U.S. Mint Makes Move to Halt Penny Production
Washington, D.C. – May 22, 2025
In a significant change to the cash currency landscape, the U.S. Mint has confirmed it is moving forward with plans to cease the production of the penny. This decision comes amid rising production costs, which have increased by over 20% in the past year. The Mint’s final order of penny blanks will soon be used up, leading to an estimated annual saving of $56 million in material costs for the Treasury Department.
This decision aligns with an earlier directive from President Donald Trump, who, in February, called for the end of penny production due to its cost inefficiency. In a post on his Truth Social platform, Trump highlighted the irony of minting a coin that costs more than its actual value, stating, “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!”
Currently, there are approximately 114 billion pennies in circulation, representing a total value of $1.14 billion. However, the Treasury has indicated that they are largely underutilized. Established in 1792, the penny was one of the first coins minted in the United States, but its ongoing production has sparked debate about the efficiency and practicality of continuing to produce the 1-cent coin.
Economic Perspectives on Ending the Penny
The move to abandon the penny has garnered mixed reactions. Advocates for its elimination cite the high production cost, now nearing 4 cents for each penny minted, and the limited practical use of the coin in everyday transactions. Conversely, some supporters of the penny underscore its utility in charitable donations and the overall lower production costs compared to other coins, like the nickel, which has a manufacturing cost of nearly 14 cents.
The Wall Street Journal reported this development, noting that while pennies remain the most produced coin by the U.S. Mint—with 3.2 billion minted last year—the growing expenses and limited usage have prompted this reconsideration.
Legislative actions are underway, with two bipartisan bills introduced recently aimed at firmly prohibiting future penny production. The “Make Sense Not Cents Act,” introduced by Senators Mike Lee (R-Utah) and Jeff Merkley (D-Ore), and the “Common Cents Act,” introduced by Representatives Lisa McClain (R-Mich.) and Robert Garcia (D-Calif.), among others, seek to establish a legal framework for the cessation of the penny.
Addressing Future Coin Production Needs
Economists and market experts, like Jay Zagorsky from Boston University, argue that any proposed legislation to eliminate pennies must also consider necessary changes in pricing practices, such as rounding prices to the nearest five cents. Without these measures, there could be an unintended increase in the demand for nickels, potentially leading to greater losses, as it is more costly to mint them.
Mark Weller, executive director of the Americans for Common Cents, a group that advocates for the penny, expressed concerns over the implications of eliminating the coin entirely. Weller highlighted the need for the Treasury to explore cost-saving measures in the production of other coins, particularly the nickel, which might see an uptick in demand should the penny be completely removed from circulation.
In conclusion, while the halt in penny production signals a forward-thinking approach to modernize currency management, it also raises important discussions about the practicality and economic impacts of such a decision on the U.S. monetary system.
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