A Simple Solution to Ineffective Regulations

Government agencies should review their rules regularly to ensure that those rules impose the lowest reasonable burden on Americans consistent with fulfilling the agency’s statutory objectives. This principle applies to independent agencies like the U.S. Consumer Product Safety Commission as much as any agency. We were, therefore, pleased when President Obama issued Executive Order 13579, which asked independent agencies to use cost-benefit analysis and to conduct such retrospective reviews to identify and fix or repeal rules that are ineffective or too burdensome. The Consumer Product Safety Commission (CSPC) should use this process. We regulate over 15,000 products worth billions of dollars 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. Unfortunately, at the CPSC, we are barely giving a head nod to the President’s directive. Prior to the current vacancy, 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. As directed by the Executive Order, the agency developed a draft review plan and in October 2011 put that plan out for public comment. In April, staff gave the Commission a draft review plan. Commission consideration has been repeatedly delayed. It does not appear that the draft plan adequately focuses on identifying and addressing the most important rules that need to be examined. Instead, it focuses on rules that qualify as “minor housekeeping,” at best. Here is what we have done so far: Both of these proposals 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. Here are some rules that deserve greater attention: 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 directly told us to review ways to reduce the costs associated with this rule. We expect to see staff recommendations for reducing the cost burdens of this rule before the end of the summer. However, 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 as much as other government agencies. 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 edits for substantial fixes. The Commission’s 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