On January 31, 2012, a bipartisan group of Senators introduced a bill which seeks to transition from $1 bills to $1 coins in order to save taxpayer money. The bill S. 2049 was introduced by Senators Tom Harkin and John McCain, and cosponsored by Senators Tom Coburn and Mike Enzi.
The Treasury Department recently implemented a suspension of production of Presidential Dollars for circulation. The move was announced by Vice President Biden and Treasury Secretary Timothy Geithner as part of the Administration’s Campaign to Cut Waste.
Federal Reserve Banks hold an estimated 1.4 billion dollar coins in surplus, and it was estimated that the amount would have grown to 2 billion if the Presidential Dollars had continued to be produced for circulation through the conclusion of the program in 2016. The Treasury Department indicated that the suspension would yield annual savings of $50 million over the next several years.
The group of Senators who introduced S. 2049 the Currency Optimization, Innovation, and National Savings Act (COINS Act), cited potential longer term savings from phasing out the $1 bill in favor of the $1 coin. Although the coins initially cost more to produce than bills, savings would be generated due the longer lifespan of the coins compared to bills. A recent GAO study was estimated that the savings would be $5.6 billion over 30 years.
A news release from the Senators noted that virtually every modern economy has made a similar transition to higher denomination coins. The release also stated that when the Canadian government switched the the $1 coin, the move generated savings at a rate ten times the initial projections.
The COINS Act introduced in the Senate is a companion bill to H.R. 2977 introduced in the House of Representatives on September 20, 2011. The House bill currently has 12 cosponsors and has been referred to the House Committee on Financial Services.