CORRECTED-U.S. tries to find savings in penny-pinching - literally

Tue Mar 4, 2014 12:42pm EST

(Corrects to make clear that Treasury is not considering phasing out penny or nickel coins, is looking instead at using alternative metals)

By Gabriel Debenedetti

WASHINGTON, March 4 (Reuters) - In a budget proposal that aims to make government more efficient, President Barack Obama on Tuesday floated the idea of using alternative metals to make penny and nickel coins.

The fiscal 2015 budget, released on Tuesday, points out that the coins' manufacturing and circulation have not changed in decades and that the Treasury Department has been reviewing the coins' production. Obama has proposed similar reviews in the past but the measures stalled despite not being partisan points of contention.

The budget does not include a specific cost savings figure for the potential changes but it identifies the rise of electronic commerce as a reason to review the coins' makeup and distribution.

Obama's 2014 budget had pegged the cost of manufacturing a penny at two cents and the price of a nickel at 11 cents.

Past attempts to change penny and nickel production have faced resistance from interest groups. A 2010 Wall Street Journal report noted the Coin Laundry Association was one such group resisting a change, due to the "unintended consequences that could deeply impact the small-business owner during a recession."

The budget, which lays out the president's policy priorities ahead of November's midterm elections, has little chance of becoming law. Still, it provides a path for Democrats, who are hoping to retain a majority in the Senate but face an uphill battle to cut down on Republicans' majority in the House of Representatives. (Additional reporting by Patrick Temple-West and Emily Stephenson; Editing by Bill Trott)

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Comments (1)
lakefork wrote:
why not join the penny and the nickel and make it worth 13 cents and call it a pickle, that way it only cost 11 cents to make and you gain 2 cents for every nickel made

Mar 04, 2014 2:20pm EST  --  Report as abuse
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