President Donald Trump unveiled plans Sunday to halt manufacturing of the penny — however getting that initiative underway requires a number of further steps and probably congressional approval.
Moreover, whereas Trump stated he instructed the Treasury Division to cease minting them as a result of their excessive prices, supporters of the penny declare it’s wiser to guage modifications to the nickel as a substitute.
“For much too lengthy, the USA has minted pennies which accurately value us greater than 2 cents,” Trump wrote on Reality Social on Sunday. “That is so wasteful! I’ve instructed my Secretary of the US Treasury to cease producing new pennies.”
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President Trump is requesting the Treasury Division to cease manufacturing pennies, as a result of excessive prices. (Olivia Oxley by way of AP)
In actual fact, producing pennies is much more costly than Trump’s numbers. In keeping with a 2024 U.S. Mint report, it prices practically 3.69 cents to mint a single penny. The cash are primarily made from zinc after which lined in copper.
Trump’s assertion comes after Tesla and SpaceX CEO Elon Musk, who’s heading up the brand new Division of Authorities Effectivity (DOGE), posted on X in January how costly minting pennies is.
DOGE is tasked with figuring out methods to eradicate waste, and has so prompted modifications, together with gutting the $40 billion U.S. Company for Worldwide Growth (USAID), which supplies help to impoverished nations and improvement help.
Nonetheless, proponents of the penny exist. Individuals for Frequent Cents, a corporation that gives Congress and the White Home with analysis on the worth of the penny, claimed that efforts are higher focused at decreasing the price of the manufacturing for the nickel.
Nickels, value 5 cents, value roughly 13.8 cents to mint, in accordance with the 2024 U.S. Mint report.
“The logical and fiscally accountable answer is to not eradicate the penny however to give attention to producing a less expensive nickel,” Individuals for Frequent Cents Government Director Mark Weller stated in a Jan. 23 assertion. “This strategy would deal with the true driver of losses whereas preserving the performance of small denominations in on a regular basis transactions.”
Whereas the waters are a little bit murky on the subsequent steps, consultants say Congress doubtless would wish to change into concerned and go laws to satisfy Trump’s needs. And, traditionally, earlier makes an attempt in Congress to eradicate the coin have failed.
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Nickels value roughly 13.8 cents to mint, in accordance with the 2024 U.S. Mint report. (Kevin Lamarque/Reuters)
“The method of discontinuing the penny within the U.S. is a little bit unclear. It might doubtless require an act of Congress, however the Secretary of the Treasury would possibly be capable to merely cease the minting of recent pennies,” Robert Triest, an economics professor at Northeastern College, instructed the Northeastern World Information.
Even so, there’s bipartisan curiosity on Capitol Hill to change minting pennies. In 2023, Sens. Joni Ernst, R-Iowa, and Maggie Hasson, D-N.H., reintroduced laws to change the composition of the penny to chop down on prices.
“It’s absolute non-cents that American taxpayers spend ten cents to make only one nickel. Solely Washington might lose cash earning money,” Ernst stated in a press release in April 2023. “This commonsense, bipartisan effort will modify the composition of sure cash to cut back prices whereas permitting for a seamless transition into circulation. A penny saved is a penny not borrowed.”
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Even so, a composition change will unlikely yield cheaper outcomes. The 2024 Mint Report stated that choices for various metallic compositions aren’t accessible to cut back manufacturing prices all the way down to face worth.
There’s nonetheless some precedent for change although, and Congress has acted beforehand to discontinue minting new cash. The legislative department approved discontinuing new half-cent cash in 1857.
The Related Press contributed to this report.
