June 17, 2003
The purpose of the hearing is to examine proposed changes to the Consumer Product Safety Act (CPSA) and discuss key issues before the Commission. Senator Fitzgerald will preside. Following is a list of tentative witnesses (not necessarily in order of appearance):
The Honorable Mary Sheila Gall
Thank you for the opportunity to come before you today. The Subcommittee has doubtless noted that the Commission has proposed no amendments to its statutes beyond a technical one to conform the statute to the existing organizational structure. During the thirty years of the Commission’s existence, the statutes administered by the Commission have evolved and have been subject to amendments, interpretations, and administration through regulations. The Commission, industry, and consumers have worked well under this statutory framework, as evidenced by the continuing improvement in the nation’s product safety. I do not believe there is a need for substantive revisions of the Commission’s authorizing legislation. Proposed Authorization Levels While acknowledging that the Commission has been successful in improving product safety, I do want to note that the proposed authorization levels we have submitted for the next five years leave some critical investments of the Commission unfunded. We have routinely asked for this funding, but in this difficult budget climate, our requests have not been granted. Laboratory The $0.5 million we have proposed for laboratory modernization expenditures will establish an annual replacement cycle for laboratory equipment. More, however, is needed to modernize the laboratory. CPSC’s laboratory provides critical support to compliance investigations and safety standards activities. The laboratory structures were originally designed for military use in the 1950s. While the Commission and GSA have made modest investments and slight modifications to the existing structures over the years, the laboratory is in need of redevelopment. By relocating and consolidating specialized laboratory and office sites, we could make much better use of the limited available space. The National Capital Planning Commission recently approved our redevelopment plan for the laboratory, which would include renovation of existing facilities, construction of new testing space, and outfitting the laboratory facilities. The renovation and modernization of the laboratory would lead to efficiency and productivity gains. An estimated $750,000 to $1 million would be needed to begin implementing a redevelopment plan for the laboratory. Final implementation of the plan would require a multi-year investment of at least several million dollars. We are working with GSA to develop these costs; these figures should be available this fall. Information Technology As you are aware, as a Federal agency the CPSC must meet a number of Information Technology (IT) requirements established under Federal mandates. These include the Clinger-Cohen Act of 1996, the Government Information Security Reform Act (GISRA), the Government Paperwork Elimination Act (GPEA), and the Telecommuting Act. The agency’s proposed funding level of $1 million for IT investments funds the four-year modernization cycle of agency computers, software, and network components as mandated by the Clinger-Cohen Act. The proposed funding level of $0.5 million for database integration and programming would provide the funds necessary to integrate the five agency databases. Currently, if a field investigator needs to do a search of a chainsaw, the investigator must search separately through each of the agency databases. The integration of databases, on the other hand, will allow this investigator to do a single search for the desired information. Furthermore, integrated databases will reduce redundancy in data collection and data entry. Integration of CPSC’s databases is consistent with, and supports, enhanced access for remote users in our telework program and quick and easy access by citizens to CPSC services as recommended in the President’s Management Agenda. While our proposed funding levels provide the funds for an information technology capital investment fund and integration of agency databases, other requirements mandated by the Clinger-Cohen Act and GISRA are not fully funded. In 2002, we began to address weaknesses found in our first GISRA audit by applying one-time, unanticipated operating savings. We currently have no funds allocated to continue IT security enhancements. Furthermore, we cannot move ahead to fully implement other Federal mandates such as the Government Paperwork Elimination Act and Teleworking Act without addressing IT security. Efficiency The Commission is adept at channeling its limited resources to the areas in which it will see the most benefit. For example, in order to enhance the type of training the agency offers to its employees, the Commission has leveraged on other existing training programs, federal and otherwise. In addition, the Commission has undertaken partnerships with industry and consumer groups in order to conduct various projects or relay consumer product safety information to the public. For example, last year the Commission worked with the Juvenile Product Manufacturers Association in a campaign to educate the public about the hidden hazards of placing infants on adult-sized beds. The Commission is working in conjunction with Customs to enable CPSC field personnel to monitor imported consumer products with the aid of Customs databases. Conclusion By any measure, the Commission saves the nation many times its annual budget each year and is a great value to the American people. We are adept in using in our limited resources wisely, as well as in working within the construct of our statutes to protect the public from hazardous consumer products. I believe that the Commission represents a health and safety bargain for the American people, and ask that you reauthorize the agency today so that it may continue its good work in the future.
The Honorable Thomas MooreCommissionerU.S. Consumer Product Safety Commission
Mr. Chairman and members of the Subcommittee, I appreciate the opportunity to appear before you today to provide testimony on the reauthorization of the United States Consumer Product Safety Commission (CPSC). The Commission is charged by Congress with the critical responsibility of protecting the public against unreasonable risk of injury and death associated with consumer products. This is a crucial responsibility because, often without CPSC’s intervention, the consequences of exposure to the hazards associated with dangerous products may literally be of a life and death nature for individual consumers unknowingly in possession of unsafe consumer products. As you are aware, CPSC has not been reauthorized since 1992 and has not had a reauthorization hearing before this body since 1996. Although these proceedings could be an exceedingly intensive undertaking for the CPSC, I welcome this reauthorization process because I believe it presents a unique opportunity to focus on the Commission’s present and future agenda. THE MISSION In examining the legislative history of the statute creating the CPSC 30 years ago, we find that Congress, in its wisdom and foresight, was concerned about technological advances creating a variety of new products with greater potential for injury which would be less easily recognized and comprehended by the American consumer. Congress recognized that the dramatically increasing number of consumer products and the consumer’s increasing reliance on more complex labor saving and recreational devices would create increasing risk of injury from their use. Additionally, continuing product development demonstrated that previously acceptable risk levels were no longer reasonable in light of available safety technology. Today, the risk of injury and death from unsafe consumer products continues to be enormous and costly. CPSC’s mission is to protect children and families against unreasonable risk of injury and death from about 15,000 types of consumer products. Our work has contributed significantly to the almost 30 percent decline in the rate of deaths and injuries related to hazardous consumer products since the agency’s inception. However, despite significant reductions over the years, there remains on average about 23,900 deaths and 32.7 million injuries each year related to consumer products under CPSC’s jurisdiction. These numbers represent almost 9 deaths and 12,000 injuries per 100,000 people each year. Moreover, the deaths, injuries, and property damage associated with consumer products cost the nation over $700 billion annually. Unintentional injuries are the leading cause of death for all Americans under the age of 45 and are the fifth leading cause of death in the nation. Individuals 65 years of age and older are three times as likely to die of unintentional injuries than their representation in the population. We know that for the most part, we accept national and state governments’ responsibility to protect citizens from intentional injury or death. Aside from questions of justice, do loved ones grieve less when a serious injury or premature death occurs through unintentional means? Is there less grief if one is, say, paralyzed for life after a fall from a defective stepladder as opposed to a spinal cord injury from a robber’s knife or bullet? Today, our reliance on consumer products in our lives is tremendous and growing. We rely on manufactured mechanized and electrical devices to assist us in too many of life’s activities to mention—at play, at work, in education, in travel, and particularly inside and outside of the home: in food preparation, in cleaning and making repairs around the home, in child-care, in trimming trees and grass, and on and on and on. To further complicate matters, more and more of these products are manufactured abroad. Increasingly, other western nations are following our lead in having recognized a governmental responsibility to become actively engaged in reducing the consumer’s risk of injury or death from hidden dangers in hazardous consumer products. In today’s complex marketplace it is going to be exceedingly difficult for any amount of libertarian sophistry to overwhelm these obvious facts of modern life. It is suggested in some circles that the modern, sophisticated marketplace of today can effectively regulate itself for product safety. I strongly submit that the previously discussed justification for governmental involvement in the protection of the consumer’s right to safety is even more compelling today than it was 30 years ago. Very simply put, competition and voluntary actions of today’s businessmen do not always suffice to safeguard the public interest. Competition does not and will not inevitably take the form of a rivalry to produce the safest product. The role of the CPSC in today’s consumer product marketplace remains compelling, substantial and relevant. ADDRESSING PRODUCT SAFETY HAZARDS Aside from using its rulemaking authority, CPSC can act forcefully and quickly to remove dangerous products from the marketplace through two main enforcement activities. The first is in vigorously enforcing its current regulations; and the second is in utilizing its Section 15 authority to achieve recalls or corrective action plans when it is believed that a product meets the level of a substantial product hazard. I point out to you that in 2002 alone, the Commission obtained 625 corrective actions involving regulated products. Fifty-one of these actions involved consumer level recalls covering more than 2.4 million products units that violated the Commission’s regulations. We accepted another 342 corrective action plans involving approximately 48 million product units that were not subject to mandatory standards, but which may have contained a product defect. With the help of U.S. Customs Service, we detained an additional 3.5 million foreign products that violated our regulations. Unless interdicted, those goods would have competed with U.S. manufactured products, often undercutting them on price because the foreign manufacturers did not bother complying with our safety regulations. Our efforts to keep these violative products out of the marketplace protect not only the American consumer, but the American manufacturer as well. Thus, in 2002 alone, the Commission took direct action against nearly 55 million product units through recalls, repairs, replacements, refunds, design changes or seizures. If these millions of products were left in the hands of or reached unsuspecting consumers, the consequences could be death or serious injury to loved ones. Requiring a manufacturer, distributor or retailer to recall defective products is a primary mechanism in CPSC’s continuous undertaking to address product safety hazards. However, announcing the recall is just one step in an overall process of eliminating the hazards presented by unsafe products in consumer’s homes. Ensuring the removal of those unsafe products from potential consumer use is also essential. Given the limitations presented by CPSC’s resources, it is tremendously important that the Commission maximize the effectiveness of this particular aspect of the recall process. Recently, there have been questions raised about just how effective the Commission has been in facilitating the removal of unsafe products from consumer use: Is the unsafe product message being effectively communicated to the public, are enough products being effectively removed, and are there additional things that the Commission can do? I think that there are certainly enough legitimate questions surrounding the best method for determining what constitutes an effective recall in any particular case to merit careful review. In July 2001, the Consumer Federation of America petitioned the CPSC to require manufacturers (or distributors, retailers, or importers) of products intended for children to provide a product registration card along with every product sold. In March 2003, after being briefed on the issue by CPSC staff and hearing presentations from representatives of consumer groups and industry, a majority of the Commission voted to deny the petition. While I am disappointed that we have not begun the formal process that I believe is necessary to give this issue the prominence it deserves, I believe my fellow Commissioners are also very serious in wanting to address issues raised by this petition. To that end, a multi-disciplinary team of CPSC staff is exploring the issue of recall effectiveness. The team has developed a multi-stage plan to determine how best to address the way we do recalls including scheduling a series of three meetings to obtain information on this issue from outside experts. Another issue in the enforcement area lies within the civil penalty arena. I have supported, and continue to support, the elimination of the monetary cap on civil penalties. While the cap does rise periodically, the reality is that a $1.65 million fine means nothing to many of the corporations we regulate. Why do we need a cap at all? We already have statutory considerations which guide our decision as to how large a penalty to assess, and those should be sufficient. It is one thing to limit the amount one consumer can recover against a company (and not a position I necessarily support either), but it is quite another to limit the government’s ability to penalize a company on behalf of all consumers, thereby limiting the deterrent effect of civil penalties. Perhaps some companies would be less likely to try to stall our agency by putting off reporting hazardous products if we had penalties that were more commensurate with the harm they can cause. COOPERATION AS A KEY ELEMENT I believe that regulatory policies should recognize that the private sector and private markets are the best engines for economic growth. Regulatory approaches should respect the role of state and local governments. And, regulations should be cost effective, consistent, sensible, and understandable. Our regulatory decisions are intensely scientifically based. We rely on the analyses of dozens of high-level and well-experienced Epidemiologists, Pharmacologists, Toxicologists, Physiologists, Chemists, Engineers, Statisticians, and Economists as the underpinning of CPSC decision-making. As confirmation, the Office of Management and Budget (OMB), in applying its new Program Assessment Rating Tool (PART) to CPSC, found that the Commission scored relatively high (83 percent) among the 20 percent of Federal programs rated this year. While the OMB assessment suggested areas for improvement, OMB found that CPSC performs very well, thus giving support to our overall regulatory policies. Additionally, the Commission works well with, and understands the needs of, corporate America. Whenever appropriate, we encourage voluntary action by industry to address safety requirements. Since 1990, we have worked cooperatively with industry to conduct more than 4500 recalls and resorted to litigation to compel recalls only 7 times. Further, we worked with industry and others to complete about 6 times as many voluntary standards as mandatory standards (CPSC assisted in completing 214 voluntary safety standards while issuing 35 mandatory standards). The Commission recognizes that, in this time of shrinking resources, voluntary action is preferable to mandatory regulations when such action is implemented in a timely fashion, carried out productively and, most importantly, when such action adequately addresses an unreasonable risk of injury. As an example, CPSC worked with industry to revise the voluntary baby walker safety standard to address injuries from stair falls. New walkers with safety features are now on the market. There has been a decrease in injuries of over 70 percent since 1995 likely due in large part to the new voluntary standard requirements. CPSC projects societal costs decreasing about $600 million annually from this one action. So in this time of shrinking resources, the Commission is always looking for faster, more cost-efficient ways to reach our goals. Furthermore, many product problems involving safety-minded corporations have been resolved through carefully negotiated high-integrity agreements. Co-operative engagement with industry contemplates and facilitates the amelioration of product safety hazards without resorting to the time-consuming and costly use of the regulatory process. An example of this is the continued success of the Fast Track Product Recall Program. This program is designed to speed up corrective actions, including product recalls, and, most importantly, quickly remove unsafe consumer products from the marketplace. Over 700 firms have participated in the program since its inception, resulting in almost 1,100 corrective action plans involving over 124 million product units. This effort was a winner of the 1998 “Innovations in American Government Award” sponsored by the Ford Foundation in conjunction with the Harvard University’s Kennedy School of Government and the Council for Excellence in Government. Additionally, the Commission has learned that finding and assessing hazards, developing and enforcing standards and regulations, and informing and educating the public about product safety matters can best be handled as a partnership between CPSC and appropriate state/local agencies. SUCCESS STORIES The Commission’s successes are a major source of optimism. During my time at the Commission, I have been very pleased to be involved in many of the Commission’s successes. The agency, with a $56.8 million budget for FY 2003 really pays for itself many times over by reducing societal costs associated with hazardous consumer products. By all current measures, CPSC provides both tremendous service and tremendous value to the American people. Each year through reductions in deaths, injuries, and other costs associated with unsafe products, such as health care costs and property damage, CPSC saves the nation many times the agency’s annual budget. As I indicated earlier, CPSC is the major factor in the 30% decline in the rate of deaths and injuries related to consumer products since 1974. Through our standards work, compliance efforts, industry partnerships, and consumer information, this year we expect to prevent 1,600 fire deaths, 460 electrocution deaths, 40 child-poisoning deaths, 140 infant deaths from suffocation and strangulation hazards associated with cribs, and 60 carbon monoxide (CO) poisoning deaths. In addition, we expect to prevent over 13,000 children’s head injuries and 40,000 injuries associated with dangerous fireworks. We expect the annual number of deaths and injuries prevented by just these examples to reduce societal costs by over $13 billion. These savings by themselves are over 200 times CPSC’s FY 2003 budget. Currently, the Commission collects information about product-related injuries treated in hospital emergency rooms through our National Electronic Injury Surveillance System or “NEISS.” This unique system provides statistically valid national estimates of product-related injuries from a probability sample of about 100 hospital emergency rooms. These estimates provide the data support for many of the Commission activities allowing the Commission to spot hazard patterns, set priorities, and give direction to product safety efforts. These estimates are also valuable to industry, which can use the data to spot hazard patterns to help give direction to their own product safety efforts. In 2002, NEISS supplied about 350,000 product-related cases from its sample of hospital emergency rooms. Several foreign governments have modeled their national injury data collection systems after the Commission’s system. Additionally, in 2000, NEISS was expanded to provide data on all trauma-related injuries. This expanded data provides other federal agencies, researchers, and the public with more comprehensive information on injuries from all sources, not just consumer products. PRESENT AND FUTURE ACTIVITIES Protecting the most vulnerable segments of our society is a special interest of mine. Children, the elderly, the infirm, low-income families, minorities, and those for whom English is not their native language are often disproportionately represented in our injury and death data. I think that it is a reasonable conclusion that if we concentrate on lowering the risk of injury and deaths due to consumer products in these vulnerable groups, overall reductions would be proportionally reflected. Balancing the concerns of product safety in vulnerable populations, against product safety concerns in the population as a whole, will always be one of my more challenging tasks at the Commission. It just seems to naturally follow that the more educated the general public is to the dangers of the use or misuse of a product, the more sensible their use of that product will be. Keeping the public properly informed about product safety hazards continues to be key. In 2002 alone, we informed the public of hazardous products through 247 press releases, 19 Video News Releases (VNRs), 1.9 million distributed publications, specific consumer product safety discussion appearances on network TV shows, and through CPSC’s consumer hotline, web site, and National Injury Information Clearinghouse. I would like to see continued emphasis at the Commission on education and information campaigns. In particular, the Commission’s use of VNRs has proven to be an effective, inexpensive way of quickly reaching tens of millions of consumers with critical product safety information. Just as disseminating information is an essential role of the Commission, collecting all relevant product safety data is also essential to protecting vulnerable segments of our population. To address any possible issues related to sleepwear-related thermal burn injuries to children, the Commission, in cooperation with the American Burn Association, the Shriners Hospitals for Children, and the National Association of State Fire Marshals, is developing a new National Burn Center Reporting system for collecting and sharing information on clothing-related burn injuries to children under the age of 15. There are about 115 burn centers nationwide that treat children. Some burn centers are already reporting under this new system and it is expected that the system will be fully operational this summer. I also strongly feel that the role of the Commission is essential to the U.S. marketplace in an increasingly competitive international marketplace. The Consumer Product Safety Commission and the marketplace must work together to ensure international consumer product safety standards and enforcement compatibility so we can enhance international trade and export opportunities without lowering U.S. safety standards. Just as the Commission played an essential role in the development of uniformity in domestic product safety standards and has thereby minimized conflicting state and local regulations, that role should now be expanded to working with industry internationally to harmonize safety standards and thereby reduce non-tariff trade barriers that varying international safety standards can create. It is also worth noting that there is now, at CPSC, an added emphasis on public participation in our overall safety efforts. The Commission has added a new dimension of public participation to our decision-making process by inviting the interested public to make oral presentations at our public staff briefings on regulatory matters under consideration by the Commission. The public provided both written and oral presentations at recent Commission meetings on chromated cooper arsenate (CCA) treated wood and product registration cards, and is invited to make similar presentations at our meeting to consider a notice of proposed rulemaking on baby bath seats scheduled for July 28th. In addition, the Commission, on June 5th, held a field hearing in Morgantown, West Virginia on issues related to the hazards associated with All-Terrain Vehicles (ATVs). From 1997 to 2001, annual ATV-related injuries rose 104 percent, from an estimated 54,700 to 111,700. This was the first field hearing held by the Commission since it held hearings on this same issue in the late 1980s. I have also given considerable advocacy to the idea of a product safety research effort at the Commission. Most other federal health and safety agencies have research budgets that are a vital part of their programs. Clearly, Congress envisioned research as part of the Commission’s safety efforts when it adopted the Consumer Product Safety Act and established the Commission. The very first Commission Annual Report in 1973 indicated that research was an important component of the agency’s work. The language in Section 5 (b)(1) of the Consumer Product Safety Act explicitly addresses conducting research. Yet, for too many years, we have had to defer any research program for lack of funding. One project for consideration is to conduct long-term testing and evaluation of the performance of circuit breakers and panel boards to determine whether the safety standards for these products should be upgraded. This research could provide important safety benefits because residential electrical distribution systems (including circuit breakers, panel boards and wiring) were implicated in an estimated 39,000 fires resulting in 280 deaths and $680 million in property damage in 1998, the last year for which this data is available. CONCLUSION In closing, while I believe that consumers must take responsibility for their own safety, there clearly is a role for the CPSC to assure that products are designed safely and recalled where there is a problem. Consumer responsibility is something that all three Commissioners feel strongly about. I think that consumers should be informed about the products they purchase and take reasonable care in using them. Mr. Chairman, I believe that our government is attempting to move into a new era of accountability. It is my hope that this will be an era where well reasoned, and I emphasize the word reasoned, government action will be the rule, and not the exception. I also think that reasoned Commission action reflects a pragmatic approach to resolving safety problems and recognizes that regulation is only one of many options that can be employed to address safety issues. We will work actively to achieve safety goals, and I expect, as is often the case, industry will respond reasonably. But, if safety is not the goal of a certain industry or manufacturer, the Commission stands ready to protect the consumer expeditiously and without compromise. Given CPSC’s important role, it is clearly reasonable to assert that funding flexibility is critical if the Commission is to adequately address the risk of injury and death from future major unexpected safety hazards that are beyond the current funding capability of the agency. As Congress envisioned 30 years ago, the Commission should have the capability to handle increasingly technologically complex products as well as the capability to uncover high injury risks and defective products using today’s sophisticated data sources. To successfully continue the mission of the agency, the Commission must have the resources and the flexibility to respond quickly and effectively to critical situations where the lives and health of the American public are at risk. I would like to thank the Subcommittee for allowing me to address my concerns at this hearing and I look forward to working with the Members of the Committee and its staff in this reauthorization process. Thank you.
The Honorable Hal Stratton
Thank you, Chairman Fitzgerald, and good afternoon. I appreciate the opportunity to come before your subcommittee today, along with my colleagues, to answer any questions that you and other subcommittee members may have as you work to reauthorize the Consumer Product Safety Commission. As you know, I had the honor of being sworn in as Chairman of the Consumer Product Safety Commission (CPSC) on August 2, 2002. Before my swearing-in, the CPSC was ably led by my friend and colleague Commissioner Thomas Moore with the strong and active support of my friend and colleague Commissioner and Vice Chair Mary Gall. I never miss an opportunity to applaud their leadership and commitment to the CPSC during that period, and I want to express my appreciation for their continued support and guidance. Mr. Chairman, the CPSC has a very important mission. Thirty years ago, Congress established the CPSC to protect children and families against unreasonable risks of injury and death from hazardous consumer products. Over that time, the work of the Commission has contributed significantly to the 30% decline in the rates of deaths and injuries from these products. The Commission enforces five federal statutes: the Consumer Product Safety Act, the Flammable Fabrics Act, the Poison Prevention Packaging Act, the Federal Hazardous Substances Act and the Refrigerator Safety Act. Through these laws, we have jurisdiction over the safety of some 15,000 consumer products. In enforcing these laws, the CPSC divides itself into three main divisions – hazard identification and reduction, enforcement and compliance, and public information and education. These divisions are staffed by the 471 employees at our headquarters, our laboratory and our field offices around the country, and I should note that one of our three regional centers is in the Chairman’s hometown of Chicago. Our employees and the skills that they bring to their jobs are Stratton Testimony Page 2 June 17, 2003 the most critical component of the CPSC success story. Because of the nature of our work, the Commission relies on a highly educated scientific and technical staff. Their expertise covers a wide range of disciplines and is central to our safety mission. In fulfilling this mission, the CPSC operates advanced hazard identification systems, including an internationally-recognized hospital emergency room injury reporting system, a toll-free hotline and a web site that have all been cited as models among Federal agencies. When a hazard is identified, the Commission has a wide range of options available to address the problem including voluntary standards, safety guidelines, labeling and consumer information, cooperative product recalls, and when necessary, mandatory rulemakings and litigation. The Commission’s actions are based on rigorous risk-based analysis to assure that our solutions are fair and effective. We initiate our safety efforts by working cooperatively with affected industries, and this has resulted in hundreds of voluntary safety standards that have assured safer products for American consumers. The Commission’s current appropriation is $56.6 million dollars, and we believe that is a great value to the American people. We don’t put a price on the loss of any human life, but beyond the human grief and tragedy of injuries and lost lives from unsafe products, there is also the measurable economic toll of medical bills, legal costs and property damage. As the committee members well know, these societal costs can be extraordinary. Just one avoided serious injury can save society literally hundreds of thousands of dollars. In this regard, CPSC is a bargain for America’s tax-paying families. We are very serious about our mission at the CPSC. Last year alone the Commission completed 387 cooperative recalls involving about 50 million product units. These recalls ranged from promotional toys to power tools. Our enforcement division completed 13 civil penalty cases that resulted in over $4 million in fines for failure to report a hazardous defect to the Commission or for selling products in violation of CPSC’s mandatory safety standards. We are a results-oriented agency, and our current strategic plan has focused on clear, measurable goals that have reduced death rates from fires, electrocutions, poisonings and children’s head injuries. As called for by the Government Performance and Results Act, we are currently developing our new strategic plan for the next six-year cycle to begin in 2004. The authorization levels before you would allow us to maintain our current safety programs and employee levels while increasing our efficiency through improved information technology and a modernized laboratory. Our funding increases since our last authorization in 1990 have averaged 3.3% annually, a figure that is outpaced by the agency’s mandatory cost increases for such items as salary cost-of-living-adjustments, health benefit increases, and rent increases. Any authorization above these mandatory expenditures would be applied to quality improvements in our ability to collect and examine data through upgrades to our Stratton Testimony Page 3 June 17, 2003 technology infrastructure, laboratory equipment and staff training. As you know, expenditures such as these can significantly increase agency productivity without increasing agency employment. As a data driven agency, CPSC needs to continually invest in data handling resources to maintain our capabilities as well as take advantage of technological efficiencies. Many of these investments are mandated by legislation such as the Clinger-Cohen Act, the Government Information Security Results Act and the Government Paperwork Elimination Act. As one example of our continuing efforts in this regard, we have just launched a new Burn Center Reporting System to help us collect better data and better identify the origins of clothing related burn injuries to children. We have been pleased to work closely with the Shriners Hospitals for Children, the American Burn Association and the National Association of State Fire Marshals in developing and implementing this important new system. There are about 115 burn centers nationwide that treat children. Some burn centers are already reporting under this new system, and the system is expected to be fully operational this summer. For each of the burn incidents reported in this new system, the burn center will provide the CPSC with preliminary information on the incident. A CPSC investigator will then be assigned to the case to conduct an in-depth investigation. All reports will be reviewed and logged into the CPSC’s epidemiological databases. That data will be available for all interested parties to analyze through the Commission’s Injury Information Clearinghouse. I know this is an issue of great concern to many members of the Committee, especially to Senator Burns and Senator Breaux, and I am pleased to be able to report the significant progress we have made on this matter. The authorization before you would also enable us to establish a planned annual three to four year equipment and software replacement cycle and to improve our data access and the security of our information technology. The authorization would also enable us to establish a one-stop query capability for agency staff use. Currently, staff must query five different databases to complete research. Such integration would also reduce redundancy in data collection and data entry. Additionally, since CPSC makes its decisions based on injury and death data, the agency should continually invest in its capabilities to identify, analyze and perform in-depth study of product hazards. CPSC has pilot-tested an improved fire injury and death system in response to a General Accounting Office audit; however, we do not have the funds to operate the system. With regard to our laboratory modernization, funding would be used to establish a replacement cycle for major laboratory equipment. CPSC does not have a capital equipment replacement fund. The laboratory testing facility is a key tool underpinning much of our work, and our goal is to maintain it in modern, state-of-the-art condition to the greatest extent possible. Stratton Testimony Page 4 June 17, 2003 This authorization would allow us to improve training for agency staff and to establish training for our state and local partners. We greatly increase our effectiveness by working with state and local officials to conduct recall effectiveness checks and safety programs such as our highly successful annual recall round-up safety campaign. When I accepted this position last year, I began this job with a number of goals. First, because we are a small agency with a small budget and a large mandate, it is critical that our resource allotments be based on the most accurate and optimum risk assessment and data collection. Every CPSC dollar spent on identification and reduction of any given safety hazard is a CPSC dollar not spent on some other safety hazard. Our goal is to use each taxpayer dollar to its maximum safety effectiveness, and I am pleased that the Office of Management and Budget has recognized CPSC’s performance and has given the agency an overall rating of 83% under their Program Assessment Rating Tool, one of the highest ratings of any agency. We are building on that excellent performance assessment. Secondly, as a former attorney general, I am committed to strong enforcement of the law. American consumers – and Congress – should expect that CPSC will assertively use the tools that you provide us to get unsafe products out of the marketplace. In my nine months as Chairman, I have overseen 249 product recalls and over $3.5 million in civil and criminal penalties. Further, I believe that our decision-making process should include the full participation of the public. To a great extent that is provided for in our regular rule-making process, but beyond that we have opened up Commission hearings to full public participation inviting petitioners and other interested parties to testify before the Commission. Earlier this month, we held a very successful field hearing in Morgantown, West Virginia, on ATV injuries. We heard from medical doctors, injury prevention researchers, ATV dealers and riders, consumer safety advocates and families of victims from ATV-related crashes. It was an extraordinary day, and I believe that Commissioners Gall and Moore agree that we returned to Washington much enlightened and much better prepared to make intelligent decisions on this matter of great concern. In conclusion, I would like to say that I appreciate the Committee’s support for the Consumer Product Safety Commission over the years. We are certainly not the largest agency within your jurisdiction, but we do have an impact beyond our size on America’s families and the safety of their homes and playgrounds. We are pleased to work with your local offices in your home states in helping your constituents learn more about unsafe products and help them protect themselves and their families from the tragic accidents that we receive reports on every morning. Mr. Chairman, product safety is our goal, our commitment and our mission as public servants. Thank you for your interest in reauthorizing our agency, and we look forward to answering your questions.
Witness Panel 2
Dr. R. David Pittle
Mr. Chairman and distinguished members of committee: It is a pleasure for me to address this subcommittee regarding the reauthorization of the Consumer Product Safety Commission (CPSC). I am joined today by Sally Greenberg, CU's Senior Product Safety Counsel. I speak to you today as one of the original five commissioners of CPSC (1973-82); as the former Technical Director of Consumers Union, the nation's largest consumer product testing organization; and currently CU's Senior Vice-President for Technical Policy. Serving in these three capacities, I have experienced both the public's critical need for the unique services that CPSC provides and the many difficult technical and legal hurdles that the agency must overcome in order to deliver on its mandate. As a member of the original Commission, I spent nine years weighing the complex factors involved in establishing product safety standards and bans, recalls of substantial hazards, policies to encourage voluntary action by industry, comprehensive compliance programs and campaigns to inform and educate the consumer. Based on 30 years of working on product safety and reducing unreasonable risks to consumers, I have concluded that an agency like CPSC should be reauthorized by asking these two fundamental questions: Are CPSC's mission and authority, as stated in its enabling legislation and subsequent amendments, appropriate to fulfill the public's need for safer products and if not, how should they be changed? In my view, the answers to these questions comprise the basic ingredients that together determine how successful CPSC will be in saving lives and reducing injuries. During my tenure at CPSC, four different Presidents resided in the White House, and numerous senators chaired the CPSC's oversight subcommittee. Many things changed—but many things stayed the same. For example, the basic mission of the agency has remained the same. Every Congress that has reauthorized CPSC during the past 30 years has reaffirmed its clear and unmistakable purpose: reduce or eliminate unreasonable risks of injury and death to consumers. There is no equivocation—and rightly so, in my opinion. The pain and suffering from accidents involving chainsaw kickback, toxic formaldehyde vapors, flammable children's pajamas, explosions caused by leaking gas valves, unsafe infant safety gates, unstable ATV's and so on is devastating. And I believe consumer safety is so important that it should transcend partisan politics. The pain and suffering is the same--regardless of who is in the White House or who sits on the Commission. The National Commission on Product Safety issued its final, bipartisan report to the President and Congress in June 1970. That report set the stage for the establishment of CPSC to promote safer products in the marketplace and regulate companies manufacturing those products. The agency today estimates that deaths, injuries and property damage from consumer products cost the nation more than $700 billion annually. CPSC also estimates that its work to ensure the safety of consumer products—from toys, cribs, power tools, and home heating equipment to dangerous household chemicals—has contributed to the 30% decline in the rate of deaths and injuries associated with consumer products over the past 30 years. Clearly, protecting the public from unreasonable risks of serious injury or death from the more than 15,000 products under the CPSC's jurisdiction makes sense in both human and economic terms. To make the agency more effective—i.e., save more lives and reduce more injuries—there are several areas of CPSC's basic legislation that we believe warrant change, including section 6, section 15, section 37, and fixed-site amusement park rides. In an era marked by scarce resources, it is incumbent on us all to remove obstacles, especially low-cost obstacles that hamper the agency from being more effective. AMUSEMENT RIDES (Fixed-site) Mr. Chairman, in 1981, Congress, as part of an overall political compromise, removed the Commission's authority over fixed-site amusement rides. To say the least, the decision was entirely political and not based on the merits. Unfortunately, this political deal has not worked to the advantage of the millions of consumers who annually go to enjoy amusement rides. Numerous deaths and injuries have occurred—and continue to occur—on these rides. And the states, upon which the Congress depended to step into the regulatory void, simply have not done so in an effective or timely manner. We believe this loophole in federal law with regard to amusement park safety is nonsensical and dangerous for consumers. As I said, fixed-site amusement parks are host to literally millions of patrons each year. When an accident occurs on such rides, the law actually prevents the CPSC from even looking into the incident to find out what happened. While some states will conduct an investigation, many conduct little or no regulatory oversight at all over amusement parks in their own states. We think it makes far more sense for the federal safety officials to play both an oversight and information clearinghouse role for safety information about the amusement park rides, especially since a number of the same rides exist in different parks in different parts of the country. Further, no state has the jurisdiction or resources to be able to share safety information with all of the other states. Consumer Reports surveyed consumers about their experiences at amusement parks for the first time this past spring. We also discussed the safety record of these parks and noted that while the safety risks appeared small, they are nonetheless very real. In 2001, 6,700 people were treated in emergency rooms for injuries at fixed-site amusement parks. At least 55 people have died on amusement park rides in the last 15 years. In August 1999, four deaths occurred on roller coasters in one week, including a 12-year-old boy and an 8-year-old girl. Since then, there have been six more fatalities on amusement park rides. This past spring, an 11-year-old-girl died at a Six Flags Park in Illinois. We don't understand the logic of carving an exception out for fixed-site amusement park rides. We ask simply that CPSC be authorized once again to investigate the injuries and deaths, determine the causes, and work to reduce or fix the hazards at fixed-site amusement park rides. I'd like to direct the Committee's attention to the factsheet and overview of legislation introduced by Congressman Edward Markey of Massachusetts to correct this problem. Congressman Markey has also gathered statistics on the increase of injuries in fixed-site amusement parks and enumeration of injuries in parks across the country. SECTION 15—Remove the cap on fines that can be levied for failing to report dangerous or defective products under Section 15(b) The Consumer Product Safety Act's Section 15 (b) requires that manufacturers, distributors and retailers report to CPSC when they have reason to believe a product 1) isn't in compliance with safety standards, 2) contains a defect that could create a substantial product hazard, or 3) creates an unreasonable risk of serious injury or death. The history of manufacturers failing to report in a timely manner under this section is all too well known—and is especially worrisome for children's products that have caused injury or death. Included among companies failing to report are Wal-Mart and GE, two of the wealthiest corporations in America. We believe the cap on the fines CPSC can levy for non-reporting diminishes the power of the reporting statute. That cap is $7,000 per each violation with a total of $1,650,000 for any related series of violations—pathetically small amounts that are hardly felt by large corporations. Below are details of fines CPSC has imposed for failure to report under 15(b). In 1991, Graco, a children's products manufacturer, paid a $100,000 civil penalty for failing to report stroller injuries to CPSC in a timely fashion. In 1989, the Philadelphia Inquirer estimated Graco's revenues at $150 million. In April of 2001, Cosco/Safety 1st agreed to pay CPSC a total of $1.75 million in civil penalties—the largest fine CPSC has ever levied—for failing over a four year period to report to CPSC defects in cribs, strollers and a toy walker that caused the deaths of two babies and countless other injuries. Both companies had previously been fined for failing to report under 15(b); in 1996 Cosco paid a $725,000 civil penalty and in 1998 Safety 1st paid a $175,000 penalty. Both companies have also had an inexcusable number of recalls of products used by children. By the time this fine was levied in 2001, Cosco had had 12 recalls of children's products and Safety 1st had five recalls. Dorel Industries, which owns Cosco and Safety 1st, reported $421 million in sales from juvenile products in 2002. Does a $1.75 million fine deter a firm of this size from failing to report? Dorel Industries, which owns Cosco and Safety 1st, reported $421 million in sales from juvenile products in 2002. Does a $1.75 million fine deter a firm of this size from failing to report? In June of 2001, CPSC fined Fisher-Price $1.1 million for failing to report injuries from a dangerous and defective toy. The company had not reported 116 fires from the Power Wheels toy. Fisher Price, a wholly owned subsidiary of Mattel, boasts sales of $1.2 billion in its most recent annual report and notes that its sales are up 8% worldwide. In November 2001, CPSC fined Icon Health and Fitness $500,000 for failure to report serious safety hazards with home exercise equipment. In August of 2002, General Electric (GE) paid the CPSC a $1 million penalty for failing to report defects in dishwashers that it first became aware of 10 years earlier. GE is one of the largest companies in the history of the United States, with 2002 revenues of $131.7 billion. In March 2001, West Bend Co. paid CPSC a $225,000 fine for failing to report fire hazards caused by a defect in its water distillers it had learned about three years earlier. In 2002, the CPSC won a case in court imposing a $300,000 fine on a juice extractor company that had failed to inform CPSC about injuries 22 customers had complained of when using their juicers. In 2002, Honeywell paid $800,000 for failing to report under 15(b) violations. In 2003 to date, Weed Wizard has paid $885,000, while Wal-Mart has paid $750,000. Are these fines acting as an adequate incentive for companies to report product safety hazards? The record suggests they are not. We believe these companies are well aware of the CPSA's reporting requirements—these requirements have been on the books for 30 years. It seems clear that the caps on these fines limit them to the deterrence equivalent of a $2 parking ticket in downtown New York City. Recommendation: CU recommends lifting the cap on penalties for failure to report for several reasons: a) Caps mean the companies can figure in the cost of paying penalties at or below the cap as a cost of doing business. b) A cap usually means that CPSC is always negotiating down from that amount; the CPSC has never fined a company to the limits of the current cap. c) Other federal safety agencies aren't hindered in their enforcement powers by caps on penalties. The FDA last week announced that it had won a court case that imposed a $92.4 million against Guidant Corporation for the company's failure to notify the agency of defects in its artery device. There was no artificial cap hindering the FDA's enforcement. Similarly, the FTC ??? TK TK d) d) The number of companies paying fines for failure to report demonstrates the need for higher penalties. Of course, we all would like to think that these companies would report because it is the right thing to do, but we know from the CPSC's experience that far too often this is not the case. We must put the sting back into the failure to report a dangerous or defective product under 15(b) by lifting the caps on fines. At some point, manufacturers will recognize the business need to report potentially dangerous products sooner rather than later. SECTION 37 Section 37 was added to the CPSA in 1990 and was intended to strengthen CPSC's ability to learn about relevant product hazards. Section 37 says that if a consumer product is the subject of at least three civil actions filed in federal or state court for death or grievous bodily injury resulting in a final settlement involving the manufacturer or a court judgment in favor of the plaintiff, the manufacturer must report that fact to the CPSC. Section 37 was supposed to serve as an "early warning" system to CPSC to ensure that it hadn't missed important product hazard information. The problem with Section 37, however, is that its wordingthe way it was drafted renders it largely ineffective. Under Section 37, CPSC receives information about lawsuits getting information when a case iswhen the three cases involving the same product are settled, which is is simply much too late in the process to provide the requisite early warning. If the statute required reports to CPSC once three cases involving serious injury or death were filed as opposed to settled, the early warning intent of this statute would be greatly enhanced. Jeffrey Bromme, at the time he was serving as CPSC General Counsel and writing in the December 27, 1999 BNA Product Safety and Liability Reporter, reaffirmed this flaw in the law. Bromme cited "two chief reasons that Section 37 has contributed little to consumer safety. First, reports received by the Commission generally come too late to serve as any kind of 'early warning system’.' Second, the Commission is receiving fewer reports." Bromme concludeds: the original 1990 proposal to require reports of litigation when filed - and not when settled - would likely have served as a far more effective "early warning system," if such a system were truly what Congress intended. Further, Iif a product defect exists, reports under 15(b) are required long before any litigation is settled, hence, a Section 37 report seldom provides the first warning. Secondly, according to Bromme, from January 1991 to January to 1992, there were 190 reports under Section 37. That number dwindled throughout the 1990s - in October 1999, there were only 19 reports, from November 2001 through December 2002 there were 41 reports and for the first six months of this current two year period, there have been only 2 reports. Bromme speculated that this dwindling number might stem from because some companies having foundhave found a way to delay the third settlement on the same product until the next reporting period, thereby avoiding the reporting requirement. In any case, it is abundantly clear that even with the best of congressional intent, Section 37 as currently written is largely a failure. After a decade of experience, we believe that it is time to amend Section 37 to conform to how it was originally drafted. Recommendation: Amend Section 37 to require manufacturers to report to CPSC when three or more lawsuits are filed (not settled) about the same product that allege that serious bodily injury or death has been caused by that product and that product falls under CPSC's jurisdiction. SECTION 6 Mr. Chairman, one of the criticisms of health and safety agencies is that they regulate rather than inform. Opponents of CPSC regulations insist that government's role should be to provide information to the public and let consumers make their own safety choices. Unfortunately, this would be difficult to implement at the CPSC. The agency stands alone among the federal health and safety agencies in being unable, as a practical matter, to provide important safety data to the public. The reason is that section 6(b) of the Consumer Product Safety Act presents a major obstacle to the timely release of product-specific safety information in the agency's possession. It does so by barring the release of this information unless and until the agency has sent a copy of it to the named manufacturer, allowed the manufacturer 30 days to comment on the information, reviewed the manufacturer's comments regarding the accuracy of the information and the fairness of releasing it, and determined that disclosure of the information would effectuate the purposes of the Act. Exceptions to these restrictions are extremely limited. The resource drain on the Commission staff for these procedures is enormous and unfair. Even if section 6(b) constituted good public policy—which it does not—it consumes so many staff hours and causes so many delays in the release of information, one cannot avoid the conclusion that it causes more problems than it solves. The CPSC is one of the smallest health and safety agencies. Yet, it alone must follow these burdensome procedures, and consumer safety is the loser. Moreover, industry knows about and constantly exploits CPSC's resource problems. Most manufacturers are well aware that a strong letter to the agency threatening litigation over the release of the information will chill the agency's ability to release information about them. They know that the most common reaction will be to accommodate a manufacturer's objections, even if the objections do not have substantial merit, simply to avoid a lawsuit. But, my opposition to section 6(b) goes deeper than agency resource problems. I think it is bad policy for congress to require a government agency to "censor" health and safety information. If the CPSC has acquired data that raises questions about a product, CU thinks that the public should have access to the data and decide for themselves. In this regard, I find completely unconvincing the argument by some manufacturers that merely by virtue of being the repository of information, the CPSC will inevitably be viewed by the public as having placed its imprimatur on it. A carefully worded disclaimer would easily handle this problem. Indeed, I don't hold a library responsible for the content of the books on its shelves, nor would the public conclude that the accuracy of every consumer complaint in CPSC files is endorsed by the agency. As stated earlier, CPSC is the only federal health and safety agency that operates with these substantial restrictions on information disclosure. We believe that Section 6 hampers the agency's ability to let the public know breaking information about safety matters, as NHTSA did during the Ford/Firestone tragedies, for example, in statements like "we are looking at reports about the Ford Explorer's safety record" or the "Firestone tire's tendency to lose its tread at high speeds." CPSC official Marc Schoem told Consumer Reports in 1994 that the "effect" of Section 6 "is to make the release of some information almost impossible. Objections by any manufacturer can lead to a long struggle." Even newspaper clippings on a particular product cannot be released by the CPSC without prior review. Executive Order Already Protects Trade Secrets and Confidential Commercial Information Section 6 is unnecessary and redundant, and is in direct conflict with the public health and safety goals CPSC was set up to promote. It is premised on protecting the trade secrets and legitimately confidential information of manufacturers. Executive Order No. 12600, , signed by President Ronald Reagan in 1987, already provides such protections and federal agencies use this Order for the very same purposes that Section 6 was set up to accomplish, except that Section 6 goes far beyond the requirements set out in President Reagan's Executive Order. 6(b)(5) for example, doesn't permit CPSC to disclose information on whether a product may present a "substantial product hazard" unless the Commission has filed a formal complaint against the company, settled the case or the company agrees to disclosure. Under FOIA, however, such information would have to be disclosed unless the information qualified for protection under one of FOIA's exemption, i.e., that it is a trade secret or confidential commercial information. Thus, 6(b)(5) prevents the press and watchdog groups like CUours from determining whether manufacturers are complying with their duty to report substantial product hazards. The Supreme Court's holding in GTE Sylvania v. Consumer Prod. Safety Comm'n, 447 U.S. 102 (1980), expanded the restrictions on CPSC's ability to release of information to the public to include FOIA requests as well as affirmative disclosures by the CPSC. Robert Adler, law professor at the University of North Carolina and former CPSC attorney-adviser to two CPSC commissioners, reviewed the Commission's record of releasing information during the 7 years before the Supreme Court's decision in GTE Sylvania. He found the CPSC released information in about 50,000 cases when it received FOIA requests. When pressed to cite abuses in releasing information, the industry cited only six limited and debatable set of examples, several of which Adler found to be inaccurate or unfair. Further, of the six examples cited by industry representatives, five related to CPSC-initiated information releases which would remain covered by 6(b) even under reform measures offered by members of Congress. Finally, in releasing information that it has in its files, the government's job is not to determine which information is accurate and which is not. That is the public's responsibility—and its right. As a final point, I must say that I find it disturbing that those who argue most vehemently for giving the public adequate information and letting them make safety decisions tend to be those most opposed to doing so in the case of section 6(b) Recommendation: Repeal Section 6(b) of the CPSA. It inhibits public access to important information about product safety. Indeed, as presently constituted, it is the exact opposite of promoting the consumer's right to know about safety information, possibly life saving information, in the files of CPSC. ONGOING CPSC SAFETY CONCERNS 1. The Safety of "Durable" Childrens Products According to the July 5, 2002 2001, CPSC Nursery Product-Related Injuries and Deaths to Children under age 5 Annual Memorandum, an estimated 69,500 children under age five were treated in hospital emergency rooms for injuries associated with nursery products. An average of 65 children, according to this CPSC report, have died annually in such incidents from 1997-1999. over the past __ years We believe the number of injuries and deaths from using such products is far too high- indeed, it is unconscionable - and we urge this Subcommittee to focus a series of hearings on: The extent to which safety is incorporated in the design and manufacture in the design and manufacture of baby products; Pre-market testing of baby products by manufacturers; Voluntary safety standards set by private standards-setting organizations for baby products; Barriers to public access to information about injuries to children using baby products; Frequent recall of baby products intended for use by children; Secrecy in settling lawsuits when children have been injured or killed when using a baby product. We urge the Subcommittee to focus on products like strollers, high chairs, or portable cribs, products that one would find in a nursery, which we call "durable" children's products. Why do we urge this action on the Subcommittee? The top 5 manufacturers of durable childrens' products have had an alarming number of recalls over the past decade. From March 1993 to February 2003, we have listed the five top companies and their respective recalls: Dorel Juvenile Group -- 20 products recalled (includes Cosco 12, Safety First 8) Graco- 11 products recalled Century-11 products recalled Kolcraft -9 products recalled Evenflo -9 products recalled It is unreasonable and unconscionable for any company, especially those making products for use by children, to have more than one or two recalls over a decade. Proper safety-oriented design, prototype andrigorous pre-marketing testing, and setting strong industry-wide voluntary safety standards should prevent the recurring avoid the problem of having to recall product after product. And yet recalls clearly are not seem to be uncommonthe rule, not the exception, for the top five durable child product manufacturers. Add this lax record of putting products into the stream of commerce that must be recalled later to the fact that only 10-30% of product recalls are effective - i.e., the product is successfully repaired, replaced, refunded and/or destroyed - and you have a recipe for extreme danger, and that danger is to children, our most vulnerable consumers. These recalls translate into millions of products in the marketplace, with the frightening reality that only 10-30% of them will ever be successfully recalled. As a result, our smallest, most vulnerable consumers are exposed daily to products that pose the threat of injury or death. Consumers Union has met with parents whose children have died using products that were recalled but the parents or the day care center were unaware of that recall. While we are critical of how often new products are getting into the marketplace without proper testing, we are also critical of the CPSC's ineffective process of recalling those products from consumers. The Commission held a hearing 's hearingon May 15, 2003 that , focused on methods for increasing recall effectiveness, bringing many top public relations and marketing experts to the table. These experts discussed many creative methods for increasing recall effectiveness and consumer response, however, most of them require manufacturers of products and the agency to spend money and resources. We commend the Commission for bringing together so much experience and talent, but we are concerned that it may lack the will to require manufacturers to put into place effective recall strategies that may cost money. Perhaps our concern is prompted by the Commission's rejecting by a 2-1 vote, shortly before the May 15 hearing, a petition calling for baby products to be accompanied by Product Registration Cards to accompany baby products that would allow parents the opportunity to fill the cards out with simple contact information and thereby allow manufacturers to contact them in the event of a recall. The industry argued that the cost of such cards was not worth the benefit they might provide. We disagree. We had urged the Commission to tailor a rule that required companies to provide registration cards for higher cost "durable" baby products, indicating that these cards would be used only for safety recalls and not for marketing, allowing consumers to provide multiple contact information, and have the postage paid. We believe we would see greater registration percentages and the possibility of saving young lives. Recommendation: This committee should hold hearings on the manufacture of child products, as discussed above. CU supports two legislative proposals related to durable children's products and recommends that this Subcommittee hold hearings on both: a) Legislation offered by Senator Mary Landrieu Product Safety Notification and Recall Effectiveness Act of 2003, S. 584, would require registration cards to accompany products intended for use by children. These cards would clearly state they are only for the purpose of contacting the consumer in the event of a recall and would ask not for marketing information, as so many cards currently do, but for simply contact information. There is a precedent for this. The National Highway Traffic Safety Administration began requiring such cards with the sale of each child restraint in 1993 and the numbers of consumers registering went from 3% to 27% in 10 years. b) Llegislation introduced in the offered last Congress by US Representative Jan Schakowsky of Illinois entitled "The Infant and Toddler Durable Product Safety Act," HR 3283, would require pre-market testing of all durable children's products by an independent entity. This legislation was initiated by a leading child safety advocacy organization, Kids in Danger, based in Illinois, whose founders' son was killed in a recalled portable crib. We also recommend that CPSC report annually to this Committee on effectiveness of recalls for the preceding calendar year. Most consumers are unaware that success rates for recalls are so low; we believe making the information public would spur manufacturers to improve their safety records. 1. All Terrain Vehicles Between 1993 and 2001, the number of injuries caused by ATV-related accidents more than doubled, with 111,700 ATV accidents occurring in 2001. The number of injuries suffered by children under sixteen increased 94% to 34,800 in 2001. Pursuant to a petition filed by the Consumer Federation of America, CU supports calling for CPSC to ban the sale of ATVs to children under the age of 16 (and other safety measures). The CPSC held an all day hearing on ATV fatalities and injuries on June 5 of this year in West Virginia. That state has the 6th highest number of injuries, while efforts to pass a state law regulating ATVs have met with defeat on several occasions. We commend the Commission for providing an open forum at that hearing for some 36 individuals, including ATV enthusiasts, state legislators, industry representatives, consumer advocates, pediatricians, neurosurgeons, and ATV dealers to share their ideas for addressing the problem. One message that came out of the meeting is that in states with laws regulating ATVs, the number of deaths and injuries are lower than in states with no such regulations. The challenge is how to encourage states to pass such laws. We think Congress has an invaluable part to play in making this happen. Recommendation: This Subcommittee should work with the Commission to schedule hearings on ATV safety, perhaps on a smaller scale but similar to the kind of hearing the CPSC held in West Virginia. Congress should then provide financial incentives to states to adopt ATV safety laws. (The American Academy of Pediatrics Model Statute is an excellent and comprehensive approach to ATV regulation, providing for training and licensure of ATV riders and requiring safety gear like helmets and proper clothing). There is precedent for this approach. In 2000, Congress passed and President Clinton signed a law requiring that states enact a 0.08% BAC (blood alcohol content level) law by October 1, 2003 or lose a portion of highway funding. Federal law currently offers financial incentives to the states to adopt a 0.08% permissible blood alcohol level for drivers and has been successful in persuading states to adopt this provision. Prior to this law, 18 states and the District of Columbia had passed 0.08% BAC laws. In the two years since, the total number of states with 0.08% BAC laws has increased to 33 and the District of Columbia. 2. Baby Bath Seats CU feels strongly that this baby product should have been banned long ago and indeed, we . supported the Consumer Federation of America's 2000 petition to ban these seats. Baby bath seats have been involved in 96 baby drowning deaths since January 1983, according to CPSC's May 2003 Staff Memorandum. The tragedy, we believe, is that the Commission voted to proceed with a mandatory rule on these seats in August 2001, but to this day still has not acted to ban or improve their design. countless deaths of babies,In the interim, an additional 10 babies have died in this nearly two year period. We know that the staff has recommended a mandatory performance standard for baby bath seats. While we maintain an open mind about the recommended changes, we are skeptical: these devices, despite the warning stickers on them, still give givingparents a false sense of security that when they place their child in these seats, it is safe to leave them in the bathtub alone. Clearly, the bath seats being sold and used today are not safe, and we are simply not sure that any design change will remedy these inherent problems. e. 3. Furniture Flammability and other fire hazards The Commission has failed, in our view, to address in a comprehensive way the issue of fire safety over the past several decades. The US has one of the highest fire death rates in the industrialized world. Each year, fire kills more Americans than all natural disasters combined. More than 730 people on average die each year in fires where cigarettes, matches, lighters and candles ignite upholstered furniture or mattresses and bedding. These ignitions are the number one cause of fire deaths. Since 1980, when the CPSC began gathering data on fire deaths, more than 20,000 people have died and countless more have been injured in fires involving smoldering and open flame ignitions of upholstered furniture, mattresses, and bedding. The government has been making and considering mattress and furniture flammability standards since before the CPSC was established over 30 years ago. We recommend that CPSC develop fire safety standards in the following areas: fire safe cigarettes, fire safe candles, residential bedding systems (mattresses, foundations, accessories, etc) and upholstered furniture. The Commission would not be starting from scratch. Much research has been done over many years in each of these areas. The comprehensive fire safety program, as recommended by the National Association of State Fire Marshals, is a good starting point. What has been is lacking is strong and decisive leadership on the part of the CPSC in moving forward with standards. Perhaps the agency needs greater resources to adequately address fire hazards. We encourage Congress to provide those resources. Few issues have received more research or debate at the Commission than developing a fire safe standard for upholstered furniture. We understand that developing such a standard is a highly complex issue and one that requires careful consideration, but it has been nine years since (petition granted in 1994) the Commission granted the National Association of State Fire Marshals Petition to do so and the research seems to be never ending. The news last week regarding the terrible fire at a Seton Hall University dormitory that killed three students and injured more than 50 others highlights the problem. Yes, this fire was started by students deliberately setting a poster on fire, but as the New York Times noted, "The poster . . . was lying on a couch made of highly flammable foam that caught fire and filled the dormitory with smoke. . . " The foam inside most upholstered furniture is highly flammable, a fact few consumers comprehend. California is the only state with an upholstered furniture safety standard and the deaths and injuries in that state from upholstered furniture fires are far fewer than in the rest of the country. Recommendation: The Commission should move forward with a comprehensive plan to set fire safety standards for candles, cigarettes, upholstered furniture, and mattresses and bedding. CONCLUSION The product safety agenda has much unfinished business. Too many consumers, especially children, are still injured and killed through no fault of their own, and the sad part is that much of this grief can be prevented. Consumers need and depend on the vigorous, ongoing work of CPSC. We believe the recommendations we make here, if adopted, would amendments we have outlinedmake the agency far more effective in reducing or eliminating unreasonable risks from consumer products. We urge you to provide this federal safety agency the necessary financial resources and exercise the strongest possible oversight to make CPSC function as Congress intended. Thank you.
Mr. Stephen Gold
Mr. Chairman and members of the Committee, I’m Stephen Gold, vice president at the National Association of Manufacturers and executive director of the Council of Manufacturing Associations. One of my roles at the NAM is to administer the NAM CPSC Coalition. Thank you for providing our CPSC Coalition an opportunity to testify on the reauthorization of the Consumer Product Safety Commission. Our Coalition represents approximately 65 consumer product manufacturers and manufacturing associations. It has functioned for two decades as a forum to address common issues and concerns about the operation of the Commission and about manufacturers’ requirements under the Consumer Product Safety Act and related acts. The mission of the Coalition is to ensure that the shared goal of consumer product safety is achieved in a just and balanced manner. To that extent, our Coalition very much supports the important and vital mission of the Commission. Today’s U.S. economy is the most consumer-driven in history, and more consumer products are manufactured and sold in the United States than ever before. With that in mind, industry standards organizations and internal safety requirements developed by manufacturers provide the margin of safety that allows American consumers to be comfortably secure in the use of their consumer products. Still, there are occasions where the Commission justifiably acts to remove unsafe products from the marketplace, and to set standards where private standards either do not exist or are clearly inadequate. Consumer product manufacturers are committed to working with the Commission to achieve these objectives. We support the Commission’s efforts, along with the Customs Service, to monitor imported products to ensure that they meet appropriate safety standards, an important step toward better enforcement regarding imports. In addition, our Coalition also believes that the Commission has a significant role in educating consumers about safe practices. That said, our Coalition has made no secret of its discomfort with certain Commission practices, policies and procedures over the years. We have expressed concern in the past when cooperation with industry was minimized while a public-relations campaign to tarnish a company was launched in the media. We have objected in the past to proposed mandates when education, research and innovative private initiatives were not first encouraged. We have pointed out when due process was given short shrift by the Commission. Our Coalition applauds the current Chairman and his colleagues’ interest in seeking the views, transparently and broadly, of all interested parties without predisposition on important matters. We appreciate the recent Commission hearings and workshops to improve recall efficiency, at which experts from a variety of disciplines were give the opportunity to share information. And we laud the Commission’s growing emphasis on sound research and data, including its focus on more rigorous cost-benefit analyses. With respect to reauthorization of the Commission, first and foremost we ask this Committee to “do no harm.” A recent study commissioned by the NAM highlights not only how critical a healthy manufacturing sector is to our nation’s prosperity, but the exceedingly difficult economic times U.S. manufacturers presently face. Global competition, particularly in the consumer product industry, is more intense than ever. In such an economic environment, U.S. manufacturers should not be disadvantaged by an unnecessarily intrusive and inefficient domestic regulatory regime. Along those lines, we believe that there are ways to make the Commission more effective and at the same time more efficient. As I noted, in these difficult economic times complexities and confusion in the regulatory process are an unnecessary burden on consumer product companies. Allow me to share a few proposals on ways the Commission can increase its effectiveness in protecting consumers while minimizing burdens on the manufacturing sector of this country. First, we believe that the Commission could rejuvenate its consumer and educational function. In recent years, the Commission has devoted relatively little attention to educating consumers about the importance of safe practices and careful supervision of minors. We support dynamic new partnerships between industry and the Commission to promote safety and safe consumer practices. Consumer education does not substitute for the essential responsibility of manufacturers to provide safe products, but statistics show that a large percentage of accidents are due to improper or irresponsible consumer conducts or lack of supervision of minors. The Commission is fully authorized to embark on such programs, but encouragement from Congress would be appreciated. Second, there is a need for better guidance from the Commission in the implementation of the Section 15 Substantial Product Hazard Reporting provisions. Manufacturers with defective products that constitute substantial product hazards are obliged to report to the Commission and, if needed, to take corrective action including recalls. However, the law and implementing regulations are vague and ambiguous. It is difficult for manufacturers, especially small businesses, to determine when reporting and corrective action is necessary. Likewise, it is difficult for them to comprehend how the penalty for the failure to report in a timely fashion is justified by the agency. We applaud the Commission's willingness to resolve corrective action issues and many penalty issues without resorting to litigation, as many other agencies are prone to do. That being said, we believe that the lack of a bright-line guidance on reporting and penalty computation may lead to resolutions that are arbitrary. The Commission already is authorized to develop more effective guidelines in this area, and we encourage this. Finally, we are supportive of the Commission’s involvement in private standards activities as authorized in the current statute. These standards are the bulwark of our national and even international safety system, and the Commission plays an important role in providing comments and proposals. However, we believe the Commission needs to better manage and supervise its internal process, particularly staff input to standards organizations, to ensure an opportunity for public comment and to prevent proposals which lack technical merit or otherwise cannot be justified as federal standards. Thank you, Mr. Chairman, for providing the NAM and its CPSC Coalition the opportunity to testify. The Commission is an important agency and we support its mission. It can and should, for the benefit of consumers, be administered more effectively than in the past, and we look forward to working with the current Chairman, the Commissioners and the Committee to this end.
Mr. Robert Polk
Senator Fitzgerald, Members of the Committee, my name is Robert Polk. I appear before you on behalf of the National Association of State Fire Marshals. Our association represents the most senior fire safety officials of the 50 states and District of Columbia. Our mission is to protect life, property and the environment from fire and other hazards. We receive virtually all of our resources from federal and state government agencies. We thank you for this opportunity. Yesterday, I retired from a challenging and incredibly rewarding 31-year career as a firefighter, paramedic, fire chief, emergency services director – most of it in Illinois and Florida – and, for the past three years, as the State Fire Marshal for the great state of South Carolina. I have been asked for the time being to remain as chairman of our Association’s Consumer Product Fire Safety Task Force, and it is in that capacity that I address you this morning. The United States Consumer Product Safety Commission’s authorizing statutes were written decades ago and have been amended rarely in the intervening years. Compared to virtually all of the other federal regulatory agencies, the Commission has received relatively little attention from the Congress, industry, news media or even the advocacy community. There were years when our association was the only organization to testify before the Commission’s annual hearing on priorities. My personal view is that a passive Commission has opened the doors wide to the trial bar. Case in point: we have a 50-year-old wearing apparel fire safety standard that is so weak that newspaper is able to pass it. This standard has absolutely no value to fire safety, or to the textiles producers who are routinely sued for fires involving products that pass the federal requirement. The Commission has the authority – and, we believe, the information it needs – to set a real standard. The Commission has potentially made a step forward in addressing this issue through its recent collaboration with State Fire Marshals, the American Burn Association and the Shriners on the new Children’s Fire Burn Injury Reporting System, which will include analysis of garments worn by children who have been burned. The National Association of State Fire Marshals believes that the statutory tools available to the Commission – the Consumer Product Safety Act, the Flammable Fabrics Act, the Federal Hazardous Substances Act and the other laws that give the Commission its powers – are more or less adequate if they are used. The Commission is what it is. But, in my remaining time, I would like to share our vision of what it could be. Consumer product safety is no less important than the credibility of financial reporting or the production of tires – both of which have been the subject of intense Congressional scrutiny in recent years. This Committee has distinguished itself many times on the subject of corporate integrity. Once again, we are talking about the integrity of the private sector. In simple terms, we believe the Commission should make it as easy as possible for the tens of thousands of consumer product manufacturers and retailers who are committed to doing the right thing. But, by the same token, the Commission should make it far tougher on the few companies – and, in some instances, whole industries – that knowingly make hazardous products, conceal data on reportable incidents and generally disregard their responsibility to public safety. How might we make it easier for responsible companies to do the right thing? We would begin by using every tool at our disposal to facilitate the international trade of products that are made with integrity, regardless of where they are manufactured. Safety, health and environmental requirements differ from nation –to nation, state –to state and even city –to city. This patchwork penalizes the companies that respect the rule of law, and yet we have the means to establish true, serious and integrated safety, health and environmental standards for consumer products. Where Commissions in other administrations have ignored global markets, this Commission seems intent upon working on these issues. Such an approach would require greater collaboration with other government agencies. The Commission should work more closely with the office of the US Trade Representative (USTR), the Customs Bureau, the Environmental Protection Agency, the State Department and other agencies defining trade policy. In an ever-globalizing market, we need to bring all of our resources to bear in order to make sure that average Americans are not exposed to unsafe products. In addition, we collectively must do more to strengthen and then defend voluntary standards development and compliance programs. Organizations like the National Fire Protection Association, Underwriters Laboratories (UL), American Society for Testing and Materials (ASTM), American National Standards Institute (ANSI) and the International Code Council have developed hundreds of requirements that save lives and protect property every day. But – in the interest of maintaining the credibility of these requirements – the Commission might provide more oversight and guidance. For example, how is it that we have roughly 20,000 fires a year involving electrical appliances that are expected to meet UL requirements? Those fires resulted in 100 deaths and 730 serious injuries in 1998, which is the most recent year for which statistics are available. It should be noted that some industries prefer mandatory national requirements. The American Furniture Manufacturers Association recently took this position in a letter to the Commission dated May 2, 2003. Now to address the other part of our recommendation: How might we make it far tougher on those companies and industries that ignore their obligation to make and sell safe products? First, we would add industry associations to the list of organizations accountable for product safety. In many cases, industries work together to improve standards. The International Sleep Products Association has done a wonderful job with new mattress fire safety requirements. But other associations work against public safety. The Consumer Electronics Association has attempted to discourage any consideration of standards that would prevent fires from external sources – for example, a candle tipping over onto a “boom box” in a child’s room. In tests conducted and funded by electronics producers this past January at UL, the industry observed a computer keyboard ignited by a birthday candle. We respect the right to commercial free speech, but Section 15 of the Consumer Product Safety Act might be amended to include an affirmative duty on trade groups to report to the CPSC when they come into possession of information that may suggest a product is unsafe. It stands to reason that if individual companies are obliged to report unsafe products to the Commission, so too should the groups that represent their interests. Second, if we intend to facilitate trade of properly made consumer products, we must also use every legal means possible to prevent cheap, non-compliant, dangerous products, components and materials from entering into this country. The National Association of Manufacturers recently listed Chinese-made imports among its greatest concerns. We would agree, but no one expects the Chinese to do much, and the U.S. Customs Bureau is spread thin with its many responsibilities. Closer collaboration between the Commission and agencies like the Office of the US Trade Representative may help. Naturally, ensuring that the Commission has the resources it needs remains vital. Beyond working toward safer imports, we believe additional steps can be taken with respect to our nation’s largest retailers, who effectively define the choice of products available to American consumers. The law already holds retailers accountable for the safety of the products they sell. However, when one examines the limited penalties that the Commission may seek from those that manufacture or sell unsafe products, it is easy to see why some remained undeterred. Take, for example, Wal-Mart. The recent lawsuit and civil penalty of $750,000 imposed by the Commission represented the first time a retailer was punished for failing to report a safety problem, where the retailer was not also an importer or private labeler. However, the penalty amount was, in context, minuscule – equivalent to about one hour’s profit earned by Wal-Mart in 2002. A firefighter or police officer who does something wrong can lose a couple of weeks of pay. One hour of lost earnings isn’t much of a statement to anyone, especially large corporations. The statutory limitation on fines that can be assessed by the Commission is woefully inadequate if it intends to get the attention of large retailers and manufacturers. Furthermore, the Consumer Product Safety Act makes no provision for special penalties in the event of an industry-wide attempt to deceive consumers. The current civil and criminal penalty scheme in effect rewards larger companies. The Commission has most of the basic statutory tools it needs to help responsible companies. However, in the thirty-one years since the Consumer Product Safety Act was first adopted, we have witnessed drastic changes both in the U.S. market and global market place. If Congress is serious about ensuring the safety of the products that we use every day, we must pursue innovative solutions to 21st Century problems. Enhanced inter-agency cooperation, revamped civil penalties and ensuring the Commission has sufficient resources are essential steps that Congress must take. I thank the Committee for holding this hearing and would be happy to take any questions.
Mr. Alan Korn
Ms. Rachel WeintraubDirector of Product Safety and Senior CounselConsumer Federation of America
Mr. Chairman and members of the Subcommittee, I am Rachel Weintraub, Assistant General Counsel for Consumer Federation of America (CFA). CFA is a non-profit association of approximately 300 pro-consumer groups, with a combined membership of 50 million people that was founded in 1968 to advance the consumer interest through advocacy and education. CFA appreciates the opportunity to testify here today on the reauthorization of the U.S. Consumer Product Safety Commission. We are pleased to offer our very strongest support for the reauthorization of this vital consumer safety agency. The Consumer Product Safety Commission (CPSC) plays an extremely critical role in protecting American consumers from product hazards found in the home, in schools and during recreation. We know from past experience, from survey data, and from consumers, who contact us on a daily basis, that safety is an issue that consumers care deeply about and that CPSC is an agency that consumers support and recognize as protecting them and their families. Yet, with jurisdiction of over many different products, this small agency has a monstrous task. This challenge is heightened by the fact that, over the past two decades, CPSC has suffered the deepest cuts to its budget and staff of any health and safety agency. Today, CPSC’s budget is $56.7 million with 471 full time employees. To put these staffing levels and budget appropriations in perspective, it is necessary to consider the history and authority of this consumer agency. Established by Congress in 1972, CPSC is charged with protecting the public from hazards associated with over 15,000 different consumer products. Its statutes give the Commission the authority to set safety standards, require labeling, order recalls, ban products, collect death and injury data, and inform the public about consumer product safety. In 1974, when CPSC was created, the agency was appropriated $34.7 million and 786 FTEs. Now 28 years later, the agency’s budget has not kept up with inflation, has not kept up with its deteriorating infrastructure, has not kept up with increasing data collection needs, has not kept up with the fast paced changes occurring in consumer product development, and has not kept pace with the vast increase in the number of consumer products on the market. CPSC’s staff has suffered severe and repeated cuts during the last two decades, falling from a high of 978 employees in 1980 to just 471 for the coming fiscal year. While every year an estimated 23,000 American consumers die, and an additional 31 million suffer injuries related to consumer products under the jurisdiction of the CPSC, this agency, with its reduced staff and inadequate funds, is limited in what it can do to protect consumers. Because of these constraints, CPSC cannot maintain its current level of safety programs, nor can it invest in its infrastructure to improve its work in the future. In addition to giving CPSC the tools it needs to comply with its mandate, an increase in authorized funding will help to reduce the enormous costs to society caused by unsafe products, estimated at $500 billion annually. Because of this historically bleak resource picture, CFA is extremely concerned about the agency’s ability to operate effectively to reduce consumer deaths and injuries from unsafe products. It is for this reason that CFA believes that the most important thing that this Subcommittee can do in reauthorizing the CPSC is to assure that sufficient reauthorization funding levels are approved. We believe that the amounts sought by CPSC have been overly conservative and should be expanded by at least 10%. In a time when limiting federal agency budgets may be necessary, it is important to understand the context in which CFA and others (including the agency itself) seek sufficient authorization levels for CPSC. CPSC’s current budget, staff, and equipment are stretched to the point of breaking. CPSC salaries and rent currently consume 85% of the agency’s appropriation. An additional 11% of the agency’s budget pays for other functions (such as supplies, communications and utility charges, operation and maintenance of facilities and equipment) that merely allow CPSC to keep its doors open for business each day. Much of CPSC’s equipment, particularly at the laboratory is old and outdated. CPSC’s testing laboratory serves a crucial role in CPSC’s compliance investigations and safety standards activities. In spite of the laboratory’s critical importance, no major improvements have been made in the past 25 years. Rather, CPSC and GSA have made only slight modifications to its infrastructure, which was originally designed for military use not laboratory use. Currently, CPSC staff working at the lab are working under merely adequate conditions. If the laboratory were to be modernized, CPSC would gain significantly through increased productivity and efficiency. As often as it can, CPSC operates in a very cost efficient manner. Most of the recalls brought about by the agency are the result of voluntary agreements reached between CPSC and manufacturers and/or distributors. However, in every recall matter it considers, the Commission must be prepared with research evidence to convince the company of the need for action. In cases where the agency must file a complaint and litigate the matter, the agency may require even more extensive testing and research data for use as evidence at trial. This testing and research, whether leading to a recall or trial, may need to be contracted out and is very costly. This contingency is one with enormous ramifications. In effect, not having sufficient resources puts CPSC in a terrible position as an enforcement agency. It can’t put its money where its mouth is – so to speak – because it can’t be sure it will have the money needed to follow through. This concern is further exacerbated as new products and new technologies come on to the market. Sophisticated, high tech products, such as Segway devices, which CPSC engineers may have never seen, much less have expertise with, pose particularly resource intensive challenges. For CPSC to live up to its safety mandate, it must be able to keep pace with the ever-changing development of technology. Because of CPSC’s limited resources, some might argue that the private sector should do more to pick up the slack in protecting the public from consumer product hazards. While on the surface this might appear an appealing partial solution, CFA believes that it is an unworthy answer for two reasons. First, the private sector can never take the place of a regulatory agency that has the force of law as its underpinning. Congress, with widespread bipartisan support, created CPSC because a corporation’s goals of increasing profits and making safe products sometimes collide, and there is a need for government to provide consumers with a safety net when this occurs. CPSC’s ability to set product standards, ban products, collect data and force recalls are functions, which must necessarily remain with government. Second, private non- profits have limited resources and budgets to fund educational and informational programs. However, like many organizations, CFA works on several fronts to increase public awareness on safety issues. For example, Safechild.net, a project of CFA’s sister organization, the CFA Foundation, is a web site designed to be the most comprehensive child safety web site on the internet. Our web site features special sections for parents, professionals who work with children, and child advocates. In order to aid parents seeking more information about recalls and child safety, SafeChild.net makes available a free, non-commercial and confidential e-mail notification service detailing major child-safety product recalls and related child-safety tips. This is so necessary because CPSC’s recall notification system is not effective. Most consumers do not respond to recalls because they don’t hear about them. This is not surprising, given that CPSC’s primary method of telling consumers that a product they own has been recalled is through a press release. SafeChild.net has logged more than 18 million hits since its launch on June 21, 2001. While CPSC has managed to leverage its resources in working with private sector partners, its leadership position as our nation’s consumer safety agency should not be further compromised. While CFA fully supports the reauthorization of CPSC, CFA believes that CPSC could be an even more effective agency if a number of changes were made to the statutes over which CPSC has jurisdiction. First, CFA suggests that Congress eliminate the cap on the amount of civil penalties that CPSC can assess, as spelled out in section 20 (a) of the Consumer Product Safety Act (CPSA), against an entity in knowing violation of CPSC’s statutes. The current civil penalty is capped at $7,000 for each violation up to $1.65 million. A “knowing violation” occurs when the manufacturer, distributor or retailer has actual knowledge or is presumed to have knowledge deemed to be possessed by a reasonable person who acts in the circumstances, including knowledge obtainable upon the exercise of due care to ascertain the truth of representations. Knowing violations often involve a company’s awareness of serious injury or death associated with their product. Eliminating the cap will encourage manufactures to recall products faster and comply with CPSC’s statutes in a more aggressive way. Importantly, the elimination of the cap will act as a deterrent to non-compliance with CPSC’s regulations. Eliminating the cap will also strengthen CPSC’s bargaining power when negotiating with many companies to take a particular action. For example, consider a situation that came to light just last week concerning a company regulated by another health and safety agency, the Food and Drug Administration (FDA). The recent guilty plea to 10 felonies by Guidant, a division of one of the country's largest makers of medical devices, and its admission that it lied to the FDA and hid thousands of serious health problems, including 12 deaths, caused by one of its products, shows how important the role of civil penalties play in not only preventing but punishing manufacturers for wrong doing. According to a June 13, 2003 New York Times article, the case against Guidant resulted in $92.4 million in criminal and civil penalties, the largest ever imposed against a maker of medical devices for failing to report problems to the government. Unfortunately, CPSC has companies under its jurisdiction that have made products that have caused many deaths and injuries. For example, CPSC fined Cosco, a Canadian company, which is the largest children’s product manufacturer and distributor in the United States, $725,000 in September 1996 for failing to report 96 known toddler bed and guardrail entrapments and one death associated with its toddler beds. In 2001 CPSC again fined Cosco and Safety 1st a record fine of $1.75 million after failing to report two deaths and 303 injuries to CPSC. However, these companies never admitted wrongdoing and obviously the penalty did not deter non-compliance with the reporting requirements. Second, CFA urges Congress to restore CPSC’s authority over fixed-site amusement parks. Fifty-five fatalities have occurred on amusement park rides in the last fifteen years. According to the CPSC, serious injuries on theme park rides have soared 96 percent in the last five years. Federal oversight is crucial to the prevention of any future deaths and injuries associated with fixed site amusement parks due to the vast variation in state laws and the absence of any regulation in some states. CPSC has illustrated its ability to identify and prevent injuries from many consumer products including mobile amusement park rides. CPSC should be granted the same scope of authority to protect against unreasonable risks of harm on fixed-site rides that it currently retains for carnival rides that are moved from site to site. However, with this additional authority, CPSC should be authorized more money to take on this important role. Third, CFA urges Congress to eliminate section 6(b) of the CPSA. This section of the Act prohibits CPSC, at the insistence of industry, to withhold safety information from the public. This provision, which no other health and safety regulatory agency must adhere to, requires that CPSC, before it can give out certain information to the public, must check with the relevant industry before disclosing information. If the industry denies access to the information, CPSC must evaluate their response and may just drop the issue and deny access of the information to consumers. This has the effect of delaying or denying access of important information to consumers. Fourth, we urge Congress to require businesses selling toys on the Internet to provide on their website the same cautionary labeling that is required on toy packaging. Currently, Section 24 of the Federal Hazardous Substances Act (FHSA) requires cautionary labeling on small balls, marbles and toys that contain small parts for children three years of age and younger. This labeling must be apparent to consumers at the point of purchase so consumers are able to make informed decisions about potential safety hazards associated with the toys. Online retailers should be required to post the cautionary warnings on their website so that consumers could be aware of the potential safety issues before actually purchasing the product. In addition there are a number of issues currently before the agency in which we have a deep concern. · Recall Effectiveness: CFA filed a petition with CPSC in June 2000 requesting that CPSC initiate rulemaking to require all manufacturers, (or distributors, retailers or importers) of products intended for children to provide along with every product, a Consumer Registration Card that allows the purchaser to register information through the mail or electronically, require recall remedies to be indefinite and require manufacturer identification and contact information on each product. CPSC agreed to consider only the issue of product registration cards, a requirement that the National Highway Transportation Safety Administration (NHTSA) currently has for child car seats. Unfortunately, on March 7 by a vote of 2 to 1, CPSC denied our petition. We were very disappointed with this decision and continue to believe that product registration cards are an essential component of any effort to improve recall effectiveness. Our current system of recall notification is failing. By relying upon the media and manufacturers to broadly communicate notification of recalls to the public, CPSC and the companies involved are missing an opportunity to communicate with the most critical population-- those who purchased the potentially dangerous product. Requiring companies that manufacture, distribute, import or sell products intended for children to take additional measures to assure the effectiveness of recalls is necessary for the following reasons: 1) First, return rates for CPSC- recalled products are extremely low. In Fiscal Year 1996, CPSC recalls experienced an 18% return rate. In FY 1997, the most recent year for which data is available, the return rate fell slightly to 16%. 2) Second, many CPSC recalls involve products for children. In fiscal year 2002, CPSC instituted recall actions involving 84 toy and children’s products, involving more than 11 million product units. 3) Third, children are a vulnerable population who deserve additional protections. 4) Fourth, the risks of death or serious injury associated with children’s product recalls are substantial. These recalls often occur because of choking, strangulation, suffocation, burns or serious fall hazards. All of these too often result in the death of a child or serious injury. Children have no capacity to prevent any of these hazards. The effective recall of hazardous products is an important purpose of the Consumer Product Safety Commission and should be the priority of any company that puts a consumer product into the market place. While CPSC denied the petition based primarily upon industry’s assessment that these cards would be too expensive and may not work, we continue to believe that the costs involved are reasonable considering the benefit of the lives that may be saved. In addition, efforts by NHTSA to require registration cards for child car seats have been successful. Because child restraints are used in automobiles, NHTSA has jurisdiction over this product and has required that manufacturers provide cards to consumers. In a new study released January 6, 2003, NHTSA evaluated its child safety seat registration program. The study found that child safety seat registration was successful in notifying purchasers of recalls. Specifically the NHTSA study found: 1) Increased registration rates increased recall compliance rates: the repair rate on recalled seats is now 21.5% vs. 13.8% in 1993- a statistically significant 56% increase. 2) The indirect cost to consumers of the mandatory standard is 43 cents for each car seat sold. 3) Return rates for registration cards are now at 27% vs. 3% before the rule was implemented. NHTSA’s experience with registration cards over the last decade provides an important model for CPSC to emulate. NHTSA’s recent study evaluating their product registration card proves that the cards are not only effective in increasing consumer compliance with recalls but also achieve a successful result at a low cost to consumers. We urge CPSC to consider product registration cards as an important part of their current “broader look” at recall effectiveness. In addition, we urge Congress to require CPSC to submit a report within one year, on the steps it will take to increase recall return rates including an evaluation of product registration cards as one alternative. · All- Terrain Vehicles CFA has long been concerned about all-terrain vehicle (ATV) safety. Unfortunately our concern has been increasing as injuries and death on ATVs-- especially injuries and deaths to kids-- have been on the rise. CPSC data consistently shows that ATV- related injuries and deaths are increasing: between 1982 and 2001, at least 4,541 adults and children were killed in ATV accidents; between 1993 and 2001, the number of injuries caused by ATVs more than doubled; in 2001 alone, 111,700 people were injured seriously enough by ATVs to require emergency room treatment; and between 1993 and 2001, the number of injuries involving four-wheel ATVs increased by 211 percent to nearly 100,000. Tragically, the CPSC data show that children under 16 are at high risk. Between 1982 and 2001, 1,714 children under the age of 16 were killed in ATV incidents, representing 38 percent of the total number of fatalities. Of those ATV deaths involving children, 799 were to children 11 or younger. Between 1993 and 2001, ATV-related injuries suffered by children under 16 increased 94 percent to 34,800. The history of ATVs in the United States proves that the current approach-- the industry’s self-regulating approach-- to safety is not working. Self-regulation by the ATV industry has led to larger and faster ATVs and more children being killed and injured. CPSC’s own data illustrates that CPSC and the states must act to end this hidden epidemic by moving aggressively to protect young children from the dangers posed by adult-size ATVs. In particular we have urged CPSC through a petition we filed this past August, to ban the sale of adult size ATVs for the use of children under 16. We hope that the agency will act soon to ensure that these trends are reversed. We urge Congress to monitor this issue closely and to hold oversight hearings on ATV safety to determine the role Congress should play in this public health crisis. · Baby Bath Seats Since 1981, when baby bath seats came on to the market, approximately 96 children have drowned to death and 153 were injured while using the product. One study of caregivers who use bath seats found that: they are likely to fill the bathtub with more water, increasing the chance of drowning, and they are more likely to willfully leave a child in the bathtub alone when a bath seat is in use believing that the device provides an added measure of safety. Furthermore, there are mechanical problems with baby bath seats that make it more likely that a child will drown if a caregiver leaves the child unattended. There are no mandatory safety standards for these products. CFA petitioned CPSC to ban baby bath seats in July, 2000. CPSC ruled in favor of an Advanced Notice of Proposed Rulemaking in 2001 and just recently announced a meeting for the end of July on CPSC staff’s recommendations for a notice of proposed rulemaking. Ten of the deaths occurred since the Commission voted to initiate an ANPR in May of 2001. CPSC should not wait for more deaths and injuries to occur before they take action on this hazardous product. Congress should carefully track CPSC’s progress on this issue. In conclusion, this Subcommittee must step in and exercise its duty to make sure that the federal government lives up to the commitment it made to protect consumers from product- related deaths and injuries when it created the Consumer Product Safety Commission. CFA supports the multi-year reauthorization of CPSC and urges more funds to be appropriated to the agency so that more people will have the benefit of CPSC’s efforts to protect consumers from unsafe products. Thank you.
Mr. Gary Kline