Government May Use Steel Pennies

Government May Use Steel Pennies

News Day
March 13, 2008

No more penny for your thoughts. It’s 1.7 cents. And start thinking more of the nickel, because it’s worth a dime.

Those are the U.S. Treasury costs of minting the penny and nickel, thanks to metal prices shooting up by as much as 450 percent since 2003. With congressional lawmakers trying to right the lopsided ledger of making money, the pennies in your purse may soon be made of steel but treated to retain the copper color.

“Never before in our nation’s history has the government spent more money to mint and issue a coin than the coin’s legal tender value,” Edmund Moy, director of the United States Mint, wrote in testimony submitted at Tuesday’s hearing before the House Financial Services Committee’s panel on monetary policy.

“With each new penny and nickel we issue, we also increase the national debt by almost as much as the coin is worth, and these losses are rapidly mounting.”

Changing the metals or the percentage mix in coins could save the Treasury about $30 million a year for the penny and $70 million for the nickel under the proposed Coin Modernization and Taxpayer Savings Act of 2008, supporters said.

The bill would give the Treasury the flexibility to revamp the metal and weight makeup of all coins in response to metal prices. It would require the department to immediately stem losses over the one-cent coin by making pennies primarily of steel within 180 days of the law’s passage.

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