One of the most practical and least painful ways to save taxpayers (the government) billions of dollars is obvious — replace the $1 Federal Reserve note with a dollar coin. But every time in the past the subject has surfaced, most members of Congress have run from it like scared rabbits.
With the public now closely watching as Congress claims it is leaving no stone unturned to find ways to slash spending and reduce the national debt, it will be interesting to see if the idea of forcing circulation of the dollar coin gains any footing this time.
In early March the United States Government Accountability Office advised Congress that replacing the $1 note with a dollar coin could save the government approximately $5.5 billion over the next 30 years. The GAO noted that many other countries during the past 47 years have replaced their low-denomination note with a coin.
GAO researchers acknowledged that the American public, in opinion polls, has not been receptive to the idea of giving up the $1 FRN, but cited withdrawing the $1 note from circulation as the essential success factor. Interviews with officials from other nations revealed their experience as being that, once there is no alternative to the coin, public resistance dissipated within a few years.
The GAO’s latest study is the fourth time in the past 20 years (most recently in April 2000) that it has researched replacing the $1 note with a dollar coin. Each time it has shown that the savings would be significant. Each time it has also underlined the fact that letting opinion polls dictate public policy will not lead to change.
The latest study reiterates previous recommendations: "Congress and the executive branch would have to lead rather than follow public opinion for a transition from the $1 note to the $1 coin to succeed. Furthermore, we have noted in those reports that past $1 coin initiatives—such as changes to the color of the $1 coin and new coin designs—have not led to widespread public acceptance and use, in part because the $1 note was not simultaneously eliminated."
The operative phrase is "lead rather than follow."
Is there anyone in the current Congress, the Treasury Department or in the White House brave enough to be a leader on this issue?
As in most decisions made in the political arena these days, it would come down to a battle of the sound bites.
Advocates could drape their message under the banner of savings and helping to reduce the debt. They could also point out the potential of creating more jobs at the nation’s minting facilities located in four states. Although some 5 billion dollar coins (Anthony, Sacagawea, Presidential and Native American) have been produced since 1979 and are immediately available, during the transition period of the next few years even more dollar coins would have to be made. Printers at the Bureau of Engraving and Printing would also be busy. GAO researchers project an increase in use of the $2 FRN.
Of course, opponents would likely trot out all of the scare tactics we have heard before.
Our responses: If other nations can do this, why can’t the United States? How much longer can the U.S. afford to waste money? n