Product Safety Regulator May Lack Resources to Implement New Mandates, Safeguards

With federal spending on the chopping block, we have decided to highlight the potential effects of spending cuts on public protections. In a series of articles, we will examine spending cuts to a number of crucial public protections, beginning here with consumer product safety, and discuss how budget decisions in fiscal year 2013 could affect the ability of federal agencies to safeguard the public.

Although the nation's premier consumer product regulator, the Consumer Product Safety Commission (CPSC), has been crippled by budget cuts and staffing losses in the past, it has seen increases in its resources and responsibilities since 2008. However, advocates argue that a much larger influx is required to ensure that the CPSC has the resources it needs to protect Americans and eliminate dangerous products from the marketplace.

President Obama's 2013 budget request would cut many agency budgets, but CPSC would see a proposed six percent increase in its budget. Nonetheless, consumer safety advocates warn that CPSC’s resources have not kept pace with the size and number of industries it regulates or the inflow of imported goods from under-regulated countries.

CPSC Budget 1973 to 2011
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In 1972, Congress passed the Consumer Product Safety Act, creating the Consumer Product Safety Commission. CPSC began operating in 1973 as an independent federal regulatory agency whose mission was to protect the public from product risks and reduce injuries and fatalities associated with the use of those products. CPSC now regulates more than 15,000 different kinds of consumer products. After decades of cuts in the 1980s and 1990s, its funding reached an all-time low in 1996, when its annual budget fell to a third of its 1976 budget, in inflation-adjusted dollars.

Between 1998 and 2008, imports of foreign-made consumer products that entered the United States more than doubled, but staffing declined during this period.

CPSC Budget and Staffing 1996 to 2011
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Recalls of unsafe toys and other consumer products increased as imports rose. At the height of the consumer product recalls of 2007, the CPSC had its lowest staffing levels ever and half the funding it enjoyed in 1976.

Congress responded by enacting the Consumer Product Safety Improvement Act (CPSIA) in 2008. The CPSIA increased the CPSC’s authority to regulate dangerous products and increased its budget to reflect its broader mandate. Since 2008, the agency’s budget has increased by 40 percent.

The CPSIA included a provision that authorizes a significant increase in CPSC’s budget to $136 million in 2014, though congressional appropriators must approve additional legislation to direct those funds to the commission. The act also directed the CPSC to increase the number of full-time employees to at least 500 by 2013, subject to the availability of appropriations. In fiscal year (FY) 2011, the agency’s staff was increased to above 500 employees; CPSC requested 610 full-time employees for FY 2012. Yet while the agency received significant budget increases from 2008 to 2010, funding decreased in 2011 and remained level in 2012. The president’s FY 2013 request of $122 million represents an increase over the $115 million appropriated in fiscal years 2011 and 2012 but is roughly the same as funding in 2010 when adjusted for inflation. The agency will need significant and steady increases in appropriations in the coming years if it is to accomplish its mission and fulfill its statutory obligations under the CPSIA.

Can CPSC Keep Up with the Growth of Imports?

CPSC’s increased efforts have helped improve consumer product safety. In the past 30 years since the agency was established, there has been a 30 percent decline in deaths and injuries associated with unsafe consumer products, and toy recalls have steadily declined since the passage of the CPSIA in 2008. But even with the improvements these safeguards have achieved, the number of toy-related injuries continues to grow. CPSC estimates the number of toy-related injuries jumped from about 130,000 in 1996 to about 220,000 in 2006 – more than 600 injuries every day. Even when adjusted for population growth, the rate of toy-related injuries has increased significantly since the 1990s.

Toy-Related Injury Rate 1992 to 2010
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The American Association for Justice estimates that almost 95 percent of toys in America are imported. Most of these come from China. In fact, the value of toys imported into the U.S. increased 16-fold between 1974 and 2007, even when adjusted for inflation, according to a report by Public Citizen. Since 1992, the value of these imports has nearly doubled.

The increase in imported toys and rise in toy-related injuries illustrates the difficulty CPSC has in keeping pace with the regulated community. An astonishing 251,700 toy-related injuries were reported in 2010 – 16,400 more than in 2008. The CPSC reported in 2011, "Deaths, injuries, and property damage from consumer product incidents cost the nation more than $900 billion annually."

The CPSC is working with U.S. Customs and Border Protection to stop dangerous imported products from ending up on American shelves, but the agency must have more resources to keep up with the vast universe of products Congress has charged it with overseeing.

How Will the CPSC Weather Spending Caps in FY 2013?

The House recently approved Rep. Paul Ryan’s (R-WI) FY 2013 budget resolution, which calls for severe cuts to non-defense programs. If enacted, Ryan’s plan would probably put the CPSC out of business in the next ten years. Slate’s business and economics correspondent Matthew Yglesias wrote, "[T]o meet the spending caps consistent with Ryan's views on the appropriate level of military spending would require us to completely dismantle the rest of the federal government."

With the passage of the CPSIA, Congress gave the CPSC new authority and new responsibilities to regulate a massive increase in imported consumer products. Depleting agency resources now will undercut the progress the agency made in recent years in taking dangerous products off the market and reducing injuries from unsafe goods.

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