- President Donald Trump has ordered the U.S. Treasury to stop minting new pennies, citing high production costs. The U.S. Mint reported a loss of $85.3 million in the last fiscal year from penny production, with each coin costing 3.69 cents to manufacture.
- The move’s legality is uncertain, as the U.S. Mint states that only Congress can authorize changes to coinage, including discontinuing production.
- Eliminating the penny could have a minimal economic impact, but opponents argued it would lead to price rounding, increased reliance on nickels and higher production costs for other coins.
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President Donald Trump ordered the U.S. Treasury Department to stop minting new pennies, citing high production costs. In a post to Truth Social, Trump called the coin a waste of taxpayer money, stating that pennies “literally cost us more than two cents” to produce.
The U.S. Mint reported losing $85.3 million in the last fiscal year from penny production, costing 3.69 cents to manufacture each coin. The government also incurs losses on nickels, which cost 13.78 cents each to produce.
Does Trump have the authority to stop penny production?
It’s unclear whether the president can unilaterally stop penny production. The U.S. Mint stated that only Congress can authorize changes to coinage, including discontinuing production.
However, some economists argued that the Treasury secretary may have the discretion to pause production without congressional approval.
Robert K. Triest, an economics professor at Northeastern University, said the process is ambiguous but suggested the Treasury could halt minting new pennies without violating the law.
The penny costs over 3 cents to make and cost US taxpayers over $179 million in FY2023.
— Department of Government Efficiency (@DOGE) January 22, 2025
The Mint produced over 4.5 billion pennies in FY2023, around 40% of the 11.4 billion coins for circulation produced.
Penny (or 3 cents!) for your thoughts.
Sources:https://t.co/Y5LlrpyA62…
Has Congress tried to eliminate the penny before?
Lawmakers have introduced multiple bills over the years aimed at eliminating the penny.
Some proposals sought to temporarily suspend production, while others suggested removing pennies from circulation entirely and rounding cash transactions to the nearest five cents.
None of these efforts have passed.
How have other countries handled penny elimination?
The U.S. would not be the first country to phase out its smallest-denomination coin.
- Canada stopped minting pennies in 2012, stating that the coin was no longer cost-effective. Cash transactions are now rounded to the nearest nickel.
- Australia removed its one- and two-cent coins in 1992, citing inflation and production costs.
- Sweden and New Zealand phased out their smallest coins decades ago.
Experts said eliminating the penny would likely have a minimal impact on the U.S. economy, as the coin is rarely used in transactions and is often discarded or stored away.
Why are some groups opposed to eliminating the penny?
Organizations like Americans for Common Cents, an advocacy group for penny production, argued that eliminating the coin would not save money. It claimed that overhead expenses at the Mint would remain and need to be absorbed by other coins, raising their per-unit costs.
Another concern is price rounding, which opponents argued could act as an indirect tax on consumers. Prices ending in 99 cents are common, and critics worry that retailers would round prices up rather than down.
Additionally, eliminating pennies could increase reliance on nickels, which are even more expensive to produce than their face value.
What happens next?
The Treasury Department may follow Trump’s directive, but it remains uncertain whether penny production will officially stop without congressional approval. The issue will likely continue as part of the administration’s broader effort to cut government spending.
