Order Code RS22821
February 27, 2008
Consumer Product Safety Commission:
Current Issues
Bruce Mulock
Specialist in Government and Business
Government and Finance Division
Summary
The Consumer Product Safety Commission (CPSC), one of the agency’s two
current Commissioners stated recently, is at a crossroads. According to CPSC
Commissioner Thomas Moore, either Congress will reverse the agency’s steady decline
or the CPSC will become so weakened as to be irrelevant.
Created in the early 1970s, the CPSC is a small agency by Washington standards
(slightly more than 400 employees and a $62.5 million FY2007 appropriation) charged
with a seemingly overwhelming responsibility: to protect American consumers against
death or injury from unsafe products, including imported products. A series of high-
profile product recalls — most notably of children’s toys imported from China — has
focused attention on the CPSC’s resources, including its legal authority, for the task at
hand. Legislation (H.R. 4040 and S. 2045) to strengthen the Commission is being
considered.
The CPSC is but one part of growing congressional concern about the protection
being afforded American consumers from unsafe imports. Food (pet food as well as that
intended for human consumption), drugs, and products fall under the jurisdictions of
other federal regulatory agencies. This report will be updated as events warrant.
About the Agency
The Consumer Product Safety Commission is perhaps best understood in the context
of the surge of the consumer protection movement of the 1960s. Beginning with Ralph
Nader’s efforts to dramatize the problems of auto safety, a general interest in product
safety was stimulated. The Congress responded by passing a series of laws dealing with
auto safety, toy safety, radiation safety, fabric flammability, and child resistant packaging
for hazardous household substances. These laws — as well as several dating from the
1950s — were, in the opinion of some observers, neither comprehensive in scope with
respect to the wide range of consumer products nor adequate in protection.
While industry was originally opposed to a federal regulatory approach, by the early
1970s, the National Association of Manufacturers agreed there was a need for Congress

---

CRS-2
to pass a product safety law.1 A key reason was because manufacturers were increasingly
having to contend with a complex and confusing assortment of state laws, and the
prospect of having to deal with a unified regulatory approach appeared attractive.
Although there are other historical factors, the CPSC owes its existence primarily to
the work of the National Commission on Product Safety (NCPS). Legislation was
introduced in 1966 and the following year P.L. 90-146 authorizing the NCPS was
approved. In March 1968, President Lyndon Johnson appointed the seven-member,
bipartisan Commission to “conduct a comprehensive study and investigation of the scope
and adequacy of measures now employed to protect consumers against unreasonable risk
of injuries which may be caused by hazardous household products.”2
The agency’s statutory purposes are to (1) protect the public against unreasonable
risks of injury associated with consumer products; (2) assist consumers in evaluating the
comparative safety of consumer products; (3) develop uniform safety standards for
consumer products and minimize conflicting state and local regulations; and (4) promote
research and investigation into the causes and prevention of product-related deaths,
illnesses, and injuries.
In addition to the authority assigned to the CPSC by its enabling legislation, major
consumer programs were transferred to the new agency from the Food and Drug
Administration, the Health, Education and Welfare Department (now known as Health
and Human Services), and the Commerce Department. Included were the Federal
Hazardous Substances Act of 1960, as amended by the Toy Safety Acts of 1969 and 1984
and the Child Protection Amendments of 1966, the Poison Prevention Packaging Act of
1970, the Flammable Fabrics Act of 1953, and the Refrigerator Safety Act of 1956.
The CPSC was designed to be relatively small. Rather than relying on thousands
of inspectors, the agency relies on the onus placed on firms by its enabling statute.
Section 15(b), for example, requires manufacturers to report unsafe products to the
Commission. This general approach appears to have worked reasonably well for
domestically produced consumer products, because of the nation’s regulatory regime.
When it comes to imported products, however, the absence of key factors may make
safety oversight more problematic. In China, for example, inspections cannot — with
anything approaching confidence — be left to Chinese factory owners. China reportedly
suffers from the absence of a rigorous regulatory system, endemic problems of
corruption, and a lack of a free press.3
1 “Product Safety: Stricter Law in Congressional Mill,” Congressional Quarterly, Dec. 18, 1971,
p. 2629.
2 P.L. 90-146, Section 2(a), Nov. 20, 1967.
3 Edwin S. Steinfeld, “The Rogue That Plays by the Rules,” The Washington Post, Sept. 2, 2007,
p. B3.

---

CRS-3
Recent Recalls
Beginning in spring 2007, newspaper stories began appearing with increasing
regularity about dangerous and sometimes deadly defects in imported products —
principally products produced in China.4 First came reports about toothpaste
manufactured in China containing chemicals unsafe for human consumption. Then,
awareness of unsafe products was brought home to millions of pet owners when it was
discovered that some pet food manufactured in China contained melamine contamination,
which was blamed for causing kidney failure in hundreds of animals. Subsequently,
health and safety concerns were raised about seafood, tires, and chemical and
pharmaceutical products.5
Throughout the summer of 2007, additional recalls of toys appeared. Some involved
danger because of loose magnets, some because of beads containing a toxic chemical if
ingested, and toy ovens with the potential for finger entrapment and burn hazards. A
large number of recalls involved jewelry and painted toys containing unsafe levels of
lead.
Thus, it is not surprising that there is a concern among many American consumers:
If all these problems have been detected or uncovered in spite of various underfunded and
understaffed inspection systems, have we been seeing just the tip of the iceberg?
CPSC Funding Reflects Increasing Congressional Concern
Throughout the summer and fall of 2007, appropriators took note of the growing
concerns about the adequacy of the agency’s funding. At oversight and appropriations
hearings in both the House and Senate, witnesses from consumer organizations, industry,
and the agency were among those who advocated providing CPSC with more money to
get the job done. The CPSC’s FY2007 budget was $62.27 million. The House,
following the recommendation of the Appropriations Committee, proposed increasing the
agency’s appropriation to $66.83 million for FY2008. For its part, the Senate proposed
$70 million. In the end, under the omnibus funding measure (H.R. 2764), CPSC received
$80 million for FY2008, an increase of $17.7 million for FY2008, or 28%.
The appropriators directed CPSC to use its additional funding to increase staff,
workspace, and information technology resources. In particular, appropriators instructed
the agency to hire in the areas of hazard identification and reduction as well as
compliance and field operations.
Consumer groups and others have repeatedly expressed concerns over the CPSC’s
staffing level. In 1977, three years after the Commission opened its doors, it had a staff
of 900. The staffing level has declined sharply over the past three decades from a high
of 978 in 1980. The budget for FY2007 culminated a two-year reduction of full-time
positions (FTEs) from 471 to 420. The Commission’s request for FY2008 anticipated
4 For more information see CRS Report RS22713, Health and Safety Concerns Over U.S. Imports
of Chinese Products: An Overview, by Wayne M. Morrison.
5 For an overview of issues concerning U.S. food imports from China, see CRS Report RL34080,
Food and Agricultural Imports from China, by Geoffrey S. Becker.

---

CRS-4
a decrease of an additional 19 FTEs. All indications are that the CPSC will substantially
increase its staffing level over the next few years. In the House, H.R. 4040, the
Consumer Product Safety Commission Modernization Act, passed unanimously (407-0)
in December 2007. That bill would authorize $80 million for FY2009, $90 million for
FY2010, and $100 million for FY2011. S. 2045, currently pending in the Senate
(discussed below), also calls for substantially increased authorizations.
Import Safety Working Group
As noted earlier, the CPSC is but one agency involved in the problem of unsafe
imports. Food (pet food as well as that intended for human consumption), drugs, and
products (e.g., tires and goods associated with business and commercial application) fall
under the jurisdictions of other federal regulatory agencies.

On July 18, 2007, President Bush issued an Executive Order (E.O. 13439)
establishing the Interagency Working Group on Import Safety.6 The working group
comprises senior administration officials. It includes the Secretaries of Agriculture,
Commerce, Health and Human Services (HHS), Transportation, and Homeland Security;
the Administrator of the Environmental Protection Agency; and the Chairman of the
CPSC.

HHS Secretary Michael Leavitt, who chairs the working group, presented an Import
Safety Action Plan to President Bush on November 6, 2007. Noting the sheer magnitude
of the import-export enterprise, the plan concludes that the United States cannot inspect
its way to safety. Rather, the plan presented a number of short- and long-term
recommendations designed to improve the safety of imports entering the country. The
recommendations include creating a stronger certification process, encouraging various
“best practices,” increasing transparency, exchanging import data, increasing U.S.
presence overseas, enhancing standards, and strengthening penalties.
The Working Group presented President Bush with a “Strategic Framework” to
increase import safety that called for several immediate steps. One of these steps was a
directive to federal agencies to accelerate their participation in an automated “single
window” system for reporting imports electronically. The aim is to achieve better
coordination and efficiency, thus facilitating information exchange among government
agencies and between the government and the importing community in real time.
Legislative Proposals to Strengthen the CPSC
Although major consumer groups such as the Consumer Federation of America,
Consumers Union, and U.S. Public Interest Research Group had been voicing concern
about the CPSC’s declining budgets (in real terms) and staffing for decades, and had tried
6 For information on the efforts of the working group, including fact sheets and its “Action Plan
for Import Safety,” see [http://www.importsafety.gov/].

---

CRS-5
for years to persuade Congress to amend and strengthen the agency’s powers, until the
recent uproar over dangerous imported products, they had made little headway.7
Last year’s spate of recalls of products that poisoned pets, endangered infants and
children from lead-painted toys and small magnets, and posed potential health threats to
millions who consumed imported fish and other foods has led to major CPSC reform bills
in both houses of Congress.
In the House, H.R. 4040, “The Consumer Product Safety Modernization Act of
2007,” was favorably reported by the House Energy and Commerce Committee on
December 18, 2007, and passed in the House the following day by a vote of 407-0.
Among the bill’s major provisions are the following:
! Would require mandatory third-party testing of children’s products, and
requires pre-market testing of many children’s products for lead and
other hazards by certified laboratories;
! Would prohibit the CPSC from using agency rulemaking actions to
preempt state common law claims, and increase the cap on civil penalties
to $10 million (current level: $1.8 million);
! Would authorize state attorneys general to enforce CPSC standards;
! Would create new lead standards for children’s products; when fully
phased in , the bill would lower the standard for lead from 600 parts per
million to 100 parts per million or trace amounts. It would mandate that
the agency periodically review and revise this standard to require the
lowest amount of lead that science and technology make feasible to
achieve;
! Would require mandatory safety standards for nursery products (e.g.,
cribs and high chairs); calls for CPSC to examine the current voluntary
safety standards for toys, starting with dangerous magnets, and if found
to be inadequate, mandatory standards must be adopted;
! Would require manufacturers to place distinguishing marks on products
and packaging of children’s products to aid in recalls. It would prohibit
the sale and export of recalled products; prohibit the export of products
that violate U.S. consumer product safety rules; and
! Would provide CPSC with $80 million for 2009, $90 million for
FY2010, and $100 million for FY2011. It would also restore the agency
to a full panel of five commissioners, and include $20 million to
modernize the agency’s testing lab.
In the Senate, Commerce, Science and Transportation Committee Chairman Daniel
Inouye and the committee’s Ranking Member, Ted Stevens, announced on February 15,
2008, they had joined with Senator Mark Pryor, sponsor of S. 2045, “The CPSC Reform
7 The pattern of legislation being driven by a sudden increase in public awareness is well
established. More than a century ago, for example, Upton Sinclair’s book The Jungle
(1906), which dealt with conditions in the U.S. meat packing industry and caused a public
uproar, contributed to the passage of the Pure Food and Drug Act and the Meat Inspection
Act of 1906.

---

CRS-6
Act of 2007,” to announce a new compromise bill.8 Senator Pryor reportedly said he was
willing to scale back as part of negotiations certain provisions of S. 2045, including those
on states’ authority to sue companies over unsafe products, and on whistleblower
provisions. Those two provisions represented key differences from H.R. 4040.
Consumer groups generally supported provisions originally incorporated in S. 2045 that
would have afforded protections to public and private employers when they disclosed
problems in the supply chain, and would have allowed states to bring legal actions against
manufacturers for violations of any acts administered by the CPSC. The Bush
Administration opposed giving whistleblowers financial incentives for reporting defects
and hazards in products made by companies with whom they were employed. It also
objected to giving state attorneys general power to enforce product safety standards.
The key provisions contained in the compromise Senate bill include the following:
! Would authorize giving state attorneys general the right to seek
injunctive relief for unsafe products, such as the ability to ask a court to
remove a product from store shelves — authority not included in H.R.
4040. The compromise would no longer allow states to sue for damages
as S. 2045 would have;
! Would grant whistleblowers certain protections. The compromise does
not include language from S. 2045 that would have provided financial
rewards for disclosing information about dangerous products;
! Would restore the CPSC to five members, as with H.R. 4040. Quorum
requirements for the agency have complicated efforts to conduct
business; it has been functioning with only two of the three
commissioners since July 2006;
! Would provide CPSC with $88.5 million in FY2009 and increase
funding at a rate of 10% each year through 2015;
! Would ban lead in all children’s products;
! Would require third-party safety certification of children’s products;
! Would streamline the product safety rulemaking process to be more
timely by eliminating a mandatory “Advanced Notice of Proposed
Rulemaking” step; and
! Would allow CPSC to expedite the disclosure of industry-provided
information in the interest of public health and safety.
It is anticipated that the Senate will consider the compromise version of S. 2045 as
early as the week of February 25, 2008.
8 Daily Report for Executives, “Work Continues on CPSC Legislation: Pryor Hopes for Strong
Bipartisan Measure,” Feb. 1, 2008, p. A-16.

---