President Trump said he directed the Treasury Department to stop minting new pennies, citing production costs. But it’s Congress that authorizes the U.S. Mint’s manufacturing of coins.
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President Trump, whose sweeping agenda aims to dramatically reshape both policy and government, is now aiming at a much smaller target: the 1-cent coin.
Trump announced Sunday night — as he departed the Super Bowl in New Orleans — that he had instructed the secretary of the U.S. Treasury to stop producing new pennies, a practice he called “wasteful.”
“For far too long the United States has minted pennies which literally cost us more than 2 cents,” he wrote on Truth Social. “Let’s rip the waste out of our great nations [sic] budget, even if it’s a penny at a time.”
That’s not just Trump’s two cents. The Department of Government Efficiency (DOGE), took aim at the penny in a tweet the day after Trump’s inauguration, saying they take over 3 cents to make and cost American taxpayers over $179 million in fiscal year 2023 alone.
Indeed, the penny has what is known as “negative seigniorage,” meaning it is worth less than what it costs to produce: 3.69 cents in 2024, according to the U.S. Mint.
The U.S. Mint — a bureau of the Department of the Treasury — said in its annual report that it lost $85.3 million on the nearly 3.2 billion pennies it produced in fiscal year 2024. That was the 19th consecutive fiscal year that the unit cost for pennies has been above face value, it adds.
The value of keeping the nation’s smallest-value coin has been a decades-long debate — even former President Barack Obama expressed his support for eliminating pennies in a 2013 interview.
“This is not going to be a huge savings for government, but anytime we’re spending more money on something that people don’t actually use, that’s an example of something we should probably change,” Obama said.
The idea is popular among many economists and has been raised before in Congress. But as with several of his recent directives, it’s not clear that Trump has the authority to do so by himself.
Can Trump do it?
It is Congress that oversees the Mint’s operations and authorizes the manufacturing of coins, as well as many medals.
“As a part of the U.S. Department of Treasury, the United States Mint derives its authority from the United States Congress,” reads the agency’s website.
Treasury Secretary Scott Bessent has not commented publicly on the president’s directive.
The consensus seems to be that it would take an act of Congress to stop minting pennies, though there may be some gray area.
“The process of discontinuing the penny in the U.S. is a little unclear,” said Northeastern University professor Robert Triest in a January news release. “It would likely require an act of Congress, but the secretary of the Treasury might be able to simply stop the minting of new pennies.”
Has Congress tried before?
Over the years, various lawmakers have attempted to either temporarily suspend the penny’s production, eliminate it from circulation or address its cost, according to the Congressional Research Service.
“The most frequent proposal is to request the Government Accountability Office (GAO) to study the cost of coin production,” it says. “None of these measures has been enacted.”
In 2017, for example, the late Sen. John McCain, R-Ariz., co-sponsored a bill that would have paused penny production for 10 years and directed the GAO to study the impacts.
As NPR has reported, another Arizona Republican, former Rep. Jim Kolbe, spent two decades trying to kill the penny beginning in the 1980s — initially out of a desire to help the state’s copper industry by seeking to replace the paper dollar with a copper coin. But Kolbe quickly got behind it as a cost-cutting measure, too
But he faced opposition from many corners, including zinc miners and lawmakers from Illinois, the home state of penny resident Abraham Lincoln. Before his death in 2022, Kolbe reflected that he felt “bemused as much as anything” whenever he left a store with one more penny, “because I think it’s a good illustration of the problems in our legislative process.”
What’s the case for keeping pennies?
Some pro-penny advocates worry that getting rid of the coin could lead to a “rounding tax” on cash transactions, where prices are rounded up to the nearest five cents and end up costing Americans more.
The nationwide chain Chipotle, for example, quietly started rounding up cash orders (to limit the number of pennies involved in transactions) in New Jersey and other “high volume markets” in 2012 — but it started rounding down after considerable backlash.
Mark Weller, the executive director of Americans for Common Cents, told NPR in 2009 that the alternative to the penny is “is rounding to the nickel, and that’s something that will negatively impact working families every time they buy a gallon of gas or a gallon of milk.”
However, some economists say it’s just as likely that prices could be rounded down to the nickel. Robert Whaples, an economics professor at Wake Forest University, found in a 2006 study that rounding prices to the nearest nickel wouldn’t cost consumers extra, based on data from about 20 locations of a gas station and convenience store chain.
“I think there are still people who think that there’ll be rounding up, and you’ll get nicked by a penny many times and it’ll help the seller and hurt the consumer a little bit,” Whaples told Marketplace in 2023. “That’s the perception. But I don’t think it’s the reality.”
Some critics of eliminating the penny also worry it will spell the end of penny drives, a fundraising method employed by certain charities and schools. But many organizations have found other ways to collect spare change in an increasingly cashless society, like “round-up” donations at the grocery store checkout.
There’s also the possible nostalgia factor.
“It’s one of those things where, I think, people get attached emotionally to the way things have been,” Obama said in 2013. “We remember our piggy banks and counting up all our pennies and taking them in and getting a dollar bill or a couple dollars from them, and maybe that’s the reason people haven’t gotten around to it.”
Americans for Common Cents — which represents the interests of zinc producers and coin manufacturers and collectors, among others — has called the Trump administration’s penny plan “fundamentally flawed,” arguing that it would actually increase the Mint’s losses in part by requiring it to produce more nickels.
“The logical and fiscally responsible solution isn’t to eliminate the penny but to reexamine how the Mint allocates its overhead costs and focus on reducing the cost of producing nickels,” it said in January.
What’s the case for eliminating pennies?
The anti-penny camp isn’t only excited about the potential to save the U.S. some money.
Proponents of scrapping the coin also hope it will free up the U.S. Mint to focus on higher-denomination coins, according to the Congressional Research Service.
Many also maintain that pennies aren’t getting much use these days anyway, thanks to credit cards and other forms of electronic payment. An estimated 86.9% of all transactions in the U.S. were cashless in 2024, according to CapitalOne Shopping Research.
There are also concerns about the environmental impact of penny production, given the carbon dioxide emissions, pollution and energy use associated with mining their main ingredients, zinc and copper. Another argument is that the penny’s value, especially factoring in inflation, is just too small to be useful.
“Today, the value of a penny has shrunk to the point that, if you earn more than the minimum wage, you’re losing money stopping and picking up a penny on the sidewalk,” Philip Diehl — who served as the director of the U.S. Mint under former President Bill Clinton (and supported eliminating the penny at the time) — wrote in 2015.
Diehl also noted that the U.S. has eliminated previous coins that lost their usefulness in the past, “before the coinage lobby became as powerful as it is today.” Congress discontinued the half-cent coin (and reduced the size of the cent) by passing the Coinage Act of 1857.
Have other countries punted pennies?
Those in favor of parting with pennies point out that other countries have successfully done the same.
Half a dozen European nations, most recently Estonia, have started phasing out 1- and 2-cent coins by rounding all cash transactions to the nearest 5 cents. Australia and New Zealand phased out their 1-cent coins in the 1990s, and Canada followed suit in 2012.
Canada’s mint stopped distributing pennies, though the government allows consumers to keep using them in transactions indefinitely. It also started requiring cash transactions to be rounded to the nearest 5-cent increment “in a fair and transparent manner.” The Canadian mint then set to work collecting and recycling billions of pennies.
