In a surprising move, US President Donald Trump has ordered the US Treasury to cease the minting of new pennies, citing long-standing concerns over the coin's production cost. Trump announced his decision on Truth Social, stating that the US has been producing pennies that "literally cost us more than 2 cents" for too long, deeming it wasteful. This initiative is part of a broader effort by his administration to reduce government spending and streamline operations.
The penny issue gained traction after Elon Musk's Department of Government Efficiency (DOGE) highlighted the high cost of manufacturing pennies in a post on X. The department noted that each penny costs over 3 cents to produce, costing US taxpayers over $179 million in fiscal year 2023. In 2023, the US Mint produced over 4.5 billion pennies, which accounted for approximately 40% of all coins made for circulation.
The US Mint reported an $85.3 million loss in the 2024 fiscal year from producing nearly 3.2 billion pennies. The cost to manufacture each penny was approximately 3.7 cents, an increase from 3.1 cents the previous year. The mint also faces losses on nickels, which cost nearly 14 cents to produce but have a face value of only 5 cents.
It is unclear whether President Trump can unilaterally halt penny production or if congressional legislation is required. Congress dictates currency specifications, including coin composition and size. However, Robert K. Triest, an economics professor at Northeastern University, suggests that the Secretary of the Treasury might be able to stop minting new pennies without congressional action.
The potential elimination of the penny has sparked debate, with some experts suggesting that cash transactions could be rounded to the nearest five-cent increment. Several other countries, including Canada, have already discontinued their one-cent coins. Canada stopped producing pennies in 2012 due to prices at grocery stores typically ending in 9, and an estimated $3.27 million more being spent when prices were rounded to the nearest nickel.
