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Steel yourself for new cent

It looks like a steel cent has moved closer to reality and a steel nickel is a definite maybe after the House of Representatives passed H.R. 5512 yesterday.

Passage came after it was caught up in two days of political infighting on Capitol Hill. The bill calls for a copper-colored steel cent. The new composition would come into use 270 days after the Senate passes an identical bill and the President signs it.

The House wording provides an escape clause if the Treasury can find an alternative composition in 90 days to achieve the same goals of lowering production costs to less than one cent for each cent produced.

That isn’t likely.

Steel nickels may be in our future, too. There is mandate language but the time frame is longer and the Treasury is asked to jump through a number of hoops that could easily prevent any action.

The mandate language is two years after enactment of the legislation into law a nickel-coated “primarily” steel 5-cent coin will be produced, but the there is also a very big sticking point. The House mandates a new composition that can “co-circulate with the existing supply of 5-cent coins and work interchangeably in coin handling machines.”

Good luck with that.

Steel is magnetic and copper-nickel is not. The use of magnets is a common form of vending discriminator mechanism. Steel is also significantly lighter.

The legislation also provides a list of exceptions to allow the Treasury to wiggle out of the mandate language, but these include consultation with the vending machine industry and other coin users, and other hurdles that make reaching any kind of consensus and conclusion difficult if not impossible.

Mint Director Ed Moy is not buying the steel mandate even for the cent. He issued a statement yesterday looking for better legislation to come out of the Senate.