With the sudden resignation of Consumer Product Safety Commission Chairman Nancy Harvey Steorts last week, the beleaguered agency is again at a turning point.
Steorts' resignation, effective next month, will leave one open seat to be filled by President Reagan, with the four incumbents on the five-member commission more or less split between regulators and deregulators, a commission official said. One of the deregulators, CPSC Commissioner Terrence M. Scanlon, is a leading candidate to replace Steorts as chairman and is a strong advocate of reducing regulation of consumer product manufacturers.
"With the imminency of a new chairman, the commission is at a crossroads," said Republican Commissioner Stuart M. Statler, who often stood beside Steorts in opposing deregulatory efforts.
At stake is not only the future course, but conceivably the survival of the tiny regulatory agency, formed in 1972 to protect consumers from "unreasonable risks of injury associated with consumer products."
The Heritage Foundation has renewed its call for deregulation of consumer products in its Mandate for Leadership II, a sequel to its 1980 report, which the Reagan administration called its blueprint for regulatory reform.
While product liability laws "are far from perfect, they do make redundant much of the work of the Consumer Product Safety Commission," the Heritage Foundation said. "The judgments and attending bad publicity inherent in the use of the legal system represent stronger deterrents than any the CPSC could hope to devise."
When Steorts was appointed by President Reagan in 1981, many people expected her to lead the way in reducing the agency's activity.
She did not do so, however, putting herself frequently at odds with Scanlon and the White House, while winning the support of consumer groups.
Steorts, 47, one of the highest-ranking women in the Reagan administration, resigned last week, saying the time had come for her to "move on to new challenges." Administration officials and several sources close to the commission said that Steorts had no choice. Her term ended on Oct. 26, and one administration source said that the White House was not planning to renominate her.
"I fear it is because of her record of consumer protection that the Reagan administration has refused to reappoint her, and is instead seeking a replacement more amenable to its goal of destroying this small consumer protection agency," said Henry A. Waxman (D-Calif.), chairman of the House subcommittee with jurisdiction over the agency.
"The dismissal of Nancy Steorts by the Reagan administration signals a renewed attack on the programs of the Consumer Product Safety Commission," said Joan Claybrook, president of Public Citizen. "Even Nancy Steorts was too progressive for the Reagan tastebuds."
Although Steorts said at her Senate confirmation hearing and in an interview last week that she favored voluntary standards rather than mandatory rule-making, she didn't resist taking mandatory action when voluntary industry action was not forthcoming.
For instance, she fought to ban urea formaldehyde foam insulation, which the CPSC declared unsafe, and favored the regulation of amusement rides in theme parks and other fixed-site locations.
Scanlon, 45, actively supports voluntary, rather than mandatory, standards for product manufacturers, and he strongly backed the White House position on the standards issue.
"You can get a voluntary standard from industry in a year, but it takes an average of 4 1/2 years to promulgate a mandatory standard," Scanlon said in an interview last week. "I only favor mandatory standards as a last resort."
These views have made Scanlon popular with the companies the CPSC regulates. The Toy Manufacturers of America was one industry group that worked closely with the commission. "I was very unhappy with the previous chairman," said Douglas Thomson, president of the toy industry group and a supporter of Scanlon. "If I had to choose something that needed to be improved, it is the administration of the agency, the setting of goals and objectives. The staff is not focused, and the programs are not cost-effective."
Scanlon, a Democrat, is a logical White House choice for chairman, commission sources said. "In effect, the administration has signed off on Scanlon's nomination," said a commission source after Steorts resigned.
Scanlon's path, however, may be blocked by a new candidate.
Congressional sources say that a new contender for the chairmanship is Camille Haney, 38, a Republican from Wisconsin who was a member of the White House Consumer Advisory Council. She was the 1983 president of the National Society of Consumer Affairs Professionals in Business, which is based in Alexandria.
Haney's name was put forward by Sen. Robert W. Kasten Jr. (R-Wis.), chairman of the Senate Commerce subcommittee, which oversees the confirmation hearing on the White House nominee for CPSC chairman.
"Since Haney is the candidate of the chairman who will oversee the confirmation hearing, she's nothing less than a very strong candidate," said a White House official, who asked not to be named.
Administration and congressional sources said that Kasten asked the White House to "put a hold on its decision regarding Scanlon" and to look at Haney's credentials. She was interviewed at the White House Wednesday, an administration source said.
"Camille Haney would be an excellent choice," said Kasten, and sources say he plans to fight hard for her nomination. Kasten hasn't recommended any individual to the White House for either the CPSC or the Federal Trade Commission in the four years that he has headed the subcommittee, which oversees both agencies, congressional sources say.
"Haney has a fine national reputation and has had 15 years of experience in government, consumer affairs and private business," Kasten said. "She would be an outstanding spokeswoman for the administration on consumer issues."
Haney is the president of the Haney Co., a Milwaukee-based national consumer-related consulting firm whose clients include Ford Motor Co., American Express Co., Atlantic Richfield Co., Bank of America, Firestone Tire and Rubber and Allstate Insurance Co. She serves on 20 boards and associations, including the national Council of Better Business Bureaus.
Haney previously headed the Wisconsin Attorney General's Office of Consumer Protection. "She's generally thought of as the No. 1 spokesperson for consumer issues in Wisconsin," a congressional source said.
Steorts also spoke highly of Haney in an interview this week. "She's an outstanding individual," Steorts said. "She possesses a quality that I think is important in that she can work with both the consumer and industry."
Haney, a relative unknown among many national consumer groups, did receive praise from the Consumer Federation of America.
"Haney has a good relationship with most constituencies within the consumer movement," said Steve Brobeck of the CFA. "She is highly respected by business and consumer groups."
The U.S. Chamber of Commerce, which represents business interests, also praised Haney. "We think very highly of Camille Haney," said Jeff Pearlman of the chamber, who declined to commit himself to any candidate for the chairmanship. "We think she would be a fine chairman."
Haney declined to comment on her nomination, except to say that she is "honored to be considered." Some consumer groups said they do not know how she stands on deregulation of the agency.
Attitudes toward Scanlon are more polarized, with his support coming from industry and his opposition from consumer groups.
"I think he is well thought of in the business community," Pearlman said. "Our industry has had an extremely good relationship with Commissioner Scanlon," said Charles Carey, co-chairman of the Upholstered Furniture Action Council, which is based in North Carolina.
Consumer groups, however, said Scanlon's elevation to chairman would be a setback for consumer product safety.
"We are pleased that Commissioner Scanlon has consulted us on numerous occasions, but are disappointed that he has voted against the consumer interest on virtually every issue considered by the commission in the past three years," said Brobeck of the CFA. "There is a serious question whether he is prepared to require safety regulation when business fails to regulate itself."
Among Scanlon's views that angered consumer groups was his vote on the CPSC's restrictive export policy. Scanlon was the only commissioner who voted to allow companies to export products that the CPSC had deemed unsafe. He argued that judgments about product safety should be made by the country receiving the U.S. goods and that the CPSC should not be a "foreign policy meddler" that takes the role of "international nanny."
Scanlon said he would try to significantly change the CPSC method of gathering injury statistics in hospital emergency rooms if he were appointed chairman.
Under the current method, an official in hospital emergency rooms collects statistics on everyone brought in for a product-related injury. The CPSC later examines this information to determine whether the injury was caused by the individual or the product.
Scanlon wants the emergency room official to determine on the spot whether the injury was product-related.
Consumer groups and other commissioners, however, argue that many defective products, like certain types of lawn mowers, never would have been discovered if the CPSC had not been alerted by the large volume of statistics from emergency rooms compiled under the current method.
Although consumer groups said last week that they initially disapproved of Steorts' appointment, they were more fearful of the direction that Scanlon might take the commission.
"When it came down to the tough and important votes, Steorts voted for the consumer," said Mary Ellen Fise, product safety director of the Consumer Federation of America.
Still, critics said that a major problem for the commission under Steorts was the increasing friction among commissioners.
"The health and safety of the American public is well-served by a commission that works well together," said Pearlman of the Chamber of Commerce. "And it is my clear perception that the commission has not recently been a smoothly operating commission. There has been a substantial amount of friction there."