Two bills were introduced in the House of Representatives on December 15, 2011 which seek to immediately alter the metallic composition of the one cent and five cent coins. Although the text of the bills is not yet available, statements released by Rep. Steve Stivers who introduced the bills H.R. 3693 and H.R. 3694 indicate that the legislation would require the coins to be made from steel.
“This legislation is a common-sense solution to decrease the cost of minting pennies and nickels,” said Stivers. “Not only will it cost less, but steel is an American resource that we have and can manufacture right here in our backyard.”
Since 2006, the cost to manufacture and produce both the cent and nickel have exceeded their face values. Based on the most recent information from the US Mint’s 2010 annual report, the costs were 1.79 cents for each cent and 9.22 cents for each nickel. The total losses related to producing cents and nickels from 2006 to 2010 are $243.1 million.
Under existing law, the Secretary of the Treasury may prescribe a composition of copper and zinc for the one cent coin. Currently, the coins are struck in copper plated zinc with a net composition of 97.5% zinc and 2.5% copper. The five cent coin is currently required under law to consist of an alloy of 75% copper and 25% nickel.
The bills introduced by Stivers would require both coins to be made from steel, with the penny coated in copper. According to Stivers, the appearance of the coins would not change, just the materials to make them.
Both the cent and nickel have undergone radical changes in composition during the last century. In 1943, the cent was struck in zinc plated steel due to wartime needs for copper. This change was only temporary. In 1982, the composition of the cent was permanently changed from the previous 95% copper and 5% zinc to the current copper plated zinc composition. From 1942 to 1945, the composition of the nickel was changed to 56% copper, 35% silver, and 9% manganese to preserve more copper and nickel for wartime needs.
In light of the higher cost of base metals in recent years, there have been some legislative attempts to further alter the composition of cents and nickels. In 2008, a bill was introduced seeking to require the cents to be immediately produced primarily from steel treated to impart a copper color. The same bill called for five cent coins to be produced in nickel coated steel or an alternative metallic content within a two year time frame. The bill was passed in the House, but ultimately did not become law.
At the end of 2010, a bill was passed and signed into law which provided the Secretary of the Treasury with the authority to conduct research and development activities related to coinage materials. At the end of a two year period, a report is due to Congress, which may make suggestions for alternative coinage materials. The first report is required before December 14, 2012. Any actual changes in composition resulting from the report would need to be made through legislation passed by Congress.
The two bills introduced yesterday by Rep. Stivers have been referred to the House Committee on Financial Services. Each bill is cosponsored by two Ohio Representatives, the state from which Stivers also hails. Ohio is one of the three top steel producing states in the country.
WHY BOTHER?!?!? Just get rid of the penny!!. The steel Nickel makes sense.
Jamie Thompson says
It has been the U.S. government’s pattern for the last three decades or so to lag behind the coining practices of many other countries. In this instance the best example the U.S. Mint could follow would be that of our neighbor to the north. The Royal Canadian Mint has been producing its circulation pennies, nickels, dimes, quarters, and half-dollars out of steel with varying compositions of copper-nickel plating (according on the color desired) since 1999. Of course, the U.S. Mint will most likely follow its practice of attempting to reinvent the wheel if it is tasked with producing U.S. steel coins and will disregard the thirteen years of experience with coins actually in circulation that the Royal Canadian Mint already has under its belt. Another recent example of the U.S. Mint’s failure to profit from the experience of other countries was its great difficulty in producing the edge lettering on the Presidential dollar coins… a practice employed in France continuously for 200 years!
But let us hope that if this proposed legislation passes this may be a first step toward the U.S. Mint improving all aspects of its coinage operations; something it desperately needs to do.
Now, if it would just bring its customer service up to the standards of the Royal Canadian Mint, we’d be getting somewhere!
Another example of the US federal government being penny-wise and pound foolish!
Paul E. says
I echo the previous comments on the Royal Canadian Mint having utilized steel coinage for a number of years now. A great amendment to the bill would be to require the U.S. Mint to contact the RCM and ask them for HELP. No since having to repeat the “experiments” for ourselves.
Steel coinage clearly works, so let’s save a few hundred million and just pay somebody to show the U.S. Mint how to do it!
As to getting rid of the cent, WHY? Does everybody really want to pay an additional 1 to 4 cents per item on EVERYTHING? Because that’s what you’d have to do and you know that no retailer or manufacturer is going to “round down”. They’ll all “round UP” to the next nickel. Unless, of course, Joe, your real goal is to eliminate ALL cash.
Suburban tool says
If you got rid of the penny, everything would increase by 5 times and if you got rid of the nickel everything would increase by 10X,
Something that would cost 1cent to make, you could get 100 of them for a dollar.
Now you would get 20 of them for a dollar, because we don’t have the penny.
Image the price of thing with screws if you had to pay 5 cents instead of 1 cent.
Screws, nails, washers there’s a lot of stuff out there that uses 1cent items.
The penny does have utility. We do not need to get rid of it. What we do need to get rid of is the $1 bill. $1 coins are far more cost effective as they last so much longer. Also, we have untold numbers of $2 bills sitting unused. Get rid of the 1 bill, and increase usage of the $2 bills and $1 coins.
we should keep the penny and nickel… and examine why it takes more “fiat” paper to mint coinage. theres a reason why people for thousands of years have used metal like copper, nickel, silver, gold etc. as a medium of exchange. (its a fair and balanced way to trade goods and services) getting rid of the last coinage that has a metallic content thats honestly worth its face value is not the answer to our problems.
John Blocher says
If we were really up to current practice, many countries have stopped minting coins at the one cent equivalent value. They round the cash transaction only to the nearest five cents. That does not mean the final amount always goes up. The final amount goes down as often as it goes up.
.x1 and .x2 round down to .x0, .x3, .x4, .x6 and .x7 round to .x5, and .x8 and .x9 round up to the next higher .y0 where y = x+1. It looks much more imposing mathematically than it ease of use in practice.
I favor discontinuing the one cent coin and changing the composition of the five cent coin to more zinc and less copper and nickel (perhaps the mint can recycle the zinc from one cent coins to make five cent coins)
I used to live in the U.S. until about 2 years ago. I would (and continue) to coin-roll-hunt for copper, nickel and silver. Personally, I see the move to a steel cent as a common sense matter, but eliminating the penny altogether would make more sense. With inflation as it is, the buying power of a power simply lies in the magical realm of marketing (i.e. $999.99 for a TV). A penny holds (literally) NO value.
Ironic, this talk by the government about altering the composition of various denominations, considering that it is they who are guilty of debasing them in the first place, given their incessant money printing. But then again, it really isn’t the government’s fault, is it?. The fault lies with we the people, who, due to our weak and covetous nature, continue to elect them to power. Whatever.
Save your pennies,and your nickels!
Watch this video and then come back and tell me we don’t need to get rid of the penny:
Jim Rawles says
It would be better if the Treasury simply dropped a zero from the Dollar. They could issue a new paper currency, but leave the old coinage in circulation. That way we’d again have Penny Candy, and both gasoline and milk would again be around 35 cents per gallon.
Suburban tool says
The US government makes all of the coinage in the US, the US mint which is the owned by the US government. But all paper dollars are created by the federal reserve which is NOT owned by the government, but by private people, like AIG and Goldman Sacs.
They are 2 different things!!!
Look it up,
US mint doesnt print paper… And the Fed does not mint coins…
Sadly enough, the 243.1 M saved by eliminating the penny and nickel will mean nothing to the average taxpayer. It looks good in print for the administration in power at that time, but that’s all. The morons in Washington will find a way to make that money disappear. Or better still, it will give Barack Hussein Obama an extra 243.1 M to spend on family vacations, and maybe still have a little left over to float a loan or two to his Chicago goombahs.
Iman Azol says
Suburban tool: you are aptly named.
Who buys screws 1 at a time? Mfrs buy 500 lb lots. I buy 100 packs. Someone going into a store to buy one screw has already wasted $2 in gas and $10 in time.
Paul E: your gas is rounded every day. They don’t “always” round up, and as has been pointed out, the military stopped bothering with pennies overseas. They’re just not worth the time to deal with.
It’ll be missed the way the 1/2C coin was. Remember that?
We can not get rid of the penny or nickel.
A recent report said that now 1/2 of the
U.S. is in the low income bracket.
The middle class has shrunk down and gone
low income bracket. The top 1% are getting
richer. We need the penny and nickel for
survival. Can you imagine a dollar store that
can’t make change. We need steel for our
bridges and roads. I think this is why we have the occupy movement. We went from a welfare state to corporate welfare. After all
there to big to fail. But the average joe can.
We can do fine without a penny now. A penny now buys way LESS than a penny from WWI, WWII etc etc. A coke or candy bar was 5 cents then, try buying the same now with 5 pennies now. They got by just fine then, no need then for a coin that you would need ~80 to buy a small simple snack or drink.
And don’t toss in that ’rounding’ thing. They got by perfectly well with the smallest coin then being worth more than what a nickel is now.
Of course all this talk about the need to eliminate the small coins is ignoring the elephant in the room. As long as the Government continues to inflate the money supply this will be an ongoing problem as far as the eye can see. Pretty soon they will start debating on what to do with the dimes and quarters as the cost of production starts to exceed their face value.
Jeffrey Blum says
From what I’m reading the penny and the nickle willl not go away but save tthe Gov. money in producing them. Here! Hear! Finally a good idea.
Just make the penny worth 2 cents
V. Kurt Bellman says
Will all you people insisting that the elimination of the cent will cause price increases PLEASE GET YOUR HEADS OUT OF YOUR, well, you know where. The last few decades the Swiss have completely eliminated the 1 and 2 rappen and the five rappen is virtually NEVER seen. Their lowest denomination coin is worth more than a U.S dime. Guess what. A screw or nail is NOT 10 rappen. The concept of the single rappen still exists, just like the mil as quoted for gasoline.
Ron D. says
Steel cents and nickels….1943…rust and corrosion worse than the zinc ones…???
face 1004 says
This has been a long time coming and a waste of taxpayers money. I never can understand why it takes so long to change something that should have happen 5 years ago. Also I understand that in reality the government will waste what is saved by changing the metal content and use that savings from it to find something else to waste it on. I still think we need to get rid of the dollar bill but now we have all these dollar coins in vaults that will never be used because of the dollar bill. I least lets pay are debt with China with those dollar coins since we won’t be using them. Don’t worry if we need them back they can always make good counterfeits.
Bill T says
Eliminate the Cent (Penny) altogether. Round up (3 – 4 Cents = 5 Cents) or round down (1 – 2 Cents = 0 Cents) in buying/selling. (What can you buy now a days with just 1 Cent?) Go to the 1943-style Cent and sure as anything there will be confusion between it and the Dime. A stainless steel “Nickel” (5 Cent piece) would be better in that it won’t rust like a zinc coated steel coin (1943 Cents) would eventually. (Once the change is made you can’t call the 5 Cent coin a “Nickel” anymore. It’ll have to be called either “5 Cents” or, perhaps, a “Steely.”
Melinda G. says
Eliminate the Penny.
Studies have shown that we are loosing considerable money with the continuation of minting this one cent coin. Even if US changes it to steel, it will still loose money.
If the US can make the decision to eliminate the $1 coin, why can it not move forward with a coin that is loosing money.
It just does not make sense to me.
Roger B. says
The real problem is not the cost of minting the coins but the decreasing value of those coins requiring more coins to be minted. And with the value of goods shooting through the roof with no real end to the inflationary plan in sight, why simplistically alter the metal, which would increase costs in the redesign and retooling. What can you buy with one penny? Two pennys? Three pennys?
Since the Dollar has become the new penny, why not shift the zeroes and save lots of money. Then we could start using pennies, nickles, dimes, and quarters for closer to their real value. Ya, I know, won’t work because it would make US look bad, and doesn’t allow some assortment of big shot friends of the Government to make the big bucks off of this special interest, special deal. Guess who loses again, Mr. & Mrs. America.
To everyone who says get rid of the penny it is worthless, send me all of your unwanted pennies I will gladly take them all and put them to good use. That is the problem with people today they can not do a small task like put spare change in a jar till it adds up. After a month or so you would be surprised to see just how much you have, oh but then you might have to roll your change and go to the bank to exchange for bills but that requires effort and like I said that is to much for most people out there. So I will gladly save you from doing all of that and just take all the so called useless change you want to send my way.
If the government hadn’t devalued the paper dollar they wouldn’t have to devalue the penny and the nickel.
Sounds like a good reason to buy a bunch of rolls of nickles every week. Just like in 1964 when the government stopped making silver dimes, quarters, half-dollars and dollars. Copper/nickel nickles will never have the value of silver but their metal value will easily double within a year or two. The metal value of a nickel is already 6.5 cents.
Don Yeier says
PLEASE, BY ALL MEANS ELIMINATE THE PENNY AND PERHAPS EITHER MAKE THE NICKLE OUT OF STEEL OR (BETTER YET) GO BACK TO RE-MAKING THE HALF DIME WITH SAME COMPOSITION AS THE CURRENT DIME. AS FAS AS VENDING MACHINES ARE CONCERNED, GIVE SOME PEOPLE THE JOBS REQUIRED TO MAKE NEW MACHINES; WON’T TAKE LONG TO DO..