Legislators aim to reduce coin production costs
As the United States faces an enormous national debt and still struggles to fully recover from the economic downturn, many politicians have sought out new ways to cut spending by eliminating unnecessary programs and reducing costs for essential projects. One of the ways some lawmakers aim to achieve these goals is by changing how American coins are produced.
Legislation could change coin composition to limit costs
Recently, Rep. Steve Stiversâ (R-Ohio) re-introduced the Cents and Sensibility Act in an effort to limit coin production costs. This initiative would mandate pennies be composed primarily of American steel, rather than imported metal. According to The Los Angeles Times, Stivers has advocated the plan as a way to trim coin manufacturing expenses, especially for low-denomination change, as pennies and nickels now cost more to make than their face value.
A penny is currently composed of 97.5 percent zinc and 2.5 percent copper, according to U.S. Mint data. Because the Cents and Sensibility Act would eliminate the use of the compound that gives them their unique color, The Los Angeles Times reported the coins would be dipped in copper coating, which would ensure they retain the same appearance. This wouldn't be the first time coin composition has changed, as pennies have been made of multiple combinations of metals throughout the history of the country.
According to the House Financial Services Committee, this bill could result in significant cost savings if it garners enough support. The body anticipated the enactment of the bill would save up to $433 million over the next 10 years.
While the zinc lobby has opposed the measure, the Mint has also expressed concern mandates on metal use from Congress could stifle the ability for Mint officials to determine the most cost-effective materials.
Not the first attempt to cut expenses with new coin initiatives
The bill is similar to legislation reviewed by the House of Representatives several years ago; however, that measure did not garner enough support to be enacted.
The United States is not the only country trying to trim the expenses associated with producing change. Multiple countries have eliminated pennies as part of new budgeting plans, Canada being one of the most recent. The Cents and Sensibility bill wouldn't eliminate these commonly used coins, but rather make them most cost effective to produce. If the bill is passed, businesses and organizations will still see plenty of pennies from customer transactions and will therefore need to ensure their coin sorter is prepared for the task.
May 15, 2013