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The Department of Government Efficiency (DOGE), led by Elon Musk, is reportedly considering promoting a plan that would lead to the elimination of the penny in order to reduce federal spending. As explained by the world’s richest man, the U.S.
spends about three cents to mint the coin in question, worth only one cent. “The penny costs over 3 cents to make and cost U.S.
taxpayers over $179 million in FY2023,” DOGE wrote on X, “The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced.
” Musk, as head of DOGE, is not the first to raise the issue on the cost of producing the penny. However, it should be specified that production prices have risen particularly in recent years. Until 2016 it took 1.
5 cents to mint the coin in question, just about half of today’s costs. While the coins were originally made of pure copper, since 1982 they have been composed of almost 98 percent zinc. This particular material, however, is no longer as cheap as it once was.
According to the U.S. Mint’s 2023 report, the cost of the penny has increased by 12.
9 percent, more than any other coin. Federal officials have proposed suspending the penny in previous years, with former Secretary of Department of the Treasury Jacob Lew advocating such an idea as early as 2015. Some economists, however, have explained that eliminating the penny could have some disadvantages, as transactions would be rounded up in 5-cent intervals.
In November, Iowa Republican Senator Joni Ernst brought the issue back into the spotlight before Musk and DOGE intervened. Of course, the department alone cannot permanently eliminate the controversial coin, Congress would have to pass a law halting its distribution, or the Department of the Treasury could decide to put a stop to its production. In the past, other countries, such as Canada and Sweden, have decided to stop the distribution of their respective pennies.
After the change, Canadian consumers spent more than $3 million more in supermarkets than before due to the rounding up of prices. It remains to be seen whether the department headed by the richest man in the world will decide to pursue its “battle” against the penny. DOGE’s goals go well beyond this issue; President Donald Trump has said the latter will provide advice to cut excess regulations, unnecessary spending and restructure federal agencies.
Musk, for his part, said the group will aim to cut $500 billion in annual federal spending..
