Legislation reintroduced in the U.S. Senate seeks to save taxpayers money by suspending production of the 1-cent coin, changing the 5-cent coin’s composition, and replacing $1 notes with $1 coins.
Numbered S.759, the Currency Optimization, Innovation and National Savings (COINS) Act of 2017 was introduced by Sen. John McCain and Sen. Enzi on March 29, 2017.
"With our country facing $20 trillion in debt, Congress must act to protect the American taxpayer," Senator McCain said in a statement. "By reforming and modernizing America’s outdated currency system, this commonsense bill would bring about billions in savings without raising taxes."
10-Year Suspension of 1-Cent Coin
In the U.S. Mint’s FY 2016 Annual Report, the agency said that it costs 1.5 cents to strike and distribute each 1-cent coin. The nation’s smallest denominated coin has been a money-loser for 11 straight years.
The COINS Act would suspend their production for circulation for 10 years and pave the way for their elimination by requiring a GAO study to determine the effect of the suspension and whether it should remain in place.
The legislation carves out an exception to the suspension, enabling the coin’s production to fulfill the needs of numismatic collectors.
Change 5c Composition
The same U.S. Mint annual report said it costs 7.44 cents to produce and distribute every 5-cent coin. Similar to the cent, the nickel has lost money for 11 years in a row.
Five-cent coins are composed of 25% nickel with the balance copper. The COINS Act directs the U.S. Mint to make them from 80% copper and 20% nickel, and provides a provision to increase their copper content further.
Before any composition changes could happen, there are requirements that they must save taxpayers money and have no impact on the public or on stakeholders (like vending machine companies).
Replace $1 Notes with $1 Coins
Finally, the COINS Act would replace $1 Federal Reserve notes with longer lasting $1 coins.
"It is well-documented that replacing the dollar bill with a dollar coin would save taxpayers billions of dollars, and also be good for consumers, businesses, and the environment," said Tom Schatz, President of the Council for Citizens Against Government Waste (CCAGW).
According to a GAO study published in 2011, median lifespans are 40 months for notes and 34 years for coins. The same report estimates costs at 2.7 cents per note compared to 15 cents per coin. The GAO’s analysis concluded that replacing the $1 note with a $1 coin could save taxpayers approximately $5.5 billion over 30 years.
"The Council Citizens Against Government Waste has been advocating for the dollar coin for many years and we welcome the introduction of the COINS Act by Senators McCain and Enzi," Schatz added.
Beginning 2 years after its enactment, $1 notes would no longer be printed aside from numismatic purposes, and Federal Reserve Banks would remove them from circulation for destruction. They would remain legal tender currency.
Bill’s Status
S.759 has been refereed to Senate Committee on Banking, Housing and Urban Affairs.
For it to become law, it must pass in the Senate and House and get signed by the President. Similar versions of the bill have been introduced in prior sessions of Congress but they died from inaction.
Two week old news here published March 29 by coinworld.com. Better late than never!
-NumisDudeTX
The coins need major overhaul, none of them with the exception of the $1 coin is fit for purpose anymore. The 5 and 10 cent coins need to be produced in copper-plated steel and comparable in size to their respective values, the 25 cent or quarter needs to be re-issued as a coin comparable to the Dollar coin along with a practical and usable 50 cent coin – also in comparison to the Dollar coin and the Mint needs to explore the issue of a practical $2 coin. Change seems to never take place with circulation coins, if you have… Read more »
Good ideas and I like the way they will keep cents for proof and mint sets (and perhaps selling in bag lots like halves?). We really could easily get by with just a nickel, dime, and quarter, but overcoming inertia to change is hard (can anyone say “metric system”?). Getting rid of the cent is logical, given how its value has steadily decreased, but I doubt if any US government wants to admit this way that the money is worth less. After all, the shrunken Anthony dollar was derisively called the “Carter quarter”. Still, it would be a good time… Read more »
I think it’s a great idea. It would be better if a new $1 coin would be art like it used to be.
Unfortunately special interest groups will end up killing these proposals & nothing will change.
I’m surprised an old fogey like John McCain would sponsor this kind of bill but glad to see it and that something might be done about the penny and $1 bill. Don’t understand the 10 year suspension on making the penny nor the continued production of the penny for numismatic purposes. Canada no longer mints pennies at all and their collector coin sets haven’t suffered at all. Speaking of Canada at least when they stopped making the penny they provided a solution for purchases that ended in the odd cent whereas this bill makes no suggestion about what to do… Read more »
In order to help business the Executive Branch proposes if pa$$ed all transactions will just be rounded up to the next dollar……seriously about time, but the vested mining etc., lobbyists will be out against this like a Chicago Aviation Security Team……what a drag
These proposals are a little more popular each year. If they just add a provision to increase the two dollar bill production, it could get by the lobbies.
Anxious to see who will be on the Dollar coin?
Trump agreed not to veto this bill as long as his face was placed on the new nickel, dime, quarter, $1 and $2 coin.
As ever, this article cites cost savings that completely ignore the $1 public debt reduction that accrues to the US Treasury from issuing each $1 coin. (There is no countervailing public debt increase due to $1 federal reserve notes being withdrawn, since they are issued by the twelve privately-owned federal reserve banks.) As a result, the benefits to the government over the same (30 year) period, based on the same production schedules, are some $50 billion more than the given estimates.
Ideally, the $1 coin should be redesigned, to match the size of the eliminated penny. Although pretty, the bulk of the $1 coin renders it inconvenient.
The penny is a loser – yes. But elimination of thie bill will cost everyone reading this more money as a whole. The government studies do not cover the realities of increased costs to consumers that happen in the real world. Yes – taxpayer money is saved THEORETICALLY and ON PAPER to look good for politicians. But the reality is that, just like when Canada eliminated one dollar bills, the costs to consumers on a daily basis rise from two main occurences: 1. When the dollar “psychologically” becomes the “new quarter,” retailers take advantage of this and jack up prices.… Read more »
The COINS Act conspicuously ignores the fact that every other country which replaced its $1 (or equivalent) bill also has a widely-circulating $2 denomination. Having both denominations greatly simplifies change-making AND negates the standard “pocket full of $1 coins” objection of the naysayers – any dollar amount less than five bucks can be given with at most two coins instead of the four needed in its absence. Ideally a $2 coin should be introduced at the same time as the $1 bill is ended. It should be small and distinctive, perhaps multi-sided and/or bimetallic. However given the politics surrounding ANY… Read more »
The $2 coin could be cent-sized.
“The $2 coin could be cent-sized”
Definitely, although there’d have to be enough differences to avoid confusion, not to mention re-use of old 1¢ coins. The Australian $2 coin is a good example that a small, higher-denomination coin can be successful. It’s 20.5 mm in diameter (very close to our cent’s 19 mm) but has a distinctive thickness and color.
This has been in the talks for a while now. Maybe it WILL happen this time. And maybe it would be a good time to put the half dollar back into circulation. But why would it be a 10 year period before it is all said and done.
The $5.5 billion savings over 30 years will never even be noticed the way our government goes through money. The savings per year would be just over 183 million, which in government terms is almost nothing. Sure the mint will save but it will be spent somewhere else.
As my previous comment states, the actual savings would be ten times the GAO’s estimate, owing to the GAO’s failure to incorporate the Treasury’s $1 per $1 coin debt reduction.
There is such a glut of pennies out there does not make Sense (cents) to be producing them! Especially since we are loosing money. Hopefully President Trump will pass this bill reducing the deficit was his plan! Great Work Sen. Mcain. Hopefully the lobbyists will not have the power to block.