It has been, for the most part, a good year for California consumers: * Representatives of the automobile insurance industry spent $17.5 million on Proposition 33, an initiative that would have allowed insurers to essentially charge millions of good drivers higher rates. A sufficient number of voters saw through it, and Prop. 33 failed.
* Health insurance consumer groups got behind a 2014 California ballot measure that forces health insurance companies to justify and obtain permission before raising rates -- and compels them to issue refunds for overpayment.
* Elizabeth Warren became the interim director of the new Consumer Financial Protection Bureau. At midyear, she turned the post over to Richard Cordray, the former Ohio attorney general, who is best known for protecting consumers from fraudulent foreclosures and other financial crimes.
But 2013 may not be so good.
Automatic spending cuts triggered by the so-called fiscal cliff would take away about $69 million from the annual budgets of three federal agencies that stand watch on consumers' behalf. Unless there's deal soon, $109 billion in federal spending will kick in on Jan. 2, part of the sequestration process of automatic, budget-leveling cuts.
The Consumer Product Safety Commission, the Federal Trade Commission and Cordray's Consumer Financial Protection Bureau will all take hits, leaving Americans more vulnerable to scams, unfair business practices and unsafe products.
"Agencies have learned to deal with flat budgets, but most have already been cut to the bone," Ed Mierzwinski, the consumer program director for U.S. PIRG, a nonprofit consumer-advocacy group, told McClatchy-Tribune News Service. "Sequestration cuts on top of flat budgets is a recipe for more fraud, more dangerous products and less consumer protection."
We've seen what can happen when financial institutions run amok with little regulatory oversight. We've seen what can happen when advertisers stray too far from the truth about their products or services, or, worse, unsafe products actually make it onto store shelves.
Sequestration does not prioritize according to relative value or need, unless the program or agency in question is one of a growing number that have been granted specific exemptions. Consumer agencies don't qualify, so it's upon the federal government, if they value consumer protection, to do something about it.