President Trump’s sweeping agenda, which aims at reshaping US policy and government, has recently found a new target: the penny. On Feb. 9, shortly after departing from the Super Bowl in New Orleans, Trump announced that he had instructed the secretary of the US Treasury to stop producing pennies. With the cost of manufacturing outweighing the coin’s value, the government has zoned in on the drawbacks of America’s smallest coin.
A major downside of the penny is that the creation of the coin costs more than its value. The day after Trump’s inauguration, the Department of Government Efficiency (DOGE) criticized the penny in a tweet, sharing how each penny costs over three cents to produce which costs American taxpayers over 179 million dollars in the fiscal year 2023. The US Mint — a bureau of the Department of the Treasury — announced the manufacturing price rose to 3.69 cents per penny in 2024. In their annual report, the US Mint reported a fiscal loss of about 85.3 million dollars last year because of the 3.2 billion pennies produced. Trump wrote on his social media, “Let’s rip the waste out of our great nation’s [SIC] budget, even if it’s a penny at a time.”
Past government officials and presidents have publicly shared the advantages of removing the penny and their desire to do so. Former President Barack Obama shared his support for stopping the production of pennies in an interview in 2013. Obama believed extra costs due to the penny were unnecessary, stating, “This is not going to be a huge savings for the government, but anytime we’re spending more money on something that people don’t actually use, that’s an example of something we should probably change.” In the past, many law officials and economists have attempted to stop the production of pennies or at least addressed its harmful costs. In 2017, Senator John McCain co-sponsored a bill with the intent of pausing penny production for ten years and having the Government Accountability Office study the effects that the experiment would have on the US economy. With other countries eliminating their lowest currency values over recent years, US citizens have supported debates to eliminate the penny since the 1980s. In its 1989 edition, the Farmer’s Almanac wrote, “Only tradition explains our stubborn attachment to the penny. But sometimes traditions get ridiculous.”
This proposes the question that has been up in the air since Trump’s announcement: Does he have the power to do it? Congress oversees the Mint’s functions and authorizes the production of US coins. Mint’s website says, “As a part of the U.S. Department of Treasury, the United States Mint derives its authority from the United States Congress.” As of now, it seems the solution to Trump’s goal is an act of Congress to stop the production of pennies, but due to some grey area, it is also possible that the US Treasury might also have the power to stop production. Scott Bessent, Secretary of the Treasury, has not publicly responded to Trump’s endeavors. The penny’s “negative seigniorage” has caught the attention of government officials, and this time, it is not certain it will make it out alive.
(Sources: AP News, NPR)