President Trump Directs Treasury to Halt Penny Production Amid Rising Costs
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Feb. 10, 2025 | Washington
President Donald Trump has announced a dramatic shift in coin production, directing the Treasury Department to stop minting new pennies. In a move aimed at reducing government waste, Trump highlighted the growing cost inefficiencies that have plagued the production of the one-cent coin.
“For far too long the United States has minted pennies wich literally cost us more than 2 cents. This is so wasteful!” Trump stated on his Truth Social site Sunday night. “I have instructed my Secretary of the US Treasury to stop producing new pennies.”
The decision forms part of an aggressive series of executive actions undertaken by the administration. While Trump had not made this proposal during his campaign, the idea gained traction after a post on X by Elon Musk’s Department of Government Efficiency earlier last month drew attention to the coin’s expenses.
Recent data underscores the urgency of the issue. According to a report by the U.S. Mint, the production losses reached approximately $85.3 million during the 2024 fiscal year that ended in September. Nearly 3.2 billion pennies were produced at an average cost of around $0.037 each,up from $0.031 the previous year. In comparison, the cost to produce the nickel—a coin with a face value of 5 cents—soars even higher at nearly $0.14 per piece.
Economists and industry experts have pointed out that while this executive move may help stem further losses,its legal and practical implementation presents meaningful challenges. Congress controls the specifications of U.S. coinage, including size and metal content, meaning that any lasting change would likely need legislative approval.
“The process of discontinuing the penny in the U.S. is a little unclear. It would likely require an act of Congress, but the Secretary of the Treasury might be able to simply stop the minting of new pennies,” Robert K. Triest, northeastern University explained last month.
Legislators have long debated the fate of the one-cent coin,introducing proposals to either temporarily suspend its production or eliminate it entirely by mandating price rounding to the nearest five cents. Historical examples support this notion. In 1857, Congress discontinued the half-cent coin, and more recently, Canada ceased minting its penny in 2012, citing improved efficiency at checkout counters and enhanced cost savings.
Implications for American Commerce and Budget Efficiency
The potential elimination of the penny carries far-reaching implications for daily transactions and government budgeting. Retailers in cities across the United States, from New York to Chicago, have noted that rounding adjustments could streamline checkout processes, reducing operational delays linked to handling small coins.
Consumers would likely see changes in cash transactions,especially in areas where small denominations are common. However, the benefits include long-term savings and a reduction in the overall cost burden borne by the government when producing each coin. This mirrors similar reforms adopted around the world and contributes to ongoing efforts by the Trump administration to achieve substantial budgetary savings—an initiative reportedly targeting as much as $2 trillion in overall reductions.
“Let’s rip the waste out of our great nations budget, even if it’s a penny at a time,” Trump added during his departure from New Orleans after watching the first half of the Super Bowl, summarizing the administration’s broader cost-cutting agenda.
Future Prospects and Counterarguments
Despite the clear economic rationale, critics caution that the unilateral cessation of penny production might not be a silver bullet. Some argue that without Congressional support, the measure may only be temporary, leaving consumers and businesses to cope with a system that still requires the eliminated coin in circulation. Furthermore, while many are eager about faster checkouts and reduced government spending, small businesses and populations reliant on cash transactions could face challenges during the transition period.
The debate continues as experts encourage further investigation into the practical application of such a policy. Real-world case studies from regions that have successfully phased out low-denomination coins provide a framework, but additional research is needed to address the specific concerns of American consumers and retailers.
Frequently Asked Questions (FAQ)
- What did President Trump announce regarding penny production?
- President Trump announced that he has directed the Treasury Department to halt the minting of new pennies as part of his effort to reduce government waste and cut costs.
- Why is the production of pennies being halted?
- The decision comes as penny production has become increasingly inefficient and costly, with each penny reportedly costing more than 2 cents to produce, leading to notable production losses.
- How much did the U.S. lose from penny production in fiscal year 2024?
- According to a report by the U.S. Mint, production losses reached approximately $85.3 million during the 2024 fiscal year, with nearly 3.2 billion pennies produced at an average cost of around $0.037 each.
- How does the cost of producing a penny compare to that of other coins?
- While pennies cost about $0.037 to produce, the cost of producing a nickel—a coin with a face value of 5 cents—is nearly $0.14, highlighting the inefficient economics behind the penny production.
- What impact could stopping penny production have on commerce?
- Discontinuing the penny may lead to changes in cash transactions,such as rounding prices to the nearest five cents,potentially streamlining checkout processes and reducing delays related to handling small coins.
- Are there any legal challenges to ending penny production?
- Yes, there are legal challenges since congress controls the specifications of U.S. coinage—including size and metal content—so a lasting discontinuation of the penny might require legislative approval.
- What are some potential benefits of this executive action?
- The move could result in long-term savings for the government, reduced production waste, a more efficient cash transaction process for retailers, and contribute to broader cost-cutting initiatives.
- What concerns have critics raised about the decision?
- Critics argue that without Congressional support, the measure may be temporary.They also note that the transition might pose challenges for consumers, small businesses, and cash-dependent populations.
