WASHINGTON — The Trump administration claims that making cents no longer makes sense.
The United States Mint has placed its final order of penny blanks and intends to stop producing the coin when supplies run out, a Treasury Department official confirmed Thursday. This move comes as the cost of producing pennies has risen significantly, by up to 20% in 2024, according to the Treasury.
The Treasury expects an immediate annual savings of $56 million in reduced material costs by discontinuing the production of the penny, according to the official, who was not authorized to discuss the matter publicly and spoke on the condition of anonymity to preview the news.
In February, President Donald Trump announced that his administration would stop producing the one-cent coin.
“For far too long, the United States has produced pennies that literally cost us more than two cents. This is incredibly wasteful!” At the time, Trump wrote in a post on his Truth Social website. “I have instructed my Secretary of the US Treasury to stop producing new pennies.”
There are approximately 114 billion pennies in circulation in the United States, totaling $1.14 billion, but they are vastly underutilized, according to the Treasury. The penny was one of the first coins produced by the United States Mint following its establishment in 1792.
The nation’s treasury secretary has the authority to mint and issue coins “in amounts the secretary decides are necessary to meet the needs of the United States.”
Advocates for eliminating the penny cite its high production cost (nearly 4 cents per penny now, according to the US Mint) and limited utility. Fans of the penny point to its usefulness in charity drives and its lower production costs when compared to the nickel, which costs nearly 14 cents to mint.
The Wall Street Journal was the first to report the news.
Pennies are the most popular coin produced by the United States Mint, which reported 3.2 billion last year. That’s more than half of the new coins it produced last year.
Congress, which sets currency specifications such as coin size and metal content, could make Trump’s order permanent by law. However, previous congressional efforts to eliminate the penny have failed.
Two bipartisan bills to permanently abolish the penny were introduced this year.
Senators Mike Lee (R-Utah) and Jeff Merkley (D-Ore.) introduced the Make Sense Not Cents Act this month. The Common Cents Act was introduced in April by Representatives Lisa McClain (R-Mich.) and Robert Garcia (D-Calif.), as well as Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.).
Jay Zagorsky, a professor of markets, public policy, and law at Boston University, stated that while he supports the move to end penny production, Congress must include language in any proposed legislation requiring rounding up in pricing, which will eliminate the demand for pennies.
Zagorsky, who recently published a book titled “The Power of Cash: Why Using Paper Money is Good for You and Society,” claims that simply eliminating the penny will increase demand for nickels, which are even more expensive to produce at 14 cents.
“If we suddenly have to produce a lot of nickels — and we lose more money on producing every nickel — eliminating the penny doesn’t make any sense.”
Mark Weller, executive director of the Americans for Common Cents organization, which conducts research and provides information to Congress and the Executive Branch on the value and benefits of the penny, says “there has been an evolution over the past six months that inevitably the production of the penny will be halted.”
His group advocates for the United States to find ways to reduce the cost of producing nickel, especially since it will be in higher demand once the penny is completely removed from circulation.
“It’s incumbent on Treasury to come up with a cheaper way to make the nickel,” Weller told the audience. “Let’s make sure we’re making our coins as least expensively as possible and maintaining the option to use cash in transactions.”