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[Senate Hearing 108-940]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 108-940

                    REAUTHORIZATION OF THE CONSUMER 
                    PRODUCT SAFETY COMMISSION (CPSC)

=======================================================================

                                HEARING

                               before the

          SUBCOMMITTEE ON CONSUMER AFFAIRS AND PRODUCT SAFETY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 17, 2003

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

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                                _____

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South 
CONRAD BURNS, Montana                    Carolina, Ranking
TRENT LOTT, Mississippi              DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas          JOHN D. ROCKEFELLER IV, West 
OLYMPIA J. SNOWE, Maine                  Virginia
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              JOHN B. BREAUX, Louisiana
PETER G. FITZGERALD, Illinois        BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  RON WYDEN, Oregon
GEORGE ALLEN, Virginia               BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
                                     MARIA CANTWELL, Washington
                                     FRANK R. LAUTENBERG, New Jersey
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Robert W. Chamberlin, Republican Chief Counsel
      Kevin D. Kayes, Democratic Staff Director and Chief Counsel
                Gregg Elias, Democratic General Counsel
                                 ------                                

          SUBCOMMITTEE ON CONSUMER AFFAIRS AND PRODUCT SAFETY

                PETER G. FITZGERALD, Illinois, Chairman
CONRAD BURNS, Montana                RON WYDEN, Oregon, Ranking
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 17, 2003....................................     1
Statement of Senator Fitzgerald..................................     1

                               Witnesses

Gall, Hon. Mary Sheila, Commissioner, Consumer Product Safety 
  Commission.....................................................    12
    Prepared statement...........................................    13
Gold, Stephen, Vice President, National Association Manufacturers 
  CPSC Coalition.................................................    48
    Prepared statement...........................................    49
Klein, Gary S., Senior Vice President, Government, Legal and 
  Regulatory Affairs, Toy Industry Association, Inc. (TIA).......    51
    Prepared statement...........................................    53
Korn, J.D., Alan, Director, Public Policy and General Counsel, 
  National SAFE KIDS Campaign....................................    41
    Prepared statement...........................................    43
Moore, Hon. Thomas H., Commissioner, Consumer Product Safety 
  Commission.....................................................     6
    Prepared statement...........................................     8
Pittle, Ph.D., R. David, Senior Vice President, Technical Policy, 
  Consumers Union................................................    25
    Prepared statement...........................................    27
Polk, Robert, on behalf of the National Association of State Fire 
  Marshals.......................................................    58
    Prepared statement...........................................    59
Stratton, Hon. Hal, Chairman, Consumer Product Safety Commission.     2
    Prepared statement...........................................     4
Weintraub, Rachel, Assistant General Counsel, Consumer Federation 
  of America.....................................................    35
    Prepared statement...........................................    36

 
    REAUTHORIZATION OF THE CONSUMER PRODUCT SAFETY COMMISSION (CPSC)

                              ----------                              

                         TUESDAY, JUNE 17, 2003

                               U.S. Senate,
      Subcommittee on Consumer Affairs and Product 
                                            Safety,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:35 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Peter G. 
Fitzgerald, Chairman of the Subcommittee, presiding.

        OPENING STATEMENT OF HON. PETER G. FITZGERALD, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Fitzgerald. Thank you all for waiting. I am sorry I 
was delayed. And I am glad to call this Committee hearing to 
order in order to hear testimony on the reauthorization of the 
Consumer Product Safety Commission. We hope to get an 
authorization in place for the Commission very soon.
    I would like to thank Chairman Stratton, Commissioner Gall, 
and Commissioner Moore for being here with us today. I would 
also like to welcome the other witnesses to the Committee. I 
would also like to thank Senator McCain for his leadership on 
this and other issues before the Committee and for his interest 
in addressing these and other issues related to the 
reauthorization of the Consumer Product Safety Commission.
    The CPSC's mission is to, ``reduce unreasonable risks of 
injury and death from consumer products and to assist consumers 
in evaluating the comparative safety of consumer products.'' It 
has jurisdiction over some 15,000 products. According to the 
CPSC, since its inception there has been an almost 30 percent 
decline in the rate of deaths and injuries related to hazardous 
consumer products. Without doubt, the CPSC has contributed 
significantly to this decline.
    In 2002, the CPSC completed 387 cooperative recalls 
involving about 50 million product units. It completed 13 civil 
penalty cases that resulted in over $4 million in fines last 
year. The CPSC has also attempted to keep up with the effects 
that modern technology has had on how consumers purchase 
products.
    I was interested to learn that the CPSC joined forces with 
Amazon.com and eBay to alert their customers to products for 
sale on their auction sites that may have been recalled, and 
direct them to CPSC's website for recall information.
    I would like to congratulate the Commissioners and the CPSC 
on the work that has been done over the last several years to 
protect American consumers.
    The CPSC was last reauthorized in 1990, for Fiscal Years 
1991 and 1992. Since the expiration of that reauthorization, 
its funding has been increased by approximately 5 to 6 percent 
each year, mainly through the appropriations process. This 
funding has not adequately allowed the CPSC to keep pace with 
the growing number of consumer products and its increased 
workload. Since 1990, the CPSC staff has decreased by 10 
percent.
    According to the CPSC, there is still an average of 23,900 
deaths and 32.7 million injuries each year that are related to 
consumer products under its jurisdiction. The deaths, injuries, 
and property damage associated with consumer products cost the 
United States over $700 billion each year. These statistics 
underscore the need to reauthorize the CPSC this year.
    I am proud to be an original cosponsor of the Consumer 
Product Safety Commission Reauthorization Act of 2003, which 
Senator McCain introduced last week. This bill will reauthorize 
the CPSC through Fiscal Year 2007. It will provide it with the 
funding increases that it needs to update its laboratories and 
technology. This reauthorization bill is essential to the CPSC 
being able to continue to carry out its mission and to meet the 
demands of the continual technological advances that are part 
of our society.
    I look forward to hearing testimony today on the 
reauthorization of the CPSC, as well as their thoughts on how 
the CPSC should carry out its mission in the coming years. I am 
pleased we have such a diverse group of consumer organizations 
here today. I am also interested to learn more about some of 
the current consumer issues, such as fire safety, the fire 
safety of various household products, all-terrain-vehicle 
safety, recall effectiveness, as well as other issues that 
affect the CPSC.
    And with that, I would like to thank the Commissioners for 
being here, Chairman Stratton, Mr. Moore, and Ms. Gall. I would 
like to ask you each if we could limit our testimony to 5 
minutes each. We will allow your written statements to be 
introduced and submitted for the record. I would think that 
most of you would be in a position to talk off the top of your 
heads and be more succinct than your well-written, well-done 
reports that we will file for the Committee's record today.
    So, Chairman Stratton, thank you very much for being here.

           STATEMENT OF HON. HAL STRATTON, CHAIRMAN, 
               CONSUMER PRODUCT SAFETY COMMISSION

    Chairman Stratton. Thank you, Mr. Chairman. I appreciate 
that. Frankly, your statement was better than mine is going to 
be----
    [Laughter.]
    Chairman Stratton.--so I am going to try to shorten up my 
statement as I go through, because, I agree, I would just as 
soon respond to the questions on things you want to hear about.
    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 the 
Chairman of the Commission on August 2, 2002. Before my 
swearing in, the CPSC was ably led by my friend and colleague, 
Commissioner Moore, who was the Acting Chairman, with strong 
support from my friend, Commissioner Gall. And I might just 
indicate that we, up here, now have, collectively, almost 20 
years of experience at the CPSC. My tenure contributes 10 
months to that.
    [Laughter.]
    Chairman Stratton. So sitting beside me, we have almost 20 
years of experience, and I expect them, should I get in trouble 
today, to bail me out.
    [Laughter.]
    Chairman Stratton. The Commission has jurisdiction, as the 
Chairman has said, over some 15,000 types of consumer products. 
To effectively enforce the law, the CPSC divides itself into 
three main divisions: hazard identification and reduction, 
enforcement and compliance, and public information. To support 
these divisions, the CPSC operates advanced hazard 
identification systems, including an internationally recognized 
injury reporting system, a toll-free hotline, and a website, 
all of which have been cited as models among Federal agencies.
    The Commission has a range of options available to address 
consumer-product problems, including the power to promulgate 
safety regulations, implement recalls, and exact civil and 
criminal penalties, where appropriate. We are very serious 
about our mission at the CPSC. As the Chairman stated, last 
year we had 387 cooperative recalls, which involved 50 million 
product units. Our enforcement division concluded 13 civil 
penalty cases that resulted in $4 million in fines for failure 
to report a hazardous defect to the Commission or for selling 
products in violation of the CPSC's mandatory standards.
    The authorization before you today would allow us to 
maintain our current safety programs and employee levels, while 
increasing our efficiency through modernization of our 
laboratory and improved technology.
    As an information-driven agency, CPSC needs to continually 
invest in our data-handling resources. As one example of the 
importance of this, we have just launched a new burn center 
reporting system to collect better data and better identify the 
origins of burn injuries to children under 15 years of age. We 
are pleased to be working on this project, along with the 
Shriners Hospitals for Children, the American Burn Association, 
and the National Association of State Fire Marshals, in 
developing and implementing this new and important system. And 
I would just like to thank them publicly for coming together 
with us. It is the first cooperative effort like this ever, and 
I think it is going to be very successful.
    As a former State Attorney General, I am committed to 
strong enforcement of the law. American consumers and Congress 
should expect that the CPSC will assertively use the tools that 
you provide us to get unsafe products out of the marketplace. 
Further, I believe that our decision-making process should 
include the full participation of the public, and that is why 
we have opened up the Commission's meetings, inviting 
petitioners, stakeholders, and other interested parties to 
testify directly 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, ATV dealers and riders, consumer-safety 
advocates, and families of victims. We returned to Washington 
much enlightened, I believe--at least I am speaking for myself 
there--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 CPSC. Mr. Chairman, I will be happy 
to answer whatever questions you have.
    Thank you.
    [The prepared statement of Commissioner Stratton follows:]

          Prepared Statement of Hon. Hal Stratton, Chairman, 
                   Consumer Product Safety Commission
    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 percent 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 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 website 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, 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 percent 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 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.
    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 percent 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.

    Senator Fitzgerald. Thank you.
    Mr. Moore?

STATEMENT OF HON. THOMAS MOORE, COMMISSIONER, CONSUMER PRODUCT 
                       SAFETY COMMISSION

    Commissioner Moore. Thank you.
    Mr. Chairman, I am here to support the reauthorization of 
the United States Consumer Product Safety Commission. Without a 
doubt, the Commission is charged by Congress----
    Senator Fitzgerald. Could you pull your microphone closer 
to your mouth? Thank you.
    Commissioner Moore. The Commission is charged, by Congress, 
with the critical responsibility of protecting the American 
public against unreasonable risk of injuries and deaths 
associated with consumer products. Protecting life, without 
question, is a crucial responsibility. Our work has resulted in 
an almost 30 percent decline in the rate of deaths and injuries 
related to hazardous consumer products since about 1974. 
However, despite significant reductions, there remains, on 
average, about 23,900 deaths and 32.7 million injuries each 
year related to unsafe products. Moreover, the deaths, 
injuries, and property damage associated with unsafe products 
cost the Nation over $700 billion annually.
    In 2002, alone, the Commission took direct action against 
nearly 55 million products units through recalls, repairs, 
replacements, refunds, design changes, or seizures. Ensuring 
the removal of unsafe products from potential consumer use is 
essential.
    Another issue in the enforcement area relates to civil 
penalties. I support the elimination of the monetary cap on 
civil penalties for business failure to report the marketing of 
unsafe products. 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.
    I believe that regulatory policies should recognize that 
the private markets are the best engines for economic growth. 
Regulations, therefore, should be cost effective, consistent, 
sensible, and understandable.
    Whenever appropriate, we encourage voluntary industry 
action to address safety requirements. Voluntary actions. Since 
1990, we have worked cooperatively with industry to conduct 
more than 4500 recalls, and resorted to litigation to compel 
recalls only seven times. Effective voluntary action is always 
preferable.
    The Commission's successes are a major source of optimism. 
I have been very pleased to have been involved in many of these 
successes. The agency, with a $56.6 million budget for Fiscal 
Year 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 value to the American people. CPSC's reductions in 
deaths, injuries, and costs associated with unsafe products 
saves the Nation many times the agency's annual budget. This 
year, we expect to reduce societal costs by over $13 billion. 
These savings are over 200 times CPSC's Fiscal Year 2003 
budget.
    In addition, I still advocate the idea of a product-safety 
research effort at the Commission. Clearly, Congress envisioned 
research as part of the Commission's safety efforts. 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.
    In closing, I think that reasoned Commission action 
reflects a pragmatic approach to resolving product-safety 
problems and recognizes that regulation is only one of many 
options for addressing safety issues. 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.
    However, the key to the Commission's continued success is 
funding. To successfully continue the mission of the agency, 
the Commission must have the resources to respond quickly and 
effectively where the lives and health of the American public 
are at risk. Our U.S. CPSC is a worldwide example of how a 
free-market economy protects its people.
    I thank you for allowing me to address my concerns at this 
hearing, and I look forward to working with you and your staff 
in the reauthorization process. And of course, I will try to 
respond to any questions you may raise.
    Thank you.
    [The prepared statement of Commissioner Moore follows:]

       Prepared Statement of Hon. Thomas H. Moore, Commissioner, 
                   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 percent 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, website, 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 28. 
In addition, the Commission, on June 5, 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.

    Senator Fitzgerald. Thank you, Mr. Moore.
    Commissioner Gall?

  STATEMENT OF HON. MARY SHEILA GALL, COMMISSIONER, CONSUMER 
                   PRODUCT SAFETY COMMISSION

    Commissioner Gall. Thank you, Mr. Chairman. Good afternoon. 
I will make my statement short and sweet, just like me.
    [Laughter.]
    Commissioner Gall. I believe that the Commission and 
industry and consumers have worked well under our current 
statutory framework, and I have no recommendations to make for 
substantial amendments.
    I do want to make a quick note of a critical investment 
that we cannot, at this time, incorporate into our 
authorization levels that we are discussing here today, and 
that is about our laboratory that is located in Gaithersburg. 
It is eight acres, five buildings that were constructed in the 
1950s as part of a Nike missile base for the military to track 
Nike missiles. We need to relocate some of the facilities 
there, and we need to do some new construction as an overall 
redevelopment activity for our laboratory. This has been 
approved by the National Capital Planning Commission, and we 
are in the process right now of working with GSA to develop the 
costs and the design. So we will have a better understanding of 
how much that will cost us in late fall.
    I would make note, though, that we will require a multi-
year investment of at least several million dollars in order to 
pay for the redevelopment of the lab. And the lab, of course, 
is at the very heart of our operations at the Commission, and 
so this is very important.
    In closing, I just want to say thank you for holding this 
hearing today, and I hope that all of us will focus on what a 
great value CPSC is to the American public.
    Thank you, sir.
    [The prepared statement of Commissioner Gall follows:]

      Prepared Statement of Hon. Mary Sheila Gall, Commissioner, 
                   Consumer Product Safety Commission
    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.

    Senator Fitzgerald. Well, Commissioner Gall and Chairman 
Stratton, and Commissioner Moore, thank you all very much.
    I do have a few questions, and I want to start by following 
up on some testimony that Commissioner Moore gave. Commissioner 
Moore recommended that the cap on civil penalties, that I 
gather is now in your authorizing statute--is that cap in the 
authorizing statute? You recommend, Mr. Moore, that that cap be 
eliminated altogether.
    Commissioner Moore. Yes.
    Senator Fitzgerald. I am wondering if you can give me 
examples of cases where you think the cap made you assess a 
fine that was too small. Could----
    Commissioner Moore. Well, I cannot give you a specific 
example. However, the specific reason why I think the cap ought 
to be removed is that the cap can serve as a hindrance to 
enforcement in the sense that if an entity that is violating 
some of our rules is not aware of any particular cap, we are 
then in a better position, I think, to get submission and to 
get behavior control, in not only that one particular 
situation, but across the board, because they have no idea of 
what the assessment might be against them.
    Senator Fitzgerald. They will fear you more.
    [Laughter.]
    Commissioner Moore. That is right.
    Senator Fitzgerald. OK.
    Have you ever reached the cap in any cases? Do you know of 
any?
    Commissioner Gall. No, we have not reached it yet.
    Senator Fitzgerald. You have never reached it? In no----
    Commissioner Gall. No.
    Senator Fitzgerald.--in no case have you reached the cap.
    Commissioner Gall. No.
    Senator Fitzgerald. Now, Chairman Stratton and Commissioner 
Gall, do you wish to weigh in on this issue of whether the cap 
should be eliminated or raised?
    Chairman Stratton. Ladies first, Mr. Chairman.
    [Laughter.]
    Commissioner Gall. Well, that is one point for 
consideration. We have yet to reach our current cap. And----
    Senator Fitzgerald. What is the biggest fine----
    Commissioner Gall.--it is 1.1----
    Senator Fitzgerald.--you have ever assessed?
    Commissioner Gall.--million. Fisher-Price was $1.35 million 
for Power Wheels--I believe it was for Power Wheels, right?--
for Power Wheels, which were these nifty little motorized 
vehicles for children, toy rides for children.
    We assessed a civil penalty of $1 million, I think, against 
General Electric for dishwashers that tended to catch fire. And 
we have yet to reach the cap itself, which is one concern.
    A second concern is that if we remove the caps, then we 
would need sufficient resources to take on any battles that we 
have, which would result in greater effort on the other party's 
part because the amount would be so much higher.
    Senator Fitzgerald. Have you had fines that you have 
assessed challenged in court?
    Commissioner Gall. I believe we have had some fines 
challenged, but not in court. I mean, we have come to 
settlement agreements.
    Senator Fitzgerald. Internally.
    Commissioner Gall. We came to one recently where we were 
looking for a penalty of six--no, seven figures, and we settled 
for $750,000.
    Senator Fitzgerald. OK. And you used in-house lawyers, I 
would imagine, to handle those cases, right?
    Commissioner Gall. Yes, that is correct. Yes.
    Senator Fitzgerald. Do you use outside counsel at all?
    Commissioner Gall. Well, we work with the Department of 
Justice, of course. When we----
    Senator Fitzgerald. They represent you.
    Commissioner Gall.--bring the cases. But we negotiate our 
settlements.
    Senator Fitzgerald. So when you say you would need more 
resources if you had the ability to levy bigger fines, for what 
would those additional resources be used? Not for legal fees, 
because you use either inside lawyers, in-house counsel, or the 
Justice Department.
    Commissioner Gall. Yes. Well, I think we would have to, for 
one thing, spend a lot more time than we do now. We would have 
to spend a lot more staff time in addressing those issues.
    I would expect that we would have--if we are looking at 
fines that are much, much higher than the current cap, that we 
would get more of an argument from the other side. So it 
certainly would be a greater investment of time and resources, 
additional investigation, and so on, to document, and then 
perhaps more cases might actually go to court.
    Senator Fitzgerald. For some of these companies, Mr. Moore, 
would you not think that just the adverse publicity that the 
firm faces after word leaks out that you are acting against 
their corporation for a defective product even be more of a 
penalty than the monetary fines we assess?
    Commissioner Moore. Certainly that is a penalty, but I 
still think the leverage, potential leverage, of an unlimited 
potential for fining is meaningful. I think that leverage would 
be meaningful.
    Senator Fitzgerald. Well, it would give the Commission more 
power. There is no doubt about that.
    [Laughter.]
    Senator Fitzgerald. Well, this is an issue that may come 
up. I know that Senator Hollings may offer an amendment to 
either increase your fine limit--I think his amendment is to 
increase it from the $1.65 million to $20 million. But another 
alternative would be to remove the limit altogether. Does 
anyone know how long that limit has been in place? Does that go 
back to your original authorization, in the 1970s?
    Chairman Stratton. I do not know.
    Commissioner Gall. Well, it is adjusted. It is adjusted 
through periodically----
    Chairman Stratton. It began at $500,000, and it has been 
ratcheted up starting in 1990, I forget what the number was, 
but they put an inflation kicker on it, so it kicks up every 5 
years. It has gone up to $1.65 million.
    Mr. Chairman, could I weigh in on----
    Senator Fitzgerald. Yes.
    Chairman Stratton.--on the cost issue here without talking 
about the caps?
    It is a huge resource to engage in this kind of litigation. 
Most of the work gets done before the case goes to the Justice 
Department. That is where you try to settle the case and build 
your case and settle it. Our lawyers, even after it goes to 
Justice, are intimately involved in this kind of litigation and 
other kinds of litigation.
    If the caps were increased to $20 million, or if they were 
unlimited, you are putting us in a whole 'nother ball game. And 
I suspect when you want us to come back next year, you will 
want us to have utilized those caps and to have put the whole 
penalty paradigm in another dimension at the CPSC. Right now, 
there is a dimension where everybody kind of knows what the 
penalties are. If we move it up to $20 million, it is going to 
be a lot more.
    Right now, our lawyers make decisions about when to 
schedule cases--and it's not always based on when the judge is 
available or in the earliest time available. We often do it 
based upon what fiscal year we are in, because of how much 
money we have, and to make sure we have enough money to attend 
the trial.
    In the Wal-Mart case that we just mentioned, where we 
settled for $750,000 after sending it to Justice and going 
through litigation--this was a settled case, not a pre-case 
settlement--Wal-Mart hired eight lawyers in that particular 
case to litigate against us. I suspect if we were going for $20 
million, they would hire just that many more. And I have been a 
litigator for 26 years now, on and off, through the attorney 
general's office, complex litigation, and in private practice. 
It is a very expensive process, and I just want it to be clear 
to the Committee that if we do go in, take it up to the next 
step, and we become a litigation agency involved in litigating 
millions or tens of millions of dollars, that we are going to 
have to have more lawyers. We have got--I do not know how many 
lawyers we have now--less than 30 in the whole place, and I 
think that includes me and Commissioner Moore, and most of them 
are not involved in litigation.
    So I just want to bring that to your attention as we move 
through this, that you are moving us into a new area, which--
and, you know, I have done this for 26 years, so I am happy to 
lead that effort, but you have got to have the soldiers if you 
are going to go into battle.
    Senator Fitzgerald. Now, you bring up lawyers. Many of 
those lawyers that those companies that are resisting you hire, 
they are former staff attorneys at the CPSC, too, are they not?
    Chairman Stratton. I do not know if I would say ``many,'' 
not in this particular case, but we certainly do see some 
staffers that worked at the CPSC litigating.
    Senator Fitzgerald. Now, does that not bring up another 
issue called the ``revolving door'' issue about staffers who 
leave the Commission and immediately go to work for a law firm 
representing the other side, and also the issue of whether your 
authorizing statute should put into place some restrictions, 
maybe a cooling-off period for a year or so, or more, before 
staff attorneys and others can go work against the Consumer 
Product Safety Commission?
    Chairman Stratton. Mr. Chairman, I did not expect this 
question, so I apologize that I do not have the exact answer, 
but my belief is that they are covered, currently, under--not 
our act, but under the general--whatever other ethics acts we 
have in government. I think they have to wait a year before 
they can litigate directly against us. And there is some 2-year 
period, as well.
    Senator Fitzgerald. Does anybody know the answer to that 
question? Any staff person?
    Chairman Stratton. Here is our General Counsel, Mr. 
Chairman.
    Mr. Duross. Mr. Chairman, my name is Bill Duross. Bill 
Duross, D-u-r-o-s-s. I am the General Counsel. Under the 
Government ethics regs, there are restrictions, Mr. Chairman, 
for any matter that they personally--the lawyer has personally 
handled--dating for a year or up to 2 years, depending on 
whether it was a matter that they substantially handled, for 
any particular matter in the agency.
    Senator Fitzgerald. What if they did not personally work on 
the matter while they were in the agency?
    Mr. Duross. Well, that is the ethical question, what is the 
definition of a particular matter, and how much involvement a 
particular lawyer may have with that particular question. But 
if it is a litigation matter, which is what you are discussing 
with the Chairman right now, then any involvement in litigation 
would trigger those restrictions if the lawyer worked on the 
litigation personally and substantially, or had it pending 
under his or her supervision within one year before departing 
from CPSC.
    Senator Fitzgerald. OK. But somebody who was not involved 
in the matter while at the CPSC can immediately go to work for 
an outside law firm that would be fighting against the CPSC 
with no cooling-off period. Is that the same for all Government 
agencies?
    Mr. Duross. Yes, Mr. Chairman. If you are not involved in a 
particular matter, rather a matter of general applicability, 
you do not have any restriction in dealing with that.
    Senator Fitzgerald. OK.
    Chairman Stratton. I would just say, Mr. Chairman, in 
defense of lawyers, if you----
    [Laughter.]
    Chairman Stratton.--and I know that is a precarious 
slippery slope--but if you are going to make that rule for 
lawyers, you ought to make it for everybody else, because we 
have people leaving our agency at all times, going out into the 
private sector and then doing work that falls into----
    Senator Fitzgerald. And then coming back and lobbying you.
    Chairman Stratton. We do not get seriously lobbied at the 
Consumer Product Safety Commission. If we are lobbied, we have 
to notice a hearing and make it an open hearing, if we are 
lobbied on any substantive issue before the Commission. So it 
is not----
    Senator Fitzgerald. Is that your internal rules, or is that 
in the statute?
    Chairman Stratton. I am sure it is a reg. I do not believe 
it is in the statute.
    Senator Fitzgerald. So XYZ Company that you are considering 
levying fine against. They cannot come in and lobby you, take 
you out to dinner before you have the vote on that.
    Chairman Stratton. No.
    Senator Fitzgerald. OK.
    Chairman Stratton. Absolutely not.
    Senator Fitzgerald. OK.
    Chairman Stratton. And even if they did, nobody on this 
Commission would do that, Mr. Chairman, I can assure you.
    Senator Fitzgerald. Oh, I am sure they would not.
    Chairman Stratton. Let me say, since I have been at the 
CPSC, I have met with scores of stakeholders on courtesy 
meetings. When I do a courtesy meeting with somebody, or when 
the Commissioners do, we formally notice it to the public. 
Every meeting I have had with anybody has been formally 
noticed.
    Now, if we are going to discuss anything substantive, we 
not only formally notice it, but we open the meeting up to 
anybody that wants to come. I have had one of those requests 
and one of those meetings out of literally probably a hundred 
meetings in the last year, and nobody takes us out to dinner, 
and nobody takes us out to lunch.
    [Laughter.]
    Senator Fitzgerald. OK.
    Chairman Stratton. And let me assure you--and my wife has 
been speaking with me about all these lunches I have been 
having----
    [Laughter.]
    Chairman Stratton.--since I have been here. It is not like 
the legislature in New Mexico.
    [Laughter.]
    Senator Fitzgerald. Going back to the original question of 
the fines, the cap on the fines, Mr. Moore, would you not think 
that just the ordinary tort liability that companies face if 
they introduce a defective or dangerous product into the stream 
of commerce is really the deterrent effect against negligent 
design or manufacture of a product that could harm a consumer--
and that that is a far more significant deterrent than your 
fines, unless your fines were extraordinarily large?
    Commissioner Moore. That certainly is an element, but, in 
working to remove defective products from the market, we like 
to have companies respond positively and as quickly as 
possible, rather than to delay responses to us. And, that often 
happens. They delay, delay as long as they possibly can, in 
responding to the agency.
    I am saying that, with the higher potential fines out 
there, that they are going to be more concerned with the 
potential damage to their operation and to their companies, and 
that they are more likely to get in line more quickly to try to 
get these things resolved. That is the way I see it.
    Commissioner Gall. If I could just add one thing, it seems 
to me that one of the important factors in all of this is 
perhaps not so much the dollar amount of the fine as the 
certainty that the fine will come and the publicity that 
attends that. When the Consumer Product Safety Commission makes 
an announcement about something along these lines in a fine 
against a company, that is covered around the country, and 
companies are very sensitive to having a Federal Government 
agency make note of some safety defects. And I think that has 
an impact.
    Senator Fitzgerald. Well, as I said before, I would think 
just the adverse publicity, alone----
    Commissioner Gall. Yes.
    Senator Fitzgerald.--and the damage to sales figures and so 
forth would be an awfully big deterrent.
    Off the top of your head, do any of you know whether the 
fines you levy are ordinarily covered by the manufacturer's 
product liability insurance, or are those typically not 
insurable--are there policies that----
    Commissioner Moore. I have no idea.
    Chairman Stratton. Our director of compliance tells us he 
believes not, that they would not be covered by----
    Senator Fitzgerald. Probably most----
    Chairman Stratton.--product liability insurance.
    Senator Fitzgerald.--policies would not cover such 
regulatory fines.
    Chairman Stratton. Right.
    Senator Fitzgerald. I believe, in your written statement, 
Chairman Stratton, you mention briefly the ongoing safety 
problem that exists with regard to children operating all-
terrain vehicles. Would you explain, in more detail, how 
serious the problem really is, in your view, and any possible 
solutions that may exist?
    Chairman Stratton. Mr. Chairman, I will be happy to do 
that. And once again, the Commissioners who are sitting here 
with me have been through these ATV matters for quite awhile, 
and so they may have something they want to add.
    About three or four years ago, it became clear that ATV 
injuries were rising on a much steeper curve each year than 
they had been in the past. If you look at the curve, back in 
the 1980s there was a steep curve of injuries, primarily due to 
three-wheel ATVs. Those were banned by the Commission back in 
the 1980s. Actually, there was a consent decree on that. And 
you saw the injury rate drop.
    And it dropped, and it kind of stayed down and kind of just 
leveled off. And then, in 1997 and 1998, it increased. And it 
increased to about 111,700 emergency-room visits a year.
    Senator Fitzgerald. Say that number again.
    Chairman Stratton. 111,700 emergency-room visits per year.
    Senator Fitzgerald. 111,000 emergency-room visits a year?
    Chairman Stratton. That was for 2001. So----
    Senator Fitzgerald. For 2001. But just from injury on ATVs.
    Chairman Stratton. Correct, Mr. Chairman.
    So I know that seems like a large number to some people, 
and that is what we do at the Commission. So we decided we had 
better take a look at it. The Consumer Federation filed a 
petition, part of which is still pending, which asks us to ban 
sales of adult ATVs to children. And my view, not speaking for 
the other Commissioners, was, even if we do that, that we are 
probably still going to have a problem. And it was then the 
considered opinion of the Commission to go out and look into 
this.
    We had a brief study that was done in cooperation with 
industry, which has come back and given us some partial answers 
on why this is occurring; such as, it appears that it happens 
more often with people who have less experience on ATVs. It 
certainly happens with the higher-per-capita of younger people 
who are on ATVs. But it did not give us the whole story, and 
the increased number of ATVs did not give us the whole story.
    So we decided we should look into it, and we got together 
and decided the first thing we ought to do is have a hearing. 
And since we do not see many ATVs driving around the District 
of Columbia, we thought we might take it out on the road. It 
has been a long time since the Commission had taken a hearing 
on the road. So we went to Morgantown, West Virginia, just the 
week before last.
    Commissioner Gall. June 5.
    Chairman Stratton. June 5--and had our first hearing, at 
which we had 35 people testify, from all over the country, 
mainly in that region, up that way.
    So what I would hope to do is to conclude this study and 
come up with some ideas about how to reduce those numbers. I 
think the overwhelming theme of the West Virginia hearing, 
without prejudging this issue--and I do not want to prejudge it 
here, because I have not heard enough about it--is that a lot 
of this activity is behavioral. And as the Chairman knows, we 
do not regulate behavior; we regulate dangerous, hazardous 
products.
    So what I would hope to do, by the time we conclude this, 
is to understand what is causing the increase, with some good, 
hard data, so we know for sure what is causing the increase, 
and then the Commission can do what it does, in regard to the 
issue, what it should do, and the other jurisdictions, who have 
jurisdiction, can do the same, whether it is the State of West 
Virginia, whether it is local Governments, or anybody else.
    So that is the game plan. But to come here today and tell 
you why it is so high, I do not think we can do it. That is why 
we are out there digging, trying to figure it out.
    Senator Fitzgerald. Would either Ms. Gall or Mr. Moore care 
to respond on the ATVs?
    Commissioner Moore. I think the Chairman has done an 
excellent job. I wanted to clarify a point, though, in terms of 
the numbers. That number was over a 4-year period increase, 
from 1997 to 2001, from 54,700 to 111,700, which was 104 
percent increase in that brief period of time.
    Senator Fitzgerald. Could it be because you are monitoring 
emergency-room visits better? Has anything----
    Commissioner Moore. I do not think so.
    Senator Fitzgerald.--changed? No?
    Commissioner Moore. That has not changed.
    Senator Fitzgerald. OK.
    Commissioner Moore. That has not changed.
    Commissioner Gall. That----
    Chairman Stratton. Everybody--I am sorry.
    Commissioner Gall. Go ahead.
    Chairman Stratton. I am sorry. I was just going to say, 
there is no particular disagreement on the numbers. Everybody 
pretty much agrees those are the numbers. The issue is, ``What 
do we do about it,'' basically.
    Senator Fitzgerald. How many ATVs are in existence? Do you 
have any idea?
    Chairman Stratton. Tons.
    Commissioner Moore. The numbers rose 40 percent--from 4 
million to 5.6 million, I believe, in that period, in that 
four-year period. That is the data that I have here. Yes. The 
number of ATVs rose 40 percent from--over that 4-year period, 
from 4.0 million to 5.6 million.
    Chairman Stratton. That is right.
    Senator Fitzgerald. OK.
    Commissioner Gall. We did take a look at the injury data 
over that five-year period that the other Commissioners have 
talked about, we looked at the number of riders, the number of 
hours that ATVs are ridden, and you cannot account for the 
dramatic increase of 105 percent in injuries over that period 
of time, when you look at those factors, there is something 
else at work here.
    One of the reasons we went to West Virginia was because 
they have such a high rate of injuries and death with ATVs. We 
have noted that when states have State laws that require 
helmets, require off-road riding rather than on-road riding, 
and some other laws that pertain to ATV safety, their numbers 
are lower than states that do not have these kinds of safety 
initiatives.
    When we did the Consent Agreement and post-consent 
agreement action plans, dealers agreed not to sell engines 
larger than 90 cc's for use by people under 16. But the problem 
is, a lot of families can only afford to buy one ATV. They want 
an adult size, for whatever reason. It is difficult to tell a 
14-year-old who has been driving a tractor for several years 
that now he cannot get on an adult-size ATV.
    We have education programs to help train people how to ride 
ATVs safely. Another factor that we are looking at is that the 
engine size of ATVs has increased dramatically in the past few 
years, and we wonder if the power of those engines may have 
some implications for safety, as well.
    So there are a number of issues that we are looking at. But 
I certainly agree with the Chairman. As someone at our hearing 
said, ``The key to safety with ATVs is the person who holds the 
keys.'' And so behavior is a very important component of this 
issue.
    Senator Fitzgerald. Mr. Chairman, for many years, product 
flammability issues have been among the most frequently raised 
when discussing CPSC activities. Appearing on the second panel 
today is a representative of the State Fire Marshals. Last 
November, I, along with Senator McCain, Senator Hollings, and 
Senator Dorgan, sent you a letter asking that you make fire-
safety issues one of the Commission's top priorities.
    Would you explain what activities the CPSC is engaged in 
currently to reduce fire-safety concerns regarding candles, 
upholstered furniture, and mattresses? Which of these products 
is the CPSC most concerned about with respect to flammability?
    Chairman Stratton. Mr. Chairman, I will answer the last 
question first, and that answers all of them; and I will go 
through them briefly, and then I will ask the other 
Commissioners to chime in, because burn injuries are one of the 
very top priorities at the CPSC.
    The first thing that I noted as I was getting your letters 
and other letters, even during confirmation, and in questions 
during my confirmation process, was, where was our burn data? 
And I would talk to the Shriners and the State Fire Marshals, 
and we could not agree on whether--it is not a matter of 
disagreement; it was the fact that we did not have enough data. 
And that is why I, frankly, am so proud of our Commission and 
the Shriners and the American Burn Association and the National 
State Fire Marshals Association for coming together and putting 
this together.
    Now, this is going to begin on the 1st of July, when we 
start collecting this new data on children 14 and under. And 
so, within a year, we should, hopefully, have better data upon 
which to act when it comes to this type of burn injury.
    Let me talk about, now, briefly, about each of the issues 
that you raised.
    First is upholstered furniture. That petition has been 
pending since--I do not know if it is 1993 or 1994. And I 
know--I think I committed to you, during confirmation, that I 
would come in and get that cleaned up. And we now have a 
proposal from the American Furniture Manufacturers Association, 
which is a substantial movement on their part, toward a 
mandatory regulation. And I expect that, by the end of the 
month, we will have another proposal from the textile 
manufacturers, the American Textile Manufacturers. And I hope--
I have no idea what it is going to be, and I am not sure it is 
going to happen, because these are not the kind of things that 
you learn about ahead of time, but I suspect it will be 
substantial movement, as well.
    Senator Fitzgerald. From the textile manufacturers? Is that 
regarding sleepwear for children or----
    Chairman Stratton. I am talking about upholstered furniture 
right now.
    Senator Fitzgerald. Upholstered furniture----
    Chairman Stratton. This would be----
    Senator Fitzgerald.--OK.
    Chairman Stratton.--the fabrics. This would be the fabrics, 
that we are talking about on the furniture.
    And our staff is poised to give us the report, with all of 
our options on this matter, no later--keeping my fingers 
crossed--July 9. And the reason they need to do that is because 
I am addressing the Annual Convention of the National State 
Fire Marshals' Association on July 10----
    [Laughter.]
    Chairman Stratton.--and they are going to expect me to have 
that, and if I do not have that, I may not be coming back.
    [Laughter.]
    Chairman Stratton. But we will know, by that date, what our 
options are. I then suspect we will be setting a hearing up as 
quickly as we can. I do not think--we might do it in August, 
but I understand things do not happen in this town in August, 
so we probably will not get it done that quickly. But I would 
not be surprised if we had a hearing on this in September, at 
which all the stakeholders will be allowed to testify, and then 
we will be ready and poised to vote on this particular 
regulation. And I do not know which way it is going to go, and 
I do not know what is going to happen. But I do know this. 
There has been substantial movement on behalf of a lot of the 
stakeholders in the case. So that is what I can tell you today 
on upholstered furniture.
    On mattresses and what the industry calls ``bed 
clothing''--covers, sheets, blankets, comforters, those kind of 
things--we are also in a rulemaking process. That is going a 
little bit slower. We have an advanced notice of proposed 
rulemaking out on that. Right now, our staff is in the process 
of working with NIST to develop the appropriate methodology for 
testing mattresses and bed clothing.
    I should first tell you that we do have a petition on 
mattresses. We do not have a petition on bed clothing. But I 
suspect that our staff is going to recommend that we take that 
issue up and that we look at both of those--whether we pass a 
regulation or not, that we take them both into account and look 
at them.
    Now, this is not going to happen as quickly as the 
upholstered-furniture reg, I do not believe. I think it may be 
sometime next year that we finally get a report out of our 
staff and based on the NIST methodology that they have come up 
with. But as soon as we get that, the Commission will be ready 
to move immediately to resolve the mattress flammability issue.
    Candles. We have just finished promulgating a regulation 
banning lead in candle wicks, a mandatory regulation, which is 
done. That happened in the last month or so. So we have gotten 
that behind us now.
    As far as other candle safety is concerned, that is 
currently in the voluntary regulation process. It is being 
negotiated with the voluntary standards group with the 
industry, with the fire marshals and others. I understand that 
they published a provisional voluntary performance standard 
that is out there right now. It is provisional. It has not been 
finalized. But they are moving toward a finalized voluntary 
standard in that area, and that is going to include things like 
the end of the useful life of the candle, the flame height, and 
secondary ignition problems.
    So we do not technically have a regulatory proceeding going 
right now. That is in the voluntary standard proceeding.
    So I think I covered the three topics, and if the other 
Commissioners have anything to add, I will be happy to have 
them do that.
    Commissioner Gall. No, I have nothing to add.
    Commissioner Moore. No, that is fine.
    Senator Fitzgerald. Well, thank you very much. That pretty 
much concludes my questions of the Commissioners. And I want to 
thank you for coming before us. We have another panel we want 
to get to. I want to thank you all for your hard work on the 
Commission, and we will look forward to working with you as we 
try to move a reauthorization bill forward. So thank you all 
very much for coming.
    Chairman Stratton. Thank you, Mr. Chairman.
    Senator Fitzgerald. And with that, I would like to invite 
the second panel to make their way up to the witness table.
    Appearing on the second panel, we have R. David Pittle, 
Senior Vice President, Technical Operations, of the Consumer 
Union; Ms. Rachel Weintraub, Assistant General Counsel, 
Consumer Federation of America; Mr. Alan Korn, Director of 
Public Policy, National SAFE Kids; Mr. Stephen Gold, Vice 
President of the National Association of Manufacturers; Mr. 
Gary Klein, Senior Vice President, Government Legal and 
Regulatory Affairs, from the Toy Industry Association; and Mr. 
Robert Polk, Chairman, Consumer Product Fire Safety Taskforce, 
National Association of State Fire Marshals.
    I want to thank all of you for appearing before the 
Committee today and weighing in with your thoughts on the 
reauthorization of the CPSC.
    As I asked the Commissioners, I would appreciate it if you 
could all be kind enough to summarize your remarks orally for 
us, as opposed to reading your written statements. I would 
prefer to just take your written statements and have them made 
part of the permanent record, and we would ask that you limit 
your testimony to no more than 5 minutes, as there are six of 
you. We want to give all of you a chance to be heard.
    So, Dr. Pittle, if we could start with you, and we will 
move left to the right; so Mr. Polk, you will have a long wait, 
down at the other end. Dr. Pittle?

  STATEMENT OF R. DAVID PITTLE, Ph.D., SENIOR VICE PRESIDENT, 
               TECHNICAL POLICY, CONSUMERS UNION

    Dr. Pittle. Thank you. I expected to be last, so I have to 
redo this.
    Thank you for the opportunity to be here today. I speak to 
you today as one of the original five Commissioners of the 
Consumer Product Safety Commission, also as the former 
technical director of Consumers Union, the Nation's largest 
consumer product testing organization, and currently as 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 of CPSC and the many difficult 
technical and legal hurdles that the agency must overcome in 
order to deliver on its mandate.
    Based on more than 30 years of working on product safety 
and reducing unreasonable risk to consumers, I have concluded 
that the agency should be reauthorized, but by asking two 
questions first. Are the agency's mission and authority, as 
stated in its enabling legislation and subsequent amendments, 
appropriate to fill the public's need for safer products? And 
if not, how should they be changed?
    During my tenure at CPSC, four different Presidents, from 
two parties, resided in the White House, and numerous Senators 
chaired the CPSC's oversight committees. Many things changed 
since then, but many things have stayed the same. For example, 
the basic mission of the agency has remained the same.
    Every Congress that has reauthorized CPSC during the last 
30 years has reaffirmed its clear and unmistakable purpose, to 
reduce or eliminate unreasonable risks of death and injury to 
consumers. There is no equivocation. The pain and suffering 
from accidents involving chain-saw kickback, flammable 
children's pajamas, or explosions caused by leaking gas valves, 
or unstable ATVs is devastating.
    To make the agency more effective--that is, to save more 
lives and to reduce more injuries--there are several areas of 
CPSC's basic legislation that we believe warrant change. These 
include Section 6, Section 15, Section 37, and restoring the 
authority over fixed-site amusement park rides. And this has 
all been submitted in our full testimony. And in an era marked 
by scarce resources, it is incumbent on us to remove all the 
obstacles that hamper the agency from being more effective.
    I would like to turn to Section 15. And fortunately for me, 
I was taking notes, so I do not have to go to my own prepared 
text. I would just like to mention a few things from the last 
discussion.
    First of all, Section 15 is not designed to make companies 
fearful of CPSC. Its purpose is to get companies to report 
hazards before people are injured or killed by those hazards. 
And so the purpose of a fine is to make there be a cost to the 
manufacturer who purposefully misbehaved by not reporting that 
information to the agency. And this is not a new requirement. 
That requirement has been on the book and known to corporations 
for the last 30 years. So when a manufacturer has had recall 
after recall, and they do not notify the agency promptly 
enough, it is not as if they did not understand what their 
responsibility was. They made a calculated business decision 
not to inform the agency.
    So we favor removing the caps altogether. We think that 
when you have a cap that says $1.65 million, it does not mean 
much to a company like General Electric, whose got revenues of 
$137 billion a year. This is just a decimal point that gets 
lost at the edge of the page.
    And so companies like Graco and Cosco, Fisher Price, 
General Electric, West Bend, Honeywell, Wal-Mart, these 
companies all know what their responsibilities are. And for 
them to pay a $2- or $300,000 fine is simply silly. The only 
way that this will get their attention, if they are not 
responsible to do it in the affirmative, is to remove the cap 
so that there is always a question in their mind, ``How big 
will this fine be?'' They might pay more attention to it.
    So it seems clear to us that these current caps have the 
effect of imposing a $2 ticket for parking down in downtown New 
York City. It just does not mean anything, and people will not 
pay attention to the requirements. So we would be very 
supportive of removing those caps. Really, the whole thing is 
about preventing injuries, not about making money. But, darn 
it, when a manufacturer does not report, they are putting their 
customers at risk.
    I would like to turn now to the last section, which is 
Section 6. Opponents of Government regulations insist that the 
Government's role should be to provide information to the 
public and let consumers make their own choices. Well, 
unfortunately, this is very difficult to do with CPSC. This 
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 safety information 
that is 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 the information to the manufacturer, allowed the 
manufacturer 30 days to comment on the information, reviewed 
their comments regarding the accuracy and the fairness of 
releasing it, and then, finally, determining whether or not it 
is important to release it.
    We think it is bad policy for Congress to require a 
Government agency to censor health and safety information to 
the consumers. If the CPSC has acquired information that raises 
questions about a product, CU thinks the public should have 
access to the data and decide for themselves. CPSC official, 
Mark Schoem, was quoted in Consumer Reports 1994, saying, ``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 CPSC without prior review by the 
manufacturer.
    So, in concluding my remarks, there are several other 
things--in particular, ATVs--that we think that the Congress 
has a role to play, and we hope you will.
    Thank you.
    [The prepared statement of Dr. Pittle follows:]

 Prepared Statement of R. David Pittle, Ph.D., Senior Vice President, 
                   Technical Policy, Consumers Union
    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 those 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 percent decline in the rate of deaths and injuries associated 
with consumer products over the past 30 year. 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 good 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.
    I'd like to direct the Committee's attention to the fact sheet 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 be 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?

   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 percent 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). 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.

        (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 the fines.
Section 37
    Section 37 was added to the CPSA in the 1990 and 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 wording 
renders it largely ineffective. Under Section 37 CPSC receives 
information about lawsuits when the three cases involving the same 
product are settled, which is simply 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 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 concluded: 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, if 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 be stem from companies having 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.\1\
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    \1\ Section 6(b)(1) requires that the CPSC must, at least 30 days 
prior to ``public disclosure'' of information, notify each manufacturer 
or private labeler identified in the documents of the forthcoming 
release and give them an opportunity to submit comments, and take 
reasonable steps to ensure accuracy.
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    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.\2\ 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.''
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    \2\ In 1983 the Commission was directed by Congress to compare 
these restrictions to those of ten other health and safety 
organizations. None operated with restrictions other than the normal 
restrictions on trade secrets and confidential business information.
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    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,\3\ 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.
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    \3\ The Executive Order requires the head of each Executive 
department and agency to establish procedures to notify submitters of 
records containing confidential commercial information, if the agency 
determines that it may be required to disclose the records. The agency 
is to afford the submitter a reasonable period of time to object to the 
disclosure and to state all grounds for objection, and the agency is 
bound to give careful consideration to all specified grounds for 
nondisclosure prior to making a determination on the issue. 52 Red. 
Reg. 23781 (June 25, 1987),
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    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 complain 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 CU from determining whether 
manufacturers are complying with their duty to report substantial 
product hazards.\4\
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    \4\ Congress added amendments to 6(b) in 1981 largely at the urging 
of the Chamber of Commerce, which argued that companies would be more 
likely to report product hazards under 15(b) if the public did not have 
access to such information. To the contrary, after passage of the 
restrictions, the number of ``15(b) reports'' dropped significantly.
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    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 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.
    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, rigorous pre-
marketing testing, and strong industry-wide voluntary safety standards 
should prevent the recurring problem of having to recall product after 
product. And yet recalls clearly are not uncommon 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 percent 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.
    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 CPSC's ineffective process of recalling those products from 
consumers.
    The Commission held a hearing on 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 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, 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 percent to 27 percent in 10 years.

        (b) Legislation introduced in the last Congress by U.S. 
        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.
2. 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 percent 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 
percent 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 percent 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 percent BAC laws. In the two years 
since, the total number of states with 0.08 percent BAC laws has 
increased to 33 and the District of Columbia.
3. 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. 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 parents 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.
4. 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 U.S. 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, \5\ fire safe candles,\6\ 
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.
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    \5\ Cigarette fires are the leading cause of fire deaths in the 
United States, resulting in 800 deaths, including 100 children, in 
1998. New York State has a fire safe cigarette standard based on the 
National Institute of Standards and Technology (NIST) testing 
methodology for cigarettes. This is one example that the Commission 
could consider in developing a national standard for fire safe 
cigarettes.
    \6\ Candle fires resulted in 170 deaths and 1,200 injuries in 1998, 
representing a 750 increase in deaths from 1980 to 1998.
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    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 a 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. . 
.'' \7\ 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.
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    \7\ New York Times, June 13, 2003, p. A28.
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    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 
make 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.

    Senator Fitzgerald. Thank you, Dr. Pittle.
    Ms. Weintraub?

   STATEMENT OF RACHEL WEINTRAUB, ASSISTANT GENERAL COUNSEL, 
                 CONSUMER FEDERATION OF AMERICA

    Ms. Weintraub. Mr. Chairman, I am Rachel Weintraub, 
Assistant General Counsel with Consumer Federation of America.
    CFA is a nonprofit association of approximately 300 pro-
consumer groups, with a combined membership of 50 million 
people. CFA appreciates the opportunity to testify today on the 
reauthorization of the U.S. Consumer Product Safety Commission. 
We are pleased to offer our strongest support for the 
reauthorization of this final consumer safety agency.
    We are asking Congress to do eight things to help 
strengthen CPSC and protect consumers from unsafe products.
    First, the Consumer Product Safety Commission plays an 
extremely critical role in protecting American consumers from 
product hazards. Yet with jurisdiction of 15,000 different 
products, this small agency has a monstrous task. This 
challenge is heightened by the fact that, over the last two 
decades, CPSC has suffered deep cuts to its budget and to its 
staff. Because of these constraints, CPSC cannot maintain its 
current level of safety programs, nor can it invest in its 
infrastructure to improve its work for the future. It is for 
this reason that CFA believes that the most important thing 
that this Subcommittee can do is to assure that sufficient 
reauthorization funding levels are approved.
    We believe that the current amount of funding sought should 
be expanded by at least a modest 10 percent. This would allow 
for much-needed improvements. For example, in spite of the 
critical role of CPSC's laboratory, no major improvements have 
been made in the past 25 years. If CPSC were granted the funds 
to modernize the laboratory, the agency would gain 
significantly through increased productivity and efficiency.
    Second, CFA suggests that Congress eliminate the cap of 
$1.65 million on the amount of civil penalties that CPSC can 
assess. Eliminating the cap will encourage manufacturers to 
recall products faster, will act as a deterrence to 
noncompliance with CPSC's regulations, and will strengthen 
CPSC's bargaining power when negotiating with companies.
    Third, CFA urges Congress to restore CPSC's authority over 
fixed-site amusement parks. 55 fatalities have occurred on 
amusement parks in the last 15 years, and serious injuries have 
soared 96 percent in the last 5 years. Federal oversight is 
crucial, due to the vast variation in State laws and the 
complete absence of regulation in some states. CPSC should be 
authorized more money to take on this expanded role.
    Fourth, CFA urges Congress to eliminate Section 6(b) of the 
Consumer Product Safety Act. This provision, which no other 
health and safety regulatory agency must adhere to, requires 
that CPSC must check with the relevant company before it can 
give out certain information to the public. This has the effect 
of delaying or denying access of important information to 
consumers.
    Fifth, 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. Online 
retailers should be required to post the cautionary warnings on 
their websites so that consumers can be aware of the potential 
safety issues before purchasing the product.
    Our sixth request for Congress relates to recall 
effectiveness. CFA filed a petition with CPSC in June 2001 
requesting that CPSC initiate rulemaking to require all child 
product manufacturers to provide a product registration card 
with every product. Unfortunately, by a vote of two to one, 
CPSC denied our petition. CFA maintains that product 
registration cards are necessary because our current system of 
recall notification is failing. Recall rates are very low, and 
many CPSC recalls involve products for children. Recalls of 
children's products often occur because of choking, 
strangulation, suffocation, burns, or serious fall hazards. We 
urge Congress to require CPSC to submit a report, within 1 
year, on the steps it will take to increase recall return 
rates, including an evaluation of product registration cards.
    Seventh, CFA has long been concerned that the all- terrain-
vehicle industry's self-regulating approach to safety is 
failing. Unfortunately, our concern has been increasing as 
injuries and deaths on the ATVs, especially injuries and deaths 
to kids, have been on the rise. Between 1993 and 2001, the 
number of injuries caused by ATVs more than doubled. And in 
2000, alone, as was previously stated, 111,700 people were 
injured seriously enough by ATVs to require emergency-room 
treatment. Tragically, data show that between 1982 and 2001, 
children under 16 make up 38 percent of the total number of 
fatalities and 37 percent of total number of injuries.
    CFA urges CPSC, through a petition we filed last August, to 
ban the sale of adult-size ATVs for use by children under 16. 
We ask 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.
    Finally, CFA supports CPSC action to ban baby bath seats. 
Since 1981, approximately 96 children have drowned to death, 
and 153 were injured seriously, while using baby bath seats. 
Caregivers who use bath seats are more likely to take riskier 
behaviors because they incorrectly believe that the device 
provides an added measure of safety. Furthermore, mechanical 
problems with baby bath seats make it more likely that a child 
will drown if unattended.
    CFA petitioned CPSC to ban baby bath seats in July of 2000, 
and the agency recently announced a meeting for the end of July 
on CPSC staff's recommendations. Congress should carefully 
track CPSC's progress on this issue.
    In conclusion, CFA supports the multi-year reauthorization 
of CPSC and urges an increase of at least 10 percent so that 
all consumers, especially our Nation's children, will have a 
strong CPSC to protect them from unsafe products.
    Thank you.
    [The prepared statement of Ms. Weintraub follows:]

  Prepared Statement of Rachel Weintraub, Assistant General Counsel, 
                     Consumer 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 percent.
    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 percent 
of the agency's appropriation. An additional 11 percent 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 
website designed to be the most comprehensive child safety website on 
the Internet. Our website 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 5 
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 3 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 percent return rate. In Fiscal Year 1997, the most recent 
        year for which data is available, the return rate fell slightly 
        to 16 percent.

        (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 percent 
        vs. 13.8 percent in 1993--a statistically significant 56 
        percent 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 percent 
        vs. 3 percent 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 1 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 onto 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.

    Senator Fitzgerald. Thank you, Ms. Weintraub.
    Mr. Korn, thank you for being here. And thank you for your 
help last year on child booster-seat laws that we passed. I 
appreciate your help in the past.
    Mr. Korn?

   STATEMENT OF ALAN KORN, J.D., DIRECTOR, PUBLIC POLICY AND 
          GENERAL COUNSEL, NATIONAL SAFE KIDS CAMPAIGN

    Mr. Korn. Thank you, Mr. Chairman. You just read the first 
paragraph. We know, by working with you and your staff on the 
TREAD Act and the booster-seat component bills of that, that 
our children will be well-served by your stewardship here.
    I will, in uncharacteristic fashion, kind of lift my head 
up from my written comments and just summarize some of the 
things. We did turn in very detailed written comments, which I 
know will be in the record. Any specific questions beyond that 
can be answered in those.
    Suffice it to say, our organization is wildly supportive of 
the Consumer Product Safety Commission. It does a super job, 
with very little. Nonetheless, the reauthorization process 
gives us an opportunity, and the CPSC and other groups, to 
comment on ways it could be better and improve. Since it has 
not been done in 8 years or 10 years, it does give us an 
opportunity to get a few things in front of the Committee of 
jurisdiction and oversight.
    The first is one topic that has not been raised yet, so I 
would like to spend a little bit more time on that one. SAFE 
Kids believes that allowing an unfettered election of remedy, 
under Section 15, does not necessarily serve the public 
interest. And here is what I mean by that. Once the Commission 
determines that a product distributed in commerce presents a 
substantial product hazard and requires some kind of remedial 
action, Section 15 allows the CPSC to order the manufacturer to 
do one of three things: repair the product, replace the 
product, or refund the purchase price, less a reasonable 
allowance for use. However, there is an election on there. It 
allows the manufacturer to choose amongst those three remedies. 
And we believe that discretionary election may not always serve 
the public interest.
    For instance, if the CPSC is recalling a $75 toaster that 
poses an electrocution hazard or a burn hazard, the 
manufacturer, once ordered to remedy, may elect to refund, 
minus a reasonable allowance for use. A toaster or an electric 
appliance that has been on the market for 10 years may have a 
value of $10. This refund, we believe, may not be a motivating 
enough factor to encourage the consumer to actually remove that 
product out of their household.
    Instead, we would like to have a check on that election 
where the Consumer Product Safety Commission can, if it serves 
the public interest, choose another remedy. In that particular 
case, it could be repair or actually removal of the product 
from the marketplace, or a refund price that is a little bit 
higher for economic motivation.
    We are not asking or suggesting that the election be 
eliminated; only that there be a check on the election and that 
the CPSC staff, and the compliance staff, in particular, have 
the ability to check the election process of a manufacturer. 
That is Section 15(d) of the enabling statute.
    Second, we have talked quite a bit about the cap. SAFE Kids 
is not necessarily supporting an elimination of the cap, but we 
do think it is time for an increase of the cap. In many cases, 
the 1.65 million--in fact, in probably all too many cases--the 
$1.65 million cap may not be enough of an economic deterrent to 
prevent a company from engaging in an unlawful act.
    Here is a quick example. If a company has $50 million worth 
of product in the marketplace, it may be willing to incur that 
civil penalty instead of reporting a defect in the product or 
an injury in the product to the CPSC, as is required under 
15(d), in order to avoid the recall--in other words, pulling 
$50 million worth of product off the marketplace. The cap makes 
the economic decision, ``Well, we will just incur that civil 
cap,'' instead of doing something that might better serve the 
public interest, and, in our view, children, getting a burn 
hazard or an electrocution hazard out of the home.
    We do note that, you know, there is different companies of 
different sizes, so we are suggesting that if you were to 
choose, in the Committee's wisdom, to, at the very least, 
increase the cap, that the cap could be tied to the size of the 
companies--meaning, the greater the company, the bigger the 
gross revenue for the company, the higher the cap; the smaller 
the company, the lower the cap--or maybe some kind of a cap 
that is tied to the egregiousness of the act.
    Section 19 lists lots of prohibited acts. Some are very 
egregious and really do affect the consumer health and safety 
of children--the group that we represent here today--and some 
are less--all are important, but some are less important; that 
is not the best word, but less egregious--and maybe a smaller 
cap could be tied with those.
    I do want to make a quick comment on the denial of the 
petition that the CPSC had recently on the CFA and the American 
Academy of Pediatric's petition on registration cards. The CFA 
and other groups petitioned that all children's products have 
registration cards attached to them so that if there is a 
recall, they can better notify the consumer of that recall. We 
believe that there is--and they denied that petition--we 
believe there is somewhere in between a complete denial and the 
requirement of registration cards on all consumer products.
    And in our testimony, we talk about two different types of 
products. Briefly, we kind of--we make up our own phrase, 
``consumer products that are intimately interwoven with a 
child's life''--a crib, a changing table, a baby walker, an 
exercise play station--those that, either by design or by 
practice, allow a child to be left unattended, and, finally, 
maybe products that serve a safety purpose, like child safety 
seats, at NHTSA, carbon monoxide detectors, smoke alarms, baby 
gates. We think it is important to get those products off the 
market very fast if there is a problem. Registration cards may 
help in that process.
    And finally, I just want to add support for the Committee. 
We were very happy to see the numbers, the authorization 
numbers, through 2007. Obviously, they could use a whole lot 
more, but we think that demonstrates the confidence in this 
Committee in this agency. And SAFE Kids will try to educate the 
appropriators to do the same.
    [The prepared statement of Mr. Korn follows:]

 Prepared Statement of Alan Korn, J.D., Director of Public Policy and 
              General Counsel, National SAFE KIDS Campaign
    My name is Alan Korn and I am the Director of Public Policy and 
General Counsel for the National SAFE KIDS Campaign. It is my pleasure 
to testify before the Subcommittee today. Mr. Chairman, thank you for 
inviting me to address the important role of the U.S. Consumer Product 
Safety Commission (CPSC). As the mission of the National SAFE KIDS 
Campaign (hereinafter ``SAFE KIDS'') is to prevent childhood 
unintentional injury, collaborators like the CPSC are vital to our 
efforts. SAFE KIDS believes that a strong and effective CPSC is 
critical to keeping Americans, especially children, safe from injury 
and death due to dangerous consumer products. We also believe, however, 
that the CPSC can fulfill its responsibilities without becoming overly 
invasive. The Commission cannot, and should not, attempt to protect all 
consumers from every possible risk. Consumers, and parents in 
particular, have a role in their own and their children's safety. 
Consumers should be informed about the products they purchase and use, 
follow instructions, and take care in using them.
    Nonetheless, the pending reauthorization process affords the Senate 
Commerce, Science, and Transportation Subcommittee on Consumer Affairs 
and Product Safety, the CPSC, and organizations like SAFE KIDS an 
important opportunity to examine the agency's effectiveness and ways 
that its capabilities can be enhanced to better protect children. SAFE 
KIDS hopes that the Subcommittee will consider the following comments 
as it reviews legislation to reauthorize the CPSC. There may be room 
for enhancement or update.
I. Background: Childhood Injury and the National SAFE KIDS Campaign
    As you may know, unintentional injuries are the leading cause of 
death and disability to persons ages 1 to 35. Each year, for all ages, 
there are 23,900 deaths and 32.7 million injuries related to consumer 
products. The deaths, injuries, and property damage associated with 
consumer products cost our Nation approximately $700 billion annually.
    Unfortunately, injuries to children make up too large a portion of 
these numbers. Each year, more than 5,600 children die and nearly 12 
million (one child in five) are hurt seriously enough to require 
medical care due to unintentional injury. More than 16 percent of all 
hospitalizations for unintentional injury among children result in 
permanent disability. Many of these injuries are preventable and some 
of these preventable injuries are associated with hazardous or 
dangerous products.
    The National SAFE KIDS Campaign is the first and only national 
nonprofit organization dedicated solely to the prevention of 
unintentional childhood injury--the number one killer of children ages 
14 and under. Launched in 1987, SAFE KIDS' current nationwide 
grassroots network of over 600 state and local coalitions and chapters 
have provided hands-on assistance to families to help prevent these 
needless tragedies from occurring in the first place. The on-going work 
of SAFE KIDS coalitions, and partners like the CPSC, has helped lead to 
the decline of the unintentional injury death rate from 1987 to 2000--a 
39 percent decline for children ages 14 and under.
II. Specific Comments: CPSC's Core Functions, Capabilities, Strengths, 
        and Needed Improvements
    As the CPSC monitors the safety of over 15,000 types of consumer 
products, SAFE KIDS knows that it is charged with an enormous 
responsibility to keep families safe from injury and death. SAFE KIDS 
recognizes that the CPSC over the last few years has been extremely 
effective given its small budget and large statutory mandate. Overall, 
SAFE KIDS believes that the CPSC serves its core functions very well, 
and has many capabilities and strengths that help protect the public. 
However, there are some areas that can be improved upon with additional 
resources.
A. Unique Data Collection Capability
    The CPSC's data collection is unique among all Federal agencies and 
is one of its most important functions. A key component is its National 
Electronic Injury Surveillance System (NEISS), a national probability 
sample of hospitals in the U.S. and its territories. Using NEISS, 
injury data from hospital emergency rooms is collected and analyzed to 
identify patterns of occurrence and risk groups for specific injuries. 
This valuable information forms the basis for preventive measures and 
educational programs. The agency should continue this important 
function. SAFE KIDS applauds the evolution of NEISS throughout the 
years, such as increasing the number of hospitals used in the sample 
and the expansion of the system to capture data on all injuries, 
including those not associated with consumer products.
    SAFE KIDS applauds the Commission's new initiative to better 
monitor children's burn injuries.
    CPSC is working with the American Burn Association and Shriners 
Hospitals to set up a reporting system encompassing all burn centers in 
this country. Each burn center will file a report to the CPSC 
containing information on every clothing-related burn injury to a child 
under the age of 15. In turn, CPSC analysts will use that data to 
assess hazards related to the flammability of all children's clothing, 
including sleepwear. As a result, the data will enable the CPSC to have 
a comprehensive picture of the most serious clothing-related burns to 
children and will substantially improve their basis for making 
decisions on appropriate injury reduction strategies. This information 
will also help SAFE KIDS target our programming, so that it is more 
effective and more valuable to families.
    In addition, the CPSC ``Safety Hotline'' provides a vital link 
between the government and America's consumers to report a product 
complaint or report a product-related injury. Despite its small budget, 
the CPSC maintains this toll-free hotline that permits consumers to: 
(1) report an unsafe product; (2) report a product-related injury; (3) 
find out whether a product has been recalled; (4) learn how to return a 
recalled product or arrange for its repair; (5) obtain information on 
what to look for when buying a consumer product; and (6) receive 
information on how to safely use a consumer product. State and local 
SAFE KIDS coalitions, and other grassroots organizations, have used the 
hotline to both report potentially dangerous products and to collect 
information on unsafe products. The hotline is an invaluable resource 
to groups like SAFE KIDS that are in the business of communicating 
critical safety messages to the general public.
    Information gathered from the NEISS system, the ``Safety Hotline'', 
and other sources, such as death certificates and special 
investigations, guide the Commission in setting priorities for 
identifying potentially hazardous products that may warrant future 
investigation or action. This data provides the CPSC with critical 
basic information that may eventually lead to a product modification or 
the development of voluntary or mandatory safety standards. 
Additionally, the information is used by outside organizations, like 
SAFE KIDS, to aid in the development of injury prevention initiatives.
B. Adequate Testing Labs
    A few years ago, several members of the Campaign staff toured the 
CPSC testing lab located in Gaithersburg, Maryland. The CPSC, among 
other things, uses this lab to test thousands of consumer products to 
ensure that they comply with existing voluntary or mandatory standards, 
or to determine whether or not they pose an unreasonable risk of injury 
to the American public. SAFE KIDS staff was impressed by the commitment 
and expertise of CPSC lab personnel, but was surprised by the poor 
quality of the lab's conditions. The CPSC, while fulfilling their 
mission, has done so with less than adequate technical facilities. We 
believe that the CPSC should have a lab that, at the very least, 
competes with those found in the private sector and that Congress 
should authorize and appropriate the funds necessary to upgrade the 
facility. If the CPSC staff can access a well-equipped lab, this most 
certainly will translate into better and safer consumer products.
C. Effective Market Oversight
    The CPSC has the mandate to ensure that companies that produce or 
sell consumer products comply with the laws, regulations, and standards 
that protect consumers and children from hazardous products. The CPSC's 
ability to recall dangerous or defective products allows the agency to 
remove products that could injure or kill children if left on the 
market. It is important to note that since 1973, the Commission's use 
of its recall authority has resulted in the initiation of thousands of 
recalls or other corrective actions involving millions of products. 
These recalls have included baby rattles, pacifiers, cribs, toys 
bearing lead paint, flammable clothing, and bike helmets. Although it 
is a process than can be improved, America's children live in a safer 
environment because of the CPSC's market oversight efforts.
D. Effective Public Education
    The CPSC uses a wide range of tools to spread important safety 
messages that are critical to the prevention of product-related 
injuries. Each time the CPSC educates a parent, an adult, or a child 
about the proper use of a product, it is helping to create a safer 
environment for America's children.
    Grassroots-based organizations, such as SAFE KIDS, are especially 
effective in spreading safety information to underserved and hard-to-
reach populations. In other administrations, the CPSC seemed to be 
reluctant to engage groups like ours in its effort to spread safety 
messages. SAFE KIDS is pleased that the new agency administration has 
regularly engaged our organization and our coalition network. The new 
Chairman and his staff have made concerted efforts to actively seek our 
input on different topics. It has been a pleasure working with the new 
administration. We encourage this cooperative relationship to continue 
with our organization and with other groups. These partnerships will 
help to ensure that educational campaigns more effectively reach their 
target population.
E. Encouragement of Market Solutions
    The CPSC should continue to emphasize market-oriented solutions to 
product safety hazards. In the past, the Commission has convened 
meetings with industry and consumer groups to address hazards 
associated with a variety of children's products, including multi-use 
helmets, baseball safety equipment, movable soccer goals, and 
bleachers. These meetings allow for industry, government, and consumer 
groups to exchange ideas in a productive environment that lead to 
widely accepted solutions to product hazards--without unnecessary 
regulation or legislation. The new CPSC administration is continuing, 
and has expanded, this effective approach by initiating a series of 
recall effectiveness roundtables. We applaud the Chairman's initiative 
to reach out to a wide range of groups of different interests and 
viewpoints.
F. The Commission Should Consider Select Use of Product Registration 
        Cards to 
        Improve Recall Effectiveness
    The CPSC recently denied a petition that requested the agency to 
require registration cards ``for all products intended for children.'' 
This general definition applied to a wide universe of products ranging 
from toys to art supplies to clothing to children's books to cribs. 
This requirement, in our view, would have not only been overly 
burdensome on manufacturers, but also could have decreased the value of 
registration cards as they are used in the marketplace today. The CPSC 
was technically justified when it denied the petition. SAFE KIDS 
believes, however, that there may be a need for an expanded role and 
use of product registration cards. SAFE KIDS suggests at least two 
types of products that may benefit from a registration card 
requirement:

 Items Intimately Interwoven in a Child's Daily Life

    SAFE KIDS believes that registration cards may be of value when 
accompanied with items such as cribs, bunk beds, strollers, high 
chairs, baby walkers, changing tables, and play yards--products that 
are intimately interwoven in a child's daily life. These types of 
consumer products have special characteristics, in that a child often 
interacts with them for a substantial period of time. Additionally, 
many of these products are designed by intent or by practice to allow 
for a child to be left unattended for several moments or for an even 
longer duration. If the Commission were to determine that one of these 
products posed an unreasonable risk to the child, and subsequently 
required a recall, SAFE KIDS believes that it would be particularly 
important to notify consumers as quickly as possible. Registration 
cards would assist in that process.

 Products with a Safety Purpose

    Mandatory registration cards may have some value when attached to 
products that are designed to fulfill a safety purpose, such as baby 
monitors, bike helmets, safety latches, baby gates, catcher's masks and 
other sports safety equipment, smoke alarms, and carbon monoxide 
detectors. Consumers purchase these products to serve a preventive role 
in order to protect their children and families from deaths and 
injuries. If the Commission determines that one of these products is 
not adequately fulfilling that safety purpose, it is critically 
important to remove that product from the marketplace as soon as 
possible. We cannot have consumers relying on a safety product when the 
product itself fails to fulfill its intended purpose. Again, in those 
circumstances, it would be particularly important to notify consumers 
quickly about the defect.
III. Suggested Congressional Considerations
    The CPSC must be active guardians of consumer safety. We cannot 
wait for deaths and injuries to happen before we act. We must spend our 
time, effort, and resources now in order to prevent the incidents from 
ever occurring. Accordingly, SAFE KIDS offers the following points for 
Congress to consider.
A. Overall Budget Increase
    The CPSC monitors the safety of over 15,000 product categories--
including kitchen appliances, sporting equipment, safety devices, home 
furnishings, and art materials--just to name a few. The CPSC must 
regulate these products, recall them when necessary, educate the public 
about safe use and behavior, and stay current on new injury product 
trends. SAFE KIDS believes that the Commission does the best it can 
with a $60 million annual budget--clearly not enough money given the 
CPSC's breadth and depth of products under its jurisdiction. SAFE KIDS 
urges the Subcommittee to authorize additional funding, so that the 
agency can better fulfill its broad mission (i.e., better marketplace 
policing, more effective consumer education, improved testing of 
products).
B. Allowing Election of Remedy Under Section 15 Does Not Necessarily 
        Serve the Public Interest
    Once the Commission determines that a product distributed in 
commerce presents a substantial hazard and that remedial action is 
required to serve the public interest under Section 15 of the Consumer 
Product Safety Act, the CPSC may order the manufacturer of the 
dangerous product to elect (at the product manufacturer's discretion) 
to either:

   A. Bring the merchandise into conformity with requirements 
        of the applicable consumer product safety rule; or

   B. Replace the product with a like or equivalent product; or

   C. Refund the purchase price (less a reasonable allowance 
        for use).

                         (Consumer Product Safety Act, Section 15d)

    This discretionary election may not always serve the public 
interest. For instance, if the CPSC is recalling a $75 toaster that 
poses a serious electrocution or fire and burn hazard, the 
manufacturer, once ordered to remedy, may elect to refund the purchase 
price less a reasonable allowance for use. The refund on a toaster that 
has been in the marketplace for five years may have a refund value of 
$10. This refund may not be a motivating enough factor to encourage the 
consumer to remove the dangerous product from their household. In this 
case, the public may be better served by a different remedy--such as 
receiving a replacement item that is of similar quality or having the 
recalled product repaired. SAFE KIDS believes that CPSC compliance 
officers should ultimately decide what constitutes an appropriate 
remedy given the totality of the circumstances. Congress should 
consider a technical change to Section 15 of the enabling statute that 
empowers the CPSC to police the manufacturer's elected remedy option.
C. Congressional Consideration of Increase of Civil Penalties under the 
        Consumer Product Safety Act
    During this reauthorization process, SAFE KIDS urges Congress to 
consider an increase in the civil penalty allowed by the Consumer 
Product Safety Act. In its present form (under Section 20), any person 
who knowingly engages in a prohibited act, as outlined in Section 19, 
is subject to a civil penalty not to exceed approximately $1.65 
million. In some cases, and in particular when larger companies are 
involved, the $1.65 million cap may not be enough of an economic 
deterrent to prevent the company from engaging in an unlawful act. For 
example, a company that has $50 million worth of product in the 
marketplace may be willing to incur the civil penalty instead of 
reporting a defect or injury as required under Section 15 in hopes of 
avoiding a recall. Congress should consider increasing the civil cap to 
an amount that better represents a deterrent. In order to avoid an 
unduly harsh and unfair penalty, if Congress chooses to increase the 
cap, consideration could be given for different caps for different 
companies based on gross revenues. For instance, bigger companies could 
have bigger caps, and smaller companies could have smaller caps. 
Alternatively, an increase in the cap could also be raised for only the 
most serious violations of Section 19.
D. Fixed Site Amusement Park Rides Should be Considered a ``Consumer 
        Product''
    SAFE KIDS urges Congress to amend the Consumer Product Safety Act 
to include fixed site amusement park rides as a consumer product under 
CPSC jurisdiction. In its present form, Section 3 of the Consumer 
Product Safety Act defines a consumer product as, among other things, 
``any mechanical device which carries or convey passengers . . . for 
the purpose of giving its passengers amusement . . . and which is not 
permanently fixed to a site.'' (Emphasis added.) This definition is 
commonly referred to as the ``roller coaster loophole.''
    SAFE KIDS supports Congressman Ed Markey's National Amusement Park 
Ride Safety Act of 2003 (H.R. 2207), which among other things, closes 
the ``roller coaster loophole.'' This loophole prevents the CPSC from 
investigating any amusement park ride accident in any park in America. 
Instead, all authority has fallen by default to the states--many of 
which do not have the resources to oversee these activities--leaving 
regulation largely to the parks themselves. However, even if state-by-
state regulation were adequate, the fact that no one with 50-state 
authority has the ability to investigate deaths or serious injuries in 
amusement parks means:

   Accidents in one state may be repeated on similar rides in 
        other states--resulting in possible tragedies that could have 
        been prevented but for the loophole;

   Injury and accident trends are not identified because there 
        is no independent government source of data;

   When safety repairs are ordered by one state, they are not 
        required in any other state.
    The Markey bill would restore fixed site amusement park ride 
jurisdiction to the CPSC (jurisdiction that was removed from the 
Commission in 1981). The bill would allow the CPSC to investigate 
accidents; develop an enforced action plan to correct problems if 
found; and act as a national clearinghouse for incident and defect 
data.
    If Congress in its wisdom chooses to restore this jurisdiction to 
the CPSC, SAFE KIDS urges the Subcommittee to authorize and Congress to 
appropriate adequate funding to the agency to carry out this new 
policing effort. SAFE KIDS recognizes that if CPSC jurisdiction were 
expanded to include these facilities, the Commission would need a 
substantial increase in funding to ensure its proper implementation.
E. Congress Should Monitor CPSC Activities Regarding All-Terrain 
        Vehicles
    Pending before the Commission is a petition filed by the Consumer 
Federation of America, the American Academy of Pediatrics, and the 
American College of Emergency Physicians, which requests, among other 
things, a ban of adult all-terrain vehicles (ATVs) for use by children 
under the age of 16. SAFE KIDS supports most of the petition.
    SAFE KIDS has long believed that adult ATVs should not be operated 
by children ages 15 and under. ATVs are often beyond the developmental 
capability of children to control. This concept, coupled with the 
increased number of associated injuries and fatalities, show that there 
are inherent dangers to children driving adult ATVs. Between 1982 and 
2001, 1,714 children under age 16--including 799 under the age of 12--
were killed in ATV incidents. Furthermore, between 1993 and 2001, the 
number of ATV-related injuries by children under age 16 increased 94 
percent to 34,800. Recent CPSC data revealed that while only 14 percent 
of all ATV riders were children under the age of 16, these children 
disproportionately suffered approximately 37 percent of all injuries 
and 38 percent of total fatalities between 1985 and 2001.
    In our view, banning adult ATVs for children would not remove the 
products from the marketplace, but simply preclude ATV manufacturers 
and dealers from marketing or knowingly selling their adult products to 
children. Additionally, ATV salespeople would be required to warn 
potential purchasers about the dangers of the product and ask parents 
if the adult ATV was being bought for a child under the age of 16. 
These measures, if properly enforced, would pass on vital safety 
information to parents as well as help to prevent child ATV-related 
incidents from occurring in the first place.
    At this juncture, SAFE KIDS believes that there is no need for 
congressional intervention. The CPSC is taking the petition seriously 
and in our view, is properly researching all the potential public 
health/policy solutions. However, we urge the Subcommittee to follow 
the CPSC's activities to ensure that whatever plan is implemented by 
the agency is one that serves the public interest.
IV. Conclusion
    The CPSC has used its relatively small budget and staff to 
accomplish an incredibly important task--keeping children safe from 
defective and hazardous products. As the CPSC is now under new 
leadership, SAFE KIDS expects that the current administration will 
continue this strong track record. As product-related injuries still 
exist and can be prevented, the CPSC is needed now more than ever to 
protect consumers, families, and children. I would be happy to answer 
any questions.

    Senator Fitzgerald. Mr. Korn, thank you very much.
    Mr. Gold?

          STATEMENT OF STEPHEN GOLD, VICE PRESIDENT, 
       NATIONAL ASSOCIATION MANUFACTURERS CPSC COALITION

    Mr. Gold. Mr. Chairman, I am Stephen Gold.
    I am a Vice President at the National Association of 
Manufacturers, and I am also Executive Director of the NAM 
Council of Manufacturing Associations. And one of the hats I 
wear at NAM is to administer the NAM's CPSC coalition, which is 
a coalition of approximately 65 manufacturing companies and 
associations, all who are responsible or involved in consumer 
products. The coalition has actually been around for about two 
decades, and its function is to basically serve as a forum to 
work on the common issues and the concerns regarding the CPSC 
and the legislation--the statute.
    In reauthorizing the Commission, first and foremost, we do 
urge the Committee to do no harm. A recent study by the NAM 
which we just released last week, shows that a vibrant 
manufacturing sector is critical to our Nation's long-term 
prosperity. This study also pointed out the very serious 
economic challenges that manufacturers are presently facing, 
including challenges that have led to a loss of 2.3 million 
manufacturing jobs over the last 3 years.
    Global competition, particularly in the consumer product 
industry, is more intense than ever; and in such an economic 
environment, manufacturers should not be disadvantaged by an 
unnecessarily intrusive and inefficient regulatory regime.
    So, first--and to that extent, first, we would recommend 
the Committee and the Commission provide better guidance 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.
    But the law and the implementing regulations are vague, and 
they are ambiguous. It is difficult for manufacturers, 
especially small businesses, to determine when reporting and 
corrective action is actually necessary. Likewise, it is 
difficult for them to comprehend how the Commission justifies 
its penalties for failing to report in a timely fashion.
    We believe that the lack of bright-line guidance for 
failing to--on reporting and on the penalty computation leads 
to resolutions that could be very arbitrary. So the Commission 
is already authorized, by the way, to develop more effective 
guidelines in this area, and we encourage this. You do not even 
have to bother with redoing the statute for that--revising the 
statute.
    The coalition also opposes--and this was something new to 
us since we actually filed our testimony--the coalition opposes 
the lifting of the maximum level for penalty caps to an 
impractical and unrealistic level. First, we do not know of any 
evidence that the cap is limiting the Commission's enforcement 
activities. Small businesses are sufficiently discouraged by 
the 1.5 million, or as it continues to rise, cap; while the 
larger businesses are sufficiently discouraged by other 
reasons.
    You mentioned tort liability. It was mentioned by the 
Commissioners. Publicity will always deter businesses, in 
general, especially the larger businesses, which have greater 
publicity.
    In addition, we believe that raising the penalty cap to a 
much higher level will generate more litigation. That is, a 
corporation will choose to fight the penalty, or even a recall, 
if you are looking at an unreasonably high cap that the 
Commission decides to levy--I mean, the penalty the Commission 
decides to levy.
    Finally, I mentioned before, ambiguities in the statute, in 
Section 15, will exacerbate the unfairness of increased penalty 
caps. Not only does the statute not distinguish between late-
filing a report and actually violating a safety standard, the 
criterion for a presumption of knowledge under Section 20 is a 
very loose standard and subject to abuse.
    Thank you, Mr. Chairman, for providing the NAM and its CPSC 
coalition the opportunity to testify. We look forward to 
working with you and the Commission.
    [The prepared statement of Mr. Gold follows:]

          Prepared Statement of Stephen Gold, Vice President, 
           National Association Manufacturers CPSC Coalition
    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 
given 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.

    Senator Fitzgerald. Mr. Gold, thank you.
    Mr. Klein?

       STATEMENT OF GARY S. KLEIN, SENIOR VICE PRESIDENT,

           GOVERNMENT, LEGAL AND REGULATORY AFFAIRS,

              TOY INDUSTRY ASSOCIATION, INC. (TIA)

    Mr. Klein. Thank you, Mr. Chairman.
    My name is Gary Klein, the Senior Vice President of the Toy 
Industry Association. And thank you for inviting me to be here 
today.
    TIA is a not-for-profit trade association composed of more 
than 345 members, including members whose aggregate sales 
exceed $24 billion annually. The U.S. toy industry leads the 
world in innovative, cost-effective design and sale of toy 
products; and TIA members account 85 percent of domestic toy 
sales, and, globally, approximately 50 percent of all toys 
sold.
    TIA emphasizes the importance of play in all children's 
lives. Not only is it fun and educational, but a necessary part 
of growing up. However, to ensure that all children have a 
positive play experience, TIA's primary concern is that toys 
are safe. And since the 1930s, TIA has established a tradition 
of working with others, including--and I go into acronym mode 
here--NSB, NSC, ANSI, ASTM, ISO, and SAFE Kids--to ensure the 
manufacture and distribution of safe toys.
    This commitment continues today. And in 1999, TIA launched 
the first year-round industry consumer website to assist U.S. 
consumers with questions and concerns about toy safety. 
Comprehensive and accurate information is available any time of 
day through a specially designed area on the TIA website.
    Under the auspices of the National Bureau of Safety, TIA 
led the development of the voluntary safety standard for all 
toys, in 1976; which, in 1986, was revised and designed under 
ATM. The current standard is published in CFR.
    In addition, TIA works regularly with the CPSC to develop 
voluntary standards and to monitor any potential hazards 
associated with toys already on the market. The Commission's 
active participation in voluntary standards activities is 
instrumental in making the U.S. toy-industry products the 
safest and best in the world.
    Testing is a vital component of achieving that result, and 
our members make more than 100 separate tests and design 
specifications included in the ASTM standard, and Federal 
regulations to reduce or eliminate hazards with the potential 
to cause injury under normal conditions of use or foreseeable 
use.
    TIA and its members are vitally interested in developing 
reputations as safety-conscious companies; because, indeed, 
when you think of who the end user of toys are, there is no 
other industry that understands better the fragility of a brand 
and how the company and its reputation can be damaged by merely 
being tarnished with the label of having produced an unsafe 
toy.
    What our testimony boils down to, Mr. Chairman, is that 
CPSC needs to reallocate resources based upon demonstrable 
data. In spite of progress that has dramatically improved the 
length and quality of kids' lives in the U.S. over the past 
century, today's children obviously still face significant 
risks. However, as the data in our testimony, on page 5, shows, 
toys do not figure prominently in that risk. The actual rate 
for toys would be about the same rate as suicide for children 
under ten, which is extremely rare.
    Important work in creating tools to benchmark and catalog 
risk is being undertaken and should be supported by this 
Committee and the CPSC.
    CPSC's own annual report indicates that of the 15 commonly 
used household products, toys had among the lowest number of 
incidents of injuries or deaths for children from birth to 15. 
Yet it is remarkable that media attention continues to focus on 
the small risks associated with toys, while some very big risks 
remain under-appreciated, under-reported, and unaddressed. In a 
world where perception is reality, where misinformation often 
drives perception, and where some advocacy groups find motives 
to highlight new, scary, and uncertain hazards, without 
providing context, it is no wonder policymakers and parents 
lack that context for understanding and managing children's 
risks.
    Unfortunately, the net result is that we often collectively 
waste scarce financial resources on hypothetical hazards at the 
expense of allocating them efficiently to make children's lives 
measurably safer. Further, this perpetuates a lack of 
coordination between groups that are all arguably committed to 
helping children, that focuses on individual issues and agendas 
instead of children, themselves, and that promotes competition, 
rather than cooperation, for the resources to truly protect 
children.
    We support the mission and goals of the CPSC, and we think 
there is room for improvement. We have made four suggestions 
that are in our testimony that I will leave for the Committee. 
We can talk about them later.
    But we believe the Commission has made significant progress 
in the past year at creating a more transparent regulatory 
process. We welcome the opening of the Commission hearings to 
testimony from the public. We welcome efforts made to solicit 
expert advice on ways to enhance recall effectiveness and 
better communicate with the public, recognizing that not all 
recalls involve serious risk of injury or death, and the need 
to communicate to the public according to relative risk.
    CPSC needs to be judged by how effectively it communicates 
relative risks to the public, not by a count of how many 
products subject to recall are actually returned. We welcome 
the seemingly common sense notion that scarce resources should 
be allocated according to demonstrable risk, based upon 
analysis of real-world data, an application of statutorily 
mandated cost-benefit analysis.
    We support the Commission's request for resources to 
efficiently carry out its mission. We think they should be 
provided with resources to develop tools to assess real-world 
relative risks of injury from products, and should be 
encouraged to utilize existing resources more efficiently, in 
partnership with industry, consumer groups, academia, State and 
local health and safety officials. And we certainly support the 
funding they need to update their laboratories.
    Thank you.
    [The prepared statement of Mr. Klein follows:]

Prepared Statement of Gary S. Klein, Senior Vice President, Government, 
   Legal and Regulatory Affairs, Toy Industry Association, Inc. (TIA)
    Mr. Chairman and members of the Committee, I'm Gary Klein, Senior 
Vice President, Government, Legal and Regulatory Affairs, for the Toy 
Industry Association, Inc. (TIA). Thank you for providing TIA an 
opportunity to testify on the reauthorization of the Consumer Product 
Safety Commission (CPSC).
TIA
    The Toy Industry Association, Inc. is a not-for-profit trade 
association composed of more than three hundred forty-five (345) 
members, including manufacturers whose aggregate sales at the retail 
level exceed $24 billion annually (regular members), as well as product 
design firms, toy testing labs and safety consultants, and others 
(associate members). The U.S. Toy Industry leads the world in the 
innovative, cost-effective design and sale of toy products. We are in 
the business of developing fun, innovative products with which children 
can play and learn. TIA's primary office is located in New York City. 
TIA members account for 85 percent of domestic toy sales and, global in 
character, approximately 50 percent of all toys sold worldwide.
    TIA emphasizes the importance play has in all childrens' lives. Not 
only is it fun and educational, but a necessary part of growing up. 
However, to ensure that all children have a positive play experience, 
TIA's primary concern is that play is safe. Together with the U.S. 
government, TIA and its members have led the world in the development 
of toy safety standards by investing heavily in child development 
research, dynamic safety testing, quality assurance testing, risk 
analysis and basic anthropometric studies of children. Moreover, since 
the 1930s, TIA has established a tradition of working with others to 
ensure the manufacture and distribution of safe toys.
    TIA is proud of its record of significant accomplishments in the 
area of toy safety over many decades through relationships with the 
National Safety Council (NSC), National Bureau of Standards (NBS), 
American National Standards Institute (ANSI), ASTM International 
(formerly American Society for Testing and Materials, ASTM) and 
International Organization for Standardization (ISO). We have also 
worked in collaboration with many charities and consumer organizations 
to promote the well-being of children. This includes working with the 
International Consumer Product Health and Safety Organization (ICPHSO) 
and National SAFE KIDS Campaign, to advocate the need for product 
safety initiatives in both the U.S. and internationally.
    This commitment to toy safety continues today, and in 1999, TIA 
launched the first, year-round, industry consumer website to assist 
U.S. consumers with questions and concerns about toy safety. 
Comprehensive and accurate information is available any time of day, 
through a specially-designed area on the TIA website: www.toy-tia.org./
consumer/parents/safety/4toysafety.html.
The Voluntary ASTM Consumer Safety Specification on Toy Safety is the 
        ``Gold'' Standard
    Under the auspices of NBS, TIA led in the development of a 
voluntary safety standard for all toys in 1976, and then, in 1986 it 
was revised and designed under ASTM. The current standard is the ASTM 
F963-96a Consumer Safety Specification on Toy Safety, published in 
January 1997. The standard is currently undergoing its five-year review 
and should be completed this year. All of the Federal toy safety 
regulations, which appear in the Code of Federal Regulations Title 16-
Commercial Practices, are referenced in ASTM F963. ASTM is one of the 
largest voluntary standards development organizations in the world. The 
standards are an example of the various ways TIA incorporates and 
coordinates its safety activities with CPSC.
    Almost all toy packages include a suggested age range for use. A 
child's actual age, physical size, skill level and maturity, as well as 
safety, are all taken into consideration when developing age labels for 
different types of toys. To help manufacturers reach a greater degree 
of consistency in age grading practices and age labeling toy packages, 
CPSC publishes a manufacturers' guide for age labeling toys.
    Since children develop at different rates and vary in their 
interests and skills, age labeling on packages is intended to give the 
consumer a general guideline on which to rely to base toy selections. 
Typical designations might be ``Recommended for children from eighteen 
months to three years'' or ``Not recommended for children under three 
years of age.'' Additional specific cautionary labeling requirements 
specified by ASTM F963 or by CPSC regulations cover products such as 
crib gyms, electrically operated toys, chemistry sets, swim-aids and 
such toy features as functional points and edges (i.e., paper doll 
scissors and toy sewing kit needles).
    The standard also contains cautionary labeling requirements, as 
mandated by the U.S. Consumer Safety Protection Act (CSPA, 1995), 
relating to potential choking hazards to children under three years of 
age from toys or games intended for children ages three through under 
six years, which contain a small part, any small ball, marble or 
balloon. TIA supported this 1994 legislation that also contains a 
preemption provision precluding states or localities from legislating 
in this area in a manner not identical to the Federal requirements. 
Regardless of labeling, however, there is simply no substitute, at any 
age, for appropriate adult supervision.
    In addition, TIA works regularly with the CPSC to develop voluntary 
standards and to monitor any potential hazards associated with toys 
already on the market. CPSC staff often participate in the 
Association's safety seminars and other safety-related activities. The 
Commission's active participation in voluntary standards activities is 
instrumental in making U.S. toy industry products the safest and best 
in the world.
    If a manufacturer misrepresents compliance with ASTM F963, the 
company is subject to prosecution under Section 5 of the Federal Trade 
Commission Act, which prohibits unfair and deceptive methods of 
competition.
How the Industry Tests Its Toys for Safety
    There are more than 100 separate tests and design specifications 
included in ASTM F963 and Federal regulations to reduce or eliminate 
hazards with the potential to cause injury under conditions of normal 
use or reasonably foreseeable abuse. These tests and design 
specifications include use-and-abuse tests, testing for accessible 
sharp points and edges, and measuring for small parts, wheel-pull 
resistance and projectiles. Tests include those for flammability, 
toxicity, electrical and thermal requirements, as well as acoustical 
requirements for toy caps. Several manufacturers, especially larger 
ones, have their own in-house testing laboratories sophisticated enough 
to ensure that products meet standards for safety. Those without safety 
facilities on site use independent testing laboratories. Manufacturers 
producing toys overseas test them before shipping, and then sample 
production lots again once they arrive in the United States. TIA and 
its members are vitally interested in developing reputations as 
``safety conscious'' companies.
CPSC Needs To Reallocate Resources Based Upon Demonstrable Data
    In spite of remarkable progress that dramatically improved the 
length and quality of children's lives in the U.S. over the past 
century, today's children still face significant, real risks. For 
example, often-avoidable unintentional injuries take the lives of more 
than 1 out of every 10,000 children in the U.S. annually. That may not 
sound like a lot, but this includes over 150 infants that die before 
their first birthday in motor vehicle accidents and nearly 50 who drown 
in bathtubs.

        Estimated Annual Mortality Risk for Children Under Age 10
               (Number of deaths per million children)\1\
------------------------------------------------------------------------

------------------------------------------------------------------------
Motor vehicles               46      Guns                         25
------------------------------------------------------------------------
Drowning                     20      Poisoning                     2
------------------------------------------------------------------------
Suffocation                  17      Bicycles                      2
------------------------------------------------------------------------
Fire                         16      Medical care                  2
------------------------------------------------------------------------

    In addition, statistics that show other significant risks to young 
people include: \2\
---------------------------------------------------------------------------
    \1\ Harvard University School of Public Health, Kids Risk 
Symposium, March 26-27, 2003 (Kimberly Thompson, M.S. SCP, Assoc. 
Professor of Risk Analysis and Decision Science, Children's Hospital 
Boston, Harvard Medical School Co-Founder/Director of Research Center 
on Media and Child Health; Director HSPH Kids Risk Project.
    \2\ Based on 1997 data from: (1) the National Center for Injury 
Prevention & Control, Centers for Disease Control and Prevention and 
population estimates from Statistical Abstract of the United States for 
1997.

   16 percent of American children under the age of 18 live in 
---------------------------------------------------------------------------
        families with incomes below the poverty level

   4 percent live in households experiencing food insecurity 
        with moderate to severe hunger

   69 percent live in two-parent families, down from 77 percent 
        in 1980

   Birth rate for females (age 15-17) around 26 per 1000

   Substance use rates are high

     21 percent of 12th graders smoke daily

     30 percent of 12th graders have at least 5 drinks in a 
            row at least once in the previous 2 weeks

     25 percent of 12th graders report illicit drug usage 
            in past 30 days

   14 percent of young adults age 18-24 have not completed high 
        school

     8 percent of youths age 16-19 are not in school or 
            working

    Further, as you can see, the risk of death to children from toys 
does not figure prominently in much of the data. The actual rates for 
toys would be about the same as the rate of suicide for children under 
10, which is extremely rare! Important work in creating tools to 
benchmark and catalogue risk is being undertaken and should be 
supported by this Committee and CPSC.
    Compare these childhood risks with the handful of ``toy-
associated'' deaths per year for children from birth to approximately 
age 13 (primarily balloons and ride-on toys like scooters), or to 
CPSC's own annual report that indicates that of fifteen commonly used 
household products, toys had among the lowest number of incidences of 
injuries and deaths. Although there are risks associated with some 
toys, they are clearly very small by comparison, and it is remarkable 
that media attention continues to focus on the small risks associated 
with toys while some very big risks remain underappreciated and 
unaddressed. In a world where perception is reality, where 
misinformation often drives perception, and where some self-proclaimed 
advocacy groups find motives to highlight new, scary and uncertain 
hazards without providing context, it is no wonder that policy makers 
and parents lack context for understanding and managing children's 
risks. Unfortunately, the net result is that we often collectively 
waste scarce financial resources on hypothetical hazards at the expense 
of allocating them efficiently to make children's lives measurably 
safer. Further, this perpetuates a lack of coordination between groups 
that are all arguably committed to helping children; focuses on 
individual issues and agendas instead of children themselves; and 
competition rather than cooperation for the resources to truly protect 
children. This is true at all levels, and anecdotal evidence includes a 
scenario in which, despite years of safe use with no real, measurable 
effects on children, a commonly used chemical in plastic toys (PVC or 
polyvinyl chloride) became the focus of major new stories, needlessly 
frightening parents and politicians worldwide. The wealth of research 
conducted on behalf of national and international industry determined 
that vinyl toys were safe.\3\
---------------------------------------------------------------------------
    \3\ The American Council on Science and Health (ACSH), a panel 
headed by former Surgeon General Dr. C. Everett Koop stated that, 
``Consumers can be confident that vinyl toys. . .are safe.'' This same 
conclusion was reached this year by the Consumer Product Safety 
Commission after considering a report of the Chronic Hazard Advisory 
Panel (CHAP), a body of experts nominated by the American National 
Academy of Sciences.
---------------------------------------------------------------------------
    CPSC's extensive NEISS injury data (National Electronic Injury 
Surveillance System) do not usually give the details of the 
circumstances in which the injury took place. Therefore, when examining 
the data it's not always possible to determine whether the particular 
toy-associated injury was the result of the accident (e.g., a child 
tripping over toys left on the stairs), unintended misuse of the toy, 
or a fault in the toy's design, material content, construction or 
performance. Studies of NEISS data by the CPSC have shown that most 
toy-related injuries appeared to be minor, with hospitalization 
occurring less than half as frequently as the overall average for 
injuries. As illustrated by the CPSC data, the industry's commitment to 
designing and producing safe toys and emphasizing the importance of 
parental supervision and appropriate selection of playthings has made 
toys one of the safest products that can be brought into the home.
TIA Supports The Efforts Of The CPSC
    For these reasons, we support the mission and goals of the CPSC. Of 
course there is room for improvement. However we believe that the 
Commission has made significant progress in the past year at creating a 
more transparent regulatory process. We welcome the opening of 
Commission hearings to testimony from the public. We welcome the 
efforts made to solicit expert advice on ways to enhance recall 
effectiveness and better communicate with the public, recognizing that 
not all recalls involve serious risks of injury or death and the need 
to communicate to the public differently according to relative risk. 
CPSC needs to be judged by how effectively it communicates relative 
risks to the public, not by a count of how many products subject to a 
recall are returned. The latter is a simpleminded approach, since it 
ignores the use, cost and distribution of different products. We 
welcome the seemingly common sense notion that scarce resources should 
be allocated according to demonstrable risk based upon analysis of real 
world data and application of statutorily mandated cost benefit 
analysis (Section 9 of the CPSA/15 U.S.C. Sec. 2003). We support the 
Commission's request for resources to efficiently carry out its 
mission. We think they should be provided with resources to develop 
tools to assess real world relative risks of injury from products and 
should be encouraged to utilize existing resources more efficiently in 
partnership with industry, consumer groups, academia and state and 
local health and safety officials. We also believe that CPSC needs 
funding to update its laboratories.
TIA Recommends CPSA Improvements To Make CPSC More Efficient
    TIA recommends the following changes to enabling Statutes in order 
improve the function of the CPSC:
PSA Section 6 (f)
    Add a new Section 6(f) as follows:

        Any report furnished under subsection (b) of section 15 shall 
        be inadmissible in any civil action in a State or Federal court 
        or in any administrative proceeding.

Rationale: Many firms claim that they are reluctant to report under 
Section 15(b) of the CPSA because of a concern about the possible use 
of such reports in court actions. This provision would provide an 
incentive to reporting by assuring that reports filed under Section 
15(b) will not be admissible in any civil action or administrative 
proceeding (except one brought by the Commission against the 
manufacturer, distributor or retailer). The availability of the report 
to plaintiffs would continue to be subject to the normal rules of 
discovery in civil actions or proceedings, and, this provision is not 
intended to affect the admissibility of the facts set forth in Section 
15 reports.
CPSA Section 20
    Section 20 should be amended by eliminating the reference to 
19(a)(4) and (11) from Section 20(a)(1) and by adding a requirement 
that a violation of Section 19(a)(4) and (11) shall constitute a 
separate violation with a maximum penalty to be set for such a 
violation. Additionally, 20(d)(2) should be omitted.
    Section 20 (c) should have an additional sentence added after the 
second sentence, which states:

        The Commission shall also consider whether a company 
        voluntarily reported, is a first-time offender and whether the 
        penalty sought would be detrimental to the viability of the 
        business as a going concern, resulting in the loss of jobs.

Rationale: The current statute is confusing. Penalties are keyed into 
individual products which are sold when they are not in conformity with 
an applicable consumer product safety standard under the Act or which 
have been declared a banned hazardous product by a rule under the Act 
or fail to meet required filings and performance requirements. A 
violation for a failure to file information required under Section 
15(b), Section 37 or Section 102 should constitute a separate offense 
and is unrelated to the sale of individual products. Currently, CPSC 
assesses fines based upon sales of individual product units which are 
perceived to be subject to a report, whether or not the products are 
defective or violative of standards or rules under the Act. The 
violation involved is the failure to file a report and is unrelated to 
the sale of a product. Currently, the Commission staff does not 
adequately consider and make a distinction between companies filing 
voluntarily, first-time offenders, or its impact on the viability of 
the business and its potential to damage the company's reputation and 
cause the loss of jobs. The omission of the last sentence in 20(d)(2) 
would make it clear that actual knowledge would be required before 
imposition of onerous penalties. The current language is too vague.
CPSA Section 29 (f)
    Add a new section 29(f) as follows:

        (1) For purposes of carrying out this Act, the Commission is 
        authorized to undertake such product safety harmonization, 
        conformity assessment, testing, research, monitoring, 
        coordinating, and other activities as the Commission may deem 
        appropriate, in cooperation with other United States or foreign 
        agencies, governments, or public or private institutions;

        (2) In connection with the cooperative activities authorized by 
        subsection (f)(1), the Commission, unless specifically 
        prohibited by law, and as appropriate, may:

                (A) make use of resources offered by foreign countries 
                participating in improving consumer product safety;

                (B) participate, and otherwise cooperate in, 
                international activities which contribute to improving 
                the safety of consumer products imported into the 
                United States;

                (C) exchange information on consumer product safety 
                research, test methods development, death and injury 
                data, product bans and recalls, proposed product safety 
                standards, and remedial strategies to reduce deaths and 
                injuries associated with consumer products; and

                (D) work to harmonize foreign regulations to make them 
                compatible with U.S. standards, provided that the 
                Commission determines that such amendment is desirable 
                to reduce or eliminate non-tariff trade barriers for 
                U.S. companies posed by foreign safety standards.

        (3) In issuing amendments to its regulations, the Commission 
        shall follow the procedures set forth in this Act.

Rationale: The differences between Canadian and U.S. mandatory toy 
safety requirements illustrate the need to clarify CPSC's authority to 
harmonize international product safety regulations. Canada and the U.S. 
agree in large part on most toy safety requirements. However, there are 
specific cases in which differences in our respective regulations 
contribute to restraint of free trade. This situation is also evident 
with PVC toys. After exhaustive study by the Commission and a Panel of 
Advisors from the National Academy of Sciences, these products were 
determined to be safe. Despite this, certain countries have blocked 
sale of U.S. toys if they are made from PVC plastic, creating a non-
tariff trade barrier based upon ``junk science.'' More important, these 
differences create confusion in the toy industry and among product 
safety experts as to which set of criteria are most appropriate to 
ensure safer products for children. Such harmonization processes will 
be beneficial to other industries that face similar restriction on 
their products in foreign markets. By streamlining the processes 
necessary to harmonize product safety regulations, we can move more 
quickly toward establishing unified standards that facilitate global 
free trade and provide rational equal protection from unsafe products 
for all consumers.
    Additional Clarification of Preemption Provision Should be Added to 
Sec. 26(a) of the Consumer Product Safety Act, Sec. 16(a) of the 
Flammable Fabrics Act, Sec. 18(b)(1)(A) and Sec. 8(b)(1)(B) of the 
Federal Hazardous Substances Act, Sec. 7(a) of the Poison Prevention 
Packaging Act, as follows: \4\
---------------------------------------------------------------------------
    \4\ This is similar to the chaos faced by the industry when states 
fail to defer to the coloration and marking of toy guns under 15 U.S.C. 
Sec. 5001(g).

        This provision expressly preempts and supersedes any state or 
        local law, rule, regulation, or standard, providing for 
        registration, certification, payment of fees, or any pre-sale 
        conditions or requirements relating to any rule, standard, 
        regulation or requirements applicable to any risk of injury 
---------------------------------------------------------------------------
        promulgated by the Consumer Product Safety Commission.

Rationale: From time to time, states have enacted registration, 
certification, fee requirements and other pre-sale requirements as a 
condition to the sale of federally compliant product in the state. 
These unduly burden and hamper the free flow of commerce and expose 
manufacturers to multiple state or locality registration, 
certification, pre-sale conditions and fee requirements, even though 
these products are fully in compliance with Federal standards, 
regulations or requirements. This burden would be eliminated by the 
enactment of this requirement. This change would not affect the ability 
of states to enforce existing CPSC regulations or third party tort 
actions. This is consistent with existing provisions in the Acts which 
require localities to use identical requirements.
Conclusion
    TIA is a strong supporter of CPSC. We believe additional funding 
should be provided to develop effective models so that the data 
currently collected can be better analyzed in order to prioritize and 
catalog risk to the public using objective criteria. If the Agency 
requires funding to utilize outside expertise in order to create risk-
benefit analysis models, it should be provided. Cost-benefit analysis 
should continue to be a crucial requirement prior to imposition of 
rules. This is especially important in a global economy and at a time 
when the U.S. is faced with increasing competition and a soft economic 
outlook. The integrity of due process requirements currently required 
under the enabling statutes should be strictly adhered to. Objective 
measures should be used to determine civil penalties and a distinction 
needs to be made between penalties imposed for the sale of violative 
product and reporting failures. Actual knowledge should be a 
prerequisite for the imposition of penalties. The Commission should be 
encouraged to explore creative ways to provide valuable information to 
consumers. They should be lauded for recent efforts in this regard. The 
flexibility and safeguards currently provided in the existing statutes 
should be maintained and the Agency should not be subject to micro-
management. We look forward to continuing to work with the Agency to 
promote child health and safety.

    Senator Fitzgerald. Thank you very much.
    Mr. Polk?

STATEMENT OF ROBERT POLK, ON BEHALF OF THE NATIONAL ASSOCIATION 
                     OF STATE FIRE MARSHALS

    Mr. Polk. Yes, thank you, Senator Fitzgerald.
    My name is Robert Polk. I appear before you on behalf of 
the National Association of State Fire Marshals. As you know, 
our association represents the most senior fire official in the 
50 states and the District of Columbia.
    Our mission is simple. It 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, and we thank you for this opportunity to 
testify today.
    Senator Fitzgerald, I have a longer, more defined statement 
that I would ask be made part of the record. In my limited 
time, I would wish to make a few observations and 
recommendations for this Subcommittee as you consider the 
reauthorization of the Consumer Product Safety Commission.
    The National Association of State Fire Marshals does not 
support wholesale changes to the various pieces of legislation 
that the Commission oversees. It is our view that the Consumer 
Product Safety Act, the Flammable Fabrics Act, and the other 
such laws, provide adequate statutory framework to protect the 
public and gives the Commission the powers that it needs.
    It is clear, however, that the Commission has generally not 
kept pace with changes in the manufacturing, distribution, and 
retailing world. A perfect example of this is the 50-year-old 
wearing-apparel fire-safety standard that is so woefully 
inadequate that it has been reported that newspaper can pass 
the test. This lack of effective and current standards has 
implications for issues such as tort reform as it opens the 
apparel industry to a litany of lawsuits. The Commission has 
the power and, we believe, the information it needs to set a 
real standard.
    Although some progress is being made--and the Commission's 
new Children's Fire Burn Injury Reporting System is evidence of 
this--it is clear much more needs to be done.
    Beyond the basic statutory framework in which the 
Commission operates, there are improvements that the National 
Association of State Fire Marshals believes can and should be 
made to enhance safety.
    First, trade groups and industry associations should be 
added to the list of groups obligated to report to the 
Commission should they come into possession of information that 
suggests a given product is unsafe. Many such groups conduct 
independent studies and research. It stands to reason that if 
members companies are required to report to the Commission, so, 
then, should those groups that represent their interests.
    Second, in an ever-globalizing marketplace, we need to make 
sure that all the agencies of the Federal Government are 
working cooperatively to ensure that imported goods are safe 
for Americans. This will require greater interagency 
cooperation between the Commission and agencies involved in the 
making of trade policy, such as the U.S. Trade Representatives, 
State Department, and the Customs Service.
    Third, the Commission should take a more active role in 
strengthening and defending voluntary standard development and 
compliance programs. How is it that we have roughly 20,000 
fires per year from electrical appliances that are supposed to 
be in compliance with voluntary standards set by Underwriters 
Laboratory? These fires resulted in 100 deaths and nearly 800 
injuries during 1998, which is the latest year for which we 
have data.
    Let us also be aware that some industries prefer the 
mandatory approach. The American Furniture Manufacturers 
Association recently asked for a mandatory national fire safety 
standard for upholstered furniture in a letter to the 
Commission dated May 2, 2003.
    Finally, the civil penalties prescribed in the Consumer 
Product Safety Act need to better reflect the era of large 
corporations. Take for example what has been discussed today, 
Wal-Mart, which was recently fined $750,000 by the Commission, 
as a retailer, for failing to report a safety problem. This 
amount is equivalent to approximately 1 hour's profit for Wal-
Mart during the year 2002. One hour's profit. Large 
corporations have little incentive to work hard on ensuring 
safety when the repercussions are so minor. A more flexible 
penalty system, with higher maximum fines, would give the 
Commission greater leverage.
    If Congress is serious about ensuring the safety of the 
products that we use every day, we must pursue innovative 
solutions for the 21st century problems we face. Enhanced 
interagency 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. And on behalf of myself and all 
members of the National Association of State Fire Marshals, we 
would like to wish Chairman Stratton a safe and uneventful 
return from our upcoming conference.
    [Laughter.]
    [The prepared statement of Mr. Polk follows:]

     Prepared Statement of Robert Polk, on Behalf of the National 
                   Association of State Fire Marshals
    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 U.S. 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 U.S. 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.

    Senator Fitzgerald. Well, thank you, all of you, for your 
testimony.
    I think most of you brought up the issue of the civil money 
penalties, and there is a difference of opinion about whether 
the cap should be raised or increased.
    Dr. Pittle, you were in favor of it. You mention that, in 
the case of large corporations, a $1.6 million fine is the 
equivalent of a $2 parking ticket in New York City, ``Why not 
just go ahead and pay it?'' Others of you thought it should be 
raised. Others of you thought it should not be raised.
    With respect to those who favor raising it, like Dr. Pittle 
and Mr. Polk, do you not think the tort liability is a much 
more serious concern for the big companies, along with the 
adverse publicity?
    Mr. Polk. Well, I would respond by saying that, in the case 
of Wal-Mart, they did not manufacture the product for which 
they were fined. They were fined for failing to report a 
product that they were retailing to the consumer. But, again, 
we support more flexibility in that system. Whether or not it 
should be lifted entirely or raised is a matter for the 
Commission and Congress to decide. But we feel, when you are 
able to negotiate a settlement, knowing, going in, what the 
maximum penalty can possibly be, it gives the corporations in 
America somewhat of a competitive advantage going into that 
negotiations process.
    Senator Fitzgerald. Mr. Gold, do you want to respond to 
that?
    Mr. Gold. Yes. I have not heard or seen any evidence--and I 
will just say--and Commissioner Moore, kind of, could back me 
up on this--that the current penalty cap is not working.
    I mean, again, what we are talking about is incentives 
here. There are a lot of different ways go create incentives or 
disincentives. There is no doubt in my mind that it could be 
that it is like a $2 parking ticket for a large company. But 
the publicity from a large company violating a safety standard 
or coming to--having problems with safety standards is going to 
be far, far greater. That could be millions and millions and 
millions of dollars.
    The way the marketplace works, the fact is, with our 
customers, we need to have an honest relationship with them. 
They need to know they can trust us. It is not in our interest, 
in a business group's interest, to pretend that relationship 
does not exist.
    Senator Fitzgerald. Dr. Pittle, is this true?
    Dr. Pittle. Yes. Well, in a perfect world, every 
manufacturer would read the Consumer Product Safety Act, look 
at Section 15(b), and affirmatively report whenever they find 
that one of their products could create a substantial hazard. 
Unfortunately, this is not a perfect world, and that is why 
there are penalties for people who do not act perfectly. And I 
do not think we can rely on the tort liability system to do 
that, because that is a post-injury mechanism, an important 
one.
    Here, we are talking about--the name of the game is 
``injury prevention.'' We are trying to get the attention of 
manufacturers, distributors, and retailers to give an early 
warning that they see a problem. There is no penalty for having 
a problem. The penalty is for covering it up and letting the 
complaints and the injury data pile up in your records and not 
notifying the agency in a timely manner.
    Some of the cases in which they have recently issued a fine 
involve companies that have had a dozen recalls prior to that, 
and it is not as though they do not know what they are doing. 
They know what they are doing. They are making a calculated 
business decision that $1.65 million, at max--``What's the big 
deal? I mean, we are a multimillion-dollar or billion-dollar 
corporation.''
    The attention-getting by taking the cap off is that this is 
not certain anymore. And it is the hope that manufacturers will 
give this a more serious attention. They have got to know that 
the agency welcomes them with open arms when they come in and 
say, ``I think we have a problem.'' They do not penalize them 
for that. It is when they discover, through a death certificate 
or some kind of report, that they go back to the company and 
find out that festering into their files are hundreds of 
complaints and people saying, ``I've been injured,'' or 
somebody has been killed. That is what they get fined for. That 
is calculated misbehavior. And I think that they ought to take 
the cap off and let them walk in there--and of course there is 
negotiation.
    You asked before, ``Did anybody ever go to the maximum?'' 
The fact is, you always negotiate down from the maximum. That 
is just the way it is. There should not be a maximum. And then 
I think manufacturers would give it greater attention, the 
attention that it needs.
    Senator Fitzgerald. Mr. Klein?
    Mr. Klein. Thank you.
    I know what Chairman Stratton said before about, you know, 
in a sense, making this a lawyer relief act. And I am a 
recovering lawyer in the 12-step program----
    [Laughter.]
    Mr. Klein.--so I do not put myself in that category. But 
part of the problem--well, first of all, we will get to the 
manufacturer's reputation. Again, with a toy company, as soon 
as somebody says a toy is unsafe, that company is in trouble. 
It either has to do something immediately to fix the product, 
it has to recall the product, it has to repair the product. And 
the reputation of that company is on the line.
    But part of the problem is that Section 15 is vague, 
because it talks about what is reasonably foreseeable abuse of 
a product and what a reasonable person would know to be an 
abuse of a product. And if you do not fit into that description 
and you do not report, because you do not think that is 
reasonable abuse, then you could be subject to these caps.
    Senator Fitzgerald. That is pretty much the same as a tort 
standards, is not it?
    Mr. Klein. Well, but--well, you have a jury deciding what a 
reasonable man is in a tort standard. And a jury may have a 
totally different opinion than what the Commission might have. 
So that is the question. And then you do get into the area of 
how much is it going to be worth to a company to litigate and 
to try to deal with that reasonable foreseeability of abuse.
    Senator Fitzgerald. Ms. Weintraub?
    Ms. Weintraub. Yes, Senator Fitzgerald. CPSC was created 
precisely because the tort system alone was insufficient to 
protect consumers from unsafe products. So the role of the 
agency----
    Senator Fitzgerald. It was created a long time ago. We have 
a lot more trial lawyers today, though, than we did back in the 
1970s, do we not? At least in my State of Illinois, I think we 
do.
    Ms. Weintraub. I do not know.
    But, in addition to that fact, and the fact that, as Dr. 
Pittle said, the tort system does not work necessarily at 
preventing injuries before they happen, we know that publicity 
alone does not work, and we know that the current caps hinder 
the entire system, because there are repeat offenders. For 
example, CPSC levied a fine of $725,000 against Cosco, which is 
a children's products manufacturer, in 1996, for failing to 
report 96 known toddler bed and guardrail entrapments and one 
death associated with its toddler beds. So this was 96 known 
injuries, one known death.
    Again, in 2001, CPSC again levied a fine against Cosco, 
along with another company, Safety First. And this was a record 
combined fine of $1.75 million after failing to report 2 deaths 
and 303 injuries from a number of products. So this shows that 
the system, with the caps in place, is not working, and it is 
really failing as acting as a deterrent.
    Senator Fitzgerald. Mr. Gold, could you give us concrete 
examples of when vague implementing regulations of Section 15 
substantial product hazard reporting provisions have caused 
confusion on the part of manufacturers in determining what 
their reporting and corrective duties are with respect to 
particular products?
    Mr. Gold. You know, what I can do--I mean, we have a 
coalition of 65 different manufacturers and associations. I 
would be glad to collect that. I know there are cases in which, 
for instance, the--well, what I--the best thing for me to do is 
to just tell you that I can go back to the coalition and 
collect it. I would be glad to, in the next 2 days, submit it 
to the Committee.
    So, at this point, I simply know that we have had the--
enough of our coalition members have told us, at the NAM, that 
this is a problem and they are having problems. And in fact, I 
could, perhaps, even point to the cases we are simply talking 
about, not necessarily the most extreme cases. But when you 
tell me somebody has filed a late--is given a penalty for a 
late filing, I might respond to--that could be a case in 
which--simply in which that company did not--misunderstood or 
did not have a clear understanding of what late was. So----
    But I would gladly submit examples in the next 2 days, if 
you would like.
    Senator Fitzgerald. Dr. Pittle?
    Dr. Pittle. Can I add--that is an interesting juxtaposition 
here. The cases we are talking about are when people have had 
hundreds of complaints over a period of years. It is not a 
matter that you are 2 days late or a month late in reporting. 
The agency is not unreasonable. What they do when they levy one 
of these penalties is that it is just simply an egregious 
misbehavior on not filling the responsibilities clearly spelled 
out in the law. I mean, for the last 30 years, the CPSC staff 
has traveled the world, all over this country, giving seminars 
to manufacturers, explaining to them what they mean by what is 
a substantial hazard and when is a time to report.
    The agency staff has asked people to come in and say, 
``Come in and show us what the problem is. If there is no 
problem, you will walk out, and there is not even a file opened 
on you.'' They are bending over backward to reach out to 
manufacturers and say, ``Tell us, before we wind up with a 
bunch of deaths or a bunch of injuries,'' because that is what 
Congress intended this act to do, is to head off and prevent 
things that are known to the manufacturers and not known to 
other consumers.
    And so I think it is--it feels distorted to me to paint 
this as if everybody is kind of confused and nobody knows what 
to do. The agency staff has tried to make it very clear to 
businesses what their responsibilities are. They know what 
those responsibilities are. They may not have product liability 
lawyers working for them, but they have other lawyers telling 
them, ``There's probably a way to get around this if you do not 
quite report now. You can always decide that it is not quite 
clear.'' Well, the fact of the matter, it is clear, and you 
want to resolve these uncertainties in the favor of the 
consumers. I mean, if the people are really concerned about 
their customers, they will go to the agency and check it out. 
There is no penalty for checking it out. The penalty comes for 
letting it sit.
    Senator Fitzgerald. Mr. Klein, I do not know if you have 
anything to add. You complained of vagueness in the standards, 
as well, in Section 15.
    Mr. Klein. Well, you know, another part of the problem with 
the caps is, they make no distinction between what are, in 
fact, safety violations under Sections 19(a)(1) and (2) and 
minor technical reporting, and it is all part of the same bag. 
There is no distinction between major violations, those that 
actually are safety hazards that have resulted in serious 
bodily harm or grievous injury, and those that have merely been 
late filings. Not late filings that are 10 years late or 20 
years late, but simply late.
    And I think, as Mr. Gold said, I mean, he can provide some 
examples of those situations, and so I think that is what the 
Committee really needs to look at. And whether or not----
    Manufacturers of products, I mean, their reputations, for 
the most part, are very important to them. And again, I think 
what you were suggesting before, between public opinion, tort 
liability, and a $1.65 million fine, all taken together, have a 
salutary effect on how a company is going to behave or that 
company will not be in business.
    Senator Fitzgerald. Did you want to respond, Dr. Pittle?
    Dr. Pittle. I am sorry. Somehow there is always another 
side to these things. They do not levy fines for minor 
technical violations. They levy fines when someone has an 
egregious act that is right there before them--many, many 
complaints, deaths and serious injuries that have been known 
for a long time, sometimes 3 or 4 years, or longer.
    So General Electric did not get fined because they were a 
day or a month late when they--about those dishwashers. They 
were 10 years late.
    So there is a reason why this is there. This is the power 
that Congress gave, because this is a small agency with a very 
large job to do. So it has to reach out to the manufacturing 
industry to act in the affirmative to consider the customer's 
safety as important as it is the sale. And the only way they 
can do that is to get them to come in and talk about problems 
and give them a safe haven to talk about them. And if they sit 
on the information, that is when there is a fine.
    So I have to go back to something else. The agency has 
published explanation, documents trying to educate the 
manufacturers affected, and they have gone to great lengths to 
make sure that people do know what their responsibilities are. 
But some of these manufacturers that we are talking about have 
had a dozen or more recalls. It is not as though this is a 
surprise to them. This is just, unfortunately, a way of doing 
business.
    I wanted to just tell you one thing that we were hoping--
and we have laid out in our testimony--just in the area of 
children's nursery products. Five of the largest companies--
Doral, Graco, Century, Kolcraft, and Evenflo--have had 60 
recalls in the last 10 years. And these are mature companies. 
This it not into a product line where they have never been 
before. This is their business. And to have 60 recalls tells me 
there is something not right here. There is something that is--
I am just an old country engineer, and so I do not know about 
this lawyer stuff, but I have to think that there is not the 
right kind of prototype testing or the right kind of pre-market 
testing. Something is wrong when manufacturers have this kind 
of recall history, because parents look to these names, and 
they go in and they buy a product for their kid. And these are 
involuntarily risk-takers. They cannot make a decision for 
themselves. They are going to rely on their parents. Their 
parents are relying on information, like the advertising, and 
the names they trust. 60 recalls--there is something wrong.
    I would think that maybe this Committee could convene a 
hearing and ask the manufacturers, ``What's going on? Why are 
you all not able to put a product out that does not wind up in 
a recall?'' There is something wrong.
    Mr. Klein. One quick thing, Mr. Chairman. Fisher-Price, 
that $1.65 million fine against Fisher-Price for those Power 
Wheels, it was a question of--nobody was ever hurt, no injury 
was ever reported with those. The question was, they failed to 
report because they considered what was happening with those to 
be unreasonable abuse. People were bypassing the fuse and 
putting pennies into the product, and it was causing combustion 
and, therefore, potential fire hazard. And they were hit with 
that fine. Again, it was a failure to report. But the question 
was, was it something that they could foresee? And the answer 
was, ``Yes, you should have foreseen that people were going to 
put pennies instead of fuses.''
    So I do not know about the 10 years and the other examples; 
I am just giving you an example that was given before about 
Fisher-Price.
    Dr. Pittle. May I?
    Senator Fitzgerald. Doctor?
    Dr. Pittle. There is another side to this. There are 116 
fires. At least. If the fuses are going out and people are 
putting pennies in them, that is really dumb on the part of the 
consumer. And so we should say that is dumb on the part of the 
consumer. I do not give them any credit for that. But the 
manufacturer is seeing that there is something going on in 
their product in which the electrical system is causing the 
fuse to keep blowing. There is something that could create a 
fire. There could be something--I do not know--down at the end 
of the table--people should not be putting pennies in things, 
because houses burn down.
    That was something that should have been reported to the 
Commission. They would not have gotten a bad mark or a press 
release or the evening news. They would have walked in and 
said, ``We've got a problem here.'' And the staff would have 
worked with them. Those engineers spend time trying to help 
manufacturers develop a competent fix.
    But to sit on a 116 fires, that was inappropriate. That is 
not getting to the will of Congress to say, ``Let's get ahead 
of the curve. Let's not wait until there's a body count. Let's 
not wait until people''--we can demonstrate that it was a 
hazard. Remember, the act says you are supposed to report if 
your product ``could'' create a substantial hazard, not that it 
already has demonstrated that it was. That is too many deaths 
and injuries to prove that.
    Senator Fitzgerald. I want to move to a different topic 
now, and this is really going to be my last line of 
questioning. You have all been very good, and I appreciate your 
being here. But I did want to ask about the amusement park 
rides.
    I gather the CPSC lost authority to regulate amusement park 
rides back in 1981, I think it was. Dr. Pittle, you mentioned 
it. I think, Ms. Weintraub, you mentioned it. Mr. Korn, I do 
not think you brought it up.
    Mr. Korn. In the written statement.
    Senator Fitzgerald. In your written statement? I do not 
know if Mr. Klein or Mr. Gold want to defend--you have no dog 
in this----
    [Laughter.]
    Senator Fitzgerald.--in this fight. Nobody is up here to--
the Fire Commissioners do not have a dog in this fight either. 
Maybe we should have had somebody here from the amusement park 
industry, because I am sure they probably were instrumental in 
trying to get the CPSC out of their affairs.
    Mr. Gold. I would be glad to alert them, if you are looking 
for information. They are a member of our coalition, even 
though they are not manufacturers. So----
    Senator Fitzgerald. Oh, they are a member of your 
coalition? OK. OK.
    Mr. Gold. So if you would like, we can say you are looking 
for information immediately----
    Senator Fitzgerald. OK.
    Mr. Gold.--on that.
    Senator Fitzgerald. OK.
    Well, Dr. Pittle, is there evidence that the states----
    Dr. Pittle. Oh, yes.
    Senator Fitzgerald.--do not have the ability to do this and 
have not been doing a good job?
    Dr. Pittle. I was Acting Chairman of CPSC at the time that 
this compromise took place--not with my input; it just was 
handed to us--and it was purely a political event that took 
place up here. It had nothing to do with the merits of whether 
we could effectively--or we were ineffective.
    What the ultimate result is, is that these rides, which 
appear in different parks throughout the country, some of the 
same rides--there is no Federal presence, there is no way to 
collect the data. CPSC, because they have no authority, is 
obligated not to spend one penny on this, so they stand back 
and watch.
    So if you find that someone dies in a roller-coaster 
accident or some kind of ride in one State, and the same ride 
appears someplace else, there is nobody to collect the 
information, share it with the other states----
    Senator Fitzgerald. You used to collect the information, 
nationwide data? Did you do that at the CPSC?
    Dr. Pittle. I would have to check--that was back 20-some-
odd years ago. I do not remember. Because it might have been in 
the NEISS injury data system. I cannot say for sure. But I know 
that, since 1981, there is no single source of this 
information. And so----
    Senator Fitzgerald. Have accident rates or injury rates 
gone up since then?
    Dr. Pittle. The injury rates have gone up. There is 55 
deaths in the last--it is in our testimony--in the last so many 
years--the last 15 years.
    The important thing is that some states are more aggressive 
and more assertive than others, and that there is no way to 
share among the states about what is going on. None of them 
have the authority, nor take the resources, to notify the other 
49 states about what happened with their state.
    We think that it makes no sense for a Federal--the only 
Federal presence in the marketplace today on these kinds of 
products, on these types of products, is CPSC, and it seems 
like they should have the authority, if nothing else, just to 
collect data and investigate the accidents.
    Senator Fitzgerald. Alan Korn?
    Mr. Korn. Yes, Senator, I--there is a carousel that sits 
right on the mall, and I have a three-year-old. I have taken my 
three-year-old three or four times, and I sit on the bench 
outside and watch my three-year-old go around on that carousel. 
And it strikes me--I am a District resident, and it strikes me 
that this carousel may not be the top priority of the District 
of Columbia. It could be. I do not know. Based on some of its 
other issues, I am tending to think not. So I think to myself 
as I sit there, I sure would like to have at least the CPSC to 
have some authority to look into this product in the fixed-site 
scenario, whether or not it is up at Hershey Park or Dollywood, 
down in Tennessee, to spot patterns as data collect, as Dr. 
Pittle has said.
    The one thing I will say, though--and that seems very 
reasonable to me--if the Committee were to expand that 
jurisdiction--I have been told by staff, and, quite frankly, I 
agree 100 percent--that if you were to do it, it would require 
probably a lot, a boatload, of money for the CPSC to get an 
expertise on these types of fixed-site amusement parks. So----
    Senator Fitzgerald. It is a lot of money. There is no 
doubt. That is why maybe, Dr. Pittle, you are only recommending 
that they have the ability to collect data and keep statistics.
    Dr. Pittle. If they have the authority to, for example, say 
to the fixed site--they do not travel; they are not on wheels; 
they are fixed--and so if they have the authority to require 
that each of them send in all the accident information, deaths 
and injuries, they have a central clearing house, they put that 
in NEISS. Now, there is something--it is amazing what 
information will do. I think that is probably another way of 
saying that is why 6(b)(2) ought to be abolished. Because when 
people have information, they can make intelligent and informed 
choices.
    Mr. Korn. And spot trends and report----
    Senator Fitzgerald. And spot trends?
    Mr. Gold. Let me just respond. If he is talking about 
getting rid of 6(b)(2), involving third-party allegations--I 
just want to note that third-party allegations can have 
inaccuracies, they can be unverified, it can be unfair 
information. All it says is that a company can look at this. 
And I think that companies have rights and duties, in some 
cases, to protect their reputation before information gets put 
out by a Federal agency.
    Senator Fitzgerald. And from competitors, too, calling in, 
could it not?
    Mr. Gold. Well, there is another section for that. But, in 
this case, it is simply in terms of--I just do not think the 
hurdle is particularly high for a company to be able to simply 
look at the information that is being submitted by a third 
party, an allegation by a third party.
    Mr. Klein. I just quickly want to agree with that, Senator. 
Remember, what is being reported is raw information. It is 
unconfirmed, uncorroborated. And in fact, like you said--under 
an FOIA request, which apparently is filed mostly by 
competitors and trial lawyers, what it can do to a company's 
reputation if this raw data, which has not been looked at by 
anyone, gets out to the public--again, just the inkling that 
something is unsafe, and the company's reputation can go down 
the hill.
    Basically, what is in there--there is a 30-day period that 
allows companies or individuals to comment about the accuracy 
of the information before the Commission decides what to do 
with it. And we think that was wisely put in place by Congress, 
and we would also oppose removing 6(b).
    Ms. Weintraub. I would just like to clarify that no other 
health and safety agency has this type of prohibition. It is 
extreme, and it has a really--the effect of delaying or denying 
information. Some of the information would have--most, I am 
sure, actually--would not have an effect on competitive issues 
or issues that the company would not want someone to know when 
it comes to the intricacies of their product. Most of it is the 
type of information that any other agency would give over right 
away. But this creates a whole other level for the company, for 
the regulated company, to basically censor the information.
    Dr. Pittle. Could I answer that?
    If you were to ask for information from NHTSA, you would 
get it, and these are complaints from consumers. And you know, 
people have their own opinions about what is wrong with their 
car. We do not live in a censored society, but CPSC does live 
in one. And it is--if you were to ask the members of the press, 
over there, about their ability to get product information, 
categorically or specific, that has anybody's name on it, they 
will tell you that it takes either forever or never, because of 
the process. It is not just 30 days to give the company the 
opportunity to comment on it. Then it comes back, and then 
there is a wrangling in how it is going to go out, and the 
threats of lawsuits and everything else, and it has come to a 
halt. It is very hard to get information.
    CPSC is--I remember when I was being--during my 
confirmation hearings, virtually every Senator sat there and 
said, ``You've got to make sure that you let the public know 
about hazards.'' We did not have the 6(b) restrictions then. 
``You have to make sure that the consumers get the information 
in a timely way so they can make informed decisions that may 
head off regulation.''
    It is now the reverse, and there is nothing--the 
marketplace is free of ideas that are not perfect when they go 
out there, and people talk about it as everybody talks back and 
forth. Right now, that safety information about cribs and 
strollers and bicycles and everything else is kept locked up, 
even a newspaper article, which becomes ridiculous.
    It really ought to be taken off. It is really painful for 
consumers.
    Senator Fitzgerald. Mr. Gold--and this is the final 
question--do you want to say anything regarding ATVs? There 
have been a lot of statements made here today about this issue.
    Mr. Gold. No, actually, you know what? We do not do 
product-specific in the coalition. And the NAM, in fact, does 
not do industry-specific. I mean, what we do is, we try to 
cover the broad--what is of interest to all of our members. We 
would leave it to the individual industry representative to 
discuss that.
    Senator Fitzgerald. OK. OK. I did want to leave that option 
out there. And if any of your members want you to submit a 
written statement, I encourage them to do so. I think, going 
back to Commissioner Stratton, who noted 111,000 accidents that 
have resulted in trips to the emergency rooms just in the last 
few years--that is starting to catch some attention.
    All of you, thank you very much. You were all very good, 
and we appreciate your being here.
    I am not going to take on the carnival industry myself. 
About a year ago at this time, Ken Lay, from Enron, sat where 
Alan Korn is sitting, and I compared him to a carnival barker, 
and I said, ``But that might not be fair to carnival barkers, 
because a carnie will at least tell you up front that he is 
running a shell game.''
    [Laughter.]
    Senator Fitzgerald. Well, I heard from carnival barkers all 
over the country----
    [Laughter.]
    Senator Fitzgerald.--and I did not know there were so many 
of them. And we immediately heard from them.
    So thank you all very much. I appreciate your being here.
    [Whereupon, at 4:30 p.m., the hearing was adjourned.]

                                  
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