Action to preserve the cent as a coin denomination, albeit made of copper-colored steel, to strike a nickel-coated steel five-cent piece and to assure congressional authority in exercising its constitutional responsibilities in deciding how to coin money and regulate the value of it was decisive May 8. That?s when the U.s. House of Representatives unanimously approved the ?Coin Modernization and Taxpayer Savings Act of 2008,? H.R. 5512.
Partisan shenanigans the previous two days were forgotten, and both sides of the aisle spoke favorably of a measure that changed substantially since its February introduction as a different bill that was subject to criticism for Congress abdicating the responsibilities that the Founders gave it on coinage matters in Article I, section 8 of the Constitution.
This was evidenced by the bill?s title change from H.R. 3956, introduced last October as a bill ?To authorize the Secretary of the Treasury to prescribe the weights and the compositions of circulating coins, and for other purposes.?
What passed has a very different purpose: ?To reduce the costs of producing 1-cent and 5-cent coins, provide authority to the Secretary of the Treasury to perform research and development on new metallic content for circulating coins, and to require biennial reports to Congress on circulating coin production costs and possible alternative metallic content.?
Changing the scope of the bill ? there are dozens of changes ? has Mint director Edmund Moy in opposition. Laurie Kellman, a reporter for the Associated Press, picks up the story in a May 6 Washington Post article that talks about the high price of copper and soaring production costs of a copper cent and copper-based nickel that cause the need for change.
Credit the Washington Post for publishing the constitutional assault: ?Just a few hours before the House vote, Mint Director Edmund Moy told House Financial Services Chairman Barney Frank, D-Mass., that the Treasury Department opposes the bill as ?too prescriptive? in part because it does not explicitly delegate the power to decide the new coin composition.
?We can?t wholeheartedly support that bill,? Moy said in a telephone interview. Moy said he could not say whether President Bush would veto the House version in the unlikely event that it survived the Senate.?
And so for the first time since Sen. John Tower, R-Texas, threatened a veto by President Nixon of a gold Bicentennial coin proposed in the Senate in 1973, a clash of constitutional dimension hangs over coinage legislation.
The original version of the Coin Modernization and Taxpayer Savings Act of 2008 that the House began with the following provisions:
? Revises the discretionary authority of the Secretary of the Treasury to prescribe the weight and the composition of the alloy in the one-cent coin;
? Requires the coins to be minted of materials fabricated in the United States;
? Requires the Secretary to enter into a formal rule-making process when making any determination with respect to any change in the weight and composition of any coin;
? Repeals current weight requirements for the half dollar, quarter dollar, dime, five-cent coin and the one-cent coin;
? Specifies the characteristics of $1 coins and gold coins;
? Authorizes the Secretary to prescribe manufacturing tolerances for five-cent and one-cent coins; and,
? Requires, for a specified period, the one-cent coin (except for Lincoln Bicentennial numismatic cents) to be produced primarily of steel and treated to impart a copper color to its appearance similar to one-cent coins produced of a copper-zinc alloy.
Here?s what emerged in an amended version of the bill that was sponsored by Rep. Zack Space, D-OH, and co-sponsored by full Committee chair Frank and subcommittee chair Gutierrez. The actual name of the coinage unit is the Subcommittee on Domestic and International Monetary Policy.
? Nine months (270 days) after passage, the Mint must be producing a cent made primarily of steel;
? In the 90 days after enactment, the Treasury chief may direct the Mint to use a different alloy that achieves the technical and financial objectives ? producing a cent whose production cost and metal value is less than a cent;
? Two years after passage, the composition of the five-cent coin shall be changed from the current copper-nickel to steel with a nickel coating;
? The historic Mint practice of testing alternative alloys, done administratively for over 150 years, is formally legitimized: ?To accomplish the goals of this Act, the Secretary may conduct any appropriate testing within or without the Department of the Treasury;
? Significantly, the bill would allow the Mint to ?solicit input from or otherwise work in conjunction with entities within or without the Federal government including independent research facilities or current or potential suppliers of the material used in volume production of circulating coins;? and,
? Just so there?s no mistake, the purpose is ?to complete [a]… report [to Congress]… and to develop, evaluate or begin the use of new metallic material for such production.
The Mint evidently objects to this, too, for as Rep. Peter Roskam R-Ill.) noted in floor debate, the Mint has an alternative agenda. ?[W]ithout wanting to be overly critical of the Mint, let me just point out that I think that they have not done exactly as I think would be wise as it relates to solving this cost production problem,? Roskam said.
?It sent legislation here proposing to transfer power from Congress to the Mint on the authority to decide what coins should be made of, what they would weigh, authority explicitly held by Congress since the founding of this country,? he continued, echoing remarks made by some commentators in this newspaper.
Then the bombshell: ?More recently, the Mint has criticized the bill before us because it would force the Mint to continue making coins out of metal. I don?t know about your constituents, Madam Speaker, but I can guess, along with mine, that they?re not interested in having coins made out of plastic.?
Roskam then threw the zinger, saying constituents would be ?even less enthusiastic if they found out that the decision to switch had been made by a few unelected bureaucrats in a gray building somewhere in Washington, D.C. This is our responsibility to make these decisions.?
He suggests the downside of an uninformed decision: ?if such a switch were made the wrong way, it could force billions in conversion costs onto coin handlers, vending machines and banks, that would eventually be passed onto customers.?
To assure this doesn?t happen, and that it can make an informed decision, the bill that passed requires the Mint to ?submit a [detailed] report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate analyzing production costs for each circulating coin, cost trends, and possible new metallic materials or technologies for the production of circulating coins.?
Now action now shifts to the Senate where legislation more friendly to the Mint and Administration view is said to be in the process of being drafted. On the assumption that there may be some middle ground to find, both sides ought to think about a requirement for the Mint to preserve in its archives ? and the Smithsonian National Coin Collection ? the results of the testing, so that posterity has a reference point in time.