The president’s two nominees to be commissioners on the Consumer Product Safety Commission will be confirmed soon. The question is: will new leadership change either the tone or the direction of the agency? Two exchanges during the confirmation hearings went to that question.
The first exchange dealt with testing burden reduction. P.L. 112-28 directed the commission to take action to reduce the costs of testing that now must be done on products or report back to Congress if it needed additional authorities. Sen. John Thune (R-S.D.) noted that the agency has done nothing to implement measures to reduce costs in any meaningful way. Thune asked each nominee, upon confirmation, to provide the Senate committee with their plans for implementing efforts to reduce testing costs. Thune has given the nominees a real opportunity to show leadership and provide actual relief from the agency’s overly-expansive and costly testing approach—which does not provide consumers with additional safety but does add additional costs to the products they buy.
So as the two nominees craft their plans in response to Thune’s request, will those plans reflect business as usual, with the agency doing only enough to make it appear that it is doing its legal duty but still managing to avoid any real change? Or will those plans show a thoughtful and creative approach to fixing a problem that Congress and members of the public have identified but which the leadership of the agency, up to this point, has sought to minimize?
Another interesting exchange during the hearing dealt with procedures for issuing regulations. The nominee for chairman bemoaned the lack of “express” rulemaking authority in the Consumer Product Safety Act. He attributed regulatory delays in issuing safety standards to the cost-benefit analysis that he said was “unique” to the CPSC and the findings the agency has to make before issuing a final rule. But he did not identify which findings and what aspects of cost-benefit analysis are overly burdensome to the agency. Having that information would provide the basis for a good discussion on regulatory policy at the agency.
Those advocating for express rulemaking complain about the cost benefit analysis that must been done during the rulemaking process, but what is it that is so burdensome? The law states that the analysis must include a description of the potential benefits and potential costs of the rule and a description of the alternatives to the rule that the commission considered, the costs and benefits of those alternatives and a description of why they were not chosen. But the law merely states explicitly what necessarily should be included in any competent regulatory analysis. Unless we are willing to agree that the feds are always right in their regulatory approach, would we not want any agency to gather, write down and then actually consider that information before regulating? To my ears, the complaint that doing your homework is too hard rings hollow.
I suspect that the real problem for those advocating for express rulemaking is the law’s expectation that the data will be used to inform results--that the agency actually will use the data to tailor or perhaps even change its preferred regulatory approach. The law tells the agency that it may not issue a rule unless it finds, among other things, that
- the benefits of the rule bear a reasonable relationship to its costs; and
- the rule imposes the least burdensome requirement to adequately address the risk.
In other words, if the agency’s preferred regulatory approach is not the most efficient way to address a risk, then Congress expects the agency to change its approach.
Here are a couple of follow-up questions to the CPSC nominees. Do we want the agency to be able to regulate without regard to costs and benefits? Should not the agency have to change its preferred approach if the costs and benefits are not reasonably related? Do we want the agency to impose requirements that are more burdensome than they need to be and do so out of ignorance because it did not bother to consider alternatives? I submit that we do not. And I believe that experience over the past four years illustrates the importance of these requirements. The CPSC promulgated several extremely costly and burdensome rules without the analysis described above since the CPSIA did not require that analysis. Indeed, PL 112-28 was passed because the testing rule, not subjected to that analysis, resulted in costs that are excessive.
Regulation is not and should not be easy. If data shows the need for a rule, then the agency should roll up its sleeves and get to work, not complain about how hard it is and look for shortcuts. It will be interesting to see if the new leadership is up for doing the hard work.
Nord is a former CPSC commissioner, whose term of office expired in 2013. Her blog on consumer issues is at nancynord.net.