updated 9/20/2007 4:46:46 PM ET 2007-09-20T20:46:46

More than just Elmo's bug-eyes will be watching as "Sesame Street" toys roll off the factory line in China.

The nonprofit company behind the show's cast of characters said Thursday it would dispatch auditors to factories, ports and stores to check for lead and other problems in the toys its licenses.

Sesame Workshop's announcement came as toy industry representatives acknowledged recent recalls of imported toys for lead, choking and other hazards mean it must do more to assure the safety of the 3 billion playthings it sells each year.

"These recalls demonstrated to us that we needed to apply some new safety assurance measures in the toy production process," Carter Keithley, president of the Toy Industry Association, said during the second of two days of hearings before a House Energy and Commerce subcommittee.

Last month, Mattel Inc. recalled nearly 1 million toys — including 400,000 Sesame Workshop-licensed toys — because of lead contamination. Company tests found lead levels in paint in the recalled toys as high as 200 times the accepted safety ceiling.

"The lesson for Sesame Workshop from this experience is that we must be even more vigilant about who we license to produce products that bear our characters and we must be very clear about the standards they must satisfy," the nonprofit's president and chief executive, Gary Knell, told lawmakers.

About 80 percent of the $22 billion in toys sold each year are imported from China. The volume surged after the country entered the World Trade Organization in 2001, said Lori Wallach of the watchdog group Public Citizen.

U.S. trade and safety policies, coupled with the Consumer Product Safety Commission's "laissez-faire" attitude, have left American consumers to rely on foreign regulations and inspectors to ensure the safety of products in their homes, Wallach said.

"Sadly, recent experience has highlighted that many foreign regulatory systems are not up to the task," Wallach said.

While China and the underfunded CPSC are partly to blame, so are American importers, retailers, investors and consumers, who variously demand lower prices, higher sales and increased growth — all at the expense of quality, said Mary Teagarden, a Thunderbird School of Global Management expert in offshoring. Downward price pressure exerted by big-box retailers like Wal-Mart Stores Inc. squeezes suppliers all the way down the supply chain, Teagarden said.

"As a consequence, there is a risk of slippage — quality slippage, use of inferior materials and less supervision of the manufacturing process," Teagarden told lawmakers.

While toys decorated with leaden paint have grabbed headlines, far more jewelry made with excessive levels of the toxic metal likely has made it into the hands — and, potentially, mouths and stomachs — of American children in recent years. Since 1998, the CPSC has recalled roughly 158 million pieces of toy jewelry due to high lead levels, by one estimate.

Even if lead doesn't kill, it still can cause cognitive, motor and behavioral harm, Dr. Dana Best of the American Academy of Pediatrics told the panel. Even low levels of exposure to the toxic metal can drag down a child's IQ.

"There is no 'safe' level of lead exposure," Best said.

Consumer activists and a local official complained to lawmakers the CPSC doesn't do enough to police the market for lead in toys and other products sold to children.

In Baltimore, mandatory monthly lead testing of children's jewelry found in March three rings for sale in a vending machine that were about 5 percent lead by weight, said Olivia Farrow, the city's assistant commissioner of environmental health. The CPSC had recalled the rings in July 2004 — nearly three years earlier.

"The failure of the CPSC product recall system exemplifies the federal government's failure to protect the public from imported goods," Farrow said.

On Wednesday, top CPSC officials told Congress it should increase the agency's budget and power. A day later, one lawmaker appeared to question the present-day risk of lead.

Rep. Cliff Stearns, R-Fla., noted that many adult Americans grew up with leaded gasoline, lead pipes and lead paint, yet are living to 85 and 90.

"We had all this lead that was omnipresent. How did they escape it?" Stearns asked Best.

"We didn't escape it. I would have been a lot smarter," said Best, who has a master's degree in public health as well as a medical degree.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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