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Senator Jim DeMint on the need, but lack of Democratic support, to reform CPSIA

Monday, March 9, 2009

HH: As you have heard me talking two weeks ago and again today with Gary Wolensky from Snell and Wilmer, the Consumer Product Safety Improvement Act is an utter and total fiasco, a disaster for American manufacturing. It’s cost about a billion dollars in wasted, good products. It’s putting a lot of people out of business. And still, the United States Congress does nothing about it. Joining me now is one member of the United States Senate who does want to do something about that. It’s Senator Jim DeMint from the great state of South Carolina. Senator DeMint, always a pleasure, welcome back to the Hugh Hewitt Show.

JD: Well, thank you, Hugh, and thank you for making people aware of what we’re doing here. This is such a perfect example of unintended consequences from Congressional knee-jerk reaction. And everyone was patting themselves on the back for passing this bill in a hurry, and now we’ve got everyone from yard sales to manufacturers losing their shirts, losing jobs. And it doesn’t make any sense at all. I do have an amendment that would delay the implementation, even though it has basically kicked in now, for six months for us to straighten this out. But it’s been hard for me to get the Democrat majority to let me get it on the floor.

HH: Now Senator DeMint, about three weeks ago, a friend of mine, Gary Wolensky of the law firm Snell and Wilmer, he represents some of the biggest sporting goods manufacturers, he’s involved with some of the ATV people, a lot of the big companies who have got these hundreds of millions of dollars of inventory that’s suddenly worthless. And he’s real well read up on the thrift stores and all that stuff, sat down with me and described this. I could not believe it. I really, I had trouble believing that the Congress could have done something this stupid. Were you aware at the time? Do you think that your colleagues knew at the time, in August of 2008, what they were doing?

JD: Well, I don’t think many of them did or cared. They seemed to be out of touch with the people who really create jobs in our country. And now we’re talking about spending trillions of dollars to get people jobs, but we can look at things like this and see we know that this’ll cost thousands of jobs. I’ve talked to a lot of small manufacturers who have inventory that they know is harmless, but they can’t afford to get the testing done, and small companies where a major retailer like Wal-Mart just says we’re sending this stuff back because we can’t test it. And there are going to be jobs lost, companies go out of business. And we’ve got everything from just small, I mean, yard sales or consignment shops, they don’t know what to do with this new rule. But it is a perfect example of the unintended consequences of a Congress that’s just trying to do good with other people’s money, and we are doing so much harm right now in every area of our economy. It just is painful.

HH: Now Senator DeMint, when I began to read up on this, I understand that no one wants lead in products sold to children.

JD: Right.

HH: On the other hand, the deadlines put into this, and the testing requirements, have been ruinous for small manufactures, as you said. And a lot of products out there, like these all-terrain vehicles for the 12 and under set, it’s dangerous if they drive adult vehicles. And now we’ve got all this stuff that’s simply sitting in warehouses. Do your Democratic colleagues want to work with you to get just a delay in the law so that this inventory can at least move through the pipeline without being destroyed?

JD: They have given no indication they’ll work with us, or that they care about the lost jobs, the lost money involved with this, in which I’m just pulling my hair out over it. I’m going to keep looking for an opportunity over the next few weeks to just add it as an amendment to something else. If nothing else, I’ll try to get it on the budget that comes through that Obama’s pushing, but that doesn’t mean that they won’t just strip it out when they get behind closed doors. But I know they’ve got to be getting some of the same calls that we’re getting from people, so I frankly just think there’s a callousness towards the people who are creating the jobs. Right now, they’re trying to stir up the rich versus the poor, and employers versus workers. And they just see this as an effort to help employers.

HH: Now who are the key Democrats? I know that Amy Klobuchar of Minnesota was one of the co-sponsors, and I saw that she was quoted in yesterday’s Minneapolis Star Tribune as saying it wasn’t supposed to be this way, the Consumer Product Safety Commission is making it this way. I don’t think that’s true, by the way. I’ve read the law.

JD: Right.

HH: Wolensky gave it to me. They’re doing what the law says to do, which is crazy. But besides Klobuchar, who ought the audience get in touch with and say come on, you’ve got to fix this?

JD: Well, Harry Reid is the majority leader. He could put this on the floor and we could have it done in a few minutes if they would let it. Senator Durbin from Illinois is a key person to get this on the floor. But those two are key. If people would just call their offices, e-mail their offices, calling right now is more effective, because we just need to get them to act quickly before these companies actually destroy all this inventory and just lose literally millions and millions of dollars.

HH: Now in terms of the effort, I know that the sporting goods manufacturers have been up on the Hill, Wolensky told me. How about other industries? Have they been up there knocking on doors trying to educate people?

JD: Not as much as you would think, and a lot of people that are being hurt are smaller companies and just everyone from Rotarians or charities that do different kinds of sales. And a lot of the smaller companies don’t have the lobbyists or the presence on Capitol Hill to know the ins and outs. In the larger companies, maybe they can deal with it more effectively. But in this economy, I wouldn’t think any company could take the losses that might be required to throw away a lot of inventory, and to spend the thousands that’s required for testing. I mean, I don’t want any child to be in danger, but we have certainly not had the health problems that you would have thought to justify this kind of massive overreach.

HH: Senator DeMint, one of my suspicions is your Democratic colleagues are not in a hurry to change this because it empowers plaintiffs lawyers, and indeed the first lawsuits have been filed against manufacturers of products that have not been carefully tested, or have not been recalled. Do you think that some of our colleagues on the Democratic side of the aisle are refusing to move because their trial lawyer buddies are going to get rich off this thing?

JD: There’s no question about it. Almost every piece of legislation now seems to have been written by plaintiffs lawyers. There’s new risk, new loopholes, and what small company is, if they get a call from just a small, local plaintiffs attorney, that they’re going to be sued unless they settle, there’s going to be so much, so many lawsuits and threats of lawsuits because of this. And that’s just hurting our economy. I just can’t believe we’re talking about something like this when we’re spending trillions of dollars to try to get people jobs. We’re just throwing them away for no reason with this legislation.

HH: Last question, Senator Jim DeMint, in terms of, you know, the market slide continued today only about 80 points, that really seems like an up day given what we’ve been living through under President Obama. Have some of your Democratic colleagues started to say to you, perhaps quietly in the corner of the cloak room, we’ve got to talk to the President about changing course? He’s got to try and grow the economy, not simply tax it?

JD: Oh, no. Most of them are real believers in a centrally-managed economy, and they’re going to keep blaming George Bush, and they’re going to keep spending money. I don’t think many of them are anywhere close to the point of saying that it is a problem with policy. They think this is a hole that George Bush dug. But if you look at the charts, in September of last year, just about everyone knew that Obama was going to win the presidency, and that’s when the stock market started going down. The market knows when it’s in for policies that are bad for investment.

HH: You know, if he did one thing, if the President were to lead on the CPSIA, reform it, I think he’d send a big signal that carried even beyond those people being heard here, meaning that he was open to the idea of protecting jobs, not just raising taxes. Senator Jim DeMint, always a pleasure, look forward to talking to you again soon. Good luck in reforming CPSIA.

End of interview.

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