Geithner stops most Presidential dollar production
- Published: Dec 18, 2011, 7 PM
U.S. Treasury Secretary Timothy F. Geithner Dec. 13 suspended production of Presidential dollars for circulation, but the U.S. Mint retains authority to strike circulation-quality Presidential and Native American dollars for numismatic sales.
“Consistent with the Presidential $1 Coin Act, those who would like to obtain future Presidential $1 Coins can purchase them directly from the U.S. Mint during specified periods,” according to a statement released Dec. 14 from the U.S. Mint by Mint spokesman Michael White. “Prices and shipping costs for future $1 Coins will be announced in the near future and will be set at a level that ensures that they do not result in a cost to taxpayers.”
Presidential dollars have been available in roll and box options directly from the Mint for those customers unable to obtain them from banks at face value.
Dollar coins needed to satisfy circulation demand will come from the vaults of the Federal Reserve Banks and their contracted armored carriers where 1.4 billion Presidential dollars currently reside. Federal Reserve and Treasury officials state that the existing inventory of dollar coins is sufficient to satisfy circulation demand for the next 10 to 12 years without additional production of the coins.
Government studies forecast that Presidential dollar coin surpluses would climb to 2 billion coins by 2016, the last year of the program, if production continued unabated.
Since the Presidential dollar coin program was introduced in February 2007 with the George Washington dollar, nearly 2.4 billion Presidential dollars representing the first 20 presidential administrations have been struck in circulation quality for circulation and for numismatic product sales. The Mint has also produced the dollar coins in numismatic versions for Proof sets, Uncirculated Mint sets and special packaging options. Production of those numismatic products will continue.
Geithner’s action to suspend Presidential dollar coin production for circulation was announced Dec. 13 by Deputy Treasury Secretary Neal S. Wolin at a news conference to report on Treasury Department efforts under the Obama Administration’s Campaign to Cut Government Waste.
Wolin said it is estimated that suspending dollar coin production will save $50 million to $70 million annually.
Difficult to obtain
Although the Federal Reserve’s inventory of Presidential dollars is well above what is needed for circulation purposes, some collectors across the country have found it difficult to obtain the coins at face value, especially if their local banks did not order them directly from the Federal Reserve. Native American dollars have been made available only through the Mint, either as a numismatic product or as part of the Direct Ship Program.
Both dollar series have been available for acquisition directly from the Mint.
Individual $25 face value rolls of 25 Presidential and Native American dollars were being offered as of Dec. 15 at $39.95 per roll, plus shipping, as part of the Mint’s regular product offerings.
Coins from both programs have also been available in larger quantities from the Mint through its Direct Ship Program, though the Mint recently raised the cost of the coins to consumers. Starting Nov. 15, the U.S. Mint imposed a $12.95 shipping and handling fee on $250 face value boxes of rolled Presidential dollars and Native American dollars. Prior to Nov. 15, the boxes were offered at face value, with the U.S. Mint absorbing the shipping costs, in order to get more dollar coins into circulation.
From the 2007 George Washington dollar through the 2011 James Garfield coin, Federal Reserve member banks have been able to order the latest Presidential dollar during a time period starting at three weeks before the coin’s release until two weeks after its release. Until these provisions, banks had to order the coins in $1,000 face value boxes of rolled coins.
Ceremonies and savings
Treasury Department spokesman Matthew Anderson said no decision has been made as to whether the official launch ceremonies associated with the release of each Presidential dollar into circulation will continue.
Anderson said the $50 million to $70 million in savings represents strictly production costs associated with the Presidential dollars. While the Mint profits on the production of each coin through seigniorage — the difference between the face value of the coin (the price at which the Mint sells the coins to the Federal Reserve) and the cost to produce it — those totals are negated by shipping and storage costs for the coins, according to Anderson.
The U.S. Mint’s latest cost to produce a manganese-brass clad Presidential dollar is 32 cents, according to White.
Native American dollars
The Presidential Dollar Coin Act of 2005 mandates the production of Presidential dollars from 2007 to 2016. The Native American $1 Coin Act of 2008 requires that 20 percent of all dollar coin production be Native American dollars. Those mandates will be met at the new production levels, Anderson said.
Anderson said suspending Presidential dollar coin production at the Denver and Philadelphia Mints affects 26 full-time or equivalent positions total. Anderson said no layoffs will result from the suspension of production, but the number of full-time positions or equivalents will be absorbed through attrition over time.
Anderson said Treasury officials are also looking at potential cost savings associated with the production of Lincoln copper-plated zinc cents and Jefferson copper-nickel 5-cent coins, both of which cost at or more than face value to produce. ¦