Obama's Regulators Earn a B- for Year One in New CPR Report

Over the weekend, the Associated Press ran a story on the results of its enterprising investigation into the toxic content of children’s jewelry imported from China. Pressed to abandon the use of toxic lead in toys and jewelry, manufacturers have apparently begun using an even more dangerous metal, cadmium, which can cause neurological damage – brain damage – to children and give them cancer. AP tested 103 pieces of jewelry bought in American stores within the last few months, and found that 12 percent contained at least 10 percent cadmium. One item, a cute little Rudolph the red-nosed reindeer trinket, was 91 percent cadmium.

Addressing the question that leaps to mind – How did these extraordinarily dangerous trinkets get onto store shelves in the first place? – reporter Justin Pritchard writes these utterly terrifying and completely truthful words:

A patchwork of federal consumer protection regulations does nothing to keep these nuggets of cadmium from U.S. store shelves. If the products were painted toys, they would face a recall. If they were industrial garbage, they could qualify as hazardous waste. But since there are no cadmium restrictions on jewelry, such items are sold legally.

Of course, this is just the latest in a series of startling tales of dangerous products making it to market in the United States – poisoned peanut butter, toxic drywall, lead-painted toys, and more. Not to put too fine a point on it, but such products often kill people – sometimes immediately, from acute exposure to toxins, and sometimes over a longer period of time by way of cancer. If folks are lucky, their lives simply become miserable, with headaches, nausea, respiratory and heart problems a daily occurrence.

There ought to be a law, one wants to scream, and in fact there are plenty of them. They are barely enforced, however, because the regulatory system is on the very edge of dysfunction – overwhelmed, understaffed, underfunded, and bearing the scars of political interference.

That gives us a sense of the challenge Barack Obama inherited one year ago on the regulatory front. And not just when it comes to children’s jewelry, or just to imports. We’ve got plenty of home-baked hazards that can hurt us, kill us, or do grave damage to the environment. And the five regulatory agencies charged with protecting us from those hazards – the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), the National Highway Traffic Safety Administration (NHTSA), the Consumer Product Safety Commission (CPSC) and the Food and Drug Administration (FDA) – are all struggling to catch up after years of neglect.

A new report from the Center for Progressive Reform today, Obama’s Regulators: A First-Year Report Card, grades the Obama Administration’s progress in that effort – a goal the President himself articulated during the 2008 campaign. Co-authors Amy Sinden, Shana Jones, James Goodwin, and I examined the work of those five “protector agencies” and of the White House Office of Information and Regulatory Affairs (headed by Cass Sunstein). Overall, we gave the Administration’s first-year regulatory efforts a B-, taking into account some impressive regulatory work on climate change, for example, as well as some disturbing instances where the administration fumbled or dropped the ball – toxic Chinese drywall and toy-testing, for example.

Here’s a thumbnail description, agency by agency, from the report:

CPSC: Despite facing many challenges, CPSC appears committed to improving its enforcement record, and has taken important new steps to protect consumers from dangerous products. The agency did not respond well to the toxic drywall crisis and struggled in implementing a toy testing program. Final Grade: C.

EPA: With leadership committed to the agency’s regulatory mission and increased resources, EPA tackled several important environmental issues this past year, including making progress on climate change regulations, ground level ozone, sulfur dioxide, lead air pollution monitoring, and Chesapeake Bay cleanup. EPA failed, however, to take regulatory action against perchlorate, atrazine, and mercury air pollution, and it has done nothing to improve its overall inspection and enforcement record. Final Grade: B.

FDA: With leadership committed to the agency’s regulatory mission and increased resources, FDA significantly improved its overall inspection and enforcement record, and began addressing long-ignored food- and drug-safety issues. FDA has been too slow to address the threat to children’s health posed by bisphenol A (BPA), and much more must be done to protect the U.S. food supply. Final Grade: B.

NHTSA: Despite many challenges, NHTSA made some progress on improving overall traffic safety and automobile fuel efficiency. Significantly though, much of this progress involved finalizing some pending rules from the Bush Administration, rather than from any new protective initiatives launched by the agency this past year. Also, NHTSA’s proposed corporate average fuel efficiency (CAFE) standards were not strong enough. Final Grade: B-.

OSHA: Thanks to an improved budget, OSHA strengthened its inspection and enforcement record. The agency made important progress on developing a hazard communication (HazCom) rule and a diacetyl standard, but yet has to take action on literally hundreds of well-known workplace hazards. Final Grade: C.

And then there’s OIRA – the White House office that rides herd on the regulatory agencies. Regulations must pass OIRA’s systemically flawed cost-benefit tests before being issued. But more than that, OIRA has continued to serve as a powerful ally to regulated industries seeking to kill regulations. The Bush Administration made it thus, but so far, there’s little evidence that the Obama OIRA is any different. Just in the last few months, we’ve seen a full-court press from the coal industry, seeking to strangle in the cradle a regulation on dangerous coal ash – a regulation that is still being drafted. OIRA has taken at least 17 separate meetings with industry representatives on the topic, while doing practically nothing to get the other side of the story from environmentalists. Of course, the entire conversation is in the wrong building: industry should be taking its concerns to EPA, and OIRA should have responded to industry’s initial entreaties by saying as much. But it didn’t. Instead, it waded hip deep into coal ash, and according to the Wall Street Journal, EPA and OIRA are now in combat over the rule. That’s exactly how the Bush OIRA would have handled it, of course. Significantly, this is one of the first OIRA dramas to play out entirely on Cass Sunstein’s watch – the Senate didn’t confirm him for the job until September, and it is therefore doubly disturbing to see OIRA pursuing Bush-style business as usual. Here’s how we graded OIRA and the White House overall:

The White House/OIRA: Overall, the White House’s participation in the regulatory process has undermined the agencies’ recovery, with the Office of Information and Regulatory Affairs largely operating as a barrier to effective regulations. Although President Obama’s budget requests were an improvement over the Bush Administration’s, the budget requests, most notably for CPSC and NHTSA, were not large enough to reverse agencies’ chronic underfunded state. Final Grade: C-.

Note that we take into account the Administration’s budget requests for the regulatory agencies – OIRA is part of the Office of Management and Budget, which rides herd on budget requests. The reason that’s so critical is that many of the problems agencies confront in designing regulations for emerging or long-ignored hazards, and then in enforcing those regulations, trace back to funding shortfalls. It’s no accident that the agencies have been put on starvation diets, of course. That’s exactly how the anti-regulatory forces in the Bush Administration and in previous Administrations wanted it. So it’s great that the Obama Administration has begun to address that. But it’s not even half done. The agencies are woefully underfunded, and as a result, Americans face hazards they needn’t. The good news is that what we spend on the "protector" agencies now is a pittance in the scope of things – about $10.3 billion, less than 3/10ths of one percent of the federal budget. We could increase funding significantly – as the circumstances demand – without making much impact on the overall budget. We simply need the will.

One final point: Time is of the essence. Regulations often take years to get written and put into effect, and opponents of regulation know that time is always on their side. They can delay regulations at all stages of the process – before they are proposed, as in the coal ash example, after they are proposed, by flooding agencies with absurdly long comments submissions, and after they’re published by challenging them in court, frivolously or otherwise. Every day they delay is one more unregulated day of profit, as far as they’re concerned.

But it’s also a day of unnecessary hazard for American families and workers. That’s exactly why the Obama Administration needs to be as aggressive as it can be with the time it has. Otherwise, we can look forward to years of stories like the one about cadmium in children’s jewelry.