#1 Component testing.   
     Accept supplier test certificates for these components.  
     Assume that products sold as food-grade are also lead/phthalate safe.

Even if the law isn't changed to require suppliers to test materials before selling them, the market is already driving them to because manufacturers need to know that their finished product will pass the test long before there is an actual product to have tested.  Before they order their supplies, the need to know that they aren't going to cause any problems down the road.
And for the rare widget that is only available from one supplier who refuses to test, asking a small manufacturer to pay for ONE test on their shipment of those widgets (regardless of the number of end uses) is not an unreasonable burden.
Products sold for human consumption, such as food coloring, should also be presumed safe for toys and other children's products.

#2 Inexpensive screening to determine need for testing
I don't have the hard data on XRF testing precision, and don't know that it meets the laws wording of "equally precise" - but something doesn't need to be equally precise to be equally effective.  A less precise technology can be made equally effective at capturing all cases of something by setting your tolerances to allow for more false positives and virtually no false negatives. 
If XRF (or other inexpensive testing mechanism) is deemed less precise, how about using it as a screening tool?  Even if acid tests are required for any material showing ANY lead detected in the screening, that should significantly reduce the financial burden.

#3 "Caution: not tested for lead or phthalates"
I see this as more potentially problematic than the other suggestions, but this would be a wonderful option for LOW-RISK products (ie non-painted, non-plastic).  

#4 Require testing only for products with an established risk factor.
The current system of "test everything until we determine what doesn't need to be tested" is not only un-American, but impractical.  This needs to be reversed to target high-risk categories of products now and adopt a plan to assess risk factors for everything else BEFORE requiring any testing.  
This would IMMEDIATELY fix the most drastic issues that caused the recalls (jewelry, painted toys) while allowing testing facilities to grow gradually to meet the need instead of forcing exponential expansion of testing capacity then slashing their work as certain categories are deemed safe.
Look at the lead/phthalate recalls of the last 10 years and target similar products: painted toys, vinyl, jewelry, fabric with painted designs, fabric with metallic threads, painted zipper pulls, etc
THEN consider whether you need to implement a law to test socks.  Or the entire sweatshirt that the painted zipper pull is attached to.  Or the playsilks dyed with food coloring and vinegar.   

  - by Christy Dryden