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A Destructive Toy Story Made in Washington

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A Destructive Toy Story Made in Washington

The Wall Street Journal September 13, 2009
Legal ReformOther

Last Thursday, the House Energy and Commerce Committee finally held a hearing on the highly controversial Consumer Product Safety Improvement Act, the children’s-product-safety law that took effect on Feb. 10. Chairman Henry Waxman (D., Calif.) allowed a single witness: Inez Tenenbaum, the newly installed chair of the Consumer Product Safety Commission (CPSC), who, like himself, is a strong advocate of the law. Not one of the thousands of craftspeople, retailers and small manufacturers the law has sent reeling was permitted to testify.

This law has saddled businesses with billions of dollars in losses on T-shirts, bath toys and other items that were lawful to sell one day and unlawful the next. It has induced thrift and secondhand stores to trash mountains of outgrown blue jeans, bicycles and board games for fear there might be trivial, harmless—but suddenly illegal—quantities of lead in their zippers and valves or phthalates in their plastic spinners. (Phthalates are substances that add flexibility to plastic.) Even classic children’s books are at risk: Because lead was not definitively removed from printing inks until 1985, the CPSC has advised that only kids’ books printed after that date should be considered safe to resell.

Yielding to a business outcry, the agency postponed until next February the law’s highly onerous product-testing requirements, which many small manufacturers have said will impose costs exceeding their annual profit or even revenue. It also has postponed enforcement of the law’s effective ban on kids’ bikes and power vehicles, which unavoidably contain leaded brass or similar alloys in certain components.

Nevertheless, the law’s latest shock hit businesses on Aug. 14. That’s when the law’s tracking-label mandate went into effect, requiring that makers of childrens’ goods “place permanent, distinguishing marks on the product and its packaging, to the extent practicable.” The idea is to facilitate recalls and make it easier to trace safety problems. The result will be to capsize yet more small businesses.

According to the CPSC, the new marks must allow users to ascertain the identity of an item’s manufacturer, “location and date” of production, and “cohort information” such as batch or run numbers. An adhesive sticker on the product won’t qualify as “permanent” since consumers might peel it off, while other provisions of the law greatly discourage the use of paint or similar coatings on children’s products. Makers of wood, ceramic and glass items may therefore need to consider alternatives such as etching and branding.

Much of the guesswork arises from Congress’s vague command that products carry distinguishing marks “to the extent practicable.” The CPSC got more than 500 pages worth of comments on the provision from affected parties, many from anguished small-business people. When the small-town owner of a producer of baby carriers in Michigan checked out the availability of suitable printed labels, she found they had to be ordered in minimum sets of 100 (at $30 per set) though her four-employee firm has never produced more than 30 carriers at a time, and often produces single-item “batches.” A South Carolina maker of school assignment sheets and other classroom supplies predicted that if enforced with rigor the law would require changing labels “hundreds of times a week” at its two facilities at “crippling” expense.

On July 20, only three-and-a-half weeks before the rules were to take effect, the CPSC announced some lenient if vague interpretive guidelines. The agency said it didn’t think individual marking was required for very small objects and items in sets, such as wooden blocks, and agreed that harm to a product’s functionality or aesthetics might be a possible reason to reject marking as impracticable. So long as handcraft and small-production-run makers keep careful control of components, it seems, they might not even need to set up batch numbering systems.

During a “period of education,” at least, the commission expects to avoid penalizing makers who have put in good-faith efforts to comply with its guidelines. That’s a step in the right direction. But the 50 state attorneys general can enforce the law independently, and they have never promised to be reasonable.

The CPSC touched off another furor this summer when it confirmed that Mattel, the giant toy maker whose many recalls helped set off the lead-in-toys panic, had qualified for an exemption from onerous third-party (outside laboratory) testing of its products under the law, and would instead be allowed to test in its own in-house labs. (Mattel had successfully lobbied for such a provision.) Of course, most companies do not operate on a scale that will make such an exemption feasible.

Why did Congress rush to pass this bill, and why is it so reluctant to amend a law whose burdens fall mostly on products that have never been linked to poisoning? One reason is the skill of antibusiness groups claiming to speak for consumers. Groups such as Public Citizen and the Public Interest Research Group seized on and promoted the Chinese toy panic for their own legislative ends and have taken credit for some of the law’s most extreme provisions. (The tracking-labels provision was added by then-Sen. Barack Obama.)

Some of the same groups are active in the coalition now pushing for “traceability” principles in food and farm safety. New mandates being talked of include everything from machine-readable leg tags on backyard chickens to batch labeling of orchard fruit. Before ideas of that sort pass into law, one hopes the farm and food communities will study closely the experience of the Consumer Product Safety Improvement Act.

This piece originally appeared in Wall Street Journal