In a bold move aimed at cutting government waste, President Donald Trump announced on Truth Social on Sunday night that he has instructed the U.S. Treasury Department to stop minting new pennies. The decision comes after reports revealed that producing the one-cent coin costs more than its actual value, resulting in millions of dollars in losses each year.
Why Stop Producing Pennies?
Trump’s Post on Truth Social:
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies.”
The U.S. Mint reported a loss of $85.3 million in the 2024 fiscal year from producing nearly 3.2 billion pennies, with each penny costing approximately $0.037 to produce. This marked an increase from $0.031 per penny the year before. The nickel is also a money-losing coin, costing nearly $0.14 to produce despite its $0.05 face value.
The Penny Problem: Ongoing Debate
The rising cost of producing pennies has been a long-standing debate in Congress. Over the years, lawmakers have introduced multiple bills to:
- Temporarily suspend penny production
- Eliminate it from circulation
- Require prices to be rounded to the nearest five cents
However, these efforts have never gained enough traction to become law.
International Perspective
Countries like Canada eliminated their one-cent coins in 2012, citing cost savings and improved efficiency at checkout counters. Other nations, such as Australia and New Zealand, have also discontinued their least valuable coins.
The U.S. itself eliminated its half-cent coin in 1857, suggesting that there is historical precedent for phasing out coins of minimal value.
Does Trump Have the Authority to Eliminate the Penny?
The power to change currency specifications — such as the size, composition, and production of coins — is typically granted to Congress.
However, Robert K. Triest, an economics professor at Northeastern University, believes there could be some flexibility:
“The process of discontinuing the penny in the U.S. is a little unclear. It would likely require an act of Congress, but the Secretary of the Treasury might be able to simply stop the minting of new pennies.”
This means that while Trump’s directive to halt penny production may initially face legal scrutiny, it could be temporarily implemented if the Treasury Department chooses to act independently.
Elon Musk and Government Efficiency
The idea of cutting penny production gained traction after Elon Musk’s Department of Government Efficiency (DOGE) highlighted the issue in a post on X last month. Musk’s department is part of Trump’s broader initiative to reduce federal spending by $2 trillion, targeting wasteful programs and inefficient government agencies.
Musk’s Role in Cost-Cutting Efforts:
- Musk has already led efforts to restructure USAID, with thousands of employees placed on administrative leave.
- His department is reviewing the Department of Education and military spending to identify further savings.
Trump praised Musk’s efforts in his Truth Social post, stating:
“Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.”
Supporters and Opponents of Penny Elimination
Proponents Say:
- Cost savings: Eliminating pennies would save millions of dollars annually.
- Faster transactions: Cashiers and consumers could save time during checkouts.
- Other countries have done it: Many countries have successfully eliminated their one-cent coins without major issues.
Opponents Say:
- Rounding concerns: Prices rounded to the nearest five cents may disadvantage consumers.
- Cultural significance: The penny, featuring Abraham Lincoln’s image, holds sentimental value for many Americans.
- Charitable donations: Charities often rely on penny drives to raise funds.
What’s Next?
It remains unclear how long Trump’s directive will last or whether Congress will challenge the decision. Further legislative action may be required to officially end the penny’s production and circulation.
Trump’s move to halt penny production is part of his administration’s aggressive cost-cutting measures aimed at reducing wasteful government spending. While the future of the one-cent coin remains uncertain, the debate over its value—both financial and symbolic—will likely continue in the months ahead.
