The super-committee charged with cutting trillions of dollars from the US debt by the end of the year may be able to find at least one relatively small-change solution in their wallets: replacing the dollar bill with the dollar coin.
The controversial move would phase out paper bills and replace them with a new $1 coin, increasing production costs at first but saving billions in the long term, USA Today reports. Groups on both sides of the issue are voicing their opinions, with the Americans for George claiming that we prefer the paper bill, while the Dollar Coin Alliance say saving money is preferable.
The Government Accountability Office, which issued a report on the cost-savings of a currency switch earlier this year, said that because coins outlast paper currency (which survive about 42 months), the switch would save about $5.6 billion over 30 years.
Lobbyists and industries with ties to the money-making industry are also weighing in. Massachusetts Sen. John Kerry has introduced a bill to do away with dollar coins (the current Susan B. Anthony versions). Paper for U.S. currency is made by Massachusetts-based Crane & Co.
On the flip side of the coin, mining interests and states that have heavy mining industries are pushing for the coins to become the standard. Former Arizona representative Jim Kolbe, who started campaigning for dollar coins in 1986, is now honorary chairman of the Dollar Coin Alliance and is pushing for the country to “update” its currency system, the report states.
One obstacle to the money-saving move, however, could come from Americans’ dislike of using dollar coins, at least the ones now available. Currently, billions of dollar coins that are not used are sitting in storage facilities at the U.S. mint, according to a report by ABC News’ Jonathan Karl. By 2016 the dollar amount of coins in storage could grow to more than $2 billion.
To store all the unused coins, the Federal Reserve told Congress they will need to spend $650,000 to build a new vault in Dallas to hold them. Shipping the coins to the new secure facility will cost an additional $3 million.
Passed by Congress in 2005, the Presidential $1 Coin Act ordered the mint to make millions of coins to honor every dead president, but not even Sen. Jack Reed, D-R.I., one of the co-sponsors of the original bill, uses the legal tender.
“Do you use these things? Do you have any of these things in your pocket?” Reed was asked by ABC News’ Jonathan Karl while holding the dollar coins. “I don’t I tell you, but I like everyone else repeatedly use nickels, dimes, quarters. In fact I have a little jar in my car for the traffic meters.”