The Fulcrum introduces Congress Bill Spotlight, a report by Jesse Rifkin, focusing on the noteworthy legislation of the thousands introduced in Congress. Rifkin has written about Congress for years, and now he's dissecting the most interesting bills you need to know about but that often don't get the right news coverage.
Trump recently discontinued production of the one-cent coin. What about the five-cent coin too?
What the bill does
A new bill in Congress would suspend production of both the penny and nickel for 10 years. The bill also contains a provision clarifying that all existing pennies and nickels ever produced would continue to remain as legally usable money.
It was introduced on February 12 by Rep. David Schweikert (R-AZ1). The bill does not appear to have an official title.
Context
In fiscal year 2024, each penny cost 3.7 cents to produce, more than triple its face value. So on February 9, President Donald Trump announced that he was suspending the production of the penny for an indefinite period of time. (Again, existing pennies can still be used.)
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” Trump posted on Truth Social. “I have instructed my Secretary of the US Treasury to stop producing new pennies. Let's rip the waste out of our great nation's budget, even if it's a penny at a time.”
Even some congressional Democrats supported the move. Rep. Schweikert introduced his bill three days later.
However, some worry that suspending only the penny may inadvertently increase government losses on coin production, by deepening reliance on nickels. Nickels cost 13.8 cents each, so the government actually loses far more on each nickel than on each penny: about 8.8 cents versus 2.7 cents.
What supporters say
Supporters argue in part by citing history. The U.S. last discontinued a coin’s production due to low value with the half-penny or “haypenny” in 1857. However, adjusted for inflation, it was worth more than 17 cents today – the financial equivalent of discontinuing the penny, nickel, and dime due to low values.
Supporters now argue that we should discontinue the penny and nickel but keep producing the dime and quarter because those two actually earn money. Each dime currently costs 5.8 cents, while each quarter costs 14.7 cents – both well below their face value.
Treasury Secretary William E. Simon even advocated suspending the penny back in 1976.
Noting “the diminishing utility of the one-cent denomination in commerce,” Simon wrote, “the United States government is rapidly approaching a decision point concerning continuance of the one-cent coin.” He argued for doing so in the 1970s or 1980s: “Elimination of the cent at some later date would be a much more drastic action than elimination now.”
What opponents say
Opponents counter that the bill is self-serving.
Rep. Schweikert represents Arizona, which produces about 70% of U.S. copper. Only the penny’s razor-thin outer coating is made of copper, but the actual coin is 97.5% zinc versus only 2.5% copper. Vice versa, despite literally being named a “nickel,” the five-cent coin is only 25% nickel versus 75% copper.
In other words, switching from pennies to nickels would require considerably more copper production – primarily benefiting Arizona. Little surprise that Arizona politicians have historically ranked among the biggest proponents of ending the penny in years past.
In 2006, then-Rep. Jim Kolbe (R-AZ8) introduced the COIN (Currency Overhaul for an Industrious Nation) Act. In 2017, then-Sen. John McCain (R-AZ) introduced the similarly-named COINS (Currency Optimization, Innovation, and National Savings) Act. Neither received a vote.
Odds of passage
The new bill has not yet attracted any cosponsors, not even any Republicans. While lead sponsor Rep. Schweikert is a Republican, the bill isn’t particularly partisan in substance.
It awaits a potential vote in the House Financial Services Committee, controlled by Republicans. No Senate companion version appears to have been introduced yet.
Back in 2011, Rep. Schweikert also introduced a bill to replace the production of dollar bills with dollar coins within four years. (Currently, dollars are produced as both bills and coins.) The legislation never received a vote.
Jesse Rifkin is a freelance journalist with the Fulcrum. Don’t miss his report, Congress Bill Spotlight, on the Fulcrum. Rifkin’s writings about politics and Congress have been published in the Washington Post, Politico, Roll Call, Los Angeles Times, CNN Opinion, GovTrack, and USA Today.
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Source: Corporate Pero Latinos
Source: Corporate Pero Latinos
Source: Corporate Pero Latinos