On Sunday, February 9th, President Trump ordered his treasury secretary to stop the US Mint from producing the one-cent penny as part of his plan with Elon Musk’s DOGE to cut federal waste. While this pursuit may seem to have come out of nowhere, it isn’t a new idea. Arizona Congressman Jim Kolbe (R) popularized the quest to kill the penny in the late 1980s, introducing it in every new session of Congress. Kolbe has been backed by anti-penny proponents, some of whom believe the penny is an economic liability and “useless in everyday life.”
Pennies cost more than one cent to make and slow down the efficiency of transactions, and many believe they’re a prime example of government waste. Getting rid of the penny is a minor change at face value. Canada did so in 2012 and hasn’t looked back since; their main change was simply rounding cash transactions to the nearest nickel, with electronic payments remaining the same. In the United States, the coin is slowly disappearing on its own. Compared to the production rate in the 2000s, today’s penny production is down.
Contrary to popular belief, the government won’t save money by eliminating the penny. While each penny costs only 3.7 cents to make, nickels are more expensive at 14 cents. If the U.S. stopped minting the penny, it would save around $85 million a year, but it would lead to a dependency on the nickel, and we’d start losing more on nickels than we ever did on pennies.
If the government really wants to save money, it’ll have to eliminate coin production altogether because of the cost of materials. Coins currently only account for 2% of the money in circulation, but their elimination would primarily hurt lower-income communities, who often use cash to pay. The idea that the country could save any money from reducing coin production may be a misguided notion, though; in 2024, the Mint earned about $100 million by making coins.
Another reason this penny-saving decision is turning some heads is that the demand came from the executive branch. The U.S. Code gives the Treasury Secretary the authority to mint and issue coins, meaning Trump can send the order and Congress can confirm it through law. However, the final decision to eliminate the penny should have been Congress’s to make, not Trump’s, since Congress controls the federal budget.
Overall, this pursuit aligns with the Trump administration’s emphasis on cost-cutting, which the Department of Government Efficiency (DOGE) has focused on since Elon Musk’s takeover. Musk raised the question of the efficiency of the penny on X last month. Why are we still listening to everything First Lady Elon Musk says? Can Trump legally order the Treasury to stop making pennies? It doesn’t matter. As he’s proven, he’ll do it anyway.
This is yet another attempt to weaken Congress’s control of the federal purse strings by cutting federal spending, increasing governmental efficiency, and handing more power to the executive branch. Eliminating the penny is not equitable for the everyday consumer—though it’s unlikely that was ever a concern for DOGE.
The opinions expressed within this piece represent the views of the author alone and do not necessarily reflect the views of The Jefferson Independent.
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