The Treasury Department’s initiative to reduce the costs of striking cents and 5-cent coins gained new luster during the Treasury secretary’s testimony at a March 28 House hearing.
Treasury Secretary Timothy Geithner spoke before the House Committee on Financial Services and General Government to discuss Treasury’s Fiscal Year 2013 budget proposal.
While much of Geithner’s testimony centered on the national economy, he reserved time to discuss an issue that Treasury and Mint officials have broached before Congress multiple times in recent years: the need to reduce the costs of striking cents and 5-cent coins. The production costs for both denominations have exceeded their face values for years.
In his testimony, Geithner said: “The Budget ... proposes legislation to provide Treasury with the ability to change the composition of coins to utilize more cost-effective materials. Currently, the costs of making the penny and the nickel are more than twice the face value of each of those coins.”
The U.S. Mint in early January released its 2011 annual report, which stated the cost to produce the copper-plated zinc cent is 2.41 cents and to produce the Jefferson copper-nickel 5-cent coin, 11.18 cents. Both production figures include associated costs not previously assigned to the denominations.
For Fiscal Year 2010, the acknowledged costs were 1.79 cents to mint the Lincoln cent and 9.24 cents to produce each Jefferson 5-cent coin for circulation.
The Mint is currently exploring alternative compositions for all U.S. coins under authority granted it by Congress in the Coin Modernization, Oversight, and Continuity Act of 2010. The Mint is supposed to report its findings to Congress by Dec. 14, 2012.
Although Congress granted the Mint authority to seek new compositions, any final decisions on changes to U.S. coins must be approved by Congress. The Constitution grants Congress authority over coinage specifications.
However, Treasury officials have repeatedly sought direct authority to change coinage specifications without having to receive congressional approval. The legislation in the budget mentioned in Geithner’s testimony is the latest Treasury effort to gain that direct authority.
Congress has repeatedly refused to give up its constitutional authority, although since the 1970s that body has granted Treasury some additional flexibility in determining certain coinage specifications (for example, Treasury now has authority to independently alter the ratio of zinc and copper in the cent, and it also has some authority to make changes in certain bullion programs).
Other issues in testimony
Geithner also discussed several other areas of interest to the numismatic community during his March 28 testimony.
“In addition to this proposal, Treasury is implementing measures to improve the efficiency of coin and currency production, including improved manufacturing practices and administrative cost reductions, which will save more than $75 million in FY 2013,” he said.
He also touted his decision to end Presidential dollar coin production last December, citing savings in production and storage costs. ■