Following the three bills introduced in July, three more bills were introduced on August 1, 2011, which attempt to deal with the issue of the growing hoard of $1 coins held by Federal Reserve Banks. All six of the bills have been referred to committee and none have attracted a significant number of cosponsors.
The bills variously attempt to modify $1 coin production or specific aspects of the Presidential $1 Coin Program and/or Native American $1 Coin Program. None of the bills have addressed the obvious question of why we need both $1 coins and $1 banknotes. [See my article for the Washington Post “Stop legislating this buck and kill the dollar bill“.]
Below is a summary of the requirements of each of the three most recently introduced bills.
H.R. 2789: Prevention of Wasteful and Unneeded Coins Act of 2011
The bill was introduced by Rep. Kevin Yoder of Kansas. It seeks to suspend issuance of $1 coins, as well as remove the two current legislative requirements on production that have been cited as the cause of the current surplus.
Following the date of enactment, no Presidential $1 Coins may be issued for a 15-year period. An exception would be provided to resume issuance during any time within the 15-year period if the Secretary of the Treasury in consultation with the Federal Reserve System Board of Governors determines that demand for $1 coins exceeds the number held in reserve. Additionally, there would be a specific requirement that Secretary of the Treasury may not issue any $1 coins if it would result in an excess stockpile of coins not in circulation.
Addressing the causes of the current stockpile, the requirement for Federal Reserve Banks to make each design of the Presidential $1 Coin Program available to depository institutions in unmixed quantities during an introductory period would be removed, and the requirement for the US Mint to produce at least 20% of all dollar coins for each year as Native American $1 coins would be removed.
H.R. 2778: Dollars and Sense Act of 2011
This bill was introduced by Rep. Adam Smith of Washington. It includes a variety of measures to address the backlog of $1 coins in the Federal Reserve System caused by “overinflated demand for coin collecting purposes and lack of transactional demand by the general public.” The bill seeks to continue producing $1 coins with modifications to each program to “maintain seigniorage and help pay down our national deficit.”
The Presidential $1 Coin Program is modified by changing the number of presidents honored each year from 4 to 2 and removing the requirements for Reserve Banks to make unmixed quantities available during an introductory period. Meanwhile, the Native American $1 Coin Program would be postponed until the end of the Presidential $1 Coin Program, which would occur after all eligible presidents have been honored.
An unusual limitation on production for Presidential $1 Coins is specified. The aggregate number of $1 coins issued for circulation for any year shall not exceed the number of $1 coins sold as numismatic items during the previous calendar year. This limitation may be waived if the Secretary of the Treasury determines that the demand for a particular design will exceed this amount.
An unusual reform to the Direct Ship Program is included. This program was created with the intention of providing a method for individuals and small businesses to acquire quantities of $1 coins directly from the US Mint for the purpose of introducing them into circulation. The bill would require that the program would only be available “to persons who are purchasing $1 coins for coin collecting purposes.”
H.R. 2760: Presidential Dollar Coin Efficiency Act of 2011
The bill was introduced by Rep. Carolyn Maloney of New York. Through various measures, the bill seeks to improve the minting and issuing of coins and reduce the current stockpile of $1 coins.
The requirement that Federal Reserve Banks make each design of the Presidential $1 Coin Program available to depository institutions during an introductory period would be removed. Furthermore, it would be required that the aggregate number of Presidential $1 Coins produced each year may not exceed the number produced in the previous year. An exception exists for situations when demand for a particular design would exceed the amount. The current requirement that the Director of the United States Mint actively work to raise public awareness of the Presidential $1 Coin Program would be removed.
The Secretary of the Treasury in consultation with the Federal Reserve Board of Governors would be required to reduce the number of $1 coins minted and issuance “until such a time as the excess stockpiles of $1 coins have been eliminated.” A joint report to Congress would be required specifying the steps taken to reduce stockpiles of $1 coins.