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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:
So every transaction will be rounded up because we can't get a pennies in change? Pennies last a lot longer than dollar bills, why is this idiot going after pennies? Part of the "coin" problem is all these remakes of the coin casting. Why do we need 50 different quarters? Why did we need new nickel and penny designs? This has to be one of the dumbest ideas Obama has proposed.
The only thing nobama said that was true is "I don't know". And he doesn't know, cause he spends other peoples money. He has never had to count pennies to survive. I still work, but don't now and never have made so much money that I could afford to throw away pennies, have you? I mean it only takes ten of them to make a dime, or a hundred to make a buck. Nobamas problem is, his midget thinking from a midget brain. Leave things alone you don't understand you moron.
Might as well kill the all of the coins by the time we get done with the next four years of Obama spending the dollar will be the same valu as what the penny is now.
A penny will last 40 years, a paper bill lasts about a year. Why not eleminate all money and let the government only use electronic money? It would make it easier for them to control every aspect of it. That is what they want.
Let's get rid of both the penny, and the two dollar bill...equally as useless.
The ridiculous comments on here are a perfect example of the looney-tunes nature of the right wing....Obama mentions that it doesn't make much sense to pay nearly 3 times as their worth to mint new pennies thereby saving money...and the clown show on the right attack him again for God knows what.
Another perfect example of how the right wing doesn't give two ****s about actual policy....they just hate Obama. That is all those nitwits stand for.
Spending cuts need to retire Obama he the one that borrowed 2 or 3 trillion from China and Japan now he worried about pennies
Luckyl....
Do you need some sort of special decoder ring to read whatever diatribe you posted above?
I held a civilian position on an army installation in W.Germany from 1983 to 1986 and had priviliges at the commissary and all PX shops...the penny was not used at all...anything involving pennies was simply rounded off. I frankly didn't miss the penny at all. Given the cost of items today it has really become a useless coin. If so much of Europe can give up their currency and switch to the Euro, surely we can relinquish a useless coin?
I reckon this means I'll no longer be able to put my 2 cents in.
How come it's a penny for your thoughts but you insist on putting your 2 cents in ?
This means no more cent raises for taxes.Taxes will have to go up at least a nickel. This is just what Obama thrives on,the more the tax the happier he is. This man motive is always directed at getting more and more of the peoples money so he can pay for his welfare state. The wheels will eventually fall off.
The penny costs 2.41 cents to manufacture. It makes complete sense to get rid of it. Get rid of the paper dollar as well and force people to use the $1 coin. Another huge cost savings considering the life of paper money vs a coin.
People constantly complain about taxes. How about we support the president wanting to save the taxpayers money!
Unfortunately Sam, that is the problem with the clown show on the right.....policy doesn't matter.
They will object to ANYTHING the President says....could you imagine what conservative media would've done to Democrats if they would've held up a DOD nominee of a GOP President, like the Republicans are doing to Obama? My God, that would be all we would be hearing about. Republican obstruction has become so routine that something of that magnitude is simply greeted with a shrug of the shoulders.
I agree but this is an equal opportunity clown show. Pletty of clowns on the left, on the right and at 1600 Pennsylvania Ave.
They can't get rid of the Penny. If they do then what the hell am I supposed to leave for a tip for the waitress at Denny's ?
This is by far Obama's best most brilliant idea ever!
In this case, 0's thoughts were only worth a penny. Let's double that: two cents to just go away! ©2013
Postage stamps are not made of metal and they still work? Hello. Make the penny out of recycled materials.
Amy from Portland ME Hummmmmmmmmmmmmm I know the city well But any ways no penny evrything goes up in price becouse it will be rounded up not down
he has made the rest of our money worthless so he might as well stop the penny....
id like to see the mint produce a limited number of pennies with obama on them or even lincoln obama for collectors before retiring
I agree with the other people who are concerned that eliminating the penny means that the four cent difference between a penny and a nickle has to go somewhere and we can be sure it won't be into our pockets. I sense a stealth tax being created here,and rounding up affects even the ones who use plastic.
Who remembers the Superman movie where Richard Prior's character moved fractions of cents into his private account since nobody would notice their disappearance?
The Democrats and Republicans are out to destroy the country and your worried about pennies. Your so easily distracted from reality.
so eliminating the penny is not just about cost?
He is killing everything else including our rights so the penny doesn't even matter at this point. Oh well, four more years.
This man is becoming a tyrant. The truth is instead of paying $2.38, the price will now be $2.40 if he kills the penny. Way to spend more of our money Obama. Gas, food prices, retail, etc. Everything's going up and will continue to under this commie.
Here is the Issue ...
Be it going to Tax or Cost of the item ... everything will go up
Example ... nothing will cost / come out to (Example) > 1.21/1.22/1.23/1.24 ... everything will be 1.25 and I am guessing knowing obama and ALL of congress they will be so kind as to up the Tax on everything so us poor people dont have to worry about the Change thing.
I doubt that most merchants would round up a price tag from 4.99 to 5.00. I think they would mark the item as 4.95 rather than 5.00 because they want us to think of the item as costing 4 not 5 dollars or as being less than 5.00. Of course, if they just keep the item marked as 4.99 and then just round the final purchase total as up or down, we are going to pay more.