President Donald Trump has vowed to cut government spending, a goal he plans to accomplish by going after pocket change (literally). Recently, Trump directed the secretary of the treasury to end the production of the penny, citing its inefficiency and high production costs.
Last year marked the 19th consecutive fiscal year that the unit cost of making pennies was above its face value. It costs 3.7 cents to produce a penny, and there are roughly 240 billion of them in circulation—enough for every U.S. resident to have 700 pennies. The U.S. Mint reports that from 2023 to 2024, the unit cost of producing a penny increased by 20.2 percent. The production deficit reached $85.3 million in 2024, a modest reduction from $86 million in 2023.
Getting rid of the penny is not a new idea, and there have been several efforts to eliminate the coin. Former Rep. Jim Kolbe (R–Ariz.) introduced legislation in 2001 and 2006 to eliminate the penny, which ultimately failed to advance. While in office, former President Barack Obama signaled support for the idea, saying in 2013, "Anytime we're spending money on something people don't actually use, that's an example of things we should probably change."
Congress has the power to coin money and regulate its value, so eliminating the penny would likely require congressional approval. However, there may be avenues for Trump to eliminate the penny without lawmakers' sign-off, Laurence H. Tribe, a constitutional law professor at Harvard University, tells the Associated Press. According to the U.S. Code, the secretary of the treasury has the authority to mint coins in the amounts he deems necessary to meet the nation's needs. Tribe argues that if the secretary decides that no pennies are necessary, he could legally stop minting them altogether.
If Trump decides to take this route, the penny could be eliminated, although no official plan has been announced. Despite the president's order to halt penny production, the coin is still being made. "The United States Mint administers all coin programs according to legislation enacted by Congress and signed into law by the President," the Mint tells Reason in an email. It "must adhere to legislative specifications on coin subject, design, metal composition and production," the Mint adds.
If Trump is successful, the U.S. would join New Zealand, Australia, and Canada, all of which eliminated their penny. In the 1990s, both New Zealand and Australia got rid of the pennies due to rising costs and inflation. In Canada, penny production officially ended in 2012, and the Royal Canadian Mint began collecting the coins to extract their metals. At the time, the Canadian government estimated that phasing out the penny would save $11 million Canadian dollars per year (around $10.3 million dollars today).
The penny is expensive to produce and rarely used. With a ballooning national debt, any form of government waste must be cut, even if it is pocket change.
The post To Cut Government Spending, Trump Targets Pocket Change appeared first on Reason.com.
