WASHINGTON--(BUSINESS WIRE)--Today, Citizens Against Government Waste (CAGW) issued a statement expressing its indignation with today’s announcement by Vice President Biden and Treasury Secretary Tim Geithner that the Obama Administration will attempt to “stop the wasteful production of excess $1 coins for circulation” by limiting coin production to “only a small number to be sold to collectors as required by law.” If finalized, the administration’s decision would undercut Congress’s authority, outlined in Article 1, Section 8 of the U.S. Constitution, to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” It is also the least frugal available solution to the problem of wasteful $1 currencies, which should be resolved by discontinuing the $1 bill and substituting $1 coins exclusively.
On March 4, 2011, the Government Accountability Office (GAO) issued a report highlighting the substantial benefits of discontinuing $1 notes in favor of $1 coins. The GAO estimated that phasing out the $1 note and increasing circulation of the $1 coin would save taxpayers an average of $184 million annually and a total of $5.5 billion over the next 30 years. The GAO has published four previous reports on the benefits of the $1 coin, in 1990, 1993, 1995, and 2000, twice recommending the elimination of the $1 note to ensure the success of the coin.
Most of the cost savings associated with coins comes from their comparative durability. The Bureau of Engraving and Printing produces approximately 3.4 billion $1 bills each year, each of which costs 4.2 cents to manufacture and lasts 40 months. By comparison, the $1 coin costs between 12 and 20 cents but has a lifespan of 30 years or more. The $1 coin also saves money because it is cheaper to handle and process.
The GAO report also points out that “Over the last 47 years, Australia, Canada, France, Japan, the Netherlands, New Zealand, Norway, Russia, Spain, and the UK, among others, have replaced lower-denomination notes with coins … Canadian officials later determined that the Canadian government saved $450 million (Canadian) between 1987 and 1991.”
CAGW President Tom Schatz said, “The Obama administration’s decision to kill the $1 coin is exactly the wrong policy choice, one that flies in the face of any supposed regard for taxpayers’ wallets and defies common sense. To make matters worse, it usurps Congress’s authority to legislate coinage and money production.
“The Obama administration cannot claim that Congress has ignored this issue,” added Schatz. “Lawmakers on both sides of the aisle are in the process of tackling it head on. To wit, on September 20, 2011, Rep. David Schweikert (R-Ariz.) introduced H.R. 2977, the Currency Optimization, Innovation and National Savings (COINS) Act of 2011. This bipartisan bill will phase out the $1 note and transition to the $1 coin; and on July 20, 2011 Senator David Vitter (R-La.) introduced S. 1385, which would terminate the $1 presidential coin program.
“Switching to the $1 coin will not eliminate a single program or raise taxes by a single penny. CAGW will continue to lead the way to make sure that the long overdue transition to $1 coins occurs,” Schatz concluded.
Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.