Kill-the-penny bill introduced
Whizzard
Posts: 955
Citing spiraling zinc costs, Rep. Jim Kolbe continues his quest to eliminate the 1-cent piece.
NEW YORK (CNNMoney.com) -- Representative Jim Kolbe wants to do away with the penny - and for a second time has introduced legislation that would effectively kill it.
The Currency Overhaul for an Industrious Nation (COIN) Act would force the rounding off of all cash transactions to the nearest 5 cents, making the penny coin useless for everyday transactions.
The move is in part a reaction to the rising cost of zinc - the penny's main ingredient - which at current prices brings the cost of making the coin to 1.4 cents each.
Kolbe (R-Arizona) introduced similar legislation in 2001 when prices for metals weren't as high. The bill failed to pass or even to make it to a floor vote. Since then, however, zinc costs have nearly doubled.
Over half of the U.S. Mint's coin production comes in the form of pennies. At current prices, the Mint would spend some $44 million producing pennies this year, nearly $14 million more than in 2005.
As with the 2001 bill, the new one calls for rounding down any cash transaction that ends in in 1,2,6 and 7 cents; totals ending in 3,4,8, or 9 cents would round up.
Chuck Todd, editor-in-chief of the political briefing publication, Hotline, thinks it's unlikely Kolbe's bill will have better luck this time. "The only time these coin bills are successful is when you create a collectible," Todd says.
The bill does, however, call for various commemorative currencies, including a dollar coin and a $2 bill.
A recent Gallup/USA Today also indicates a tough road ahead for the bill.
Fifty-five percent of respondents consider the penny useful compared to 43 percent who think it should be eliminated. More telling, 76 percent of respondents said they would pick up a penny if they saw it on the ground.
Kolbe's home state of Arizona is the largest copper producing state in the nation. Copper is the main material of the nickel which would benefit by becoming the lowest denomination of currency in circulation.
Other elements
Kolbe's bill also takes aim at Massachusetts-based Crane Paper, which has been the exclusive supplier of paper to the Bureau of Engraving since 1879. Crane has benefited from legislation requirements that effectively makes it the only possible supplier of the paper.
Kolbe's bill would simply require the paper to be "produced entirely within the United States," rather than the current requirements that it be produced domestically by a company 90-percent American owned. Kolbe, as a freetrader, opposes such protectionism.
COIN also calls for organizational changes: Oversight of the U.S. Mint and the Bureau of Engraving and Printing would be transferred from the Department of the Treasury to the Federal Reserve Board. Kolbe's office maintains that since the Federal Reserve is in charge of the dollar, moving the currency under the Federal Reserve would remove a layer of bureaucracy.
Others don't see the wisdom in the proposed move. "Sure, you're taking bureaucracy away from the Treasury but you're adding it to the Federal Reserve," said Todd. "Where do you get the efficiency?"
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NEW YORK (CNNMoney.com) -- Representative Jim Kolbe wants to do away with the penny - and for a second time has introduced legislation that would effectively kill it.
The Currency Overhaul for an Industrious Nation (COIN) Act would force the rounding off of all cash transactions to the nearest 5 cents, making the penny coin useless for everyday transactions.
The move is in part a reaction to the rising cost of zinc - the penny's main ingredient - which at current prices brings the cost of making the coin to 1.4 cents each.
Kolbe (R-Arizona) introduced similar legislation in 2001 when prices for metals weren't as high. The bill failed to pass or even to make it to a floor vote. Since then, however, zinc costs have nearly doubled.
Over half of the U.S. Mint's coin production comes in the form of pennies. At current prices, the Mint would spend some $44 million producing pennies this year, nearly $14 million more than in 2005.
As with the 2001 bill, the new one calls for rounding down any cash transaction that ends in in 1,2,6 and 7 cents; totals ending in 3,4,8, or 9 cents would round up.
Chuck Todd, editor-in-chief of the political briefing publication, Hotline, thinks it's unlikely Kolbe's bill will have better luck this time. "The only time these coin bills are successful is when you create a collectible," Todd says.
The bill does, however, call for various commemorative currencies, including a dollar coin and a $2 bill.
A recent Gallup/USA Today also indicates a tough road ahead for the bill.
Fifty-five percent of respondents consider the penny useful compared to 43 percent who think it should be eliminated. More telling, 76 percent of respondents said they would pick up a penny if they saw it on the ground.
Kolbe's home state of Arizona is the largest copper producing state in the nation. Copper is the main material of the nickel which would benefit by becoming the lowest denomination of currency in circulation.
Other elements
Kolbe's bill also takes aim at Massachusetts-based Crane Paper, which has been the exclusive supplier of paper to the Bureau of Engraving since 1879. Crane has benefited from legislation requirements that effectively makes it the only possible supplier of the paper.
Kolbe's bill would simply require the paper to be "produced entirely within the United States," rather than the current requirements that it be produced domestically by a company 90-percent American owned. Kolbe, as a freetrader, opposes such protectionism.
COIN also calls for organizational changes: Oversight of the U.S. Mint and the Bureau of Engraving and Printing would be transferred from the Department of the Treasury to the Federal Reserve Board. Kolbe's office maintains that since the Federal Reserve is in charge of the dollar, moving the currency under the Federal Reserve would remove a layer of bureaucracy.
Others don't see the wisdom in the proposed move. "Sure, you're taking bureaucracy away from the Treasury but you're adding it to the Federal Reserve," said Todd. "Where do you get the efficiency?"
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What do you think, Mr. Bigglesworth?
0
Comments
Russ, NCNE
Please let this pass.....
<< <i>This is the second time he has introduced a bill, first time was a few years ago..... >>
The same bill was discussed here a few months ago. Either CNN is way behind the times, or he's trying for a third time.
Russ, NCNE
<< <i>Citing spiraling zinc costs, Rep. Jim Kolbe continues his quest to eliminate the 1-cent piece. >>
People from his home state needs to vote the animal out of office.
We'll use our hands and hearts and if we must we'll use our heads.
<< <i>As with the 2001 bill, the new one calls for rounding down any cash transaction that ends in in 1,2,6 and 7 cents; totals ending in 3,4,8, or 9 cents would round up. >>
Any opinions on that detail? I'd certainly price items to end in a 3 or 8.
<< <i>Most people don't just buy one item, so it won't matter. >>
I knew someone was going to say that, and I realize that, I figured it to be obvious. Point is, millions of items are purchased individually - a pack of gum at the gas station, a six-pack of beer or can of chew, a toy for a child, what ever, it all adds up.
<< <i>I knew someone was going to say that, and I realize that, I figured it to be obvious. Point is, millions of items are purchased individually - a pack of gum at the gas station, a six-pack of beer or can of chew, a toy for a child, what ever, it all adds up. >>
Make sure to factor in the effect of sales tax.
Yes, some items are purchased individually, and sometimes somebody will buy three of them. Even in a worst case scenario where a single consumer gets screwed on every transaction, the difference wouldn't be more than a couple dollars per year.
If the US Mint is turned over to the Federal Reserve, what would be left in the US Treasury ? Pretty much just the BATF.
Remember that the Federal Reserve is a privately-owned corporation, and the US Mint is the custodian of the county's gold reserves (at Ft. Knox, West Point, and Denver).
So is this really a bill to kill the penny, or is it a bill to hand over the nation's gold reserves to a private corporation ?
dcarr- That would be devious!
-Amanda
I'm a YN working on a type set!
My Buffalo Nickel Website Home of the Quirky Buffaloes Collection!
Proud member of the CUFYNA
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
I don't think the general public will eagerly accept the rounding up/rounding down portion. My opinion is that most retailers will mark products to favor the round up. Only a couple of bucks for me annually but zillions for public retailers.
Requiring paper be produced entirely in this country could also have cost ramifications. Who knows what the overhead is regarding the production of that specific product?
Commemorative dollars?? We already have a ton of them scheduled over the next 8 or so years.
Two dollar bill? We already make em and nobody uses them.
And lastly that thing about having the Federal Reserve Board oversee the US Mint and BEP? I wonder who's gonna lobby against that one.
Doesn't look good...........................or does it? Depends upon which side of the fence you got your butt parked!
The name is LEE!
The name is LEE!
Edited to add: Someone should also tell Rep. Numbnuts that having the paper produced outside the U.S. could be considered a security risk to the integrity of our currency.
-- Adam Duritz, of Counting Crows
My Ebay Auctions
<< <i>I don't think the general public will eagerly accept the rounding up/rounding down portion. My opinion is that most retailers will mark products to favor the round up. Only a couple of bucks for me annually but zillions for public retailers. >>
Can you provide a specific example of a pricing strategy that generates "zillions" for a retailer? Keep in mind that consumers will be purchasing random multiples of items, and also that sales tax varies from state to state, county to county.
<< <i>Requiring paper be produced entirely in this country could also have cost ramifications. Who knows what the overhead is regarding the production of that specific product? >>
I sincerely hope that the USA has not lost the capability to manufacture paper. Besides, currency is made from special "paper", and it makes sense to not have a foreign entity entrusted to making this paper.
<< <i>Two dollar bill? We already make em and nobody uses them. >>
If the dollar bill were discontinued, $2s would see much greater circulation.
<< <i>And lastly that thing about having the Federal Reserve Board oversee the US Mint and BEP? I wonder who's gonna lobby against that one. >>
This seems like a dumb piece of legislation. I'm not sure why Kolbe decided to have it ride along with a simple money modernization plan.
can't be disturbed. When they need water to flow uphill to save the republic
then it will simply be the end.
It would be simpler to just put a recycling plant right outside the mint and
start melting all the coins for their metal.
it would be the first time in our country's history that we wouldn't have the one cent piece.
<< <i>it would be the first time in our country's history that we wouldn't have the one cent piece.
We've survived 150 years without a half-cent. We'll easily survive 150 more without a one cent piece.
<< <i>Edited to add: Someone should also tell Rep. Numbnuts that having the paper produced outside the U.S. could be considered a security risk to the integrity of our currency. >>
So what's your problem? "Rep Numbnuts" bill still requires that the paper be produced inside the United States. It just allows a greater stake of ownership in the producing company by foreigners. That provides the possibility that more than the one company has a chance at winning a paper contract.
<< <i>Two dollar bill? We already make em and nobody uses them. >>
Stop making dollar notes, people WILL use them.
<< <i>
<< <i>Edited to add: Someone should also tell Rep. Numbnuts that having the paper produced outside the U.S. could be considered a security risk to the integrity of our currency. >>
So what's your problem? "Rep Numbnuts" bill still requires that the paper be produced inside the United States. It just allows a greater stake of ownership in the producing company by foreigners. That provides the possibility that more than the one company has a chance at winning a paper contract. >>
I thought the whole point of having one company produce the paper was so that the paper would be harder to come by. I mean, I'm sure that even under the bill, you wouldn't be able to just buy the paper at Office Depot, but the fewer entities that have the paper, the better, right?
-- Adam Duritz, of Counting Crows
My Ebay Auctions
well,
A one ounce gold American Eagle has a denomination of $50
whereas the market value is roughly $630.
Is this a problem?
Um, yep.
But don't take my word for it...
Let's see what Charles Jenkinson had to say about the general subject in A Treatise on Coins of the Realm:
"A difficulty then existed, and continues to exist, which must necessarily be removed, before any plan can be adopted for the improvement of the silver I have already observed, that silver and gold, in reference to each other, are estimated at Your Majesty's mint at a different value or price, than these metals are generally sold for at market. As long as this difference subsists, both of these metals will not be brought, in a sufficient quantity to the mint to be coined: that mineral will only be brought which is estimated at the lowest value with reference to the other: and Coins of both metal cannot be sent into circulation at the same time, without exposing the public to the traffic of one sort of coin against the other; by which the traders in money would make a considerable profit, to the great detriment of Your Majesty's subjects. And this mischievous practice, and the frauds committed in carrying it on, are the more to be apprehended in this country, where the Mint is free: - that is: where every one has the right to bring gold or silver to the mine to be converted into coin; not at the charge of the person who so brings it, but of the public: for, ...the charge of coining Gold and Silver has been born by the public; and, contrary to the practice of most other countries, no seignorage has been taken. To prevent this evil, it is necessary to determine, whether there must be a standard, or superior Coin, made of one metal only; and whether the coins of other metals must not be made, and take their value, with reference to this standard Coin, and become subservient to it; - and, in such case, of what metal this standard Coin, to which the pre-eminence and preference are to be given, should be made."
Now, substitute copper for silver (or metal - such as it is, for paper notes) and talk about removing the modern cent from circulation...
In the 1950's, Japan introduced aluminum coinage into circulation for the first time in her history.
Source: Coins through the Ages. Laurence Brown. Bonanza Books. New York. 1961
A better solution, but politically unpalatable, is for the US to call a spade a spade and devalue the US 'dollar' (the Federal Reserve Note) by one significant digit. At one point a (large) cent could buy a loaf of bread. A loaf of bread nowadays is $3. So, knock off two digits from the dollar, and that FRN would be worth what a post 1982 cent is worth today - one cent. Although, you would still need 3.5 cents to buy the loaf of bread, look at it this way, now the loaf comes with slices so it is 'value added', part of the productivity daydream nightmare that has allowed flawed logic to devalue the dollar some 97%.
The marketplace last devalued paper relative to metal in 1964 and 1965. According to Burton Hobson in International Guide to Coin Colleting, [First Edition. New American Library. New York. 1966]:
"..we had a coin shortage so severe that commercial banks at one point were forced to offer a few cents' premium for every dollar's worth of coins turned in, so that payrolls could be met and change made to the penny."
At some point the Red Note FRN will circulate outside the country at some discount, or premium to, the domestically traded greenback. We may as well position ourselves for this eventuality and influence its due course to whatever degree possible.
Of course, this proposed bill to remove the darned penny from circulation, actually has a much deeper and more damaging purpose: To put the US Mint and other US Department of Treasury Operations (Bureau of Engraving and Printing) under the control of a private corporation, the Federal Reserve. So, really, the penny discussion is just the lead-off red herring...
<< <i>
Of course, this proposed bill to remove the darned penny from circulation, actually has a much deeper and more damaging purpose: To put the US Mint and other US Department of Treasury Operations (Bureau of Engraving and Printing) under the control of a private corporation, the Federal Reserve. So, really, the penny discussion is just the lead-off red herring... >>
One has to suspect as much.
But then I ask myself, if the treasury department is willing to issue a couple hundred billion (200,000,000,000)
worthless zinc cents that are each and every one a drain on our economy for nearly a quarter century, how
much worse can quasi-private enterprise do? It's a safe bet the FED would never tolerate such madness
for even the briefest period. The FED is already charged with getting all coin and currency into circulation, so
how much of a stretch is it to add oversight of mint operations to its duties.
<< <i>
<< <i>I don't think the general public will eagerly accept the rounding up/rounding down portion. My opinion is that most retailers will mark products to favor the round up. Only a couple of bucks for me annually but zillions for public retailers. >>
Can you provide a specific example of a pricing strategy that generates "zillions" for a retailer? Keep in mind that consumers will be purchasing random multiples of items, and also that sales tax varies from state to state, county to county. >>
It would only make them money if people only purchased one item at a time. then they could price everything so that the final price of an individual item would end in a 3 or an 8 (after figuring state sales tax) and make an extra 2 cents. However 99/100 people buy more than one item, so there would be no way for them to price items to accomadate for this.