In early December, before anyone else was talking about it, OhMyGov! ran a story about the ridiculous economics happening at the U.S. Mint, where a penny costs 1.7 pennies to make and a nickel costs 10 cents. In response to this and similar stories that followed which called for either eliminating the penny altogether or changing the composition of change to cheaper materials, Congress conducted a hearing yesterday to address the issue.
The House Financial Services subcommittee led by Rep. Luis Gutierrez
(D-Ill.) discussed a proposal to save taxpayers $100 million annually by using cheaper metals to produce the coins. Members of the subcommittee on both sides of the aisle seemed to agree that it made little sense to continue producing coins at a loss.
The subcommittee's policy proposal is called the Coin Modernization and Taxpayer Savings Act of 2008. The bill gives the U.S. Treasury Department authority to
set the weight and composition of any coin whose production costs
exceed its face value for five consecutive years. (Amazingly, the agency does not already have this power.) It also requires Treasury to begin manufacturing steel (instead of copper) pennies within 180 days of the
bill becoming law.
We hope that that common sense prevails over opposition voices, whose arguments center around keeping coin creation power in Congress or eliminating the penny altogether. If so, the bill should appear on the floor of Congress sometime in the summer. Until then, you may want to start saving your pennies. They may soon be a collector's item.