Contact: Mark Weller Peter G. Mirijanian
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MONEY “COUP” – NEW LEGISLATION SEEKS TO ELIMINATE LINCOLN PENNY AND LIMIT DOLLAR NOTE
Washington, DC (July 17) Legislation has been introduced in Congress that seeks to eliminate two mainstays of the United States monetary system – the dollar note and the Lincoln cent – to increase circulation of the one-year-old Sacagawea dollar coin.
“This legislation is bad for Americans and bad for our money system,” said Mark Weller, Executive Director of Americans for Common Cents. “You don’t legislatively ban the two most recognized parts of our currency to prop up a failed dollar coin that nobody uses,” added Weller.
The proposed bill by Congressman Jim Kolbe, a Republican from the Fifth Congressional District of Arizona, would require the production of additional $2 bills to eventually phase-out the $1 bill. The legislation would also limit the number of pennies consumers could use in a purchase and would round transactions to the nickel. Sums ending in 1, 2, 6 or 7 cents would be rounded down and sums ending in 3, 4, 8 or 9 cents would be rounded up.
Americans for Common Cents (ACC) – a broad-based coalition of 48 organizations dedicated to keeping the penny a part of the nation’s coinage system – opposes this legislation. “The Kolbe bill is special interest legislation at its worst. It attempts to benefit the metals industry that wants to make more dollar coins and nickels at the expense of ordinary consumers,” said Weller.
The alternative to the penny is rounding purchases to the nickel. Research by Penn State economist Raymond Lombra shows people will be hit with a $600 million rounding tax every year under the Kolbe proposal. In contrast to Kolbe’s assertion that rounding evens-out, the Lombra study suggests that between 60% and 93% of typical convenience store transactions would be rounded up and lead to higher prices, according to Weller. “This discriminatory rounding ‘tax’ would be regressive, affecting the poor and those who rely on cash purchases the most,” he added.
Despite a $50 million dollar taxpayer-funded advertising campaign to help it circulate, the dollar coin is not used and cannot be found. Peter Mirijanian, spokesman for the Washington-Lincoln Coalition, an organization that supports continued production of the dollar note and the penny, rejects the idea that new legislation will help the dollar coin circulate. “People may want one Sacagawea, but not two,” said Mirijanian. “A dollar coin has been tried three times since the Coolidge Administration – each time it’s failed,” Mirijanian noted. The Kolbe bill falsely assumes that there is some unmet demand for dollar coins,” he concluded.
In sharp contrast to the lack of support for the dollar coin, public opinion polls continue to show Americans’ strong attachment to the penny, with almost three-fourths (73%) in a recent survey favoring keeping the penny in production. Polling also shows that over 80% of the public want to keep the dollar note.
The federal government’s experiences with the metric system and the Susan B. Anthony coin suggest that changes imposed without the public’s consent will fail miserably. There is no pressing need to eliminate the penny or dollar note – especially during times of general economic uncertainty. “Americans – from consumers to charities – want to keep the penny. The Kolbe bill is bad legislation that will be rejected by the American public,” Weller said.
Americans for Common Cents is a broad-based coalition of business and charitable organizations dedicated to keeping the penny. ACC was formed in 1990 in response to Congressional threats to eliminate the one-cent coin (www.pennies.org). The Washington-Lincoln Coalition web site is www.washingtonlincolncoalition.com.