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Consumer Product Safety Modernization Act - Conference Report

Floor Speech

By:
Date:
Location: Washington, DC


CONSUMER PRODUCT SAFETY MODERNIZATION ACT--CONFERENCE REPORT -- (Senate - July 31, 2008)

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Mr. COBURN. Mr. President, the Consumer Product Safety Bill, while well intentioned, will do little to improve consumer product safety.

Since when should the Government be held responsible for the safety of consumers when time and time again the Federal bureaucracy has failed in its other safety obligations and responsibilities?

In 2005, Hurricane Katrina was a stark and sad reminder that a bloated, inefficient, and incompetent bureaucracy does not have the ability to protect citizens.

Just last year, the interstate bridge collapse in Minnesota reminded us all of the misplaced priorities of the Federal Government. Instead of ensuring the structural soundness of bridges, politicians were more concerned with their earmarks, and diverted funds away from bridges such as the one in Minnesota for their own political benefit.

In another example of Government incompetence, the census is currently in grave peril of not completing its constitutional duty effectively and on time. This speaks volumes about the inefficiencies of our Government, as we have 10 years to prepare for the census with over two centuries of experience to draw upon to execute this responsibility.

This bill is a perfect example of politicians rushing to legislate on a problem that really isn't there in order to pat themselves on the back to try to curry favor with their constituents in an election year.

The truth is the paranoia and hysteria currently with consumer product safety is not proportional to the reality of the situation. Nancy Ord, Chairman of the Consumer Product Safety Commission, stated in January, ``Last year was marked by intense media scrutiny of the agency and of toy recalls in particular ..... the coverage reached near-hysteria level, And then, of course, some politicians, sensing a possible political issue, jumped on the bandwagon.''

While there has been a rise in product recalls, in a sense, the recalls are themselves a positive sign, as dangers were identified by manufacturers and products were removed from the market.

More importantly, these product recalls have not translated into dire health consequences, as there has been little evidence of any deterioration in overall product safety. There were few if any reports of consumer injuries from the recalled products. Although the number of injuries from toys increased somewhat in 2006, injury rates generally have decreased since 2001. Also, lead poisoning cases are at historic lows in many areas.

Regardless, many of the companies that fall under the CPSC umbrella have raised the levels of their own self-policing. Wal-Mart has announced that this month it will require independent lab testing for all new toys as well as those it reorders. Mattei and others have ended the use of certain kinds of batteries. And the Toy Industry Association has worked with the Commission on a plan to test toy safety in the design and manufacturing process as well as the final product.

The political reaction to the problem, like most Government solutions, is to throw money at it.

While some statutory upgrades are needed, almost doubling the size of the agency, as this bill does, will not eradicate or drastically improve the issue.

As we have seen time after time, when Government throws money at a problem, rarely does it improve a situation, and more often than not, it further complicates and aggravates the problem.

In addition, there are also a lot of unintended consequences in this bill, as it is a trial lawyer giveaway.

While the dramatic increase in authorization is troubling, the provisions that subject businesses to the wrath of the trial lawyer and plaintiffs bar are far more problematic as they will raise the cost of doing business, hurt or destroy small businesses, and could further exasperate an already unstable economy.

Authorizing State attorneys general to initiate lawsuits, creating a consumer product safety database, and drastically increasing fines are free giveaways to trial lawyers that will do little for consumer safety and will unnecessarily damage small businesses.

Allowing State attorneys general to bring lawsuits on behalf of their residents for violations of consumer safety rules would reverse 35 years of successful policy experience.

Overzealous State attorneys general will now have the authority and discretion to interpret safety regulations and could unilaterally on a whim rule a business is noncompliant and could then hand over expensive lawsuits to their trial lawyer's cronies who are notoriously close with State law enforcement officials.

State attorneys, then, would be hard-pressed to deny politically active State trial lawyers to sue companies when the litigation will not cost the State a dime and could, in many cases, bring the attorney general positive publicity.

This provides false incentives for overzealous attorneys general and would run precisely counter to the CPSC's policy of carefully balancing cost and benefit in making safety regulations.

Lawsuits, which are expensive, adversarial, and often drawn out, can be an impediment to a successful long-term relationship that maximizes compliance and safety.

State attorneys general should not have the power to reduce the effectiveness of the CPSC's efforts by undermining its balanced approach to enforcement.

Another free giveaway to trial lawyers is the creation of a consumer product safety database. The database is estimated to cost $10 million, which accounts for over 10 percent of the Commission's budget.

This section requires the CPSC to establish a Web site to post any complaint, regardless of accuracy or merit, from consumer groups or individuals.

While on the surface the database appears to aim to educate and warn consumers about potential product defect or harm, the reality of it is far from effective. It is highly doubtful that many consumers will know about or even care to peruse a Government Web site to validate whether a product is safe prior to purchase, especially considering the claims are not verified prior to posting.

What the database does provide in much more practical terms however, is a centralized, consolidated data source where law firms, unions, and lobbyists are given access to cherry-pick consumer reports for potential lawsuits.

There is already a consumer product database, called lawcash.com, that consolidates consumer product complaints.

The Web site brags that its database provides consumers ``the information you need and the access you deserve to find out if you are eligible to claim your share of billions of dollars distributed yearly through thousands of class action lawsuits.''

This reveals the true motives for such ``consumer product batabases,'' and accordingly the Government has no role in serving as a conduit of information that promotes hit job lawsuits.

This cumbersome endeavor will divert funds and resources from efforts that actually go toward consumer safety and redirect it toward maintaining a Web site that will only contain inflammatory information that unions and lawyers can utilize to sue businesses.

The bill drastically increases maximum civil penalties more than tenfold and the individual violation more than twentyfold, subjecting each product that wrongfully enters the market to a $100,000 fine. The threat of a $100,000 fine will cause many small manufacturers and retailers who commit only minor violations to declare bankruptcy.

Additionally, faced with these hefty fines, this provision could erode the healthy and productive relationship between businesses and the Commission.

Faced with bankruptcy, many businesses would be much less inclined to voluntarily report violations and as a consequence would not receive the proper guidance to fix the problem, subjecting the business and its employees to potential harm.

While allowing increases in frivolous lawsuits and drastically hiking up the fines for businesses may allow Senators to tout to the public that they are tough on consumer safety, these actions are unlikely to improve the situation, and more importantly, the unintended consequences would be to increase the cost of doing business, impairing economic and job growth at a time when our economy desperately needs economic and job growth.

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