President Donald Trump announced on Feb. 9 that he had instructed Treasury Secretary Scott Bessent to stop producing pennies.
According to JM Bullion, the U.S. Mint lost $179 million in producing pennies in 2023. Producing nickels, however, leads to even more losses.
According to GovMint, the cost to produce and distribute a penny was 3.69 cents. The cost for a nickel, however, was 13.78 cents. While the U.S. Mint has recently reduced production figures to cut costs, it still makes hundreds of millions of nickels each year.
It is not practical to produce a coin that costs the mint more than double its value. If this is true for the penny, it should also be the case for the nickel.
Removing pennies and nickels from circulation would mean that cash transactions would need to be rounded to the nearest five or 10 cents. With no exact change combination of dimes and quarters equalling five or 15 cents, 10-cent increments seem to be the likely alternative.
While some consumers may be upset about a “price hike,” pennies and nickels are virtually worthless to buy anything with anyway. A four-cent increase in the final cost of a purchase is not nearly as big of a jump as it was 50 years ago.
With the savings, the mint could compensate for some of the lost nickels by making more quarters. As of 2024, the cost of producing a quarter is 14.68 cents.
The authority of the executive branch to stop the minting of coins is up for debate. While Congress has the power to control the coinage of money, Bessent could likely reduce the mintage figures further to minimize losses until Congress takes action. Congress, however, did not stop Trump when he moved to eliminate the penny, so it is unlikely that they would stop him if he wanted to get rid of the nickel as well.
Trump’s move to eliminate the penny two months ago was a step in the right direction for reducing wasteful spending.
WHAT IS DOGE? WHAT TO KNOW ABOUT THE DEPARTMENT OF GOVERNMENT EFFICIENCY
While the Department of Government Efficiency is making good progress in cutting waste through its audits of the Education and Labor departments, it should take advantage of an even easier opportunity.
If Trump wants to reach Elon Musk’s goal of reducing waste, cutting both pennies and nickels should be a layup for Trump and the DOGE team.