The Department of Government Effectiveness led by Elon Musk doesn’t seem to be a fan of the penny. In a post circulation produced. Penny (or 3 cents!) for your thoughts. CBS News reports that the cost has already more than doubled since 2016, when it cost 1.5 cents to mint each penny; the rise in the price of zinc, which makes up most of the coin, is the cause. According to the U.S. Mint’s 2024 report, the current cost of manufacturing and distributing a penny is 3.7 cents.
This is far from the first time the penny has been in the crosshairs. Treasury Secretary Jacob Lew suggested getting rid of it in 2015. CBS News reports a potential downside, as the Federal Reserve Bank of Richmond pointed out in a 2020 blog post: “For a single item or a small value purchase, round up. or downward (to the nearest five cents) could represent a significant price change. If DOGE succeeds in reducing the $179 million spent on a penny, it will still have a long way to go in terms of reducing $500 billion in annual federal spending; penny savings would only cover 0.04% of that amount.
Senator Joni Ernst presented a variation of this idea to Musk in November. In a letter outlining various cost-cutting ideas for DOGE, she advocated changing the composition of two coins, writing: “The government is losing money while making money, paying over three cents to produce a penny and more than 11 cents for a nickel. This doesn’t add any money when a simple change in the composition of the parts could save more than $50 million per year. » (More penny stories.)
