More egislation continues to be introduced in the United States
House of Representatives aimed at reforming the Presidential dollar
On July 25, Rep. Jared Polis, D-Colo., introduced H.R. 2635, the
COINS — Cutting Out Inefficient and Needless Spending — Act of 2011.
It calls for the suspension of the Presidential dollar coin program
during any period where the secretary of the Treasury determines that
the surplus supply of dollar coins exceeds the reasonable circulation
needs for one year.
While the Treasury already has the authority to produce coins
based on demand, the bill would require the suspension of production
when supply exceeds demand. It would also prevent the current
mandatory introductory period during which each Federal Reserve Bank
must purchase unmixed quantities of new Presidential dollar coins,
regardless of whether the coins are needed.
In a July 25 statement, Rep. Polis said, “It’s absurd that the
U.S. government is spending millions sitting on these presidential
dollar coins that no one wants to use — and is still cranking them
out.” He added, “If we want to pay tribute to past presidents, we
should reform the presidential coin program so that it’s not wasting
our tax dollars.”
H.R. 2635 presently has two cosponsors and has been referred to
the House Committee on Financial Services.
The Presidential $1 Coin Act of 2005 required the Mint to produce
dollar coins with the images of former presidents — issued four per
year starting in 2007 — in the order they served in office. More than
2 billion coins have been produced under the program, of which 1.2
billion currently sit in the Federal Reserve’s vaults. A new storage
facility at the Federal Reserve Bank of Dallas was constructed — at a
cost of approximately $650,000 — to store the coins and the Federal
Reserve Banks will incur costs of more than $3 million to ship the
surplus inventory from other Reserve Banks to the new facility.
Three bills introduced Aug. 1
Each of three bills introduced in the House on Aug. 1 take a
slightly different spin on addressing the problems enumerated in the
governors of the Federal Reserve System’s June 2011 Report to the
Congress on the Presidential $1 Coin Program. The report stated that
the Fed’s current inventory surplus of Presidential dollar coins
exceeds 1.2 billion coins and at the program’s end in 2016, without
modifying the current law that number would swell to 2 billion.
The report recommended that Congress eliminate the introductory
period in which Reserve Banks are legally required to make specific
Presidential dollar designs available. The report noted that the
Presidential dollar program is the only circulating commemorative coin
program for which statutes mandate an introductory release of specific
designs (the Fed must offer banks opportunities to order each new
Presidential dollar for a specific period of time).
On Aug. 1, Rep. Carolyn B. Maloney, D-N.Y., introduced a bill,
H.R. 2760, to amend United States Code to improve the minting and
issuing of coins, reduce the current excess stockpile of Presidential
dollars, and for other purposes. The bill would limit the amount of
Presidential dollars that can be produced in a year, while allowing
the secretary of the Treasury to produce more coins if the demand for
a particular design calls for it.
Her bill seeks to reduce the number of dollar coins minted until
the excess stockpiles of the coins have been eliminated. The bill
would also change the annual report required under the Coin
Modernization, Oversight and Continuity Act of 2010 by requiring the
report to also include a section on steps taken to reduce the
stockpiles, with the first new report to be issued by March 31, 2012.
Dollars and Sense Act
The same day, Rep. Adam Smith, D-Wash., introduced H.R. 2778, “The
Dollars and Sense Act of 2011,” which seeks to efficiently meet
collector demand for Presidential dollars, while reducing the surplus
of dollar coins already in the Fed’s vaults.
Rep. Smith cites the backlog of 1.2 billion coins in the Fed’s
vaults, finding that an “overinflated demand for coin collecting
purposes and lack of transactional demand by the general public has
led to a backlog of these coins.”
Rep. Smith’s bill would change the number of presidents honored
per year from four to two, limiting production so that the number
dollar coins produced for circulation cannot exceed the dollar coins
sold as numismatic items. The bill gives the secretary of the Treasury
the right to adjust production as necessary if the demand for a
particular design during a year will exceed the amount of coins able
to be produced under the proposed limitation.
The bill also limits the circulating dollar coin Direct Ship
Program by making it only available to persons purchasing coins for
“coin collection purposes.” On July 22, the Mint announced that it had
eliminated the credit and debit card purchase of dollar coins in the
direct ship program, restricting payment to wire transfer, check or
money order. Some customers had been purchasing the coins with a
credit card to accumulate bonuses such as airline miles and other
rewards, and then depositing the coins with a bank rather than using
them in circulation transactions.
H.R. 2778 concludes that it is the sense of Congress “that the
Board of Governors of the Federal Reserve System should do everything
in its power to address the backlog of $1 coins in its vaults by
making them as accessible as possible to the public for purposes of
circulation,” adding that the Mint should continue production of
Sacagawea dollars for circulation purposes at the conclusion of the
Presidential dollar program.
Wasteful and unneeded coins
A third bill covering similar ground was introduced on Aug. 1, by
Rep. Kevin Yoder, R-Kan., seeking to suspend the issuance of dollar
coins for a 15-year period, or until excess stockpiles are exhausted.
H.R. 2789, titled the “Prevention of Wasteful and Unneeded Coins Act
of 2011,” states that while the Mint is legally required to continue
to produce four new Presidential dollars each year until the program
is complete — without consideration of waste or surplus — the “minting
of coins should be based on actual demand and not future estimates.”
The bill calls for the end of the production of dollar coins for a
15-year period that would begin immediately upon the bill becoming
law. The bill would require the secretary of the Treasury, in
consultation with the Board of Governors of the Federal Reserve
System, to resume the issuance of dollar coins upon informing Congress
that the demand for dollar coins exceeds the amount of dollar coins
held in reserve. It would prevent the Secretary from issuing dollar
coins if the issuance would result in an excess stockpile of dollar
coins not in circulation.
It also seeks to abolish the requirement that the number of dollar
coins minted and issued in a year with the Sacagawea-design on the
obverse and commemorative Native American design on the reverse be at
least 20 percent of the total number of dollar coins minted and issued
in the year.
All three of the bills introduced Aug. 1 have no cosponsors and
have been referred to the House Committee on Financial Services.
These bills came on the heels of H.R. 2593, the Wasteful
Presidential Coin Act of 2011, which was introduced July 19, by Rep.
Jackie Speier, D-Cal. Her bill would restrict production of the coins
when the number of issued Presidential dollar coins not in circulation
outnumbers the number of pieces in circulation by more than 10
percent. A companion bill, S. 1385, was introduced the same day in the
Senate by David Vitter, R-La.
Coins circulate poorly
Presidential dollars have not seen wide circulation since their
introduction in 2007. The Federal Reserve has not ordered Sacagawea
dollars for circulation distribution since the program’s second year,
in 2001; the Fed has ordered none of the Native American circulating
commemorative versions of the Sacagawea dollar, which were introduced
in 2009. Native American dollars may be ordered from the United States
Mint via both numismatic and circulating programs, with pricing and
packaging differing between the two different programs. ■