President Trump directs Treasury to halt penny production, sparking debate on currency modernization and economic impacts.
Quick Takes
- Trump orders end to penny minting, citing production costs exceeding face value
- U.S. Mint reported $85.3 million loss from penny production in 2024 fiscal year
- Move aims to cut government spending, supported by Elon Musk’s Department of Government Efficiency
- Legal authority for eliminating penny through executive action remains unclear
- Decision aligns with international trends of phasing out low-denomination coins
Trump’s Bold Move Against the Penny
In a surprising turn of events, President Donald Trump has directed the Treasury Department to cease the minting of new pennies, citing the coin’s excessive production costs. This decision, announced on Trump’s Truth Social platform, has reignited a longstanding debate about the future of America’s smallest denomination coin.
The U.S. Mint reported a staggering loss of $85.3 million in the 2024 fiscal year from producing nearly 3.2 billion pennies, with each coin costing about $0.037 to manufacture. This financial drain has been a point of contention for years, with critics arguing that the penny’s production is an unnecessary burden on taxpayers.
Breaking News: President Trump ordered the Treasury to stop minting pennies, saying the coins cost more to produce than their face value. https://t.co/nbUYA1aDL9
— The New York Times (@nytimes) February 10, 2025
Economic Implications and Government Efficiency
Trump’s directive is part of a broader effort to cut government spending, supported by Elon Musk’s newly established Department of Government Efficiency (DOGE). The move has garnered support from both sides of the political aisle, with Democratic Colorado Governor Jared Polis praising the decision for its potential taxpayer savings and environmental benefits.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” Trump stated in his announcement. “I have instructed my Secretary of the U.S. Treasury to stop producing new pennies.”
The Department of Government Efficiency has highlighted the significant costs associated with penny production, stating that it cost taxpayers over $179 million in the 2023 fiscal year alone. This revelation has fueled the argument that eliminating the penny could lead to substantial savings for the nation’s budget.
Legal Hurdles and Congressional Authority
Despite Trump’s decisive action, questions remain about the legal authority to eliminate the penny through executive action. Currency specifications are typically determined by Congress, and some experts suggest that discontinuing the penny might require an act of Congress. The Treasury Secretary may have the authority to stop minting new pennies, but the outcome of Trump’s directive could face potential legal challenges and congressional intervention.
Lawmakers have previously introduced bills to suspend penny production or remove it from circulation, indicating that there is some legislative interest in addressing this issue. However, the success of Trump’s initiative may ultimately depend on how Congress responds to this executive action.
International Precedent and Economic Modernization
Trump’s decision to target the penny aligns with international trends in currency modernization. Several countries, including Canada, Ireland, the Netherlands, and Brazil, have already stopped producing or circulating their lowest denomination coins. Canada, for instance, discontinued its penny in 2012, setting a precedent for North American currency reform.
Advocates for eliminating the penny argue that such a move would not only reduce costs but also expedite checkout times and streamline financial transactions. As digital payments become increasingly prevalent, the necessity for small denomination coins has come under scrutiny.
Following from DOGE, Trump has ordered the Treasury to stop minting pennies. In the paper (written quickly) references in the next tweet, I provide a more reasonable economic analysis of this. Substitution to nickels may eliminate savings. pic.twitter.com/ujR1Jn2FWs
— Joshua Gans (@joshgans) February 10, 2025
As the nation grapples with this potential change to its currency system, the debate continues about balancing tradition with the need for economic efficiency. Trump’s bold move against the penny marks a significant step in fiscal strategy and policy, potentially paving the way for further modernization of America’s monetary system.
