Posted: July 30, 2009 12:07 PM

Give Peanuts A Second Chance

Source of Article:

Over the last several years, TARP watchdog Elizabeth Warren has been arguing for a Consumer Financial Protection Agency to regulate financial products like mortgages. To do so, she has used the example of a combustible toaster:

It is impossible to buy a toaster that has a one-in-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street...Why are consumers safe when they purchase tangible consumer products with cash, but when they sign up for routine financial products...they are left at the mercy of their creditors? The regulation.

Consumer product safety regulations have indeed kept ordinary Americans safe from, for example, the Cornballer. But Warren's comparison does not hold for all consumer products we can buy with cash. While in recent years Congress has improved oversight of toys and drugs, food products has been roundly ignored. Meanwhile, the CDC reports that there are 76 million cases of foodborne illness in the United States each year, which result in 325,000 hospitalizations and 5,000 deaths. Most recently, 691 individuals were sickened and 9 died from an outbreak of Salmonella in contaminated peanut products while health officials struggled to determine the source of the hazardous food.

Yesterday, the House failed to pass a measure that would remedy an outdated, overstretched, and underfunded food safety system, not to mention give more ammunition to Warren's argument for financial product regulation. Though the bill may be voted on again today, House leaders miscalculated the measure's support (by 8 votes), leaving the current food system intact.

In that current system, the FDA is responsible for overseeing 80 percent of the food supply. Yet, much of this food never passes under the watchful eye of an inspector. While Department of Agriculture inspectors visit meat and poultry processing plants at least once a day, FDA inspectors average an inspection visit to a food facility once every ten years. Further, the current food safety system is reactive: current regulations mean that the agency springs into action only after an outbreak of illness.

The Food Safety Enhancement Act updates food safety laws to improve the Food and Drug Administration's supervision of the nation's food supply. The legislation requires more frequent inspection of food facilities, improves inspector access to plant records, and orders facilities to develop and implement safety plans to identify and protect against hazards. The bill compels all food plants to register with the FDA and pay an annual $500 fee which, along with fees for food inspection and recall, will help pay for the expansions of oversight included in the legislation. Along with other measures that enhance the FDA's ability to prevent the distribution of unsafe food, the Act authorizes the agency to order food recalls of products that may cause adverse health consequences or death. Finally, the Act makes food origin easier to trace, improves oversight of fresh produce and imported foods, and boosts penalties for violations of food safety laws.

The Food Safety Enhancement Act would modernize the food safety system to protect middle-class Americans who are increasingly concerned about the integrity of the food they eat. More frequent inspections - at least once every 18 months for high-risk facilities - and expanded access to records during these inspections would keep food plants honest, while the requirement for each facility to develop a food safety plan would shift the emphasis of the food safety system to preventing outbreaks of foodborne illness. More detailed descriptions of product origin will assist efforts to stem outbreaks and the FDA's mandatory recall authority will be a vital tool to ensure that the public is protected if an outbreak does occur. The collection of registration fees adds an important source of funding for the expanded oversight activities, though industry payment for their own oversight is always questionable. The Food Safety Enhancement Act will help make middle-class families safer and reinspire confidence in the food safety system.

Even during the Bush administration progress was made in expanding protections for consumers. That makes yesterday's vote - even if a fluke - all the more surprising.



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