The metallic composition of cents and nickels would be changed if newly introduced legislation becomes law. According to two separate bills introduced on December 15, 2011, America’s two lowest denominated coins should be struck primarily from steel.
Congressman Steve Stivers of Ohio introduced the proposed changes as part of the Cents and Sensibility Act, H.R. 3693, and the Saving Taxpayer Expenditures by Employing Less Imported Nickel Act, H.R. 3694, also known as the STEEL Nickel Act. Taxpayer savings was the reason given for each.
"This legislation is a common-sense solution to decrease the cost of minting pennies and nickels," said Rep. Steve Stivers about the proposed legislation to strike both cent coins and nickels from steel. "Not only will it cost less, but steel is an American resource that we have and can manufacture right here in our backyard."
Rep. Stivers’ backyard reference is exceptionally apt for Ohio, as the state is one of the top producers of steel in the country.
Currently, the one cent coin has a composition of copper coated zinc (2.5% Cu, 97.5% Zn) while the nickel is composed of a cupro-nickel blend (75% Cu and 25% Ni). Those compositions have been a matter of controversy going back to 2006 when the cost to manufacture the two coins rose above their face values. A multitude of bills have appeared since with various proposals to address the costs. As recently as 2010, the Coin Modernization, Oversight, and Continuity Act became law (Public Law 111-302), giving the Treasury Secretary, and thereby the United States Mint, the authority to research and develop different compositions for coins. The Mint earlier this year took the first steps in looking at alternative metals, and must submit its report on the matter to Congress by late 2012.
Base metal costs for cents and nickels have continued to rise. The most recent U.S. Mint annual report (2010) indicates it costs 1.79 cents to strike each penny. That same report showed nickels cost 9.22 cents each. Together, the production of the two coins rose to $42.6 million over their totaled face values. That nearly doubled the previous year’s loss of $22.0 million.
To alleviate that imbalance, the bills seek cents and nickels in steel which is available at a lower price. According to the text of the proposed pieces of legislation, the composition of the two coins would change within ninety days of the applicable bills becoming law.
"At a time when too many of our products are being manufactured in other countries, we should at least be able to buy those products with money produced using materials made in America," said Rep. Tim Ryan of Ohio, who co-sponsored the two bills. "Using American steel will reduce the cost of producing nickels and pennies by hundreds of millions of dollars over the next ten years, and shows that the United States is still a place where we make things."
While the composition of cents and nickels would change, the two pieces of proposed legislation require that their appearances remain similar, and result in no required changes to coin-handling equipment such as vending machines.
Both bills have been referred to the House Committee on Financial Services. For proposed legislation to become law, it must pass in both chambers of Congress and win the signature of the President of the United States.