The Dollar Coin Alliance, a coalition of small businesses, budget watchdogs, transit agencies and labor groups, called on the Obama Administration to reverse course on its decision to suspend the Presidential $1 Coin program. While the Administration claims this action as a way to save taxpayer money, the coalition claims the opposite is true for the following reasons:
- If the Administration’s concern is reducing waste in our $1 currency supply, the smart solution is to eliminate the antiquated $1 bill. As noted in repeated studies over two decades by the nonpartisan Government Accountability Office (GAO), the continued production of $1 notes costs taxpayers at least $5.5 billion over 30 years.
- The current $1 coin program actually reduces the federal deficit by nearly $300 million each year. According to the U.S. Mint’s 2010 Annual Report, the $1 coin program made a net profit of $283 million, all of which was transferred to the Treasury General Fund to reduce government debt.
- This is a transparently political push by the Federal Reserve and the Treasury Department. Both have previously urged Congress to eliminate the $1 coin program in order to maintain profits generated by the continued production of $1 bills. Having failed, Treasury has now unilaterally acted to stop $1 coin production, usurping Congress’ authority in U.S. currency and coin matters under the Presidential Dollar Coin Act.
In September, Congressman David Schweikert introduced the bipartisan Currency Optimization, Innovation and National Savings (COINS) Act (H.R. 2977), a bill to modernize the nation’s currency by eliminating the $1 note – a change virtually every country in the world has made in the past several decades to reduce waste.
“Unfortunately, the Treasury and the Federal Reserve, with Administration support, are pulling a fast one on taxpayers, claiming the government saves money by eliminating the $1 coin program,” said Tom Schatz, President of the Citizens Against Government Waste in a prepared statement. “If the Administration really wants to save taxpayers money, they’ll heed the advice of the nonpartisan Government Accountability Office, which has been advocating the elimination of the $1 note for 20 years.”
According to a report released in March by the GAO, hundreds of millions of taxpayer dollars are wasted each year by the continued use of the dollar note. The report, “Replacing the $1 Note with a $1 Coin Would Provide a Financial Benefit to the Government,” found that transitioning fully to a $1 coin would save the government an average of $184 million per year and approximately $5.5 billion over a 30 year period. Using more traditional assumptions in their analysis, savings could be as high as $11.1 billion. This was the fifth report the GAO has issued on the benefits of transitioning to the dollar coin, dating back to 1990. Estimates of annual cost savings in previous reports have been as high as $522 million.
“The Federal Reserve and Treasury Department want to go back to business as usual, protecting the out-of-date $1 bill, a pet government program that costs taxpayers billions,” added Schatz. “We trust that once all the facts are known, common sense will prevail.”
According to the U.S. Mint’s Fiscal Year 2010 Annual Report, the $1 coin program generated a net profit of $283 million, all of which was transferred to the Treasury General Fund to reduce government debt. Further, in 2010, the $1 coin accounted for 70 percent of all Mint profits, and was responsible for a whopping 94 percent of the total profit for all circulating coinage (pennies, nickels, dimes, quarters, halves, dollars). In FY 2010, the U.S. Mint had a total, agency-wide, net profit of $405 million: $300 million of that came from the entire circulating coin program, and $283 million of that, 94 percent, was generated by $1 coins. Without a dollar coin program, and given losses of over $40 million for pennies and nickels, the Mint would be in danger of operating the circulating coin program at a net loss.
A January 2011 poll conducted by the Tarrance Group and Hart Research found that Americans favor the transition to a dollar coin by a two-to-one margin once the potential government savings are explained. This is consistent with findings from the GAO’s own polling in 2002.
Members of the Dollar Coin Alliance include Citizens Against Government Waste, the International Association of Machinists, the National Bulk Vendors Association, Southeastern Pennsylvania Transportation Authority, Tri-State Automatic Merchandising Council and United Steelworkers.
For more information, visit www.DollarCoinAlliance.org.