The OIRA Module: Published Research

From:  The Hill

By Nancy A. Nord and Anne M. Northup, commissioners, U.S. Consumer Product Safety Commission

Government agencies should review their rules regularly to ensure that those rules impose the lowest reasonable burden consistent with fulfilling the agency’s statutory objectives. As commissioners at the Consumer Product Safety Commission, we are faced with regulatory decisions that affect over 15,000 products worth billions to the American economy each year. As good regulators, it is incumbent upon us to consider the costs and benefits of the rules we adopt. To that end, we challenge our colleagues at the CPSC to embrace the spirit of President Obama’s Executive Order 13579, which asked independent agencies to use cost benefit analysis and to conduct retrospective reviews to identify and fix or repeal rules that are ineffective or too burdensome.

Unfortunately, at the CPSC, we are barely giving a head nod to the president’s directive. Last fall, a majority of commissioners affirmatively rejected using cost benefit analysis, even for major regulations. With respect to the retrospective review process, our efforts have been focused on minor fixes that are not in the spirit of the Executive Order. Instead, our focus has been on rules that qualify as “minor housekeeping,” at best.

For example, this past June the CPSC proposed to repeal toy cap gun regulations. However, this regulation already had been subsumed by another regulation which went into effect in 2009. Other than cleaning up the Code of Federal Regulations, we question what effect this action has. The agency’s other response to the call for retrospective review has been restate our animal testing policy to say again something we have already said—that animal testing should not be used where it is not necessary. Both of these actions fall into the “housekeeping” category, not the kind of review envisioned by the Executive Order. Yet these are our only responses to the Executive Order so far.

There are a number of rules that deserve greater attention. Our bicycle safety regulations were written many years ago and are so out of date that modern adult bicycles do not, and cannot, comply with the regulation. Yet these regulations remain on the books. Our fireworks safety regulations were most recently updated in the 1980s and, again, are quite out of date. We have two safety standards dealing with mattress flammability issues, put in place at different times. Two standards means two different sets of tests and two sets of testing costs. One flammability standard for mattresses could reduce costs and testing burdens while preserving a high level of safety.

These are just three examples of significant rules that warrant review but are not contemplated by our plan. We could provide others. However, the best example of a rule that should be thoroughly reviewed deals with the testing and certification required by the 2008 Consumer Product Safety Improvement Act. The rule, which passed by a three-to-two vote, imposes enormous burdens and costs on the global supply chain but was adopted with no cost-benefit analysis. A request for such an analysis of this rule was specifically rejected by the majority.

The rule is so burdensome that Congress had to intervene and direct the CPSC to review ways to reduce the costs associated with this rule. Had the commission done the hard work of honestly analyzing ways to reduce costs and enhance the benefits of this rule, congressional intervention would not have been necessary. Even our staff’s recommendation that the cost reduction analysis be done before the finalization of the testing rule was overridden by the majority.

In summary, the CPSC and other independent agencies need to perform cost benefit analysis when drafting rules and retrospectively review existing rules. The president’s Executive Order directing them to do so was welcome, but we fear that the CPSC’s retrospective review activities will focus on minor revisions instead of the major review that would be in the spirit of the order. We should not mistake tinkering for substantial fixes.

The Commission’s regulatory review plan should be an “ambitious and unprecedentedly open process for streamlining, improving, and eliminating regulations,” to use the words of Cass Sunstein, director of the president’s Office of Information and Regulatory Affairs. The end of this process should be a regulatory regime that protects the public’s health and safety while ensuring that American consumers, employers, manufacturers, and innovators face the lowest reasonable burden. 

Nord and Northup are commissioners on the United States Consumer Product Safety Commission. Nord has served on the Commission since 2005 and is the former acting chairman. Northup has served on the Commission since 2009 and formerly served as a Kentucky Congresswoman in the United States House of Representatives.