In a surprise move, President Donald Trump announced that he has directed the U.S. Treasury Department to cease minting new pennies, citing the high cost of producing the one-cent coin.
The High Cost of Pennies
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” Trump posted recently on his Truth Social platform. “I have instructed my Secretary of the U.S. Treasury to stop producing new pennies.”
The decision comes as part of the broader effort of the Trump administration to cut government spending, spearheaded by tech billionaire Elon Musk, who was appointed to lead the Department of Government Efficiency. Musk’s team has scrutinized various government expenditures, with the penny’s production cost emerging as a prime target in a social media post last month.
According to the U.S. Mint, the government lost $85.3 million in the 2024 fiscal year due to penny production, with nearly 3.2 billion pennies minted. Each penny cost approximately $0.037 to produce, a notable increase from the previous year’s $0.031. The nickel also operates at a loss, costing nearly $0.14 per coin despite its face value of $0.05.
Can Trump Halt Penny Production?
While Trump’s move is decisive, legal experts question whether he has the authority to unilaterally eliminate the penny. Coinage laws, including specifications such as size and metal content, fall under Congress’s jurisdiction. However, some scholars suggest there may be a legal gray area regarding the Treasury’s power to halt production.
Robert K. Triest, an economics professor at Northeastern University, noted that while an act of Congress is typically required to discontinue a coin officially, the Secretary of the Treasury might have the ability to stop new production. “The process of discontinuing the penny in the U.S. is a little unclear,” Triest said in Jan. “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.”
Will Congress Ever Get Rid of the Penny?
Congress has seen multiple attempts to eliminate the penny over the years, with bills proposing production suspensions, removal from circulation, or even mandatory rounding of prices to the nearest five cents. None have passed, despite support from fiscal conservatives and efficiency advocates.
The Case for Eliminating the Penny
Supporters of ending the penny argue that doing so would reduce government waste, speed up cash transactions, and align the U.S. with other developed nations that have phased out their lowest-value coins. Canada, for instance, stopped minting pennies in 2012 without significant economic disruption.
Historically, the U.S. has retired coins when their value became negligible. The half-cent coin, once a mainstay of American currency, was discontinued by Congress in 1857 when it became impractical for daily transactions.
Trump and Musk Aim to Slash $2 Trillion in Government Spending
Trump’s latest cost-cutting initiative fits into Musk’s broader mission to identify $2 trillion in federal savings by eliminating inefficiencies across government agencies. The administration has aggressively pursued streamlining efforts, with Musk leading reviews that target redundant departments and workforce reductions.
“Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” Trump declared in his Truth Social post.
While the directive is clear, its implementation may face political and legal hurdles. Congressional leaders have yet to respond formally, and it remains uncertain whether the Treasury will immediately comply or if the issue will lead to a legislative showdown.
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The complete version of this story can be found at the Associated Press.
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