By PlanetLaundry staff | Oct 06, 2010
Citizens Against Government Waste, a nonpartisan taxpayer watchdog organization, is urging Treasury Secretary Timothy Geithner to encourage the Treasury Department to aggressively increase the circulation of $1 coins.
“According to an April 7, 2000, Government Accountability Office report, replacing the $1 bill with a coin would save taxpayers $522.2 million per year,” according to the letter the CAGW sent to Mr. Geithner. “The savings would likely be even higher today.
“In 2005, Congress overwhelmingly passed a program that would make $1 coins as common as $1 bills in everyday commerce by removing barriers to their circulation and promoting the benefits of their use,” the CAGW continued. “Leaders at the Federal Reserve, however, have resisted competition to paper currency and have erected barriers to restrict access to $1 coins for banks, businesses, and individual Americans.”
Most of the cost savings associated with coins comes from their comparative durability. The Bureau of Engraving and Printing produces approximately 3.4 billion $1 bills each year, each of which cost 4.2 cents to manufacture. Each bill has a lifespan of approximately 21 months. By comparison, the $1 coin costs slightly more to produce – 12 to 20 cents – but has a lifespan of 30 years or more.
“The $1 coin also saves money because it is cheaper to handle and process,” the CAGW said. “Mass transit agencies have found that processing $1 coins costs 83 percent less than processing $1 bills. In addition, vending machine operators have determined that $1 coins save their industry $1 billion a year. Other benefits include savings on the processing of money by banks and businesses. Coins cost 30 cents per thousand pieces to process at Federal Reserve Banks, compared to 75 cents per thousand for $1 notes. Large-scale private-sector users reap even more savings. Processing bills costs more than 500 percent above processing coins.
“Increased circulation of the $1 coin would be a win for the U.S. Treasury, private-sector businesses and American taxpayers. At a time when the nation is in dire need of solutions to its looming fiscal crisis, you have the power to promote a simple, effective and impactful cost savings.”
Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.