In what could end up being an about-face in government policy, new legislation was introduced in the United States Senate on Tuesday, January 31, 2012 seeking to replace paper dollar bills with $1 coins.
The proposed bipartisan bill, entitled the Currency Optimization, Innovation, and National Savings (COINS) Act, S. 2049, was introduced by Senator Tom Harkin of Iowa and Senator John McCain of Arizona.
If passed and signed into law, the COINS Act would effectively serve as a reversal to the December order by Secretary of the Treasury Timothy Geithner which halted production on all circulating Presidential $1 Coins, making future dollars available only to coin collectors. The suspension was part of a broader Campaign to Cut Government Waste established by President Barack Obama earlier last year.
At the time, estimates had Federal Reserve Banks sitting on an estimated $1.4 billion worth of $1 coins which are stored in vaults. That stockpile was believed to be enough to last a decade based on current consumer demand which has always been poor as most American’s prefer lighter $1 Federal Reserve Notes over heavier $1 coins.
By ending production on circulating $1 coins, those responsible hoped to save millions. However, eliminating dollar bills and replacing them with $1 coins has been estimated by the General Accounting Office to save somewhere between $200 and $500 million per year with some estimates totaling over six billion dollars in thirty years.
"Promoting the dollar coin is a smart investment for our country that saves taxpayer’s money," said Senator Tom Harkin about the introduction of the COINS ACT. "With the deficit looming, we need only look at the cost-savings from this effort to understand why this legislation is so urgently needed. I am hopeful that this bipartisan legislation will continue to gain traction in Congress."
$1 coins initially cost more to produce than their paper counterparts. However, dollar bills only have a lifespan of about 4.7 years on average. In comparison, the U.S. Mint states that the average life of a coin is around twenty-five years.
"With our Nation’s debt now over $15 trillion, Congress must look at every area of the federal government, big or small, to save money," said Senator John McCain. "By moving from the costly dollar bill to the dollar coin, we can save real money and show the American taxpayer that we are serious about cutting spending in Washington."
Co-sponsoring the Senate legislation was Senators Tom Coburn of Oklahoma and Mike Enzi of Wyoming. S. 2049 has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.
The legislation was offered to compliment H.R. 2977, which is also entitled the COINS Act. H.R. 2977 was introduced by Rep. David Schweikert in the House of Representatives on September 20, 2011 and currently has 12 cosponsors.
For any version of the Currency Optimization, Innovation, and National Savings (COINS) Act to become law, it must pass in both the Senate and House and get signed by the President.
“$1 coins cost more to produce than paper money but last some 25 years versus the average lifespan of 4.7 years for dollar bills.”
I guess all those coins I found in change, when I first started collecting coins, in 1965, never knew their life span was over. I just received a 1968, 69 and 71 quarter in change. I spent them, increasing their life span, even more.
This mirrors the inflation punch we will soon be blindsided by. Replace the $1 note with the $2 note that has the buying power of a quarter.
Every time this bill pops up, so too does the Scott Brown/John Kerry Currency Efficiency Act that promotes the dollar bill. (And not coincidentally, Brown and Kerry are the House and Senate representatives from Massachusetts, home of Crane & Co., the company that since 1879 has had a monopoly on making the paper that US currency is printed on.) The usual argument advanced against dollar coins is that they are too big and heavy. But it’s a specious argument, since dollar coins can be any size desired. In fact, if dollar coins were made of 84 cents’ worth of silver… Read more »
Oh good God, what a pile of manure this is. Ignoring for just a moment the coin vs. FRN issue, these pompous stuffed shirts in Congress don’t give a rat’s ass about “saving the taxpayer’s one bloody cent. It’s political posturing in an election year, plain & simple. Since when did these idiots give a damn about handling money responsibly? I could spend the next 3 hours writing a dissertation on this, but everyone knows it’s true. I say we “DUMP” old farts like John McCain and keep the $1 FRN. And if you think I hate the dollar coin,… Read more »
Good lord…i’m not ready to carry around a whole bunch of $1 coins clinging around everytime i put my foot forward. what a disastrous decision! Pathetically ridiculous.
“If passed and signed into law, the COINS Act would effectively serve as a reversal to the December order by Secretary of the Treasury Timothy Geithner”
who cares about Geither……….I think he is a tax cheat and evader himself.
We already have a $5 coin – it’s the 1/10 oz gold eagle. And since the BEP prints more $100 notes than $1 notes every year that’s the bill we should be eliminating.
Weight of $1 bill = 1 gram
Weight of $1 coin = 8.1 grams
8 fold increase in weight of the coins, this translates directly to fuel consumption which is where we need to look for cost cutting measures…
Leave it to politicians to think of innovative ways to cut costs and not engineers…
i like when people talk about the weight of the coin vs the bill – how many singles are you really walking around with at any one time? Basically every other country in the world has made this transition except us – it works!
I’d rather dump the Senators. They are nothing but a corrupt bunch of lying gladhanders that care nothing about the Constitution or its constituents.
Udayan: ” Good lord…i’m not ready to carry around a whole bunch of $1 coins clinging around everytime [sic] i put my foot forward. what a disastrous decision! Pathetically ridiculous.” Then how do $1 AND $2 coins or their equivalents circulate successfully in 50 other countries with about 3/4 of a billion residents? I’ve visited Canada, the UK, the EU, and Australia – their civilizations didn’t die when paper bills were phased out. Some people fussed for a while but within 2 or 3 months everyone adjusted and life went on. Plus with effective circulation of $2 coins you rarely… Read more »
Amen Brothers!!
I spent some time in Canada on business. It really is not that bad to have $1 and $2 coins. Their coins are a lot lighter in weigh and are not at all heavy in the pocket.
Lets reduce the weight of our coins and perhaps this cost savings may fly!
Jim:
“We already have a $5 coin – it’s the 1/10 oz gold eagle.”
Uhh … that’s about $170 worth of gold at today’s prices. Definitely not something you’d want to spend for a $5 pack of candy bars.
Even Ron Paul (a few of whose ideas I agree with) hasn’t figured out how to get the whole planet to re-regulate the price of gold and silver to allow their use in coins again. That genie’s been out of the bottle for a way long time.
LBJ pardoned the genie or had it killed i forget which.
but any way, Bring back the IKE dollar!!
now thats a pocket clinkin’ sound i would like 🙂
Ooooh how about a 10oz. silver Kennedy half.
and a 25oz. silver Ike.
or a 5oz silver SBA lol
oh no, not a chance of this happening anytime soon, THE STRIPPPPPPEEEEEERS this senators much hire are agains it, do the fact that this is a safety hazard (they may slip and fall if stepping over slick metal)also the carrying more weight would add another heavy load to carry.
@the big boss : Some strip clubs are already breaking larger bills into $2s in order to increase tips for their dancers. They were part of the reason behind the increased demand for $2 bills in past years. @Udayan : Money is made to be spent, not hoarded. Our relationship with coins has changed in recent times due to the ravages of inflation. If the purchasing power of our coins reflected past expectations (the 2012 dollar has the purchasing power 4¢ had back when inflation records started to be kept in 1913), you would spend them long before they could… Read more »
If they wanted to seriously deal with cost savings and cutting waste they would remove the usurper from our White House, charge him with High Treason, try him, and hang him. Then they would have to move on and do the same with Congress to anyone who knowingly allowed this usurpation to come about.
A bit OT, are we? It’s also about 12 years too late.
Also please look up the legal definition of treason. I’m sure the FBI would be interested in anyone who publicly advocates the violent overthrow of the government. Besides, big corporations have figured out they can accomplish the same thing financially.
At the same time, if it costs so much to produces pennies and nickels why are we producing them? There are so many in circulation and sitting in vaults that if the mint took a few years off from making these we’d save there too. Just produces them in rolls for collectors like the half dollars.
Pennies have the zinc industry behind them the same way $1 bills have Crane Paper’s lobbyists. There’s also the significant issue of sales taxes. Other countries that have successfully dumped their 1¢ and 5¢ coins generally have a VAT, GST, or some other sales tax that’s uniformly built into prices.Rounding rules are applied at the national level so everyone gets a fair shake. But here the crazy-quilt of local and regional taxes would be a nightmare to administer. Fair rounding laws would meet a torrent of opposition from merchants not to mention the extreme right who’d scream it was yet… Read more »