DOGE’s suggestion to eliminate the penny as a cost-saving measure is fundamentally flawed. In reality, removing the penny would increase government losses, not reduce them. “The government won’t save money if the penny is eliminated,” said Americans for Common Cents Executive Director Mark Weller. “Such a change would have a massive negative impact on the US Mint’s cost structure,” he added. Here’s why:

• Erroneous Cost Calculations: DOGE’s claim conflates data by using the combined cost of producing both pennies and nickels. This exaggerates the true cost of the penny and misrepresents the issue. According to the U.S. Mint, while the penny’s production cost exceeds its face value, the real culprit for losses is the nickel, which costs nearly 14 cents per unit to produce. By eliminating the penny, the Mint would inevitably need to produce more nickels, compounding the losses associated with nickel production.
• Nickel Production Losses: Without the penny, the volume of nickels in circulation would have to rise to fill the gap in small-value transactions. Since each nickel represents a significantly higher loss per unit, this would drive up overall production costs for the government. Far from saving money, eliminating the penny shifts and amplifies the financial burden.
• Unfair Mint Accounting Practices: The Mint’s accounting methods have unfairly inflated the reported cost of the penny. Since 2011, the Mint has allocated overhead costs based on production volumes rather than actual labor consumed for each denomination. This methodology disproportionately impacts the penny, for which the Mint performs fewer operations. Pennies are manufactured using ready-to-strike blanks supplied by the private sector, meaning the Mint’s actual involvement is minimal. Applying overhead based on production volume misrepresents the true cost of the penny and unfairly penalizes its production.

The Bottom Line
Eliminating the penny would not achieve DOGE’s stated goal of saving taxpayer money. Instead, it would increase the Mint’s losses due to higher nickel production costs and the reallocation of fixed overhead expenses across remaining denominations. The logical and fiscally responsible solution is not to eliminate the penny but to focus on producing a cheaper nickel. This approach would address the real driver of losses while preserving the functionality of small denominations in everyday transactions.

In short, DOGE’s proposal completely misses the mark. A more thoughtful and accurate assessment of Mint operations makes it clear: penny elimination is a costly mistake.