Under the consumer radar: Knee Jerk anti-small business law creating havoc


woody-buzz-lightyear-toy-story-473549_445_266Here’s a Toy Story for you…..

Aside from blogging, which is entirely a non-revenue hobby for me, I do have a small business that I run from home….it involves children’s products.

Last year, a bill passed Congress that requires CPSA regulations for makers of children’s products….but what is not clear is all of its requirements and for whom. 

The bill is targeted at regulating the testing for lead and other chemicals in children’s products.  Deadline to adhere to law is February 10, 2009 (Update on this at bottom of post).

This law was passed as a knee jerk reaction to China toy recalls last year.  The law is referred to as Consumer Product Safety Improvement Act  (CPSIA).  In the words of Walter Olson at Forbes.com and editor at Overlawyered:

Congress passed CPSIA in a frenzy of self-congratulation following last year’s overblown panic over Chinese toys with lead paint.

Long story short….this bill is affecting many small home businesses and small creators/manufacturers of children’s toys and clothing.  Essentially if the companies making the products don’t do THIRD party testing and then provide certificates of testing, they will be outside of the law.

What is interesting that there has been little to no mainstream media coverage on this issue….and it is NO SMALL PROBLEM.   The list is long on who this affects and how it affects the economy and businesses, in general.

The first thing to note is that we’re not just talking about toys here. With few exceptions, the law covers all products intended primarily for children under 12. That includes clothing, fabric and textile goods of all kinds: hats, shoes, diapers, hair bands, sports pennants, Scouting patches, local school-logo gear and so on.

And paper goods: books, flash cards, board games, baseball cards, kits for home schoolers, party supplies and the like. And sporting equipment, outdoor gear, bikes, backpacks and telescopes. And furnishings for kids’ rooms.

And videogame cartridges and audio books. And specialized assistive and therapeutic gear used by disabled and autistic kids.

Again with relatively few exceptions, makers of these goods can’t rely only on materials known to be unproblematic (natural dyed yarn, local wood) or that come from reputable local suppliers, or even ones that are certified organic.

Instead they must put a sample item from each lot of goods through testing after complete assembly, and the testing must be applied to each component. For a given hand-knitted sweater, for example, one might have to pay not just, say, $150 for the first test, but added-on charges for each component beyond the first: a button or snap, yarn of a second color, a care label, maybe a ribbon or stitching–with each color of stitching thread having to be tested separately.

Suddenly the bill is more like $1,000–and that’s just to test the one style and size. The same sweater in a larger size, or with a different button or clasp, would need a new round of tests–not just on the button or clasp, but on the whole garment. The maker of a kids’ telescope (with no suspected problems) was quoted a $24,000 testing estimate, on a product with only $32,000 in annual sales.

Clearly, the Congress did not think through the unnecessary burden this places on smaller businesses…seemingly much less burden for large companies (like Mattel who actually lobbied for the bill?!?)   As written, and as of Feb 10 these products must be tested and certified….

Also from Olson:

Yes, something’s being exposed as systematically defective here. But it’s not the contents of our kids’ toy chests. It’s the way we make public policy.

What an example of the effect of this bill?  From Forbes.com:

Hailed almost universally on its passage last year–it passed the Senate 89 to three and the House by 424 to one, with Ron Paul the lone dissenter–CPSIA is now shaping up as a calamity for businesses and an epic failure of regulation, threatening to wipe out tens of thousands of small makers of children’s items from coast to coast, and taking a particular toll on the handcrafted and creative, the small-production-run and sideline at-home business, not to mention struggling retailers. How could this have happened?

Many retailers and manufacturers unwilling to take the risk of fines/prison time are clearing their shelves of EXISTING inventory and some even contemplating closing their doors.  Picture the woman who makes kids clothes from her home and sells them….she, under this ramshackle law, is required to spend THOUSANDS in testing each piece of clothing AGAIN! (even if the materials used to produce the product have already been tested).

In addition, those who retail these very same products have no idea if they are required to RETEST if they have no certification from the manufacturer nor if they are held to the same standard since they didn’t produce the product.  All signs say they ARE responsible, which then leads to further shelf clearing and business doors closing.

Bottom line….this is a personal issue for me for sure….but this is a great example of lawmakers listening to lobbyists, not reading the bills they support, and never understanding what they are doing to the business process and its fallout….really frustrating! 

In addition, there has been no effort (until today by REPUBLICAN Jim DeMint – 10 days before law takes effect) to redefine and clarify this lobbyist-induced law from turning the knife in the back of an already flailing economy.

I said “lobbyist-induced”…and you can probably guess which side of the spectrum most, if not all, of these supporting groups fall under….yep…the LEFT hand column. 

As stated at Forbes:

“Washington’s consumer and environmentalist lobbies used the occasion to tack on some other long-sought legislative goals, including a ban on phthalates used to soften plastic.”  

Sound familiar?  Kind of the like the Theft Act of 2009 that is supposed to be “Stimulus” but instead includes all of kind of pork payments back to Democrat-supporting groups.   (I might add that, yes, Bush signed the bill.  However, apparently he did try to fight the bill but, under the crescendo of elation at “passing a bill” to counter China’s lead toys, he would have been overridden on a veto!)

Examples below indicate a plethora of environmental and family planning groups….find them all here:

AAIDD (American Association on Intellectual and Developmental Disabilities).

Alaska Community Action on Toxics.

Association of Reproductive Health Professionals.

AWHONN (Association of Women’s Health, Obstetric & Neonatal Nurses).

Center for Environmental Health.

Center for Health, Environment and Justice.

Citizens for a Healthy Bay

Clean New York.

Clean Water Action Alliance of Massachusetts.

Coalition for Clean Air.

Consumer Federation of America.

Consumers Union.

CREHM (Chicago Consortium for Reproductive Environmental Health in Minority Communities).

EarthJustice.

Endometriosis Association.

Environment California.

Environmental Health Fund.

Environmental Working Group.

Greenpeace.

Healthy Children Organizing Project.

Illinois Maternal and Child Health Coalition.

Institute for Children’s Environmental Health.

Kids in Danger.

Learning Disabilities Association of America.

Olympic Environmental Council.

Oregon Center for Environmental Health.

Oregon Environmental Council.

Physicians for Social Responsibility- San Francisco Bay Area Chapter.

Planned Parenthood Affiliates of California.

Planned Parenthood Golden Gate.

Planned Parenthood of Mar Monte.

Planned Parenthood of the Rocky Mountains.

PODER (People Organized in Defense of Earth & her Resources).

SisterSong Women of Color Reproductive Health Collective.

Sources for Sustainable Communities.

Washington Toxics Coalition.

WHEN (Women’s Health & Environmental Network).

In fact, late last night (Friday night 1/30), the CPSC did delay the certification rule for one year.  Problems with that?  You betcha…1) The action may be vulnerable to legal challenge as violating the CPSC’s legal obligations to regulate, and in particular to enforce CPSIA’s terms faithfully and 2) the CPSC is not the law’s only enforcer and State’s Attorneys General may also enforce what they deem necessary to enforce–meaning there may be no reprieve at all depending on where you live and how aggressive your AG may be!)

As you might expect, the libs are fighting the “stay” already from The Common Room:

Keep in mind, US PIRG already has a lawsuit pending requiring the CPSC to enforce the law as written- and Feinstein and Boxer are involved, too.

It figures.

We haven’t heard the end of this debacle. 

More info here:

Text of CPSC stay on 1/30/09

On the CPSIA stay

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2 Responses

  1. Article says, “Clearly, the Congress did not think through the unnecessary burden this places on smaller businesses.”

    Or maybe they did…and this is what they intended to do all a long.

  2. […] read that was “Do you think that these condoms will be held to the lead and chemical testing standards set in CPSIA for children’s products?   After all, we don’t want the juveniles in government […]

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