Bills Seek to Change Cents and Nickels to Steel

by Darrin Lee Unser on December 23, 2011 · 15 comments

Steel Appearing Cents

Two new bills would have the U.S. Mint use steel in cents and nickels

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.

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Koichi Ito
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Koichi Ito

Why not Aluminum, because it is cheaper than Steel? Reason to choose Aluminum to replace penny and nickel?

Ryan North
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Ryan North

Why not just save more money and get rid of the penny and just change the Nickel’s comp. around.

Jason
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Jason

Instead of changing the composition stop devaluing the US dollar!! If our monetary base was not expanding rapidly the price of the commodities used to make our coins wouldn’t be rising so fast. Copper is the 3rd precious metal. Converting coins from real money to steel is usually an indicator of a collapsing empire throughout history. Steel has no monetary value. Coins made from it are as worthless as a token.

Stewart
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Stewart

Agreed with the above comments. Lets have the mint follow suit of the dollar coins, just mint the collector versions of these coins every year, and do a full public production circulation run once every five years, do we really need new pennies every year for circulation? Next year, mint no new nickels, no dimes the next year, no quarters the next and so on. Scrap the half dollar entirely, I haven’t seen one in circulation in something like ten years. We need to follow the Canadian and European schemes and stop the production of paper dollar bills and move forward to the dollar coin, we will get over the” purported pain

Stan Kocaya
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Stan Kocaya

Why not save some real money and discontinue the one dollar bill. We would save several billion on paper, ink and printing cost over the first ten years. We could then circulate the dollar coins in storage and save the money we’re spending on that storage, plus the coins are already minted. But they won’t ….. it’s not about saving it’s about who can make money. …. Printers, paper and ink dealers, steel mfrs. etc …… Whatever happened to the real United States of America?

UhNo
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UhNo

No.. I dont want a pocket full of euro style dollar coins. LESS Coins MORE CASH.

Makoto
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Makoto

I agree with the top comment on the Aluminum, but getting rid of the penny wouldn’t be the right thing to do. Believe it or not we use the penny more than any other coin. This Steel penny will be interesting though, bringing back old memories like the 1943 silver penny.

kelly
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kelly

How many steel circulated pennies from 1942 have you seen are in good condition. They get the rusty appearance and don’t seem to look as good for as long as copper. Do away with the penny is the best solution and as said in. prior post, do away with the paper dollar bill. Bring our goods making back to the US where American jobs could be created, make the country strong and go back to silver coinage.

Stewart
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Stewart

Agreed, that we use lots of pennies at the retail level, but just suggesting that we already have enough in common circulation, never mind what we all have stored in a jar somehwere in your home. We could go a decade without making a single circulating penny and we wouldn’t miss a beat. Christ, I must have $20 of common circulating pennies at my disposal, never mind the proof/BU versions.Same goes for nickels/dimes/quarters.

Munze
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Munze

Yes! As almost all of us agree, get rid of the $1 bill! And either introduce a $2 coin at the same time or redesign the $2 bill; every other country with a successful $1 coin also makes extensive use of a Two to minimize the number of coins needed to make change. To address other points: > Aluminum tends not to be practical coinage metal because it’s so light. An aluminum cent would weight about 1 gm; I’ve seen aluminum coins in some other countries and they quite literally can blow away in a good breeze! > What’s wrong with bringing back the half dollar in a smaller size? Halves circulated regularly till 1964. They disappeared for the twin reasons of having JFK’s image put on them that year and continuing to have silver in them till 1970. OK, only 40% but it still made them worth more than… Read more »

Clem
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Clem

Simple.Recall all the nasty zinc pennies for health reasons. Revalue the pre 1982 penny to a nickel.Better yet.Keep printing dollars and make the copper penny the new dollar.

bill
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bill

END THE FED!

Leo
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Leo

I also think aluminum would be a better choice. The old steel pennies from 1943 did not handle circulation very well. Aluminum tolerates everyday handling much better and would retain a nicer appearance over time.

RonnieBGood
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RonnieBGood

I agree with the requested changes. As much sense (pun intended) as Aluminum coins would make they would cause too many issues with coin operated machines due to their weight differences. Both the old and new coinage must be able to be used in vending machines, etc. This issue should have been dealt with as soon as the cost of the metals exceeded the value of the coins struck. With our current debt situation in the US it makes no sense to continue to lose money on each penny and nickel that are struck for circulation! Please support the change!!

Don Yeier
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First, the penney should be eliminated, period. They buy nothing & no one even stoops to pick them off the floor/ground. Secondly, let’s save a few billion dollars and make either steel nickels or revert back to the 1/2 dime (which worked fine for upwards of a hundred years…).. The composition could be the same as the current dime. Can’t figure why someone in Congress hasn’t introduced a bill to that effect! But regardless, for now, yes, support the pending bill for steel nickels & the heck with any pennies whatsoever. Don