MoneyWatch
Elon Musk's DOGE has a new target for cutting federal spending: the U.S. penny
By
Aimee Picchi
Billionaire Elon Musk's Department of Government Efficiency has a new target in its sights for trimming federal spending: the U.S. penny.
In Tuesday X post, Musk's DOGE wrote that the U.S. spends about 3 cents to mint each penny, which, of course, is only valued at 1 cent.
"The penny costs over 3 cents to make and cost U.S. taxpayers over $179 million in FY2023," DOGE wrote. "The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced."
In pointing out the penny's costliness, DOGE is taking aim at an issue that has sparked debate for years, although the price of manufacturing the cent has only grown over the past several years. In 2016, for instance, the U.S. was spending about 1.5 cents to mint each penny, or less than half of its current manufacturing cost.
Elon Musk's DOGE is taking aim at the U.S. penny, pointing out that it costs more to manufacture than it's worth.
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My comment:
As a coin enthusiast, I have always taken note of news about the penny. They've been calling to eliminate the penny since at least the 1970's, citing costs. In 1982 the Treasury started minting pennies that were 95% zinc, instead of copper, later to increase to 97.5% zinc. I will say the new pennies are crap. Zinc deteriorates. Zinc pennies are often chipped, discolored, and rotted due to moisture. In my charity, I go through thousands of pennies a week. I have to throw out probably 25 pennies per thousand because they are unsuitable for merchants I sell them back to. You don't see that with the 95% copper pennies minted before that year. Copper holds up well. The melt value of copper pennies alone is about 2.8 cents apiece. If the penny goes away, it will likely become legal to melt coppers, since the purpose of the anti-melting law was to keep coins in circulation. We saw massive melting in 1965 after the Coinage Act in which the dime, quarter, and half dollar were no longer made of 90% silver. In 1970, they eliminated the 40% silver half. Within a few years, it became very difficult to find silver coins in change, although I got a silver dime just last week. I let out a yell whenever that happens.
Believe it or not, you can get 2 to 1 on the open market (Ebay) for pre-1982 copper pennies, even though they comprise 12% of pennies you find in change. Who would pay that? But people do. Wheat stalks are another matter. Minted from 1909-58, they'll bring up to five cents apiece. Probably 1 in 300 are wheat stalks from my experience.
I personally think the penny should go. Inflation has worn them down to nothing, and they're a pain in the ass to deal with. Canada stopped minting pennies in 2012. They have merchants round to the nearest five. Though they are still legal tender, pennies have become much scarcer there. It's one of the few things Canada does smarter than us. I have saved probably 40 peanut jars of coppers. Each jar holds 2000. Face value $800. I concocted a gizmo that separates out the copper specimens using magnets and a ramp made of angle aluminum. Wife thinks the whole thing is ridiculous. I'm hoping they'll be worth a lot once pennies are discontinued. I tell myself maybe they'll pay for college for the grandbabies some day. In reality, my kids will probably have to haul them out after I'm at the undertaker's, cussing me all the way.
