UPDATE 3-US House speaker wants product safety chief to go

The bill would also boost the maximum penalty in consumer product safety cases to $100 million from $1.25 million. This would raise the potential for meritless claims by "bounty hunters," Allan Hubbard, the president's economic adviser, in a letter to Senate Commerce Committee Chairman Daniel Inouye, a Hawaii Democrat.

The White House also opposed a measure to delegate some product safety enforcement to state attorneys general, in addition to the federal safety agency.

The White House concerns are shared by the National Association of Manufacturers, the National Retail Federation, and several other industry groups.

Hubbard said the administration recently launched a working group on import safety that is looking at many of the same issues as the Democrats' bill and that it will develop an "action plan."

At a briefing with reporters, White House spokeswoman Dana Perino said: "There's never going to be any way that we will have enough people to inspect every single item that comes into this country that's going to be sold ... But you can have better systems, and that's what we're trying to work towards."

The bill approved by the Senate Commerce Committee included the provisions criticized by the White House. It would also require third-party laboratory testing of children's products and raise agency staffing to at least 500 by 2013. (Additional reporting by Julie Vorman)