The goal of the American Liberty Coinage and Deficit Reduction Act, H.R. 2535, introduced June 27 by Rep. Andy Barr, R-Ky., is to “reduce the deficit by $100 million or more,” according to a written statement prepared by David Stern, Barr’s legislative director.
“Believe it or not, the cost to the U.S. Mint to produce dimes, quarters, and half dollar coins is actually less than the face value of the coin. This means that the U.S. Mint actually makes a profit from coin production, which it then returns to the Treasury to reduce the federal deficit. This profit is known as ‘seigniorage’ – the difference between the value of money and the cost to produce it,” Stern’s statement explains.
Stern references the 10-year 50 State Quarters Program, in which the U.S. Mint “realized an increased profit of approximately $3.0 billion.”
Stern said the legislation introduced by Barr was developed in consultation with the Citizens Coinage Advisory Committee.
On March 19, CCAC Chair Gary B. Marks and CCAC members Erik Jansen and Mike Moran met with Barr to discuss the proposal. Moran is a friend of Rep. Barr and lives in his congressional district. The three CCAC members said they met with Barr as individuals and not in the committee’s name, according to a story published in the May 13 issue of Coin World.
During the CCAC’s April 19 meeting, members voted unanimously to press the panel’s argument for a new Liberty-themed circulating commemorative coin series.
The committee has included the proposal in its annual report for five years, but the idea, along with several other committee ideas for new coins, has failed to win the support of lawmakers.
The CCAC had initially proposed issuing a series of Liberty-themed designs for five circulating coins — cents, 5-cent coins, dimes, quarter dollars and half dollars. But citing the high costs of cents and 5-cent coins, the committee agreed to drop them from the latest proposal, according to the Coin World story.
Instead, they developed the proposal included in Barr’s legislation.
At the time of the CCAC discussions, the group estimated that profits from the proposed redesigned coins would be $57.8 million a year or $579 million over 10 years. The dollar amounts were calculated using figures from the U.S. Mint’s public reports.
But the group also did two other “sensitivity cases” in case their sales estimate were off.
The first scenario called for a 20 percent lower sales level, which would cut 10-year profits to $471 million. The second called for a 5 percent increase above their projections, which would boost U.S. Mint profits to $606 million.
While technically the Treasury secretary has the authority to change the designs of the Roosevelt dime and Kennedy half dollar without congressional approval, the Treasury Department in recent years has been reluctant to initiate coinage design change without congressional support.
The law governing coinage designs states that the designs on the dime and half dollar could be changed by Treasury unilaterally, but then could not be changed again until after 25 years, unless Congress otherwise dictates. ■