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Hearing of the House Energy and Commerce Committee's Commerce, Trade, and Consumer Protection Subcommittee - Child/Consumer Product Safety Panel I


Location: Washington, DC


REP. JOHN BARROW (D-GA): I thank the chair and the ranking member for you all's relentless pursuit of this issue and your willingness to put behind us the years that the locusts have eaten and to get down to trying to address this problem.

Lincoln said that as our case is new, we have to think anew. And I think we ought to consider a little bit just how much our case has changed since the Consumer Product Safety Commission was launched way back in 1973. Back then I guess it was probably safe to say that our toy market was a domestic market. We consumed toys that we made.

But against that backdrop of putting the CPSC in the picture, there was a whole regime of compliance in this country that we kind of took for granted; we didn't think of much because it worked silently. Through the invisible hand of self-interest, we had a regime of compliance in which people could actually make manufacturers pay for the consequences of the harm that they do.

Granted, that was a reactive approach, the civil justice system. Making you pay the damages that you cause is a reactive approach, not a proactive approach. But if there is a regime of compliance in which folks can make manufacturers compensate folks for real harm when they commit real harm, you at least are making sure that you're not subsidizing people who want to harm people by letting them throw out the consequences of their harm on the consumer.

And we had that in this country. And when the CPSC was added to the picture, it was a new cop on the beat. It did not supplant the civil justice system. It supplemented the civil justice system in a country where we had largely incorporated a culture of compliance which we incorporated in the cost of doing business in this country.

Now, fast-forward 30 some-odd years. We're getting most of our toys in this country from China. Eighty percent of our toys are coming from China. And last month alone, we recalled more products that were manufactured in that country than we've had in any calendar year before. We have a whole new case now where most of our toys are coming from countries where they don't have a culture of compliance.

It might have been hard in the pre-1973 days to go all the way from Georgia to Michigan to sue somebody for the consequences of what they did, but in Georgia we had (the reach of ?) the long-arm statutes and we could hold folks accountable for the consequences of their harm where that harm occurred.

We can't do that today. It is virtually impossible to hold a manufacturer in a foreign country accountable for the consequences of the harm that they do in our marketplace as a result of the stuff, the pollution they put in the stream of commerce.

So it seems to me that what we've got to do is we've got to figure out some way to outsource a regime and a culture of compliance, just as we've outsourced all the jobs, and make the toys that we consume in this country. If we can't figure out how to do that, nothing we're going to be able to do with the CPSC is going to work, because right now that is virtually the only cop we've got on the beat when all of the bad guys are now overseas, abroad, and beyond the reach of the civil justice system as a check on the impulse to cut corners and to hurt people for profit.

So we've got to figure out some way of exporting a culture of compliance into the places so that we can interdict this stuff and stop polluting the stream of commerce at the source of the pollution. We've got to have a point-source pollution mentality about this and go at the source of pollution, because we can't deal with a flood of products when they arrive on our shores or when they've gotten into our marketplace and trying and recall. The costs of doing that are just too high. We no longer have the other systems to fall back on.

We've got to recognize that the CPSC, which was never designed to be the only cop on the beat when we were making our own stuff, is now the only cop on the beat with respect to all the stuff we consume, because we ain't making it anymore. We're importing it from someplace else. We've got to figure out how to export that culture of compliance. I don't know how to do it.

I know this, though. The issues we need to face are who ought to pay for it. And the American consumer should not have to pay for making folks in other countries comply with the law. We should figure out a way of making them comply with the law.

I'm all for the people who are causing the problem bearing the burden of cleaning up the problem. The American consumer ain't the problem and American industry and American manufacturing ain't the problem, because that's not where the stuff is coming from anymore.

Maybe we ought to take a cue from the USDA, which takes a proactive approach toward meat inspection that we don't have from the FDA when it comes to inspecting crops that are imported in this country. Go to the foreign country, go to the place where it's made, and inspect what they're doing there before it gets offloaded from the plant and fed into the stream of commerce.

Maybe we need to take a cue from financial responsibility laws, where you had to post a bond or some sort of insurance as the condition for engaging in certain businesses so that we can extend the reach of the civil justice system in this country to make sure the people who are getting into commerce in this country will be financially responsible for what they do in a way that is reasonable and accessible to the victims of injury here in this country.

We need to think anew. Our case is new. We have a cop that we've added to the beat that was never intended to be the only cop on the beat, and it's the only cop now. And the problem has gotten much bigger for that cop today. We've got to figure out how to export the culture of compliance we take for granted in this country.

And with that, Mr. Chairman, I yield back the few seconds of my time. Thank you.


REP. JOHN BARROW (D-GA): Thank you, Mr. Chairman.

Commissioner Nord, in church when you want to talk to the preacher about something delicate, you don't tell them what you think. You tell them what other folks are saying. You say, "Some have said that your sermon's a little too long" or "some have said that you're not hitting this theme or that theme." Well, some have said that the CPSC ain't exercising its rulemaking authority -- that it's got rulemaking constipation somewhere along the line. I don't know where it is, but I feel -- some have even gone so far to say the manufacturing community would like to have some guidance, like to have some standards, especially those that are complying, you know, with best practices, our laws, domestic laws on the subject of the poisons and toxins you're supposed to keep out of products. I mean, some folks have said that it would be helpful.

Now, 4040 -- H.R. 4040's got a provision in there that proposes to streamline the process for rulemaking. This is a direct follow-up to the gentlelady from Tennessee's comments about the rulemaking authority. My question to you is if this were to be adopted and the rulemaking authority for the CPSC were to be streamlined in the manner called for by H.R. 4040, would it actually result in any new rules being adopted or would it result in any rules being adopted a more expeditious manner? Would anything change? I want to hear from you as to whether or not that provision would actually result in any change in the rulemaking activity of the commission.

MS. NORD: Well, since I recommended it, I certainly hope it will. What I think is important is to understand how we would use this --

REP. BARROW: Can you tell me that it will make a change?

MS. NORD: Yes.

REP. BARROW: How will it make a change?

MS. NORD: It will allow us to operate more quickly, regulate more quickly the --

REP. BARROW: What are the kinds of --

MS. NORD: amendments --

REP. BARROW: Okay, what are -- I understand that as a process.

What are the kinds of things we can expect that we haven't seen so far?

MS. NORD: When we were doing amendments to regulations -- when we are doing technical non-controversial kinds of regulations, we could do two-part rulemaking -- just do a notice of proposed rulemaking and a then a final rule as opposed to the three-step rulemaking which is under our statute. Right now --

REP. BARROW: How many instances can you think of where you all have been unable to get things done under the current three-step process that you think you could get done under the proposed two-step process?

MS. NORD: Again, technical changes, amendments to rules -- things that are non-controversial. Things were we are not breaking new territory. I think we could do that in two steps. But where are doing complicated and new kinds of regulations, then we should have the option to do three-step rulemaking because that allows us to develop information and refine our regulatory approach to problems.

REP. BARROW: Well, if this is incorporated in the final bill, I'm going to look to you all to exercise that authority to the fullest.

Now I want to follow up on a subject that I raised, and that's the subject of financial responsibility on the part of people who are way outside the reach of the civil justice system in this country, for whom you all are really the only cop on the beat anywhere, policing a market that is dominated by foreign importers. The Senate has a provision -- a bonding requirement that basically says if you've gotten into trouble and messed up in the past, you're going to have to post a bond as a condition of getting back into the marketplace. Well, it seems to me to be pretty silly to give people who had a demonstrated track record of messing up -- to force them to buy their way back into the marketplace when we have no way of knowing who those people will be in advance of the trouble that they cause.

What do you think about the idea of trying to impose financial responsibility as a condition for entering the American marketplace in the first place? I mean, we have lost the ability to hold anybody accountable for what they do and whenever we have stripped away that fundamental, very conservative underpinning of safety in the marketplace, we've got to replace it with something or we're basically going to start subsidizing, corner-cutting and hazard-producing activity in markets that are beyond -- in -- by suppliers who are beyond the reach of the folks whose -- that they harm. What do you think about something like that?

MS. NORD: I like to understand better how that would work, and perhaps we can sit down and talk about that. I'd like to see a model for where that has worked in other areas --

(Cross talk.)

REP. BARROW: I'll tell you where -- a model where it's worked. You can't get a car. You can't get a license to drive a car in this country without post -- without complying with the financial responsibility to the law in the state where you want to get your license.

MS. NORD: Mm-hmm.

REP. BARROW: And it's not to protect you from other people. It's to protect other people from you. Now why don't we have -- why don't we apply a similar mentality to folks who want to not just come into a marketplace, but dominate our marketplace? Why don't we tell the manufacturers who've got 80 (percent) to 90 percent of the market in this country that as a condition for you doing business in this country, we're going to make sure that you're doing right? The goal -- what I'm getting at is the goal ought to be that if it's bought and sold in the USA, it's going to be just as safe as if it was made in the USA.

MS. NORD: Well, that is a goal that I think is admirable and --

REP. BARROW: How can we possibly accomplish that if you all are the only cop on the beat with respect to a market that's gone from 80 percent "We make it in this country" to 80 percent "It's made someplace else and shipped into this country in containers in a vast stream of commerce"? We channel the Mississippi out of its channel and it's going north instead of south. I mean, it's that big a change in the stream of commerce and we've got nothing -- nothing policing it except you guys, and you guys were never designed to be the end-all be-all and certainly don't have the resources to do that.

MS. NORD: Well, yes. But I think practically, what you're suggesting is going to have -- may have untoward or unexpected consequences, especially on the small business --

REP. BARROW: I'm sure it will, but so has the current process of basically outsourcing the supply of stuff without outsourcing any of the compliance regime that we take for granted.

MS. NORD: But --

REP. RUSH: The gentleman's time has expired.


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