- Category: Penny News
Contact: Mark Weller
For Immediate Release: April 29, 2008
WASHINGTON, DC -Americans For Common Cents understands that the US House of Representatives may be moving forward soon on The Coin Modernization and Taxpayer Savings Act of 2008 (H.R. 5512), which would authorize a change in the metallic content of coins. While we think that it is wise to explore various options to make all coins more cost effectively, we are concerned with some of the bill provisions outlined below.
The Mint should have flexibility to determine the metal content of U.S. Coins.
Section 4 of H.R. 5512 mandates the production of one-cent coins to be made primarily of steel 270-days after enactment of this legislation. Converting to a steel penny in such a short period of time simply can't be done according to the Mint. During that time, the Mint needs to determine the coin alloy, gauge, upset design and plating thickness as well as the equipment needed, the manufacturing process, and supply chain and production issues.
The legislation also eliminates the Mint's ability to consider other low-cost alternatives based on availability and cost. Beginning in late 2006, there was a super surge in world wide metals prices caused by market speculation, increased global demand, and supply disruptions. Since that time, the price of the primary penny metal, zinc, has dropped 50 percent. The price of steel, on the other hand, has increased 40 percent in the last 6-months alone. The Mint should have the flexibility to respond to changing market conditions and not be locked into one option.
Also, whatever happens with the content of the penny should NOT lead to calls for penny elimination.
The alternative to the penny, rounding transactions to the nickel, harms consumers. Under the current fragile economic climate, the last thing Congress should do is increase inflationary pressure. Rounding affects purchases from the gas pump to the grocery store and Americans overwhelmingly reject the rounding to the nickel..
We therefore urge Congress to work to ensure that the drive to make coins less expensively provides the Mint needed flexibility to respond to the current situation.
Mark W. Weller, Executive Director
Americans For Common Cents