Treasury Secretary Henry Paulson used a Chicago radio show appearance to call for the elimination of the cent Feb. 29, but then said it was not ?politically doable.?
A Treasury Department spokesman later augmented the statement made on the ?Spike O?Dell Show? on WGN Radio by saying ?Treasury has not taken any steps to eliminate the penny but is considering changing the metal content to lower production costs.?
The cent currently costs about two cents to produce, including metal
content, using the Mint?s current per-piece-of-coinage method of accounting. The method takes all overhead and fixed costs and attributes them on a per-coin basis.
Actual metallic value of the one-cent piece is currently 0.72 cents.
Paulson told the radio audience the coin should be eliminated because, ?The penny is worth less than any other currency.? The cent has lost substantial international value, but the Treasury chief is peddling erroneous information.
For example, the Japanese 1 yen coin (Yeoman number 95.2) has been produced for more than 50 years (including more than 50 million pieces in 2006). Its current value: around a ?penny? (actually at the 103 to the dollar exchange rate on Feb. 29, about 0.96 cents).
Martin Crutsinger, the Associated Press economic writer, quoted from the program where host O?Dell also asked Paulson, who made a fortune as the head of investment giant Goldman Sachs before joining the Bush Cabinet, how much money he carried in his pocket.
?I walk around with very little cash in my pocket,? he said, depending instead on credit cards ?like everyone else.?
Meanwhile, Treasury spokeswoman Brookly McLaughlin said, ?To address the growing cost of producing the penny, we have asked Congress for the authority to adjust the metal content in our coins.?