In a historic move, President Donald Trump has directed the U.S. Treasury Department to halt the production of the penny, marking the end of a 233-year era for the one-cent coin. The decision comes in response to the rising cost of minting pennies, which now exceeds their face value, creating a financial burden on taxpayers.
The Rising Cost of the Penny
The cost of producing and distributing a single penny has significantly increased over the years. In the 2024 fiscal year, reports from the U.S. Mint indicate that each penny costs approximately 3.7 cents to produce—nearly four times its actual value. This inefficiency has led to an estimated $179 million in taxpayer losses in the past year alone.
Trump’s Statement on the Decision
Announcing the decision on Truth Social, Trump expressed his concerns over the wastefulness of continuing to mint the penny. “For far too long, the United States has minted pennies that cost more than two cents to produce. This is so wasteful! I have instructed my Secretary of the Treasury to stop producing new pennies,” he stated.
Influence of the Department of Government Efficiency
Elon Musk’s Department of Government Efficiency (DOGE) played a role in pushing for the elimination of the penny. Last month, DOGE highlighted the increasing cost of penny production in a post on X, arguing that discontinuing the coin would result in significant savings.
International Precedents for Eliminating Small Denomination Coins
The U.S. is not the first country to phase out its smallest currency denomination. Canada stopped producing pennies in 2012, while Australia ceased circulation of its one- and two-cent coins back in 1992. In both cases, transactions were adjusted through rounding systems to the nearest five cents.
Potential Challenges and Legislative Hurdles
While Trump has issued an executive directive, the full elimination of the penny might require Congressional approval. The U.S. Constitution grants Congress the authority over currency specifications, including coin composition and production.
However, some economists suggest that the Secretary of the Treasury might have the authority to halt new penny production without direct congressional approval. Robert K. Triest, an economics professor at Northeastern University, explained, “The process of discontinuing the penny in the U.S. is a little unclear. It would likely require an act of Congress, but the Secretary of the Treasury might be able to simply stop minting new pennies.”
Impact on Everyday Transactions
One of the major concerns surrounding the elimination of the penny is how it will affect cash transactions. Many retailers and businesses may adopt rounding policies similar to those implemented in other countries. Proponents argue that removing the penny will lead to faster transactions at cash registers and reduced handling costs for businesses.
Nickel Also Under Scrutiny?
The nickel, another low-value coin, is also a subject of concern due to high production costs. The U.S. Mint has reported that each nickel costs approximately 14 cents to produce. While no formal decision has been made, discussions about its future may follow in the wake of the penny’s elimination.
Public Reaction and Political Ramifications
Trump’s decision to eliminate the penny has sparked mixed reactions. Supporters praise the move as a practical step toward reducing government waste, while critics argue that the decision should have undergone further debate in Congress. Additionally, political analysts suggest that this decision aligns with Trump’s broader cost-cutting initiatives.
What’s Next?
With the directive in place, the Treasury Department is expected to phase out penny production in the coming months. However, the final fate of the penny may still depend on congressional action and potential legal challenges.
Conclusion
The elimination of the penny marks a significant shift in U.S. currency policy, reflecting broader efforts to streamline government spending. Whether this decision will lead to further changes in coinage remains to be seen, but for now, the era of the penny is coming to an end.
No More Pennies USA – A New Chapter in American Currency History.
