British Prime Minister Winston Churchill once quipped that the United States always does the right thing – after it has tried everything else.
Is the future of the U.S. cent one of those issues where everything else will be tried before arriving at some ultimate course of action?
Playing out are parallel dramas north and south of the Canadian border.
While Canada expects to save $11 million annually when it abolishes its 1-cent coin by autumn, the United States for the moment is looking at the top end of its circulating denominational scale to find its cost savings.
In December production of the Presidential dollar coin for circulation was ordered suspended.
At a March 28 hearing before the House Financial Services Subcommittee Treasury Secretary Timothy Geithner said, “Taking this simple step will save taxpayers $50 million per year in production and storage costs.”
He expects the current surplus of 1.4 million Presidential dollars stored by the Federal Reserve to be drawn down over time much as the surplus Anthony dollar supply was drawn down in the 18 years after production ended in 1981.
He also noted a further annual savings of $75 million through “improved manufacturing practices and administrative cost reductions.”
Additional unspecified savings would result if legislation requested in the proposed Fiscal Year 2013 budget would be passed to authorize the Treasury Secretary “to change the composition of coins to utilize more cost-effective materials.”
As justification he noted that it costs the government “more than twice the face value of each of those coins” to produce them.
The 2011 annual Mint report shows the cent costs 2.41 cents each and nickel 11.18 cents to make.
However, such a request has been made before and Congress has not ceded its authority to determine the composition of U.S. coins to the Treasury.
How this legislative effort will play out differently in a Presidential election year is yet to be seen.
The Mint is in the process of compiling information for a report that Congress has asked for in the 2013 budget year.
It will be eagerly studied by collectors when it is delivered.