President Donald Trump has announced that the U.S. Treasury Department will no longer produce new pennies, citing the high cost of minting the coin. The decision was revealed in a post on Truth Social, where Trump labeled the continued production of pennies as wasteful. His directive aligns with his broader efforts to cut government expenses, an initiative heavily influenced by Elon Musk’s Department of Government Efficiency.
The U.S. Mint has long reported losses on penny production. In the 2024 fiscal year alone, nearly 3.2 billion pennies were minted at a cost of 3.69 cents per coin, leading to an overall deficit of $85.3 million. This is not a new issue—pennies have cost more than their face value to produce for nearly two decades. The situation has sparked repeated discussions in Congress about whether the coin should be phased out.
The financial burden extends beyond the penny. The nickel also costs more to produce than its actual worth, with each five-cent coin requiring nearly 14 cents to manufacture. These figures have led some economists and policymakers to argue that the government should reassess its entire coinage strategy.
Despite Trump’s directive, it remains unclear whether the executive branch has the legal authority to halt penny production unilaterally. Congress holds legislative control over the U.S. Mint and determines coin specifications, including size and composition. While some experts suggest the Treasury Secretary might have the discretion to pause new production, formal discontinuation of the penny would likely require legislative action.
Past attempts to eliminate the penny have failed to gain traction in Congress. Lawmakers have proposed suspending its production, removing it from circulation, or implementing price rounding policies to make the transition smoother. However, these efforts have met resistance from industries and organizations that benefit from the coin’s continued use.
Advocates for discontinuing the penny point to multiple benefits, including cost savings and increased efficiency in cash transactions. Retailers and businesses often deal with slow checkouts due to penny usage, and the coin’s declining purchasing power makes it less relevant in everyday transactions. Many countries, such as Canada, Australia, and New Zealand, have successfully phased out their lowest-denomination coins, demonstrating that such a move is feasible.
Opponents argue that removing the penny could lead to price rounding that disadvantages consumers. Some worry that businesses might round prices up rather than down, leading to small but cumulative financial impacts on low-income individuals. Additionally, organizations that rely on penny-based charity drives fear losing an easy source of donations.
While pennies remain in circulation for now, Trump’s directive has reignited a debate that has persisted for decades. Whether Congress acts on the issue remains to be seen, but the discussion over the value and necessity of the penny is unlikely to fade anytime soon. If history is any indication, even the smallest changes in currency policy can have lasting economic and social effects.
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