Is Feb. 10 financial doomsday for thousands?

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A new government regulation scheduled to take effect next month has thousands of retailers, thrift stores and small businesses worried they will be forced to permanently close their doors – and destroy their merchandise.

The law is expected to have such a devastating impact that Feb. 10 is now unofficially known as "National Bankruptcy Day."

Congress passed the Consumer Product Safety Improvement Act of 2008, or HR 4040, a retroactive rule mandating that all items sold for use by children under 12 must be tested by an independent party for lead and phthalates, which are chemicals used to make plastics more pliable.

All untested items, regardless of lead content, are to be declared "banned hazardous products.'' The CPSC has already determined the law applies to every children's item on shelves, not just to items made beginning Feb. 10.

The regulations could force thousands of businesses – especially smaller ones that cannot afford the cost of lead testing – to throw away truckloads of children's clothing, books, toys, furniture and other children's items and even force them to close their doors.

Valerie Jacobsen and her husband, Paul, support their family of 13 by selling literature at Jacobsen Books in Clinton, Wis. Her family has contracts with local libraries to buy and sell overstocked books – an arrangement that draws income for both parties.

However, Jacobsen told WND that lead testing is estimated to cost $100 to $400 for each of her used children's books because she does not buy in bulk, and each batch of merchandise is required to be tested.

"There's a big difference between me and Wal-Mart or Toys 'R' Us," she said. "They'll have a batch of 50,000. Everything I have is a batch of one because I don't know its history. I'm looking at a testing cost of about $1.2 million. I would normally sell my full inventory of all children's products for probably $15,000. So, it's effectively a ban."

The Consumer Product Safety Commission states that lead testing requirements apply to children's books, cassettes and CDs, printed game boards, posters and other printed goods used for children's education. While it does claim some printing inks will be exempt, paper, cardboard, bindings, glues, laminates and other inks are still subject to regulation and require testing.

Jacobsen said that unless the new law is repealed or substantially modified, it could devastate her family business.

Jacobsen said she often shops at second-hand stores for her 11 children because she can buy quality clothing at low prices.

"Over the years I have always tried to make the most of our money, so we'll go to Goodwill," she said. "To be honest, I'd rather go to Goodwill and get a brand-name item that's hardly been worn and pay $3.99 for it than to go to Wal-Mart and pay $13.99 for something that in six weeks from now is not going to worth anything."

But now some thrift and consignment stores are in a panic over the new regulation because it extends to children's clothing, shoes and other items as well.

While some may continue to sell their children's products and disobey the law, Jacobsen told WND she's not taking any chances at her bookstore.

"Would I ever get caught? Probably not," she said. "But they are talking about $100,000 fines and jail terms of up to five years. I'm not comfortable operating with that law on the books."

Rep. Bobby Rush, D-Il., sponsored the measure along with 106 co-sponsors. In the House of Representatives, 424 members voted for the act, nine voted "present" and a single member voted against it – Rep. Ron Paul, R-Texas.

In the Senate, the totals were 89 for, eight "present" and three against – Sens. Tom Coburn, R-Okla., Jim DeMint, R-S.C., and Jon Kyl, R-Ariz.

President George Bush signed it into law on Aug. 14, 2008.