Bush signs consumer bill; boosts funding, cuts lead

By Georgina Coolidge

WASHINGTON (Reuters) - Legislation aimed at improving U.S. consumer product safety after millions of Chinese-made toys were recalled last summer was signed into law by President George W. Bush on Thursday.

The measure dramatically cuts the amount of lead allowed in toys and other children's products, increases funding for the Consumer Product Safety Commission (CPSC) and partially bans controversial plastic-softening chemicals called phthalates.

"This bill will help to ensure that products Americans find on their store shelves are safe and that the regulating agencies have the resources they need to enforce law," White House Deputy Press Secretary Tony Fratto said in a statement.

"This has become an increasingly difficult and complex job as more imports from more nations are now sold in the United States than ever before," Fratto added.

Mattel Inc, RC2 Corp, and other companies were forced to pull millions of Chinese-made toys from shelves in 2007, primarily due to excessive lead content in paint.

Under the new law, the CPSC's annual budget will rise from its current $80 million to $118 million starting in fiscal 2010 and grow to $136 million over five years.

The legislation also mandates national safety standards for all-terrain vehicles, linked to hundreds of deaths each year, as well as set standards for toys.

The curb on phthalates, chemicals which some believe can cause abnormal reproductive development in children, was one of the most controversial provisions in the bill.

Three types of phthalates would be permanently banned in children's toys and child care items, except for minute amounts, while three others would be temporarily banned pending further study.

The American Chemistry Council said although they believed there was no scientific basis for the phthalate restriction, they understood consumer concern and were committed to working with the CPSC and others to conduct the studies to ensure public safety.

Other features of the bill include whistle-blower protections and third-party testing requirements for certain children's products. It also extends authority to the CPSC to inspect manufacturers' proprietary labs and increases maximum criminal penalties for violations.

The Consumer Federation of America welcomed the legislation.

"This bill patches up our current system by giving the CPSC the resources, regulatory authority and enforcement tools it needs to protect consumer from hazards posed by unsafe products," said Rachel Weintraub, federation director of product safety and senior counsel.

(Reporting by Georgina Coolidge, editing by Richard Chang)