Monday Morning Brief for May 1, 2023: Congress must act
- Published: May 1, 2023, 7 AM
Congress must act, and quickly, to pass legislation that would grant the Treasury Department and the United States Mint the authority to change the compositions of U.S. circulating coinage.
Every two years, Mint officials send a report to Congress advising the legislative branch on the status of research into alternative coin compositions and the problems the nation faces with its circulating coinage. Members of Congress dutifully introduce supporting legislation. And then the bills sit at the committee level, ignored by Congress while members instead choose to snipe at members of the opposite political party and pass legislation that is a lot less meaningful.
As the newest report states (see the article on Page 5), it continues to cost the Mint — in reality, the American public — more to produce and distribute the two lower denominations, the Lincoln cent and the Jefferson 5-cent coin, than their face values. The Mint literally loses money for every cent and 5-cent coin it makes and sends to the Federal Reserve for release into circulation.
Mint officials have long acknowledged that continuing to make cents will always be a loss leader. No composition exists that would enable the Mint to make and ship cents for a price that is less than a cent per coin. The wisdom of continuing to make billions of cents every year needs to be addressed. Eliminating the denomination might be wise financially while difficult politically.
However, easy solutions exist to reduce the cost of making 5-cent coins, by employing an alternative composition. The coin has been made of the same alloy since 1866 (prodded by powerful lobbyists in the nickel industry). Authorizing the Mint to change the alloy to any of several promising compositions to save production costs should be a no-brainer. The same holds true for introducing new compositions for the dime, quarter dollar, and half dollar. Congress after Congress, however, refuses to act — because of ignorance, myopia, negligence ... the reasons could be many.
Whatever the reasons, Congress should be ashamed that for more than a decade, it has ignored requests from Mint officials seeking authority to make necessary changes. The measure before the current Senate, S. 1228, has bipartisan support and should be noncontroversial.
I guess that Congress simply does not care about the savings of $12 million to $51 million annually that could be realized fairly quickly by passing this legislation.
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