Posted on 05/08/2008 8:42:43 AM PDT by Red Badger
WASHINGTON (AP) — Further evidence that times are tough: It now costs more than a penny to make a penny. And the cost of a nickel is more than 7 1/2 cents.
Surging prices for copper, zinc and nickel have some in Congress trying to bring back the steel-made pennies of World War II, and maybe using steel for nickels, as well.
Copper and nickel prices have tripled since 2003 and the price of zinc has quadrupled, said Rep. Luis Gutierrez, D-Ill., whose subcommittee oversees the U.S. Mint.
Keeping the coin content means "contributing to our national debt by almost as much as the coin is worth," Gutierrez said.
A penny, which consists of 97.5 percent zinc and 2.5 percent copper, cost 1.26 cents to make as of Tuesday. And a nickel — 75 percent copper and the rest nickel — cost 7.7 cents, based on current commodity prices, according to the Mint.
That's down from the end of the 2007, when even higher metal prices drove the penny's cost to 1.67 cents, according to the Mint. The cost of making a nickel then was nearly a dime.
Gutierrez estimated that striking the two coins at costs well above their face value set the Treasury and taxpayers back about $100 million last year alone.
A lousy deal, lawmakers have concluded. On Tuesday, the House debated a bill that directs the Treasury secretary to "prescribe" — suggest — a new, more economical composition of the nickel and the penny. A vote was delayed because of Republican procedural moves and is expected later in the week.
Unsaid in the legislation is the Constitution's delegation of power to Congress "to coin money (and) regulate the value thereof."
The Bush administration, like others before, chafes at that.
Just a few hours before the House vote, Mint Director Edmund Moy told House Financial Services Chairman Barney Frank, D-Mass., that the Treasury Department opposes the bill as "too prescriptive" in part because it does not explicitly delegate the power to decide the new coin composition.
The bill also gives the public and the metal industry too little time to weigh in on the new coin composition, he said.
"We can't wholeheartedly support that bill," Moy said in a telephone interview. Moy said he could not say whether President Bush would veto the House version in the unlikely event that it survived the Senate.
Sen. Wayne Allard, R-Colo., who is retiring at the end of the year, is expected to present the Senate with a version more acceptable to the administration in the next few weeks.
The proposals are alternatives to what many consider a more pragmatic, but politically impossible solution to the penny problem: getting rid of the penny altogether.
"People still want pennies, which is why we're still making them," Moy said.
Even Treasury Secretary Henry Paulson acknowledged in a radio interview earlier this year that getting rid of the penny made sense but wasn't politically doable — and certainly nothing he is planning to tackle during the Bush team's final months in office.
In 2007, the Mint produced 7.4 billion pennies and 1.2 billion nickels, according to the House Financial Services Committee.
Other coins still cost less than their face value, according to the Mint. The dime costs a little over 4 cents to make, while the quarter costs almost 10 cents. The dollar coin, meanwhile, costs about 16 cents to make, according to the Mint.
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The House bill is H.R. 5512.
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U.S. Mint: http://www.usmint.gov
House Committee on Financial Services: http://financialservices.house.gov
Especially since Andy Jackson was a Democrat!..............
It's time for a thoroughgoing coinage and currency reform. It took 121 years from the ratification of the Constitution to put a dead politician on a coin, the last non-dead politician coin fell in 1948.
Step one: No more dead politicians, at least not for another 121 years. Presidents are not kings, they are not sovereign equivalents, and they don't belong on our coinage. Animals (Flying Eagle), stylized figures of Liberty, and representative (symbolic) people are all acceptable.
Step two: Start the coinage at 10c, and go to $5.
No more dead politicians. Not even Reagan.
If government would stop deficit spending, it might only cost a penny to make a penny again.
“getting rid of the penny made sense but wasn’t politically doable”
No, that would be an admission that the Gov has stolen the savings of everyone holding dollars by devaluing the currency (printing lots and lots of little pieces of paper)
The Emperor has no clothes. Just waiting for some little kid to point it out to the huddled masses.
Saw an interesting post a few days back: The inflation rate from the beginning of the country up to 1913 (the year the Federal Reserve was created) was 8%. Not 8% per year, a total of 8%. The inflation rate between 1913 and today is something like 2600% (I’m not sure I remember this number but 2600% is close). Who need taxes when the government can simple print your money away?
Rather than eliminate our small denominations, it would be better to revalue our dollar by a factor of 10. That is, issue new currency where 1 dollar equals 10 old dollars. Other countries have done it, it's not that traumatic.
As to the metals used, I think plain steel is stupid; it rusts. Stainless steel requires chromium, which is probably skyrocketing too. What are the Europeans using? They've got some cheap base metal coins that are better than steel.
It’s a shame they put that Constitution thing down in writing.
There’s always some smart-ass in the room pointing out our Government’s treasonous acts.
Good thing they have no problem ignoring us. Or they might come after you (and me).
This is nothing new, they have been “stealing my pennies and nickels for years....
“It now costs more than a penny to make a penny. And the cost of a nickel is more than 7 1/2 cents.”.....
...And only our dumb ass governmental bureaucracy would continue wasting taxpayer money making them....
Pre-1985 pennies are are worth $2.08 melted down for every hundred ($1.00 face value); sort your piggy banks.
“Especially since Andy Jackson was a Democrat”
And not a particularly good man either!
With that attitude advancements would never be made. Coin changers need replacing often enough already so while it might cause plenty of complaining it wouldn’t be all that disruptive. Many won’t even take a penny.
Australia rounds (up or down) to the nearest 5 cents. The theory being you “win” as often as you “lose” while they can do away without 1 cent piece.
One enterprising fellow has made a device for sorting out pre-1982 pennies from post 1982. Clever device. Videos of the machine sorting coins on the site.
http://www.ryedalecoin.com/Gallery.html
I can’t see any great value in eliminating pennies and nickels without Congress commissioning at least a $350 million study.
so if I insisted on being paid in pennies i could melt it down and make almost double my money back?
Pennies (or more properly one cent coins) should be abolished. The Dutch abolished the 1/100 guilder before going on the Euro, and the Aussies abolished their pennies.
All retail transactions in Australia have a ‘rounding’ item: if the total purchase plus applicable taxes has a remainder of 1 or 2 AU cents when divided by 5, they are dropped and the purchase pays less, if it has a remainder of 3 or 4 AU cents when divided by 5, the purchaser pays the extra 2 or 1 cent to make the price divisible by 5. It’s like having a ‘take a penny, leave a penny’ bin that never runs empty, and everyone must use. On average everyone ends up even.
The Swiss have no 1 and 5 cent pieces and ALL prices are rounded accordingly.
Pennies and nickels are stupid IMO.
Well, gas prices are higher than they were during the much maligned Carter (early Reagan) malaise, so things certainly aren't peachy.
Illegal, but yes....
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