We believe that it would be in our economy's best interest to form a new coinage standard. This standard would consist of three coins. a ten-cent coin, a fifty-cent coin, and a one dollar coin. This standard would open up new efficiencies in both everyday economic life, and in government spending.
According to the US Mint, in 2010 a single one-cent coin cost 1.79 cents to produce and distribute. Minting 3,487 million pennies in 2010 cost the US taxpayer $27.5 million in order to subsidize the existence of the penny.
There is a similar situation with nickels. A single five-cent coin cost 9.16 cents to produce and distribute in 2010.
We waste valuable time handling coins that aren't worth much. Getting rid of these coins could save us up to $1 billion annually in lost opportunity costs.
Response to Petition
By Rosie Rios
Thank you for your interest in the United States' coinage system. The Administration is committed to evaluating the best ways to meet public demand for coins in a cost-effective manner. Indeed, Vice President Biden and Treasury Secretary Geithner recently announced that the United States Mint is suspending the production of Presidential $1 Coins for circulation in light of the Federal Reserve Banks' inventories of 1.4 billion $1 coins. This measure will reduce costs by at least $50 million annually.
As you note, the total production costs of both the penny and the nickel currently exceed their respective face values. The Obama Administration, along with Congress and other stakeholders, continues to review this issue and the best way to address it.
One potential way to reduce the cost of the penny and nickel--as well as the cost of the other coin denominations--is by changing the composition of those coins to more cost-effective materials. The compositions of the current half-dollar, quarter-dollar, dime, five-cent and one-cent coins are set by law in the Coinage Act of 1965 (as well as other laws passed by Congress). Since that time, the material costs of those coins have increased substantially, while the face value of each denomination has remained constant.
To help address this issue, in 2010, the President signed into law the Coin Modernization, Oversight, and Continuity Act. This law provides the Secretary of the Treasury with the authority to conduct research and development for alternative metallic coinage materials and requires the Secretary of the Treasury to make recommendations to Congress on potential new alloys. Since the law's enactment, the United States Mint has been actively engaged in research and development work to find more economical metallic materials for our coinage.
The President also proposed legislation that would provide the Secretary of the Treasury the authority to prescribe the weights and compositions of all circulating coins. If enacted, this legislation would enable the United States Mint to manufacture the Nation's coins at significantly lower costs.
Moving forward, the Administration will continue to work to ensure that United States coinage is produced and circulated as efficiently and effectively as possible. We appreciate your proposal and your interest in this issue.
Rosie Rios is Treasurer of the United States