Stop making cents: US Mint moves forward with plans to kill the penny
Context:
The U.S. Mint is set to cease the production of pennies, having placed its final order for penny blanks, in a move expected to save $56 million annually due to rising production costs. The decision, driven by President Trump's directive, highlights the penny's high production cost of nearly 4 cents each, rendering them economically inefficient. Despite 114 billion pennies still in circulation, their utility is questioned, with advocates for discontinuation arguing against their necessity. Congress could cement this decision through legislation, although past attempts to eliminate the penny have been unsuccessful. Economists warn that removing the penny without a plan to adjust pricing could lead to increased demand for nickels, which are costlier to produce at 14 cents each.
Dive Deeper:
The U.S. Mint plans to halt penny production after fulfilling its final order of penny blanks, as manufacturing costs have surged by 20% in 2024, leading to a projected annual savings of $56 million.
President Trump has directed the stoppage of penny production, criticizing the wastefulness of minting a coin that costs more to produce than its face value, with nearly 4 cents spent per penny.
There are approximately 114 billion pennies in circulation, valued at $1.14 billion, but their actual use is limited, prompting debate over their necessity.
Congress has the power to make the cessation of penny production permanent through legislation, though previous attempts to pass such laws have failed.
Economists, such as Jay Zagorsky, caution that without legislation mandating price rounding, eliminating the penny could inadvertently increase demand for nickels, which are more expensive to produce at 14 cents each.
Two bipartisan bills, the Make Sense Not Cents Act and the Common Cents Act, have been introduced to address the penny's discontinuation, but their passage remains uncertain.
The penny remains the most produced coin by the U.S. Mint, with 3.2 billion pennies minted last year, accounting for over half of all newly produced coins.