Legislation was introduced in both the House and the Senate on Friday, September 21, that would prohibit the payment of surcharges to private organizations or entities from the sale of U.S. Mint commemorative coins.
Instead, per the reform act, any net profit raised by the sale of these coins would be used to reduce the government’s deficit. The bills, titled Commemorative Coins Reform Act of 2012 and numbered S. 3612 in the Senate and H.R. 6495 in the House, were referred to committee.
In order for either bill to become law, it would need to pass in both the House and the Senate and then get signed by the President. The Senate version currently has seven cosponsors while the House bill has one.
Presently, the sale of commemorative coins helps raise money for various projects and organizations. For example, in 2010, the United States Mint produced the American Veterans Disabled for Life Silver Dollars as required by Public Law 110-277. By year’s end, approximately 267,740 coins sold*. With a surcharge of $10 per coin, about $2,677,400 was paid to the Disabled Veterans’ LIFE Memorial Foundation in order to help support the construction of the American Veterans Disabled for Life Memorial in Washington, D.C. In the same year 350,000 commemorative Boy Scouts of America Centennial Silver Dollars were purchased*, thus raising around $3.5 million that was paid to the National Boy Scouts of America Foundation, according to Public Law 110-363. Those funds were distributed as grants to local councils in hard-to-serve areas.
The purpose of the proposed bill is to eliminate earmarks. While those who are behind the act want to continue to honor outstanding people, events, etc. with commemorative coins, they want to limit the government’s involvement in specific projects that benefit the home districts and states of legislators.
Proposing the bills were U.S. Senator Jim DeMint, R-SC, and U.S. Representative Justin Amash, R-MI. Other supporters, all Republican, include Senators Tom Coburn of Oklahoma, Lindsey Graham of South Carolina, Kay Bailey Hutchison of Texas, Ron Johnson of Wisconsin, Mike Lee of Utah, John McCain of Arizona, and Jim Risch of Idaho as well as Representative Jeff Duncan of South Carolina.
In a press release Sen. DeMint relayed, "Congress has done great work on eliminating earmarks, but commemorative coins have become a way for politicians to continue steering federal benefits to favored projects. Congress can still issue commemorative coins, but the funds should go to deficit reduction instead of becoming a money-maker for private entities. If organizations wish to raise money for worthy causes, there are many ways available without the use of taxpayer resources."
"Congress found yet another way to circumvent the earmark ban with commemorative coins," Rep. Amash said according to the same announcement. "Organizations shouldn’t receive special treatment because of their D.C. connections. It’s far beyond the proper role of the federal government to act as the sales agent for private groups."
This bill will not affect beneficiaries of the commemorative coin acts that have already been signed into law. Some of the upcoming programs that have been set in motion are the 2013 Girl Scouts of the USA Centennial Silver Dollars, the 2013-dated 5-Star Generals Commemorative Coins, the 2014 Civil Rights Act of 1964 Silver Dollars, 2014 National Baseball Hall of Fame Commemorative Coins, and the 2015 US Marshals Service Commemorative Coins.
It should be noted that the U.S. Mint operates solely on revenue it makes from selling coins and numismatic products, and it does not rely on Congressional appropriations, that is to say income from taxpayers. It sells circulating coins at face value to Federal Reserve Banks, bullion coins at a bit over spot prices to its network of Authorized Purchasers and numismatic products at a premium to the public.
Using net income from the U.S. Mint to pay down the national debt is nothing new. Pursuant to the Mint’s annual reports, seigniorage obtained from selling circulation coins and numismatic products containing circulation quality coins goes to the Treasury General Fund as an off-budget receipt, meaning it is used to "reduce the amount of cash that Treasury has to borrow to pay interest on the national debt."
Gains from the selling all of the other numismatic products such as proof coins and proof sets, annual reports explain, go to the Treasury General Fund as an on-budget receipt. That means it can be used by the government either as current operating cash or to reduce the annual budget deficit.
If the Commemorative Coins Reform Act of 2012 passes in Congress and gets signed by the President, the excess funds raised by commemorative sales, after program costs are recovered, will be transferred to "the general fund of the Treasury for the purpose of deficit reduction."
*These are not final, audited figures.
