Rationality of phalates requirement of PL 110-314, Sec. 108(a) is discussed in CBS 60 Minutes presentation "Phalates: Are they safe?" aired on May 23, 2010. The video is available at this link.
CBS concludes that dangers posed by phalates (decreased male masculinity) is questionable at best due to mixed results of animal testing. Nonetheless, Congress passed Consumer Product Safety Improvement Act of 2008 banning phalates in certain children's products, effectively raising the cost of doing business for toy / children's articles manufacturers.
For specific's regarding applications of phalates to children's products see CPSIA Questionnaire portion "Children's Articles" produced by the editor of this blog.