Trump has ordered the Treasury Secretary to end production of the penny. Will the idea really save costs?
by Boris Nusinzon
Assistant Editor
The “penny problem” is nothing new in America. Members of Congress have previously introduced legislation that proposed eliminating the penny in one fashion or another; Representative Jim Kolbe of Arizona previously created bills on three separate occasions (ranging from 1990 to 2006) that would remove the penny, with the most recent Congressional attempt being made by Senators John McCain and Mike Enzi in 2017. The public discourse over the penny was briefly revived due to Elon Musk’s Department of Government Efficiency (DOGE) noting in late January how “the penny costs over 3 cents to make and cost US taxpayers over $179 million in FY2023.” Trump added on Truth Social that he had “instructed my Secretary of the US Treasury to stop producing new pennies.” Is the penny really so wasteful?
American opinions are divided on this issue, as the potential elimination of the penny is a more complicated issue than one would think. Public polling reflects this division, as one survey conducted by the pro-penny organization Americans for Common Cents (ACC) found in 2019 that 68% of those polled support the penny, whereas another poll from Data for Progress found that 58% of respondents believed the coin should be abolished.
At the very least, Trump and Musk were certainly correct in saying that pennies cost more to produce than their value; the U.S. Mint found in 2024 that it costs 3.69 cents to mint just one penny–and much like other products, minting pennies is environmentally costly due to the zinc and copper that needs to be mined to produce them.
Moreover, the penny has become a monetarily decrepit coin. The penny’s worth has declined more than 30 times since 1990, and the coin is becoming increasingly worthless for the average spender; this fact is plainly demonstrated by the reality that pennies are constantly “in circulation,” but just left in jars and behind couches instead of properly used. Transactional speed would also benefit from the penny’s elimination, as The Washington Post reported that the time taken to handle pennies adds about two seconds to every cash transaction.
The ACC had significant issues with Trump’s proposal, though. They claimed that the elimination of the penny would lead to an increase in nickel production to “fill the gap,” with nickel production currently costing nearly fourteen cents a piece. This would ultimately result in a major net loss for the US government; CNN proved this in a recent data-driven piece where they explained how nickel production was cut by 86% in 2024 to cut down on losses for the Mint. However, “even if the Mint has to make only 850,000 additional nickels in 2025… that would wipe out the savings of eliminating the penny.” Unfortunately, “the Mint would likely have to make more than that,” so it is probable that the Mint would lose money (unless, for whatever reason, nickel production did not increase accordingly).
On top of this, eliminating the penny and adding the typical “rounding tax” (rounding all purchases to the nearest five cents) could disproportionately hurt the poor. The rounding tax on cash-using consumers would be “regressive” (low-income earners pay a larger tax than higher earners), as The New Yorker found that the poor tend to use cash more often. In fact, Raymond Lombra, an economist at Penn State, discovered in 2001 that this tax could reach up to $600 million a year–accompanied by a jump in the inflation rate. Many penny drives and charities also benefit from pennies; the chief executive of the Small Charities Coalition explained in a 2018 article from The Guardian that “Most small charities rely on donations from individuals for the majority of their fundraising. That’s volunteers asking people to put in their pennies where they can.”
A particularly unique solution that may please both sides would be the one advocated by Jack McAndrews in an Opinion article from The Washington Post: The government could switch the penny to a special paper-based currency previously used on overseas military bases called “Military Payment Certificates,” colloquially referred to as “scrips.” He explained that “The U.S. Mint could print one-cent scrips inexpensively… One-cent scrips would allow the relatively more expensive production of metal pennies to stop.” Another option that the aforementioned Data for Progress poll collected data on would be even bolder–both the penny and the nickel could be abolished, though getting rid of the nickel only garnered 33% support in the poll (as opposed to 59% who believed that it should continue to be minted).
Even still, eliminating the penny has precedent outside of America. The coin has been removed in other countries such as Canada, Australia, and Singapore; Estonia joined several other European countries in January by removing the coin as well. The Nasdaq found that in four of these nations (Australia, Canada, New Zealand, and Sweden), the visible effect was “not much” and that “countries that have eliminated the lowest-value denominations of currency often implement subsequent changes to phase out the next-smallest increment.” This could mean that if the penny is abolished in America, the nickel could be next (despite the less than universal support for doing so in the Data for Progress poll).
The constitutionality of Trump’s order has also come under question. A PBS analysis noted that when Congress passed the Coinage Act of 1792, creating the U.S. Mint, it “must produce ‘Cents – each to be of the value of the one hundredth part of a dollar, and to contain eleven penny-weights of copper.’” By this logic, Congress should be the only branch of government able to end the minting of the penny–but Robert K. Triest, an economics professor at Northeastern University said in a CBS News article that there might be “wiggle room.” Triest explained that “The process of discontinuing the penny in the U.S. is a little unclear. It would likely require an act of Congress, but the Secretary of the Treasury might be able to simply stop the minting of new pennies.”
The penny has gained an infamous reputation in the last fifty years as its value has decreased, leading the public to remain divided on what the fate of the coin should be. Should the penny be eliminated, or will nixing the coin amount to one costly mistake?