In a move that could ultimately save U.S. taxpayers millions of dollars, the new Department of Government Efficiency seems to be eying eliminating the penny.
As the new group headed by Elon Musk has been tasked with cutting excess federal spending, a post on X this week drew attention to the cost-value ratio of producing the U.S. coin that features a profile of President Abraham Lincoln.
“The penny costs over 3 cents to make and cost U.S. taxpayers over $179 million in FY2023,” the DOGE post read. “The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced.”
The penny costs over 3 cents to make and cost US taxpayers over $179 million in FY2023.
The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced.
Penny (or 3 cents!) for your thoughts.
Sources:https://t.co/Y5LlrpyA62…
— Department of Government Efficiency (@DOGE) January 22, 2025
“During the past year, the penny’s costs have only continued to rise, with the U.S. Mint’s 2024 annual report finding that one cent now costs about 3.7 cents to manufacture and distribute,” CBS News reported.
“Pennies are mostly made of zinc, with a copper overlay to give them their distinctive color. While zinc’s price fluctuates from year to year, its cost per metric ton is now double what it was in 2016, according to data from the Federal Reserve Bank of St. Louis,” the outlet added.
The U.S. Mint report noted that the Federal Reserve “consistently orders more pennies than any other denomination” while also noting that it costs 14 cents to make and distribute every nickel.
7. Bad Pennies
Currently, the federal government is paying 3 cents to produce a penny and 11 cents to make a nickel.
That makes no sense!
Only Washington could lose money making money.
Changing the composition of coins would save $50 million a year.
— Joni Ernst (@SenJoniErnst) November 25, 2024
Some have noted that dropping the penny could cost consumers more as prices would likely be rounded up to a 5-cent interval.
“For a single item or small-value purchase, rounding up or down could represent a significant price change,” the Federal Reserve Bank of Richmond noted back in 2020. “On the other hand, there may be additional, hard-to-quantify costs to using pennies that would argue in favor of elimination. Counting pennies to make change takes time, and as the old business adage goes, time is money.”
While eliminating the penny would require an act of Congress, X users had mixed reactions to the DOGE post.
Cash is the last thing you guys need to be looking at eliminating. Cash keeps us free. Hands off.
— Clint Micheau (@ClintMicheau) January 22, 2025
This is something Canada did right. Get rid of the penny! And if you’re a business, you usually benefit from additional profit due to the rounding if prices are set right.
— Canadian Republican (@Cad_Republican) January 22, 2025
The slippery slope creeping up to eliminate the poor penny b/c it costs money to print. Next it’ll be the nickel, then the dime, then the quarter, then the dollar & then poof only digital money available on your phone. Hey doge, maybe cut back on some $30,000 govt. toilets.
— rdub67 (@rdub067) January 22, 2025
How about taking a first principles approach to the manufacture of a penny by analyzing it and deleting as many parts as possible. Just like you and your teams do at SpaceX and Tesla.
Don’t delete the product;
Delete the inefficiencies in the manufacturing process.— 108 (@UnoCero0cho) January 22, 2025
Meanwhile, President Trump has also been cutting costs as he ended remote work for federal employees.
“Heads of all departments and agencies in the executive branch of Government shall, as soon as practicable, take all necessary steps to terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis, provided that the department and agency heads shall make exemptions they deem necessary,” reads the order Trump signed.
The president also signed an order to freeze the hiring of civilian employees, though military personnel is excluded from the order as are federal positions associated with immigration enforcement, national security, and public safety.
“As part of this freeze, no Federal civilian position that is vacant at noon on January 20, 2025, may be filled, and no new position may be created except as otherwise provided for in this memorandum or other applicable law.” the order reads.
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