we would ask that you advocate for your 
agency initiatives. Request the money needed to protect 
consumers, especially children.
    When the statutes under which you operate prohibit you from 
naming specific companies, don't miss the opportunity to warn 
parents about the general hazard of the product. Take your 
obligations under the Freedom of Information Act seriously. 
Simply not responding to requests for information or losing the 
file is simply not acceptable. Investigative journalists, 
consumer advocates and even lawyers can be your allies in 
getting the message out about product safety, and for Congress 
we would ask that you give CPSC the funding it needs to keep 
our children safe.
    We need more dedicated staff members to pursue the standard 
setting, investigate changes and enforce corrective actions. 
Remove the cap on civil penalties. Serious violations of safety 
law deserve serious fines. Remove section 6(b). Don't censure 
public safety. I can now get more information on safety 
concerns about a baby stroller and other products from the 
customer comments on Amazon.com, and I would recommend all 
parents go there when they're considering buying a product than 
I can from our Federal safety agency.
    Senator Durbin. If I could ask you to please wrap up.
    Ms. Cowles. Sure. We were funded by grieving parents who 
believed that the company who made the deadly crib and the CPSC 
failed to protect their son from death. I cannot tell you how 
it adds to their grief to know that almost 10 years later more 
families are put through similar tragedies because of the 
inaccurate response by manufacturers, retailers and regulators. 
We thank you for holding this hearing and look forward to some 
action on this issue.
    Senator Durbin. Thank you.
    [The statement follows:]

                 Prepared Statement of Nancy A. Cowles

    Good morning Senator Durbin, Representative Rush, Commissioner Nord 
and panel members. Thank you for this opportunity to present our views 
on the children's product safety system and ways to better protect 
children.
    Kids In Danger is a nonprofit organization dedicated to protecting 
children by improving children's product safety. We were founded in 
1998 by Linda Ginzel and Boaz Keysar, after the death of their son 
Danny Keysar in a poorly designed, inadequately tested and feebly 
recalled portable crib. Our mission is to promote the development of 
safer children's products, advocate for children and educate the 
general public, especially parents and caregivers, about children's 
product safety.
    Starting here in Illinois, we have worked with states to implement 
the Children's Product Safety Act which prohibits the sale or lease of 
recalled or dangerous children's products or their use in licensed 
childcare. Currently seven states have such a law. We provide 
educational materials on children's product safety to childcare 
providers, health care professionals, parents and caregivers to alert 
them to the minefield of dangers facing children. We work with 
engineering programs at universities including Northwestern to increase 
the knowledge of safety and standards that tomorrow's designers will 
bring to children's products. We are doing all we can to protect 
children and welcome this opportunity to speak to you about how we 
believe the Congress and the U.S. Consumer Product Safety Commission 
could better protect our children.
    KID first learned of the death of Kenny Sweet in December of 2005. 
Kenny had died on Thanksgiving Day from magnets attaching to each other 
and ripping through his intestines, creating a blockage and releasing 
toxins into his abdominal cavity--he was 20 months old. The magnets had 
fallen unnoticed out of a Magnetix construction set as his older 
siblings played with it and nestled unseen in the carpet until Kenny 
found them.
    As a mother of three and a safety expert, I thought I had heard 
every possible way there was for a child to die from a dangerous 
product--but until Kenny died, I had never heard of the very specific 
and gruesome danger of swallowing magnets.
    But as the Chicago Tribune series published in May revealed, both 
the company and the CPSC had heard of the potential injuries by the 
time Kenny died. They could have taken earlier action to prevent his 
death and scores of other injuries.
    As soon as KID learned of Kenny's death, we brought it to the 
attention of the ASTM Committee on Toy Safety, the voluntary standard 
setting group for toys. Why CPSC or the toy industry didn't raise the 
issue when they first learned of it is a mystery. We raised the issue 
at the February meeting, the first Magnetix recall was the end of 
March, and ASTM began working on the issue in June after a task group 
was appointed. This spring, ASTM published a standard, a year and a 
half after Kenny's death and almost two years after an Indiana child 
care provider called to warn the CPSC. And this is quick in the world 
of standards setting.
    The new standard is voluntary. It includes a requirement that toys 
with swallowable magnets be labeled with a warning about the dangers of 
magnets and that all toys with magnets be tested to assure that the 
magnets do not fall out during use as was the case with Magnetix and 
Polly Pocket dolls. However, the standard does not require the magnet 
warning on toys with larger components and still allows toys with loose 
swallowable magnets to be sold. In my opinion, no toy that contains 
small magnets, accessible or not, should be sold without the warning 
for parents. And CPSC should weigh the dangers of small candy shaped 
magnets and consider a ban of particular shapes and sizes based on the 
large number of incidents.
    Read the stories of the children who survived and you'll see what a 
devastating injury these little magnets cause. Most of the children 
injured were above the age limit on the toy. Those that weren't usually 
got the magnets when they broke loose from the toy--not from lack of 
supervision. In fact, the recent CPSC recall of more Magnetix sets 
documents at least 1,500 reports of magnets coming loose--compared with 
one death and 28 injuries--luckily, parents are supervising their 
children. But supervision can't be the only line of defense between our 
children and defective products.
    When CPSC finally took action, it was too little too late. They 
``recalled'' some Magnetix sets, but left the ones on the store 
shelves--even though they had no proof that there was any difference 
between the ones in homes and the ones on shelves. In fact, the 
manufacturer never used the word recall--they called it a replacement 
program and said ``if you bought it for a child under age 6 (it was 
marketed for 3 and up) and were uncomfortable with having it in your 
home, you could return it for another product''--nothing to give the 
parent going to the site a sense of urgency about getting the product 
out of her home.
    But CPSC apparently could do nothing more and that weak-kneed 
recall stood for a year, while children continued to get hurt from old 
Magnetix, new Magnetix, other magnetic toys and magnetic jewelry. The 
recall was announced on March 30, 2006. That fall, Jonathan Midgett 
from CPSC published Gastrointestinal Injuries from Magnet Ingestion in 
Children--United States 2003-2006 in MMWR weekly of the CDC. And in 
November, 8 months after the initial recall and almost a year after 
Kenny's death, magnets were mentioned by the CPSC for the first time in 
a general safety warning--not related to a specific product. Too long 
in our opinion--there was no restriction on CPSC announcing the general 
hazards of these strong magnets when it was first brought to their 
attention--but lack of staff or funding or will kept it on the back 
burner until a child had died and dozens more were injured.
    The story of Kenny's death and injuries from magnets in toys is 
horrific. KID urges parents to keep all toys with strong magnets away 
from children under six and from all children who have a tendency to 
mouth objects. In addition to Magnetix, CPSC has recalled 4.4 million 
Polly Pocket dolls after 3 injuries requiring surgery and 170 reports 
of loose magnets, 40,000 Magneblock toys, 30,000 magnetic puzzles and 
almost 9,000 townhouse toys because of the hazards the magnets pose. 
Jewelry with magnets can also pose a real risk to any age child.
    As Patricia Callahan of the Tribune put it; this is not just the 
story of one family's grief or the hazards of one type of toy, but 
``emblematic of how a weakened federal agency, in its myopic and docile 
approach to regulation, fails to protect children.''
    First, as highlighted in the Chicago Tribune article, early reports 
of dangers from the magnets were overlooked or ignored by CPSC and the 
manufacturer. So often I hear from parents that they report a problem 
to the CPSC and are never contacted again. As the injuries piled up, no 
effort was made to reach out to the public to highlight this emerging 
risk. Again, as someone who spends her days learning about and trying 
to prevent childhood injuries from nursery products and toys, I was 
unaware of this specific risk of swallowing or inhaling magnetic 
pieces. If I'm not aware of it, I can assure you that parents trying to 
supervise their children are even less aware of it. CPSC needs to take 
its mandate to protect the public from hazardous products more 
seriously and Congress needs to give them the funding and staffing they 
need to do a better job.
    Secondly, when a recall was announced, the resulting release and 
replacement program was so confusing that it is amazing any parent took 
advantage of it. Parents could tell that the product they had in their 
home was no different that the ones still on the shelves of some 
stores--making them unsure about the need to return their product. The 
press release obfuscated the real hazard the toys posed, gave 
contradictory messages and downplayed the danger. Not because CPSC 
wanted it that way, but because Section 6(b) of the Consumer Product 
Safety Act creates a situation where the company has the upper hand. 
CPSC must have the power to draft their own press releases about 
dangerous products without the red pen of the manufacturer scratching 
out their every attempt to get the danger across.
    Third and this is a strength of CPSC, the dedicated engineering and 
career staff worked hard to identify the danger and present information 
to the ASTM subcommittee to draft a strong voluntary standard. It was 
CPSC staff along with consumer representatives who, although vastly 
outnumbered on the task group, kept pushing to create a stronger 
standard. CPSC needs increased funding to keep these dedicated 
professionals and increase their ranks--we would then be able to 
identify more hazards prior to injury rather than waiting until someone 
gets hurt.
    Finally--not enough was done to make sure the recalled products 
were off the shelves. Even after the Tribune's expose, the recalled 
items remained on shelves here in Illinois. The Illinois Attorney 
General, armed with the Illinois Children's Product Safety Act and her 
own commitment to keep children safe has taken a strong role in 
monitoring retailers here in Illinois. CPSC really should be taking the 
lead on this and making manufacturers take the steps needed to reach 
every retailer and every consumer possible. They know how to reach us 
when they want to sell their products, they can use those same methods 
to reach us to retrieve the dangerous recalled products.
    So you ask, are children's products safe? My answer to parents is 
``we can't be sure.'' Most parents believe that children's products and 
toys are tested for safety before they are sold and if there is a 
recall, the companies will make every effort to reach them--wrong on 
both counts. Here is our wish list to improve children's product 
safety:
Manufacturers
    Test your products before they are sold. Make sure they meet all 
voluntary and mandatory standards before they are sold and test for 
likely hazards not yet addressed by a standard.
    If you can't guarantee the safety of products you have manufactured 
overseas, then bring your factories back to the United States. More 
than 30 years after lead paint was banned in the United States there is 
no excuse for products meant for children to be coated in lead. Just 
last week, Thomas the Tank Engine toys, a staple for millions of 
children, were recalled because of lead paint. This is unacceptable.
    Take human factors into account. Consider how the product is 
actually going to be used, not your ideal circumstances. Expect your 
designers and engineers to think about safety as they develop a 
product, not as an afterthought when the product is almost ready for 
the market. KID would be happy to send our Teach Early Safety Program 
for undergraduate engineers to use as a refresher course for product 
designers.
    Be open about product hazards and react quickly. Don't dismiss 
incidents reported by consumers. Remove unsafe products quickly from 
the store shelves, spend money to retrieve recalled products 
effectively and look carefully at other product lines to make sure more 
products don't have the same hazard.
Retailers
    Get it off the shelves. When you are informed of a recall, make 
sure every unit of the product is removed and returned to the 
manufacturer. Products taken off the shelves, but left in the back 
rooms often mistakenly end up back on the shelves.
    Post notices online and in stores. Let your customers know that 
they can get up to date safety information from you.
    Contact as many consumers as possible. If you have contact 
information, use it to let your customers know they may have a 
dangerous product.
    Require your manufacturers to show proof of pre-market testing. 
Every shipment of children's products you receive should have some 
certification that it was tested to all relevant mandatory and 
voluntary standards and additional certification that the paint or 
substances used are lead free.
    Report returns to the manufacturer and CPSC. CPSC often only learns 
of defects after the product has left the store shelves, be a reliable 
source of information on unsafe products to CPSC.
CPSC
    Advocate for your agency and your mission. Request the money needed 
to adequately protect consumers, especially children, from dangerous 
products. CPSC has a smaller budget to oversee more than 15,000 product 
types than the FDA has to oversee animal medicine.
    When the statutes under which you operate prohibit you from 
publishing information about a hazard and naming specific companies, 
don't miss the opportunity to warn parents about the general hazard.
    Take your obligations under the Freedom of Information Act 
seriously. Simply not responding or ``losing'' the file is not 
acceptable. Investigative journalists, consumer advocates and even 
lawyers can be your allies in getting the message out about product 
safety--we are not the enemy.
Consumers
    Follow age guidelines and recommendations on all products. Don't 
take them as a challenge, as in ``my 2 year old is as smart as an 
average 3 year old!'' They are there for safety reasons.
    If you have a problem with a product that you believe could be 
unsafe, report it both to the manufacturer and the Consumer Product 
Safety Commission.
    Check all the products you use with your children at cpsc.gov and 
sign up for email alerts about recalls--either from the CPSC or monthly 
from Kids In Danger.
    Tell your friends and family about the need to check all products, 
especially hand me downs, for recalls. Find more information about 
keeping children safe at www.KidsInDanger.org.
Congress
    Give CPSC the funding it needs to keep our children safe. We need 
more dedicated staff members to participate in voluntary standard 
setting, investigate reports of dangers and enforce corrective actions.
    Remove the cap on civil penalties. Fines should be unexpected and 
painful--not something a company can write into its budget. Serious 
violations of safety laws deserve serious fines.
    Remove section 6(b)--don't censor public safety. If CPSC doesn't 
have the funding or mandate to take action against companies, arm 
consumers with the information they have so we can protect our own 
children. No other federal safety agency is subject to this provision, 
with no observable negative effect on the drug industry, auto companies 
or other regulated companies. I can get more information on safety 
concerns about a baby stroller in the customer comments at Amazon.com 
than I can from our federal safety agency. Congress should change this 
by denying manufacturer's veto power over safety alerts.
    Ask CPSC for annual reporting on recall effectiveness, FOIA request 
fulfillment, investigations of death and more. Hold them accountable. 
It is impossible to find out if a product recall is effective. When 
requesting this information I have been told everything from ``that 
file is lost'' to simply being ignored, even though supposedly monthly 
reports are filed with the agency. Congress can ask for this 
information--simply making it public will have a positive effect on the 
recall return rate.
    Support pending legislation to require pre-market testing of 
durable children's products. CPSC has no authority to make companies 
prove their products are safe before they are sold. 177 children were 
injured and six killed before dangerous products recalled just last 
year could be removed from the market place. Looking back 5 years, over 
1,200 children were injured by products before they could be recalled. 
Requiring manufacturers to test their products before they are sold and 
having a certification seal from CPSC that parents could look for would 
greatly improve the safety of our children. Simply put, it is what most 
parents already believe to be the case.
    Support pending legislation to require product registration cards 
for durable children's products. Perhaps they are not all returned, 
perhaps a product is no longer with its original owner, but this 
information could still vastly improve the likelihood that a parent 
will learn of a dangerous product before their child is injured.
    Kids In Danger was founded by grieving parents who believed that 
the company who made the deadly crib and the CPSC failed to protect 
their son from death. I can't tell you how it adds to their grief to 
know that almost 10 years later, more families are put though similar 
tragedies because of the inadequate response by manufacturers, 
retailers and regulators. Thank you for holding this hearing and we can 
only hope that with renewed public scrutiny, additional funding and 
staff and a renewed commitment to safety, CPSC can be effective in 
protecting children from harm.

    Senator Durbin. Carter Keithly head of the Toy Industry 
Association.
STATEMENT OF CARTER KEITHLY, PRESIDENT, TOY INDUSTRY 
            ASSOCIATION, INC.
    Mr. Keithly. Thank you very much for giving us the 
opportunity to provide comments about the important subject of 
consumer product safety in general and about the safety of toy 
products in particular.
    I'm Carter Keithly, the president of the Toy Industry 
Association (TIA) of about just a little more than 1 year ago. 
The Toy Industry Association is a not-for-profit trade 
association with more than 500 members, and our members account 
for about 85 percent of U.S. domestic toy sales. Because our 
market consists of one of the most vulnerable segments of our 
population, our children, our number one priority and the 
number one priority of our members is to assure that our 
products are safe.
    Our industry has lead the world in developing toy safety 
standards. We are proud of our record of accomplishment and the 
respect that we have earned from the safety authorities. 
Decades ago, under the auspices of the National Bureau of 
Standards, the TIA led the development of a safety standard for 
toys, and in 1996 the standard was republished as an ASTM 
consensus standard. Consensus standards such as a standard for 
toys are developed under the auspices of standards development 
organizations, and the development of such standards involves 
participation by consumers, CPSC, industry experts, retailers, 
safety consultants, testing labs and academics.
    They are developed in an open and transparent process and 
are more quickly implemented than rulemaking which can take 
years. Bringing all interested parties together to develop 
safety standards has made America the leader in safety 
standards around the world.
    The system is expeditious, flexible, and effective. It 
avoids the slow, bureaucratic processes of governments and 
allows for constant review and revision to accommodate changes 
in products and technology. It enables industry and safety 
organizations to react quickly to emerging and unforeseen 
issues, and as a consequence of the merits and success of this 
system, Congress wisely emphasized a preference for reliance 
upon what it termed voluntary safety standards in the Consumer 
Product Safety Act.
    The system deserves the continued support of Congress. Our 
toy standard is under constant review, and a revised version of 
the toy safety standard was published just last month. The 
revisions contain important new provisions to address magnets 
individually or as components in toys. Products containing 
magnets as loose parts are required to include labeling, safety 
labeling, and toys containing magnets as components may not 
liberate magnets during use or abuse. The ASTM work group 
developed a standard for magnet in toys in record time. ASTM 
approved the standard as published and directed that the work 
group continue to evaluate potential hazards and refine the 
standard if needed over the next year.
    In addition, CPSC is this very day conducting a forum at 
the headquarters to indicate to the industry and others about 
the standard.
    In addition to the design specifications prescribed by toy 
safety standards, manufacturers must submit their toys for 
safety testing to reduce or eliminate potential hazards during 
normal use or abuse. The tests include requirements addressed 
mechanical, electrical, thermal, chemical hazard. Thanks to the 
toy safety standard and testing process, toys are 
extraordinarily safe. In spite of the remarkable process in 
improving the safety of children in America over the past year, 
children unfortunately today still face significant risks, but 
those risks are mostly unrelated to toys. Tragically, often 
avoidable injuries take the lives of more than 1 out of every 
10,000 children in the United States annually. It includes 
children who die in motor vehicle accidents or drown in 
bathtubs. I have provided you data on the primary causes of 
children's deaths.
    CPSC's annual report indicates that of 15 commonly used 
household products, toys had among the lowest number of 
incidences of injury and death. It is still heartbreaking when 
accidents with toys occur, but we react quickly and vigorously 
when any pattern of hazard emerges relating to toys. 
Unfortunately, attention continues to focus on the small risks 
associated with toys while some very big risks remain 
unaddressed. The net result is that we often waste scarce 
resources in areas of minimal risk such as toys at the expense 
of allocating them efficiently to make children's lives truly 
safer.
    An enormous number and variety of consumer products are 
sold in the United States, and thousands of new toy products 
alone are created for sale in America.
    Any governmental system of standards of testing for such a 
vast number of consumer products could never cope with the 
sheer volume. That is why our system of consensus standards has 
worked so successfully. The CPSC does a very effective job with 
a modest budget. We commend the Commission and its hardworking 
staff for their successful work on behalf of the American 
public, and we believe there are ways the Commission can become 
even more effective and efficient.
    Toward that end I'd like to offer the following 
recommendations: First, we support dynamic new partnerships 
between stakeholders and the Commission to promote safety and 
safe consumer practices. Second, we support the Commission's 
involvement in private standards activities as authorized in 
the current statute. Third, there is a need for better guidance 
and education from the Commission on the implementation of 
section 15 product hazard reporting provisions. The current law 
implementing regulations is still vague and ambiguous, and it 
is difficult for manufacturers, especially small businesses, to 
determine when reporting corrective action are necessary. 
Fourth, in the global economy we note the importance of the 
agency's international engagement to ensure greater import with 
fines with safety standards.
    And, finally, we believe the CPSC does not lack authority 
to implement its congressional mandates. However, it requires 
greater resources to implement its support. Thank you for 
providing me the opportunity to testify. The Commission is an 
important agency, and we fully support its mission. It can and 
should have the funding and resources it needs.
    [The statement follows:]

                 Prepared Statement of Carter Keithley

    Chairman Durbin, thank you for the opportunity to provide comments 
about the important subject of consumer product safety in general and 
about the safety of toy products in particular. I am Carter Keithley, 
President of the Toy Industry Association (TIA). TIA is a not-for-
profit trade association with more than 500 members. Our members 
account for 85 percent of U.S. domestic toy sales. While there are a 
few very large toy manufacturers, over 75 percent of our members are 
companies with under $5 million in sales.
    Because our market consists of one of the most vulnerable segments 
of our population, our children, our number one priority, and the 
number one priority of our members, is to assure that our products are 
safe. Together with the U.S. government, recognized standard 
development organizations, independent toy safety experts and others, 
the toy industry has led the world in the development of globally 
recognized toy safety standards. We have invested heavily in child 
development research, dynamic safety testing, quality assurance 
testing, risk analysis and basic anthropometric studies of children. 
For decades, TIA has worked tirelessly for toy safety and we are proud 
of our record of accomplishment and our relationships with the National 
Safety Council (NSC), National Bureau of Standards (NBS), American 
National Standards Institute (ANSI), ASTM International and the 
International Standards Organization (ISO). To help assure the 
effective implementation of toy safety standards, we provide 
comprehensive and accurate information on toy safety 24 hours a day, 
through a special area on our website: www.toy-tia.org/consumer/
parents/safety/4toysafety.

          THE SUCCESS OF THE CONSENSUS SAFETY STANDARD SYSTEM

    In 1976, under the auspices of NBS, TIA led the development of a 
voluntary safety standard for toys. In 1986 the standard was revised 
and published as an ASTM consensus standard.
    Consensus standards, including the standard for toys, are developed 
under the auspices of international standards development organizations 
such as ASTM International. The development of such standards involves 
the participation of consumers, consumer organizations, CPSC, industry 
experts, retailers, safety consultants, testing laboratories and 
academic institutions. In the ASTM standards process, consensus of all 
participants and ASTM is required prior to enactment. ASTM standards 
are developed in an open and transparent process, with a balance of 
participants. Consensus standards, such as the ASTM Toy Standard are 
more quickly achieved than rulemaking, which can take several years.
    The system of bringing all of the interested parties and subject 
matter experts together to provide guidance and direction in the 
development of safety standards has made America the leader in safety 
standards around the world. The system is expeditious, flexible and 
effective. It avoids the slow, rigid bureaucratic processes of 
government. It allows for constant review and revision to accommodate 
changes in products and technology, and enables industry and public 
safety organizations to react quickly to emerging and unforeseen safety 
issues.
    As a consequence of the merits and success of this system, Congress 
wisely emphasized a preference for reliance upon ``voluntary'' safety 
standards in the Consumer Product Safety Act. Section 7(b) of the Act 
provides: ``The Commission shall rely upon voluntary consumer product 
safety standards rather than promulgate a consumer product safety 
standard prescribing requirements described in subsection (a) whenever 
compliance with such voluntary standards would eliminate or adequately 
reduce the risk of injury addressed and it is likely that there will be 
substantial compliance with such voluntary standards.'' The consensus 
standard system deserves the continued support of Congress.
    As one of the largest standard development organizations in the 
world, we are proud to have ASTM as the publisher of the toy safety 
standard. The current standard, ASTM F963-07 Consumer Safety 
Specification on Toy Safety, is under constant review, and a revised 
and updated version of the toy safety standard was published at the 
beginning of last month. The revised Standard contains important new 
provisions to address certain types of hazardous magnets, individually 
or as a component in toys or craft sets intended for children from 3 to 
8 years of age. Products containing such magnets as loose parts will be 
required to include safety labeling on their packaging and 
instructions. The labeling shall contain, at a minimum, the following 
text or equivalent that clearly communicates to parents:

    ``WARNING: This product contains (a) small magnet(s). Swallowed 
magnets can stick together across intestines causing serious infections 
and death. Seek immediate medical attention if magnet(s) are swallowed 
or inhaled.''

    The Standard also addresses the potential for release of magnets 
during reasonably foreseeable use or abuse of toys. Under the new 
standard, toys should not liberate magnets during use or abuse.
    ASTM commended the efforts of the Magnets Work Group in developing 
a standard for magnets in toys in record time. The ASTM Subcommittee on 
Toys approved the standard as published, with the intent that the 
Subcommittee's Magnets Work Group would continue to evaluate the 
potential hazards and the standard, refining it, if needed, over the 
next year. In addition, CPSC is this very day conducting a forum at the 
agency headquarters in Bethesda, MD to educate industry on the new 
magnet standard.

                       TOYS ARE TESTED FOR SAFETY

    In addition to the design specifications prescribed by the toy 
safety standards, manufacturers must submit their toy products for 
testing to reduce or eliminate potential hazards during normal use or 
reasonably foreseeable abuse conditions. These include, but are not 
limited to, testing requirements addressing mechanical, electrical, 
thermal and chemical hazards. For example, testing involves simulated 
use-and-abuse tests, testing for accessible sharp points and edges, 
small parts, projectiles, heavy metals in paint and other surface 
coatings, flammability, toxicity, and even noise level restrictions.
    Many manufacturers, especially larger ones, have their own in-house 
testing laboratories sophisticated enough to ensure that products meet 
standards for safety. Those without safety facilities on site use 
independent testing laboratories. Manufacturers producing toys overseas 
test them before shipping, and then sample production lots again once 
they arrive in the United States. Major retailers duplicate this 
process on product orders.

  THE TOY SAFETY STANDARD IS EXTRAORDINARILY SUCCESSFUL IN PROTECTING 
                                CHILDREN

    In spite of remarkable progress in improving the safety of children 
in America over the past century, children today still face significant 
risks, but those risks are mostly unrelated to toys. Tragically, often-
avoidable injuries take the lives of more than 1 out of every 10,000 
children in the United States annually. This includes infants that die 
before their first birthday in motor vehicle accidents and many who 
drown in bathtubs. Here are the data relating to primary causes of the 
death of children annually in the United States:

        ESTIMATED ANNUAL MORTALITY RISK FOR CHILDREN UNDER AGE 10
               [Number of deaths per million children] \1\
------------------------------------------------------------------------
                                                                 Number
------------------------------------------------------------------------
Motor vehicles...............................................         46
Guns.........................................................          5
Drowning.....................................................         20
Poisoning....................................................          2
Suffocation..................................................         17
Bicycles.....................................................          2
Fire.........................................................         16
Medical care.................................................          2
------------------------------------------------------------------------
\1\ Harvard University School of Public Health, Kids Risk Symposium,
  March 26-27, 2003 (Kimberly Thompson, M.S. SCP, Assoc. Professor of
  Risk Analysis and Decision Science, Children's Hospital Boston,
  Harvard Medical School Co-Founder/Director of Research Center on Media
  and Child Health; Director HSPH Kids Risk Project.

    CPSC's annual report indicates that of fifteen commonly used 
household products, toys had among the lowest number of incidences of 
injuries and deaths. Although there are risks associated with some 
toys, they are clearly very small by comparison with other products. 
The actual rate of children's deaths related to toys would be about the 
same as the rate of suicide for children under 10, which is extremely 
rare! Of course accidents still occur, and we react quickly and 
vigorously when any pattern of hazards emerges relating to our 
products.
    Unfortunately, media attention continues to focus on the small 
risks associated with toys while some very big risks remain 
unaddressed. In a world where perception is reality, where 
misinformation often drives perception, and where new, scary and 
uncertain hazards receive widespread attention, it is no wonder that 
policy makers and parents lack context for understanding and managing 
children's risks. The net result is that we often waste scarce 
financial resources in areas of minimal risk, such as toys, at the 
expense of allocating them efficiently to make children's lives 
measurably safer.

                         CPSC'S VITAL FUNCTION

    CPSC's mission is to protect children and families against an 
unreasonable risk of injury and death from more than 15,000 types of 
consumer products from a wide range of product hazards. Their work 
addresses consumer product hazards through a framework of mandatory 
product safety standards where appropriate; engagement in the voluntary 
or consensus standard-setting process; compilation of consumer injury 
data; issuance of safety guidelines; information and education programs 
to proactively avoid injuries; and product recalls and corrective 
actions when necessary.
    In 2006, CPSC completed 471 product recalls involving nearly 124 
million product units that either violated mandatory standards or 
presented a potential risk of injury to the public and negotiated civil 
penalties of approximately $2.3 million. In addition, the CPSC 
compliance staff has continued to refine its Retailer Reporting Model 
implemented in 2005 and used by two of the nation's largest retailers. 
This provides additional complaint data for evaluation by the staff, 
which supplements manufacturer and consumer reporting.
    An enormous number and variety of consumer products are designed, 
manufactured, imported and sold in the United States. Thousands of new 
toy products alone are created for sale in the United States, nearly 
half of which are sold in just the last quarter of the year. Any 
governmental system of standards or testing for such a vast number of 
consumer products could never cope with the sheer volume. That is why 
our pluralistic system of consensus standards has worked so 
successfully to promote prosperity and consumer satisfaction while 
assuring safety in America. Consumer product companies also recognize 
the value of responsible corrective action to address patterns of 
injuries or misuse that may indicate a problem with their products. 
This alertness accounts for most of the product recalls conducted in 
cooperation with the Commission.
    The CPSC does a very effective job with a relatively modest budget. 
We believe that their budget request of $63,250,000 for fiscal year 
2008 should be granted. We commend the Commission and its hard-working 
staff for their successful work on behalf of the American public, and 
we believe that there are ways the Commission can become even more 
effective and efficient. Toward that end, I would like to offer the 
following recommendations:
Collaborative Information and Education Programs
    First, we support dynamic new partnerships between stakeholders and 
the Commission to promote safety and safe consumer practices. Consumer 
information and education does not substitute for the essential 
responsibility of manufacturers to provide safe products, but it can 
help with a large percentage of accidents due to improper or 
irresponsible conduct or lack of supervision of minors. The Commission 
is fully authorized to embark on such programs, but encouragement and 
additional funding from Congress should be provided.\1\
---------------------------------------------------------------------------
    \1\ CPSC has been increasingly effective at using electronic media 
and websites. The creation of www.recalls.gov and enhancements to their 
website has resulted in a rapid growth from 200,000 visits in 1997 to 
what is expected to be almost 25 million visits by the end of the year. 
Product safety information is increasingly available in Spanish and 
other languages. In addition, outreach activities such as the 
Neighborhood Safety Network; collaborative efforts with FEMA and public 
information education initiatives with NGOs and industries have 
resulted in increasingly effective communication about fire and carbon 
monoxide hazards, disaster preparedness, hazards associated with 
recreational vehicles, proactive holiday safety messaging, poison 
prevention, pool drowning risks and back to school safety programs.
---------------------------------------------------------------------------
Continued Involvement in Consensus Safety Standards and Activities
    Second, we support the Commission's involvement in private 
standards activities as authorized in the current statute. These 
standards are the bulwark of our national and even international safety 
system, and the Commission plays an important role in providing 
comments and proposals.\2\ However, we believe the Commission needs to 
better manage and supervise its internal process, particularly staff 
input to standards organizations, to ensure an opportunity for public 
comment and to prevent proposals which lack technical merit or 
otherwise cannot be justified as federal standards. This is why we 
support the Commission's stated strategic goal to improve the quality 
of CPSC's data collection through 2009 by improving the accuracy, 
consistency and completeness of the data.
---------------------------------------------------------------------------
    \2\ CPSC has worked with stakeholders to develop effective 
consensus standards completing approximately 10 times as many voluntary 
standards as mandatory standards (CPSC assisted in completing and 
developing 352 voluntary safety standards while issuing 36 mandatory 
standards from 1990 through 2006).
---------------------------------------------------------------------------
Continued Efforts to Engage and Educate Small Manufacturers
    Third, there is a need for better guidance and education from the 
Commission on the implementation of the Section 15 Substantial Product 
Hazard Reporting provisions. Manufacturers with defective products that 
could create substantial product hazards are obliged to report to the 
Commission and, if needed, to take corrective action including recalls. 
However, the law and implementing regulations are vague and ambiguous. 
It is difficult for manufacturers, especially small businesses, to 
determine when reporting and corrective action is necessary. We support 
the Commission's efforts to clarify guidance on reporting and penalty 
computation by issuance of guidelines, which were subject to prior 
publication, comment and review prior to adoption.\3\
---------------------------------------------------------------------------
    \3\ Federal Register, Vol. 71, No. 142, pages 42028-42031 and 
proposed interpretive rule, Federal Register, Vol. 71, No. 133, pages 
39248-39249.
---------------------------------------------------------------------------
A Strong Role in Setting and Enforcing Safety Standards in a Global 
        Economy
    Fourth, in a global economy, we note the importance of the agency's 
international engagement to ensure greater import compliance with U.S. 
safety standards and harmonization of standards to promote export 
opportunities for American businesses and the elimination of non-tariff 
trade barriers. CPSC has entered into Memorandums of Understanding 
(MOU) with a number of foreign governments to provide for a greater 
exchange of information regarding consumer product safety. We note by 
the end of 2008, CPSC expects to have MOUs with 17 countries. These 
activities are becoming increasingly important in helping to ensure 
consistent hazard-based, harmonized global safety standards.
Existing Regulatory Framework is Effective, But More Resources are 
        Needed
    Finally, we believe that the existing authority granted to the 
Commission under the Consumer Product Safety Act and related Acts, 
together with existing implementing regulations, are sufficient for the 
CPSC to execute its mission in an effective manner. The CPSC does not 
lack the requisite authority to implement fully its congressional 
mandate ``to protect the public against unreasonable risks of injury 
associated with consumer products.'' However, it requires greater 
resources to implement such authority. Recently the Consumer Federation 
of America noted that this is the most important action that Congress 
can take. We agree that funding is necessary to insure staffing levels 
are maintained and laboratory equipment is kept up to date.
    Thank you for providing me the opportunity to testify. The 
Commission is an important agency and we fully support its mission. It 
can and should, have the funding and resources it needs to effectively 
function and we look forward to working with the Committee to this end.

    Senator Durbin. Mr. Keithly, your testimony I've read over 
leads one to believe that extensive testing takes place before 
toys are put on shelves in American retail establishments.
    Mr. Keithly. Yes, sir.
    Senator Durbin. So you're saying that the toys that we're 
discussing this morning were tested through the process that 
you've described?
    Mr. Keithly. Yes, sir.
    Senator Durbin. And so can you explain to me how a Thomas 
the Tank train could have lead paint on it and be sold in the 
United States when we have known for decades that lead ingested 
by children is a danger?
    Mr. Keithly. No, sir. I can't explain it, and it should not 
happen, and there needs to be consistent constant monitoring 
and enforcement of compliance of these standards.
    Senator Durbin. What about these tiny rare earth magnets 
which turned out to be so dangerous for Ms. Henry's son and for 
Kenneth Sweet and so many others? Are you telling us that your 
industry tested those magnets ahead of time and envisioned the 
possibility that they would be ingested and still included them 
in products sold in the United States?
    Mr. Keithly. Sir, I don't believe anybody envisioned the 
possibility that they would be ingested, and when the industry 
learned, and, particularly, the company learned that this 
problem and hazard, that's when the industry moved quickly.
    Senator Durbin. So let me ask you how quickly you moved. 
Since we learned that in April 2004 we had the first report of 
danger to children, and it wasn't until May 2006 that there was 
a recall, do you consider that a quick response by your 
industry?
    Mr. Keithly. Well, sir, the standard preparation practice 
here or system was set in motion in February I believe of 2006, 
and about 14 months later the standard was issued.
    Senator Durbin. And how many of these toys were sold in 
that 14-month period of time while you were working up to a 
recall?
    Mr. Keithly. I don't know, sir. I could try and determine 
that for you.
    Senator Durbin. Do you understand that as they were being 
sold with these dangerous magnets you were endangering the life 
of children with those toys?
    Mr. Keithly. Well, sir, I think that--I don't know that we 
were endangering the lives of children. I think that truly the 
industry cares and the industry needs to and has consistently 
worked toward toy safety.
    Senator Durbin. I don't understand that. If you were 
arguing that these toys were not endangering the lives of 
children, then you're defying all the evidence we have that 
these magnets, and this is a brand new version of the toy which 
is a little safer I might add, but in its original version 
these tiny little magnets could pop out. Let me ask you. I 
don't know if you're a parent or whether you have small 
children.
    Mr. Keithly. I am, yes.
    Senator Durbin. Do you consider it an unreasonable 
likelihood that a child seeing a tiny little magnet would 
swallow it?
    Mr. Keithly. Well, a small child, yes, sir. That's why 
these toys are not sold for small children at all.
    Senator Durbin. So what age group are they sold for?
    Mr. Keithly. Above three.
    Senator Durbin. Above three. So you're saying that children 
above three would not swallow these things.
    Mr. Keithly. Well, sir, I don't know if that's the right 
standard or not. The standard is being continually analyzed.
    Senator Durbin. That's why when you testify about this 
extensive testing and all the different things that are done on 
the toys, and then I ask you some basic questions about lead 
paint and swallowing magnets, I'm afraid it's not a confidence 
builder that your testing is really protecting me. Now, let me 
ask you about China. If one-half of the products being 
investigated by the Consumer Product Safety Commission come 
from China, do you pay special attention in your industry to 
toys that are coming in from China? Have you been forewarned 
that there are some problems?
    Mr. Keithly. We do indeed, and, in fact, every year for the 
past 11 years and coming up again next month we have hosted toy 
safety standard seminars for Chinese manufacturing operations, 
and we have invited and made provision for participation by the 
CPSC in those seminars.
    Senator Durbin. How would you describe the level of 
cooperation and compliance by Chinese manufacturers with what 
you consider to be normal safety standards for toys sold in 
America?
    Mr. Keithly. I believe it's gotten very good, sir. Mistakes 
are made from time to time, but, as was testified earlier, most 
of the safety testing laboratories that are headquartered here 
in the United States have a huge staff in China to make sure 
that there is compliance.
    Senator Durbin. You said mistakes were made. Is this one of 
the mistakes?
    Mr. Keithly. I don't know, sir. Mistakes were made 
apparently in the lead and paint situation, but I'm not sure 
that--that product was most likely made before the standard was 
established, before it was learned what the hazard was.
    Senator Durbin. Congressman Rush.
    Mr. Rush. Ms. Cowles, we only have a few moments. I just 
want to ask you in your testimony you mentioned the weak-kneed 
recalls.
    Ms. Cowles. The original Magnetix recall, and I again have 
been working on this issue since 2000, was really one of the 
weakest recalls I had ever seen. It basically did not require 
that the products be taken off the shelves, and so while there 
was no indication on the packaging, what the difference was was 
the one you bought on March 29 versus the one that was still on 
the shelf on March 31, there was no apparent difference. One 
was so-called recalled and the other wasn't, and yet if you 
went to the website of the company, they don't even call it a 
recall. They basically said, ``If you bought this and you're 
uncomfortable with it in your house, feel free to return it for 
a replacement item.'' They never mentioned the safety hazard. 
They really did not get across to parents the very severe 
injury Ms. Henry here can attest to.
    This is a horrific injury to a young child, and that danger 
did not come across from the recall specifically because of the 
negotiating that CPSC has to do to say anything about a product 
even when it's caused a death.
    Mr. Rush. So are you saying then that there are different 
types of recalls?
    Ms. Cowles. Because each one is negotiated with a company 
and whoever their lawyer is, and the language, you get a wide 
variety. You get companies that comply. They want the dangers 
to be known. They post it on their website. They do a great 
job. Or you get someone like this or the ATV. There was a 
recall last week of children's ATV that the CPSC says is 
horrendously dangerous, and yet because they're foreign they 
said they can't do anything about it, so there's not even a 
recall.
    We should not be so dependent on the good graces of the 
companies who make the dangerous products to begin with. The 
CPSC needs to have the power to do it.
    Mr. Rush. And then like notices for a recall. Can you 
explain from your perspective----
    Ms. Cowles. The only requirement that CPSC has is that the 
company put out with them a press release that announces the 
recall. Again, they may negotiate more with different 
companies. I've been surprised to learn over the past few years 
that in fact retailers aren't even notified necessarily about a 
recall. Sometimes I've had people from Amazon tell me they 
learn of the recall the same way I do. They open the web page 
in the morning and look to see what was recalled the night 
before. That's simply wrong. There has to be more done than 
simply a press release. If it's not a big news day, no one's 
going to hear it about. So we think that more needs to be done.
    Again, these manufacturers know how to reach us to sell us 
a product. They need to use same technique to reach us when a 
product proves dangerous.
    Mr. Rush. Mr. Keithly, how can your association address and 
help strengthen the recall mechanisms that we depend on?
    Mr. Keithly. We can be doing this here. In fact, we helped 
publicize information about the new--I believe there's new 
Illinois law, and we helped publicize information about that to 
the retailers. We work hard to try and get the information out. 
We want our children----
    Mr. Rush. But what about the negotiation? How do you as an 
industry or an association, do you think that you have a right 
to negotiate the notice of recall, the press releases from the 
Consumer Product Safety Commission?
    Mr. Keithly. Well, sir, ``negotiation'' sounds as if it's 
trying to relieve a company of liability when in fact I think 
what is going on is to assure that safety information gets out 
there without simply condemning a company for a product simply 
on the basis of an accusation rather than proven----
    Mr. Rush. If it's not accusation, what would a recall be 
based on then?
    Mr. Keithly. Well, it certainly would be based on proven 
hazard.
    Mr. Rush. Proven hazard. And so you think that your agency 
or your association and your membership should have the 
authority and the right and the power to negotiate notice of 
recalls, press releases that go out to the American public----
    Mr. Keithly. No. No. We don't engage in negotiations.
    Mr. Rush [continuing]. And insist on it.
    Mr. Keithly. We don't engage in negotiations.
    Mr. Rush. Don't you insist on it?
    Mr. Keithly. Do we insist on the right to negotiation?
    Mr. Rush. Don't you insist on collaboration and agreement 
in the issuance of press releases and on notices of recall that 
the CPSC initiates?
    Mr. Keithly. Well, sir, we want to be sure that justice is 
done in all respects.
    Mr. Rush. You don't think that the CPSC is accountable to 
the American public much more so than the members of your 
association?
    Mr. Keithly. Well, sir, I don't know if they're more 
accountable than members of our association.
    Mr. Rush. Don't they have the legal authority--don't the 
American people depend on the CPSC to protect it in the final 
analysis?
    Mr. Keithly. Yes, and I think they depend on our companies 
to protect them too, and they can depend on our companies.
    Senator Durbin. Congressman Rush, thank you for your 
participation in this hearing, your leadership in Washington 
working on the organization, working on the corporation side, 
and I thank this panel for joining us today.
    I'm sorry we don't have more time. Ms. Henry, thank you. I 
wish Deron the best and hope everything turns out just fine for 
him after what he's been through. Ms. Cowles, thank you as 
well. Dr. Quinlan, and I would just like to say we now live in 
a global economy. There are products coming in from all over 
the world. The American consumers mistakenly assume that if 
it's on the shelf it's safe. They think their Government is 
their watchdog, their Government is going to protect them. If 
you've listened to the testimony today, the convoluted long-
term process that you have to go through to take a dangerous 
toy that is killing children like this little toy off the 
shelves, you understand Government's not doing its job.
    Now, part of that has to do with Congress. Republican 
Congress are crawling with special interest groups that are 
trying to make sure that they protect the people that make the 
products.
    The halls of Congress are not crawling with representatives 
of consumers and families across America who want to make sure 
that that Christmas toy doesn't turn out to be a tragedy for a 
child like Deron Henry, and that is exactly why we end up with 
laws that are so weak and convoluted that when a company is 
making a dangerous toy, they can drag out the process for 2 
years forcing the Consumer Product Safety Commission to 
negotiate every word of the press release that goes out to warn 
the public. That's the reality of what we face today. This 
agency has been downsized because they don't want more cops on 
the beat in the industry. They don't want more people watching, 
and, as a result, terrible things occur whether it's pet food 
or toothpaste or Thomas the Tank trains or magnetic toys, 
unfortunately, consumers had better beware. Many times they're 
in a position where they're buying things they assume are safe, 
and the Government is not doing its job.
    That starts with us. We have to change the laws in 
Congress, appropriate the money to get it done. We have to 
demand of everyone who sell to the public that they be 
responsible whether their company is in the United States or in 
China or in any other place. We fell down. The system fell 
apart when it came to this toy.
    I want to salute Patricia Callahan who wrote the series 
that called my attention to this toy in the Chicago Tribune and 
urge those involved in the media to help us do our job. Shine 
the light on these abuses and put the responsibility where it 
belongs--elected Members of Congress, Presidents, 
administrations and people who serve on these commissions. 
Congressman Rush, would you like to make a closing statement?
    Mr. Rush. Mr. Chairman, I concur with your closing 
statement. Ms. Henry, I'd also share my concern and my well 
wishes to you and to Deron. I apologize. I think that the 
American Government has failed your child and millions of other 
children across this Nation.
    I intend to work very, very hard with my colleague Senator 
Durbin to make sure that we strengthen this agency and 
strengthen its ability to protect America's children. I intend 
personally to do all that I can in Congress to make sure that 
we strengthen the CPSC by giving it more resources, by giving 
it more authority and more power.
    I believe that, again, that the toys that our innocent 
children play with, that those toys should have the utmost 
scrutiny before those toys end up in our homes, so I concur 
with the comments of Senator Durbin. I just want you to know 
that I am committed. We will leave no stone unturned. It's a 
tragedy, and it's shameful that the CPSC as we sit right now 
does not have a quorum to conduct the American public's 
business. That's totally, totally uncalled for and unacceptable 
that we can't even get a third Commissioner in place to conduct 
the affairs of this worthwhile and important agency.
    We intend to make sure that CPSC no longer is a bit player 
in Government, that it becomes not a minor league player but 
the major league player in the affairs of the lives of our 
citizens and the safety of our children. Thank you very much, 
and thank you, Mr. Chairman. You've exhibited fine leadership 
here, and I certainly am proud and honored to be a part of 
this.
    Senator Durbin. Thanks, Congressman Rush.
    The record will remain open for questions to be asked of 
the witnesses.
    Senator Durbin. I hope that you'll help us cooperate by 
making a complete record.

                          SUBCOMMITTEE RECESS

    This meeting subsequently stands recessed.
    [Whereupon, at 11:41 a.m., Monday, June 18, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


  ENHANCING THE SAFETY OF OUR TOYS: LEAD PAINT, THE CONSUMER PRODUCT 
              SAFETY COMMISSION, AND TOY SAFETY STANDARDS

                              ----------                              


                     WEDNESDAY, SEPTEMBER 12, 2007

                           U.S. Senate,    
         Subcommittee on Financial Services
                            and General Government,
                               Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 11 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Richard J. Durbin (chairman) 
presiding.
    Present: Senators Durbin and Brownback.
    Also present: Senators Bill Nelson, Pryor, and Klobuchar.

                 STATEMENT OF SENATOR RICHARD J. DURBIN

    Senator Durbin. Good morning. I want to thank all of our 
witnesses for being here. We will have Consumer Product Safety 
Commission (CPSC) Acting Chairman Nancy Nord, who has been 
busily involved in negotiations with Chinese officials, will be 
testifying.
    Today we'll be hearing from three panels. First a panel of 
my colleagues from the Commerce Committee, and I welcome my 
colleague from Arkansas, Senator Mark Pryor, as well as Senator 
Bill Nelson. I believe Senator Klobuchar will be here shortly. 
I believe they're all--Senator Pryor chairs, and they're all 
members of the Subcommittee on Consumer Affairs, which has the 
authorizing jurisdiction over the issues that we will discuss 
today.
    After their testimony, these members and other members from 
Commerce are welcome to join us at the dais here to ask 
questions. This is in the nature of a joint hearing, and I hope 
it will serve our needs to learn a lot more about this 
important issue.
    We have quite a few important witnesses before the panel 
today, including Consumer Product Safety Commissioners, and 
outside witnesses from the toy industry, Toy Industry 
Association, from the consumer groups and testing 
organizations.
    We have a lot to cover in a limited amount of time. I will 
try to make my opening remarks brief and to the point, and hope 
my colleagues will do the same.
    My interest in this issue was sparked when I read a Chicago 
Tribune front-page series just a few weeks ago. It was written 
by Patricia Callahan. She talked about a toy called Magnetix. I 
knew all about this toy because I had bought it for my 
grandson. He has this huge box of Magnetix. Luckily, he's old 
enough not to be in danger. But we learned in that series, that 
the tiny little rare earth magnets that look like little pieces 
of candy, when swallowed or inhaled by toddlers or children--if 
more than one is inhaled or swallowed--can lead to serious 
complications, requiring surgery, and at least in one tragic 
case, resulting in death.
    That series and other publications have documented a real 
need for improvement in our safety standards in America. Our 
toy safety system is not as strong as it should be. I can tell 
you that I've gone home--and I'm sure Senator Brownback can say 
the same--and had families with toddlers come up to me and say, 
``What is safe to buy for Christmas? For the holidays?'' It's a 
legitimate question, with all of the headlines about lead paint 
and magnets, and loose parts of toys that can cause serious 
problems.
    I've introduced the Consumer Safety Modernization Act 
(CSMA), and shared it with my friend, Senator Pryor, because he 
has the responsibility for writing the reauthorization of the 
Consumer Product Safety Commission. I had a field hearing in 
Chicago, and continue with our effort today.
    The Consumer Product Safety Commission is an agency which, 
many people may not have noted until this recent controversy, 
is one that flies below the radar most of the time. But it has 
an important responsibility for the safety of products that are 
sold in America--not just imports--but all products sold in 
America.
    Tragically, the Consumer Product Safety Commission has been 
neglected and underfunded for years. Since its inception in 
1973, its staffing has decreased by almost 60 percent, going 
from a high of 978 full-time employees in 1980, to a current 
low of 401. This has occurred at a time when the volume of 
products--just imports, not just those made in America, but 
imports--has increased dramatically.
    In 1974, the United States imported $104 billion worth of 
products. In 2006, that number was $1.8 trillion--a 15-fold 
increase in that 32 year period of time.



    Let me show a chart here--the chart with the bar graphs--
that shows the increase in value of U.S. imports. The red dots 
that you note here are the number of people working at the 
Consumer Product Safety Commission. As the volume of work has 
increased, the number of people responsible for the safety of 
the products has decreased.
    The budget of this Commission is about $62 million; it 
passes through this subcommittee. We're going to increase it, 
and we're going to make a dedicated effort to make the Consumer 
Product Safety Commission a better Commission, with more 
inspectors, more technical capability, and a better track 
record in terms of protecting American consumers.
    In the past 3 years, agency staff levels have been reduced 
15 percent. The field division responsible for investigations 
and compliance--35 employees. This doesn't tell the whole 
story, but a couple of pictures might.
    The Consumer Product Safety Commission has one person 
responsible for toy safety. Its lab is staffed by 30 
technicians and engineers, housed in a 1960s missile station. 
The entire compliance staff has 146 inspectors, 4 less than at 
the beginning of the year. This Commission is significantly 
understaffed.



    What you are looking at here is an employee of the Consumer 
Product Safety Commission, who is responsible for helping to 
test toys. What you see is the scientific impact test on 
whether toys will break up. The line on the wall, 4 feet, 5\1/
2\ inches at the higher level, 2 feet 11\1/2\ inches at the 
lower level--toys are dropped to see what happens to them. That 
is the scientific test of the toys by the Consumer Product 
Safety Commission. 




    The next photo I'd like to show you looks a lot like my 
work bench in my basement in Springfield. This is the toy 
safety testing lab at the Consumer Product Safety Commission. 
This is totally inadequate. It is not up to the task of 
building any kind of confidence among American consumers that 
we are really watching out for them.
    When American families go into a store, they expect 
whatever's on the shelf is safe. And yet, if we don't have 
enough people, if we don't have enough resources, if we don't 
have enough technology, we are not meeting our responsibility. 
And that is part of this hearing that we will discuss.
    Of course, at ports of entry, enormous quantities of 
products are coming in--not just toys, but all sorts of 
different products. This Consumer Product Safety Commission has 
jurisdiction way beyond toys; when you consider all of the 
possible things that they could be looking at, you can imagine 
the volume that they have to deal with.
    In the area of southern California, around Long Beach, it's 
my understanding that they have six inspectors on call--six--
who are sent from time to time to different places to look at 
imports.
    We have to change this Commission and the work that it 
does. Senator Pryor is going to be leading that effort on 
reauthorization. We have to reduce the amount of time that a 
company has to respond to information--from 30 days to 15, or 
even shorter. We need to increase the maximum fine, so that the 
Commission can issue such a fine to a firm that violates the 
law, and it has to be a fine that catches the attention of 
multi-million dollar companies. We need to expand to make it a 
crime to sell recalled products.
    The last thing I want to mention here is imports. And I had 
a meeting this morning with some representatives of the Chinese 
Government who, I believe, are in the audience here, if I'm not 
mistaken. They were invited in; I hope they made it through the 
queue outside. But, among those I met with today was the vice 
minister in charge of AQSIQ, which is the Chinese agency 
responsible for inspecting products--both food and non-food 
products--Mr. Wei Chaunzhong, and I'm sorry if I mispronounced 
that. We had a lengthy meeting. He, incidentally, told me that 
his agency has 210,000 employees; 30,000 are assigned to 
exports. They have 1,800 laboratories. So, it is hard for me to 
preach to them about dedicating more resources to making sure 
that the products that they export are safe, when you see what 
we are dealing with here in the United States.
    But I can tell you, that what we know now gives me concern. 
Mr. Chaunzhong told me that there is zero tolerance for lead in 
products exported from China. Having said that, we know there's 
lead paint on toys. We'll have testimony a little later from 
Mattel and from Toys ``R'' Us, and we'll hear firsthand about 
some of the bitter experiences they've had with lead paint on 
toys exported from China.
    We also know that one in five sampled articles of 
children's jewelry tested positive for excessive lead levels. 
Most of those were Chinese imports.
    Other contaminated products from China have included, this 
year, pet food--which I know very well has caused concern among 
millions of American families as innocent animals, dogs and 
cats, died from contaminated food--toothpaste containing anti-
freeze, seafood recalls, many, many more.
    Now that I've met with this delegation from China, I think 
we need to follow through. We need to make it clear to those in 
China who are in the export business, America will never 
compromise the health and safety of our consumers and our 
families. Our standards of health and safety have to be 
followed.
    We're going to make certain that we move forward with the 
Toy Industry Association and others represented today, to try 
to deal with this season's problems. As we face a holiday 
season where toys are a major product, families are concerned, 
companies are responding--it is unlikely that Government will 
be able to do much to restore confidence. But we will learn a 
bitter lesson from the holiday season of 2007, and I hope we'll 
apply that lesson to passing new authorization in 2008 for this 
Commission, putting more resources in this Commission, and 
restoring the confidence of families across America.
    Let me turn it over to my ranking member, Senator Brownback 
of Kansas.

                   STATEMENT OF SENATOR SAM BROWNBACK

    Senator Brownback. Thank you very much, Mr. Chairman. I 
appreciate you holding this hearing, and appreciate those that 
are here to testify. I look forward to a good exchange and a 
good dialogue.




    I won't recover--or I won't cover, again--the same 
statistics, but I do want to put up an initial chart, because I 
think it does show some of the problems that we're dealing with 
that we've heard anecdotally about--whether it's the toy 
problems, or toothpaste or pet food. But, just look at this 
chart, on consumer product recalls that we've had from 
countries. And you can see the big one, and it is China. Far 
and away, the most number of consumer product recalls that 
we've had from December 2006 to August 2007.
    Unfortunately, as some others have already noted, ``Made in 
China'' has now become a warning label. And we're seeing this 
in the charts, and we're seeing this in the products, and it's 
got to stop. And we're not going to let this continue to take 
place.
    The American consumer is the most discerning consumer in 
the world, and I believe that given the imminent and potential 
harm to American consumers, and the real harm by these 
products, their purchasing power will act as a powerful 
deterrent and disciplining mechanism for these products.
    At the same time, the regulatory agencies must aggressively 
do their part. Given the sheer volume of defective products 
coming from one main source, more than 70 percent of the 
defective products that we're seeing coming from China, we have 
a big regulatory challenge. As the chart showed, this is a 
troubling and dangerous picture.
    I agree with you, Mr. Chairman, the Consumer Product Safety 
Commission could and should provide additional oversight and 
inspections and the independent testers--like an Underwriters 
Laboratory for Toys, I believe, as one of the panelists is 
going to suggest, would give consumers more confidence. I think 
that's a good idea. But, I firmly believe that the problems 
we're now seeing with Chinese-made toys and other consumer 
products is just a symptom of a much larger problem that must 
be dealt with in a swift and vigorous way.
    I think it's fair to say that an open and transparent 
system of government, like ours, is less likely to produce 
defective products, and it is more likely to catch those that 
are. As one expert put it to me, the democratic countries are 
better at producing safe products than non-democratic ones. And 
one of the ways a non-democratic country, like China, is 
usurping the way in which business is being conducted around 
the globe, is through manipulation of its production system, 
and particularly of its currency.
    Now, I realize that finance is a convoluted topic, but in 
this case, I think it's quite simple. Ever since we granted the 
Chinese Government PNTR back in 2000, the Chinese Government 
has implemented capital controls to manipulate its currency, as 
a matter of state policy.
    With an increasingly and alarmingly higher number of 
consumer goods being made in China, as much as 80 percent of 
the items in retail chains like Wal-Mart and Target, a currency 
that is undervalued by 40 percent relative to the dollar is a 
systematic, systemic danger to the U.S. economy, if not to the 
international financial system. By unfairly keeping the yen 
undervalued, the Chinese Government has boosted China's 
exports, and has unfairly sucked foreign direct investment in 
export production facilities, much of which comes from the U.S. 
firms.




    This chart that I'm putting up now shows how $1.3 trillion 
have rushed into China over the past decade, through foreign 
direct investment and trade. Every year, we buy more goods than 
we sell, and every year more American investment dollars are 
sucked into China. This is not surprising, given that the 
currency--Chinese currency--is held at these artificially low 
levels. You can see these trends on that chart.




    Mr. Chairman, I wanted to show another chart that is 
extremely troubling, as well, and I think it's part of the 
overall symptom here. As hundreds of billions of U.S. dollars 
flow to China every year, China, in turn, sends support to bad 
actors around the world--like Iran, Sudan, Burma, Zimbabwe, and 
North Korea. As we know, these are dictatorships which commit 
acts of genocide and promote terrorism.




    Most disconcerting is that the Congressional Research 
Service (CRS) has confirmed that China's sales of weapons, 
small arms and munitions to Iran, have ended up in the 
conflicts involving U.S. forces in Afghanistan, and in Iraq.
    The chairman and I are both concerned about what's taking 
place, particularly, in Sudan, and the genocide in Darfur, and 
strongly promoting divestiture campaigns for those countries 
and those companies investing in Sudan, the lead of which is 
China. And, I think we have to point out that that is taking 
place, as a part of this overall symptom and problems.
    Do we really want to stand idly by as the Chinese 
Government manipulates its currency, to give itself an unfair 
economic advantage, to suck in this foreign capital, to support 
other bad regimes around the world, and sell defective products 
to the United States? I don't think so. Do we really want to 
keep the floodgates open, as unsafe Chinese products, made 
under coercive labor conditions, enter this country? I don't 
think so. And, do we really want U.S. consumer and direct 
investment dollars going to support Chinese sales of weapons to 
dangerous dictatorships around the globe? Some of these weapons 
we're facing on the battlefield today? I don't think we want to 
continue to see that taking place.
    I think we need to do more on consumer safety products 
here, I think we must require it of Chinese products, but I 
don't think we can stop there. There are clearly other things 
that are happening, and that have been happening for some time. 
While I support this hearing, and I'm delighted to see it 
taking place, I hope we don't just focus on one narrow issue, 
but go at the broader issues of what is being done by the 
Chinese Government.
    Mr. Chairman, it's time to end the status quo, the business 
as usual relationship with China. We must act to apply U.S. 
counterveiling laws to non-market economies, and to make 
exchange rate manipulation actionable under such laws.
    Some will cry out that we can't afford to take such actions 
as these, they may say that such actions will hurt American 
consumers by increasing prices.
    I say we can't afford not to take such actions. American 
consumers have already been hurt, in the worst way. Their lives 
and their children's lives have been put at risk by unsafe 
products produced in Chinese manufacturing plants that are so 
suspect that they keep American inspectors out.
    American consumers have been hit over the head with a 2 by 
4. We can't allow this to continue to take place.
    I look forward to the comments by my colleagues, and by 
those involved in the industry, and I look forward to us 
addressing this problem, consumer safety problem, and 
underlying problems, as well.
    Senator Durbin. Thank you, Senator.
    [The statement follows:]

              Prepared Statement of Senator Sam Brownback

    Good morning. Thank you Chairman Durbin for calling this hearing. 
It's an important and timely issue.
    I would like to ask that my longer statement be made a part of the 
record. So, I will not go through the same troubling statistics that 
the Chairman helpfully reviewed for us this morning. What I will say is 
this: shoddy, defective and dangerous products being made in China and 
sold to American consumers has simply got to stop. I hope that we will 
not wait for legislation for that to happen. It's simply unacceptable.
    The American consumer is the most discerning consumer in the world 
and I believe that given the imminent and potential harm to American 
consumers by these products, their purchasing power will act as a 
powerful deterrent and disciplining mechanism for these products. In 
short, those who continue with shoddy manufacturing practices will not 
be in business much longer.
    At the same time, the regulatory agencies must aggressively do 
their part.
    Given the sheer volume of defective products coming from one main 
source--more than 70 percent from China--we have a big regulatory 
challenge. As this chart shows, the vast majority of defective consumer 
goods come from China. It is a very troubling and dangerous picture.
    I agree with you, Mr. Chairman, the Consumer Product Safety 
Commission could and should provide additional oversight and 
inspections and that independent testers--like an Underwriter's 
Laboratories for toys--would give consumers more confidence.
    But I firmly believe that the problems we are now seeing with 
Chinese-made toys is just a symptom of a much larger problem that must 
be dealt with in a swift and vigorous way.
    I think it's fair to say that an open and transparent system of 
government like ours is less likely to produce defective products and 
is more likely to catch those that are. As one expert put it to me, 
democratic countries are better at producing safe products than non-
democratic ones.
    And one of the ways in which a non-democratic country like China is 
usurping the way in which business is being conducted around the globe 
is through manipulation of its currency. I realize that finance is a 
confusing and convoluted topic for most, but in this case, it's very 
simple. Ever since we granted the Chinese government PNTR back in 2000, 
the Chinese government has implemented capital controls to manipulate 
its currency as a matter of state policy.
    With an increasingly and alarmingly higher number of consumer goods 
being made in China--as much as 80 percent of the items in retail 
chains like Wal-Mart and Target--a currency that is undervalued by 40 
percent relative to the dollar is a systemic danger to the U.S. 
economy, if not to the international financial system. By unfairly 
keeping the Yuan undervalued, the Chinese government has boosted 
China's exports and has unfairly sucked foreign direct investment in 
export-production facilities, much of which comes from U.S. firms.
    This chart shows how $1.3 trillion have rushed into China over the 
past decade through foreign direct investment and trade. Every year, 
China buys more goods than we sell them and every year more American 
investment dollars are sucked into China. This is not surprising given 
that the Chinese currency is held at an artificially low level.
    Mr. Chairman, I want to show another chart that is extremely 
troubling.
    As hundreds of billions of U.S. dollars flow to China every year, 
China, in turn, sends support to bad actors like Iran, Sudan, Burma, 
Zimbabwe, and North Korea. As we know, these are dictatorships which 
commit acts of genocide and promote terrorism. Most disconcerting is 
that the Congressional Research Service has confirmed that China's 
sales of weapons, small arms, and munitions to Iran have ended up in 
the conflicts involving U.S. forces in Afghanistan and Iraq.
    Do we really want to stand idly by as the Chinese government 
manipulates its currency to give itself an unfair economic advantage in 
the world?
    Do we really want to keep the floodgates open as unsafe Chinese 
products made under coercive labor conditions enter this country? And 
do we really want U.S. consumer and direct investment dollars going to 
support Chinese sales of weapons to dangerous dictatorships around the 
globe?
    Mr. Chairman, it is time to end the status quo, ``business as 
usual'' relationship with China. We must act to apply U.S. 
countervailing laws to non-market economies and to make exchange rate 
manipulation actionable under such laws.
    Some will cry out that we cannot afford to take such actions. They 
will say that such actions will hurt American consumers by increasing 
prices.
    I say that we cannot afford not to take such actions. American 
consumers have already been hurt in the worst way. Their lives and 
their children's lives have been put at risk by unsafe products 
produced in Chinese manufacturing plants that are so suspect that they 
keep American inspectors out.
    American consumers have been hit over the head with a two-by-four. 
We cannot allow it to continue.

    Senator Durbin. Senator Mark Pryor of Arkansas is chairman 
of the Commerce Subcommittee on Consumer Affairs. Welcome 
Senator Pryor, and please give us your opening statement.

                    STATEMENT OF SENATOR MARK PRYOR

    Senator Pryor. Thank you, Mr. Chairman, and thank both of 
you for having this very important hearing on consumer products 
safety--specifically on toy safety. There's been an 
unprecedented number of toy recalls this year. Of course, we 
know the statistics, all the toy recalls are from China, and 
from our standpoint, that highlights a larger problem, and that 
is, the Consumer Product Safety Commission is not equipped to 
handle the challenges that it faces today in the American 
marketplace. The Consumer Product Safety Commission, back in 
the 1970s, had 900 employees, today it has less than one-half 
that.
    In the meantime, we see 10,000 new products that have come 
on the U.S. marketplace since the 1970s, and we've also seen 
major changes in the global marketplace. We see a Federal 
agency that has been withering on the vine--they have smaller 
budgets, they have less staff, they have inadequate labs. And 
this morning, Senator Inouye and I introduced legislation to 
overhaul and revamp the Consumer Product Safety Commission. 
This is much broader than toys--it really covers the entire 
scope of the CPSC, but for the benefit of today's hearing, I 
would like to mention four areas that we address in the 
proposed legislation.
    One is resources. Senator Durbin mentioned that a few 
moments ago--our bill would move this agency from the 401 
employees that it has today, up to 500 employees by 2013--
nowhere close to the 900 it once had, but nonetheless, we 
acknowledge that we're in a difficult budget situation, and 
we've talked to CPSC and others, and we think that that will 
get us on the way to where we need to be.
    Also we include money in there for upgrading the testing 
facilities, and upgrading our port inspection capabilities--
that's been a real problem that the CPSC has just not been able 
to keep up with.
    Second thing I want to highlight, is the bill would--the 
proposed bill would ban all lead in toys. And, I think every 
parent, every pediatrician in America would agree that we 
should just ban lead in all children's toys.
    Third thing I wanted to mention is the bill includes an 
independent, third-party safety certification. Senator Bill 
Nelson and Senator Durbin have been working very hard on that 
language and trying to make sure that that makes sense, and 
that parents and grandparents have assurance that all the toys 
they buy here in the United States meet U.S. safety standards.
    And the fourth thing I wanted to say about the legislation 
that we filed today, is it puts--it stiffens the penalties, it 
puts teeth in the current legislation, in the current law, that 
the current law just doesn't have in it, in order to get the 
attention of the wrongdoer--especially those who are repeat 
offenders, and those who are just unscrupulous, and don't care 
about the safety of our people in this country. So, we're 
putting that in there so they understand that there will be 
significant pain when they violate U.S. consumer safety law.
    Last thing I wanted to say before I turn it over to my 
colleagues here, is I need to publicly thank Senator Durbin for 
his efforts earlier this year, before there was all of the 
media scrutiny and all the attention on toys, but earlier this 
year to work very hard to get an additional $8 million for the 
Consumer Product Safety Commission, just to stop the bleeding 
in the interim while we have time to fix this agency. So, 
Senator Durbin, thank you for doing that.
    Senator Durbin. Thank you, Chairman Pryor.
    [The statement follows:]

                Prepared Statement of Senator Mark Pryor

    Good morning Mr. Chairman, Senator Brownback, members of the 
committee. I am excited to be here this morning to talk about an issue 
that is very important to me and the millions of American parents 
across the country--product safety, and more specifically toy safety.
    In recent months, we have seen an unprecedented number of toy 
recalls, ranging from Barbie dolls to magnet building sets to trains 
with lead paint. This massive proliferation of dangerous children's 
products on U.S. retailers' shelves highlights problems that I have 
been concerned with for some time--the efficacy of our consumer product 
safety standards, the resources we allocate to those agencies charged 
with preventing dangerous products from getting on shelves and into 
consumers' homes, and our ability to prevent dangerous imported 
products from penetrating our domestic markets.
    It is no secret that I believe we can and should be doing more to 
protect parents and children from dangerous products. The primary 
government agency charged with this important task, the Consumer 
Product Safety Commission (CPSC), though well-intentioned, has been 
hamstrung for many years by an inadequate budget, staff reductions, and 
by arcane rules and regulations. In order to ensure that the products 
on our shelves are safe for American families, I believe we must not 
only greatly increase the Commission's resources, but we must also 
overhaul the Commission's responsibilities and authority to reflect the 
21st century marketplace, where many products come from overseas.
    This is a problem that the Committee has recognized. Earlier this 
year, I offered an amendment to the budget to increase the resources 
available to the CPSC. This Committee responded by providing an $8 
million increase to the Commission's fiscal year 2008 budget. I would 
like to thank the committee, along with Senator Durbin, who has long 
been a strong consumer advocate, for their foresight. I appreciate your 
leadership and insight on this issue, and I look forward to working 
with you to ensure that these vital resources make it through the 
Senate and into law.
    As the Chairman of the Commerce Committee Consumer Affairs 
Subcommittee I also appreciate the input and ideas you have offered for 
a CPSC reauthorization bill. I have incorporated several of these ideas 
into my own reauthorization bill, which I will address shortly.
    As I have said, increased resources are an important piece of the 
puzzle when it comes to product safety--but it is not the only one. 
With that in mind, this morning I and Senate Commerce Chairman Inouye 
introduced legislation to provide a comprehensive overhaul of the 
Consumer Product Safety Commission. I plan to work with my friends on 
both sides of the aisle toward quick committee action with the hopes of 
having the bill available for action by the full Senate by the end of 
September. As Chairman of the Subcommittee, this is my number one 
priority.
    Although my bill will provide a comprehensive overhaul of the CPSC, 
I would like to briefly address four parts of my bill most relevant to 
our meeting here today.
    Resources.--The CPSC is in serious distress. Its budget has been 
significantly slashed at the same time counterfeit and dangerous 
imports have been flowing into our country. The agency is responsible 
for over 15,000 consumer products, in addition to emerging 
technologies, such as nanotechnology. Since its inception in the 70's, 
CPSC staff has shrunk from over 900 full time employees (FTE's) to 
around 401. President Bush has recommended further budget cuts. We 
cannot expect this overburdened agency to prevent dangerous toys and 
products from ending up on store shelves in its current condition. To 
address this, my bill authorizes $759 million over the next seven 
years, an increase of 58 percent over current levels. This increased 
funding would restore CPSC to at least 500 FTE's by 2013, beef up CPSC 
presence at our ports of entry, and allow them to update their 
antiquated testing facilities.
    Removing lead from children's products.--Congress should make it 
clear that lead in children's products is unacceptable. In recent 
weeks, we have seen the recall of hundreds of thousands of children's 
products in which lead was contained in the paint on these products. It 
is an unnecessary risk for us to take with the lives of our children. 
My legislation proposes an outright ban on lead in any children's 
products--from lunch boxes to toys. A brighter color Elmo or more 
durable Big Bird is simply not worth the risk.
    Third party certification of children's products.--It is vital that 
Congress and American companies restore the public's confidence in the 
goods they are purchasing. We can make strides in accomplishing this by 
requiring testing by government-certified third parties that children's 
products are safe and in compliance with government standards. With the 
holidays fast approaching, parents have a right to know the toys under 
their Christmas trees will be safe for their children. My legislation 
would require manufacturers of children's products to issue a 
certificate that their products conform to consumer product safety 
standards and require testing of these products to ensure their 
continued compliance.
    Penalties for Repeat Offenders and Unscrupulous Importers.--
Congress must send a strong signal to bad actors placing the public at 
risk. When it comes to safety, insignificant fines for violations 
should not be a part of the cost of doing business. My bill will 
increase civil fines up to $250,000 per violation with a cap of $100 
million from a current level of $8,000 per violation with a $1.825 
million cap. Criminal violators would be subject to up to 5 years in 
jail. Increasing civil and criminal penalties is a necessary step to 
encourage companies to value consumer safety above their bottom line.
    Though these are four integral aspects of my bill, other provisions 
of the legislation comprise an expansive mechanism for restoring 
consumer confidence in the American marketplace and ensuring their and 
their family's safety. Through a multi-prong approach of providing 
incentives to companies to protect the public, enhancing penalties when 
they do not, streamlining product safety rules and procedures, and 
ultimately ensuring that only safe products are entering the 
marketplace, we can restore the CPSC to a robust and proactive 
Commission for consumer safety.
    It is my hope that the committee and the Senate can act swiftly to 
pass this important legislation, and I would ask all of the members of 
the committee for their support in this endeavor. I want to thank the 
members of the subcommittee for giving this important issue your time, 
and I look forward to working with you as we move forward on this 
issue. I thank you for your leadership and for the opportunity to 
testify this morning.

    Senator Durbin. Senator Bill Nelson of Florida has been--
we've been working together, not just on toys, but children's 
products--I thank you for joining us. Senator Nelson.

                    STATEMENT OF SENATOR BILL NELSON

    Senator Nelson. Thank you, Mr. Chairman.
    We support what Senator Pryor is doing in his subcommittee. 
Hopefully, we can produce this out of our full Commerce 
Committee and get it moving.
    Senator Durbin, there is no excuse that the CPSC has a 
laboratory that looks like that. And a large part of what 
Senator Pryor has just outlined will address that.
    With regard to toys--it's very interesting what China just 
announced yesterday. China signed an agreement to prohibit the 
use of lead paint on toys exported to the United States. Well, 
what about all of the toys exported elsewhere? Let me show you 
some of these toys.
    That's good that they're saying that they've agreed to 
prohibit the use of lead paint in toys, but that's not the only 
problem with the toys. And certainly it's not the solution to 
the problem of lead paint elsewhere in the world.
    I went to one of our children's hospitals, and I asked them 
about these toys. They have a ``Laugh and Learn'' bunny that 
has a nose that comes off. That nose is just about that big. 
Guess what happens when a child swallows something that big? 
And the doctors were telling me about the operations that they 
had to conduct to extract those components of toys.
    The Magnetix building set--the doctors told me about what 
magnets inside a child's digestive system can do. Then, of 
course, you've got Thomas the Train. Again, it's the lead 
paint.
    I think Senator Klobuchar is going to show you an example 
of what happens when it gets into a child's mouth. And we know 
the effects of the lead paint. And then you have these Barbie 
accessories, again with lead paint.
    This just shouldn't be happening in America. And why is our 
CPSC letting it happen? If the Chinese Government is not going 
to police it, and if the Chinese industry isn't going to police 
it, then there's an easy way for us to insist--since 80 percent 
of all of our toys sold in America are coming from China--
there's an easy way to do it. And that is, go to an independent 
third party that sets safety standards, such as Underwriters 
Laboratory, or the American National Standards Institute, 
something like that, that is recognized, and get them to do the 
safety certification.
    Thank you, Mr. Chairman.
    [The statement follows:]

               Prepared Statement of Senator Bill Nelson

    Mr. Chairman, Members of the subcommittee, thank you for inviting 
me here today to speak with you about efforts to improve the safety of 
imported toys.
    As you are all aware, over the past few months the news has been 
filed with numerous reports of unsafe imported toys and consumer 
products.
    From children's jewelry containing toxic levels of lead to toys 
with detachable magnets that can cause fatal intestinal obstructions, 
this country has literally been flooded by a sea of dangerous products.
    Over the summer I was able to see some of the impacts of this 
first-hand.
    In July, I visited with a team of emergency room doctors in Tampa 
who had treated children with intestinal obstructions due to magnets 
that had detached from toys.
    In some cases, the doctors noted that the intestinal obstructions 
were so severe that the children had to undergo surgery to remove the 
obstructions.
    Invasive surgery like this is scary for most adults--so you can 
probably only imagine what it is like for a 4 or 5-year old to have to 
go through something like this.
    In August, I also visited with a family in Jacksonville who left 
two of their children in a room with a disco ball toy. The disco ball 
toy later overheated, caught fire, and emitted enough carbon monoxide 
to kill both children. Two young children are dead from playing with a 
seemingly innocuous toy.
    These incidents just shouldn't be happening--and it's time to 
finally take action to protect our kids from toxic toys.
    I'm encouraged by the early reaction from the Consumer Product 
Safety Commission and the toy industry to this problem.
    I think everyone now realizes that we must move quickly to restore 
confidence that imported consumer products--and in particular toys--are 
safe.
    The real question now is how we move to address this problem.
    On Monday, we received a policy report from the Administration's 
Import Safety Working Group.
    On Tuesday, the Consumer Product Safety Commission also announced a 
Memorandum of Understanding with the Chinese Government on toy safety.
    I appreciate the work that was put into both of these endeavors.
    However, I think now is the time to move beyond policy statements 
and aspirational goals--and pass real legislation to stop dangerous 
products before they get to the United States and into the hands of 
children.
    That's why I have introduced S. 1833, the Children's Products 
Safety Act of 2007.
    This legislation would require all toys and other products intended 
for children 5 years of age or under to be tested by a independent, 
third-party entity to ensure that they meet all applicable U.S. 
consumer products safety standards.
    Products that pass testing would receive a certificate of 
compliance that they meet safety standards.
    Products that fail would not, and would be prohibited from either 
importation or sale in the United States.
    It's one thing for exporters to state that they are complying with 
our safety regulations.
    What we need to do now is actually verify that they are complying.
    This legislation will do just that.
    Furthermore, we need to ensure that the Consumer Product Safety 
Commission has the funding and regulatory tools to identify new threats 
to children's safety.
    That's why I am also proud to be an original co-sponsor of Senator 
Durbin's legislation, S. 1847, which will re-authorize and reinvigorate 
the Consumer Product Safety Commission.
    Taken together, these two pieces of legislation will help to 
restore consumer confidence in children's toys and other consumer 
products.
    I look forward to working with my colleagues in the coming weeks to 
advance these items as soon as possible.

    Senator Durbin. Senator Klobuchar of Minnesota. Thank you 
for your interest in this issue, and your testimony today.

                   STATEMENT OF SENATOR AMY KLOBUCHAR

    Senator Klobuchar. Well, thank you very much, Senator 
Durbin, and thank you for your work in helping to build the 
CPSC and working to provide more resources. I don't think one 
guy in an office like that should be charged with ensuring the 
safety of $22 billion worth of toys. We clearly need change.
    And I also am proud to be on the Commerce Committee with my 
two colleagues who are working so hard on this issue.
    This issue hit home to us in Minnesota, when a little 4-
year-old boy named Jarnelle Brown died when he swallowed a 
little heart-shaped charm. And this charm was given to him for 
free with a pair of tennis shoes--he didn't buy it, his mom 
didn't buy it. And he didn't die from swallowing it, he didn't 
die from choking on it, he died when the lead leaked into his 
bloodstream. It fatally poisoned him, it took a number of days. 
And when the Minnesota Department of Health tested that charm, 
it was 99 percent lead. It came from China, and his blood level 
contained three times the amount of lead that health officials 
consider dangerous. This was preventable. This little boy 
should never have had that charm in the first place.
    As the parent of a 12 year old, like everyone else, I'm 
alarmed about the reports that have been coming out about toys. 
And you look at this Thomas the Train toy set, with--over 1 
million pieces of this toy recalled. This has got to stop.
    My daughter is 12, as I said, and I've got to tell you, she 
was sort of embarrassed by my interest in this issue, Mr. 
Chairman, because she didn't care about Sponge Bob, or Thomas 
the Train set. It was sort of embarrassing. But, when she heard 
that the Barbies were recalled, she came into the kitchen, and 
said, ``Mom, this is really getting serious.''
    And this is getting serious, and it's time for us to take 
action. These toys shouldn't be on our shores, they shouldn't 
be in our stores.
    I've introduced two pieces of legislation that have been 
incorporated into the bill that Senator Pryor referenced. The 
first is to effectively ban lead in children's toys. We looked 
at what was going on with the Consumer Product Safety 
Commission. Right now, what happens is they have a voluntary 
guidelines standard, and then after that, if it doesn't meet 
that standard, they have to go through a number of tests. There 
are proposals out there for rulemaking. But we decided, Mr. 
Chairman, it would be easier just to ban lead, allowing trace 
levels of lead at a level that's actually lower than what the 
CPSC uses. The amount of lead allowed would go lower, to .02 
percent for jewelry, which is important in cases like we've 
seen with the little boy in Minneapolis.
    For 30 years, we've been aware of the dangers posed to 
children by lead paint. It's time to change our current system 
of voluntary guidelines, use the force of law, and have an 
actual, Federal standard.
    The other piece of legislation that I introduced which is 
also incorporated into this bill will make it easier for 
parents to identify recalled toys. Now, imagine, if you're a 
parent, you've got a toy box, and you're trying to figure out, 
when you hear that Thomas the Train set has been recalled--
which one? Is this the caboose? Is this the box car? Or you've 
got a Barbie, and you're trying to tell the difference between 
Barbies--it's nearly impossible.
    So, our legislation requires that batch numbers or 
identifications be on these toys, so when there is a recall, 
it's easier for parents to tell what that recall is. It also 
requires that it be on the packaging, because while larger 
retailers are able to put things into their computer systems 
and stop the sale right when it occurs--and we've worked with 
the retailers on this--some of the smaller operations or online 
services wouldn't be able to do that. So, that's the other 
piece of the bill.
    Finally, the legislation makes it illegal to sell a 
recalled toy, taking action against those bad actors who are 
out there. We've seen too many headlines, we've had too many 
deaths, for one little boy in Minneapolis, and for the others 
that could be prevented. We have to stop just bemoaning the 
recalls, and we have to act now.
    Thank you for your leadership.
    Senator Durbin. Thank you, Senator Klobuchar.
    [The statement follows:]

              Prepared Statement of Senator Amy Klobuchar

    Good morning. First, I would like to thank you, Chairman Durbin, 
for holding this hearing today and thank you for all of the good work 
you have been doing to protect American consumers. I also thank this 
Subcommittee for its work to provide more resources to the Consumer 
Product Safety Commission to do its job. One guy sitting in an office 
charged with ensuring the safety of $22 billion worth of toys just 
isn't going to work.
    I would also like to acknowledge the work of my Commerce Committee 
colleagues. I applaud Chairman Pryor's efforts to provide the Consumer 
Product Safety Commission with the tools it needs to ensure that it can 
properly protect consumers, and I am pleased to have joined with 
Senator Nelson in cosponsoring legislation that would require third 
party testing of children's products.
    This issue has hit home in our state in a very tragic way. Last 
year, four-year-old Jarnell Brown died after swallowing a heart shaped 
charm he received for free with a pair of shoes. He didn't die from 
swallowing the toy; he didn't die as a result of choking on it. He died 
because the charm was composed almost entirely of lead--enough lead to 
fatally poison him. In fact, the charm contained so much lead that 
tests later revealed that the charm was ninety-nine percent lead. His 
blood lead level was three times higher than what health officials 
consider dangerous. That charm--that free charm--was made in China. 
What is most tragic about this little boy's death is that it was 
preventable. He never should have had access to the toy he was playing 
with in the first place.
    As a parent of a 12 year old, I am alarmed by recent reports 
showing a significant increase in the number of toys manufactured in 
China found to be unsafe. For months, news of recalled toys--like these 
Thomas the Tank Engines I have right here--has dominated our headlines. 
As a mom and a former prosecutor, I find it totally unacceptable that 
toys containing a known toxin are continuing to make their way into 
children's hands. This shouldn't happen in this day and age. Or as my 
twelve-year-old daughter said when her favorite Barbies were recalled--
``Mom, this is serious.''
    It is clear that we must take action to remove these toxic toys 
from our shores and from our stores. Parents have the right to expect 
that toys are tested and problems found before they reach a toy box.
    To achieve this goal, I have introduced two pieces of legislation: 
the first makes it easier to identify recalled products and illegal to 
sell them. The second will effectively ban lead from children's 
products.
    My legislation provides that lead in any children's product shall 
be treated as a ``banned hazardous substance.'' As millions of toys are 
being pulled from store shelves for fear of lead contamination, its 
time to make it crystal clear that lead has no place in children's 
products. The bill would set a ceiling for a trace levels of lead and 
empowers the CPSC to lower this ceiling even further through rule-
making as science and technology allow. This legislation will set clear 
standards for manufacturers, and speed the enforcement process for the 
CPSC.
    For thirty years, we've been aware of the dangers posed to children 
by lead paint. It is time to change our current system of voluntary 
guidelines and use the force of law to get the lead out of the hands 
and mouths of our children. Lead has no place in children's products.
    The other legislation I have introduced would make it easier for 
parents to identify a recalled toy already in their home. Countless 
parents have approached me to ask how they could possibly identify a 
toxic toy, and as a Mom I can tell you it is hard to tell one Barbie 
from another. A simple stamp added to the packaging and the toy itself 
will make it easy for parents to pick up the toy and match the stamps, 
recognize, and remove that unsafe toy from their child's hands.
    The legislation will also make it illegal to sell a recalled toy, 
taking action against those bad actors out there who are knowingly 
leaving recalled products on their shelves or placing them for sale 
online.
    We've seen too many headlines this summer to sit around and think 
this problem is going to solve itself. We can't just sit around 
bemoaning the recalls--it is time to act.

    Senator Durbin. Senator Pryor, what do you think is a 
realistic timetable on your reauthorization bill in the 
Commerce Committee?
    Senator Pryor. Well, we're going to try to move it as 
quickly as we can because we wanted to go ahead and get it 
filed before we really circulated it with co-sponsors, and to 
have it working. Just yesterday I started to talk about it to 
Senator Sununu about some of the specifics, and we're providing 
that to his office today, and trying to start that process.
    So the goal is to move as quickly as possible--we'd love to 
get broad-based, bipartisan co-sponsors on it, so I would love 
for members of this subcommittee to consider co-sponsoring that 
when the time is right.
    Senator Durbin. Thank you.
    Senator Nelson, of course our bill relates, not only to 
toys, but all children's products, geared for kids under the 
age of 5, they're going to have to go through some sort of 
independent testing. And I can tell you, I know you've had a 
chance to speak to some toy companies and retailers--they get 
it. They understand something has to be done. And third-party, 
certified laboratories would be a good way to move resources 
in, quickly. So, I'm hoping that we can move along those lines.
    And, please tell Abigail that we're going to do our best to 
make Barbie safe.
    Senator Klobuchar. Very good, Senator, thank you.
    Senator Durbin. Thank you, Senators, I appreciate it.
    And you're all welcome to join us, if you have time, here. 
And we're going to proceed--Senator Brownback, do you have any 
questions of the Senators?
    Thank you all for being here today.
    While the next panel comes forward representing the 
Consumer Product Safety Commission, these are of course, what 
this hearing is all about--as innocuous and small as they 
appear, the Magnetix toys and others that we've been discussing 
here today--as I said, I can recall giving these to my 
grandson, and playing with them over a holiday season.
    This little tiny magnet that I have here is really one that 
I've seen--as tiny as this is, you can imagine a toddler 
swallowing it, and swallowing two of these can be very 
dangerous, if not lethal. And they are incorporated in these 
toys, and can pop out and break.
    I'd like to thank the Acting Chairman of the Consumer 
Product Safety Commission, Nancy Nord, and Commissioner Thomas 
Moore for joining us. It was my understanding--correct me if 
I'm wrong--but Mr. Moore has to leave for a dental appointment, 
and would like to speak first? So, is that right?
    Mr. Moore [continuing]. I do have to leave for an 
appointment with my oral surgeon.
    Senator Durbin. Well, I'll let you and Ms. Nord decide the 
order of speaking, but invite you at this point.

STATEMENT OF HON. NANCY A. NORD, ACTING CHAIRMAN, 
            CONSUMER PRODUCT SAFETY COMMISSION
ACCOMPANIED BY THOMAS H. MOORE, COMMISSIONER, CONSUMER PRODUCT SAFETY 
            COMMISSION

    Ms. Nord. Thank you. My colleague is such a consummate 
gentleman, and I have to tell you that I enjoy our working 
relationship, so thank you so much, Commissioner.
    Mr. Moore. Thank you, thank you.
    Ms. Nord. I'm very pleased to be here to talk about toy 
safety. And because you can't really talk about toy safety 
without talking about the whole question of imports, what I 
would like to do is--in my oral remarks to you--give you a 
report of the second United States-China Safety Summit that was 
conducted here in Washington over the past 2 days. I have 
expanded on the whole subject of toy safety in the written 
comments that I have submitted to you, that will be made part 
of the record, I trust.
    And I am pleased to report that this summit has marked a 
significant step forward in advancing consumer product safety 
with regard to toys and other products imported from China.
    I've just left a post-summit meeting with the Canadian 
delegation to be here with you this morning to give you this 
report. And I'm going to be returning to our Bethesda offices 
this afternoon for continued conversations with other foreign 
delegations.
    I'm especially pleased to report to you that the CPSC has 
come to an agreement with our counterpart agency in the Chinese 
Government--the General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ)--to take immediate steps to 
stop the use of lead paint in the manufacture of toys.
    Furthermore, AQSIQ has also agreed to increase their 
inspections of products destined for export to the United 
States, and to assist the CPSC in tracing hazardous products to 
the manufacturer, distributor, and exporter in China.
    Additionally, the summit has launched new work plans for 
our four ongoing product working groups: fireworks, lighters, 
and electrical products, in addition to toys. These are 
significant achievements, and these agreements signal that the 
Chinese Government is serious about working with the CPSC to 
keep dangerous products out of American homes.
    We are pleased by these agreements, and appreciate China's 
responsiveness to our proposals. But, we will of course take 
heed of the advice of our 40th President, and that is, ``Trust, 
but verify.''
    CPSC's formal relationship with its Chinese counterparts 
began over 3 years ago, when few in Washington were talking 
about the safety of imports. The relationship that was 
initiated then, is paying dividends now. While we have much, 
much, much more work to do between our two nations, we have 
made great progress this week in the area of consumer product 
safety. And I look forward to our continuing work with the 
Chinese to achieve concrete, measurable results.
    I'd also like to note that the Toy Industry Association 
has, this past week, announced a new initiative to enforce toy 
safety standards. The toy industry was one of the first groups 
that I reached out to when I was named a Commissioner, just 2 
years ago. We've had many discussions since then, and I have 
commended them on this initiative.

            CONSUMER PRODUCT SAFETY COMMISSION MODERNIZATION

    Mr. Chairman, I believe that we have to look at, what I 
would call, organic changes to the CPSC, if we are to continue 
to tackle the challenges of the 21st century. That involves 
engaging, not only China, but our other trading partners, as 
well, in this global economy. And in an effort to do that, we 
have signed memoranda of understanding with 10 other nations in 
addition to China, as well as the European Union.
    Organic change also involves making use of state-of-the-art 
technology. As you know, I've requested additional money in our 
budget request for upgrading our IT infrastructure, and I thank 
you very much for those additional funds, and more. I can 
assure you that they will be put to good use.
    Organic change also involves changes to our statute. As you 
know, Commissioner Moore and I have submitted proposals to the 
Congress in this regard, and I'm delighted to hear that Senator 
Pryor has now introduced his legislation. I am looking very 
much forward to the opportunity to sit down with Senator Pryor 
and the other members of the Commerce Committee to talk about 
the changes that need to be made to our statutes.
    I appreciated hearing your report of your conversation with 
Vice Minister Wei this morning, and I want to thank you for 
emphasizing the important safety messages that we discussed 
with him these past 2 days. He--during our conversations--asked 
that I help organize a delegation trip to China to look at the 
toy manufacturing region in China, and I told him I would do 
so. So, with that, I will be following up with your staff to 
try to carry out that request that he made to me.
    I want to thank you for giving me the opportunity to update 
the subcommittee this morning. I know that your time is very 
limited, so I will keep my opening remarks to these, and I will 
look forward, very much, to answering your questions, sir.
    Senator Durbin. Thank you very much, Chairman.
    [The statement follows:]

                Prepared Statement of Hon. Nancy A. Nord

    Good morning, Mr. Chairman. I come before the Committee today to 
discuss the important issue of consumer product safety and specifically 
recalls of children's products, the Consumer Product Safety 
Commission's work to improve the safety of imported toys, and important 
proposals to modernize the agency's statutes.
    As you know, the U.S. Consumer Product Safety Commission (CPSC) is 
a small, independent and bipartisan agency established by Congress and 
charged with protecting the public from unreasonable risks of injuries 
and death associated with more than 15,000 types of consumer products 
under the agency's jurisdiction. Since its inception in 1973, CPSC's 
work has contributed substantially to the decline in the rates of 
injury and death related to the use of consumer products.
    While we are proud of the agency's many achievements, consumer 
product safety is never a completed task but always an ongoing process 
of research, standards development, enforcement and public education. 
Ever more technologically complex products, expanding retail sales over 
the Internet, and an unprecedented surge of imports, especially from 
China, are a few of the new dynamics that are continuously challenging 
the Commissioners and the professional staff at the agency.
    In recent years, about two-thirds of all U.S. product recalls are 
of imported products, and the large majority of those products are 
manufactured in China. A 2007 study showed that the value of U.S. 
imports from all countries of consumer products under CPSC's 
jurisdiction was $614 billion in 2006. Of this amount, the value of 
U.S. imports of consumer products manufactured in China was $246 
billion, comprising approximately 40 percent of all consumer products 
imported into the United States. From 1997 through 2004, the share of 
all U.S. imports of consumer products from China increased by almost 
300 percent.
    I would like to report to you in more detail today on the 
initiatives that the CPSC has undertaken in recent years to address the 
growth in imports and to relate to you what actions we are planning for 
the future.
    First, I am pleased to report to the committee that this week's 
long-planned U.S.-Sino Consumer Product Safety Summit has marked a 
significant step forward in advancing product safety with regard to 
toys and other imports from China.
    In a cooperative effort to ensure the safety of children's toys, 
the CPSC yesterday announced an agreement with its product safety 
counterparts in the Chinese government aimed at stopping the use of 
lead paint in the manufacture of toys and addressing other product 
safety issues. China's General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ) has agreed to take immediate action 
to eliminate the use of lead paint on Chinese manufactured toys 
exported to the United States. Lead paint on toys sold in the United 
States has been banned since 1978.
    In addition to the lead paint agreement, the two agencies announced 
work plans for cooperation in four product categories: Toys, Fireworks, 
Cigarette Lighters, and Electrical Products. The Work Plans provide a 
roadmap for bilateral efforts to improve the safety of these products, 
which represent some of the most frequent hazards under CPSC's 
regulatory jurisdiction.
    This is an important signal from the Chinese government that it is 
serious about working with the CPSC to keep dangerous products out of 
American homes. We will be looking for meaningful cooperation on the 
ground--that means not just with the Chinese government, but also with 
industry at both ends of the supply chain.
    The Summit also resulted in an agreement by AQSIQ to increase their 
inspections of consumer products destined for the United States and to 
assist CPSC in tracing hazardous products to the manufacturer, 
distributor and exporter in China. The two agencies will review the 
plans' effectiveness within one year to identify possible areas for 
improvement.
    The Summit is a part of CPSC's four part action plan on Chinese 
imports. The issue of Chinese imports cannot be adequately addressed by 
any one remedy but rather requires a multi-pronged approach to the 
problem. The CPSC's plan of action includes: dialogue and initiatives 
with the Chinese government; working with the private sector including 
Chinese manufacturers directly; increased surveillance and enforcement 
activities at the borders and within the marketplace; and modernization 
of our governing statutes.

                INITIATIVES WITH THE CHINESE GOVERNMENT

    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 in July 2006, 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 outlines specific cooperative actions to be taken by CPSC and 
AQSIQ to improve the safety of consumer products: training; technical 
assistance; a mechanism to provide for ``urgent consultation'' when 
necessary; information exchanges; and the creation of 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. In 
May 2007, I traveled to China with a delegation of top CPSC officials 
for in-person discussions of the issues identified by this process.
    This work culminated in this week's Second Biennial U.S.-Sino 
Consumer Product Safety Summit on which I reported at the beginning of 
my testimony, and I am looking forward to our continued work with the 
Chinese as we implement those agreements.
    Another program recently implemented is notification to Chinese 
government officials and the involved Chinese manufacturer of a 
consumer product that was recalled in the United States. The agency 
sends letters to the Chinese government and the Chinese manufacturer, 
in both English and Mandarin, briefly explaining the recall and 
enclosing a copy of the CPSC press release announcing the recall. I 
believe it is critical that the Chinese government be notified formally 
of the recall and, where known, the identity of any Chinese 
manufacturer whose product is the subject of a safety action.

                PRIVATE SECTOR/MANUFACTURERS INITIATIVES

    The second prong of our plan to address Chinese imports is to work 
with the private sector including Chinese manufacturers. One of the 
Commission's first initiatives in responding to the growth in imports 
was to establish the Office of International Programs and 
Intergovernmental Affairs to support a comprehensive effort to ensure 
that imported consumer products complied with recognized American 
safety standards. The mission of CPSC's International Programs Office 
is to coordinate the agency's work with other countries regarding 
safety standards development and harmonization, as well as inspection 
and enforcement activities.
    A major emphasis of this program is working with foreign 
manufacturers to establish product safety systems as an integral part 
of their manufacturing process. We have found that many overseas 
manufacturers, particularly those from the developing world, are either 
ignorant of existing voluntary and mandatory standards or simply choose 
not to design and manufacture their products to those standards.
    As part of our plan to address this problem, in 2005 the CPSC 
published the Handbook for Manufacturing Safe 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 Mandarin and 
distributed in China.
    In 2006 CPSC facilitated the translation of the identification and 
scope provisions that summarize the requirements of nearly 300 U.S. 
mandatory and voluntary consumer product safety standards into Mandarin 
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 the identification and scope 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 translations of the identification 
and scopes provisions of the selected standards are available at 
standardsportal.org, a website operated and maintained by ANSI.
    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. We have also 
talked with the toy industry which is planning to move forward with 
such a program.

                 INCREASED SURVEILLANCE AND ENFORCEMENT

    The third 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 allows CPSC to 
facilitate the efficient collection and analysis of records of incoming 
consumer products to identify likely shipments of violative products 
before they can be introduced into the stream of commerce. 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.
    CPSC staff is also working with various domestic and international 
associations and standards groups to assure that a strong message is 
being delivered to Chinese manufacturers and exporters.

                        STATUTORY MODERNIZATION

    The fourth prong of our plan of action for Chinese imports is the 
modernization of our governing statutes to better allow us to address 
the large influx of imports. Congress was farsighted when it crafted 
the Consumer Product Safety Act, the CPSC's governing statute. When the 
law was written in 1973, Congress recognized that the agency could not 
impose U.S. law in foreign countries against foreign manufacturers, so 
our statutes hold everyone in the product's stream of commerce in the 
United States responsible and potentially liable. In brief, the 
American importer, as well as the domestic retailers and distributors, 
are held responsible when we cannot reach an overseas manufacturer.
    However, what Congress could not foresee 34 years ago was the flood 
of exports that would be entering the United States in the 21st 
Century. That is one reason that I believe it is in the best interest 
of consumer product safety to modernize CPSC's statutes and to 
strengthen the agency's hand in protecting the American public.
    As you know, Mr. Chairman, the CPSC was last reauthorized in 1990. 
Clearly, the dynamics of the marketplace have changed dramatically 
since that time. In that regard, I would like to submit for the record 
a copy of a working paper that describes proposed revisions to CPSC's 
statutes that I believe will help the agency respond to the 21st 
Century challenges of growing imports, emerging hazards and modern 
retail technology. For example, it would address obvious gaps in our 
statutes by making it unlawful to sell a recalled product in commerce.
    Mr. Chairman, the CPSC is determined to make certain that imported 
consumer products meet the same high standards that we require of 
products manufactured in America. While the CPSC historically has been 
a relatively small agency, I believe that with the proper tools we can 
continue to accomplish our mission of making certain that the products 
American families bring into their homes and playgrounds are safe and 
sound.
    I look forward to answering your questions and working with the 
Committee on these important issues.

    Senator Durbin. Commissioner Moore.

                      STATEMENT OF THOMAS H. MOORE

    Mr. Moore. Mr. Chairman, ranking member, and members of the 
subcommittee----
    Senator Durbin. Would you pull the microphone closer to you 
there, please?
    Mr. Moore. There it is.
    I want to thank you for providing me with this opportunity 
to present testimony today on the important issues surrounding 
the improvement of consumer product safety in our country. As 
I've said before, I'm 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 finds itself in.
    For the first time since I came to the Commission over 12 
years ago, I have the sense that there's a realization of the 
need for both a substantial and sustained increase in our 
funding level, as well as the need for important changes in our 
statute.
    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've 
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 buyouts, we've lost some very key 
staffers. The experience we have lost will take years to 
recover.
    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 be 
an 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. Fortunately, Congress--both the House and the Senate, 
have done just that. I support an incremental approach to 
increasing our budget and staff. Since we require a yearly 
increase of about 3 to 4 percent to keep current with increases 
in salary 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.
    This summer has been the summer of toy recalls. 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 toys and children's jewelry. The 
safety issue associated with this increase in imports has 
created new challenges for our Commission. We would like to 
have additional resources to increase surveillance and 
enforcement activities at the ports, and in the marketplace. 
And we are working with interested congressional members to 
modernize our governing statutes, to give us more leverage 
through the regulatory process, and our enforcement activities.

                      LEAD IN CHILDREN'S PRODUCTS

    As far as the lead in children's products issue--I wish 
that the Commission had the authority to find it unacceptable 
for any--any--amount of lead, or any other toxic substance, to 
be in a child's, or be in children's products. However, our 
statute requires us to assess the accessibility of the lead, 
and this is a key measure under the Federal Hazardous 
Substances Act.
    The Commission did issue a guideline document, back in 
January 1998, which went so far as to urge manufacturers to 
eliminate lead in consumer products. In response to that 
guidance, in August 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. Even before several recent highly publicized recalls 
this summer, 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's bipartisan 
support for the Commission to make major changes to the 
Commission's statutes.
    Again, I am gratified by the attention that Congress is 
paying to the Commission, and I'm hopeful that we see 
significant results from all of our efforts. I know that the 
American public will be thankful. Thank you, and I'll be happy 
to try to respond to questions.
    Senator Durbin. Thank you, Commissioner Moore.
    Mr. Moore. Thank you.
    [The statement follows:]

                 Prepared 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 
today on the important issues surrounding the improvement of consumer 
product safety here in the United States. As I have said before, 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.''
    We now sit here less than six months later because of 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. We want 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. 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 be an 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. 
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 United States. 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 been the summer of the toy recalls. 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 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 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. We would like to 
have additional resources to increase surveillance and enforcement 
activities at the borders and in the marketplace and we are working 
with interested Congressional members to modernize our governing 
statutes to give us more leverage through the regulatory process and 
our enforcement activities.
    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, ``you will be held 
accountable.'' The Commission must have the sufficient resources, the 
adequate authority and the internal willingness to deliver that 
message.

                   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, 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 (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 ten 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 lead containing products.
    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 fiscal year 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 $30 million. 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.

                               CONCLUSION

    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.
    Again, 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 will be thankful.

                     UNITED STATES-CHINA AGREEMENT

    Senator Durbin. And if you do have to leave early for your 
dental appointment, it's understood. I thank you very much for 
your being here today.
    Chairman Nord, I want to reflect, for a moment, on the 
agreement yesterday with the Chinese. When I met with Minister 
Wei, he told me that China had a zero-tolerance policy now, 
when it came to lead paint. We, in the United States have 
banned all but the tiniest amounts of lead paint for over 30 
years--so, what's new? This agreement that you say has been 
reached reaffirms what has been the law in the United States 
for 30 years, and what is already the policy in China. Are you 
saying that the Chinese have now adopted a new and different 
standard when it comes to lead paint?
    Ms. Nord. I think, sir, that that's a question you would 
really need to put to the Chinese, I----
    Senator Durbin. But you entered into the agreement with 
them.
    Ms. Nord. Yes. And the Chinese have committed to take 
immediate action to eliminate all lead paint used in toys 
exported to the United States. Why it is there is a very 
legitimate question to put to the Chinese, and to put to the 
toy industry that is going to be following this panel. And I 
would hope that you would put it to them, and I would be very, 
very interested in knowing their answer to it.
    Senator Durbin. You don't know whether this agreement 
represents a change in the lead standards for products exported 
from China?
    Ms. Nord. What I know, sir, is that we have banned lead 
paint in this country for 30 years. And as I have told you 
before, and as I told Senator Klobuchar very recently--we will 
not tolerate it, and we will enforce the law. And why it is 
showing up in toys manufactured in China is a very, very 
serious and legitimate question, and I hope you put it to the 
manufacturers. And I'd like to know their answer to it.

                           CHILDREN'S JEWELRY

    Senator Durbin. I think we all would.
    When it comes to children's jewelry, we know that we have a 
serious problem here, and the Consumer Product Safety 
Commission has acknowledged that, with significant recalls of 
150 million pieces of children's jewelry in 2004.
    Ms. Nord. Yes.
    Senator Durbin. Recent stories indicate that we are still 
receiving lead jewelry from China. What steps has the Consumer 
Product Safety Commission taken to stop these shipments, to 
inspect these shipments, and to protect American families from 
exposure to this lead-based children's jewelry coming from 
China?
    Ms. Nord. I outlined a number of steps that the Commission 
has taken in a recent letter to you.
    The Commission started its activity in 2004, of course, 
well before I was there, and--are you leaving?
    Mr. Moore. Yes, I've got to go.
    Ms. Nord. Can I come with you?
    Senator Durbin. You're facing your own dentist here.
    Ms. Nord. It's a sad day when you'd rather go to the 
dentist.
    Senator Durbin. Is it safe?
    Ms. Nord. The Commission initiated activity in 2004 dealing 
with lead jewelry, and again, I detailed this in a recent 
letter to you. The Commission was very concerned about this. 
They did a rather non-scientific survey of what was out there, 
and as I reported in my letter to you, they found significant 
numbers of pieces of jewelry that had lead in it. When I say 
significant, sir, I'm meaning most of it. Unfortunately, 
because that survey was done in a rather unscientific way, I'm 
not going to--in this setting--get into the numbers, but 
basically most of it was lead jewelry. Because of that, the 
agency initiated an enforcement policy which we put out there 
that said that if we see lead at above the .06 parts per 
million standard, we will consider that a de facto substantial 
product hazard, warranting a recall. And that has been the 
policy in place since 2005.
    In October 2006, we did another nonscientific survey of the 
marketplace. Frankly, we were pleased that we only saw 20 
percent, but obviously 20 percent is a whole lot higher number 
than it should be----
    Senator Durbin. It was 20----
    Ms. Nord [continuing]. It had gone from virtually all, to 
20 percent.
    Senator Durbin. Does 20 percent represent millions of 
pieces of----
    Ms. Nord. Yes.
    Senator Durbin [continuing]. Children's jewelry, still 
coming into the United States with lead?
    Ms. Nord. Absolutely, absolutely.
    Senator Durbin. So, what actions are you taking now to stop 
those products from reaching the shelves of American stores?
    Ms. Nord. We have initiated rulemaking which would 
basically just ban the importation of jewelry with lead in it.
    In order to take action, we need a legal basis on which to 
do it. The enforcement policy was a good tool. But if we are 
going to be able to take effective enforcement policies, we 
need to have the underlying regulation in place, and that's 
what we're doing.
    Senator Durbin. When did you initiate the rulemaking?
    Ms. Nord. I became acting Chairman in July 2006, and this 
was one of the very first things I initiated.
    Senator Durbin. And so----
    Ms. Nord. And we got the ANPR issued--just before we lost 
our quorum in January 2007.
    Senator Durbin. And so, as a result of that rulemaking, how 
many of these dangerous lead jewelry products has the CPSC 
recalled and removed from the shelves?
    Ms. Nord. Sir, I would have to get back with you--I just 
don't----
    Senator Durbin. Any? Have you recalled any?
    Ms. Nord. I'm sure we have, but I'm going to have to come 
back to you with those details.
    Senator Durbin. If you would, please.
    Ms. Nord. I just don't have them off the top of my head.
    [The information follows:]
 Children's Metal Jewelry Recalls--February 3, 2005 to October 10, 2007
    The U.S. Consumer Product Safety Commission (CPSC) announced a new 
enforcement policy to reduce the potential health risks from lead in 
children's metal jewelry on February 3, 2005.
    Between that date and October 10, 2007, the CPSC has announced 37 
recalls of children's metal jewelry involving 17,692,170 units of 
jewelry products.
    Three of these recalls were accountable for over 72 percent of the 
units recalled:
  --(1) Stravina Operating Company
  Children's metal necklaces and zipper pulls
  6,000,000 units
  November 30, 2005
  --(2)  A&A Global Industries
  Children's bracelets
  4,000,000 units
  April 3, 2007
  --(3)  Hirschberg Schutz & Company
  Metal charms
  2,800,000 units
  March 3, 2005

            CONSUMER PRODUCT SAFETY COMMISSION'S LABORATORY

    Senator Durbin. You've seen this photo, it's probably 
familiar to you.
    Ms. Nord. It surely is, sir.
    Senator Durbin. And, could you explain to me, when most 
Americans feel that their Government is there to help them out, 
protect them from dangerous products--could you explain to me 
what we're looking at here, and what this reflects in terms of 
the toy safety inspection capacity of the Consumer Product 
Safety Commission?
    Ms. Nord. Yes, but I think actually that photo represents a 
bigger question.
    The Consumer Product Safety Commission's laboratory in 
Gaithersburg, Maryland is a 1950s-era Nike missile testing 
site. It is an incredibly inefficient facility. We've got a 
number of different buildings, some of them--I hate to admit--
do not even meet code.
    The CPSC's laboratory must be modernized. And we've been 
talking to the Congress for a number of years about that.
    This situation cannot continue, sir. And, we are--as I 
discussed with our authorizers in March--we are trying very 
hard to work through some issues with the General Services 
Administration (GSA), in order to modernize our facilities, and 
I am frankly, not happy with the progress that is being made. I 
was very, very pleased that the staff of both the 
Appropriations Committee and the Commerce Committee were able 
to go out to our laboratory about 2 weeks ago, to see 
firsthand, the situation there.
    However, having said all that, generally--with respect to 
toy testing, that is a piece of our toy testing facility. We do 
a number of tests out there. There has been quite a bit of 
press play about our lonely toy tester, single toy tester--I 
think you showed a picture of him.
    He basically spends his time doing small parts testing, 
drop testing. If there are other issues dealing with toys, for 
example--lead testing or electrical testing--there are 
obviously other people in the laboratory that do all that. But, 
Bob's our small parts guy.
    Senator Durbin. Thank you.
    Senator Brownback.

                               LEAD PAINT

    Senator Brownback. Thank you, Mr. Chairman.
    Chairman Nord, I want to make sure I understand--you're 
saying serious actions will take place if the Chinese do not 
comply with the lead paint rule that you're putting in place, 
is that correct?
    Ms. Nord. No, what I said was that we reached agreement 
that the Chinese would take immediate steps to eliminate the 
use of lead paint, and at our summit over these last 2 days, 
the Chinese went through and listed a number of actions that 
they intend to take, and I'd be happy to----
    Senator Brownback. What I want to understand from you is 
that if lead continues to show up in toy products, what will 
your Commission do?
    Ms. Nord. Well, I think that we have to address not only 
this issue, but the whole question of unsafe imports with 
respect to toys in--as I said earlier--in an organic way. You 
can't look at one kind of activity and say, ``That's going to 
solve the problem,'' because this is a problem that needs to be 
solved on a number of different levels. I've outlined----
    Senator Brownback. Chairman, I want to hear you say, 
``These products are not going to enter our stores.'' If that's 
what you continue to find.
    Ms. Nord. Well, I'm happy to say that. That, sir, almost 
goes without saying. We have been trying to enforce this lead 
paint ban, and that's why you have seen these recalls. However, 
in order to more effectively address the question of unsafe 
imports, what we want to do is make sure that the product is 
manufactured safely in the first place. And that requires, 
first of all, the Chinese Government getting together with us, 
and backing this. And I'm hopeful that our activities over the 
last 2 days resulted in that, or at least pushed it forward. 
We've got to make sure that Chinese manufacturers and exporters 
understand their legal obligations, we need to make sure that 
the toy industry is working on this, and then we have to 
enforce the law.
    Senator Brownback. But isn't it best to say, ``Look, if 
there is any lead in any of these products, the products don't 
enter America, period.''
    Ms. Nord. Well, that is the law on lead paint.
    Senator Brownback. And that that's what you're going to 
enforce.
    Ms. Nord. That's absolutely correct, sir.
    Senator Brownback. Okay, and including just identifying 
factories that are producing products like this, and saying, 
``No more products coming from here until you clean this 
problem up.''
    Ms. Nord. That's part of what was agreed to over these past 
couple of days.
    Senator Brownback. Well, here's where I've got a little 
problem.
    Ms. Nord. Okay.

                              ENFORCEMENT

    Senator Brownback. I worked in the trade field in 1990, 
1991. And then we were pushing the Chinese to protect our 
intellectual property rights. Saying, you know, we put a movie 
out, and before it's shown here, is being sold on the streets 
in Beijing. I've actually been in Beijing, and been offered a 
movie for sale by a counterfeiter, before the movie came out 
here. So, I've actually experienced this.
    And we started this back in the early 1990s, and they said, 
``Yes, yes, we'll enforce your intellectual property rights,'' 
and here we are in 2007, and they still don't honor our 
intellectual property rights.
    But now we're on something that has a consumer safety issue 
with it. This is about the safety of the children, the safety 
of the consumers, the safety of pets in this country. And we 
should have zero tolerance, and I think we need to start 
pulling the club out. And say, ``We're going to start shutting 
all of these down.'' If these products are coming in, and we 
can't be sure that the ones that are imported are good. I 
think, you have to just really pull the heavy club out, and 
say, ``That's the way it's going to be. And I'm going to use 
every tool I've got to make sure that happens.''
    Ms. Nord. Well, sir, I think I gave you a very long-winded 
answer to get to that point. That's exactly what we're trying 
to do.
    Senator Brownback. And it's what you will do.
    Ms. Nord. You have my commitment, sir.
    Senator Brownback. And if you need any additional 
legislative authority from us to do it, let us know.
    Ms. Nord. Sir, I greatly appreciate that. I sent up to the 
Hill a proposal, and I hope that we will see forward action on 
legislation.
    Senator Brownback. And, let us know of any personnel that 
you may need.
    Ms. Nord. Of course.
    Senator Brownback. Are you having any trouble getting into 
Chinese manufacturing facilities to review products? Or do you 
even have that authority and capacity?
    Ms. Nord. We don't have that authority, we don't have that 
capacity, sir--we don't have people.
    Senator Brownback. Would you like to have that?
    Ms. Nord. We don't have people in China.
    Senator Brownback. Would you like to have people in China--
do you think that is important, because you've said we need to 
get at the base of the manufacturing--do you need to be able to 
inspect the plants there?
    Ms. Nord. Well, we wouldn't have the authority to inspect 
the plants there, but certainly I have been talking, actually, 
internally for some time, about what we could do to get some 
presence in China.
    Senator Brownback. Do you want that? Do you believe you 
need the authority to enforce these standards that you've 
articulated?
    Ms. Nord. Legally, I'm not sure how we would be able to do 
that. Our statute allows us to enforce our law against 
importers--everyone in the stream of commerce within the United 
States. But, I don't think that we would legally be able to go 
in and enforce a manufacturing standard in China itself.
    Senator Brownback. Well, that's what I'm asking, whether 
that's something we should look at.
    Ms. Nord. Well, we don't have that authority now, sir.
    Senator Brownback. Mr. Chairman, I'd like another round if 
we could?
    Senator Durbin. Senator Klobuchar.

      CHANGES TO THE CONSUMER PRODUCT SAFETY COMMISSION'S STATUTES

    Senator Klobuchar. Thank you, Senator Durbin.
    Thank you, as a freshman Senator, thank you for allowing me 
to serve on the Appropriations Committee for 2 hours.
    And I appreciate, Chairman Nord, you being here, and the 
work you're doing to try to fix this problem.
    You and I have talked about the need to remove lead from 
children's products, and make sure we don't have these kinds of 
toxic toys in our country. And I think you've expressed your 
frustration, both in committee hearings and to me, about the 
process, and the rules, and how they work, and how it's 
difficult for you, and how you would prefer--and I don't want 
to put words into your mouth--but some kind of legislative ban 
that's clearer than having to go through various stages that 
you do, that delays things.
    And could you talk a little bit about what would help you, 
statutorily, to make it easier to make sure that we can 
immediately ban these products?
    Ms. Nord. Yes, I'd be happy to. Earlier this summer, I sent 
up to the Hill a legislative proposal that laid out things that 
I thought that the Commission should have--tools the Commission 
should have in order to do our job better. Included in that was 
the authority to require a certification to our safety 
standards, across all of our statutes.
    Right now, we enforce five different statutes. Only the 
Consumer Product Safety Act has a provision that allows for 
certification. So, that means when somebody is manufacturing, 
selling a product that is subject to a certification--or, a 
mandatory safety standard, they have to--as a part of the law--
certify that they are meeting it. And that's a very useful tool 
for us to have.
    But that authority doesn't exist across the other statutes, 
and the Hazardous Substances Act is the act where we regulate 
toys. So, we don't have that authority now, and I would very 
much like to have that authority.
    The other thing that is very interesting, and this may be 
getting down in the weeds a bit, so I apologize--our lead paint 
ban is under the Consumer Product Safety Act, not under the 
Hazardous Substances Act. I just told you, there's a 
certification provision there?
    Senator Klobuchar. Yes.
    Ms. Nord. The way the statute is written and past 
Commissioners have interpreted it, is it only goes to 
standards, it doesn't go to bans. So, we don't have an existing 
requirement right now that importers certify that there is no 
lead paint in their toys.
    I have asked the General Counsel to advise on, whether 
under some other provisions of the statute, we might be able to 
require that, and if so, to put together a briefing package for 
the Commission, so that we can put in place that requirement. 
Why it has never been acted on prior to this time, I don't 
know. Commissioner Moore might have been able to expand on 
that, but I do not know.
    Senator Klobuchar. Okay, thank you, and again, I hope you 
look at our legislation, where we've basically put that ban in 
place, with some trace levels, which are actually lower than 
the lead paint levels that are allowed, and then looked at a 
lower level for jewelry, which I know you've been working on. 
Because it's my understanding the rulemaking process can take 
them over 2 years, and we're just trying to give you the tools 
to act quickly.

          CONSUMER PRODUCT SAFETY COMMISSION'S RECALL PROCESS

    The recall process--could you talk about what you do now to 
make sure that these recalled products aren't for sale? Because 
there have been reports about this. We've worked very well with 
Target, Toys ``R'' Us, and some of the big retailers who've 
worked with us to talk about how they make sure that these 
products aren't sold, and we appreciate the work they're doing. 
But I'm talking about when things are in the stream of 
commerce, or they're up on the web, or they're on eBay. What 
can you do, and what tools could help you with that?
    Ms. Nord. Well, again, one of the things that I asked for 
in my earlier legislative proposal was making it illegal to 
sell a recalled product, and I think that would be a very 
helpful tool for the Commission to have. Right now, what we do 
is, once a recall is initiated and announced, we undertake a 
number of surveillance activities, including going into the 
stores, going on the web, doing secret shopping kinds of 
things, trying to purchase recalled items. We have a 
relationship with the major online auction houses, and have 
agreement with them that they will not sell recalled products. 
But again, you know----
    Senator Klobuchar. Would it help to have the batch numbers 
on the packaging or on the toys?
    Ms. Nord. Anything that provides traceability is very 
helpful.
    Senator Klobuchar. Okay, thank you.
    And can I just ask, since I'm not on the Appropriation 
Committee, and it looks like you need enormous more resources, 
and you talked about revamping things--has the administration 
been coming in, every year, asking for more resources to fix 
these thing?
    Ms. Nord. Well, every year our budget request has been a 
little bit higher than the last year, but----
    Senator Klobuchar. Has it been of the extent that you would 
need to revamp a lab like this?
    Ms. Nord. You know, again, the lab modernization issue is 
something that we have been talking to the Congress and to the 
administration about for some time. I think everyone 
understands that the lab needs to be modernized.
    What the problem is, is that we've got this facility out 
there. What GSA was looking at initially was, either 
demolishing the whole thing and rebuilding--which would have 
been enormously expensive. What we've been doing in the past is 
just Band-Aid-type activities to try to keep it somewhat 
current, but you know, that isn't very cost effective, either. 
So, we are now talking with GSA about some real estate 
solutions that I hope will get us into a facility that is 
modern, and that does the job that we need to have done.
    Senator Klobuchar. Thank you.

                     UNITED STATES-CHINA AGREEMENT

    Senator Durbin. Thank you, Senator.
    Chairman Nord, going back to my earlier questions. When I 
asked you if the new agreement meant that there would be a new 
lead standard for products exported from China, you said I 
should ask the Chinese.
    Ms. Nord. I'm sorry--I didn't understand that to be your 
question, sir.
    Senator Durbin. Well, go ahead, then--can you tell me, does 
your new agreement with China, mean that there is a new 
standard, in terms of lead and lead paint for products exported 
to the United States from China?
    Ms. Nord. Sir, there is both a statutory and a regulatory 
ban on lead paint coming into the United States--I'm not sure 
how we would make that tougher.
    Senator Durbin. No, you--please. I'm asking you about the 
Chinese standard. Have the Chinese agreed to a new standard 
when it comes to lead and lead paint for exports to the United 
States?
    Ms. Nord. Sir, what I am concerned about are products that 
are being exported to the United States. I do not want to see 
any lead paint in those products.
    Senator Durbin. I understand.
    Ms. Nord. What the Chinese do internally is up to the 
Chinese.
    Senator Durbin. Now, wait a minute. If this is a memorandum 
of understanding, an agreement with the Chinese, what they do 
internally is not up to the Chinese, if it comes to the United 
States. That's what this is about. I'm asking you if there's a 
new lead standard, agreed to, in this agreement with China for 
lead or lead paint? I've said that three times. Is there, or 
isn't there?
    Ms. Nord. Sir, the Chinese have agreed to eliminate any 
lead paint used in toys exported to the United States.
    Senator Durbin. Is this a new standard?
    Ms. Nord. Sir, again, you will have to ask the Chinese what 
the state of the Chinese law is.
    Senator Durbin. Let me ask you about your quote in this 
morning's Wall Street Journal. This relates to the toy 
industry.
    I might say that this article said that the most concrete 
aspect of the agreement--that we've referred to here--is the 
prohibition on using lead paint in toys. And, I'm trying to get 
down to whether the Chinese have agreed to a new standard, in 
terms of what they are going to export. But, I will ask the 
Chinese.
    But let me ask you what you meant when you referred to the 
toy industry and said, ``No longer can the industry tolerate an 
`ask no questions' mentality,'' said Nancy Nord, the CPSC's 
Acting Chairman. ``The stakes are just too high.'' Are you 
saying that that has been the practice in the past? That your 
Commission did not ask questions?
    Ms. Nord. Well, certainly, sir, since I've been a 
Commissioner we've been asking lots of questions.
    As I indicated in my opening statement, the very first 
group I reached out to when I became a Commissioner was the Toy 
Industry Association. And, I think I have a very strong record 
indicating a concern here, and a desire to work with you, with 
the industry, with consumer groups, to make sure that toys that 
are sold in this country are safe.

                           CHILDREN'S JEWELRY

    Senator Durbin. All right, let me ask you this--I return to 
the issue of children's jewelry. I want to give you a chance to 
clear up the record if there's any uncertainty.
    Ms. Nord. Okay, thank you.
    Senator Durbin. I believe that you had acknowledged that 
your Commission found that there were dangerous lead in 
children's jewelry that led to a substantial recall in 2004. I 
believe that your earlier testimony was that you initiated a 
rulemaking in July 2006, relative to lead children's jewelry. 
Which, I think, goes without saying, is a hazard, if tiny parts 
can break off and children can swallow them or be exposed to 
them.
    So, I want to know, as a result of that rulemaking, what 
action has been taken by the Consumer Product Safety Commission 
to stop the export, or to even examine the exports of dangerous 
children's jewelry to the United States.
    Ms. Nord. Okay. What the Commission did in January in 2007 
was issue a notice of proposed rulemaking. This is not a final 
rule. And what the Commission did over the period of time where 
we did not have our quorum, was analyze the comments that came 
back, and as I have told your staff, we intend to go to the 
next stage of rulemaking in the fall.
    Senator Durbin. This is----
    Ms. Nord. I am not going to presume to predict the way that 
rulemaking will come out, that would not be administratively 
proper.
    Senator Durbin. So, for over 1 year, your Commission has 
been sufficiently concerned about dangerous lead content in 
children's jewelry, and from what you have told me, no direct 
action has been taken to stop imports of this dangerous jewelry 
into the United States?
    Ms. Nord. Sir, we've done recalls.
    Senator Durbin. Well, I'm asking you, tell me about that?
    Ms. Nord. There is no rule in place, that's what I'm trying 
to tell you, but we've got an enforcement policy that we are 
enforcing. I would like to have a rule, because that is a much 
stronger regulatory tool--until we get a rule in place, we will 
enforce our enforcement policy.
    Senator Durbin. Well, I can just tell you that what you've 
just said is no consolation to families across America, that 
you are somehow caught up in a rulemaking process, when you 
know that one out of five pieces of children's jewelry has 
dangerous lead content.
    We expect--Americans expect our Government to act to 
protect families and children.
    Ms. Nord. That's why we have an enforcement policy, sir----
    Senator Durbin. Well----
    Ms. Nord [continuing]. And that's why we're in----
    Senator Durbin [continuing]. That's why I've asked you 
several times, to tell me what you have done to stop this 
jewelry from coming into the United States. And I've written 
you letters, asking you to do a risk analysis of these imports 
of children's jewelry, you said, ``We don't have the authority, 
we don't do that.'' And if that is the case, then I think 
either the law or the Commission, need to change.
    Ms. Nord. The law is what it is, sir. And I think I 
outlined in the letter where the holes are. So, I look forward 
to working with you and the Commerce Committee to address this 
situation.
    Senator Durbin. Thank you.
    Senator Brownback.

                          INTERNATIONAL TRADE

    Senator Brownback. Thanks.
    Chairman, you're hearing from us a great deal of 
frustration, it's just reflective of how much frustration there 
is around the country regarding this massive wave of products 
coming in from China, and the sense that we're losing a lot of 
the manufacturing base as a result of that. We have two 9-year-
old children, and my daughter asked me, ``Why is everything 
made in China?'' And I said, ``Well, it's kind of a long 
story,'' but there is this sense that there's been this huge 
wave of products flowing into the United States, and there is. 
When you look at major retailers that get 70, 80 percent of 
their products from China, and then you see these defects that 
are taking place, and China's a closed system, so it doesn't 
have a free press that's looking around at the factories and 
holding manufacturers accountable. The result of this is that 
we are recipients of defective products. And, there's this huge 
frustration that, we've lost jobs, we're losing economy, they 
manipulate their currency, and now the products aren't even 
safe, and we're allowing all of this to take place. What are 
you doing about it? I hope you're sensing the real frustration 
that we're expressing to you, which is directly from the 
countryside.
    We've got to actually do something, we can't just talk 
about it, that's why I talk about bringing the club out. Maybe 
it's putting tariffs or maybe it's shutting whole factories 
down, we just say, ``We're not going to accept products from 
this factory.''
    Now, for instance, in other countries, and this is a bit of 
a lecture here, but I want to get it off my chest. We've had 
our food exports banned from several countries for some period 
of time. And, I've hosted Japanese inspection teams into beef-
packing plants in my State. We say, ``Look, here it is. Look at 
our system. It's an open system.'' And they'll keep throwing up 
another barrier and another barrier and another barrier, and it 
gets very frustrating.
    Now, we're looking at China's selling us defective, unsafe 
products, and we don't know what's going on in the factory, and 
we're not even sure from what you're saying if they have any 
level of concern on lead. We tell them what you can send into 
here, but we don't know that they have any concern at all, 
there's not a free press there, it's a dictatorship government, 
and we're importing billions of dollars of products and many of 
them are bad. And it seems like somebody, somewhere along the 
line, ought to say, ``Well, wait a minute! This isn't the way 
we're going to operate anymore.'' The only way you can get 
their attention is by shutting the market off.
    And that's what happened to us on our beef exports, the 
markets were shut off, and we said okay--now wait a minute, now 
let's talk, you want to bring inspectors in, fine. And the 
Chinese, I would hope, would welcome inspectors into these 
plants. That they would ask you to send an inspection team. And 
I don't know if you would discover that much, but at least 
there could be some openness to it.
    And, right now, I think we should do everything we can. 
Even if it's banning whole sets of products, until we are sure 
that there is no lead in any of them, period. And, if they say, 
``Well, you can't do that under your trade agreements,'' tell 
them, ``Take us to the trade courts, then.'' Because that's 
what other countries do to us. We should get very stern and 
clear, and hit them where it hurts. Hit them in the markets.
    I think this reflects a bigger problem that we have, where 
we've had all this cash, foreign investment that's flowing into 
China, and it's not a transparent system, whatsoever, and now 
you're seeing defective products come out the other end.
    That's why I would hope that you would take every bit of 
aggressive action you can. If you need more statutory 
authority--and you've said you'll ask us for that. You should 
use it like a club, and we could move forward by putting 
tariffs on until they let their currency float; preventing 
their ability to artificially hold their currency down.
    Work with us on this, because we've got to deal with it, 
the country's fed up with it, we're fed up with it. I'm sure 
you are, too. But, we've got to start using the club on this.

              CONSUMER PRODUCT SAFETY COMMISSION'S ACTIONS

    Ms. Nord. Sir, may I respond to that?
    Senator Brownback. Yes, I'd be delighted if you would.
    Ms. Nord. I so appreciate hearing your sentiments. And what 
I have been trying to convey to you is the fact that our very 
tiny agency has been working aggressively within our statutory 
constraints and within our resource constraints to address 
this. I can't emphasize to you enough how important it is for 
our committees to work cooperatively together here to make this 
happen.
    Just as an example, sir, last year, in the Port Security 
Act, there was an amendment that, unfortunately, was deleted, 
that would have directed Customs and Border Protection (CBP) to 
work with us to put in place a training program so that the CBP 
people, and the CPSC people could work together in a better 
way. I think it's very, very unfortunate that that was dropped, 
because that would have been a very strong signal for this 
Congress to send, that they expect the Federal agencies to work 
across agency lines, to address the system holistically and 
systemically. We've got to do that. I just, appreciate hearing 
your remarks.
    Senator Brownback. Well, if I could, Mr. Chairman, as we do 
the mark on our bills moving forward, I hope in the 
appropriations process we can insert some of this language, so 
that we not only increase the funding for the agency, but we 
give it the authority necessary to fix the problem. This needs 
to move, it needs to go forward, and putting it on 
appropriations would certainly expedite the matter.
    Senator Durbin. Thank you, Senator.
    Senator Klobuchar.

                              ENFORCEMENT

    Senator Klobuchar. Thank you.
    Chairman Nord, as I'm listening to this, I'm thinking of my 
days as a prosecutor where we always knew the legislators would 
come and put in those tough laws, and unless they were 
enforced, it really didn't matter for the people in the 
neighborhoods. So, I'm trying to figure out how we got from 
nice little packaging, and this was manufactured somewhere in 
China, and it ended up in--Tamara Fucile, who works with me--
her kid's toy box. And this is one of the recalled toys.
    So, when we go back to the first instance you're talking 
about with the Chinese, and now you're reaching this 
agreement--how are you going to enforce these? How are we going 
to make sure that they are enforcing that these tests are done? 
Because, from what I've learned, it's not necessarily the 
quality of the tests that's a problem for us, it's the 
frequency of the testing. So, you'll have huge batches--1.5 
million--of toys that come in, and somehow no one caught them. 
Not us, not the retailers, not the manufacturers, and not the 
Chinese laboratories.
    So, starting at that point of entry, where these toys were 
first painted--how are we going to make sure that those laws 
are being enforced? Or that that agreement is being enforced?
    Ms. Nord. I think that this requires activity and action on 
the part of a number of different entities. First of all, we've 
got to make very clear that the manufacturers, the exporters, 
the importers, all have a responsibility here to make sure that 
they comply with the law. That they understand what the law is, 
and they comply with it.
    Now, I am very pleased by some of the leadership that has 
been shown in the toy industry to step up to this problem, and 
I understand you're going to have a chance to talk to them, and 
I would hope that you would explore a little bit more fully 
with them, exactly what they're going to do, rather than me 
discuss it with you.
    I've talked with you about the need for certification. We 
are working internally to see if we can stretch our statute to 
promulgate a requirement to require a statement from importers 
that they do not have lead paint on their products. But, 
frankly, clear legislative language would be more helpful.

                     CUSTOMS AND BORDER PROTECTION

    Senator Klobuchar. Well, that's what I'm trying to get at 
is how do we give you tools instead of stretching your statute 
so you can continue. So, are you working right now with the 
border people, for when this stuff comes in? Is there any work 
done between the CPSC and Customs at that point?
    Ms. Nord. We have a good relationship with Customs, 
generally. We all understand that Customs' first responsibility 
is homeland security and they are pressed for resources--as are 
all of us. Under our statute, it's Customs' responsibility to 
stop the product at the port of entry if it doesn't comply. 
But, we do work with Customs----
    Senator Klobuchar. But there's not any testing going on 
there?
    Ms. Nord. There is no testing being done at a port. What 
would happen is that it would have to be sent back to 
Washington, so that we would have to test it.
    Now, we are trying to integrate into our 2008 budget the 
acquisition of some new technology that would allow CBP and 
CPSC people to do more spot checking, there is some new----
    Senator Klobuchar. Do you know what percentage of the toys 
get tested now?
    Ms. Nord. Get tested for lead paint?
    Senator Klobuchar. Yes, or for----
    Ms. Nord. No, I don't.
    Senator Klobuchar. Or loose parts? Anything? Can you get 
those numbers for us? I'm just trying to figure out--since I've 
learned in the last few months looking at this, that the 
frequency of testing is important, how you do that from the 
area where it's first manufactured, how you do that on the 
retail level, and how you--as an agency--are testing it. And, 
I'm trying to increase the frequency of testing, and it's hard 
to do that when you don't know the baseline.
    Ms. Nord. Let me try to put this in context. I think in 
Commissioner Moore's statement--and it's been widely reported--
that the Food and Drug Administration (FDA) has some 1,300, 
1,400 inspectors, and they inspect 1 percent of what is brought 
in. I know at our June hearing, Senator Durbin asked what did 
we do? Did the CPSC have the ability to do that? And I 
responded to him, saying that if we did that, this agency would 
be a very different agency, and a much larger agency than it 
is. Of course we don't do that.
    When your staff was out at our lab, that question was put 
to Bob, the small parts guy. And his response, I think, was 
really, really interesting. Because what he said was, ``You 
really ought to go out to Long Beach, and you ought to see the 
acres and acres of warehouses out there loaded with products. 
And then look beyond Long Beach and see the ships that are 
lined up, full of containers of products, waiting to be 
imported into the United States.'' And, so the notion of having 
one inspector in Long Beach, or three inspectors in Long Beach 
is really not what we should be talking about. We need to be 
talking about a more systemic way of dealing with this.
    The CPSC is trying to do that, we have relationships with 
CBP, we are a part of their ACE System, which is helping us 
immensely. We now have 14 people trained to do ACE, but there 
are many other things that we should be doing. It requires 
working across agency lines to look at how we get a handle on 
this bigger picture.
    Senator Klobuchar. Thank you. But, remember that heart got 
in that little boy's stomach, and it killed him. I appreciate 
the bureaucracy and the resource issues, but as we look at 
this, there's got to be a way to stop that from happening. And, 
I think a piece of it may be the enforcement, and making clear 
there are penalties when these things are sold, penalties in 
our law that just aren't there right now. Because people just 
aren't taking this seriously if they're letting products come 
in like this.
    Senator Durbin. Thank you, Senator Klobuchar.
    Chairman Nord, thank you for your testimony.
    Ms. Nord. Thank you.
    Senator Durbin. The third panel, which we will now invite 
to the table, includes Jerry Storch, Chairman and Chief 
Executive Officer of Toys ``R'' Us, Bob Eckert, Chairman and 
Chief Executive Officer of Mattel, Inc., Sally Greenberg, 
Senior Products Safety Council, with the Consumers Union, 
Carter Keithley, President of the Toy Industry Association, and 
Joe Bhatia--I hope I didn't butcher that too badly, Joe--
President and CEO of the American National Standards Institute.
    Thank you all for joining us today, you have all submitted 
written statements, which will be made a part of the official 
record. In the interest of moving to questions and exchanges, 
we hope that you'll keep your opening remarks 5 minutes or 
less. I know that's hardly enough to do justice to an issue of 
this complexity, but we hope our questions will also lead in 
that same direction.
    The first person on my list is Jerry Storch, the CEO of 
Toys ``R'' Us.
    Is the green light on your microphone?
STATEMENT OF JERRY STORCH, CHAIRMAN AND CHIEF EXECUTIVE 
            OFFICER, TOYS ``R'' US, INCORPORATED, 
            WAYNE, NEW JERSEY
    Mr. Storch. Third time is a charm.
    Good morning, Mr. Chairman, and members of the 
subcommittee. Thank you for the opportunity to provide a 
retailer's perspective on this important subject.
    First and foremost, however, I speak to you as a parent. My 
wife, Jacquie and I have five children, and they are the most 
important part of our lives. On a very personal level we 
understand the passion we parents have about toy safety.
    Toys'' R'' Us is the largest dedicated toy and baby 
products retailer in the United States. Children are in our DNA 
and helping parents keep their kids safe is part of our brand 
mission. Safety is core to who we are--and that was so long 
before this year's events.
    Given the current focus on toy safety, our position is 
unique. We are the touch point for the customer and the conduit 
between them and the manufacturers. We recognize that the issue 
of toy safety goes well beyond business and directly to the 
well-being of the families we serve. We have reiterated that 
simple--this single fact--to our employees, suppliers, and 
business partners. We will not acquiesce, we will not tolerate 
products that do not meet our rigorous safety standards.
    As the recalls this year unfolded, it became clear to us 
all that change was needed. It is our belief that a combination 
of strong safety practices when toys are manufactured, and 
reinforcing Federal legislation, can help assure consumers that 
toys are safe.
    We also believe a strong, well-financed CPSC is needed, 
rather than a patchwork quilt of potentially contradictory 
State legislation.
    As the only retailer here today, I thought it might be 
helpful to share what happens at Toys ``R'' Us when a recall is 
announced, and our thoughts, and how we can get at the issue of 
reducing--or eliminating--the very need for recalls at all.
    When a recall takes place, we act immediately, rapidly, and 
decisively, to ensure the safety of our consumers. We have 
strict, and non-negotiable, procedures in place, which include 
immediately removing items from our systems, and instituting a 
systems-enforced ``stop sale'' so that the item may not be sold 
at the register, or leave our warehouses for stores.
    We've implemented a system to help customers return 
recalled products immediately and efficiently. This is 
regardless of whether the recalled toy was even purchased at 
Toys ``R'' Us. When it comes to products recall returns, we 
have a ``no quibble'' policy.
    This week, we are announcing further enhancements that will 
ensure our customers receive the most rapid and detailed 
information regarding toy safety issues. These include 
launching a dedicated toy safety micro-site, introducing an 
email notification system for recalls, and adding bilingual 
recall notices to our communications protocols. However, we 
believe the recall process could still be improved in two ways.
    First, we support the proposed shortening of timeframes 
between identification of a problem, and the eventual recall of 
that product, so that toys are still not being sold when 
someone else knows they may have a problem.
    And second, production code stamping of products and 
packaging would significantly help in tracing potential safety 
issues, would make it easier for us--as retailers and for 
parents--to identify recalled product.
    Ultimately, though, the objective should be to reduce and 
present recalls in the future. As you know, most of this year's 
recalls were for lead violations, and this is something the 
manufacturers should be able to eliminate.
    There are three prongs to effective prevention of these 
problems--standard-setting, comprehensive testing to ensure 
compliance with those standards, and deterrence--through real 
consequences if standards are violated.
    On standards, these have been clear--from the CPSC, and 
from retailers. In terms of deterrence, we have long held our 
vendors accountable for meeting strict safety standards. If a 
vendor does not meet our standards, we take immediate action, 
including--when warranted--termination of our relationship with 
them. We have terminated two vendors this year alone.
    To strengthen deterrence even further, we support the 
concepts in proposed legislation of increasing penalties for 
non-compliance. So, if the standards have been clear, and there 
has been deterrence, what went wrong? To our knowledge, based 
on the recalls this year, the problem was not that testing 
wasn't happening, or that testing wasn't being done properly, 
or that testing was not done frequently enough.
    Therefore, while we have long-required testing from our 
vendors, we are moving now to require that our vendors submit 
to us certification of testing for each batch coming to Toys 
``R'' Us, and we've been told by many vendors that they are 
already moving to this practice. To reinforce this direction, 
we strongly support strengthening third-party testing 
requirements. Specifically, we advocate for legislation 
requiring accredited certification of testing facilities.
    Earlier this year, Toys ``R'' Us asked an independent 
testing lab to re-test products right off our store shelves, 
and, in recent months, we have substantially increased these 
efforts. We have told manufacturers that this targeted re-
testing currently underway at Toys ``R'' Us will become a 
permanent part of our safety protocols.
    Ultimately, more change is needed. And the Federal 
Government is a welcome and crucial partner in this effort. Mr. 
Chairman, we believe proposed legislation such as the 
Children's Products Safety Act and the Consumer Product Safety 
Modernization Act can play an important role in enabling us to 
make America's toys safer.
    I would like to close with the following thought: Safety 
is, and has always been, the highest priority at Toys ``R'' Us. 
It is not a cause of the day. As you do your work, we'd like to 
be a resource to you and help in any way we can. With 
manufacturers, regulators, and retailers being ever-more 
vigilant about their processes and testing procedures, we 
believe that together we will make this the safest of holiday 
seasons for American consumers.
    Thank you again for your leadership, and I look forward to 
answering any questions you may have.
    Senator Durbin. Thank you, Mr. Storch.
    [The statement follows:]
                   Prepared Statement of Jerry Storch
    Good morning Mr. Chairman and members of the Committee. I'm Jerry 
Storch, Chairman and Chief Executive Officer of Toys ``R'' Us. Thank 
you for the opportunity to provide a retailer's perspective on this 
important subject.
    First and foremost, however, I speak to you as a parent. My wife 
Jacquie and I have five children, and they are the most important part 
of our lives. On a very personal level we understand the passion we 
parents have about toy safety.
    Toys ``R'' Us is the largest dedicated toy and baby products 
retailer in the United States, with 842 Toys ``R'' Us and Babies ``R'' 
Us stores nationwide, and we employ approximately 65,000 Americans. 
Globally, we have retail stores in 35 countries and employ 
approximately 100,000 people directly. Children are in our DNA and 
helping parents keep their kids safe is part of our brand mission. 
Safety is core to who we are--and that was so long before this year's 
events.
    Given the current focus on toy safety, our position is unique. We 
are the touchpoint for the customer and the conduit between them and 
the manufacturers.
    We recognize that the issue of toy safety goes well beyond business 
and directly to the well-being of the families we serve. We have 
reiterated that simple, single fact to our employees, suppliers, and 
business partners. We will not tolerate products that do not meet our 
rigorous safety standards.
    And that is why I am eager to be here this morning to speak with 
you in support of change, and in support of many of the initiatives I 
understand you're considering.
    As the recalls this year unfolded, it became clear to us that 
change was needed. Like many of you, we were frustrated by some of the 
large recalls earlier this year, especially by what appeared to be an 
unacceptably long timeframe between discovery of a problem and the 
actual consumer recall. And so, as you know Mr. Chairman, we reached 
out to you and Senator Klobuchar after one of the recalls earlier this 
year.
    We know consumers are asking how they can be sure the toys they buy 
for their families are safe. It is our belief that a combination of 
strong safety practices when toys are manufactured and reinforcing 
federal legislation can help provide the answer. We also believe a 
strong, well-financed Consumer Product Safety Commission (CPSC) is 
needed, rather than a patchwork quilt of potentially contradictory 
state legislation.
    As the only retailer here today, I thought it might be helpful to 
share what happens at Toys ``R'' Us when a recall is announced, and our 
thoughts on how we can get at the issue of reducing or eliminating the 
very need for recalls at all.
When Recalls Occur
    When a recall takes place we act rapidly to ensure the safety of 
our consumers. We have strict and non-negotiable procedures in place, 
which include immediately removing items from the sales floor, our 
stockrooms, our websites, and our distribution centers. Each of the 
pulled items must be properly accounted for in our systems and a stop-
sale is instituted on the product. This ensures that the item may not 
be sold at the register, and that recalled items do not leave the 
warehouses for stores.
    Our store managers are also deeply accountable for ensuring the 
recalled products are never on our shelves from the first day forward 
and also for on-the-ground communications with customers. Store 
managers are required to display recall posters on our Safety Boards 
and audit them daily for accuracy. We also post all recall information 
on the ``Product Recalls'' section of the Toys ``R'' Us website.
    Finally, we have implemented a system to help customers return 
recalled products immediately and efficiently. This is regardless of 
whether the recalled toy was purchased at Toys ``R'' Us or another 
retailer. When it comes to product recall returns, we have a ``no 
quibble'' policy.
    This week we are announcing further enhancements that will ensure 
our customers receive the most rapid and detailed information regarding 
toy safety issues. As the toy authority, we believe we can play an 
important role in communicating directly with customers about important 
safety issues. These enhancements include launching a dedicated toy 
safety microsite, introducing an email notification system for recalls 
and adding bilingual recall notices to our communications protocols.
    Given the processes we have in place, we believe our response to 
CPSC recalls or manufacturer failures is immediate, rapid, and 
decisive. Our objective is perfect execution. However, we believe the 
recall process itself could be improved in two ways:
    First, we support legislation shortening the timeframes during the 
period between identification of a problem and the eventual recall of 
that product. We are troubled by the possibility that we could be 
continuing to sell toys that someone knows may have a problem, while we 
remain unaware until we receive word that a recall is coming--usually 
just a day or two at most before the recall.
    Second, we believe that production code stamping of products and 
packaging would significantly help in tracing potential safety issues. 
It would make it easier for retailers and parents to identify recalled 
product, and avoid the guessing game when a mom or dad is trying to 
remember whether they bought the product before or after the recall 
date.
Why recalls occur and how to reduce and prevent them in the future
    Ultimately, of course, the objective should be to reduce and 
prevent recalls in the future, so let me turn to that now.
    As you know, most of this year's recalls were for lead violations, 
and this is something manufacturers should be able to eliminate. There 
are three prongs to effective prevention of these problems: setting 
standards, comprehensive testing to ensure compliance with those 
standards, and deterrence through real consequences if the standards 
are violated.
    On standards, these have been clear--from the CPSC and from 
retailers.
    In terms of deterrence, we have long held our vendors accountable 
for meeting strict safety standards. There is no room for compromise. 
And if a vendor does not meet our standards, we take immediate action, 
including, when warranted, termination of our relationship with them. 
We have terminated two vendors this year alone, and believe me, this is 
a strong message about the dire consequences of unacceptable 
performance.
    To strengthen deterrence even more, we support the concept in the 
proposed legislation of increasing penalties for noncompliance--higher 
penalties will have a significant impact, and we need that.
    So, if the standards have been clear, and there has been 
deterrence, what went wrong?
    And that's where testing comes in. To our knowledge, based on the 
recalls this year, the problem was not that testing wasn't happening, 
or that testing wasn't being done properly, but rather that testing was 
not done frequently enough.
    Prior to recent events, toy makers would test the initial batch of 
a product, then periodically re-test batches to make sure the factory 
was still complying. What appears to have happened in the recent cases 
is that someone replaced the compliant paint with non-compliant paint 
at an unknown point between tests.
    Therefore, while we have long required testing from our vendors, we 
are moving to require that our vendors submit to us certification of 
testing for each batch coming to Toys ``R'' Us, and we have been told 
many vendors are already moving to this practice. To reinforce this 
direction, we strongly support strengthening third-party testing 
requirements. Specifically, we advocate for legislation requiring 
accredited certification of testing facilities. It is a sensible way 
for all of us--including retailers and consumers--to know that the 
manufacturers have or use quality testing facilities.
    Earlier this year, Toys ``R'' Us asked Bureau Veritas, a world 
leader in independent testing, to spot-check and re-test products right 
off our store shelves--and, in recent months, we have substantially 
increased these efforts. We have alerted our manufacturers and advised 
them that this targeted re-testing currently underway at Toys ``R'' Us 
will become a permanent part of our safety protocols.
    We understand that many manufacturers and others are re-testing 
both here and overseas. And so, I agree with the CPSC that I wouldn't 
be surprised if we see further recalls in the coming weeks as a result 
of all this re-testing of products. We should watch very carefully to 
distinguish between relatively limited recalls caused by the intensity 
of the re-testing--essentially cleaning up the market--and recalls 
which indicate larger, more systematic problems needing special action.
    Ultimately, more change is needed. And the federal government is a 
welcome and crucial partner in this effort. Mr. Chairman, we believe 
proposed legislation such as the Children's Products Safety Act and the 
Consumer Product Safety Modernization Act can play an important role in 
enabling us to make America's toys safer.
    I would like to close with the following thought: Safety is, and 
has always been, the highest priority at Toys ``R'' Us. It is not the 
cause of the day. As you do your work, we'd like to be a resource to 
you and help in any way we can. Recent events have catalyzed increased 
scrutiny in manufacturing, tighter controls and substantially more and 
more product testing. This is good news for us and our customers. 
Against this backdrop, and with the combination of these efforts by 
retailers, regulators, and manufacturers, we believe that together we 
will make this the safest of holiday seasons for American consumers.
    Thank you again for your leadership, and I look forward to 
answering any questions you may have.

    Senator Durbin. Bob Eckert is the Chairman and Chief 
Executive Officer of Mattel. Mr. Eckert.

STATEMENT OF ROBERT A. ECKERT, CHAIRMAN AND CHIEF 
            EXECUTIVE OFFICER, MATTEL, INCORPORATED, EL 
            SEGUNDO, CALIFORNIA
    Mr. Eckert. Thank you, Mr. Chairman for inviting me here 
today to appear before you.
    I'm here today as the CEO of Mattel, but also as a dad. I 
have four kids, my three daughters grew up playing with Barbies 
and American Girl, my son loved his Hot Wheels. So, when I 
first heard about these problems, I took action like a CEO, but 
I thought like a parent. ``What's in the toy box? What do 
parents need to know? Are kids safe?''
    One, I had two jobs--one to find out what happened and how 
to prevent it from ever happening again. Two, to tell consumers 
what they needed to know about the recalls, and how to keep 
their children safe.
    This is a company built on trust. Parents have trusted our 
brands for generations. Our response to the lead paint recall 
must not only fix the problem, but earn back every parents' 
confidence.
    On behalf of Mattel, I want to again, apologize sincerely 
to each and every parent. I can't change the past, but I am 
changing how we do things.
    We will not rest until we know that you are confident 
Mattel's toys are safe. We've moved aggressively to ensure that 
we got our arms around the problem. We held all products in 
Asia. We initiated testing on a massive scale. We conducted 
sample lead paint testing on even the smallest part of each 
toy.
    While we recalled for lead paint, less than one-half of 1 
percent of the toys we produced over the last 12 months, that 
number should be zero.
    We've also launched a worldwide campaign to communicate the 
details of the recalls to consumers, including paid national 
advertising, participation in television and media interviews 
worldwide. Posters in stores, launch of an 800 number, and 
extensive Internet reach.
    I know this subcommittee and the American people want to 
know how lead got onto our products, and what steps we're 
taking to ensure that this doesn't happen again. Simply put--
our systems were circumvented, and our standards were violated. 
We were let down, and we let you down.
    But, how did lead paint get into some of our toys? Our own 
investigation, which is ongoing, has uncovered a few vendors 
who violated our rules. Some were careless, others deliberately 
broke rules. We've terminated relationships with some, and 
we're continuing to investigate others.
    But, I felt we needed to do more to ensure our rules were 
followed. So, let me tell you the steps we're taking.
    First, every batch of paint must not only be purchased from 
a certified supplier, but also re-tested before it's used, to 
ensure compliance with lead standards.
    Second, paint on samples of finished products from every 
production run must be tested for lead before they reach store 
shelves.
    Third, we've increased the frequency of unannounced 
inspections of vendors and subcontractors.
    I can't say enough, how personally disappointed I am by 
what's happened. I want to reiterate my personal apology on 
behalf of Mattel, and renew our commitment to parents. The 
steps we've taken will strengthen the safety of our products, 
ensuring that safety is crucial to the longstanding trust this 
company has built with parents for more than 60 years. There is 
simply nothing more important to Mattel than the safety of 
children. My goal is to make sure this holiday season's toys 
are the safest ever.
    Thank you.
    Senator Durbin. Thank you very much, Mr. Eckert.
    [The statement follows:]

                 Prepared Statement of Robert A. Eckert

    Good morning Mr. Chairman and members of the committee. My name is 
Robert Eckert, and I am the Chairman and CEO of Mattel. Thank you for 
inviting me to appear before you today to discuss the vital issue of 
the safety of our children's toys. We have made a priority of 
communicating openly and frequently about our recent recalls, and I 
welcome the opportunity to do so again today.
    Like many of you, I am a parent. I, like you, care deeply about the 
safety of children. And I, like you, am deeply disturbed and 
disappointed by recent events. As to lead paint on our products, our 
systems were circumvented, and our standards were violated. We were let 
down, and so we let you down. On behalf of Mattel and its nearly 30,000 
employees, I apologize sincerely. I can't change the past, but I can 
change the way we do things. And I already have. We are doing 
everything we can to prevent this from happening again.
    What has made these events particularly upsetting is that Mattel 
has long had in place what we believe are some of the most rigorous 
safety protocols in the toy industry. The vendors who manufacture our 
products are contractually obligated to comply with the same safety 
standards that apply to the products that Mattel manufactures in our 
own plants, including, for example, those governing lead levels in 
paint.
    For years, Mattel has: required vendors to purchase paint from a 
list of certified suppliers or test the paint that they used to ensure 
compliance with the established standards; audited the certified paint 
suppliers to ensure compliance with lead level standards; periodically 
audited vendors to ensure that they are complying with paint 
requirements; conducted lead level safety tests on samples drawn from 
the initial production run of every product; and had protocols for 
further recertification testing for lead on finished product.
    Unfortunately, despite these many safeguards, some Mattel toys with 
unacceptable levels of lead paint made it into the marketplace. I know 
this subcommittee and the American people want to know how this 
happened and what steps we are taking to best ensure this does not 
happen again.
    First, let me address the recalls. As you know, we conducted three 
lead paint-related recalls over the past several weeks. Each of these 
was a voluntary recall executed through the CPSC's fast-track process. 
We have worked closely, openly, and quickly with the CPSC to accomplish 
them, and I am personally grateful to the Commission for its prompt and 
professional handling of these matters.
    We also moved aggressively to ensure that we had our arms around 
the issue. We held all products in Asia, whether made at a Mattel 
facility or vendor facility, and we undertook additional testing on a 
massive scale. With respect to the products in Asia, for example, we 
examined samples of the toys to ensure that we identified any products 
with paint that violated applicable lead standards. This testing was 
applied to even the smallest part of each toy to identify any non-
complying paint, no matter how minor the use.
    Out of an abundance of caution, Mattel decided to be over-inclusive 
in the products we recalled. We did not just recall those specific toys 
that tested positive for lead paint. Instead, we recalled additional 
toys where our investigation of the circumstances suggested that some 
of those toys might be affected by non-complying paint, even though the 
tested samples of those toys were fine. Even with this massive testing 
program and cautious approach to identifying non-compliant products, we 
have recalled due to lead paint less than one-half of one percent of 
the toys that we've produced over the last 12 months. I'd rather that 
number was zero.
    One reason why I was so upset by recent events is that, as noted 
above, Mattel is well known for setting and maintaining some of the 
highest quality and safety standards and procedures in the industry. 
They have been in place and worked effectively for many years. And yet 
here we are today. Why?
    Our own extensive investigation, which is continuing, has uncovered 
that certain vendors or their subcontractors violated our well-
established rules. In some cases, they appear to have been careless. In 
others, they appear to have deliberately avoided doing what they knew 
they were required to do. In several instances, vendors failed to 
identify subcontractors or facility locations, even though it was 
mandated that they do so. Some vendors failed to provide certified 
paint to their subcontractors, while another vendor did not perform the 
mandated test on paint. We have already terminated relationships with 
some vendors and subcontractors, and we are continuing to investigate 
others.
    Obviously, we know that parents are looking to us to see what we're 
doing to improve our system to make people live up to their obligations 
and meet our standards. We have acted quickly and aggressively by 
immediately implementing a strengthened 3-point safety check system to 
enforce compliance with all regulations and standards applicable to 
lead paint:
    First, every batch of paint must not only be purchased from a 
certified paint supplier but also be re-tested before it is used, to 
ensure compliance with lead standards. The sample tests must be 
performed either by Mattel's own laboratories or by laboratories 
certified by Mattel, with vendors making test reports available to 
Mattel.
    Second, paint on samples of finished products from every production 
run must be tested for lead either by Mattel's own laboratories or by 
laboratories certified by Mattel to ensure applicable standards are met 
before toys reach store shelves.
    Third, Mattel has increased the frequency of random, unannounced 
inspections of vendors and subcontractors for compliance with our 
quality and safety procedures, including the applicable lead paint 
standard. We have commenced and anticipate completing soon unannounced 
inspections of every vendor and subcontractor worldwide, and this 
program will continue.
    Mattel is also implementing additional protections. Vendors and 
subcontractors must segregate all production for Mattel and have 
dedicated storage for paint used on Mattel products. No subcontractor 
may further subcontract out any part of a job to other locations. 
Before using a subcontractor's components in Mattel products, a vendor 
must test samples of such components for lead paint. Finally, as noted 
above, the vendor and subcontractor are both subject to unannounced 
audits and are held accountable for our rules and requirements.
    As I said at the outset of my testimony, these recent recalls have 
been a personal disappointment to me and, I am sure, to all of the 
thousands of men, women and parents who have always taken great pride 
in working at Mattel. As an industry leader, with some of the world's 
best known and most trusted brands, we frequently help set new 
standards for the industry. We are by no means perfect. But we have 
tackled difficult issues before and demonstrated an ability to make 
change for the better, not only within our own company but for the 
broader industry. In this regard, we've created a new Corporate 
Responsibility organization reporting directly to me. The new 
organization adds an even greater level of accountability for adherence 
to the company's safety and compliance protocols.
    Media coverage of the voluntary recalls we have announced has been 
helpful in spreading the news to consumers. Unfortunately, in the 
course of that coverage, some opinions regarding the law and the 
Commission were attributed to me that I've never held, let alone 
expressed. We were even accused of being ``unapologetic'' in a 
newspaper in which we'd run ads apologizing. I believe that our 
actions, in close cooperation with the CPSC, in quickly identifying and 
announcing these recent lead recalls demonstrate that we are committed 
to the Commission and its processes.
    We know we can continue to improve how we process and report safety 
issues to the CPSC. In that regard, we had initiated a dialogue with 
the Commission prior to this summer's recalls to develop a new set of 
reporting protocols.
    Mattel believes in the Consumer Product Safety Act and its goals, 
and we would like to work with members of Congress to strengthen the 
Commission. We fully support the Commission and the vital work that it 
does, and we recognize that more resources are needed for the 
organization to carry out its important duties. Mattel also supports 
proposals that would ensure laboratories used for testing toys are 
fully qualified and are accredited by independent organizations.
    I would like to conclude by reiterating my personal apology on 
behalf of Mattel and to emphasize our commitment to parents. The steps 
we have taken will strengthen the safety of our products. Parents 
expect that a toy carrying the Mattel brand is safe. Ensuring safety is 
crucial to the long-standing trust this company has built with parents 
for more than 60 years. There is simply nothing more important to 
Mattel than the safety of children.
    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.

    Senator Durbin. Sally Greenberg, Senior Products Safety 
Council of the Consumers Union.
STATEMENT OF SALLY GREENBERG, SENIOR PRODUCT SAFETY 
            COUNCIL, CONSUMERS UNION, WASHINGTON, DC
    Ms. Greenberg. Thank you.
    Good morning, Chairman Durbin, and Ranking Member 
Brownback, and Senator Klobuchar. My name is Sally Greenberg. I 
serve as Senior Products Safety Council for Consumers Union, we 
publish the magazine Consumer Reports.
    We appreciate the opportunity to be here this morning, and 
Senator Durbin, and Senator Klobuchar, certainly we wish to 
commend you both for your leadership in demanding a vastly 
improved product safety system, for American consumers--
especially children.
    I think the recent attention on toy safety will ultimately 
be good for consumers, good for the regulatory agency that 
oversees toys, and good for the toy industry, because the 
increased scrutiny will result in safer toys, I'm quite sure of 
that, and we've already heard some evidence of that here today 
from both a retailer and a major manufacturer.
    I'd like to touch briefly on several points that I--in my 
oral statement which were gone into in more detail in the 
written statement.
    First, the system in place for protecting consumers from 
unsafe products--especially children--has broken down. The 
recent avalanche of recalls of imported toys from China with 
excessive levels of lead paint has exposed millions of children 
to a highly toxic substance, and created a crisis of confidence 
among parents, who feel they can neither trust the toy 
industry, nor our Government, to keep their children safe.
    This breakdown occurred for several reasons. First, the 
CPSC, the Federal agency in charge, has been starved for 
resources. When the agency opened its doors in 1974, it had a 
staff of 786, and a budget of $34.7 million--the equivalent of 
about $125 million today. The agency's projected budget for 
this year is $63 million. The CPSC is a shadow of its former 
self. Acting Chairman Nord's official budget document for 2008 
reads like a sad lament on the many functions CPSC would like 
to perform, but cannot because of resources.
    The CPSC has many staff dedicated to the mission of keeping 
dangerous products out of the marketplace, but in recent years, 
the leadership of the CPSC has failed to carry forward that 
mission. Chairman Nord claimed recently the agency is doing 
more to protect consumers than it has in any time in history--
we disagree. We believe the agency's leadership has failed to 
use the regulatory authority it has to impose serious fines on 
companies that violate its rules, has refused to request more 
funding and resources while admitting it cannot carry out core 
functions, and has opposed efforts by consumer groups and 
others to provide the agency with funding--the funding and 
regulatory tools it needs to keep consumers safe.
    Companies that manufacture products abroad, as well, and 
import them into the United States, from China or other 
developing countries, have also fallen down on the job of 
conducting regular and thorough inspections of the factories 
that make their products. Inspections cannot be left to the 
Chinese factory owners. China suffers from the absence of a 
rigorous regulatory system, an endemic problem of corruption, 
and the lack of a free press, making it crucial that American 
companies doing business in China, undertake third-party, 
independent inspections, and set up certification systems, and 
make those systems transparent.
    Yesterday, the Chinese Government signed an agreement with 
the U.S. Government to eliminate lead in toys exported to the 
United States. This is long overdue. Lead paint has been 
prohibited on children's toys since 1978. Enforcement of this 
agreement will be key to ensuring the problem with lead toys 
are addressed.
    Here are our recommendations for addressing these problems.
    First, the CPSC badly needs an infusion of funds, and I 
understand there's a consciousness about that among members of 
this subcommittee, and certainly among members of the Commerce 
Committee, as well. Senator Durbin, we support your schedule of 
increases, and would like to see CPSC's budget reach the 
equivalent of what it was when it opened for business in 1974--
around $125 million when adjusted for inflation.
    Second, if we establish a certification program, the CPSC 
should administer that program, setting standards by which 
laboratories operate to certify toys. It's important to have 
some independent entity--like a CPSC--oversee the process of 
qualifying the labs to provide certification.
    Third, we recommend lifting the cap on fines--I know you 
understand what that's about--but if you read the record at 
CPSC, you see company after company flouting the agency's 
rules, because it's more expensive to comply with the rules, 
than it is to pay the fines. So, we need to have--this agency 
has to stop being a paper tiger, and start getting some bark, 
and some bite. The limits on the agency's ability to find, I 
know, were addressed in your legislation, we appreciate that, 
and we support that.
    Finally, CPSC's activities suffer from a lack of 
transparency. When a product is under investigation, unlike 
other safety agencies like the National Highway Traffic Safety 
Administration (NHTSA), for example, the CPSC, by statute, 
isn't permitted to share that information publicly, and yet it 
can be very critical information from consumers. And second, 
when products are recalled, CPSC won't publish what the recall 
rates are. NHTSA is required--once again, comparing another 
safety agency, the National Highway Traffic Safety 
Administration, to the CPSC--NHTSA has to publish that 
information for six quarters, about the rates of recall. This 
is critical information for consumers, and for consumer groups. 
We think the CPSC should be required to do the same.
    We appreciate your interest and your leadership, your 
concern on all of these issues, we thank you for your time, and 
we look forward to your questions.
    Senator Durbin. Thank you, Ms. Greenberg.
    [The statement follows:]
                 Prepared Statement of Sally Greenberg
    Good morning, Chairman Durbin and Ranking Member Brownback. 
Consumers Union,\1\ (CU) publisher of Consumer Reports, appreciates the 
opportunity to testify before the Subcommittee this morning on the 
subject of toy safety standards and the Consumer Product Safety 
Commission (CPSC). Congressional oversight such as the kind the 
Subcommittee is doing today will be a critical factor in ensuring that 
the CPSC uses its resources appropriately to fulfill its mission to 
protect the public from current and emerging product safety hazards.
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    \1\ Consumers Union is a nonprofit membership organization 
chartered in 1936 under the laws of the State of New York to provide 
consumers with information, education and counsel about goods, 
services, health, and personal finance. Consumers Union's income is 
solely derived from the sale of Consumer Reports, its other 
publications and from noncommercial contributions, grants and fees. In 
addition to reports on Consumers Union's own product testing, Consumer 
Reports and ConsumerReports.org, with more than 6.2 million paid 
circulation, regularly carries articles on health, product safety, 
marketplace economics and legislative, judicial and regulatory actions 
that affect consumer welfare. Consumers Union's publications carry no 
advertising and receive no commercial support.
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    We wish to commend you, Senator Durbin, for your outstanding 
leadership in speaking out on behalf of American consumers--and 
particularly children--who have been exposed to hazardous levels of 
lead in their toys and to magnets that can, and have seriously harmed 
or killed children who have swallowed them. Your meetings with toy 
industry leaders, the CPSC and the field hearing you organized in 
Illinois have helped to steer the debate in the right direction. 
Finally, thank you for your efforts to steadily increase the CPSC's 
budget, with an increase to $70 million for fiscal year 2008. This 
badly needed influx of funds to an agency that has been starved of 
resources comes at a critical time. However, we urge you to provide an 
even larger appropriation for this safety agency commensurate with any 
expanded responsibilities that might come with the passage of newly 
proposed legislation.
Consumer Product Safety Commission
    The CPSC is charged with the mandate to reduce or eliminate 
unreasonable risks of injury and death to consumers from more than 
15,000 types of products. The CPSC's viability is of critical 
importance to the safety of children, because the Commission has 
jurisdiction over so many children's toys, clothing and products like 
baby walkers, high chairs, and cribs.
    Unfortunately, the system in place to protect consumers--especially 
children--from unsafe products has broken down. The recent avalanche of 
toy recalls, involving Chinese-made toys made with excessive lead 
levels in the paint, has exposed millions of children to a highly toxic 
substance and created a crisis of confidence among consumers who feel 
they can trust neither the toy industry, nor our government to keep 
their children safe.\2\ Indeed, concerns about product safety extend to 
any country where quality control and safety standards are lacking.
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    \2\ According to a July 2007 poll by Harris Interactive, nearly 
two-thirds of U.S. adults lack confidence in the safety of a variety of 
products produced in developing nations, including over-the-counter 
medications, prescription drugs, herbal remedies and nutritional 
supplements, and packaged or prepared foods. http://
www.harrisinteractive.com/news/newsletters/wsjhealthnews/
HI_WSJ_HealthCarePoll_2007_v06_i1_2.pdf An August Gallup Poll found 65 
percent of Americans ``saying that they are making an effort to avoid 
buying products made in China. Nearly the same percentage--64 percent--
indicates a willingness to pay up to twice as much for a product made 
in the United States as they would pay for a similar Chinese-made 
product.'' http://www.galluppol.com/content/?ci=28552
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    Overall, the number of products made in China being recalled in the 
United States by the CPSC has doubled in the last five years, driving 
the total number of recalls in the country to 467 last year and 
involving millions of products.
    Chinese products now account for two-thirds of the products the 
CPSC regulates. At the same time, Chinese products represent 60 percent 
of all product recalls, compared with 36 percent in 2000.
    Over $22 billion worth of toys are sold in this country each year, 
with toys made in China making up 70 to 80 percent, according to the 
Toy Industry Association. Yet, despite the enormity of the industry and 
the surge of imports from China, the budget for the agency charged with 
ensuring that what enters this country meets our safety standards has 
been slashed by more 10 percent in the past two years alone.
    Never in its history has the CPSC been so challenged as an agency. 
Acting Commissioner Nord claimed recently that, ``The commission is 
currently doing more to protect consumers than it has at any prior time 
in history.'' \3\ We disagree. In fact, we believe the agency's 
leadership has failed to use the regulatory authority it has to fine 
companies that violate its rules, has refused to request more funding 
and resources even while admitting it cannot carry out core 
functions,\4\ and has opposed efforts by consumer groups to provide the 
Commission with the funding and tools it needs to keep consumers safe. 
In addition, further exacerbating the CPSC's weakened state, the 
current Administration has instead imposed additional cuts on the 
already woefully underfunded and understaffed agency.
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    \3\ ``Safety Agency Faces Scrutiny Amid Changes,'' New York Times, 
September 4, 07, page 1.
    \4\ http://www.cpsc.gov/CPSCPUB/PUBS/REPORTS/2008plan.pdf CPSC's 
2008 Budget Performance Document states on numerous occasions that the 
lack of resources is cutting into the agency's ability to carry out its 
mandate. ``While the agency's size has been reduced, the challenges 
facing CPSC continue to grow in both size and complexity.'' P. vii. ``. 
. . the 2008 funding level will challenge the Commission's ability to 
maintain its existing level of standards development, enforcement, 
public information and international activities.'' P. vii. ``In 2008, 
we set ambitious targets given the proposed reduction in staff. After 
further analysis by the Commission and based on actual funding, targets 
may have to be adjusted in the 2008 Operating Plan.'' P. 13. In 
addition, as the New York Times found in its September 4, 2007 article 
on CPSC, ``a lone employee is charged with testing suspected defective 
toys from across the nation.''
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CU's History of Support for CPSC's Work
    Consumers Union supported the creation of the CPSC and has worked 
closely with the agency since it opened its doors in 1974. The CPSC 
began operating with a staff of 786 and a budget of $34.7 million, the 
equivalent of about $125 million in today's dollars. By 1977, CPSC had 
a budget of $39 million and a staff of 900. Today the CPSC is a mere 
shadow of its former self. Its budget is $63.25 million this year--and 
the Commission's staff has plummeted to an all time low of 401 
employees.
    By comparison, the National Highway Traffic Safety Administration, 
which oversees auto and highway safety, and works to reduce the 
fatalities on our roadways (approximately 43,000), has a budget this 
year of $833 million. The CPSC estimates that 27,000 people die each 
year from product hazards under its jurisdiction. If CPSC's budget were 
equivalent to NHTSA's relative to the fatality rates each is confronted 
with, the CPSC's budget would be $523 million.
    CU commends the Appropriations Committee for successfully passing 
an increase to CPSC's budget of about 10 percent for fiscal year 2008. 
We also appreciate that your bill, Senator Durbin, S. 1847, provides 
for budget increases for the CPSC, reaching $100 million by 2012. These 
steady increases are consistent with recommendations made by CPSC 
Commissioner Thomas Moore, giving the agency time to absorb the 
additional staff. However, we recommend that Congress set a goal of 
funding the CPSC at least to reach 700-plus employees, the agency had 
when its doors opened in 1974.
Toy Industry Proposal
    On September 6, 2007 the Toy Industry Association (TIA) announced 
that its Board of Directors had approved a three-point program for toy 
testing and inspection programs:
  --First, the industry supports the concept of a federal requirement 
        to make safety testing and inspection mandatory.
  --Second, TIA is working with the American National Standards 
        Institute (ANSI) to develop and standardize procedures that 
        will be used industry-wide to verify that products comply with 
        stringent U.S. safety standards. ANSI is a private non-profit 
        organization that administers and coordinates the U.S. 
        standardization and conformity assessment system.
  --Third, TIA is also working with ANSI to develop criteria to confirm 
        and certify that test laboratories are independently qualified 
        to conduct the prescribed testing.
    Consumers Union commends the toy industry, including retail giants 
such as Toys R Us, for embracing the idea of third-party testing and 
inspecting, and for welcoming the federal regulatory involvement in 
making testing and inspection mandatory.
    On July 18 of this year, Consumers Union provided a statement at a 
Senate Commerce Committee meeting \5\ proposing eight steps that should 
be taken to help safeguard the health and safety of American consumers 
from the onslaught of unsafe Chinese-produced consumer products and 
foods. That list included the following steps:
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    \5\ http://www.consumersunion.org/pub/
2ndcorrected071707Testimony%20of%20Donald%20Mays%20-%20Final%20-
%20Chinese%20Productsl.pdf.
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  --Provide increased resources to government safety agencies to 
        prevent unsafe products from crossing our borders.
  --Hold suppliers, importers, distributors, as well as manufacturers 
        accountable for bringing unsafe products to the market by 
        requiring pre-shipment inspections and testing to ensure 
        product safety.
  --Develop U.S. government-administered, third-party safety 
        certification programs for all products.
  --Develop a product traceability program for both country-of-origin 
        labeling for food and consumer products as well as for all 
        components and ingredients.
  --Require that importers post a bond to ensure they have sufficient 
        resources to recall their products should they prove dangerous 
        or defective.
  --Give all agencies with enforcement authority the power to levy 
        meaningful civil penalties for manufacturers, importers, 
        distributors, and retailers who fail to comply with 
        regulations, and criminal penalties for those who knowingly and 
        repeatedly jeopardize public safety.
  --Authorize mandatory recall authority for all government agencies.
  --Require all government agencies to publicly disclose information 
        pertaining to safety investigations and reports of adverse 
        events.
    Although we agree with TIA about the need for government mandated 
third-party safety testing--and we applaud the trade association for 
proposing this testing--in order to be effective, it must be given real 
teeth. Specifically, third-party certification should include pre-
qualifying any factory that makes the product, having inspectors visit 
the factory unannounced a set number of times each year to check for 
compliance of the product with the safety standards, and applying a 
safety certification mark similar to the UL-listed or USDA mark.
Banning Lead in Children's Products
    Mattel's three recalls over this past summer of millions of toys 
containing lead paint alarmed parents and caregivers. Consumers Union 
believes that children should not be exposed to lead from products 
intended for their use and we support legislative efforts to ban lead, 
above minute amounts, in any product intended for use by children. We 
urge all members of Congress to move promptly to clarify that the CPSC 
has the authority to ban lead from all children's products.
    Consumers Union's safety blog includes, ``Five Things Parents Can 
Do to Avoid Lead Poisoning.\6\ '' We include within that description 
tips for parents to prevent not only lead exposure from toys but also 
from lunchboxes, bibs, metal jewelry, and other kids' products.
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    \6\ The five steps include (1) Take Inventory, (2) Clean Up, (3) 
Buy Smart, (4) Find Substitutes, (5) Get Tested The full story can be 
found at: http://blogs.consumerreports.org/safety/2007/08/five-things-
par.html.
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    We support extending CPSC's regulations for lead in toys to cover 
lead in other children's products, including in jewelry and in vinyl 
products. We note that CPSC Commissioner Thomas Moore has also called 
for giving the CPSC the authority to enforce the total elimination of 
lead or other toxic substances from children's products.
    Currently, CPSC's has regulations restricting the use of ``lead-
containing'' paint and other similar surface coatings on toys and on 
other children's products. ``Lead-containing paint'' is defined as a 
``paint or other similar surface coating materials containing lead or 
lead compounds and in which the lead content (calculated as lead metal) 
is in excess of 0.06 percent by weight . . .'' 16 C.F.R. 1303.2(b)(2). 
CPSC regulations also ban similar amounts of lead in household paint. 
Today, any toy that has a surface coating that exceeds these limits is 
considered a hazardous product and is subject to recall.
    While CU urged CPSC to set strict standards back in the 1970s, 
these limits--mandated by Congress in 1974--were based on the 
scientific understanding at the time of the hazards of lead paint, as 
well as what was achievable for paint products over 30 years ago. We 
think that 33 years later, it is time for the CPSC to conduct a 
scientific review and revise downward the current 0.06 percent limit 
for lead. Since the ingestion of lead at any level is hazardous, we 
urge Congress to direct the CPSC to review current lead limits based on 
today's scientific knowledge and reduce the allowable limit to the 
lowest possible threshold.
    In addition, CU believes the presence of lead in imported toys 
raises once again the urgency of screening children at highest risk for 
lead exposure. In 1999, the U.S. Government Accounting Office (now 
called the Government Accountability Office) issued a report entitled 
``Lead Poisoning, Federal Health Care Programs are Not Effectively 
Reaching At-Risk Children [GAO/HEHS-99-18]. That report found that only 
about 20 percent of the children at greatest risk are ever screened or 
treated for excessive lead levels, despite the fact that this is a 
covered benefit under Medicaid. We urge Congress to dedicate hearings 
to the problem of ensuring lead screening and treatment for uninsured 
and Medicaid/SCHIP children.
    Finally, we commend the CPSC for issuing an advance Notice of 
Proposed Rulemaking on January 9, 2007, in response to a petition filed 
by the Sierra Club, to ban the sale of metal jewelry intended for 
children with lead content above 600 ppm. Consumers Union is on record 
supporting this proposed ban, although we urged that it be expanded and 
include other products. We also opposed regulatory action to preempt 
stronger state regulations. Indeed, California will set a standard for 
200 ppm for lead in jewelry in August, 2009. We urge prompt action by 
the CPSC in response to comments the agency has received.
Hazards From Magnets
    While much of the concern over toy recalls in the past few months 
has focused on lead paint, recalls of toys with magnets have also 
raised serious concerns. A 20-month old boy died and at least 12 
children have been seriously injured after ingesting magnets in toys.
    Millions of toys made by Mattel containing powerful small magnets 
were recalled in August 2007. In April of this year, a recall of 
Magnetix toys was expanded to cover nearly 8 million products. Last 
year, 2.4 million toys with dangerous magnets were recalled.
    We commend you, Senator Durbin, for holding a joint hearing with 
House members on this issue on June 18, 2007 in Illinois and for 
bringing needed attention to the dangers from magnets in toys. You and 
Senator Amy Klobuchar of Minnesota have together highlighted the CPSC's 
slow response to the hazards magnets could pose to children if 
swallowed.
    CU shares your dismay at the CPSC's foot-dragging in 2005, after it 
first received a report about a serious injury to a child from 
ingesting a magnet. The agency took no immediate steps to warn the 
public and recall the product. Indeed, it took two years for the CPSC 
to launch a full blown joint voluntary recall with Rose Art/Mega Brands 
of these toys with magnets.
    CPSC finally is now appropriately warning parents that:

    ``Small magnets can kill children if two or more are swallowed. If 
two or more magnets or magnetic components or a magnet and another 
metal object (such as a small metal ball) are swallowed separately, 
they can attract one another through intestinal walls. This traps the 
magnets in place and can cause holes (perforations), twisting and/or 
blockage of the intestines, infection, blood poisoning (sepsis), and 
death. When multiple magnets are ingested surgery is required to remove 
the magnets and sometimes sections of the intestines need to be 
removed.''

    In addition, we have posted on CU's safety blog recommendations to 
parents about what to do if they suspect their child has swallowed a 
magnet or magnets.\7\
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    \7\ http://blogs.consumerreports.org/safety/2007/08/latest-toy-
reca.html.
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CPSC's Ability to Deter Company's Violating the Law is Hindered by Cap 
        on Fines
    Mr. Chairman, last week, the Wall Street Journal (WSJ) \8\ reported 
that the Chairman of Mattel stated that the company discloses problems 
on its own timetable because it believes both the law and the 
commission's enforcement practices are unreasonable. We, like many 
others, found this disturbing.
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    \8\ Wall Street Journal, September 4, 2007, p. A1. http://
online.wsj.com/article/SB118886996338816516.html?mod=hpp_us_whats_news.
---------------------------------------------------------------------------
    CPSC's statute requires companies to report if they believe their 
product creates a ``substantial product hazard.'' Failure to report can 
lead to a fine of up to $1.83 million.
    Yet according to the article, Mattel said it should be able to 
evaluate hazards internally before alerting any outsiders, regardless 
of what the law says.
    The same article also reported that Mattel, ``in at least three 
major cases since the late 1990s--including last month's recall of 
nearly 18 million (sic) playsets studded with potentially dangerous 
magnets--took months to gather information. In two of the cases, it 
collected scores of complaints for months before disclosing them to the 
agency.''
    CU believes that this statement by the head of the leading toy 
company is telling. Moreover, Mattel conflicts with the CPSC go back 
nearly a decade. Mattel was previously fined $1.1 million for failing 
to promptly report a fire hazard involving its Power Wheels line of 
motorized minicars, designed to be ridden by children as young as 2 
years old. Ten million of the cars were recalled in 1998.
    Ann Brown, the CPSC Chairman at the time, said after announcing the 
penalty in 2001 that Mattel knew about hundreds of problems with the 
toy's electrical systems, ``yet did nothing for years.'' There were 
reports of 150 fires involving the minicars and more than 10 times as 
many reports of electrical components overheating, melting, short-
circuiting or failing.
    A year later, Mattel again failed to file required reports under 
the Commission's rules. In the fall of 2002, Mattel began receiving 
reports involving the safety of screws in its Little People Animal 
Sounds Farm, which presented a choking hazard to children if swallowed. 
In one report, a screw punctured the lung of a 14-month-old baby who 
had inhaled it, sending the child into emergency surgery.
    ``It was not until March 2003 that the company reported the safety 
hazard'' to the commission, according to an agency investigation. 
According to the WSJ \9\, CPSC learned that Mattel had collected 32 
earlier reports of loose screws before approaching regulators. While 
denying any wrongdoing, the company signed a settlement in March, 
agreeing to pay $975,000.
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    \9\ Id.
---------------------------------------------------------------------------
    Pamela Gilbert, former Executive Director of the CPSC, told the 
WSJ, ``The agency has a real problem in finding out about dangerous 
products. They know after [company] lawyers might know--that's after a 
death or injury.''
    This unfortunate history of just one company's interactions with 
the CPSC suggests to us that companies simply do not regard the CPSC's 
regulatory powers as a deterrent to flouting the law. Consumers Union 
and other consumer groups have consistently pressed for lifting the cap 
on the fines CPSC can impose for violations of the agency's reporting 
rules--most notably Section 15(b) of the Consumer Product Safety Act 
(CPSA) \10\--which requires that companies ``immediately inform the 
Commission'' if a product fails to comply with a safety standard, 
contains a defect which could create a substantial product hazard, or 
creates an unreasonable risk of serious injury or death. Senator 
Durbin, the bill you and Senator Bill Nelson of Florida introduced this 
summer, S. 1848, The Consumer Product Safety Modernization Act, calls 
for lifting the cap to $20 million. While we think such an increase 
would be a great improvement over today's cap, we also agree with CPSC 
Commissioner Thomas Moore, who argued for lifting the cap entirely, 
when he told attendees at a conference in Florida in 2002 that 
``[p]erhaps some companies would be less likely to try to stall our 
agency by putting off reporting hazardous products if we had penalties 
that were more commensurate with the harm they can cause.''
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    \10\ http://www.cpsc.gov/businfo/cpsatext.html#sec15.
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    The evidence indicates that Mattel is not alone in failing to 
report to the CPSC upon learning that its products violate the 
CPSA.\11\ Year in and year out, the CPSC imposes fines on companies for 
failing to report, but the practice of failing to report continues. The 
cap on fines CPSC is authorized to impose--and the fines that CPSC does 
in fact impose--are low enough that they have become a cost of doing 
business for a company. Several years ago CPSC assessed a $750,000 fine 
on Wal-Mart for failure to report a safety problem with fitness 
machines selling in its stores. For Wal-Mart, the fine was equivalent 
to sales rung up in only 1 minute and 33 seconds.
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    \11\ In 2001, the U.S. Consumer Product Safety Commission fined 
Cosco Inc. and Safety 1st Inc., of Canton, Massachusetts a total of 
$1.75 million in civil penalties to settle CPSC charges that they 
failed to report product defects that caused serious injuries and 
deaths to children. In 2002, the Consumer Product Safety Commission 
(CPSC) fined General Electric Co. (GE) $1 million to settle allegations 
that GE knowingly failed to report to CPSC in a timely manner a defect 
with certain models of dishwashers. Under the Consumer Product Safety 
Act (CPSA), manufacturers, importers, distributors, and retailers must 
immediately report information about potentially hazardous products to 
the Commission. http://www.cpsc.gov/CPSCPUB/PREREL/prhtml01/0111 
9.html.
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    CU believes the cap on fines is just one way in which the CPSC's 
power to keep the marketplace safe is undercut and one that Congress 
should work to change.
Public Disclosure About Products Reported to the Agency
    Another way in which the CPSC's power to keep the marketplace safe 
is undermined is Section 6(b) of the Consumer Product Safety Act.
    We believe a federal agency has an obligation to disclose to the 
public when it opens an investigation on potentially hazardous 
products. Currently, NHTSA makes much of this information public; the 
CPSC, however, cannot disclose this information due to limits imposed 
on the agency by Section 6(b). Public disclosure can help warn 
consumers of potential hazards while an investigation is on-going.
    We appreciate your addressing the problem of 6(b) in S. 1848. While 
you are not calling for the repeal of 6(b), as we have urged, your bill 
would allow the CPSC to make public information if it determines that a 
manufacturer is not cooperating and that disclosure is necessary to 
prevent an ``unreasonable risk to health and safety.'' That provision 
would be a vast improvement over the CPSC's inability today to provide 
critical safety information to the public under 6(b).
The Problem With Recalls
    CU is concerned about the recall of so many millions of toys over 
the past year alone. While the term ``recalled product'' suggests that 
a product has been or will be successfully returned, repaired or 
replaced, that is rarely the case. Author Marla Felcher, in her book 
``It's No Accident--How Corporations Sell Dangerous Baby Products,'' 
\12\ quotes a CPSC study estimating that manufacturers cannot account 
for 70-90 percent of sold infant products after they have been 
recalled.
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    \12\ Common Courage Press, 2001.
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    Recall notices rarely reach the very people who most need it--
parents and caregivers. There is no law requiring manufacturers to try 
to find purchasers of the product or to notify parents or day care 
centers if a product proves dangerous and must be recalled. Further, 
there is no requirement that manufacturers advertise a product recall 
in the same way they advertised the product in the first place--toys 
with lead paint and magnets, high chairs, cribs, strollers, infant 
swings and carriers often continue to be used for months or years after 
they have been recalled.
    In an effort to improve recall effectiveness, consumer groups 
petitioned the CPSC,\13\ asking that the Commission require simple 
registration cards on products intended for use by children. While not 
a panacea, registration cards are one way to facilitate recalls. The 
Commission denied the petition on April 28, 2003, citing concerns about 
the effectiveness of registration cards, despite evidence that such 
cards--required by federal regulations to accompany the sale of a car 
seat--have improved registration of those car seats substantially. In a 
2003 National Highway Traffic Safety Administration survey, the federal 
highway safety agency found that almost three-quarters (73 percent) of 
parents/caregivers who said they obtained the car seat new also said 
that a registration card came with the seat. Of these, 53 percent 
mailed back the card.\14\
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    \13\ Federal Register, Vol. 66, No. 148, Wednesday, August 1, 2001.
    \14\ Motor Vehicle Occupant Safety Survey, http://
www.nhtsa.dot.gov/people/injury/research/2003MVOSSVol5/pages/
ExecSumm.htm.
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    In addition to the problems with getting the notice out to 
consumers about recalled products, once a product is recalled by CPSC, 
the Commission, for reasons that escape us, will not release 
information on the number of units that have been successfully recalled 
so that the public can accurately estimate how many remain at large, 
the extent of the remaining risk, and whether the recall outreach used 
for a particular product was successful. We recommend that you add a 
provision to S. 1847 requiring CPSC to publish quarterly reports on the 
success of a recall and post these reports on the Internet.
Conclusion
    Consumers Union appreciates this Subcommittee's attention to toy 
safety and extends our thanks to its determination to press the toy 
industry and the CPSC toward a far better system of ensuring the safety 
of toys.

    Senator Durbin. Carter Keithley is President of the Toy 
Industry Association.
STATEMENT OF CARTER KEITHLEY, PRESIDENT, TOY INDUSTRY 
            ASSOCIATION, NEW YORK CITY, NEW YORK
    Mr. Keithley. I've got a green light. All right.
    Good morning, Mr. Chairman, Senator Brownback, Senator 
Klobuchar.
    I'm really pleased to come before the subcommittee this 
morning on behalf of the Toy Industry Association (TIA) to talk 
about toy safety. The TIA is the leading industry association, 
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, and TIA has been a leader in 
developing and implementing toy safety measures for more than 
seven decades.
    We're very proud of our accomplishments in assuring that 
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 United States are 
extremely rare, despite the sale of nearly 3 billion new toys 
every year.
    The recent recalls of a few models of toy products in the 
United States, 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 the recalls account for a 
tiny portion of the total of nearly 3 billion toys sold in the 
United States each year. So far this year, there have been lead 
paint related recalls of 14 models of toy products imported 
into the United States 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 
develop 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 the 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 ensure that they conform to our 
standards.
    We have modeled our initiatives in this area after measures 
utilized in many American industries. We're working with the 
American National Standards Institute (ANSI) to develop these 
procedures who are communicating closely with the Consumer 
Product Safety Commission.
    The safety system in the United States is a 
characteristically American approach to solving the problems 
and meeting needs. It is a robust, pluralistic system that 
employs the talents and expertise and speed of the private 
sector to address safety issues in its own self interest.
    We're very proud to be working with ANSI in developing 
these new measures. 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, 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'd 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 trusted suppliers in 
China, our industry has produced 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 agreements 
signed yesterday between the United States 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 United States conform to our safety standard. 
We do not shirk from this responsibility, and we pledge to you, 
and to the American public that we will do everything in our 
power to ensure that toys sold in America are safe for our 
children to play with.
    I'm honored to be here representing the toy industry among 
my distinguished colleagues, and I look forward to responding 
to your questions.
    Senator Durbin. Thank you, Mr. Keithley.
    [The statement follows:]

                 Prepared Statement of Carter Keithley

    Good morning Mr. Chairman.
    Thank you for the opportunity to come before the subcommittee this 
morning to discuss the safety of toys sold in the United States. As you 
all know, my name is Carter Keithley and I am the President of the Toy 
Industry Association (TIA). We represent the toy companies who provide 
85 percent of all toys sold in the United States. As the voice of the 
industry, I would like to assure you we are, as we always have been, 
committed to the safety of our products and the children who use them.
    The fact that we are here before you today is in our view a 
positive step in gathering those who are interested in working together 
to connect the recent lapses in our safety net that have been exposed 
over the past several weeks. I would like to make the point however; 
that our actions to bridge these lapses is not an indication of a 
failed system, but rather a demonstration of the integrity of our 
industry, the Congress and the Consumer Product Safety Commission to 
fulfill our shared commitment to ensure the safety of children.
    At the outset, I would like to note the United States has among the 
strictest, most comprehensive toy safety systems in the world. U.S. 
toys have, for years, been ranked among the safest of all consumer 
products in the home. In fact, many nations around the world emulate 
the U.S. system and understand our toy safety standards to be the 
premier standards.
    This is not to say there is no room for improvement. It is our 
mission to continuously search for new ways to further strengthen our 
safety systems and standards. The unfortunate events of the last 
several weeks have presented us with such an opportunity.
    With input from Members of Congress, the U.S. Consumer Product 
Safety Commission (CPSC), American National Standards Institute (ANSI), 
industry leaders and the retailing community, TIA has led the 
development and introduction of the framework for a new testing 
requirement for toy manufacturers.
    Before addressing the specifics of this new program, however, I 
would like to take the opportunity to share with the subcommittee how 
we arrived where we are today and the current situation of the toy 
industry. As we entered the summer months and up until as late as last 
week, toy recalls were in the headlines daily. These recent recalls 
clearly demonstrated our safety system needed to be strengthened. 
Although, as I stated, we have some of the best standards in the world 
we were left wanting in assuring the application of the standards. This 
lack of assuring application of standards left our companies, the 
industry and most importantly our children exposed. I am proud to say 
that our companies acted quickly and professionally in responding to 
this issue and embracing the need to take significant action to close 
the ``assurance gap,'' if you will.
    The immediate response prompted by the recalls has been a 
redoubling of efforts to ensure U.S. standards are applied to toys 
regardless of where they are made. Many if not all toy manufacturers 
have conducted tests and in many cases retested products bound for the 
U.S. market. This effort has produced some of the recalls already 
announced and it may yet produce further recalls.
    If I can take a step back, typically, recalls are not always a 
cause for alarm. At their best, consumer product recalls serve a 
proactive role in the product safety system to avoid risk and injury 
versus a reactive role after injury or damage has occurred. As you may 
know, many products pass federal safety standards, but because of 
unintended use or an unexpected potential hazard a product can end up 
being recalled. Recalls will always be with us; and therefore we 
shouldn't strive to eliminate them, but work to make sure this valuable 
safety tool is used in an appropriate, proactive manner.
    As companies continue to test current product to clear violative 
product from their supply chains, TIA has, with the approval of our 
member companies, set out to provide a long term program to address the 
``assurance gap.'' To that end, I would like to share the framework for 
our new mandatory testing program for toys sold in the United States.
    The new mandatory program will:
  --Require all toys manufactured for the U.S. market to be tested to 
        U.S. standards;
  --Standardize procedures that will be used industry-wide to verify 
        that products comply with U.S. safety standards;
  --Establish criteria to certify that testing laboratories are 
        qualified to perform testing to U.S. standards using industry-
        wide protocols;
  --Require the development of testing protocols and certification 
        criteria through the cooperation of all stakeholders and apply 
        them consistently;
  --Necessitate that TIA work with Congress, CPSC and ANSI to implement 
        the legislation, rules and protocols to ensure industry-wide 
        adherence.
    It is the toy industry's strong belief that with this new mandatory 
testing program our industry will be even better equipped to protect 
the integrity of our products and the safety of American children. We 
held our initial meeting with ANSI, toy manufacturers and the retailing 
community August 31st. Working groups have been formed and we hope to 
announce an initial proposal with testing and certification protocols 
within the next few months.
    As mentioned in my description of the program we will need the help 
of the Consumer Product Safety Commission and Congress, specifically 
with you, Mr. Chairman and members of the Commerce Committee. In 
principle, your legislation, S. 1833 is the needed Congressional action 
to mandate this action across our industry. We, as with any 
legislation, look forward to further examining the details and working 
with you to enact the appropriate measures to implement this program.
    In closing, Mr. Chairman, again I would like to thank you for this 
opportunity and I am happy to answer any questions from the Members of 
the committee. I look forward to a positive exchange of ideas.

    Senator Durbin. Joe Bhatia is President and CEO of the 
American National Standards Institute (ANSI).
    Mr. Bhatia.

STATEMENT OF S. JOE BHATIA, PRESIDENT AND CHIEF 
            EXECUTIVE OFFICER, AMERICAN NATIONAL 
            STANDARDS INSTITUTE, WASHINGTON, DC
    Ms. Bhatia. Thank you, Chairman Durbin. And I appreciate 
you pronouncing my tough name properly.
    Senator Durbin. It's just good luck.
    Ms. Bhatia. ANSI is the coordinator of this Nation's 
private sector-led, but public sector-supported, voluntary 
standard and compliance solutions system.
    We usually speak as the U.S. voice in the standardization 
forums around the globe. Importantly to our discussion here 
today, we accredit standards developers and certification 
organizations that we've been talking about. Our membership is 
broad, it includes industry, industry associations, Government 
agencies, consumers and other groups. Collectively, we 
represent a network of members which amount to 125,000 
organizations or industries, and over 3.5 million 
professionals.
    Preventing safety of consumers is of paramount importance 
to the institute--it's actually a part of our mission. This 
hearing, in my view, is necessary because it's not an issue of 
standards, but because some suppliers--particularly those who 
are exporting products into the United States are not complying 
with rigorous standards and regulations that have already been 
established to keep our citizens safe.
    As you've already noted, has asked ANSI to work with the 
toy industry to build upon its current safety standards and 
compliance systems, and make them better--there's room for 
improvement. We will engage and work with CPSC--they are a 
member, they sit on our board--and other regulatory agencies to 
ensure that their concerns, and their needs are adequately 
addressed in formulating our solutions.
    But we need a system that is consistent across all 
manufacturers, across all geographies, and one that is 
sustainable over a long time. We'll focus our attention on the 
entire supply chain, not one part of it, improving how products 
are evaluated, and addressing who is conducting the 
evaluations.
    Our first step is to develop and standardize procedures 
that can be used across the toy industry to verify that 
products indeed comply with agreed-upon safety requirements, 
regardless of whether these are voluntary standards, or Federal 
regulations.
    Our second step will be to help the toy industry and CPSC 
to develop the tools they need to evaluate the competence of 
the organizations they are relying upon to control safety 
assessments. Our solutions will draw from a toolbox--big 
toolbox--of conformity assessment or compliance resources, not 
just testing and inspections, but also systems auditing, 
accreditation of certification bodies, accreditation of test 
labs, assessment of subcontractors and sub-subcontractors--
that's where a lot of the problems occur--and, of course, 
education and training.
    ANSI is committed into building into the global supply 
chain a sustainable approach to compliance verification, that's 
what's needed here. We will work, not only with the domestic 
entities, but also with our international partner--we work with 
them on many fronts, including the Chinese. We need to engage 
them.
    ANSI knows how to leverage standards and conform to 
assessment systems to form solutions which engage all 
stakeholders--public and private sector. During our 90-year 
history, the institute has demonstrated a unique ability to 
bring together--in the spirit of cooperation--diverse 
representation, Government agencies, Federal agencies, State 
agencies, industry, trade associations, institutions, 
consumers, labor and other groups.
    For example, we have teamed with the Council of Better 
Business Bureaus to tackle the big issue of the identity theft 
and identity protection. We partnered with the 9/11 Commission 
and continued to work with the Department of Homeland Security 
(DHS) to address homeland security. We were asked by the Office 
of Science and Technology Policy in the Executive Office of the 
President to take lead in nanotechnology initiatives. And we're 
currently helping the Department of Health and Human Services 
(HHS) to develop a secure an electronic health record for every 
American, a goal of our President.
    Mr. Chairman, members of the subcommittee, ANSI wants to 
help reassure our consumers that the products that are 
imported, that are on our shelves are safe. We want to support 
the activities of other groups, we want to coordinate this 
effort--not just from lead paint, but from also other potential 
hazards, that are yet to be identified--we need to have a 
flexible and workable solution.
    I invite everybody that is in this room to come and join us 
for our September 26 ANSI-sponsored conference that is focused 
specifically on building consumer confidence in the products 
that enter the U.S. marketplace, Nancy Nord is one of our 
speakers.
    But, to create safer consumer environment, we need to make 
more efficient use of the standards and compliance solutions 
that exist today, we need to identify every gap that exists--we 
know of some, but we need to find every one of them.
    We need to build on what works in the current system, and 
make it better. We also need to bring new human and financial 
resources that can strengthen the existing systems and satisfy 
the needs. I applaud your efforts today that you have talked 
about.
    In some cases it may be necessary--and we talked about that 
today--to elevate certain requirements from voluntary to 
mandatory status, or CPSC and other regulatory bodies that 
oversee consumer health and safety will not--will not be able 
to handle the workload alone, even with additional funding.
    Government, industry, and ANSI, and other groups need to 
work together to restore consumer confidence in the imported 
goods. ANSI stands ready to help. We have been able to 
coordinate private sector and public sector partnerships to 
create solutions over the 90-year history of our company. We 
have done it often, and we're good at it.
    I'd be glad to answer your questions. Thank you.
    Senator Durbin. Thank you, Mr. Bhatia.
    [The statement follows:]

                  Prepared Statement of S. Joe Bhatia

Introduction
    The American National Standards Institute (ANSI) is a private non-
profit organization whose mission is to enhance U.S. global 
competitiveness and the American quality of life by promoting, 
facilitating, and safeguarding the integrity of the voluntary 
standardization and conformity assessment system. ANSI's membership is 
comprised of businesses, professional societies and trade associations, 
standards developers, government agencies, and consumer and labor 
organizations. Through this network of members, the Institute 
represents the diverse interests of more than 125,000 companies and 
organizations and 3.5 million professionals worldwide.
    ANSI is the official U.S. representative to the International 
Organization for Standardization (ISO) and, via the U.S. National 
Committee, the International Electrotechnical Commission (IEC), and is 
a U.S. representative to the International Accreditation Forum (IAF). A 
memorandum of agreement between ANSI and the Commerce Department's 
National Institute of Standards and Technology outlines a mutual 
understanding of the roles of each organization. This includes ANSI's 
recognition as the official U.S. member of the International 
Organization for Standardization (ISO) and the International 
Electrotechnical Commission (IEC).
    Since its formation, ANSI has been coordinating the development of 
standards-based solutions to support accident prevention and improve 
worker and consumer safety. Today, 10 percent of the approximately 
10,000 approved American National Standards (ANS) currently available 
address issues that help to protect the workforce, consumers and the 
general public.
    Protecting the safety of consumers is of paramount importance to 
ANSI. It is a key element of the Institute's mission. ANSI works hard 
to ensure that there is consumer participation at all levels of the 
total federation--from the Board of Directors all the way through the 
policy and technical activities. Sometimes the participation is by 
consumers themselves, at other times representation is through a 
consumer organization. But there is always a need for more consumer 
involvement in standards and conformity assessment activities.
    ANSI's processes give any interested stakeholder the opportunity to 
engage in the development of a standard or the approval of a compliance 
program. The Institute's procedures are written to assure that 
everyone, regardless of ANSI membership status, is able to participate 
in ANSI activities. If someone is interested in the subject covered by 
a standard, for example, that individual may participate by applying to 
become a member of the consensus body or submitting a contribution 
during public review and comment.
    American National Standards (ANS) run the entire spectrum, from the 
very first ANS on pipe threads to work that is underway today to meet 
emerging needs in areas ranging from the service sectors to the aging 
populations and those with disabilities.
    Standards are important for everyone because they influence the 
design, safety, manufacturing and marketing of many products worldwide. 
Standards are not only developed in response to injuries, hazards or 
other identified safety risks, but more often in a proactive manner to 
prevent injuries from known hazards. Some areas that come to mind where 
voluntary standards have especially made a difference in enhancing 
consumer safety include:
  --the National Electric Code (ANSI/NFPA 70);
  --Safety for Ground-Fault Circuit Interrupters (ANSI/UL 943);
  --Safety for Gas Water Heaters (ANSI Z21.10.1);
  --Safety of Corded Window Covering Products (ANSI/WMCA A100.1);
  --Accessible and Usable Buildings and Facilities (ANSI/ICC A117.1); 
        and
  --Standard Specification for Protective Headgear Used in Bicycling or 
        Roller Skating (ASTM F1447-98--Approved as an American National 
        Standard).
    Voluntary consensus standards and conformity assessment programs 
are driven by requirements for continuous quality improvement--
especially as technology changes and evolves. ANSI and its hundreds of 
accredited standards developers and conformity assessment bodies are 
constantly reviewing and updating their systems to stay abreast of 
current and anticipated needs.
ANSI: Responding to national priorities
    ANSI's actions are aligned with the United States Standards 
Strategy (USSS), an overarching framework document that calls for close 
cooperation between those who develop the nation's standards and 
conformity assessment programs and those who use them. The USSS 
(excerpted in Annex B of this testimony) calls for the consistent use 
by government of voluntary consensus standards. It also calls for the 
standardization community to show leadership in developing responses to 
emerging national priorities.
    ANSI's standards panels are excellent examples of how the Institute 
is addressing the critical needs of the nation. Last fall, ANSI 
partnered with the Council of Better Business Bureaus to tackle 
identity theft prevention and ID management--an issue that has 
victimized more than 18 million Americans over the past two years.
    The Institute has partnered with the 9/11 Commission and the DHS to 
address homeland security; and with the President's Office of Science 
and Technology Policy to help lead global nanotechnology initiatives. 
ANSI is working with HHS to implement the President's vision for every 
American to have a secure electronic health record within the next ten 
years. And the Institute's newest panel is working with a broad 
spectrum of agencies to support the commoditization of viable 
alternatives to fossil fuels and the diversification of the global 
energy infrastructure.
    ANSI has a unique ability to bring together in a neutral forum 
representatives of industry, standards developing organizations, trade 
associations, professional and technical societies, government, labor 
and consumer groups.
    ANSI believes that a strong public-private partnership is essential 
to renew consumer confidence in the safety of imported products.
ANSI: Acting to improve toy safety
    The current American National Standard for toy safety is ASTM F963-
07e1. The Toy Industry Association and members of the toy industry 
worked in cooperation with ASTM International--another ANSI-accredited 
standards developer--and its committee on consumer products to develop 
the standard and submit the F963 standard through the ANS approval 
process.
    This hearing is necessary not because there is an issue with 
standards. It is necessary because some suppliers--particularly those 
who are exporting products to U.S. soil--are not complying with the 
rigorous standards and regulations that have been established to keep 
our citizens safe.
    Products manufactured in accordance with U.S. toy safety standards 
provide greater protection to our children. Testing and inspection 
systems must be strengthened so that compliance with these standards 
can be verified before unsafe products get into this country.
    In this testimony, ANSI will identify actions that are already 
being taken to ensure that product standards are indeed being met and 
honored in the real world. The Institute will also identify steps that 
can be taken, working in conjunction with this Committee and with other 
policymakers, to stem the tide of unsafe products imported into our 
country.
    Carter Keithley, president of the Toy Industry Association (TIA), 
has asked ANSI to work with the toy industry to build upon its current 
toy safety standards and conformity assessment systems and make them 
better. The Institute has accepted this invitation.
    ANSI will also engage the Consumer Product Safety Commission (CPSC) 
to ensure that their concerns are adequately addressed in formulating a 
solution.
    The system must be efficient, consistent and sustainable. It must 
focus on improving how products are evaluated and assessing who is 
conducting the evaluations.
    ANSI will focus its facilitation efforts on the development and 
standardization of compliance procedures that can be used industry-
wide--today these activities are defined by individual manufacturers 
and retailers.
    The Institute will also turn its attention to harmonization of the 
current practices used to evaluate the competence of the conformity 
assessment bodies that are evaluating compliance to requirements--these 
harmonized practices are also intended for use industry-wide.
    ANSI's solutions will draw from a toolbox of conformity assessment 
resources that includes sampling, testing and inspection; 
certification, registration, and auditing; accreditation and 
recognition, and--of course--education and training. These tools are 
defined in the National Conformity Assessment Principles of the United 
States, excerpted in Annex C of this testimony.
    The development of a system that can be implemented industry-wide 
may carry-over into 2008. In the meantime, a broad spectrum of 
stakeholders is already taking decisive action to remove unsafe 
products from distribution. In particular, brands and retailers have 
shared with ANSI that they have intensified their conformity assessment 
efforts to ensure the integrity of the import safety net.
    There can be no guarantee unless all the stakeholders are working 
together. From producer to government regulator to retailer to parent--
everyone has a role to play.
Building Consumer Confidence
    Just as consumers have the right to expect that the toys they buy 
for their children will be safe, the same expectation should hold true 
for the toothpaste they use, the tires they travel on, and the food 
they eat.
    The emergence of the global marketplace has created both consumer 
benefits and problems. If the public and private sectors work together, 
practicable solutions can be found to address the emerging issues of 
consumer health and safety in a global world.
    Steps are already being taken. On September 26, ANSI will host a 
conference focused on building consumer confidence in the products that 
enter into our marketplace. The Institute intends to identify 
necessary, practicable and immediate actions that can be taken to 
ensure that only safe products enter into the U.S. marketplace.
    Nancy Nord, acting chairman of the U.S. Consumer Product Safety 
Commission (CPSC), will deliver the keynote address. Among other 
topics, she will share a summary report of the Second Biennial U.S.-
Sino Consumer Product Safety Summit held on September 11 in Washington, 
DC.
    Presentations and discussion sessions will engage participants in 
identifying resources, initiatives, and applicable standards and 
compliance programs that will create a safer consumer environment.
    In the first of three panels, industry representatives will offer 
case studies of recent import safety issues, and examine opportunities 
for future improvement in their respective sectors. The second panel 
will highlight government-specific issues, focusing on federal agencies 
that rely upon private-sector standards and related compliance programs 
to ensure consumer product safety. The third panel will bring together 
representatives of consumer organizations, standards developing bodies, 
and safety certification organizations to offer their perspectives on 
what actions are and can be taken to build consumer confidence.
    ANSI invites the members of this committee to attend the conference 
on September 26 and help to identify areas where problems exist that 
might be mitigated or resolved with existing or new standards and 
compliance programs.
Conclusion
    ANSI wants to help reassure consumers that the products they find 
on the shelves of their local retailer have been tested and found to be 
safe--regardless of country of origin. In order for the Institute to 
accomplish this objective:
  --Standards and conformity assessment resources that are already in 
        place must be used more efficiently.
  --Government and industry need to work at a single purpose to 
        identify gaps in the current systems of testing and inspection 
        of products imported to the United States.
  --New human and financial resources must be brought to bear to 
        strengthen existing systems and fill any identified gaps.
    In some cases, it may be necessary to elevate certain requirements 
from voluntary to mandatory status. If this happens, the United States 
must also be careful to remain compliant with our obligations in the 
WTO and existing bi-lateral trade agreements. Any efforts made to 
improve the safety of imported products should not cause other 
governments to reciprocate with trade barriers on American exports.
    CPSC and the other regulatory bodies that lead oversight and 
regulation for consumer health and safety issues will not be able to 
handle the workload alone--even with additional financial resources. 
Private and public sector resources must be utilized in harmony if 
consumer confidence in imported goods is to be restored.
    ANSI stands ready to coordinate that public/private partnership. 
The Institute knows how to leverage voluntary consensus standards and 
the related compliance systems to create solutions that engage and 
support all stakeholders.
    ANSI looks forward to working in partnership with this committee, 
Congress, and other U.S. public sector representatives to stem the tide 
of unsafe products imported into our country.

    ANNEX A.--BACKGROUND ON THE U.S. STANDARDIZATION AND CONFORMITY 
   ASSESSMENT SYSTEM AND THE ROLE OF THE AMERICAN NATIONAL STANDARDS 
                            INSTITUTE (ANSI)

    The U.S. private sector-led, voluntary standardization and 
conformity assessment system has been in existence for more than 100 
years. Highly decentralized, the system is naturally partitioned into 
industrial sectors that are supported by numerous independent, private 
sector standards developing organizations (SDOs). Marketplace demand 
drives the system's activities, with standards and conformity 
assessment programs typically developed in response to specific 
concerns and needs expressed by industry, government, and consumers.
    Since 1918, this system has been administered and coordinated by 
the American National Standards Institute (ANSI) with the cooperation 
of the private sector and the federal, state and local governments. 
ANSI does not develop standards or conformity assessment programs. 
Rather, it functions as a central clearinghouse and coordinating body 
for its member organizations. The Institute is a unique partnership of 
industry, professional, technical, trade, labor, academic and consumer 
organizations, as well as government agencies. These members of the 
ANSI federation actually develop standards and conformity assessment 
programs, contributing their time and expertise in order to make the 
system work.
    ANSI ensures the integrity of the U.S. standards and conformity 
assessment system by: establishing a set of due process-based 
``essential requirements'' that SDOs may follow in order to manage the 
development of consensus standards and conformity assessment programs 
in a fair and open manner; accrediting SDOs who adhere to these 
requirements; approving candidate standards from ANSI-accredited SDOs 
as American National Standards (ANS); and conducting regular audits of 
the ANS activities of ANSI-accredited SDOs to ensure ongoing compliance 
with ANSI's essential requirements.
    ANSI has accredited hundreds of SDOs across a range of industry 
sectors. These industries include (but certainly are not limited to) 
telecommunications, medical devices, heavy equipment, fire protection, 
information technology, petroleum, banking, and household appliances. 
There are now approximately 10,000 ANSI-approved ANS that address 
topics as diverse as dimensions, ratings, terminology and symbols, test 
methods, interoperability criteria, product specifications, and 
performance and safety requirements. These standards development 
efforts serve the public interest and are being applied to new critical 
areas such as the environment, healthcare, homeland security, and 
nanotechnology.
    The Institute's approval of a candidate standard or conformity 
assessment program as an ANS verifies that the principles of openness 
and due process have been followed and that a consensus of all 
interested parties has been reached. Due process requires that all 
proposed ANS be circulated to the public at large for comment, that an 
attempt be made to resolve all comments, and that there is a right of 
appeal. In addition, ANSI considers any evidence that a proposed ANS is 
contrary to the public interest, contains unfair provisions or is 
unsuitable for national use. This basic formula has been the hallmark 
of the ANS process for decades, and it has garnered worldwide respect 
and acceptance.
    One of the best indicators of confidence in the U.S. voluntary 
consensus standardization and conformity assessment system (as 
exemplified by the ANS process) is Congress's 1996 passage of the 
National Technology Transfer and Advancement Act (NTTAA). This law 
(Public Law 104-113) requires federal agencies to use voluntary 
consensus standards and conformity assessment programs for regulatory 
purposes wherever feasible and to procure equipment and services in 
accordance with such standards. It also requires agencies to increase 
their participation in the development process and directs the Commerce 
Department's National Institute of Standards and Technology (NIST) to 
coordinate federal, state and local voluntary standards and related 
conformity assessment activities.
    ANSI's success is measured by usage and acceptance. From the 
government's perspective, there are two examples of confidence in the 
ANSI process that are worth citing here:
    The first is the Consumer Product Safety Act. This 1972 legislation 
mandates that if a voluntary standard exists, CPSC may issue a 
mandatory standard only when the voluntary standards will not eliminate 
or adequately reduce the risk of injury or death, or it is unlikely 
that there will be substantial compliance with the voluntary standard.
    The second is Congress' 1996 approval of Public Law 104-113, also 
know as the National Technology Transfer and Advancement Act (NTTAA). 
This law requires federal agencies to increase their reliance upon and 
participation in the voluntary consensus standards and conformity 
assessment systems.
    ANSI also promotes the international use of U.S. standards and 
conformity assessment programs. The Institute serves as the U.S. 
national body representative in two major, non-treaty international 
standards organizations: the International Organization for 
Standardization (ISO) and, through the United States National Committee 
(USNC), the International Electrotechnical Commission (IEC). ANSI and 
the USNC play a leadership role in ISO and IEC, respectively, on both 
policy and technical matters.
    Part of ANSI's role as the U.S. member of ISO includes accrediting 
U.S. Technical Advisory Groups (U.S. TAGs) which develop and transmit, 
via ANSI, U.S. consensus positions on the activities and ballots of 
technical committees and subcommittees. Similarly, the USNC approves 
TAGs for IEC activities. In many instances, voluntary standards and 
conformity assessment programs developed by U.S. SDOs are taken 
forward, through ANSI or the USNC, where they are approved in whole or 
in part by the ISO and/or IEC as International Standards. ANSI also 
encourages the adoption of international standards as national 
standards where they meet the needs of the user community.
    In addition, ANSI advocates U.S. positions in various regional 
standards organizations and regularly meets with representatives from 
standards bodies in other nations. Thus, ANSI plays an important role 
in facilitating the development of global standards and related 
conformity assessment programs that support global commerce and which 
prevent regions from using local standards that favor local industries 
as trade barriers.
    Conformity assessment is the term used to describe steps taken by 
both manufacturers and independent third-parties to determine 
fulfillment of standards requirements. ANSI's role in the conformity 
assessment arena includes accreditation of organizations that certify 
that products and personnel meet recognized standards. The ANSI-
American Society for Quality National Accreditation Board (ANAB) serves 
as the U.S. accreditation body for management systems certification, 
primarily in areas such as quality (ISO 9000 family of standards) and/
or the environment (ISO 14000 family of standards). ANSI also is 
involved in several international and regional organizations to promote 
multilateral recognition of conformity assessments across borders to 
preclude redundant and costly barriers to trade.
    In summary, through its various roles and responsibilities, ANSI 
advances its mission to ``enhance both the global competitiveness of 
U.S. business and the U.S. quality of life by promoting and 
facilitating voluntary consensus standards and conformity assessment 
systems and safeguarding their integrity.''

      ANNEX B.--EXCERPT FROM THE UNITED STATES STANDARDS STRATEGY

Principles
    It is well established in the community of nations that standards 
should meet societal and market needs and should not be developed to 
act as barriers to trade. In approving the World Trade Organization 
Technical Barriers to Trade Agreement, WTO members recognized that goal 
and established globally accepted principles as a framework to promote 
cooperation and discourage the use of standards as trade barriers. The 
U.S. standards and conformity assessment system is based on the 
following set of globally accepted principles for standards 
development.
  --Transparency.--Essential information regarding standardization and 
        conformity assessment activities is accessible to all 
        interested parties.
  --Openness.--Participation is open to all affected interests.
  --Impartiality.--No one interest dominates the process or is favored 
        over another.
  --Effectiveness and relevance.--Standards and related conformity 
        assessment programs are relevant and effectively respond to 
        regulatory and market needs, as well as scientific and 
        technological developments.
  --Consensus.--Decisions are reached through consensus among those 
        affected.
  --Performance-based.--Standards are performance-based, specifying 
        essential characteristics rather than detailed designs where 
        possible.
  --Coherence.--The process encourages coherence to avoid overlapping 
        and conflicting standards and conformity assessment programs.
  --Due Process.--Standards development accords with due process so 
        that all views are considered and appeals are possible.
  --Technical Assistance.--Assistance is offered to developing 
        countries in the formulation and application of standards and 
        related conformity assessment programs.
    In addition, U.S. interests strongly agree that the process should 
be:
  --Flexible, allowing the use of different methodologies to meet the 
        needs of different technology and product sectors;
  --Timely, so that purely administrative matters do not slow down the 
        work, but meet market expectations; and
  --Balanced among competing interests.

ANNEX C.--EXCERPT FROM THE NATIONAL CONFORMITY ASSESSMENT PRINCIPLES OF 
                           THE UNITED STATES

    The National Conformity Assessment Principles for the United States 
document articulates the principles for U.S. conformity assessment 
activities that will allow consumers, buyers, sellers, regulators and 
other interested parties to have confidence in the processes of 
providing conformity assessment, while avoiding the creation of 
unnecessary barriers to trade.
    Conformity assessment includes sampling and testing, inspection, 
supplier's declaration of conformity, certification, and management 
system assessment and registration. It also includes accreditation of 
the competence of those activities by a third party and recognition 
(usually by a government agency) of an accreditation program's 
capability.
    While each of these activities is a distinct operation, they are 
closely interrelated. The choice of the most appropriate assessment 
processes, as well as the quality with which any one of them is 
performed, can have a significant effect on the confidence in and 
reliance that can be placed on the results of the entire conformity 
assessment.
    The definitions included in the National Conformity Assessment 
Principles document are based on ISO/IEC 17000:2004, Conformity 
assessment--Vocabulary and general principles. Some variances, noted in 
italics, occur where the term is not in ISO/IEC 17000 or has another 
specific meaning in the United States. Definitions are included in this 
document to preclude confusion and to make it more understandable. In 
different contexts, the same term can signify different types of 
activities.
Accreditation
    Third party attestation related to a conformity assessment body 
conveying a formal demonstration of its competence to carry out 
specific conformity assessment tasks. (These tasks include sampling and 
testing, inspection, certification and registration.)
Certification
    Third party attestation related to products, processes, or persons 
that conveys assurance that specified requirements have been 
demonstrated.
Conformity Assessment
    Demonstration that specified requirements relating to a product, 
process, system, person or body are fulfilled. (This may include any 
activity concerned with determining directly or indirectly that 
relevant requirements are fulfilled.)
First, Second and Third Party
    The first party is generally the person or organization that 
provides the object, such as the supplier. The second party is usually 
a person or organization that has a user interest in the product, such 
as the customer. The third party is a person or body that is recognized 
as being independent of the person or organization that provides the 
object, as well as the user or customer of the object.
Inspection
    Examination of a product design, product, process or installation 
and determination of its conformity with specific requirements or, on 
the basis of professional judgment, with general requirements.
Recognition
    Procedure used to provide formal notice that an accreditation body 
is competent to carry out specific tasks. These tasks include 
accreditation of testing laboratories and inspection, certification and 
registration bodies. A governmental recognition system is a set of one 
or more procedures used by a Federal agency to provide recognition.
Registration
    Third party attestation related to systems that convey assurance 
that specified requirements have been demonstrated. Such systems 
include those established for the management of product, process or 
service quality and environmental performance.
Sampling
    Provision of a sample of the object of conformity assessment 
according to a procedure.
Supplier's Declaration
    Procedure by which a first party or supplier conveys assurance that 
the object of conformity fulfills specified requirements.
Test
    Technical operation that consists of the determination of one or 
more characteristics of a given product, material, equipment, organism, 
person's qualification, physical phenomenon, process or service 
according to a specified technical procedure (test method).
Testing
    Determination of one or more characteristics of an object of 
conformity according to a specified technical procedure (test method). 
Action of carrying out one or more tests.
Test Method
    Specified technical procedure for performing a test.

    Senator Durbin. And thanks to the entire panel. I was just 
noting as Mr. Storch and Mr. Eckert noted that they had five 
and four children, respectively. I wondered when your kids 
realized that they could say to the kids in school, ``My dad 
owns a toy store.'' Or a toy company. They must have been the 
most popular kids in school.
    Let me thank Mr. Keithley, Mr. Storch and Mr. Eckert, in 
particular, and say that over the course of my congressional 
career, there have been times when I have been tough on 
businesses, and I really have been heartened, and refreshed by, 
the response of your industry to this crisis. I think there is 
a level of openness and honesty that is essential for restoring 
the confidence in your products, and to bring your consumers 
back to your stores and back to your company. There's no 
corporate denial going on here, there's no defensive crouch, 
there's no throwing around of the terms ``junk science.''
    I mean, you're facing this honestly, and I think that's the 
only way to deal with it, and I'm glad that you are, I commend 
you for doing that, of course, you have to follow through. And 
we'll watch you as this process unfolds.
    So, Mr. Eckert would say, ``That's kind of you, Senator 
Durbin, but Mattel knew what they were doing. They were looking 
for the cheapest places in the world to make their toys. So, 
they found a country with the lowest wage scale, with virtually 
no environmental standards, and basically no safety inspection, 
so why should we be surprised at the outcome? Lead paint goes 
on products, maybe not because it's cheap, but because the 
folks who are applying it have no notion that it's dangerous or 
what the toy ultimately is going to be used for.'' So, is this 
a situation where your industry is facing the reality of 
deciding to ship your production overseas?
    Mr. Eckert. Mr. Chairman--what's important to me--the 
regulations are important, the laws are important, but as I 
tried to communicate in my statement, we're a company built on 
brands and trust. And if consumers can't trust our brands, 
regardless of where our products are made--and we make product 
in our own plants, and in vendor plants, in China, and in other 
countries. To me, the issue here hasn't been where these 
products are made, or what the rules are--have we done 
everything we can to ensure their safety? And I believe 
everything we're doing today--and the new program I talked 
about in my testimony--of certified paint, retesting the paint, 
making sure we test samples of finished products before, in 
every production run before they reach store shelves, and 
increasing the monitoring worldwide, not just in vendor plants 
in China, will make a big difference.
    Senator Durbin. Well, having taken a look at our laboratory 
facilities here at the Consumer Products Safety Commission, 
it's pretty clear we're not going to test your toys. And I want 
to get down to this third-party certification or testing. Is it 
your plan--you and I've discussed this, but I want to put it on 
the record--is it your plan to have testing in the countries of 
origin of these products before they're exported to the United 
States, by reputable firms, which can be trusted to do the job 
well?
    Mr. Eckert. Yes. In fact, that's what we're doing today. 
Now, we have--we have testing facilities in Mattel and I know 
our labs, and our labs are a little bit more sophisticated and 
have more opportunities than some of the things I've seen here 
today. I know what our labs do.
    Senator Durbin. I hope so.
    Mr. Eckert. This hasn't been an issue of the labs haven't 
done their jobs, the labs have worked. I think it is important 
to level the playing field, make sure everybody's protocols are 
right, have labs certified or accredited by an independent 
organization to make sure the labs have the right equipment, 
are doing the right tests, and are doing it with the right 
frequency.
    But I can commit to you today, and I use the cookie 
analogy. If we--if we test the ingredients going into the 
cookie and we know they're safe, and we watch the baking of the 
cookie, when the cookies come out, we do need to sample some of 
the cookies. Of course remember, you know, every time we sample 
a cookie, we destroy it. And every time we do one of these lead 
paint samples on a toy, we destroy it. But if we get the 
ingredients right, if we're doing the tests up front, by 
certified facilities or accredited facilities, I can not 
imagine we're going to have this problem again.
    Senator Durbin. Now, for the record, most of the toys for 
sale this holiday season, have been manufactured long before. 
They are in the pipeline already, in warehouses, and on ships. 
Is that true?
    Mr. Eckert. It's probably in the ballpark.
    Senator Durbin. And so, the testing that would bring 
consumer confidence, involves products that have already been 
shipped, in many instances, from the country where they were 
manufactured.
    Mr. Eckert. And we're testing those as well. So the first 
thing we did, was we've got to stop this at the source. The 
source is in these overseas plants. Let's make sure we've got 
our arms around that inventory and what is there. We know that 
we have now tested every batch of finished product before it 
leaves Asia or any other facility. That was the important 
thing.
    Now we've shifted our attention, with the help of 
retailers, into what products are already here and are there--
are any problems here. But from a long-term perspective, to me, 
the real issue is at the source.
    Senator Durbin. Ms. Greenberg, you--I hope you were here 
and listened to the testimony of Chairman Nord on children's 
jewelry. I'm at a loss to figure out what the Consumer Products 
Safety Commission is doing. What I heard her say, is in 2004 
there were massive recalls. They're concerned that one out of 
five pieces of jewelry, children's jewelry coming into America 
now are dangerous because of lead content. And the best I could 
get from her testimony, is that they're in the process of 
rulemaking, whatever that might be, that may have started in 
July of last year or January of this year. And I'm not certain, 
I don't want to misstate her testimony, that she answered 
directly my question, as to whether or not they are stopping 
and examining shipments of children's jewelry.
    As someone who has analyzed this agency, what was your 
impression of that testimony?
    Ms. Greenberg. Well, it didn't sound from her testimony 
like they had taken the kind of aggressive action I would have 
liked to have seen from this agency. And what's she saying is 
that because there's no standard in place, she felt she didn't 
have the power to go in and take these samples out of the ships 
that were coming in or--but what that generated in my mind is, 
``Okay, what would I do in that situation?'' And if I were a 
member of her staff or if I ran that agency, what I would 
have--what I would have done is say, ``You know, listen, maybe 
I don't have the standard in place, but my hands certainly 
aren't tied.'' Because the statute, under which the CPSC 
operates, provides a lot of leeway for whoever's in charge 
there, to do--to take a number of steps.
    One of the first things I probably would do, is I--
particularly Senator Klobuchar, since you had a young 
constituent who died from a piece of a lead toy that ended up 
in his stomach. We've got a serious problem here. So you're 
going to pull the manufacturers in, anybody who's making these 
toys, pull them into a room and say, ``We've got kids who are 
getting seriously injured by this. What can you--what can you 
promise me you intend to do to, are you doing the testing that 
needs to be done. What is the level of lead in these toys that 
come over? Obviously, it's way too high. Are you willing to sit 
down with us and pound out a voluntary agreement to do the 
testing and keep these lead toys out of the country?'' So 
that's one idea.
    The second idea is, under section 19, which covers imports 
from CPSC. There is an opportunity to take--if there's--if a 
product evidences a substantial--is a substantial product 
hazard, that can be the subject of reports to the CPSC about 
any--any company that is selling that product. I would have 
taken those reports, I would have looked at those, and I would 
have gone, maybe gone to a Member of Congress and said, ``We've 
got a lot of these products out there. I need your help because 
the rulemaking process is a very lengthy one. So let's take 
this product and let's try to get some legislation passed 
quickly that would put a ban in place. Because this is a 
substantial product hazard and it's killed a kid and it's hurt 
many others.''
    So, in other words, her hands are not tied. She may not 
have a standard in place, but there are a myriad options that I 
think the Chairman of the CPSC ought to--ought to have 
considered.
    Senator Durbin. Well, I'm just going to close by--this 
round of questions--by saying, it's not just a matter of 
providing more money to the agency, more staff at the agency, 
more and better laboratories and buildings. There has to be an 
aggressive attitude at the agency about protecting families and 
consumers. And when they don't have the tools to protect them, 
to reach out to Congress and other places, the President, and 
say, ``We need more authority here because there's a danger at 
stake here.'' And I think that's----
    Ms. Greenberg. Exactly.
    Senator Durbin [continuing]. I was looking for that in her 
testimony and I'm sorry that I didn't find it in many of her 
responses.
    Senator Brownback.
    Senator Brownback. Thank you, Mr. Chairman.
    Ms. Greenberg, I hope you'll work with us on statutory 
authority, that I hope we can put in the appropriations bill 
and that the authorizing committee will agree with, so we can 
move that through rapidly, so that you'll advise us on what 
else needs to be put in.
    Ms. Greenberg. Glad to do that.
    Senator Brownback. Mr. Storch, I've been in many of your 
stores, often. With two 9 year olds, I'm familiar with Toys 
``R'' Us. The information that I've looked at says that 80 
percent of your products come from China. Is that correct?
    Mr. Storch. Let me give you some, Mary and I, your staff, 
were discussing that yesterday. So let me give you some 
background on that because I went back and did some 
investigation after--after our discussion. And as in many 
consumer products categories, a majority of the products do 
come from China in toys, like they do in category after 
category now, as you pointed out in your earlier remarks.
    Senator Brownback. What is it in your store? What percent 
of your products come from China?
    Mr. Storch. Let me give you some--let me give you some 
breakout or some conception of that by category, because it 
varies, based on the category. We sell multiple categories or 
products in our stores for kids. Products like, juvenile 
products for example, diapers or baby care products, these 
typically are made by U.S. manufacturers like Proctor & Gamble, 
et cetera.
    Senator Brownback. All right.
    Mr. Storch. Outdoor and indoor--indoor--outdoor products 
and the indoor playhouses, you know, the blow-molded----
    Senator Brownback. Right. Right.
    Mr. Storch [continuing]. And injection-molded large houses. 
These also are typically domestic-manufactured because of the 
transportation costs are so high, they tend to be made in the 
United States. Video games is another big area, and those, the 
hardware is made in Asia in various places and the software is 
typically, the disks are actually stamped out in the United 
States or Japan. Construction toys, things like Legos, for 
example, or Connects, some of those are made in the United 
States, some of those are made in Mexico, they're made in 
various locations, some are in Canada. Now, the category that 
most people are focused on here, would be things like dolls and 
action figures and the trains that we've seen the recalls on. 
And for those, somewhere between three-quarters to 80 percent 
of the products are made in China.
    I would point out that we operate in 35 countries and if 
someone believes that there are, sort of, secret factories out 
there, in these countries and France or England, wherever the 
leader in toys, or in Spain. It's the same thing in those 
countries, where almost--almost all of these categories of toys 
are manufactured in China, around the world today. So our focus 
is on making the toys safe wherever they're manufactured.
    Senator Brownback. And I appreciate that.
    Mr. Eckert, now, what about in your products? How much, 
what percent of those come from China?
    Mr. Eckert. We manufacture one-half of our own toys and 
vendor source about one-half of our toys. Looking across both 
of those systems, roughly 65 percent of our toys are made in 
China and 35 percent are made in other countries.
    Senator Brownback. Ms. Greenberg pointed to a systemic 
problem. My guess is you gentleman have been going back and 
forth to China for many years. Mr. Eckert, in the last 5 years, 
how often a year have you gone to China?
    Mr. Eckert. I probably, a couple of times a year.
    Senator Brownback. Mr. Storch?
    Mr. Storch. China hasn't been a place that I've tended to 
visit.
    Senator Brownback. It is not or it has been?
    Mr. Storch. No, as a retailer again, the manufacturers have 
their facilities over there and they're making products over 
there. And as a retailer, we don't have operations in China.
    Senator Brownback. So you don't go and visit these 
factories where a big percentage of your products come from?
    Mr. Storch. Yeah. We have a very large staff, we have an 
office in Hong Kong and we have, for example, a gentleman here, 
Rick Rupert, who's our Executive Vice President, who is over 
there almost all the time, looking at the factories.
    Senator Brownback. You yourself are not, you're not going?
    Mr. Storch. No. I am not, sir.
    Senator Brownback. I would think it would be wise to visit 
the one particular area where you're getting so much of your 
product.
    Mr. Eckert, one of my growing concerns has been this 
concentration of our manufacturing and of our economic activity 
associated with China, which is a closed system and is battling 
corruption. And even the Communist Party is talking about 
corruption within China.
    So then, when you get into a manufactured set of products, 
it seems to me, you almost are set up to see these sort of 
things taking place. And then when we get this level of 
concentration in an economy, you do get people manipulating the 
marketplace.
    So you've got a closed system, having corruption, battling 
corruption, and a market concentration in the 60 to 80 percent 
ratio. You're set up, almost, to see the occurrence of 
problems. I'm sure this is something that you've thought about. 
Have you tried to break out of the sourcing in this one place? 
Or do you not see that there are endemic problems and a 
likelihood that things like this might take place?
    Mr. Eckert. First, we do manufacture in markets other than 
China. Second, I've personally seen a lot of success in the 
growth of capitalism, if you will, in China, as jobs are 
created and they start going through the industrial revolution 
there. Many of the people who work in our facilities in China, 
are people who have come from the agrarian society and, 
literally, this is their first job.
    But we make sure we enforce our own standards. That, to me, 
is what's important here. As an example, since 1990----
    Senator Brownback. Well, that didn't work, did it?
    Mr. Eckert. Well, since 1997, we have had outside, 
independent auditors go into our facilities and check who'd be 
working on our products and what conditions they have. And we 
publish those on mattel.com, so anybody can go look at 
independent auditor reports and what we've done to correct 
things, to make sure we impose our standards, regardless of 
what someone else does.
    Senator Brownback. But it didn't work.
    Mr. Eckert. Well, in the case of--if you're speaking 
specifically to lead paint testing----
    Senator Brownback. Yes.
    Mr. Eckert [continuing]. We didn't test sufficiently to 
catch that product. I don't know if that's a question of where 
the product was made.
    Senator Brownback. You don't see the setup of the macro 
situation as being a good possibility of producing a problem 
like this?
    Mr. Eckert. I see it from my perspective, just as a 
manufacturer, what systems do I have in place, regardless of 
who owns the plant or in which country it is? That's my 
viewpoint of this.
    Senator Brownback. Well, I would ask you to think about the 
macro situation in the way Ms. Greenberg identifies it, I think 
this is a situation that would evolve into the type of setup 
that we are experiencing. And my hope is, that we can give the 
Consumer Product Safety Commission more authority to deal with 
it. But also that you as manufacturers would look at the type 
of settings that you're in, and if there is a likelihood that 
situations like this would emerge you can do spot testing and 
random testing as a method of prevention. That's good, I'm glad 
that we do, because if the system is flawed we're asking for 
problems. And we have got them.
    So I would hope you could work with us and look at other 
places even other countries with more open systems, as a 
possible place to go.
    There's been this huge flush of capital going into China, 
you've had manufacturing growth taking place that I don't think 
has necessarily served the rest of the world nor served the 
United States well. You have your free choice. You're a free 
company, to do with as you see fit, and you will, and you 
should. But I think we're asking for problems in this.
    Mr. Chairman, thank you for letting me go over.
    Senator Durbin. Senator Klobuchar.
    Senator Klobuchar. Thank you, Mr. Chairman. Thank you to 
all of our witnesses. It's been very helpful, particularly I 
welcome Mr. Storch, who's a resident of Minnesota.
    And I wanted to echo what Senator Durbin had said, as I 
appreciate the people who are here today, who work in the 
industry, for being honest, for working with us, and coming 
forward. I think you've admitted that there were some major 
problems that need to be fixed.
    And I guess my first question would be of you, Mr. Eckert. 
If this can happen to a reputable company like Mattel, it can 
happen to any toy manufacturer. And how can you make sure that 
the new systems that you have put in place are going to work 
and are going to serve us adequately when the past systems 
failed?
    Mr. Eckert. I support mandatory testing by certified labs, 
the same kind of program we're doing today, with mandatory 
testing of finished goods before they reach store shelves, for 
the rest of the industry. And I think, as Carter Keithley has 
announced the TIA, the industry association of 500 members, 
both large to very small, support this proposal. We would like 
to have a level playing field and we would work with them and 
with the agency to develop those standards.
    Senator Klobuchar. So, what you're doing now, are you 
testing batch by batch? Is that what's happening?
    Mr. Eckert. Yes.
    Senator Klobuchar. Okay.
    Mr. Eckert. So here's what we're doing. And it's very 
important to me that I have an opportunity to explain this.
    First, it's the paint. Again, if you get the ingredients 
right, we don't have to worry about the end so much. Let's make 
sure the paint is right. The paint has to come from one of our 
eight certified paint vendors. You have--that's all you can do, 
you have to buy their paint and we test the paint in those 
paint factories.
    Two, when a plant takes that paint, a manufacturing plant, 
whether we own the plant or whether a vendor, an outsider owns 
the plant, that paint has to be tested again--every batch of 
paint--has to be tested before it's used.
    Three, as the toys are being made, we have more auditors on 
the ground today, going around to these various vendors and 
subcontractors to watch over their shoulder about how they're 
using the paint.
    And four--to me the ultimate test--before that product gets 
to retailer shelves, we take a sampling from every production 
run, of finished toys, and test the paint one more time. I 
think that kind of system will be effective and I think that 
sort of system would benefit manufacturers large and small.
    Senator Klobuchar. Now, do you produce kids jewelry?
    Mr. Eckert. We don't. We have had some jewelry, licensed 
product jewelry for example. I recall a situation with American 
Girl, which is one of our brands.
    Senator Klobuchar. I've seen that jewelry.
    Mr. Eckert. Okay.
    Senator Klobuchar. In my house.
    Mr. Eckert. Well, we've had some licensed jewelry out of 
American Girl that--my recollection is this goes back to last 
spring, maybe it was the end of March of last spring--where 
routine testing, even though we don't manufacture that product, 
we just distribute it in our stores, in our few American Girl 
stores, one of which is in Chicago--we found lead in that 
product, and recalled that product, discontinued the product. 
We're not going to be in that business.
    Senator Klobuchar. Mr. Storch, you were talking about the 
recall process, and how we can make it better. I appreciated 
your support for my legislation to put some kind of demarcation 
on the products and the packaging. Could you talk about what 
you do when you get a recalled product and how that differs 
from what, maybe a smaller retailer, would do--what they may 
have the capacity to do and what you think would be best to 
guarantee that these products can be recalled immediately?
    Mr. Storch. Yes. I--we have communicated in no uncertain 
terms to our people, that executing recalls is the most 
important part of their job. And everyday, store managers check 
the recall board and audit that the recall's been carried out.
    But more importantly and more specific to your question, 
our systems allow us to lock out sales of any recalled product. 
And I mentioned that a little bit in my prepared remarks, that 
both in the distribution centers and in the stores, the system 
has basically blocked further movement of those products. So 
they can't move from the distribution centers to the stores, 
and they can't move from a store shelf, if one were on the 
store shelf, they can't be--can't be bought. And so, there is--
should be no way, from a systems-enforced perspective, for 
anyone to buy the product. And again, all the audits we've 
seen, all the testing, and believe me, everyone from 
journalists to public agencies around the country to anyone 
with a thought about this has gone in and tried to check, is 
that we have near perfection on execution of these--of these 
recalls.
    I think for a smaller retailer, that's going to be a much 
more difficult challenge. And, because they may not have the 
systems, they're not able to proceed in that--in that sort of 
guaranteed 100 percent--100 percent fashion.
    The other thing we do, is that if there's any source of 
confusion or concern, we just remove the whole line. And so 
that happened, for example, earlier this year with the Magnetix 
recall. We felt it was confusing to our customers to try to 
tell which product was recalled and which one wasn't, because 
there were so many different types of Magnetix. So we took the 
whole line off the shelf until that was sorted through. We have 
the financial ability to accomplish that. And I could see, 
perhaps, some smaller retailers not being able to do that.
    Senator Klobuchar. So do you understand the need, and I 
appreciate you talking about the voluntary work you're doing to 
revamp some of these regulations for the CPSC and also give 
them some more resources to do their work. Some of the issues 
that Ms. Greenberg was talking about, is the CPSC and is it a 
shadow of its former self? As a member of the industry, do you 
support more resources for this agency?
    Mr. Storch. Absolutely. And, it was interesting, we met 
with--with Ms. Greenberg yesterday and I was fascinated. I'm a 
little bit of a Consumer Report junkie, as I told her, from 
childhood. And we found ourselves in agreement on almost every 
issue that we discussed. So, we are absolutely in that--in that 
place. It is clear that CPSC needs more money and you've all 
spoken of that and demonstrated that. And if we expect them to 
do more things, they're going to need more money.
    It's also very important to us that some of these 
timeframes be shortened, between the time when a product is 
first discovered as having a problem and a time when the 
consumer finds out about it. And for us, often, we get a 1-day 
notice, something like that, whenever, as soon as, you know, 
the manufacturer feels like the recall is going forward, we'll 
get a phone call, ``We're going to recall this tomorrow.'' And 
so, we immediately take it off the shelf. But sometimes, 
particularly earlier this year, we felt like months may have 
gone by while these situations were being investigated and 
those products were still being sold and we didn't like that. 
Now, with more resources, we feel the CPSC can move faster on 
that.
    Senator Klobuchar. Thank you very much.
    Senator Durbin. Following up on that, Mr. Eckert. One of 
the questions that was raised is, your requirement as a toy 
manufacturer to report defective products or dangerous 
products. And, so what do you understand your corporate 
obligation to be, under the law or otherwise, to notify either 
the Consumer Product Safety Commission about the dangers that 
you found of a product that you're selling, or to take other 
action?
    Mr. Eckert. First, let me say we would also support more 
resources for the CPSC. I think they do important work. We do 
support them. Some of the things I've said in the last couple 
of weeks, I believe have been misattributed about my support of 
the CPSC, and I want--appreciate the opportunity, Senator, to 
be on the record here, saying we do support this agency.
    And I'll tell you, the work they've done with us this past 
summer on the lead paint recalls has been exemplary. We're 
working with short periods of time, we're calling them at 
night, we're calling them on weekends, we're making things 
happen, we are calling retailers the night before a recall is 
going to be announced. Everybody is working as fast as they 
possibly can.
    My understanding of the requirements, sir, are these. The 
requirement of 24-hour notice to the agency of a product that 
could present a hazard, has been well covered. And, one of my 
concerns always, is the ``could'' standard. Because with the 
benefit of hindsight, going out 3 or 4 years, well now we know 
it could have been a problem because it was a problem 3 or 4 
years down the road.
    What hasn't been reported or what hasn't received as much 
attention, is the provision of the CPSC regulations that gives 
companies 10 business days or more to determine that they have 
a reportable incident. So for example, in our very first 
situation, first lead paint recall this year, we found this 
paint, we found this issue in a shipment of product destined 
for a retailer in France. Our people on the ground thought they 
had the--their arms around the situation, that they controlled 
the product. It wasn't in commerce and it wasn't heading to the 
United States. I wish it would have dialed up sooner to the 
corporate situation, because it wasn't until we did subsequent 
tests.
    And let me give you an example. We tested--a retailer 
tested this little green fox in a Dora product, and it failed a 
lead paint test. We do thousands of lead paint tests every year 
and don't have failures. So our people, well-intended people on 
the ground in China, called the vendor and said, ``You've got a 
problem, get us some new green foxes.'' The retailer tested 
green foxes again. They pass. Our people on the ground think 
the problem's behind them.
    We, in the meantime, have also drawn our own samples from 
that vendor facility and saw products that failed. And once we 
did that, we quarantined all products and very quickly this 
situation moved into the United States, where we can take 
action, which we did in a matter of days.
    Senator Durbin. You told me in a meeting, I believe it was 
our conversation, that when it comes to vinyl, for example, 
there is some presence of lead in most or all vinyl. And so, we 
talked for a few moments about what the lead safety standard 
is.
    Ms. Greenberg, in her testimony, said that the CPSC has not 
really established an acceptable standard when it comes to 
lead. So what have you found as you're testing, what do you use 
as the standard for your products, as acceptable amounts of 
lead? Is it zero?
    Mr. Eckert. We use six parts per million. There is lead in 
the environment. Unfortunately, lead is pretty ubiquitous in 
our lives. That's the way it is. I don't know that one can find 
zero lead, but we use a very small portion of lead, which even 
though it may--as I understand now--it's not mandated. That's 
one that everyone in the industry uses.
    Senator Durbin. You mentioned to me, I think, that 
California had a State standard that was more--one of, either 
you or Mr. Storch--mentioned that California had a State 
standard that was even stricter. Is that correct?
    Mr. Storch. I believe that's not the case, in regard to 
toys where--and I'll check on this--where the toy standard is 
the same. But I believe that's in regard to vinyl, in vinyl 
products. And in that--I'll check my aperture in a second--but 
and I believe that's a standard in there law, where it's a 
standard of, where it has to be stated on the package, that it 
could be potentially harmful, as opposed to an absolute--
absolute standard. They have a lot of things like that in 
California, where you'll see on the back of the package, you 
know, this has been determined by the State to be potentially 
hazardous. I believe it's like that. Let me just, if I may just 
check for a second, I'll get you a definitive answer on that. 
Prop 65, and they say, 30 parts per million.
    Senator Durbin. My last question relates to design. When I 
met with Minister Wei this morning, from China, he said, part 
of the problem we have with toys is that our people are 
manufacturing to the design standards of the United States. And 
so, if the Magnetix toy has a magnet that pops out, it's 
because we were told to make it that way. We didn't design 
them, so don't blame us.
    How much of this, beyond lead paint, which obviously you've 
indicated not to include on any products, but how much of this 
does go to design and how much could be laid at the doorstep of 
toy manufacturers, for having designs that create loose parts 
or magnets that pop out?
    Mr. Eckert. I think that is well-stated, because a lot of 
these problems, not the lead paint problem, but a lot of toy 
recalls are related to design. We ourselves, are producing 
thousands and thousands of new products every year. And we're 
very careful when we design those products, to make sure they 
meet standards, not just regulatory standards around the world, 
but our own internal standards.
    That said, we occasionally make a mistake. Everybody does. 
And when we do, we need to fix it. And that's not a 
manufacturing issue. Everything I've seen in the magnet 
situation, has nothing to do with manufacturing. And what has 
happened in magnets, is these small, high-powered magnets, 
Senator as you know, have become almost ubiquitous. We have 
them on our cell phones, our blackberries and we've been using 
them in toys for the past few years. And when a magnet came 
loose, I think the industry, certainly Mattel and I believe the 
regulators, saw it as a quality issue, not a safety issue. A 
small part came unglued. That occasionally happens, and what do 
you do about it?
    And in our situation, we twice changed our requirements for 
how to affix those magnets as small parts so they don't come 
off. It really wasn't until November 2005, when unfortunately a 
child died as a result of ingesting multiple magnets, that I 
think we all got the wakeup call. This is a safety problem. 
This isn't about a quality and it has to do with design. How do 
we design a system to keep these magnets in place? In January 
of this year, we created a locking system to embed these small, 
high-powered magnets in the plastic itself, so they won't come 
out. And we had had a recall before then, related to loose 
magnets, but we--we found the solution.
    And what we've done this year, and I think is an example of 
how Mattel tries to lead the industry, is we retroactively 
applied that new system for locking the magnet in place to toys 
that we sold years ago, before that was even discovered. 
Because again, I think it's most important to get the 
consumers, even if they bought one of these products 2 or 3 
years ago, if we know that magnet isn't a small part issue, it 
could be a real safety hazard, it's our job to get that product 
back.
    Senator Durbin. Senator Brownback.
    Senator Brownback. Thank you, Mr. Chairman.
    Mr. Eckert, I want to talk with you about some of your 
meetings in China, if I could, and officials. You meet with 
Chinese officials, I would guess, regularly on production and 
manufacturing standards?
    Mr. Eckert. I wouldn't say regularly, and it's certainly 
not on standards. I meet with local officials around our 
facilities or the facilities I visit and I, on occasion, am in 
Beijing. But most of our facilities are in the southern part of 
China and that's where I spend most of my time, by far.
    Senator Brownback. And meeting with local officials there?
    Mr. Eckert. Yes.
    Senator Brownback. Meeting with local officials? Do you 
ever meet with people from the PLA, People's Liberation Army? 
Have you ever met with officials from the PLA?
    Mr. Eckert. Not that I'm aware of.
    Senator Brownback. Do any of the plants that you have 
associate with the PLA?
    Mr. Eckert. I don't know that to be the case.
    Senator Brownback. Do you know who runs or who owns the 
plants, 100 percent, in the cases of what you're dealing with 
in China?
    Mr. Eckert. As it relates to our plants, yes. As it relates 
to these large vendor plants, yes. Some of the issues though, 
that we found this year, is vendors and--and we wouldn't be 
here if a handful of vendors didn't violate our rules--some of 
these vendors have subcontracted and further subcontracted some 
of these components. And I don't know--and that's one of our 
issues we're tracking down--who are those people and why are 
they here?
    Senator Brownback. I'm not putting the beat on you. You're 
here, and I'm asking you these questions. But what I'm looking 
at are the systems where a problem arose. It seems that, not 
just producing problems in toys, but producing problems in 
other product areas is what I'm trying to get at there.
    I was just looking at--and this is an old article, it's 
1998 International Herald Tribune article, but they were 
estimating that the armed forces ran some 20,000 industrial 
production and service companies in China. And that's why I ask 
if you had met with, or if they continued to run, any of the 
facilities that you're a part of or that your vendors have any 
association with.
    Mr. Eckert. Not that I'm aware of. It may--there may be. 
I'm just not aware of it and I've certainly never met with 
anybody that has identified himself being that type of person.
    Senator Brownback. I hope we can--in looking forward--pass 
legislation to try to correct this situation, put standards in 
place so that people can be assured of the products they buy. 
And also push the Chinese Government, whether through 
communications through you and certainly through communications 
from our Government that we will not tolerate these problems in 
our products. And we're going to do everything we can to stop 
these problems, period. And that the products aren't coming in 
if they're not good.
    And I hope we treat them the way we get treated in other 
countries around the world. If our product is seen as having 
any quality problem, we get shut out of the marketplace, shut 
out. I think that we ought to do here. Until we are sure that 
the system has changed and won't produce the same sort of 
products that we've seen.
    Senator Durbin. Mr. Bhatia.
    Mr. Bhatia. Senator, if I may. I would like to seize this 
example that you just raised to make a point. I think we need a 
systemic fix, which goes beyond just lead or small parts. If we 
have evaluation and accreditation process, if we have a system 
that looks at not only the manufacturer, but the supplier and 
the sub-assembler and the sub-supplier. We have techniques 
available which register and record the manufacturing location, 
that record the sub and subcontractors as part of the 
certification of accreditation process. And these problems can 
be handled, they have been successfully handled in other 
sectors. We're just in need for look--for looking to these 
types of options, integrate them with what we have that works 
in other areas, and work with our industry, work with our 
regulatory framework. You need to strengthen that for sure.
    But we have mechanisms that are available, designing the 
proper system and then making sure that we inspect often, we 
audit often, we validate often, we accredit often. I think 
that's what's going to be needed to get this done. And the 
small parts are one component that has been regulated for many 
years. The regulations are meaningless unless somebody actually 
checks compliance to them. And that's what we need to focus on.
    Senator Brownback. Thank you.
    Senator Klobuchar. Thank you.
    Mr. Keithley, I thought I'd ask you a few questions. You've 
been over there on your own. We were talking briefly here about 
the lead standards. I think people are pretty surprised that 
there's no set Federal lead ban or lead standard for children's 
products. I think it was Mr. Eckert and Mr. Storch who were 
correct to explain this .06 percent is the standard that's used 
by the States. The Feds and the CPSC use a, what I understand, 
a voluntary guideline standard of .06 percent, and then if it 
meets that standard they may do some additional testing, which 
seems to add time to this whole process, which people have said 
is something they care about. And then with jewelry, from what 
I understand, the California standard is to go to .02 by 2009. 
And that's why when we have talked to people, consumer 
advocates, people at the CPSC, people in industry, we came up 
with the ban standard of .04 percent because that's the 
standard that's used for lead in dirt. I won't ask you the 
details of that. And then the jewelry of .02 percent, which is 
the one that California's looking at to go to by 2009.
    And then allowing, because of this understanding, the vinyl 
and some of these other products, that we may want to go under 
that standard to allow the CPSC or to require them to do a 
rulemaking to look at these individual products. We are 
certainly saying that this is a ceiling and that we could go 
lower as the science develops, because we wanted to try to have 
a standard that was based on science. So, could you talk a 
little bit about that idea and where you think that this should 
go? And if you think that a Federal standard would be helpful?
    Mr. Keithley. Well, in fact Senator, the jewelry people per 
se, are not strictly speaking, part of our industry. 
Nevertheless, they're closely enough related to our industry 
that it is a matter of concern to us. And in fact, in the 
spring 2006, we wrote a letter to the Commission encouraging 
the Commission to move forward, adopting a set of standards and 
rules eliminating lead from jewelry. We fully support that.
    Senator Klobuchar. Okay. And are you open to looking at 
this, the Federal standards then? To put a standard in place?
    Mr. Keithley. Absolutely.
    Senator Klobuchar. Okay.
    Mr. Keithley. Absolutely.
    Senator Klobuchar. Okay, thank you.
    Ms. Greenberg, could you comment a little bit about this? 
And then, before time expires here, I had asked Chairman Nord 
before about the agency budgets and their requests. Could you 
go on a little bit about your perspective on that as well?
    Ms. Greenberg. Sure. The agency is, as I said in my oral 
statement, is at 401 employees, as of the 2008 year. It has had 
as many as 960-some employees in the 1970s. It's clear, if you 
read their budget proposal for 2008, it is a very sad document 
because there are so many things that they say they can't do, 
they're stretched to the limit. And as the New York Times 
showed so well in the article about 1 week ago, they've got one 
person testing toys. Their lab is, looks like an old college 
friend's dorm room. They--they are suffering and they've lost 
lots of, I mean, there's been a serious brain drain there as a 
result of the very low level of funding.
    One of our frustrations is, over the past several years, 
the Chairs of the CPSC have not asked Congress for more money 
because apparently they were told that they shouldn't. But it's 
so obvious when you read their internal documents or their 
documents that they supply, that they can't carry out their 
basic functions. They actually said they weren't going to work 
on drowning incidents, which is a core issue and kills a lot of 
kids every year, because they simply don't have the resources 
to devote to it.
    So, we need to put this agency on a course, and you've done 
that in your legislation, of increasing--steady increases, so 
it can absorb additional employees and additional resources. 
This business with the lab is really sad. I mean, they've been 
dancing around this, it was cut out of the budget this year. 
Chairman--Commissioner Moore talks about that in his testimony. 
The lab was, you know, they've been trying to redesign the lab. 
It's been going on for 6 years and they just cut the money for 
it.
    So, this is an unfortunate way to draw attention to a 
Federal agency, but I think this is going to be a shot, a real 
shot in the arm. When I have a moment, I know your time is 
limited, but I want to talk about the broader issue of 
children's products. Because toys is one thing, but we have, as 
safety agencies, and certainly with the Consumer Federation of 
America, and other groups have talked about a lot of problems 
with design of children's cribs, baby walkers, strollers, car 
seats, porta-cribs. Those are issues that also need to be 
addressed. We'd like to see some independent testing of those 
items, because kids have been killed or badly injured over the 
years and the CPSC really hasn't been equipped or stepped up to 
the plate to deal with those issues.
    Senator Klobuchar. Thank you.
    Senator Durbin. Thank you very much. I want to thank this 
entire panel, my colleagues, Senator Brownback, Senator 
Klobuchar. I think the three obvious conclusions from this 
hearing: China has failed in sending us products that are 
dangerous, that have harmed children and many others and 
certainly we have to hold them to higher standards if they want 
to do business with the United States; the Consumer Products 
Safety Commission has failed in not providing adequate 
resources, staffing, or perhaps the will to deal with the 
important issues that they face; and Congress has failed. Those 
who have argued for so many years that we have to get 
Government out of our lives, understand that there are moments 
when we need Government, when we need someone to make certain 
that the products on the shelves are always going to be safe 
for our families and our kids. We need to step up to that 
responsibility.

                     ADDITIONAL COMMITTEE QUESTIONS

    If there are any questions from members they will be 
submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the agency for response subsequent to the 
hearing:]
               Questions Submitted to Hon. Nancy A. Nord
            Questions Submitted by Senator Richard J. Durbin

                             RISK ANALYSIS

    Question. One point of contention that we've had is with a request 
that I originally made in early August asking the CPSC to conduct a 
risk analysis on the presence of lead in children's products. This 
request was made in response to a news article that reported that one 
in five pieces of children's jewelry sampled by CPSC contained 
excessive quantities of lead. This analysis, which was conducted 
several years ago, revealed the risk and resulted in CPSC recalling 
more than 150 million pieces of children's jewelry in 2004.
    How much did the children's jewelry analysis cost and how long did 
it take the Commission to accomplish? What was the study's methodology?
    Answer. The report that one in five pieces of children's jewelry 
contains excessive lead was based on a market surveillance program 
conducted in fiscal year 2007 by CPSC's Office of Compliance and Field 
Operations, with the assistance of CPSC's Chemistry Lab. (The 
children's metal jewelry recalls in 2004 did not result from a formal 
surveillance program.)
    The surveillance program was conducted over the last year to get a 
sense of conditions in the children's jewelry marketplace following 
issuance of an enforcement policy by the Office of Compliance. The 
scope of this effort was not intended to be statistically 
representative of the current market but rather to provide the agency 
with a general overview by collecting jewelry items from a variety of 
different sources across the nation. Nonetheless, the program led to 
more than a dozen recalls this year and has provided useful information 
to CPSC staff who are currently developing a draft proposed rule 
regarding lead in children's jewelry for consideration by the 
Commission.
    Recalls of one product typically beget more recalls of the same 
type of product as media reports raise consciousness, and firms examine 
their activities more critically. That pattern is evident in this case 
as retailers have conducted a number of Fast Track recalls this year 
after testing their own products and reporting problems to the CPSC. 
New York State has also conducted a similar retail surveillance program 
this year, in close cooperation with CPSC staff, which we anticipate 
will result in additional recalls.
    Question. In your response to my most recent letter, you suggested 
that it would take years of work and millions of dollars to conduct a 
risk analysis. Is there any way to structure a less comprehensive 
survey that would be less expensive and time consuming? Do you think 
that the findings of such a study would be helpful to policymakers and 
consumers?
    Answer. In your letter of August 2, 2007, you proposed a risk 
analysis of children's products manufactured in China to determine 
whether there is sufficient risk of lead contamination to pursue a 
``detain and test'' program on these products. A valid risk analysis on 
which to base a ``detain and test'' program of that magnitude would 
require a major expenditure of CPSC's resources.
    CPSC staff is currently working to identify issues (see below) 
associated with the development of a sampling plan to define a baseline 
compliance assessment which is a necessary requisite for a valid risk 
analysis. This baseline compliance assessment would focus on 
determining the proportion of products that comply with regulations 
(such as the ban on toys that bear lead-containing paint). These issues 
must be identified, researched and resolved during the initial phase of 
developing a sampling plan so that staff can subsequently determine the 
number and sources of samples to be collected, the types of testing to 
be required, and resource requirements to assure that the precision, 
usefulness and applicability of the survey's results are sufficient to 
support Commission decision-making.
    A national compliance rate estimate at a very minimum requires a 
multi-staged probability sample. Issues as to whether to limit the 
compliance rate determination to a specific set of toys or across 
children's products for all importers are critical for defining the 
target population to be sampled and the utility of the results. From 
there, issues as to where samples should be obtained--at the retail 
level to emulate consumer behavior or at distribution points prior to 
consumer access--must be resolved. Once the target population is 
selected, information identifying members of the population and their 
sales or production numbers must be gathered to support the structuring 
of the sampling plan. The sampling plan, even if limited to a specific 
market segment such as imported toys, will require a large number of 
samples to be tested to reliably estimate non-compliance from a very 
large population.
    The results of this effort will allow the Commission to make a 
responsible and informed decision. Given the tens of millions of 
children's products imported from China annually, this would in any 
case be a major project which would, under CPSC's regulations, need to 
be incorporated into the agency's annual Operating Plans by a vote of 
the Commission, and it would also be expected to be brought to the 
attention of the appropriate Committees of Congress. It is an 
expenditure of agency resources that cannot be ordered solely at the 
direction of the Acting Chairman.

                          U.S.-CHINA AGREEMENT

    Question. Last week, the CPSC and its counterpart, China's AQSIQ, 
announced an agreement was reached on lead paint and consumer product 
safety. Because so many of our imports are made in China and because 
they account for such a high tally of recalled products, I think this 
is an important area to continue to explore. When I looked at the 
actual agreement, it didn't look like much more than a framework for 
future progress. However, you made statements to the press that 
suggested that concrete steps had been agreed to.
    What specifically did AQSIQ agree to do in this framework 
agreement? What specifically did CPSC agree to do in this agreement?
    Answer. Attachments 1 through 4 are the agreements that were signed 
by each of the Working Groups. They detail the specific steps to which 
AQSIQ and CPSC have agreed with regard to the different products 
addressed.
    Question. I understand that China has a lower threshold for lead 
paint than the United States. Why was yesterday's lead announcement 
such significant news? Hasn't the substance been banned in the United 
States since 1978?
    Answer. The Chinese standard for lead paint is not directly 
comparable to the U.S. standard because the two standards involve 
different test methodologies and measurement techniques. (Chinese 
government officials have stressed that the Mattel recalls included 
toys that fully complied with the Chinese lead paint standard, so at 
least in these cases, the U.S. standards were stricter than the 
Chinese.)
    AQSIQ has agreed to immediately create and implement a plan to 
ensure that Chinese toys exported to the United States do not contain 
lead paint. It has also agreed to increase inspection of toys bound for 
the United States for lead paint violations. (The government of Canada, 
whose standards for lead paint are similar to U.S. standards, is 
working to reach the same agreement with China.) The announcement is 
significant because the Chinese government has not previously had such 
a safety plan for exports to the United States. The CPSC will be 
monitoring their activities closely to verify compliance with the 
agreement.
    Question. How would you characterize China's cooperation on the 
issue of product safety?
    Answer. Commercial incentives exist that encourage Chinese 
cooperation and compliance on the issue of product safety. As you know, 
the CPSC has been actively engaged with the Chinese government, and we 
have reached important agreements with AQSIQ on product safety. In 
addition to that mentioned above regarding lead paint, AQSIQ has agreed 
to broad cooperation with the CPSC in four major product areas 
including fireworks, electrical products, and lighters, as well as 
toys. The Chinese government has also instituted programs aimed at 
ensuring that its producers meet product safety standards required by 
China's export markets (for example, pre-shipment inspections at its 
ports) and increased its regulation of manufacturers with the goal of 
improving quality and safety. The CPSC will closely monitor Chinese 
compliance with all of our agreements, as well as their other actions 
to improve product safety. We will work to expand on these programs and 
take appropriate action if they falter; however, it is responsible and 
important that we have engaged them on these issues in the first place 
and upgraded our earlier dialogue by reaching these significant 
bilateral agreements.
    Question. Beyond signing agreements, what are the key structural 
obstacles to implementing new standards in China?
    Answer. I assume that this question relates to implementing U.S. 
standards in China for products that are made for export to the United 
States. We have observed the following systemic issues with those 
products that have been problematic:
  --U.S. importers sometimes fail to communicate product specifications 
        that would ensure compliance with CPSC rules, when placing 
        orders with their Chinese suppliers.
  --U.S. importers sometimes supply faulty and unsafe designs to their 
        Chinese suppliers.
  --Chinese (and U.S.-Chinese jointly owned) factories filling orders 
        for U.S. importers may sometimes lack adequate controls and 
        accountability in their manufacturing procedures.
  --Chinese manufacturers making consumer products destined for export 
        for the United States may sometimes ignore or be unaware of 
        U.S. safety standards, or may be unaware of the destination of 
        a product to be exported, particularly if the products are to 
        be sold to a small or medium-sized Chinese trading company, 
        rather than being made-to-order for a major U.S. importer.
    Question. Are there currently personnel exchanged between AQSIQ and 
CPSC?
    Answer. The CPSC and AQSIQ have conducted technical exchanges for 
several years. AQSIQ technical personnel have visited the CPSC 
laboratory to learn about testing procedures. Chinese compliance 
officials have also visited the CPSC to learn how the U.S. system 
operates. Further exchanges of technical and managerial staff comprise 
a major component of the four Working Group Work Plans (toys, lighters, 
fireworks, electrical products) which AQSIQ and CPSC completed on 
September 10, 2007. Laboratory personnel, technical staff, and 
compliance and enforcement staff will be providing training on the most 
critical elements of consumer product safety enforcement, from risk 
assessment procedures to market surveillance and enforcement policies.
    Question. Are safety standards documents translated into Mandarin? 
If not, will there be?
    Answer. Beginning in 2005, in cooperation with the American 
National Standards Institute (ANSI), the CPSC began making titles and 
scope statements for relevant standards available in Chinese. 
Approximately 390 documents have been translated, including but not 
limited to those related to children's toys, electrical products, gas 
appliances and furniture. All of these translations are available at 
www.standardsportal.org and further translations of CPSC regulations 
and standards will be completed under the four work plans recently 
concluded with AQSIQ. The CPSC believes that making U.S. requirements 
available in Chinese is an important step in ensuring that consumer 
products manufactured in China and exported to the United States comply 
with our rules. We will continue our efforts to make more translations 
available.
    Question. The ingestion of lead at any level is hazardous. Current 
standards were set in the 1970s. Does the CPSC have any plans to 
conduct a scientific review of the current 0.06 level of lead to revise 
it downward?
    Answer. The CPSC does not have plans to conduct a scientific review 
of the 0.06 percent level of lead (i.e., the 1978 lead in paint 
standard, 16 CFR Part 1303) to revise it downward. The reason for this 
decision is best explained by discussing what we currently know about 
the health effects related to lead exposures, the technology that is 
available to rapidly and accurately detect lead in these children's 
products, and the results of a study staff conducted in 1992 on 
domestic house paints and levels of lead in the paint on the toys that 
have recently been the subject of recalls.
    CPSC staff agrees that the ingestion of lead at any level is of 
concern. In addition to our own agency actions to reduce lead 
exposures, the staff participates in several federal interagency 
committees addressing the issues of lead exposure, adverse health 
effects, public health screening, and intervention.
    The federal community currently recognizes a blood lead level above 
10 ug/dL as a level of concern--a level intended to trigger prevention 
activities. This level was established in 1991 (down from 60 ug/dL in 
1960) and reaffirmed by CDC's Advisory Committee on Childhood Lead 
Poisoning Prevention in 2005.
    CPSC staff agrees that this does not mean that this level is a 
threshold for health effects, as no ``safe'' threshold has been 
identified, and there is some evidence that adverse effects can occur 
at levels below 10 ug/dL. However, because it is critical to focus 
resources where potential adverse health effects are the greatest, the 
CDC did not lower the blood lead level of concern. CDC felt that doing 
so would be arbitrary and divert resources away from primary prevention 
activities and individual interventions.
    It is evident that the decline in blood lead levels in the United 
States has largely been the result of government regulations banning 
the use of lead in paint, gasoline, drinking water conduits, and food 
and beverage containers and increased lead screening and identification 
of children with elevated blood lead levels.
    Despite these actions, deteriorating pre-1978 residential lead 
paint remains by far the primary source of lead exposure for U.S. 
children. A 2002 HUD report indicates that 24 million housing units had 
significant lead-based paint hazards of which 1.2 million units were 
occupied by low-income families with children under 6 years of age.
    The toxicological difference between paints containing 0.06 percent 
and less than that level is hard to determine because other factors, 
such as area of painted surface, weight of paint, and any potential 
ingestion rate for paint based on location are difficult to estimate. 
Achieving zero lead content is a formidable goal that may not be 
achievable, either technologically or because of contamination.
    From the public health perspective, the least amount of lead is 
best. However, any set limit must be weighed against the ability to 
rapidly and reliably screen and/or test products. Our laboratory uses a 
desktop XRF to screen some products. Products testing negative do not 
undergo further testing; all products with positive results are tested 
with standard chemistry techniques.
    The laboratory staff indicates that it is questionable that XRF 
could detect lead in painted surfaces containing lead levels below 0.02 
percent (as is proposed in legislation pending in Congress that would 
lower the level to 0.009 percent). The lab can detect levels below this 
amount with standard chemical testing, so setting a standard below 0.02 
percent will make it slower and more cumbersome to screen and test 
products without meaningful health impact.
    Because the actual health implications of 0.009 percent vs 0.06 
percent are hard to quantify, it is reasonable to have a lead paint 
limit that allows for the use of the most effective methodology for 
rapid screening and identification. If the technology for detection 
improves, or as science progresses, the lead paint limit could be 
adjusted by the Commission through regulation.

                      PUBLICATION OF RECALL RATES

    Question. Some regulatory agencies publish statistics on recall 
rates. However, CPSC does not publish these numbers for products it 
regulates. I believe it would be helpful for policymakers and the 
American public to know these numbers.
    Why doesn't CPSC release information on the number of units that 
have been successfully recalled? Will CPSC consider publishing these 
numbers in annual or quarterly reports?
    Answer. In the staff's view, such recall rates generally do not 
provide a useful indicator of recall effectiveness. One reason for this 
view is that the CPSC regulates such a wide variety of different 
products, and many of these are inexpensive products that consumers may 
choose to throw away rather than make even a modest effort to obtain a 
repair, replacement or refund. In addition, recall rates generally 
change over time because firms are encouraged to continue their 
corrective action plans indefinitely. For this reason, it can also be 
misleading to compare rates for one year to another.

                               PENALTIES

    Question. Can you please provide an itemized list of all of the 
penalties CPSC has collected over the past ten years?
    Answer. Attachment 5 contains the requested information.

                              SECTION 6(B)

    Question. Do you know of any instances in which an uncooperative 
firm has used Section 6(b) confidentiality protection to delay 
information sharing or a recall? Can you specify what regulatory tools 
you are able to use during these instances?
    Answer. Section 6(b)(1) requires that the staff take reasonable 
steps to assure the fairness and accuracy of public disclosures, giving 
companies a 30 day review period, unless the Commission finds (and 
publishes) that a lesser period is necessary to protect public health 
and safety. Section 6(b)(5) prohibits disclosure of information 
submitted under Section 15(b) until after a recall has been announced. 
There are occasionally situations in which CPSC staff would like to 
disclose information that is protected by section 6(b)(1) or 6(b)(5). 
In such situations, there are three regulatory options available to the 
staff. First, there is an exception to both 6(b)(1) and 6(b)(5) if the 
Commission has reasonable cause to believe that the product in question 
is in violation of section 19. This exception is potentially useful 
when a product violates a standard issued under the Consumer Product 
Safety Act, but it does not apply when a product fails to comply with 
standards adopted under the other statutes administered by the 
Commission. Earlier this year, I recommended a change to the statute on 
this point. The issuance of a complaint under section 15(c) or 15(d) 
would also allow disclosure. A final option would be to bring suit 
under section 12 (relating to imminently hazardous products).

                             ACCOUNTABILITY

    Question. In 2004, a malfunctioning floor jack collapsed on James 
Jennings, killing him. Despite defects in the product, the 7th Circuit 
Court of Appeals threw out his widow's suit against the floor jack's 
Danish manufacturer because the manufacturer imported this product into 
the United States through unrelated American distributors.
    How are foreign manufacturers held legally accountable for not 
complying with American laws and standards when selling foreign goods 
in our country?
    Answer. Because the CPSC does not have the authority to enforce 
American laws in foreign countries, under our governing statutes the 
agency is empowered to hold U.S. entities (importers, distributors or 
retailers of the foreign made product) accountable for safety 
violations.

                         LENGTHY RECALL PROCESS

    Question. I understand that several companies have contacted CPSC 
upon determining that their products contain high amounts of lead yet 
these companies have reported a delay of about two to five months 
before a recall is announced, leaving consumers dangerously unaware. In 
some cases, companies have reportedly contacted CPSC yet there has been 
no recall at all. While I understand that certain procedures may need 
to be in place to handle consumer contacts, the lengthy delay endangers 
the public.
    Why can't CPSC announce the danger in order to stop consumers from 
buying these products and follow-up more quickly with the actual recall 
announcement?
    Answer. Under most health and safety statutes, firms do not need to 
report to the government unless they have determined that they have a 
safety problem warranting a recall. The Consumer Product Safety Act is 
unusual in that it requires a firm to report as soon as it has 
information that a product ``contains a defect which could create a 
substantial product hazard . . ..'' 15 U.S.C.  2064(b)(2) (emphasis 
added).
    The CPSC can order a corrective action (in common parlance, a 
recall) only when it determines after an adjudicatory hearing that a 
product actually ``presents a substantial product hazard.'' Id.  
2064(d). After a firm reports a possible hazard, therefore, CPSC staff 
must analyze the case and determine whether a recall is necessary. This 
is a staff-intensive process, which generally involves obtaining more 
information from the firm and a thorough review of the case by CPSC 
technical staffs.
    The process culminates in a ``preliminary determination'' by the 
staff. The staff may decide no corrective action is necessary (or none 
beyond what the firm has already done). If the staff concludes that a 
substantial product hazard exists, it will immediately ask the firm to 
stop sale (if the product is still being sold) and conduct a recall of 
any units in the field. The firm may of course contest the staff's 
conclusions or it may acquiesce. Even when the firm is prepared to move 
ahead, additional time may be required to work out the details of the 
recall. In particular, the firm may need time to develop an appropriate 
repair or obtain a suitable replacement product.
    In roughly half of our cases, a firm is already committed to a 
recall when it reports the problem to the CPSC. In such cases, it can 
seek ``Fast Track'' treatment. Under this approach, there is no need 
for a preliminary determination by the staff. This saves a great deal 
of time and staff resources. It is still necessary to work out the 
corrective action and public notice, but these can usually be 
accomplished relatively quickly.
    The Compliance staff has a goal to initiate corrective action in 
Fast Track cases within twenty working days. In recent years, we have 
sought to meet this schedule in 90 percent or more of Fast Track cases.
    Question. Please provide an itemized list of recalls during the 
past three years including the amount of time that passed between 
notification to CPSC and recall announcement. Please provide an 
itemized list of contacts from companies during the past three years 
for which no recall has occurred and explain why.
    Answer. CPSC staff is continuing to compile this information, and 
it will be provided to the Committee upon completion.
     Attachment 1.--Work Plan for the U.S.-Sino. Toy Working Group
    Consistent with the Memorandum of Understanding between the General 
Administration of Quality Supervision, Inspection and Quarantine of the 
People's Republic of China and the U.S. Consumer Product Safety 
Commission and the Action Plan on Consumer Product Safety between the 
General Administration of Quality Supervision, Inspection and 
Quarantine of the People's Republic of China (AQSIQ) and the U.S. 
Consumer Product Safety Commission (CPSC), and in order to promote toy 
safety and to protect the safety and health of consumers, the U.S.-
Sino. Toy Working Group agrees to develop cooperation in the following 
fields:
Increase Information Exchange
    CPSC and AQSIQ will explore ways to strengthen and improve 
information exchange relating to toys.
    CPSC will provide relevant U.S. laws and regulations to AQSIQ in 
English and Chinese. AQSIQ will publicize and distribute laws and/or 
regulations to toy manufacturers and provide feedback to CPSC on this 
activity. The exchange of information will focus initially on lead 
paint on toys, toy labeling, and age determination guidelines.
Provide Notification to AQSIQ of CPSC Recalls
    CPSC will notify AQSIQ of recalls involving toys, providing the 
names and addresses of manufacturers and/or exporters and relevant 
injury and test reports, when appropriate and available. Based on the 
information provided by CPSC, AQSIQ will follow up with the 
manufacturer in China, ensuring that the manufacturer takes corrective 
action to prevent similar problems from recurring. AQSIQ will provide 
CPSC with other useful information as available and appropriate, such 
as the existence of similar products manufactured by the same 
manufacturer for other U.S. importers where the similar products might 
present the same problems as the products recalled. CPSC will follow up 
with U.S. importers to ensure they take corrective action, as 
appropriate, to prevent similar problems.
Facilitate Technical Exchange and Cooperation
    In order to improve the technical level of toy safety testing, 
AQSIQ will send representatives to the United States for technical 
training during 2007/2008. CPSC will provide staff support and 
materials for the training.
Enhance Inspections of Violative Toys and Proper Labeling
    CPSC will notify AQSIQ of toy categories or issues of special 
concern. AQSIQ will increase inspection based on that information. In 
particular, AQSIQ will increase inspection of toys for lead paint 
violations and proper labeling in accordance with CPSC regulations.
    The cooperative activities proposed in this document will be 
undertaken on a best efforts basis and are not binding.
    This Work Plan was signed on September 10, 2007 in Bethesda, 
Maryland. The Chinese version and English version have the same 
validity.
                                        John Gibson Mullan,
      Assistant Executive Director, Office of Compliance and Field 
Operations, Consumer Product Safety Commission of the United States 
                                                        of America.
                                                  Wang Xin,
Director General, Department of Supervision on Inspection, General 
Administration of Quality Supervision, Inspection and Quarantine of 
                                    the People's Republic of China.
    Attachment 2.--Work Plan for the U.S.-Sino Lighter Working Group
    Consistent with the Memorandum of Understanding between the General 
Administration of Quality Supervision, Inspection and Quarantine of the 
People's Republic of China and the U.S. Consumer Product Safety 
Commission signed by the General Administration of Quality Supervision, 
Inspection and Quarantine of the People's Republic of China and the 
U.S. Consumer Product Safety Commission (hereinafter referred to as 
``the Participants'') on April 21, 2004, in Washington, D.C. and the 
Action Plan on Consumer Product Safety between the General 
Administration of Quality Supervision, Inspection and Quarantine of the 
People's Republic of China and the U.S. Consumer Product Safety 
Commission signed on August 30, 2005, in Beijing, China the 
Participants set up the Working Group on Lighters, which is expected to 
study, discuss, and act on issues of mutual concern in the field of 
lighters, fulfill the tasks and objectives set at the U.S.-Sino. 
Consumer Product Safety Summit, resolve differences and problems 
arising in the field of lighters and support, develop, and continuously 
strengthen technical cooperation and communication in the field of 
lighters. The Participants agree to the following joint activities:
Exchange Laws and Technical Regulations
    AQSIQ and CPSC will exchange relevant laws and technical 
regulations, including the ASTM F-400 ``Standard Consumer Safety 
Specification for Lighters'' (consensus safety standard), which is 
currently under consideration for adoption as a mandatory standard. 
CPSC will provide the latest U.S. laws and regulations on lighters to 
AQSIQ.
Exchange Technical Information
    In order to strengthen information exchange on lighter safety, 
AQSIQ and CPSC will provide each other with: Information on non-
compliant lighters, including the identity of the non-compliant 
importer and manufacturer, as well as relevant technical data, where 
available and appropriate; and information to improve inspection 
methods and efficiency, with a view toward improved analysis and 
solutions for lighters that don't comply with regulations.
Facilitate Technical Exchanges
    AQSIQ and CPSC will exchange technical personnel and provide 
training for managers and inspection personnel at least annually.
Exchange of Inspection and Certification Information
    AQSIQ will provide CPSC with inspection and certification 
information, including CIQ testing reports, sample certificates, 
information on coding rules of lighter manufacturers in China, 
Enterprise Self-Assessment Reports and related test reports.
    AQSIQ will assist the CPSC in identifying U.S. importers in order 
to verify whether importers are on the CPSC submissions list. The CPSC 
submissions list indicates that the CPSC has received a required report 
that must be submitted to the CPSC 30 days before importation.
    The cooperative activities proposed in this document will be 
undertaken on a best efforts basis and are not binding.
    This Work Plan was signed on September 10, 2007 in Bethesda, 
Maryland. The Chinese version and English version have the same 
validity.
                                                  Wang Xin,
   General Director, Department for Supervision on Inspection, the 
     General Administration of Quality Supervision, Inspection and 
                      Quarantine of the People's Republic of China.
                                               Marc Schoem,
       Deputy Director, Office of Compliance and Field Operations, 
Consumer Product Safety Commission of the United States of America.
          Attachment 3.--Work Plan of Fireworks Working Group
    Consistent with the Memorandum of Understanding between the General 
Administration of Quality Supervision, Inspection and Quarantine of the 
People's Republic of China and the U.S. Consumer Product Safety 
Commission signed in Washington D.C. on April 21, 2004 and the Action 
Plan on Consumer Product Safety between the General Administration of 
Quality Supervision, Inspection and Quarantine of the People's Republic 
of China and the U.S. Consumer Product Safety Commission signed in 
Beijing on August 30, 2005 by the General Administration of Quality 
Supervision, Inspection and Quarantine of the People's Republic of 
China and the U.S. Consumer Product Safety Commission (hereinafter 
referred to as ``the Participants''), the Participants established a 
Fireworks Working Group, which is expected to study, discuss, and act 
on issues of mutual concern in the field of fireworks; fulfill the 
tasks and objectives set at the U.S.-Sino. Consumer Product Safety 
Summit; resolve any differences and problems arising in the field of 
fireworks; and to support, develop, and continuously strengthen 
technical cooperation and communication in the field of fireworks. The 
Participants agree to the following joint activities:
Exchange Laws and Technical Regulations
    AQSIQ and CPSC will exchange relevant laws and technical 
regulations. CPSC will provide AQSIQ with the latest laws, regulations, 
and testing manual of the United States on fireworks, in English. CPSC 
and AQSIQ will organize the experts from both sides to conduct a 
comprehensive analytical comparison and discussion on compulsory 
technical requirements between the Chinese and U.S. standards. CPSC and 
AQSIQ will work together to increase awareness of the CPSC fireworks 
regulations and Chinese mandatory standards for fireworks.
Exchange Technical Information
    In order to strengthen information exchange on fireworks safety, 
AQSIQ and CPSC will provide each other with information on accidents, 
incidents, and non-compliant products, as well as analysis, where 
available and appropriate. This would include the identity of the non-
compliant importer and manufacturer where available and appropriate. It 
is suggested that the exchange will be at least on a monthly basis; 
however, more frequent exchanges are encouraged where appropriate.
Facilitate Technical Exchanges
    AQSIQ and CPSC will exchange technical personnel and provide 
training for laboratory technicians and inspection personnel at least 
annually.
    The focus of these technical exchanges will be to: improve the 
efficiency and accuracy of inspections; and strengthen the inspection 
of non-compliant manufacturers.
Exchange of Inspection and Certification Information
    AQSIQ will provide China Inspection and Quarantine Bureau testing 
reports and sample certificates and fireworks manufacturer coding rules 
of fireworks manufacturers in China to CPSC.
    Activities proposed in this Work Plan are undertaken on a best 
efforts basis and are not binding.
    This Work Plan was agreed on September 10, 2007 in Bethesda, 
Maryland. The Chinese version and English version have the same 
validity.
                                                  Wang Xin,
   General Director, Department for Supervision on Inspection, the 
     General Administration of Quality Supervision, Inspection and 
                      Quarantine of the People's Republic of China.
                                               Marc Schoem,
       Deputy Director, Office of Compliance and Field Operations, 
Consumer Product Safety Commission of the United States of America.
  Attachment 4.--Work Plan for the U.S.-Sino. Electrical Working Group
    Consistent with the Memorandum of Understanding between the General 
Administration of Quality Supervision, Inspection and Quarantine of the 
People's Republic of China and the U.S. Consumer Product Safety 
Commission and the Action Plan on Consumer Product Safety between the 
General Administration of Quality Supervision, Inspection and 
Quarantine of the People's Republic of China (AQSIQ) and the U.S. 
Consumer Product Safety Commission (CPSC), and in order to promote 
electrical product safety and to protect the safety of consumers, the 
U.S.-Sino. Electrical Working Group agrees to develop cooperation in 
the following fields:
Enhance Information Exchange on Regulations
    CPSC and AQSIQ will explore ways to strengthen and improve 
information exchange mechanisms.
    CPSC will provide U.S. laws and regulations related to electrical 
products to AQSIQ both in English and Chinese. AQSIQ will publicize and 
distribute those laws and/or regulations to manufacturers and will 
provide feedback to CPSC on this activity. The exchange of information 
will focus initially on the following categories: extension cords, 
power strips, and decorative lighting strings. The range of categories 
would be discussed at each group meeting and adjusted when it is deemed 
appropriate.
    AQSIQ will encourage manufacturers to apply UL standards and/or 
other appropriate standards for electrical products that are destined 
for the United States, and to have their products certified by 
accredited certification bodies.
Strengthen Recall Notification and Follow Up
    CPSC will notify AQSIQ of recalls involving electrical products, 
providing names and addresses of manufacturers and/or exporters in 
China and relevant injury or test reports when appropriate and 
available. Based on the above information, AQSIQ will take effective 
measures to urge the manufacturers to take corrective actions in order 
to prevent similar problems. AQSIQ will provide CPSC with other useful 
information as available and appropriate, such as the existence of 
similar products manufactured by the same manufacturer and imported by 
any other U.S. importer where the similar products might present the 
same problems as the products recalled.
Facilitate Technical Exchange and Cooperation
    In order to improve the efficiency and accuracy of electrical 
products safety testing, CPSC and AQSIQ agree to promote technical 
exchanges between testing labs, as well as certification bodies of the 
two countries.
Enhance Inspections of electrical products
    CPSC will share its screening criteria for electrical products with 
AQSIQ. AQSIQ will use the screening criteria to inspect electrical 
products designated for export to the United States. This effort will 
focus initially on extension cords, power strips and decorative 
lighting strings. The range of categories would be discussed and 
adjusted when deemed appropriate at the annual group meeting. AQSIQ 
will provide CPSC with names of the U.S. importers who designed and 
ordered defective electrical products from China, when available.
    The cooperative activities proposed in this document will be 
undertaken on a best efforts basis and are not binding.
    This Work Plan was signed on September 10, 2007 in Bethesda, 
Maryland. The Chinese version and English version have the same 
validity.
                                        John Gibson Mullan,
      Assistant Executive Director, Office of Compliance and Field 
Operations, Consumer Product Safety Commission of the United States 
                                                        of America.
                                                  Wang Xin,
Director General, Department of Supervision on Inspection, General 
Administration of Quality Supervision, Inspection and Quarantine of 
                                    the People's Republic of China.
                              Attachment 5

------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
               Fiscal Year 1997 Penalties

Atlas Importers Inc.....................................         $54,000
Brinkmann...............................................        $175,000
CSA, Inc................................................        $100,000
Dots, Inc...............................................         $50,000
Four Seasons General Merchandise........................        $110,000
Hartman.................................................         $60,000
Nutone..................................................        $110,000
One Price Clothing Stores...............................         $50,000
STK.....................................................         $80,000
The Toro Co.............................................        $250,000
                                                         ---------------
      Total.............................................      $1,039,000
                                                         ===============
               Fiscal Year 1998 Penalties

Binky Griptight.........................................        $150,000
Century Products Co.....................................        $225,000
COA.....................................................        $300,000
The Limited.............................................        $200,000
Monarch Towel Co., Inc..................................         $10,000
Ross....................................................        $200,000
Safety 1st..............................................        $175,000
TJX.....................................................        $150,000
Yongxin International, Inc..............................         $50,000
                                                         ---------------
      Total.............................................      $1,460,000
                                                         ===============
Referred to DOJ:
    Ariens--Stump grinders
    Cigarette lighter cases

               Fiscal Year 1999 Penalties

Shimano American Corp...................................        $150,000
Nordstrom, Inc..........................................        $150,000
Carter Brothers Mfg. Co.................................        $125,000
Shelton Wholesale, Inc..................................        $100,000
Neiman Marcus...........................................        $112,500
Schneitter Fireworks....................................         $60,000
Small World.............................................        $225,000
                                                         ---------------
      Total.............................................        $922,500
                                                         ===============
Central Sprinkler (trust)...............................      $1,300,000

               Fiscal Year 2000 Penalties

Red Rock Trading Co. & Blackjack Fireworks, Inc.........         $90,000
Black & Decker (USA), Inc...............................        $575,000
Baby's Dream Furniture..................................        $200,000
Lancaster Colony Corp...................................        $150,000
Hasbro, Inc.............................................        $400,000
Standard Mattress Co....................................         $60,000
Royal Sovereign.........................................         $20,000
LL Bean Inc.............................................        $750,000
Galoob Toys.............................................        $400,000
AZ3, Inc................................................         $75,000
Riello Corp of America..................................        $125,000
                                                         ---------------
      Total.............................................      $2,845,000
                                                         ===============
Referred to DOJ: High Star Toys, Inc....................        $100,000

               Fiscal Year 2001 Penalties

Cosco, Inc..............................................      $1,300,000
Crawford Textile Corp...................................        $150,000
Federated Department Stores, Inc........................        $850,000
Fisher-Price, Inc.......................................      $1,100,000
Hanro USA...............................................        $150,000
Lane....................................................        $900,000
Mast Industries, Inc....................................        $500,000
Safety 1st, Inc.........................................        $450,000
Tensor Corp.............................................        $125,000
Tropitone Furniture Co..................................        $750,000
West Bend Co............................................        $225,000
HMB.....................................................         $87,500
                                                         ---------------
      Total.............................................      $6,587,500
                                                         ===============
               Fiscal Year 2002 Penalties

Aerus LLC...............................................        $250,000
Briggs & Stratton.......................................        $400,000
Cigarettes Cheaper......................................        $220,000
General Electric........................................      $1,000,000
Golden Gift, L.L.C......................................        $125,000
Honeywell Consumer Products.............................        $800,000
Icon Health & Fitness, Inc..............................        $500,000
MTS Products, Inc.......................................         $75,000
Peg Perego U.S.A. Inc...................................        $150,000
Popular Products........................................        $180,000
Regent International Corporation, Inc...................         $75,000
STK.....................................................        $150,000
Court Ordered Penalties:
    Ameri China.........................................        $140,000
    Aroma...............................................        $300,000
    Golden Gate Fireworks, Inc..........................         $10,000
                                                         ---------------
      Total.............................................      $4,375,000
                                                         ===============
Criminal Fines: Steve Thai (three years probation)......         $20,000

               Fiscal Year 2003 Penalties

Blue Coral Slick-50, Inc................................        $150,000
Weed Wizard.............................................        $885,000
Lucky Toys, Inc.........................................        $100,000
Wal-Mart................................................        $750,000
                                                         ---------------
      Total.............................................      $1,885,000
                                                         ===============
Criminal Cases: STK and Kole............................        $120,000

               Fiscal Year 2004 Penalties

Brunswick...............................................      $1,000,000
Murray, Inc.............................................        $375,000
Imperial................................................        $200,000
E&B Giftware............................................        $100,000
Lifetime Products, Inc..................................        $800,000
Groupe SEB USA f/k/a/Krups North America, Inc...........        $500,000
RRK Holdings Inc........................................        $100,000
Battat Incorporated.....................................        $125,000
Johnson Health Tech Co, Ltd and Horizon Fitness, Inc....        $500,000
Sears, Roebuck and Company..............................        $500,000
                                                         ---------------
      Total.............................................      $4,200,000
                                                         ===============
               Fiscal Year 2005 Penalties

Dynacraft BSC, Inc......................................      $1,400,000
Polaris Industries Inc..................................       $ 950,000
Graco Children's Products, Inc., a Corporation and            $4,000,000
 Century Products, f/k/a Century Products Company.......
Hamilton Beach/Proctor-Silex, Inc.......................      $1,200,000
Nautilus, Inc...........................................        $950,000
Rose Art Industries, Inc................................        $300,000
                                                         ---------------
      Total.............................................      $8,800,000
                                                         ===============
               Fiscal Year 2006 Penalties

SMC Marketing Corp......................................        $500,000
Winco Fireworks.........................................        $600,000
Acuity Brands, Inc......................................        $700,000
West Bend Housewares, LLC...............................        $100,000
Tiffany and Company.....................................        $262,500
Family Dollar, Inc......................................        $100,000
                                                         ---------------
      Total.............................................      $2,262,500
                                                         ===============
               Fiscal Year 2007 Penalties

Fisher Price............................................        $975,000
Nexgrill................................................        $300,000
Black Dog Tavern Company, Inc...........................         $50,000
Hoover/Maytag...........................................        $750,000
                                                         ---------------
      Total.............................................      $2,075,000
------------------------------------------------------------------------

                                 ______
                                 
                 Questions Submitted to Thomas H. Moore
            Questions Submitted by Senator Richard J. Durbin

    Question. In your legislative proposals, you have called for annual 
increases of about 10 percent for the CPSC. Which divisions in 
particular would you like to see augmented? Are there functions that 
you believe are significantly under-funded?
    Answer. I will say that our Field Division, which was combined with 
the Office of Compliance in 2005, has probably been one of the most 
affected and under-funded areas. I think that we certainly need to look 
into strengthening our ability to police our ports for violative 
imports. That is an area of weakness that has been getting a tremendous 
amount of attention lately. We also have to be able to have sufficient 
Field personnel to support other areas in the Commission, besides 
Compliance, such as hazard identification and analysis and consumer 
outreach. In addition, since we have also had a lot of attention 
rightfully placed on our testing and laboratory facilities, our ability 
to enhance our testing and research of consumer products has to be 
addressed. However, I think that with the possible increase in funding 
and the modernization of our statutes to give us better enforcement 
tools across the board, we will have to look at every area of the 
agency to see how it can be improved. I think that it is not an 
exaggeration to say that all functions of the agency have been under-
funded in recent years.
    CPSC is a staff intensive organization. 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 in some very key areas. For example, just 
to name a few, we have lost key experts in these areas: Poison 
prevention, chemical hazards as they relate to the Federal Hazardous 
Substances Act, compliance of toys, drowning prevention, data 
collection and analysis, emerging hazards, fire-related hazards, and 
legal knowledge of CPSC's regulatory process.
    Therefore, we have lost ability in compliance-related activities, 
regulatory activities, information and education activities, data 
collection activities and in our legal analysis activities.
    We must seriously look at strengthening all of these areas if we 
are going to be an enforcement force in today's consumer product 
marketplace. It would be my goal that we would begin a process of 
identifying critical areas of need and increasing our staff accordingly 
each year (assuming CPSC obtains the increases that you are supporting 
for the agency) with an early emphasis on the Field, since they have 
lost so many people, but not focusing exclusively on the import 
situation. It will take time to recruit and train new employees in 
every discipline in which we need to rebuild. Spreading out the hiring 
throughout the agency will reduce the recruiting and training strains 
on any one supervisor or supervisory team. It will also help us to make 
progress each year in rebuilding non-Compliance areas, such as those 
identified above.
    Question. You have indicated that you support some of Chairman 
Nord's recommendations but not others. Which recommendations do you 
support and which don't you support and why?
    Answer. I have attached my complete analysis of Chairman Nord's 
entire list of legislative recommendations.
     comments of commissioner thomas h. moore to the prism proposal

                        (Moore comments in bold)

                   working paper . . . working paper
  product recall, information and safety modernization (``prism'') act
    Note: CPSC = Consumer Product Safety Commission; CPSA = Consumer 
Product Safety Act; FHSA = Federal Hazardous Substances Act; FFA = 
Flammable Fabrics Act.

                  TITLE I. IMPROVED ENFORCEMENT TOOLS

Section 1. Additional Prohibited Acts
    (a) Make it unlawful (under Section 19 of CPSA) to knowingly sell 
to a consumer a recalled product after the date of public announcement 
of the recall;
    Rationale: Creates incentive to halt sales of recalled products 
quickly.
    I agree with the basic premise, but I have two questions. First, 
there appears to be a ``knowing'' requirement to make selling a 
recalled product a prohibited act, in addition to the ``knowing'' 
requirement before a civil or criminal penalty can be assessed. No 
other provisions in section 19 require knowledge. I am not sure if this 
is intentional or merely a recognition of the ``knowing'' requirement 
in the penalty provisions.
    Second, sections 19, 20 and 21 make ``any person'' liable for civil 
and criminal penalties for committing a prohibited act. I can certainly 
understand wanting to make sure retailers and importers who continue to 
sell recalled products are covered, but how far down the chain would 
this provision apply: thrift stores; flea markets; yard sales? When our 
staff has visited thrift stores in the past, for recall round-up 
activities, they nearly always find a recalled product or two. Our 
enforcement capabilities are already limited, so if this provision does 
contemplate reaching beyond retailers and importers to the domestic 
resale market, there could be major resource implications for our 
Compliance staff.
    See my additional comments on this issue with regard to retailers 
in the next section.
    (b) Make it unlawful for a recalling firm to fail to provide notice 
to any retailer or distributor to whom it has previously distributed 
the recalled product at least 24 hours before notification to the 
general public or purchasers of the product (Section 19 of CPSA and 
relevant sections of other statutes);
    Rationale: Assures recalling firm's distributors/retailers have 
advance notice so that they can comply with ``stop sale'' requirement.
    I agree with this provision. Retailers have been complaining for 
years about the short notice given to them prior to a recall. However, 
I wonder if 24 hours is enough time. For a huge chain of stores, being 
able to react in that short timeframe may be difficult. Congress might 
want to consider making it at least a 48-hour advance notice. Recent 
well-publicized recalls have shone the spotlight on the difficulty of 
reaching the many retailers (from the mom-and-pop stores to the larger 
ones) that may carry a product. We are nearly always negotiating a 
recall with a manufacturer or an importer, not the retailer. 
Manufacturers usually object to our letting their retailers know about 
a pending recall until it is finalized, so the retailers have little or 
no advance notice that they need to sweep their shelves of a recalled 
product. Some of the retailers will only hear about it from the news 
reports as it is not always the case that a manufacturer will know 
where all of his products end up. Requiring a manufacturer or an 
importer to provide advance notice will go a long way to solving the 
problem, although ensuring that all retailers, of whatever size and 
however they may have ultimately received the product, know of a recall 
may not be possible. The proposal to make selling a recalled product 
after the date of the public announcement of the recall a prohibited 
act should also spur retailers to pay attention to our recall notices. 
Most of them should be able to access the Internet and could sign up to 
receive recall notices through the CPSC web site for the types of 
products they carry. Policing such a requirement at the retail level 
would still be haphazard, as the agency does not have the investigative 
force to do more than spot checks. But perhaps a few fines would bring 
most retailers into line. The larger stores could certainly be held 
accountable under such a system, but it is unclear how the mom and pop 
stores or stores that sell overstock and discontinued products would 
fare. I will be interested to hear the retailers' perspective on both 
of these issues.
    Identifying the exact product to be recalled can also be a problem. 
Manufacturers are not required, in most cases, to put date codes or 
other distinguishing marks on their products every time they change 
them. Thus they often cannot tell the Commission at what point in a 
product's production it presented a risk, and at what point the problem 
was fixed (particularly if they fixed the problem before the Commission 
became aware of it). Because old product can stay on store shelves for 
quite a while and be intermingled with newer versions of the same 
product, this presents problems for retailers and the Commission staff 
in identifying which products in stores are subject to the recall. I 
believe the law should put the burden squarely on the manufacturer/
importer/distributor to make sure the products are marked (production 
date codes, for example) so that problem products can be readily 
distinguished by everyone (including the consumer who has the product 
in his home). If Commission staff is unable to clearly distinguish 
between products that should be covered by a recall and those that 
should not, then that should result in the recall of all similar 
products made by that manufacturer. The Commission should not have to 
guess (or test) every possible permutation of a particular product to 
determine if it has been remedied (although we certainly should test 
the alleged ``fix'' to make sure that the hazard has indeed been 
eliminated). A company that misrepresents the scope of the products 
affected by a recall should be subject to a penalty. In fact, a company 
that knowingly misrepresents any material fact in a recall 
investigation that delays, or otherwise hinders the agency's ability to 
promptly initiate an effective recall, should be subject to penalties 
by the Commission.
    (c) Clarify that it is a prohibited act to manufacture etc. a 
product which violates a voluntary standard upon which the CPSC has 
relied under Section 9(b) of the CPSA or other statute administered by 
the Commission;
    Rationale: Makes clear that once the Commission has formally relied 
upon a voluntary standard, its stature is equal to a mandatory standard 
for enforcement purposes. Makes requirement uniform across all CPSC 
statutes.
    This is a policy change that Congress will need to decide because 
it significantly alters the interplay between voluntary and mandatory 
standards and would require a change to the premise that underlies the 
statutory reliance provisions. Our statutes provide that the Commission 
is required to terminate rulemaking on a mandatory standard if a 
voluntary standard exists that eliminates or satisfactorily reduces the 
unreasonable risk of injury presented by the product and there is 
likely to be substantial compliance with the voluntary standard. Under 
current law, the only consequence of the Commission formally relying 
upon a voluntary standard under the CPSA (as opposed to simply 
terminating the rulemaking) is that a reporting requirement is 
triggered under section 15(b)(1). Presently, if a product fails to meet 
a voluntary standard (whether that standard has been formally relied 
upon or not), it does not necessarily mean the product presents an 
unreasonable risk of injury or is a substantial product hazard under 
section 15. Many products that fail to meet some provision of a 
relevant voluntary standard are never recalled because no hazard is 
presented that warrants one. Conversely a product that meets a 
voluntary standard is not deemed, for that reason alone, to be free of 
safety concerns, although there are those in industry that want a 
presumption that products meeting voluntary standards are deemed to be 
safe. The PRISM proposal would make the failure to comply with a 
formally relied upon voluntary standard a prohibited act making it 
``equal to a mandatory standard for enforcement purposes.'' Thus, if a 
product fails to comply with a relied upon voluntary standard, no 
section 15 analysis would be required to determine if it presented a 
substantial product hazard, the product would automatically be deemed 
to constitute an unreasonable risk of injury and be violative.
    In its history, the Commission has only formally relied upon two 
voluntary standards and, to my knowledge, there is no problem with 
those products (unvented gas-fired space heaters and gasoline-powered 
chain saws) being introduced into commerce in contravention of the 
standards. The proposal that violations of relied upon voluntary 
standards be made a prohibited act appears to be a solution to a 
nonexistent problem. It, in fact, seeks to lay the groundwork for a 
policy change that could have far-reaching consequences in the 
interplay between voluntary and mandatory standards. The changes would 
give credibility to attempts to reinterpret the reliance provisions of 
the CPSA (and by extension to our other statutes as well) to allow the 
Commission to adopt voluntary standards as mandatory standards, with 
full enforcement powers, and possibly preemption protection, without 
having to make the usual findings required for rulemaking and to use 
``reliance'' to mean something quite different than what it was 
originally intended to mean. I object to these changes, and their 
larger agenda that anticipates a policy change by the Commission, 
because they are contrary to congressional intent, past agency 
interpretation and the clear language of the statute. Congress may very 
well want to make such a policy change, which would also require 
additional wording changes in the statute, but it should do it with a 
clear understanding of what is involved.\1\
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    \1\ Some domestic manufacturers in industries facing increasing 
competition from abroad have begun to advocate a reinterpretation of 
the reliance language to persuade the Commission to elevate their 
industry's voluntary standard to a mandatory one, as a way to create 
enforcement roadblocks for foreign competitors who are gaining market 
share and in an attempt to obtain immunity from state court civil 
actions through the preemption provisions of our statutes. Absent clear 
safety issues, foreign competition is not a concern of CPSC, but is in 
the purview of other government entities.
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    The reasons given for seeking to rely on a voluntary standard and 
enforce it as if it were a mandatory one are to reduce the time it 
takes to promulgate a mandatory standard and to have the full range of 
enforcement powers available for failure to comply with relied upon 
voluntary standards, especially the ability to stop violative imports 
at their port of entry. If the Commission could simply rely on a 
voluntary standard, without having to make the cost/benefit and other 
findings required by our statutes, it could be a much shorter process, 
or so the argument goes. It is true, it could be shorter, but unless 
the CPSC staff has been closely involved in the development of the 
voluntary standard, is completely satisfied with its provisions, and 
has been monitoring industry's conformance with it over a period of 
time, much of the underlying work that is required in promulgating a 
mandatory standard should still be done in order for the Commission to 
feel confident in relying upon the voluntary standard (the only set of 
circumstances under which the agency should consider relying upon it). 
And, of course, the premise underlying the current reliance language 
would have to be changed from one of keeping the federal government out 
of the way of effective voluntary standards to one of the federal 
government co-opting them and turning them, without the normal 
regulatory process, into mandatory standards (a significant change to 
the present reliance language).
    Over the years, Congress has viewed the relationship between 
voluntary standards and federal mandatory standards in the consumer 
product area in varying lights. The Commission was founded on the 
belief that industry-formulated voluntary standards were consensus-
driven minimum standards that sometimes did more to protect industry 
than consumers.\2\ Over time, after some changes were made to the 
voluntary standards-setting procedures and CPSC staff began to have 
active participation in those organizations, Congress became concerned 
that the Commission was stifling or supplanting acceptable voluntary 
standards with mandatory ones, and the emphasis shifted from favoring 
mandatory regulation to requiring the agency to defer to voluntary 
standards when those standards adequately addressed the risk of injury 
and the standards were substantially complied with by industry.
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    \2\ ``Safety itself has been a secondary consideration in the usual 
process of developing voluntary standards. The need for a consensus 
commonly waters down a proposed standard until it is little more than 
an affirmative of the status quo.'' Final Report of The National 
Commission on Product Safety, Presented to the President and Congress, 
June 1970, page 62.
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    It was in the context of Congress wanting CPSC to get out of 
industry's way when it was doing a good job through the voluntary 
standards process that the reliance language was added to the Consumer 
Product Safety Act. The whole thrust of the statute is to allow 
voluntary regulation (without any rulemaking or mandatory enforcement 
resources being expended) to fill as much of the regulatory landscape 
as possible. When we terminate a rulemaking in reliance (formally or 
otherwise) on a voluntary standard, the mandatory rulemaking ends as do 
any agency enforcement powers (other than the ability to make a 
substantial product hazard determination under section 15). The 
Commission understood this context at the time and has interpreted the 
provisions accordingly ever since. The Commission has only used the 
formal reliance mechanism twice--both times looking back at past 
Commission actions and determining that they met the requirements for 
reliance--one involved the revocation of a mandatory regulation for 
which the industry had adopted a more stringent voluntary standard and 
one was the termination of a rulemaking in which industry had adopted a 
solution developed in cooperation with Commission staff.\3\ \4\
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    \3\ In voting to revoke the Mandatory Standard for Unvented Gas-
Fired Space Heaters, Commissioner Stuart M. Statler listed among his 
reasons for supporting the revocation of the mandatory standard in 
favor of the voluntary standard the following: ``The Commission retains 
powers under Section 15 of the CPSA to remove from the market any 
unvented LP or natural gas-fired heaters not equipped with an ODS 
device or equivalent means to curtail the asphyxiation risk.'' He 
stated further ``If [States and localities] believe the voluntary 
standard is not a sufficient safeguard, States and cities may now 
regulate the use of unvented gas space heaters as they best see fit 
without having their hands tied by the existence of a Federal rule.'' 
[Emphases in the original.] Statement of Stuart M. Statler dated August 
16, 1984. Clearly Commissioner Statler viewed the revocation of a 
mandatory standard in reliance on a voluntary standard as terminating 
federal enforcement powers (except to the extent section 15 might 
apply, as it would to any unregulated product) and ending any federal 
preemption that had attached to the mandatory standard.
    \4\ It is also worth noting that until the adoption of the 1991 
amendments, which added the reporting requirement with respect to 
relied upon voluntary standards to section 15 of the CPSA, the 
Commission felt no obligation to make any particular distinction when 
it was terminating a rulemaking as to whether it was ``relying'' on a 
voluntary standard because, until those amendments, no statutory 
consequences were attached to reliance beyond the termination of the 
rulemaking. Not until 1992 did the Commission go back and review past 
actions and identify the two Commission actions in which it was 
determined that their revocation and termination had been done in 
reliance on a voluntary standard. The Commission did this in order to 
give notice to the affected industries that the new reporting 
requirement would apply to them.
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    There are two reasons why the Commission has so rarely formally 
terminated a rulemaking in reliance on a voluntary standard to obtain 
the increased reporting authority under section 15(b)(1). First, that 
reporting requirement only applies to voluntary standards relied upon 
under the CPSA. Since the CPSA also requires the agency to promulgate 
regulations under the more targeted provisions of the FHSA, FFA or PPPA 
whenever appropriate, the result is that most of our regulations are 
issued under one of these three statutes where there is no advantage to 
the Commission (in the form of a reporting requirement) to choose 
formal reliance over merely terminating the rulemaking proceeding and 
allowing the voluntary standard to fill the void. The second reason is 
that the premise set up by the statutory language rarely occurs. If a 
voluntary standard exists that both adequately addresses an identified 
risk and it is being substantially complied with by manufacturers and 
importers, the agency would be unlikely to even start a rulemaking 
process. There is no need for agency intervention in the face of an 
effective voluntary standard. Only if the standard does not meet one of 
the two prongs of the test (adequately addressing the risk or likely to 
be substantially complied with) could the Commission step in, and then 
it would be to turn the voluntary standard into a mandatory standard 
through its normal regulatory process.
    It might be useful to extend the reporting provision for relied 
upon voluntary standards to the other Acts we administer. For example, 
until the Commission began a rulemaking proceeding to address the more 
than 25,000 annual injuries to infants falling down stairs in baby 
walkers, no solutions were proffered by industry to this serious 
problem. Industry maintained the only solution was better parental 
supervision. But once the agency began rulemaking in this area, 
industry, working closely with Commission staff, began to work on a 
solution. CPSC held the rulemaking in abeyance until a satisfactory 
voluntary standard was issued and until staff was satisfied that there 
was substantial conformance with the standard. Had the baby walker 
rulemaking been initiated under the CPSA rather than the FHSA, the 
Commission might have considered formally relying upon the voluntary 
standard. This would have triggered the reporting requirement under 
section 15 of the CPSA and would have resulted in that voluntary 
standard being referenced in the Code of Federal Regulations as one 
upon which CPSC has relied. While it is unknown whether the reporting 
provision and the CFR reference would have prevented any of the recalls 
of noncomplying baby walkers that occurred after the acceptance of the 
voluntary standard by the Commission, it is possible that they could 
have made a difference.\5\ \6\
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    \5\ The baby walker voluntary standard has been instrumental in the 
dramatic decrease in injuries to children of almost 90 percent from 
1992 to 2005.
    \6\ Even if no other changes are made to the reliance provisions by 
Congress, I think the Commission should consider elevating the 
prominence of the relied upon standards in the text of the CFR, 
particularly if more voluntary standards are added to the current list 
of two. As it stands now, those standards are effectively buried in the 
CFR.
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    Ultimately it is for Congress to decide whether it wants to again 
change the interplay between voluntary and mandatory standards. Since 
Congress last addressed this issue, many industries have often fought 
long and hard to devise a voluntary standard in order to avoid a 
mandatory one. It would be instructive to know their reasons for not 
wanting a mandatory regulation. Is it simply the desire to keep the 
illusion of control over their product? I say ``illusion'' because the 
Commission should not accept a voluntary standard solution that 
provides less safety for the consumer than it could achieve through 
rulemaking, whether it formally relies upon the voluntary standard or 
not. Or is industry reluctant to give CPSC greater enforcement powers 
over their products? Whatever the reasons, we should move carefully in 
this area. The ability to too easily transform voluntary standards into 
mandatory ones could remove any incentive manufacturers have to develop 
voluntary standards to avoid federal regulation (there would likely be 
no effective voluntary baby walker standard today had there not been 
the real threat of mandatory regulation). Given the success the 
Commission has had over the years in getting various industries to 
adopt effective voluntary standards in order to avoid federal 
regulation, we would not want to lose the leverage we currently have in 
that regard. And given the shrinking resources of the Commission, we 
often need the resources of industry to develop a workable standard--
resources they have been much more willing to commit when working on a 
voluntary standard than when they are facing the promulgation of a 
mandatory rule. Resources would also be an issue if any significant 
number of voluntary standards suddenly had to be enforced as mandatory 
standards. Every new mandatory regulation creates expectations in 
consumers and industry alike that the Commission is going to be able to 
keep noncomplying products out of the marketplace. As our budgetary 
resources and our personnel decline, and the number of imported 
products grows, this is less and less of a realistic expectation.
    While I do not believe the current statutory language can be used 
to give formal reliance on a voluntary standard any consequence beyond 
the imposition of the reporting obligations in section 15, I think 
Congress should address whether other consequences should flow from 
formal Commission reliance on a voluntary standard in lieu of a 
mandatory one and clearly state its views on the matter. Congress 
should also consider giving the Commission the ability to do two-step 
rulemaking (instead of three-step) when the Commission, in its 
discretion, feels a shorter process may be appropriate. One case might 
be where the Commission believes an adequate voluntary standard exists 
(based on active staff participation in the development of the 
standard) that addresses a real risk of injury but which, for some 
reason, is not being adequately complied with and where the 
Commission's enforcement powers could make a significant difference in 
that compliance. I say ``significant'' because one could always make 
the argument that we have more enforcement tools in the mandatory 
setting than in the voluntary one.
    Congress also needs to consider the effect the preemption of state 
regulations, standards, and state civil court actions (in light of the 
new interpretation by the current Commission in that area) could have 
if reliance on consensus-developed voluntary standards were extended 
beyond the CPSA and too casually used in lieu of full-blown federal 
rulemaking proceedings. I do not believe we want consensus-driven 
voluntary standards routinely becoming the ceiling instead of the floor 
in protecting consumers from product hazards that may present an 
unreasonable risk of injury or death. That would run contrary to the 
purpose for which the Commission was established (see footnote 2, 
above).
    (d) Make it unlawful to fail to furnish a certificate of compliance 
with a mandatory standard under any statute administered by CPSC or any 
voluntary standard relied upon by the Commission or to issue a false 
certificate of compliance (CPSA Section 19 and relevant sections of 
other statutes);
    Rationale: Applies CPSA certificate requirement uniformly across 
all CPSC statues, and treats voluntary standards formally relied upon 
by the Commission as equivalent to mandatory product safety standards 
for certification purposes.
    I agree to the extent it extends the certification provision to 
mandatory standards under our other statutes. As to extending it to 
relied upon voluntary standards, that would depend upon what decision 
Congress makes with regard to expanding the reach and the meaning of 
such standards. See my answer to the previous proposal.
    (e) Make it unlawful to fail to provide information in timely 
response to a subpoena from the Commission (CPSA Section 19 and 
relevant sections of other statutes);
    I agree, although I would like to see the language when it is 
drafted with regard to what constitutes a ``timely'' response.
    Rationale: Provides explicit enforcement mechanism for failure to 
respond to a Commission subpoena in timely fashion.
    I agree.
    (f) Prohibit stockpiling under all statutes administered by the 
Commission to the same extent as under the CPSA (Section 9(g)).
    Rationale: Conforms other CPSC statutes to anti-stockpiling 
provisions of CPSA.
    I agree.
Section 2. Civil and Criminal Penalties and Other Remedies
    (a) Add asset forfeiture as a potential additional criminal remedy 
under any statute administered by the Commission (Section 21 of CPSA 
and relevant sections of other statutes);
    Rationale: Allows CPSC to act to assure that any gain from 
criminally violative activity is not retained by perpetrator.
    I agree.
    (b) Give the CPSC the authority to impose penalties of up to $2 
million administratively (without need for Department of Justice 
referral and initiation of federal court action) under CPSA, FHSA and 
FFA (penalty would still be subject to judicial review);
    Rationale: Streamlines civil penalty process by allowing CPSC to 
proceed administratively rather than via judicial action in many cases.
    I am undecided on this proposal. Given that this requires an 
administrative proceeding that could take quite a bit of time and 
agency resources (one of the reasons we so rarely have administrative 
proceedings in the recall area) and then would be subject to judicial 
review, I'm not sure this would streamline the process. I also worry 
about the $2 million cap becoming a barrier to Justice Department 
referrals, further limiting the use of any increased penalty authority.
    (c) Increase the cap on civil penalties under the CPSA, FHSA, and 
FFA to $10 million, to be phased in over 4 years. (Section 20 of CPSA; 
Section 5 of FHSA; Section 5 of FFA);
    Rationale: Gradual phase-in reduces likelihood of unmanageable 
surge in unnecessary reports from firms or that some firms may stop 
submitting necessary reports. Uniformity across all statutes makes 
enforcement tools consistent for all products under Commission 
jurisdiction.
    I have gone on record several times as supporting the complete 
elimination of any civil penalty cap. The civil penalty provision 
already lays out factors to be considered in determining the amount of 
any penalty: ``the nature of the product defect, the severity of the 
risk of injury, the occurrence or absence of injury, the number of 
defective products distributed and the appropriateness of such penalty 
in relation to the size of the business of the person charged.'' Having 
a monetary cap on top of those factors (particularly such a small cap) 
serves no useful purpose other than to make it easier for companies to 
include the risk of potential consumer harm in their cost of doing 
business.
    Because the Commission strives for negotiated civil penalty 
settlements whenever possible, the existence of a cap means that, even 
in the most egregious cases, the cap amount is where the agency has to 
start its negotiations. Unless we are willing to take the case to 
court, we are always going to be settling the case for less than the 
civil penalty cap and since the cap itself is so low, going to court 
will usually be the difference of only a few hundred thousand dollars. 
We often find ourselves accepting penalties below what we think is 
appropriate because the cost of getting the relatively small 
incremental amount through a lengthy court proceeding is not worth the 
time and resources. Our negotiating room is thus extremely limited and 
obvious to every company we deal with. We also have little room to make 
meaningful distinctions in assessing civil penalty amounts among the 
types of violations and the sizes of the companies involved. Industry 
complains that they cannot discern a rationale for our civil penalty 
decisions. If the cap was not putting unnatural constraints on the way 
the statutory factors should work to determine penalties, the basis for 
our decisions would be more cogent and thus more obvious. Removal of 
the cap, or raising it significantly, would put the agency in a 
stronger negotiating position, allow us to make more reasoned 
distinctions among violators and the penalties assessed against them 
and would make business more hesitant to ignore their safety 
responsibilities to consumers.
    If we are going to still have a cap, I see no particular reason to 
phase it in. We have complained for years that we really do not get the 
reports that we should be getting under section 15. If we suddenly got 
a surge of reports, I would say ``bravo.'' The whole point of the 
staff's retailer reporting model is to try to get the number of reports 
up because we know we are not seeing all the incident reports we should 
be seeing.
    On the whole, this proposal is better than no change, but, given 
how long we have labored under this low cap, and since we finally have 
the opportunity and the interest in Congress to do something about it, 
I would hope we would make the strongest change possible.
    (d) Clarify that the list of 5 statutory factors to be considered 
by the CPSC in determining a civil penalty amount under the CPSA, FHSA 
or FFA is not exclusive [Section 20(b),(c) of CPSA; Section 5(c)(3),(4) 
of FHSA; Section 5(e)(2),(3) of FFA].
    Rationale: Makes clear that while Commission must consider factors 
enumerated in the statute, it may in its discretion address other 
factors as appropriate to the particular matter under consideration.
    I agree that this provision needs to be clarified, but I take no 
position as to what the original intent of Congress was with regard to 
the exclusivity of those provisions. Last year, the Commission 
considered whether certain other factors that are not listed in the 
statute should be considered in assessing civil penalties. The 
Commission has gone out for public comment on these additional factors. 
A copy of my statement discussing the proposed factors can be found at 
http://www.cpsc.gov/pr/statements.html. Congress may want to review the 
factors currently in the statute to see if additional factors are 
warranted (such as the number of violations by the same company) and to 
clarify whether the Commission has the discretion to supplement the 
statutory list.
    In addition to this proposal I would like to see the Congress 
clarify the reference in the second sentence of section 20(a)(1) of the 
CPSA with regard to the clause ``any related series of violations.'' It 
would seem to me that if a company violates multiple provisions of 
section 19, for example, sells a product that violates a mandatory 
standard, has falsely filed a certificate with the Commission stating 
that the product meets the standard, and fails to file a section 15 
report about the failure to comply with the standard, that the 
Commission should be able to seek a separate penalty amount for each 
such offense and that they not all be swept up under one civil penalty 
cap amount. There are differing opinions as to what that second 
sentence means--some will argue that the maximum penalty will be the 
same no matter how many violations occur with regard to the same 
product--and I believe this may be why we so rarely go after any other 
penalty than one for failure to file a section 15 report. If there were 
no civil penalty cap, this would not be an issue.
    I also do not know why, if a person ``knowingly and willfully'' 
violates section 19, they also have to receive notice of noncompliance 
from the Commission before they are subject to a potential criminal 
penalty. Congress may want to reexamine the need for this requirement.
Section 3. Recalls
    (a) Clarify that the CPSC must approve the consumer remedy (refund, 
repair or replacement) proposed by a firm in a mandatory recall under 
Section 15 of the CPSA or section 15 of the FHSA;
    Rationale: Makes clear that Commission is the final arbiter of the 
remedy in rare instances of mandatory recalls (recalls that are 
mandated after failed negotiation, an administrative law hearing, 
Commission review and subject to judicial review).
    I agree. In May of 2000, I voted to endorse draft legislation that 
would have given the Commission the ability to order manufacturers, 
distributors or retailers to take whatever other action the Commission 
determines is in the public interest, if the Commission determines that 
the remedy chosen by the company in a mandatory recall is not in the 
public interest. A copy of the draft legislation and the press release 
that accompanied the vote on the legislation (as well as the statement 
in opposition by Commissioner Mary Sheila Gall) can be found at the 
following link http://www.cpsc.gov/library/foia/ballot/ballot00/
ballot00.html. This legislation also eliminated the civil penalty cap 
and the requirement of notice of noncompliance in the criminal penalty 
provisions.
    Companies have used the fact that they can elect the remedy if the 
agency pursued administrative action, as a basis for arguing with 
Commission staff that their proffered voluntary recall action plan is 
as much as they will do. Staff is thus constrained by the statutory 
consequences of failing to negotiate a voluntary recall even when staff 
believes that the remedy is inadequate. Because time is of the essence 
in removing a hazardous product from the marketplace, having to go 
through an administrative process (in addition to the cost such a 
process entails), has led to less than robust recalls on occasion. It 
is true that the agency can get an injunction to stop future 
distribution of the product during the pendency of the administrative 
proceeding, but that does not get the product out of the hands of 
consumers who already own it.
    Under the Consumer Product Safety Act, if we fail to negotiate a 
cooperative recall with a company, we can take the matter to an 
administrative proceeding before an administrative law judge. If at the 
end of that proceeding, the Commission determines that a recall of a 
product is required in the public interest, the Commission may ``order 
the manufacturer or any distributor or retailer of such product to take 
whichever of the following actions the person to whom the order is 
directed elects . . ..'' The election is among the options of repair, 
replacement or refund. The statute goes on to say, ``An order under 
this subsection may also require the person to whom it applies to 
submit a plan, satisfactory to the Commission, for taking action under 
whichever of the preceding paragraphs of this subsection under which 
such person has elected to act.'' [Emphasis added.] Thus, by statute, 
the Commission cannot require a certain remedy but I believe it can 
insist that whatever remedy is chosen be satisfactory to achieve an 
effective recall. Nevertheless, making it clear that the Commission is 
``the final arbiter'' on the choice of a recall remedy would be helpful 
in the voluntary recall negotiation stage, even though the Commission 
has rarely taken the steps necessary to go to the mandatory recall 
stage.
    (b) Authorize CPSC to order further notification of consumers and 
additional corrective action if consumers are not adequately protected 
by the original corrective action.
    Rationale: Provides clear authority to the Commission to take 
additional action if remedy as initially implemented proves 
insufficient to adequately protect consumers.
    I believe we already have this authority and we have insisted in 
several cases in the past that companies take additional action if 
their original recall remedy is not effective. However, I support any 
change that would strengthen our ability to act in this area.
Section 4. Information and Reporting
    (a) Require reports under section 15 whenever a manufacturer, 
distributor or retailer obtains information which reasonably supports 
the conclusion that a product fails to comply with (i) a mandatory 
standard or ban adopted by the Commission under any statute it 
administers; or (ii) a voluntary standard relied upon by the Commission 
under any statute it administers;
    Rationale: Adds reporting requirements for violations of mandatory 
standards under all statutes, as well as voluntary standards upon which 
the Commission may rely.
    I agree with extending the reporting requirements of section 15 to 
our other statutes.
    (b) Require any retailer or distributor of any consumer product to 
provide, to the extent practicable, the name and address of any company 
who supplied the product to such retailer or distributor (would amend 
Section 16 of CPSA);
    Rationale: Such information should be in the hands of the retailer 
or distributor. Access to it would allow CPSC to reach other possible 
routes for product to get to consumers.
    I agree, although I would add ``importer'' to the list.
    (c) Require any manufacturer, importer or distributor of a consumer 
product to provide, to the extent practicable, the name and address of 
any entity to which it sold or otherwise made available such product 
for resale (CPSA Section 16).
    Rationale: Such information should be in the hands of the 
manufacturer, importer or distributor. Access to it would allow CPSC to 
identify other possible routes for the product to get to consumers.
    I agree. While this, and the proposal just above it, appear to be 
covered in section 19(a)(3), the Congress might want to consider a 
separate reference to them in 19(a) to make it clear that failure to 
abide by these requirements are prohibited acts and to spur companies 
to obtain and retain such information.
Section 5. Bonding of Violative Imports
    (a) Permit the Commission or Customs to require the posting of a 
bond sufficient to pay for the destruction of a shipment of consumer 
products where the expense may be substantial or there are concerns 
that a firm may disappear or abandon the shipment.
    Rationale: Assures that if CPSC must address disposal of violative 
products, funds to do so are available from the importer. As an example 
of the need, disposal of violative fireworks can involve significant 
costs.
    I agree.
Section 6. Foreign Internet Sales
    (a) If a consumer product is sold or offered for sale to consumers 
on the internet by an entity located outside the United States, that 
entity shall be deemed the manufacturer/importer and shall maintain the 
original or a copy of the records relating to such sales within the 
United States.
    Rationale: Allows CPSC to reach extraterritorial internet sellers 
and assures that records necessary to track such sales are available in 
the United States.
    I do not know what enforcement tools we would have to reach foreign 
internet sellers, and given that, I am not sure what use we would make 
of the sales records, apart from taking it upon ourselves to notify 
purchasers if we discovered a problem with a product. I appreciate, as 
Acting Chairman Nord put it, that this is more of a place marker, than 
an actual solution. I think most foreign products still end up coming 
through a U.S. distributor as opposed to being sent directly to the 
consumer, due to the product having to clear Customs and tariffs having 
to be paid. This is an area that will bear continued watch and thought. 
How much of an actual problem it is at the moment I do not know.
Section 7. Information Disclosure Reform
    (a) Reduce the notice period of CPSA section 6(b) from 30 days to 
15 days and allow for electronic notice to a firm by the CPSC;
    Rationale: Reduced timeframe facilitates timely recalls and 
recognizes 21st Century modes of electronic communication.
    The entire rationale for section 6(b) of the CPSA needs to be 
revisited. Congress should decide what kind of information it wants 
consumers to have about potentially hazardous products and when that 
information should become available. The Committee may want to look at 
certain of the powers that have been granted to the National Highway 
Traffic Safety Administration (NHTSA) and consider how extending 
similar powers to the CPSC could enhance our consumer protection 
abilities. For example, anyone can go onto the NHTSA web site, type in 
the make, model and year of an automobile and read consumer complaints 
about the car. The complaints are not censored, nor are they verified, 
and they do not necessarily result in a recall. They are a compendium 
of comments by owners of cars who were concerned enough about some 
feature of their car to file a complaint. It is a car buyer's bonanza. 
Compare that to CPSC where complaints are kept secret (except from the 
manufacturer) and consumers only know about a problem with a product 
from CPSC when the agency has issued a recall, and then they only know 
what the agency and the company have agreed to make public. I cannot 
think of any good reason why there should be a difference with what a 
consumer could be aware of when he is thinking of buying a particular 
car (or who is having a problem with one he already owns) and, for 
example, what a prospective or current All-Terrain Vehicle (ATV) owner 
could know about ATVs?
    NHTSA also has the ability to publish initial defect determinations 
about a vehicle in the Federal Register for everyone to see. I think a 
lot of the foot-dragging and reluctance to provide the agency with 
information would disappear if companies knew that their lack of 
cooperation in a recall could result in the public knowing that the 
agency staff has made a determination that their product presents a 
hazard.
    The information from such an open process would not only benefit 
the consumer, it would benefit the Commission, for it could not help 
but generate input from other consumers who had had similar problems 
with a product, but who did not, for whatever reason, report it to the 
CPSC. We are always looking for ways to spot potential problems at the 
earliest possible moment. It is often not easy to recognize when a 
product incident goes from being what might simply be an aberration 
involving an unusual interaction between a consumer and one product, to 
its being a systemic problem with a product line that requires action 
by the Commission. The more that we learn from consumers about their 
product experiences, and are able to share with the public, the more 
likely we are to stop a problem before it causes serious harm. The 
Commission is forced to operate on a ``need to know'' basis and, oddly 
enough, the consumer is not on the ``need to know'' list until after a 
recall is finalized.
    I know some argue that being able to provide information to CPSC 
and having it kept secret from the public somehow encourages fuller 
disclosure by companies than there would be otherwise. All I can say is 
that companies are required, by law, to report certain information to 
the Commission and to respond truthfully and completely to our 
information requests. Companies can keep certain information out of the 
public eye by appropriately identifying information such as trade 
secrets, which they want kept confidential and the Commission can use 
the law enforcement exception to the Freedom of Information Act, if it 
feels withholding certain information is necessary. What more assurance 
companies need for them to provide the information they are required to 
provide, I do not know, but given the often very difficult time we have 
obtaining information from some companies now, I doubt seriously that 
6(b) plays much of a role in encouraging disclosure. The provision does 
come into play at a later stage in the process, after the company has 
agreed to a recall and when it is trying to paint the brightest picture 
of its product's failure. The elimination of 6(b) is not going to 
result in the agency disseminating false information about a product or 
a company. No purpose would be served by that and it would only further 
confuse consumers. Consumers want timely, accurate warnings about 
products that may cause harm to their families; information that is not 
filtered through some corporate public relations firm.
    Speaking of public relations, I also think our recall notices may 
not be designed in a way that garners them the attention they deserve. 
They have been formalized and homogenized over the years to the point 
where they look like corporate press releases about quarterly profits, 
rather than serious safety warnings that people need to heed. I think 
we need to look at these releases in a different way. To the extent 
staff feels they are constrained in making the releases more attention-
getting because of 6(b), then that is one more reason to change 6(b).
    (b) Expand the exemptions from CPSA section 6(b) to include (i) 
violations of any CPSC mandatory standard, ban or relied-upon voluntary 
standard (not just CPSA-promulgated standards); and (ii) prohibited 
acts under any statute administered by the Commission;
    Rationale: Extends application of section 6(b) exemption to relied-
upon voluntary standards and clarifies that section 6(b) exemption runs 
to prohibited acts under any CPSC statute.
    If some version of 6(b) is retained (and subject to whatever 
decision the Congress makes as to relied upon voluntary standards), I 
agree that we should extend the exemptions to the other statutes.
    (c) Amend Section 29(e) of the CPSA to allow the CPSC to share 
information with any other federal agency for law enforcement purposes 
and to share any product safety-related information with any federal, 
state, local or foreign government who has established the ability to 
protect such information from premature public disclosure and who 
agrees to protect such information;
    Rationale: Clarifies that CPSC can share any information with 
government enforcement partners, not just ``reports.'' Adding foreign 
governments recognizes global marketplace.
    I agree in principal, but I would like to see the exact language of 
the proposed statutory change.
    (d) Clarify that section 6(b) does not prohibit the disclosure of 
information to foreign governments concerning products manufactured 
within their own national territory by companies not subject to U.S. 
jurisdiction;
    Rationale: Recognizes global marketplace and addresses situations 
where direct U.S. jurisdiction over foreign manufacturer may not lie.
    I agree, assuming we still have a 6(b) provision and assuming that 
the preceding proposal does not already cover that issue. I would also 
want to make it clear that this pertains only to information that the 
agency elects to disclose, so that we are not put in the position, for 
example, of having to disclose information to the government of a 
foreign manufacturer at a sensitive point in a recall negotiation with 
the importer of the product.
    (e) Provide that reports to the Commission under section 15 shall 
be given the same consideration as reports under section 37.
    Rationale: Increases incentive to provide prompt and full 
information to CPSC. Makes section 15 provisions consistent with 
existing section 37 provisions.
    I do not know what this proposal attempts to do or what it amends.
    I would like to see section 37 amended to enable the Commission to 
get more information from lawsuits filed against manufacturers. 
Congress should amend section 37 of the CPSA to require reporting when 
three or more individual lawsuits involving the same product are filed 
(or when one class action lawsuit is filed) instead of when they are 
settled. Given how long cases can be strung out, it is fairly easy for 
manufacturers to avoid the current reporting requirement and, indeed, 
we get few reports from it. The 24-month period should be expanded or 
eliminated as it serves no useful purpose, other than to cause 
companies to be creative about their delaying tactics.

                      TITLE II. REGULATORY REFORM

Section 1. Streamline Overall Regulatory Process
    Eliminate the requirement (but not the option) of issuing an 
advance notice of proposed rulemaking (ANPR) prior to the issuance of a 
notice of proposed rulemaking (NPR) relating to standards or bans under 
any statute administered by the Commission.
    Rationale: Enables Commission to issue and update mandatory 
standards more efficiently where warranted. Commission could still, in 
its discretion, issue ANPR with regard to either potential mandatory or 
relied-upon voluntary standard.
    I agree. Congress should give the Commission the discretion to use 
two-step rulemaking in all of its statutes, instead of three-step 
rulemakings. Another example where the Commission might decide to 
streamline the process and use the two-step process (in addition to the 
example given earlier under the discussion of voluntary standards) is 
when the Commission is making amendments to current regulations that do 
not change the overall thrust of the regulation.
Section 2. Efficient Enforcement Authority
    Grant CPSC authority to promulgate regulations for the efficient 
enforcement of any statute it administers (just as the CPSC now has 
under Section 10 of the FHSA).
    Rationale: Clarifies that Commission can issue enforcement 
regulations in addition to consumer product safety standards under any 
of its statutes where warranted to carry out mission.
    I agree.
Section 3. Eliminate Unnecessary Regulatory Requirement
    Correct disparity in rulemaking process between Sections 2 and 3 of 
FHSA by eliminating the requirement that the CPSC follow the procedures 
of the Federal Food, Drug and Cosmetic Act.
    Rationale: Eliminates confusion between rulemaking under Food, Drug 
and Cosmetic Act and informal rulemaking procedures otherwise called 
for in these sections.
    I agree.
Section 4. Strike Section 30(d) of CPSA
    Eliminate the requirement to make findings, with public notice, 
before regulating under the CPSA vs. other statutes.
    Rationale: By eliminating two step proceeding, allows for more 
expedited issuance of CPSA rather than FHSA, FFA, or PPPA standard 
where warranted.
    I do not agree with this change. The rule that is required to be 
issued under section 30(d) issues at the same time as the proposed 
rule, so it is not a two-step proceeding in the sense that it causes 
cumulative delay. The comment period on the rule to explain why the 
Commission has chosen to regulate under the CPSA runs right along with 
the time for comments of the proposed rule itself. Until such time as 
all of our statutes are combined into one comprehensive safety statute 
and until such time as choosing one statute over another for procedural 
or other advantages disappears, I think it is important for the 
Commission to continue to explain why it has chosen to proceed under 
the CPSA as opposed to one of the other statutes. See, for example, the 
Proposed Rule to Regulate Under the Consumer Product Safety Act Risks 
of Injury Associated With Multi-Purpose Lighters That Can Be Operated 
by Children, September 30, 1998 issue of the Federal Register, Volume 
63, Number 189, pages 52393-52397 http://www.cpsc.gov/businfo/
frnotices/fr98/riskmult.html. This contains a thorough and informative 
explanation of why this hazard was regulated under the CPSA as opposed 
to the FHSA or the PPPA.
Section 5. Treaty Conformity
    Eliminate the 60 day deadline for publishing final rules. Executive 
Order 12889 requires minimum 75 day comment period. (Section 9(d) of 
CPSA).
    Rationale: Conforms rulemaking process to notice requirements under 
North American Free Trade Agreement.
    I agree.
Section 6. Expand Certification Requirements
    Extend existing certification requirement under CPSA (Section 14) 
to all statutes administered by the Commission.
    Rationale: Avoids confusion among disparate certification and 
labeling provisions of CPSA, FHSA, FFA, and PPPA.
    I agree.
Section 7. Relied-upon Voluntary Standards
    Clarify that informal APA rulemaking requirements are to be 
followed under the ``notice and comment'' provisions of Section 9(b) of 
the CPSA (after other, existing prerequisites to Section 9(b) are met, 
e.g., that there be an extant mandatory rulemaking underway, etc).
    Rationale: Makes clear that full notice and comment rulemaking 
using Administrative Procedure Act process is the mechanism for the 
Commission to make ``relied-upon'' determinations.
    As I indicated above, Congress must decide whether it wants to 
change the current balance between voluntary and mandatory standards. 
If it does decide that it wants to adopt a system that makes it easier 
for the Commission to convert existing voluntary standards into 
mandatory ones, then the two-step rulemaking process would be 
appropriate.
Section 8. Rulemaking Authority
    Authorize the Commission to adopt rules implementing any of the 
provisions of this Act (``PRISM'').
    Rationale: Explicitly enables the Commission to implement the other 
provisions of PRISM.
    The Commission should have the ability to adopt rules to implement 
whatever changes Congress makes to our statutes.

                     TITLE III. TECHNICAL REVISIONS

Section 1. CPSC Jurisdiction
    (a) Clarify the jurisdiction of the National Highway Traffic Safety 
Administration vs. the CPSC over ``dual use'' motor vehicle equipment 
(e.g., infant carriers and children's car seats that can be removed and 
used away from the vehicle) (Section 3 of CPSA; Section 2 of FHSA);
    Rationale: Eliminates confusion over which agency can take action 
depending on whether issue involves in-car or out-of-car problems.
    I agree.
    (b) Add ``medical devices'' to list of products not within CPSC 
jurisdiction under FHSA (Section 2(f)(2)).
    Rationale: Eliminates inconsistency with CPSA and places ``medical 
device'' jurisdiction with the Food and Drug Administration.
    I do not see any reason for this change. The FDA does not regulate 
the same type of hazards that we regulate under the FHSA. I am 
reluctant to give up any jurisdiction without a good reason.
Section 2. Other Technical Revisions
    (a) Under FFA, delete reference to enforcement under the FTC Act 
and replace with CPSA enforcement mechanisms. (Section 5(b));
    Rationale: Modernizes and simplifies FFA enforcement process to be 
consistent with other CPSC Acts.
    I agree.
    (b) Delete section CPSA section 36, FHSA section 21 and FFA section 
17;
    Rationale: These congressional veto provisions are superseded by 
the Congressional Review Act.
    I agree.
    (c) Add ``records'' to inspection authority under FHSA to make 
consistent with CPSA (FHSA Section 11(b));
    Rationale: Clarifies that FHSA inspection authority is coincident 
with that under CPSA.
    I agree.
    (d) Strike ``dealer'' and replace with ``retailer'' under Section 
15 of FHSA;
    Rationale: Makes clear in the FHSA that Commission has authority 
over the last commercial entity before the ultimate consumer.
    I agree.

                   TITLE IV. REAUTHORIZATION OF CPSC

Section 1. Authorization of Appropriations
    CPSC to be authorized to be appropriated such sums as may be 
necessary to carry out its activities for fiscal year 2009 and 
thereafter. (Amends section 32 of CPSA).
    Rationale: Multi-year authorization avoids decade and a half lapse 
like that which has occurred since 1990.
    I agree.
    Question. On the topic of submitting CPSC's initial budget 
proposals to OMB, you have raised the issue of submitting those to 
Congress as well, which apparently used to occur, per section 27(k)(1) 
under the Consumer Product Safety Act. Can you provide more detailed 
background on this issue?
    Answer. Congress used to get a copy of our annual budget 
submissions to the Office of Management and Budget. In 1999, in Public 
Law 104-66, section 3003, Congress eliminated the reporting requirement 
in the Consumer Product Safety Act (section 27(k)) that had required 
the Commission to submit its budget requests to the Congress 
concurrently with its submissions to OMB.
    Subsequently, in 2001, in OMB Circular A-11; section 22, OMB made 
the budget submissions to it confidential, (deeming them ``pre-
decisional'') so they no longer could be made public by the agency. 
Prior to that time the agency had held public briefings on its budget 
proposals and the Commissioners discussed various funding possibilities 
in open meetings. Since Congress stopped receiving the budget request 
and OMB issued its directive, the agency's budget submissions to OMB 
have not been disclosed and there are no longer public meetings to 
discuss our budget needs, which are a reflection of the agency's 
priorities. Because of the shroud of secrecy imposed by OMB, many of 
the agency's employees are kept in the dark about the budget request 
and only see the budget based on the President's proposal when it is 
released to the public. I think Congress should rethink the issue of 
whether it (and the public) should be able to review the agency's 
original budget request so it can be compared with the President's 
proposal. In that way, before the Congress makes funding decisions 
about the agency, it will know what the agency's priorities are, as 
opposed to the priorities imposed upon it by what are sometimes 
arbitrary funding levels established by OMB.

                         CONCLUSION OF HEARINGS

    Senator Durbin. I thank you all for attending this hearing. 
It stands recessed.
    [Whereupon, at 1:40 p.m., Wednesday, September 12, the 
hearings were concluded, and the subcommittee was recessed, to 
reconvene subject to the call of the Chair.]

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