Presidential dollar program target of multiple House actions
- Published: Aug 11, 2011, 8 PM
More legislation continues to be introduced in the United States House of Representatives aimed at reforming the Presidential dollar coin program.
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.
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