(Author’s Note! My comments are a bit tongue-in-cheek, although with a lot of underlying truths based on my career experiences. Please consider it fun stuff. I loved my career!)
During a recent trip to Canada I noticed that each time I received change it was rounded to the nearest nickel. At first I thought it was just an expediency but then I learned that Canada had eliminated pennies from cash transactions earlier this year. Makes sense.
The US would save big time by doing the same thing but it is unlikely that it will happen. Yes, the US Mint would have to offset it by making more of the larger denomination coins but the reduction in volume would be enormous. The Mint produced over six billion pennies last year (per Wikipedia). Then there is the indirect cost to the Government and industry for designing and maintaining these near worthless coins – shipping, counting, wrapping, storing and ultimately melting them down. Although there is no exact breakdown, the Mint has estimated that production of both pennies and nickels results in a loss of about $436 million per year.
Over the past 23 years there have been three bills introduced to eliminate the penny but none made it past the House.
I could just picture the debates in Congress on this one, should this possibility be reintroduced in today’s climate. Everyone can relate to pennies, as compared to, let’s say the multibillion dollar impact Affordable Care Act, one of many bills which are beyond comprehension. The discussions about pennies will be endless. The copper and zinc industry lobbyists would have their say with elected officials from mining states. The unions would get in the act and, of course, our representatives want to keep them happy, no matter the cost.
Sooner or later you will get some humanitarian activists who would claim that the process of rounding would unfairly challenge some cashiers (actually the computers I observed in Canada took care of this) or that tacking on two cents to fifty percent of purchases is equivalent to a tax on the poor.
Then there is the constitutionality of the whole thing. It is probably not permissible. Just like when our members of Congress concluded that docking their pay for non-performance would be a violation of the constitution.
Oh, yes, the lawyers have to make their presence felt. The litigation possibilities are endless. I’m sure there will be an environmental group here or there which will claim that the elimination of pennies will impact the habitat of the snail darter or the Komodo dragon. Maybe cause coastal erosion somewhere. The same environmental impact statement will have to consider the impact of eliminating pennies on small business. Pennies are minted in Denver and Philadelphia. The mere suggestion of a cutback would prompt elected officials to say, “Good idea, but not in my district.”
The piggy bank industry will no doubt weigh in. Likewise the publishing lobby. “Pennysaver” is a copyrighted term and has a lot more ring to it than Nickelsaver.
Let’s not forget the art and historic communities. Pennies contain fine art and sculpture so we will hear from advocates claiming eliminating the penny is a blow to the sanctity of public art. There are still hundred year old collectible pennies around, in and out of circulation, so we made need input from the Advisory Council on Historic Preservation and an accompanying mitigation plan.
Eliminating the penny probably makes economic sense but, like many other good ideas, there will always be someone to find a reason not to do it.
Can you find more reasons both for and against this proposal?
For more irreverent commentary see my other GovLoop blogs, Facebook page and my You Tube videos. All are accessible through links on my website – www.thegovernmentman.com.