Will efforts to change the composition or eliminate the Lincoln cent be successful this year?
Goldminers
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From the Business Insider article today:
Elon Musk's Department of Government Efficiency is targeting one of the federal government's most notorious examples of waste: the penny.
Getting rid of the penny would be an early test of DOGE's influence: Could it help eliminate a piece of government inefficiency that has survived decades of reform attempts?
On Tuesday, DOGE's account on X highlighted the coin's mounting costs: In fiscal year 2023, taxpayers spent more than $179 million producing over 4.5 billion pennies, with each coin costing more than three cents to make.
Despite bipartisan recognition of the penny's costs since at least the 1970s, efforts to phase out or change the coin have repeatedly stalled in Congress, making it an ideal target for DOGE's efficiency campaign.
Lawmakers were considering the questions as recently as November, when Sen. Joni Ernst of Iowa, who founded the Senate's DOGE caucus, said changing the makeup of the coin could save significant money.
Material costs are largely to blame for the penny's high cost. While the coins were originally pure copper, they've been nearly 98% zinc since 1982, per JM Bullion. But zinc isn't as cheap as it once was. According to the US Mint's 2023 report, the penny's unit cost increased by 12.9%, more than any other coin.
Fewer people are using cash at all these days, according to the Federal Reserve's 2024 report on consumer payments. While the report doesn't break down penny usage, it found that 16% of payments in 2023 were made in cash, down from 18% the year before.
It's not clear from one post if DOGE plans to officially take on eliminating the penny — and Musk's group alone doesn't have the power to get rid of the coin. Congress would need to pass a law stopping the distribution of the coin or, in theory, the Treasury secretary could decide that the nation doesn't need to make any more.
Other countries, including Canada and Sweden, have stopped producing their pennies, and the US ditched its half-cent coin in 1857. Data for Progress, a progressive think tank, found in a 2022 survey that 58% of people agreed that the government should stop producing new pennies.
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Comments
Cents not going anywhere, as long as there is a need for them in all the parking lots.😀
Too bad there isn't a fourth option of starting a phased reduction of penny production. Not sure why they would continue to produce numismatic versions as option 3 suggests. At some point, other denominations have been suspended - why not the cent? While $180M is a drop in the bucket of the US budget, this does seem like a reasonable way to save some dollars.
I know this is an unpopular opinion (especially at a numismatics site!)
I wonder if there is a "Wicked" badge for such blasphemy! :-)
There is, just for you
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Let's hope so. Most of the general public consider them a nuisance. All of the effort and cost to mine, mint, inventory, transport, etc. That capital can be much better deployed elsewhere. While they're at it, axe the nickel too.
And bring back the 20 cent piece
Nothing is as expensive as free money.
I would prefer the Mint to eliminate circulation versions and only do numismatics in copper again, but I am guessing we will see some version of steel cents again. US Steel needs all the help it can get.
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Why can't we replace the nickel with the half dime?
Small potatoes, no make that miniscule potatoes, there are far bigger and more important areas of government abuse and overspending that should be addressed before worrying about this. If this is the biggest thing on the DOGE plate then why even have DOGE.
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Something will/must happen. I think the 3rd option (“elimination”) is nearly equally likely.
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It’s a simple pragmatic example that’s easily understood by the public, so it’s actually the perfect example for DOGE to publicize while they work on thornier, more complicated issues.
“Oh, it costs 3¢ to make each penny, wtf? Yeah, let’s not do that.” Also a good example of how lobbying, special interests, and government bureaucracy combine in ways that can be contrary to common sense (no pun intended).
Nothing is as expensive as free money.
It's difficult to assume the g'ment will look at the abolishment of the cent in a logical manner.
I agree - optics are important. I think this would likely be seen as a quick win given the stated mission to reduce federal discretionary expenses.
There will be some criticism - likely from zinc suppliers and from voters who perceive such a move could contribute to inflation.
Hopefully the Mint can still make cents for collector sets and charge what is required to earn a profit.
The buying power of coinage has declined severely since 1964. I’ve always thought that they should drop the nickel and cent and mandate $1, $2, $5, and $10 coins and eliminate the paper versions. None of that will happen, though. And probably too late to change anything. If the vending machine lobby had supported using $1 and 50c coins then it would be easier to drop the 1c.
There was an article long ago about how circulating denominations in 1922 compared to ours when adjusted for inflation. I think the half dollar today is what the cent was worth then.
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While I would love to see circulating $5 and $10 coins, I think we’d have to get a lot better with coin anti-counterfeiting technology.
I don't think the DOGE will get rid of the penny, it's just talk.
I don't think that organization will be very thorough or professional. But I do expect there to be a lot more hype pieces like this.
The substantial truth doctrine is an important defense in defamation law that allows individuals to avoid liability if the gist of their statement was true.
I voted “no” because I have seen a groundswell for this.
It makes sense to do away with the physical cent for general circulation. It has no buying power. I would support including it in collectors’ sets, Proof and Mint. It has often been the starting point for many collectors. It was for me. It’s the only coin that has been every year except 1815 from 1793 to date.
For those who desire to keep the one cent coin, you could solidify your position and the arguments you make in support of same by advocating that the Mint resume producing 1/2 cents (after the 1/2 cent production ceased in 1858, 167 years ago).
Changing the composition is pointless. If they could make pennies literally out of thin air, they'd still cost more than a cent to make. Right now the zinc lobby heavily subsidizes cent blank production, to the point that they're almost giving the blanks to the government for free, yet the Mint is still losing money making them.
And personal opinion, but, continuing to make them as NCLT coins for sets would be silly. They should just make a clean break. Most other countries that stopped producing their equivalent-of-the-penny also didn't continue making them as NCLT for inclusion in sets - though they do sometimes produce a commemorative version. And I doubt many of the current generation of penny collectors would enjoy having to keep buying mint sets every year and bust them open, just so they can keep filling the slots in their Dansco.
Roman emperor Marcus Aurelius, "Meditations"
Apparently I have been awarded one DPOTD.
I voted nothing will change. I didn’t vote for the rest of that option, though. Those are not the reasons nothing who’ll change (as I’m sure has already been discussed, but I’m about to read)
Edit - and I think it’s dumb that nothing will change.
The American people get what Washington gives them; waste, inefficiency, and greed.
Don't hold your breath waiting for actual common sense because all we deserve is Common Cents.
I guess we'll have to wait and see but pennies should have gone in 1974 and all we got are "illegal" aluminum and steel cents and small dates nobody knows about. We've had 51 years of waste and stupidity already.
I voted for what I feel should happen.
Washington gives them what they want. WE are to blame.
You mean a smaller nickel?
It’s about copper states that produce copper and the power of the lobbyist that will decide the fate of the cent. Along with vending machine lobbyists, armor car lobbyists, etc, etc.
WS
Not a poll choice but I believe the cent will be discontinued, period. This year? Maybe.
there is no single choice i can select
It would be of interest to know what other countries have done with their most minor coin(s). In cases where they have eliminated same, any effects?
Any Canadians care to comment?
Bologna, most average Americans have not clue one what the mint does or how it operates. It also seems that few people understand how accounting for fixed costs happens as well. The variable costs to produce a cent are very small, but when you allocate all those fixed costs into the equation it looks like a huge looser. I'm not saying that minting cents is profitable, but then again the mint was not designed to be a profit center. The job of the mint is to produce coinage for the financial system. Overall the mint more than covers the cost of producing the cent with all the other coinage and numismatic sales, this has been discussed more than once.
Say you eliminate the cent, those fixed costs now have to be reallocated to the remaining coinage being produced. All of a sudden the nickel is now the financial burden, ok no problem just axe the nickel too. Opps now the dime is the big loser, guess we better axe that too, drat now the quarter production is losing money. And on and on and on we go until there is no way to produce a coin under a dollar that is financially feasible. All the while John Q public is being gouged paying more and more for everything due to the rounding. Just a different form of inflation is all you are advocating for, and in the process the loss of who knows how many jobs which will only swell the unemployment numbers and checks.
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If they did stop making all cents do you think it would make vintage cents go up in price, down in price, or no effect at all on the price?
Mr_Spud
no effect
when i first joined, the mint took fixed costs and allocated them in some "balanced way" that the mint chose
some years later, they started to calculate and report fixed costs of each issue as the costs borne by producing each issue
tho, i'd imagine the entire salaries of the us mint police force are probably distributed in some "balanced way" across all issues. i so, removing the cent would surely increase the sga for the remaining issues.
The public doesn’t need to know how the Mint works to understand that paying 3¢ for a cent is a bad deal.
It’s laughable that eliminating the cent would “gouge” the public. Fewer than 20% of transactions are cash today, some prices would be rounded down, and a penny has almost zero purchasing power anyway.
And we should keep doing something nonsensical because people employed in it? That’s labor that could go to productive economic use, not one that’s draining taxpayers. Do we still employ switchboard & elevator operators?
Nothing is as expensive as free money.
No, most don't have a clue, but when you put it front of them in black and white that we spend 180 mil to produce 40 mil, even someone with a room-temp IQ understands how that's irresponsible.
"I'm not saying that minting cents is profitable, but then again the mint was not designed to be a profit center."
Did someone tell them that? I'm sure you saw the recent SB auction with the FH privys...
And job losses in manufacturing? That's nothing new, and there will be plenty more jobs that must go with technological advancements, but that's just the nature of an evolving industry. Where one job is eliminated, another one will need to be created.
"Say you eliminate the cent, those fixed costs now have to be reallocated to the remaining coinage being produced."
Why is that, exactly?
"All of a sudden the nickel is now the financial burden, ok no problem just axe the nickel too. Opps now the dime is the big loser, guess we better axe that too, drat now the quarter production is losing money."
Ok? That's how it's supposed to happen as time goes on. As it stated in the article, only 16/100 transactions are made in cash and that number will likely be down to 10% in another few years. If that was only recorded amongst millennials or Gen Z, I bet its closer to 4%. What was NOT stated was that when the half dent was eliminated in 1857, it had the buying power of roughly 15 Cents.
Why do we need nickels anyway? A system could be implemented where .04 and less is rounded down, and .05 and higher is rounded up. Any difference at the end of the year, businesses are required to donate to charity or something. If someone is worried about getting cheated for 2 cents, then use a credit card or bring some pennies with you to the store, stopping production doesn't necessarily mean that they need to be removed from circulation or de monetized. There's much more substantial contributing factors to inflation than that, and like @pocketchange said, this is a small but sensible PR-win that can get the ball rolling
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@coinbuf said:
let's say the minting of cents and nickels were profitable (they were)
then the seigniorage for each coin would mean there is "profit." then, each year, the mint could send some of that profit to the treasury.
currently, some years they send money and some years they don't.
if you collect modern crap from the mint's website, then you know the the prices for all numismatic issues were adjusted such that each issue sold at a profit. {for a long time, some issues were yearly money losers} for example, the mint medals did something like quadruple in price. the appointed mint director took the "return money to the treasury" to heart and decided every issue must profit so they can say they're able to do it for them.
at the very minimum, one mint effort is to be self-funded.
don't ask me to resolve the "$50 million of seigniorage" with that mint director's idea that all numismatic issues must be individually "profitable."
@PeakRarities said:
Did the 1794 $1 have $1 worth of silver? if so, it cost more to produce than face value
I never said that it shouldn't....but multiples of the face value for a coin that often ends up in the trash or on the ground and probably costs just as much to recycle seems senseless. In 1794, unskilled labor positions payed about $1 a day. How many coins can be produced per day? At most, the total manufacturing cost may have been 1.20, and 1.2x is a far cry from 3.8x or 3.9x.
Not to mention that those coins could easily be melted down and recycled and repurposed. That's the entire reason we switched to clad though, so the mint wasn't forced to operate at a loss. Im sorry, but there is no logical argument for cent production with current costs, it's simply a function of metals lobbying and perpetual fiscal waste. Almost every country in the world has stopped producing their version of cents, I think it's just the US and UK at this point. When the best argument against a change is that people will lose their jobs, the time. has come. we discontinued the half cent almost 170 years ago, and you're telling me that since then, the dollar hasn't lost enough value to ditch the cent?
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Perhaps it's time to replace the penny with some of them meme coins. RGDS!
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The thing is, they've got to start somewhere. You might think of it as the government giving up its daily pork sandwich (we know Congress loves pork). In this case there's no political firestorm attached, only a need to beat back the zinc lobbyists. If they can identify numerous programs without a political firestorm, those "small savings" can add up quickly.
The cent was discontinued in Canada in 2012 and their monetary system is functioning just fine. And, horrors, there's no more paper dollars up there either, and their banknotes are made of plastic, yet they roll along smoothly. I love going up there and having a few loonies and toonies jangling about in my pocket.
Switzerland is even farther along. They have half-franc coins the size of a dime, the one franc piece is the size of a quarter, two francs slightly smaller than our half dollar and a beautiful five franc piece. I don't know if they are using those pesky one rappen coins however.
The reason I added "it is worth the cost", is because IF nothing changes, the folks with the authority to make the change must have decided to continue wasting money to keep the status quo as usual. So they think it is worth the cost to do nothing.
I don't think it is worth the cost, but this discussion about both the cent and nickel has been going on for many years. So far, the government continues to waste money minting them. It is time for a change.
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I voted nothing changes. But not because I believe they are too popular. Actually I don’t think many people care one way or the other except for the people making the blanks, lobbyists and the politicians that somehow are beholden to them.
I never could understand the argument that it’s so small it won’t make a difference etc. everything makes a difference when you are trying to reduce debt. Every journey takes a first step.
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So who gets the penny round up to a nickel, the merchant or the consumer? What did Canada do for this.
The compassion shown for the workers and their families that will be affected by this change by you millionaires is very underwhelming.
Perhaps one day you will find yourself in a similar position and understand karma.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
IF the Cent is eliminated perhaps interest in building registry sets of modern Lincoln Cents (1959-date) would increase significantly.
Be interesting to see what top sets would single out for in a major auction.
Ala Whispering Pines.
I guess if you can’t win the debate honestly, you can always resort to attacking one’s character.
Nothing is as expensive as free money.