President Barack Obama’s 2011 budget proposal has taken a page from the President George Bush Treasury in once again asking Congress to give the Treasury Secretary the discretionary authority to change the compositions of U.S. coinage.
Congress didn’t bite on this delegation of authority the first time around. This proposal, though buried in a document that runs thousands of pages, may not make it this time, either, but the soaring cost of coin production keeps pushing the issue forward.
High costs of copper, zinc and nickel have made the production of cents and nickel coins another source of red ink for the Treasury.
The figures cited in the budget document are 1.8 cents to produce a cent and 9 cents to produce a nickel, though the recently released annual report of the U.S. Mint shows those figures have come down some. But the coins still cost more to make than their face values.
A savings of $150 million a year is forecast, though there is no indication of what alternative compositions would be used to generate those savings.
What is said specifically is:
“The Secretary shall prescribe the weight and the composition of the dollar, half-dollar, quarter-dollar, dime, 5-cent, and one-cent coins. In addition, the Secretary shall consider such factors that the Secretary deems, in the Secretary’s sole discretion, to be appropriate.”
A Treasury official said of the proposal, “The passage of the FY 2011 Budget will begin the process for the United States Mint to determine the most cost-effective coin materials based on factors the Secretary determines to be appropriate – the materials or composition of materials has not been decided at this point. These factors include, but are not limited to, the physical, chemical, metallurgical and technical characteristics of the coins, as well as any other factors necessary to ensure the coins’ utility and integrity. The Mint will undertake research and development on materials composition in a transparent manner, and include time for public comment and collaboration with impacted/interested parties.”
In prior periods where composition changes were required, the Treasury simply requested the Congress to mandate the changes after considering recommendations from the Treasury.
The new authority, if granted, would sideline the Congress completely.