Hearing of the Financial Services and General Government Subcommittee of the Senate Appropriations Committee - The Consumer Product Safety Commission

Interview

SEN. DURBIN: Good afternoon. I'm pleased to welcome you to this hearing today before the Financial Services/General Government Appropriations Subcommittee. Today we'll discuss the president's fiscal year 2009 budget request for the Consumer Product Safety Commission.

Testifying before us will be acting Chairman Nancy Nord and Commissioner Thomas Moore.

Last year, thanks to investigative reporting by the Chicago Tribune, which won a Pulitzer Prize for its work, I became concerned about toy safety issues. With the spotlight shining on some deadly toys, America became much more aware of the dangers of toys on store shelves -- often ones coming from China.

At this time last year, we were reviewing the budget of an agency that had been neglected and underfunded for years. We acted together on a bipartisan basis last year to boost funding from a level of $63 million to $80 million, a dramatic increase by today's budget standards.

The House and Senate both passed reauthorization bills to improve CPSC's abilities to protect the public, so now with the 28 percent increase in funding last year and an expected final reauthorization that will, if the Senate prevails, give the CPS new tools, we'll be able to prevent dangerous products from reaching stores, ensure faster recalls and allow families access to information on existing safety complaints.

I think the Consumer Product Safety Commission has potential to become an exemplary watchdog agency. The commission has gone from a high of 978 full-time employees in 1980 to a low of 380 employees in January of this year. Now that it's turning around because CPSC has the funding we provided to replace the key staff it has lost over the years, I hope the commission will swiftly hire all the needed technical experts and investigators to get the agency back to better fulfill its mission.

We discussed last year in detail the dilapidated laboratory that CPSC uses to test toys. I understand that Bob the toy tester, one of the toy testers, has since retired. Bob became a very famous figure in America as we talked about his workbench and his testing laboratory.

But soon, CPSC will move to a new and improved testing laboratory. We provided funding last year to enable that timetable to be accelerated, and with funds requested in fiscal year 2009, the commission will be able to move into the space a year earlier than expected.

While good things are being done with funding provided last year, unfortunately the president didn't join in the cheer. The president froze funding for this agency for the next fiscal year at the $80 million level. So while the agency is hiring new staff, fiscal year 2009 budget proposal by the president would just maintain the staff and not continue to build the professional staff that's needed to protect consumers across America.

I don't agree with the president. There's been a dramatic upsurge in imports into the United States, a dramatic increase in products that has to be reviewed by this commission to make sure that American families are safe.

At this point, I hope that we can move forward. I hope that we can understand that some of the challenges are very obvious. A CPSC engineer was asked to design a new study of the mechanics and stability of all-terrain vehicles. He proposed a cursory review of the latest ATVs on a budget of about $40,000. He was turned down because it cost too much, he was told.

How can $40,000 be too much to study a vehicle that literally is responsible for the deaths of hundreds of people and sends more than hundreds of thousands to emergency rooms each year? It is clearly a case of penny-wise and pound foolish.

In 2001, CPSC issued an administrative complaint, a first step in litigation leading to a recall against Daisy Manufacturing Company about their Power Line air guns. Air guns' BBs were getting stuck in the gun so children thought the guns were empty and began aiming and shooting at each other.

Due to the high-velocity BBs, this resulted in deaths and serious injuries among kids. Daisy alleged there was a misuse of the product and an education campaign would solve the problem. The commission alleged a defect, which caused the BB to lodge in the gun. So the administrative complaint was issued, but it was then dismissed by the CPSC in 2003 under a new administration. One of the factors leading to the settlement action was that Daisy company could have gone out of business if there'd been a recall.

Mr. Moore, at the time, your statement took issue with that settlement action, and I quote: "The bottom line is that we're not the Business Protection Agency, we are the Consumer Product Safety Commission. Our responsibility is to protect the public from dangerous consumer products. If we lose sight of that, we'll get entangled in endless discussions of company finances while consumers are being put at risk of death or serious injury."

These are clearly issues, and many others, that we will have to consider, and we will talk about them as we get into this hearing.

But at this point, let me turn to my ranking member, Senator Brownback of Kansas.

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SEN. DURBIN: Thank you, Mr. Commissioner.

Chairman Nord, if I recall it was in December when it was clear that we were sending you this pretty substantial increase in your appropriation to ($)80 million, and I was asking the staff here what kind of staffing levels you had last year at this time. We think it was around 400 million FTEs. Pardon me, 400 FTEs -- (laughter) --

MS. NORD: You've been dealing with other agencies way too long.

SEN. DURBIN: Yeah. I'm not sure there's any agency with 400 million.

MS. NORD: Context needs to shrink.

SEN. DURBIN: But 400 FTEs. (Laughter.)

Now, historically, we talked about where this agency's been; 980 is the high-water mark, and now apparently at 380, the low-water mark. So the question I have is that in the four- or five-month period of time that we have sent you the new resources to staff up, it appears you're staffing down. It appears you're losing ground -- some 5 percent of your employees have left and not been replaced -- instead of an additional 10 percent being hired.

So can you give us an indication of why the trend line is moving in the wrong direction?

MS. NORD: Well, we see attrition on a regular basis. You generally see one or two every month leave, and those people have to be replaced to keep you even. But since January, we have brought on 21 new hires; we've got 12 offers out right now; we've got well over 30, almost 40 new positions that are in the mix for putting out for advertisement. So we are working really very, very aggressively to get up to that goal of starting the fiscal year with 444 FTEs.

SEN. DURBIN: So the 21 that you've hired, are they included in the 380 number?

MS. NORD: Well, they're included -- if they're on board, they would be included in our current staffing.

SEN. DURBIN: What is your current staffing? What number?

MS. NORD: It's approximately 385, 390. I'll have to give you the precise number.

SEN. DURBIN: Well, I don't want you to go out and pick the first person off the street, and I'm sure you wouldn't want to.

MS. NORD: No.

SEN. DURBIN: But we sure want to make certain that you understand the sense of urgency, and I'll tell you why, and I think you know it better than I do. The biggest scandal of last year involved toys. We know that the design for toys for this coming holiday season in December, those were all agreed on last year and they're currently under manufacture and currently being shipped to the United States.

So the new dolls, the new games, whatever they happen to be, are on their way, and clearly we have to be ready to make sure that the American families don't go through the same thing next holiday season that they did the last one.

MS. NORD: I do understand your sense of urgency, and I share that, Senator. The thing that I would like to point out is that the type of people we are seeking to hire are statisticians, scientists, toxicologists -- (inaudible) -- engineers. These people are essential to our operations, but they're also in demand in other government agencies who are also now trying to staff up, as well as in the private sector.

So this is something we are committed to doing, we are working full-out right now to get ourselves up to the 444. That is our goal, and we are working very hard to reach it.

SEN. DURBIN: We're going to keep in touch with you --

MS. NORD: Good.

SEN. DURBIN: -- to monitor your progress.

MS. NORD: Good.

SEN. DURBIN: And hope that you can reach the 444 with competent individuals as quickly as possible.

Let me ask you about the Import Safety Initiative, which will allow you to put permanent, full-time product safety investigators at key ports. How many ports will be part of this initiative, and how many investigators will be placed at these ports?

MS. NORD: We are going to be putting people at 10 different ports. Our overall division is going to be approximately, I believe, 12 people, and I would prefer to give your staff privately the locations of those ports, if I could.

SEN. DURBIN: May I ask if you're talking about one person or slightly more than one person per port, what kind of workload will that person face?

MS. NORD: Well, they will certainly face a very heavy workload, but the thing that needs to be remembered here is, first, we have to start someplace. And secondly, we do anticipate that this is a program that will grow based on our experiences this year.

Third, these people are not out there standing alone. They are supported by technical staff back at headquarters and also, very, very importantly, they are going to be working hand in glove with their colleagues from Customs, and that relationship between CPSC and Customs has grown wonderfully well over this past year, and I'm very encouraged by the support that we're getting from --

SEN. DURBIN: Are you considering any new technology in these ports for the detection of lead or other dangerous substances?

MS. NORD: Yes, because of the increased funding that we were able to receive from you, we have now acquired what's known as XRF technology, and this is important because it allows us to screen for potential violations.

What we had to do before is if the inspector's eye saw something that they thought was suspicious, that product had to be sent back to Washington for testing and that was a process that took a great deal of time. So this allows us to screen it right there, quick. We can then separate out the things that pass from the things that need a further look.

SEN. DURBIN: My last question: Do you expect to place any staff in China?

MS. NORD: If I have my way, we will.

SEN. DURBIN: You are the acting chairman.

MS. NORD: (Laughs.) Yes. We have been having conversations with the Beijing embassy and with the State Department about having a Foreign Service national assigned to us over there. If we are to send CPSC staff there and put them there, that is a big undertaking for our agency. I believe it requires a vote of the commission. And at this point, you know, we don't have a quorum, but we are -- I think that that would be a good thing to do, so I will certainly be voting for it.

SEN. DURBIN: Thank you.

I'm going to turn this over to Senator Brownback. I have to step out while he questions, but I'll be returning.

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SEN. DURBIN: Chairman Nord, when the Consumer Product Safety Commission Reform Act was pending, Commissioner Moore and you sent letters to Chairman Inouye about it, and you have alluded to it in your testimony today.

Now, of course, this bill, having passed the Senate, is subject to conference with the House in terms of its outcome. I just want to make sure that I understand what you have said today. If this bill as passed the Senate was enacted into law, would this give you more tools and more authority to do your job?

MS. NORD: It would certainly give us more tools and more authority.

SEN. DURBIN: Okay. Is there any way that you think provisions of this bill would make your job more difficult?

MS. NORD: There are a number of new mandates in the legislation that -- and they have very, very short time deadlines on them. So we will either have to come back to you with a plan for staffing up to the extent we can or reallocating existing resources, taking things off existing projects and putting them on --

SEN. DURBIN: So can you give me any examples of those mandates as you're sitting there? The new mandates?

MS. NORD: Oh, gosh, there's -- you know, the bill set out a whole schedule for doing rulemakings and children's products, durable infant products.

SEN. DURBIN: Like tracking labels for children's products?

MS. NORD: Well, no, doing rulemakings on putting in place rules dealing with durable children's products.

SEN. DURBIN: Such as a comprehensive ban on lead?

MS. NORD: Well, that certainly is there as well, but that's -- I was speaking of something else.

SEN. DURBIN: I'm trying to get down to what you're speaking of. I'm not trying to mislead you.

MS. NORD: The bill tells us on a schedule we are to finalize two rulemakings every year on durable children's products. It also, as you point out, has the ban on lead and we're working very hard with the authorizers' staff to --

SEN. DURBIN: I hope you don't disagree with that mandate.

MS. NORD: Oh, of course not.

SEN. DURBIN: Okay. What about the online product safety database, enhancing public access to product safety information? Does that exist today?

MS. NORD: No, it does not.

SEN. DURBIN: Okay. Do you know what it would take to put that database in operation? Have you considered that?

MS. NORD: Yeah, I've asked our data information technology people to give us some estimates and they have advised me that to do what is described in the Senate bill as it passed would take approximately $20 million in startup costs in about a 2.5 to 3.5 million-dollar annual maintenance cost.

But that, if I may expand, I mean, the database is a very good example of why we really need to get a better handle overall on our information technology needs. Unfortunately, because the agency has been short-funded, we have put together databases on an add-need basis. They're stovepiped, they don't communicate with each other, and for us to have -- for our staff to have the tools it really needs to do its work, we have got to modernize our IT resources.

SEN. DURBIN: I'd like to ask you -- I'd like to ask you, if you would, take a look at the bill that passed the Senate, and if you would give us your -- a best estimate from your staff of where you consider to be the most expensive and the most challenging elements of that bill, I'd like to know --

MS. NORD: Yes. Be happy to.

SEN. DURBIN: -- because I want to get this bill passed. We have been working hard to get the conference committee to go to work on it, and I want to be thinking in terms of next year's appropriation as to what will be needed.

If there is a -- for example, if this database requirement here is -- if people can come up with a reasonable estimate of what that might cost, I want to be thinking ahead about what that might require in the next appropriation bill.

I believe in this bill. I introduced an earlier bill which was very similar to it; Senator Pryor improved on it and did a great job leading it through the floor on a bipartisan basis. But I want to think ahead to what these new challenges might be and what their costs might be. It certainly is not going to be served with a remake of the $80 million fiscal year appropriation for this year; it's going to take more.

MS. NORD: No, we will need an amendment, and I'll be happy to do that.

SEN. DURBIN: If you would, please, I would appreciate that very much.

Commissioner Moore, your letter in reference to this bill was much more supportive in terms of the tools that it would give to your commission. As you reflect on that, were there any specifics that you had in mind that you think could really make a difference in the way you do your job?

MR. MOORE: Well, certainly, given the increase in the number of products coming in through ports, the ability to expand our study and our interest in products as we meet them at the ports, at the docks, I think is very important because to the extent that we can turn products around if they are violative, they don't meet standards, I think the more effective we can be in controlling that problem.

SEN. DURBIN: Mr. Moore, I think we all understand what happened last year. It was a troubling time for many American families.

MR. MOORE: Right.

SEN. DURBIN: Questions raised about toys in particular, but other products as well. And a lot of people came up to me in my state and to other senators and said, what's safe, what is it safe to buy? And I couldn't tell them; I really didn't know the answer to that question.

I couldn't make a recommendation of what to do. Do you feel that there is anything happening at the commission today which gives you confidence that the next holiday season will be any different or any better?

MR. MOORE: Well, I think one of the most risky elements of products out there right -- most recently has been lead in children's toys, and I think there's been enough publicity and enough vocal concerns raised about that that I think the public is very, very much aware, and also manufacturers are very much aware. And I think to the extent that we can eliminate that particular problem, that's a major consideration.

SEN. DURBIN: It is.

Chairman Nord, let me ask you the same question. Can you tell me with any degree of certainty that the next holiday season that families can have more peace of mind in the toys and products that they're purchasing, that we will have done a better job or that the process will be any safer?

MS. NORD: You know, last Christmas, the toys were -- because of what happened, were the most tested and examined in the history of our country, and, you know, we need to build on that. I think that the toy industry safety initiative is a really interesting proposal, because to Senator Brownback's concern, it really does force an examination of the Chinese factories.

I think that if I could have one thing only from the authorization bill -- this is something I asked for last summer -- is to have certification authority. That would do so much to help us. It would drive testing; it would give us another tool for imports -- that simple thing.

SEN. DURBIN: Certifying laboratories?

MS. NORD: No, certify that toys meet all relevant standards.

SEN. DURBIN: Where would the certification take place?

MS. NORD: The importer and the product seller would have to get it certified.

SEN. DURBIN: Where?

MS. NORD: If it was manufactured in China, they would have to have it tested there.

SEN. DURBIN: So there would be laboratories doing this work?

MS. NORD: Absolutely.

SEN. DURBIN: That we would certify?

MS. NORD: Absolutely.

SEN. DURBIN: And that would obviously mean that CPSC employees would have to be traveling to these laboratories.

MS. NORD: Well, we would certainly be traveling to these laboratories, but I think we would be setting up a structure that would make sure that the quality control is in place. But that all flows from that simple certification requirement.

SEN. DURBIN: Is there any effort under way now, even absent this new reform bill, to establish these laboratories in China? Laboratories -- not government laboratories but private laboratories, names of which we might recognize?

MS. NORD: There are many ongoing efforts. I think the community has anticipated that the bill will pass, and that sets out a very full third-party independent testing and certification requirement, and so they are gearing up for that now.

SEN. DURBIN: Okay. And are you involved at all in that current undertaking? What does the CPSC do?

MS. NORD: Well, our staff is working very closely with the other government players who have experience doing this in other areas, as well as -- I mean, we have an ongoing relationship with all the testing and certification accreditation bodies. You know them as well as I -- UL, ANSI, ASTM, and there are many others that have a role to play here, and we work daily with them.

SEN. DURBIN: Good.

I don't have any further questions. I want to thank Commissioner Moore and Chairman Nord for being here today.

We're looking forward to receiving your best estimate of what the new reform bill might -- the impact it might have on your agency. I encourage you as quickly as possible, in a professional way, to try to get staffed up and to make sure that we have the technical staff and investigators, both here in the United States and overseas.

If there's any need of this committee or Congress to be involved to help you locate your people in other places, I hope you'll turn to us, because I certainly hope I've made it clear that I don't want to live through what we did last year, and I'm sure you don't, either. We have to --

MS. NORD: You can be assured of that, Senator.

SEN. DURBIN: We learned from that experience and we owe it to the American people, all of us in Congress and in the executive branch, to do a better job.

So the record will be open if my colleagues have questions that they might submit for your consideration. We've made a couple of requests of you here, and I thank you for joining us today. And the meeting of the subcommittee will stand adjourned. (Sounds gavel.)

MR. MOORE: Thank you.

MS. NORD: Thank you.

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