The federal government is here to help you


The flood of federal bailouts has been especially maddening for Las Vegas resident Molly Orr. Congress is throwing hundreds of billions of dollars at failing companies, but lawmakers are content to let Orr's growing business -- and thousands like hers -- collapse less than three months from now.

"I have had the hardest time telling the average person the nightmare I'm dealing with," said Orr, a children's clothing designer. "People just can't believe that in this economy the government is putting me out of business."

The Consumer Product Safety Improvement Act, which strictly limits the amount of lead allowed in children's products, was introduced with the best of intentions. In 2006, a 4-year-old Minnesota boy was fatally poisoned after swallowing a lead charm that came with a pair of sneakers. Then, in 2007, more than 1 million Chinese-made toys had to be recalled because their paint contained unsafe amounts of lead.

No parent or business -- and certainly no politician -- wants to see kids sickened by lead poisoning. The law passed the House and Senate this year on nearly unanimous votes, dropping the standard for lead content in children's products to no more than 600 parts per million effective Feb. 10.

The law covers products intended for use by children age 12 and younger. But, as written, it goes far beyond charms and toys to include sporting goods, household items, furniture, clothing, books and school supplies -- everything marketed toward kids.

Every single retail item designed for a child must have its lead content tested and certified by Feb. 10 -- even those that obviously contain no metal. Products must be tested at one of a handful of labs inspected and licensed by the federal government.

To make matters worse, a September legal opinion from the Consumer Product Safety Commission held that products manufactured and distributed before Feb. 10 are still subject to the tougher standard. Billions of dollars worth of U.S. retail inventory must be tested and deemed safe by that date, and anything that isn't will be considered banned hazardous waste.

Orr has scrambled for months to figure out how she can comply with the law and save her business. The 33-year-old mother of three used to make clothes exclusively for her own children, but strangers kept stopping her on the street, asking, "Where did you get that outfit? Can you make me one?"

Molly O Designs was born, and her Web site logged sales from across the country, Europe and Asia. Business was so good, Orr couldn't keep up with the sewing and the demands of raising a family. She hired a Los Angeles-based manufacturer.

Orr estimates her company is approaching six figures in sales this year. But testing just her spring line for lead content would cost $50,000, far more than the clothes are worth.

Talk about a tax hike.

So rather than risk steep fines and a prison sentence, she is resigned to discounting her remaining inventory and selling it off by Feb. 10.

"Frustrated is not even the right word. I'm doing well in an economy that isn't. I'm succeeding," said Orr, who used to work in corporate public relations. "It's heartbreaking to work so hard to make something out of nothing and have to throw it all away."

Shauna Sloan, founder of the Kid to Kid second-hand stores, fears her growing company faces a similar fate.

"This is the most awful piece of legislation I have ever seen. The way it is written, it applies to every thrift store, every second-hand store -- all retailers that sell children's products of any kind," said Sloan, whose company has a franchise in Las Vegas. "This will put every second-hand operation out of business."

Already, some thrift stores around the country have stopped accepting donated toys so their inventories can be cleared out by Feb. 10.

Kevin M. Burke, president and chief executive officer of the American Apparel and Footwear Association, says his organization's members have dubbed Feb. 10 National Bankruptcy Day because thousands of small businesses like Orr's can't possibly afford to come into compliance.

The industry had placed much hope in a Wednesday congressional hearing on the law, believing key witnesses might be able to persuade lawmakers to take a second look at this boondoggle. But the hearing was canceled.

The Consumer Product Safety Commission, which is responsible for enforcing the new regulations, still hasn't finalized all the rules for compliance, but guidelines currently require testing of completed products, rather than components and materials prior to manufacture. Burke says that means slightly different clothing styles made from the same batch of cloth must undergo separate, costly testing. The requirements even apply to white T-shirts and garments with no snaps, zippers or metal buttons.

"All we want is the commission to be reasonable about what has to be tested and what doesn't have to be tested," Burke said. "They've got to look at the economy and the entire chain reaction this will cause. Retailers will have to pull stock on Feb. 10. They won't be able to get loans from banks because they won't be able to sell their inventory."

It is almost unimaginable to think that our free-spending federal masters would allow such a disaster to unfold. But as it stands today, their ill-conceived, heavy-handed legislation could have untold numbers of businesses throwing out piles of clothes, toys and children's accessories prior to Valentine's Day, then closing their doors for good. Families who have become dependent on the growing thrift economy to make ends meet might have to resort to dumpster diving.

Beyond February, consumers certainly will face higher costs and have fewer choices. And Orr's beautiful outfits won't be among them.

Ain't regulation grand?

Glenn Cook (gcook@reviewjournal.com) is an editorial writer for the Review-Journal.

 

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