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President Barack Obama finally broke his silence on an issue of national importance Friday – he thinks it’s time to retire the penny.
The possible extinction of the one-cent coin was a featured economic question in a Google+ Hangout with the Commander in Chief last week as John Green, the co-creator of a popular YouTube channel, applied a little presidential peer pressure.
“Australia, Canada, New Zealand, many other countries have gotten rid of their pennies,” Green said. “Why haven’t we done it?”
“I gotta tell you, John, I don’t know,” Obama responded, adding, “Anytime we’re spending money on something people don’t actually use, that’s an example of things we should probably change.”
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But why should anyone care? They’re pennies. Aren’t there more valuable things to worry about?
First, pennies actually cost more to make than they’re worth. In 2012, every penny cost 2.41 cents to make – more than twice their face value.
And as zinc and copper – materials used in minting the penny – have become costlier due, in part, to manufacturing shifts in China, which are likely to raise costs further.
Granted, the total cost of minting pennies was only $58 million last year – less than one-tenth of a percent of total federal spending in 2012 – but groups like Citizens to Retire the U.S. Penny have long been making the economic case for getting rid of the penny (plus, the group adds, fishing for pennies adds about 2 seconds to each cash transaction per day).
And the U.S. military has already decided they’re essentially useless; all Army and Air Force Exchange Service stores on bases round all cash purchases up or down to the nearest nickel.
With both parties looking for ways to cut government spending, it seems as though cutting penny production could be a relatively painless, if insignificant, place to start. But in the Google+ Hangout, Obama ceded that Washington has bigger fiscal fish to fry.
“The penny is an example of something that I need legislation for,” he said. “And, frankly, given all of the big issues that we have to deal with day-in/day-out, a lot of times it just doesn't -- you know, we're not able to get to it.”
There have actually been efforts to pass penny-banning legislation. Back in 2001, then-Rep. Jim Kolbe (R-AZ) introduced the “Legal Tender Modernization Act,” which would have made pennies obsolete by requiring retailers to round up or down to the nearest nickel on cash purchases.
That bill failed, and Kolbe’s second attempt in 2006, the “Currency Overhaul for an Industrious Nation (COIN) Act,” after zinc costs nearly doubled, met a similar fate.
But the president doesn’t need Congress to explore other, cheaper alternatives to zinc – the main metal in pennies. In fact, the administration’s 2013 budget encourages the Treasury to “explore, analyze, and approve new, less-expensive metals for all circulating coins like aluminum, iron and lead.”
It wouldn’t be the first time Abe Lincoln’s coin got a makeover. Back in 1982, the penny changed from 95 percent copper and 5 percent zinc to 97.5 percent zinc and 2.5 percent copper.
(And lest so-called “penny hoarders” try to melt that valuable pre-1982 copper down, the Mint in 2006 prohibited the melting of pennies and nickels. It also made it a crime to carry more than $5 in one and five-cent coins out of the country).
Changes to the composition of pennies do have Congressional champions: Ohio Rep. Steve Stivers (R) introduced the “Cents and Sensibility Act” in December 2011, which would mandate that pennies were out of American steel (much of which comes from the Buckeye State) and dipped in copper.
But these efforts will be met with some serious resistance from the zinc lobby (yes, there is one). The company Jarden Zinc, which creates “metal and zinc coinage,” according to its website, paid lobbyist Mark Weller $340,000 in 2012 to discuss issues related to “minting/money/gold standard” with members of Congress and the Mint, according to the Center for Responsive Politics.
Weller also represents the pro-penny group Americans for Common Cents, whose website warns of the risk of inflation that eliminating the penny would bring, and whose headquarters are on K Street, known for its many D.C. lobbyist offices.
“Americans for Common Cents aims to inform and educate policymakers, consumers, and the media about the penny’s economic, cultural, and historical significance,” the group’s website reads.
The political power of the penny is likely another reason Obama hasn’t acted on getting rid of it. As far back as 2008, when he was still a candidate, the “penny lobby” appeared to mystify Obama.
Asked about it at a town hall in Pennsylvania, he said, “We have been trying to eliminate the penny for quite some time -- it always comes back,” joking, “I need to find out who is lobbying to keep the penny.”
This story was originally published on Tue Feb 19, 2013 2:51 PM EST
Leave a Comment:
"And as zinc and copper – materials used in minting the penny – have become costlier due, in part, to manufacturing shifts in China, which are likely to raise costs further."
This is not a sentence.
if the penny is not worth anymore, it still the start of a fortune. it still be used for business competition(gas stations, 99cents stores, movie rental...etc) All that is truly American, why would we lose it, it's a kind of heritage that brings souvenirs back up, why would we lose that. And one again, why do we need the chinese to make it, why would we lose little things that are parts of America's ID. Why don't we speak Spanish instead of English, then?Those European Countries lost all their own identities after mixing money, work, trades and everything. Why would we not stay Americans at 100%.
EXACTLY why retailers would oppose this common sense idea. They would have to advertise and sell stuff at $9.95 or even $9,999.95. I'm guessing all those 99 cent and dollar stores only have one item that nobody wants priced at under a dollar.
The sad reality of these blogs is .... the left and the right are the same, and as for the pretender in the white house or should i say dictator, the reality of it all, the government has been taken over by the globalist bankers, they care not for you or i, only the bottom line, explain the ndaa to me the ndrp, benghazi, fast and furious, why the need for the tsa, cmon i been asking for a year and absolutely no one has explained it to me, well its not good, why are they intent on killing the 2nd amendment, those of you will say doesnt matter to me i dont own guns, but you let them do that kiss the rest goodbye, you people better wake the hell up and let reality slap you not once but twice across the face, so you can see whats coming, obamacare another issue, nobody said anything about the largest tax increase in amerikan history written into it, not to mention its going to make the price of premiums soar, it didnt give you anything you didnt already have, but now it forces you, funny how the government can force you to buy something from a private business, hmmmm and then tax hell out of you if you dont, do you realize how many people are going to be jobless over this, well. as far as the penny which will soon be worthless along with all the rest of the currency who gives a rats patooty, their killing it on purpose, end the fed is absolutely correct, its as federal as federal express and for you that dont know its a private banking cartel owned by foreign banks, illegal, unconstitutional and should be smashed and tossed into the 4 winds, theres a history lesson for you. molon labe, and combat engineers dont die, we go to hell and regroup.
Does any one oppose this or are people just talking crap because they saw Obama in the headline?
Lil Michelle
we could really use all that zinc to make more bullets.... sheesh!!
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You need more Zinc in your diet , then maybe your brain would work and not only your mouth!
AndrewWoody
Does any one oppose this or are people just talking crap because they saw Obama in the headline?
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Yup pretty much just something else that has all the Obama bashers all excited ... like this no mind: "lil Michelle" What a tool she is! lolololololololol
Lil Michelle
we could really use all that zinc to make more bullets.... sheesh!!
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You need more Zinc in your diet , then maybe your brain would work and not only your mouth!
Our money is slugs. i remember the days before Nixon and the repub's changed our money system. Then we had real silver coins. Today we have cheap metals....useless slugs.
Have any of you thought about why we need more pennies? I do understand the fact that pennies wear out eventually but why is there a need to produce more than about 2 or 3 of them a year? I understand recycling bills because they wear out faster but to be making pennies everyday is ludicrous! My point is that the gov is going to do whatever they want when they want and the people just sit back and listen to the liberal media!
And here I was thinking Obama - otherwise known as Communist In Chief would have been satisfied killing our country.
I agree with Obama, get rid of the penny which no longer serves much use and the same with nickels. He can then issue 6 one trillion dollar coins to commemorate his legacy of irresponsible fiscal policy along with the legislative maroons on Capitol Hill. Go figure.......
Hacked by China and Barry is golfing and worried about the penny.
The Boma has been golfing more that any president so what is his handicap? What was his score when he played with Tiger Woods? We really need to have a good golfer for president.
Another right wing distortion and outright lie. President Taft golfed EVERY DAY.
BTW... Taft was a Republican. I think since golf came to America, that FDR was the only president NOT to play golf, what with the polio and all. Possibly Coolidge as well.
Yes, Obama always has to concentrate on all the most important things....I hope there is not another Benghazi thing that will have to be put off while he meets his requirement to concentrate on the all important penny thing. It may even require another appearance on the Letterman show....
So now Obama is going to send out his killer drones to murder the penny. The penny has the bust of Lincoln on the front and Obama thinks he is as great or maybe better than Lincoln. Guess it is time for him to eliminate any compititon for the "dear leader" .
Our public education system is a failure when a miserable poser like Obama is elected president. The Dept of Education has admitted that Head Start is a multi billion dollar failure. So Obama is pushing for more money for a failed program. It only makes sense if you are an effete Obama zombie.
Oboma should be saving pennies and balancing our budget!! DING DONG a a a a well a a hmmm a a well get rid of him and save America!
Not sure if he can... BUT... What if the President issued an Executive order that restricted the mint to producing no more than $10.00 worth of pennies per fiscal year? Would still take decades, or perhaps never, for the current supply to disappear. Restricting the melting down of the coinage is also ludicrous.
Look... When we have thieves raiding foreclosed homes and construction projects to get copper, we need to look at ways to reduce demand. Here in Minnesota we had a local hockey rink that had all it's copper tubing ripped out and stolen over the summer. Cost multi-thousands to replace and comes out of local taxes.
The title of this piece is not real news, just gossip. I guess people get paid well for instigate problems.
If the GOP rams the sequester down our throats, then the penny will become relevant again and minimum wage will look pretty good to college graduates. Anybody over 40 can kiss their jobs goodbye and they wont have to worry about illegals crowding them out at the local Home Depot. Hell,,, even the Latinos will go back home. Better start working on those back exercises and leg squats for cucumber picking. Too bad most harvesting is in the fall.
Asta Dog,
I cannot believe you are buying into this horse manure. Snap out of it! The main stream media has turned into one great big propagandise editorial page, no matter what channel. How long have you been alive? All the crap coming out of DC in the last 20 plus years and you think the GOP is all to blame for the sequester? They just won't settle, humm? It doesn't matter why, that couldn't be an issue. More QE for ya?
Just for starters, do you know how politically top heavy we've gotten in this country? Take NC for instance, the biggest employer is the government. Our government doesn't make money, they spend money, OK? They add nothing to the GNP. Think about that and let it sink in, when it comes to paying the bills.
Of course, NAFTA was brilliant. And the never ending war? What a treat. Obama promised he would end the war. Now, even after promising to take ALL of our troops out of Afghanistan by 2014, NOPE, that isn't going to happen.
Now we support HLS and FEMA. And how about Obama Care? We can't pay for it; OUR COUNTRY IS INSOLVENT but hey, promise those suckers anything, they'll bite. Sh!^ is still sh!^, even if it comes wrapped up looking like a birthday cake. And when it doesn't pan out, balme the other guy. Great politics. NOthing like dividing a country and blaming it on the other fellow. Now, I've got some beads and blankets I'd like to sell ya. You take those and I'll take your money.
We've had the worst case of taxation without representation I've ever even read about in the history books but hey, who cares, right? And we blame women for voting based on looks.
Honestly, ya really think its all about the GOP? Ya really do? You are totally convinced the GOP is the bad guy. What else is the GOP, racist? Are they religious zelots? Are they all homophobic too? Can you really be saying that? How fricking convenient.
President has been distracted by all the minute crab and lost in the sauce of the economy. Are you the president of the most un-important things? You continue to fumble the ball and act like nothing id going on? Leave the penny alone! Focus on the economy! The hell with the penny........
Well, it will save the Feds and our government some money but it won't save you, the buyer any. Sure, why not, I love to work for the government. Nothing like having 30% of my paycheck taken every month. Over the course of a year, I work about 4 months to pay the feds. And that, of course, is just the beginning of the taxes we all pay.
I say lets put some more "unelected officials" in DC, or, maybe we could discontinue them and keep the pennies?
Get rid of the penny and businesses will adjust their prices to get that extra 1-4 cents profit and of course out of your pocket. Let's say you lose 4 cents a day X200 million consumers. That is 4 X 365 = $14.60 X 200,000,000= $2,920,000,000 out the door which of course the government will tax and get only to blow to the winds. trust me there is a method to their madness. Every day they are thinking how to rid us ALL out of money to waste. Wake up America!
Alan, so right. Further, shouldn't we take more than just a look at how the countries that have gotten rid of their "pennies" are doing financially? He mentions Canada, the Netherlands, Britain and Brazil. These are not stellar economies, to say the least.
But Canada did it so, let's see what they have to say. They do mention it costs 1.5 cents to make. That isn't favorable. They also tell us it will save 130 million @ year but... they don't tell us what it will cost the public other than saying business will either round up or down to the nearest penny and we've still pay to the cent with cash cards or checks. Sounds like money is going out the window. Is it?
What will we do without them?
As per the 2010 senate recommendations, Canadians will simply be asked to round prices up or down to the nearest nickel. Credit card users, however, will still be required to pay to pay to the cent. Does that discrepancy leave Canada vulnerable to small-scale fraud, like the Richard Pryor character in Superman III who scams his employer by filling a dummy account with the fractions of cents left over from financial transactions? Maybe, but so far nobody else seems to have had a problem with ditching low-denomination coins. Like most currency-related issues, Canada is way behind the times on this one. More than a dozen countries including Israel, Switzerland and Brazil have successfully eliminated single-unit coins. Not to mention the iconic British half-penny, which was phased out under Margaret Thatcher.
While we're tossing out coins, why not the nickel?
Soon enough. Nickels are already relatively useless – and like all coins they're dropping in value each year. New Zealand phased out its one-cent coin in the 1980s and then its five-cent coin in 2009. It's a strategy Desjardins strongly recommends, since eliminating more than one coin at a time could cause unneeded confusion and economic damage. Once the penny is successfully gone, "the federal government should consider, a few years later, the relevance of removing the five-cent coin," stated Desjardins in 2007.
And like every good sales pitch we have the finale:
Will I seem old-fashioned if I say "penny for your thoughts," "penny-pincher" or "a penny saved is a penny earned"?
Do you know why your car's control panel is called a dashboard? It refers to a board mounted at the front of horse-drawn carriages to prevent mud from the horse's hooves from being "dashed" at the driver. Your penny references remain contemporary.
Yeah, we wouldn't want to be considered "uncontemporary", would we.
Can't help but wonder how much it will cost us to go totally plastic, quite a bit more I'm thinking.
In all honesty though, I'd rather save a tree. But will we? I don't trust the government to do much of anything anymore. We are referred to as Capitalists but we aren't, our money has been manipulated for over 40 years. We don't have "free trade", our stocks are manipulated too. NAFTA certainly isn't free trade and it sure isn't about saving the environment in any country. And to top it off, the exiting Pope never once said he was for the NWO and wanted the UN to revamp, not the other way around, as it has been reported by the media. All of this has just gotten so NUTS!
This is about all the financial intellegence this president has!
I don't know, maybe because we aren't Australia, Canada or New Zealand? I'm all for emulating those countries. Which 300,000,000 people should we kill first to get population parity with those countries? Can we fine people for not voting, like they do in Australia? Can we hand government 80% of our earnings, like Canada? Maybe go rape some sheep like the Kiwis? Why on Earth would the most powerful country on the planet want to emulate weak, inferior countries?
Every one of those nations makes the USA look like a sewer. You've obviously never been out of America, have ya?
I have and your comment is ridiculous.
Yeah? What's next, the nickle? It cost more to make the penny now than it is worth because the value of the dollar has declined to that point. If it keeps going, the nickle is going to cost more to make than it is worth... and then the dime... and oh well, we all know where this is going! Step aside, make room for my wheel barrel full of money, I want to buy a loaf of bread!
It's heading toward a cashless society....
This is nothing new. The penny has cost more to mint than it's worth for over five years. Put another way, minting pennys for circulation is like if you paid (not got paid) to work for someone. Are you going to do that?
I'm no Obama apologist but he's right on this one. Finally! Something i can agree with him on.
@MyDrain. A "nickel" has 5.7 cent worth of nickel in it and costs us a little less than 9 cents to make. And, your right!
Pushing prices up to the nearest nickel sounds great to me! I'm always happy to gouge my customers for a few more cents on every purchase.