The buck stops here: Americans show no desire to swap dollar notes for coins even if it save U.S. taxypayers billions
17:01 GMT, 30 November 2012
American consumers have shown little desire for a proposal to replace dollar bills with $1 coins, even though the move could save taxpayers billions.
Congressional auditors say scrapping dollar bills entirely in favour of dollar coins could save up to $4.4billion over the next three decades.
Vending machine operators have long championed the use of $1 coins because they don’t jam the machines, cutting down on repair costs and lost sales.
But most people don’t seem to like carrying them.
Take note: American consumers have shown little desire for a proposal to replace dollar bills with $1 coins, even though it could save the economy billions
Money saver: Congressional auditors say scrapping dollar bills entirely in favour of dollar coins could save taxpayers up to $4.4billion over the next three decades
In the past five years, the U.S. Mint has produced 2.4billion Presidential $1 coins.
Most are stored by the Federal Reserve, and production was suspended about a year ago.
The Mint is preparing a report for Congress showing how changes in the metal content of coins could save money.
last time the government made major changes in the make-up of U.S. coins
was nearly 50 years ago when Congress directed the Mint to remove
silver from dimes and quarters and to reduce its content in half dollar
Now, the body is looking at new changes in response to rising
prices for copper and nickel.
At a House subcommittee hearing yesterday, the focus was on two ways of saving money. The first involves moving to less expensive combinations of metals like steel, aluminum and zinc and the second is taking dollar bills out the economy and replacing them with coins.
The GAO’s Lorelei St. James told the House Financial Services panel it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change.
Equipment would have to be bought or overhauled and more coins would have to be produced upfront to replace bills as they are taken out of circulation.
But over the years, the savings would begin to accrue, she said, largely because a $1 coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average.
'We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government,' said St. James, who added that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.
Heritage: Dollar bills are proud U.S. tradition here President Bush holds some up during a stop at a Dunkin' Donuts restaurant in
Even the $1 coin’s most ardent
supporters recognise that they haven’t been popular.
former director of the Mint, said there was a huge demand for the
Sacagawea dollar coin when production began in 2001, but as time wore
on, people stayed with what they knew best.
never bitten the bullet to remove the $1 bill as every other Western
economy has done,'
Diehl said. 'If you did, it would have the same
success the Canadians have had.'
Republican Bill Huizenga affirmed that Canadians have embraced their
dollar coins. 'I don’t know anyone who would go back to the $1 and $2
bills,' he said.
That sentiment was not shared by some of his fellow subcommittee members when it comes to the U.S. version.
Democrat Lacy Clay said men don’t like carrying coins in their pockets or in their suits, while fellow Democrat Carolyn Maloney said the $1 coins have proved too hard to distinguish from quarters.
'If the people don’t want it and they don’t want to use it,' she said, 'why in the world are we even talking about changing it'
'It’s really a matter of just getting used to it,' said Diehl, the former Mint director.
Several lawmakers were more intrigued with the idea of using different metal combinations in producing coins.
The Mint’s report, which is due in mid-December, will detail the results of nearly 18 months of work exploring a variety of new metal compositions and evaluating test coins for attributes such as hardness, resistance to wear, availability of raw materials and costs.
Richard Peterson, the Mint’s acting director, declined to give lawmakers a summary of what will be in the report, but he said 'several promising alternatives' were found.