If the Government Accountability Office has its way, though, you might need a big cup to hold plenty of coins instead.
One dollar bills don’t last very long in circulation and need frequent replacement, GAO told the House Financial Services Subcommittee on Thursday.
As a result, $1 coins should replace bills, and in a recommended four-year program that could save $4.4 billion over the next 10 years.
(What’s your opinion of $1 coins instead of $1 bills? Take the survey!)
Examine the bills in your wallet. You’ll see the year that paper money was printed in the bottom-right, to the immediate left of the treasurer’s signature. It’s hard to find a $1 bill that was printed before 2000, and they only last an average of 4.7 years, GAO says.
Now scoop the coins out of your pocket and you’ll likely find some made in the 1980’s. In fact, coins typically last 30 years – over six times longer than paper $1 bills.
This reduction in printing costs isn’t the chief savings benefit, though; the net benefit of $4.4 would result from seigniorage – “the difference between the cost of producing coins or notes and their face value,” says GAO’s report.
Every paper bill costs 9.6 cents to make currently, and after a recent 50-percent increase in production costs. Producing a dollar coin would be notably less, GAO says. “It reduces government borrowing and interest costs, resulting in a financial benefit to the government.”
Many other countries know of this first-hand. When it introduced a $1 “loonie” coin over a five-year period beginning in 1987, Canada saved $450 million in comparative paper-money printing and replacement costs. It introduced a $2 “toonie” in 1996, too. And Canadians had no complaints about these dollar coins.
A $1 coin might not be so popular here in the U.S., though, and which GAO acknowledged in Thursday’s testimony.
“We realize that replacing the $1 note with the $1 coin is controversial,” GAO director Lorelei St. James said. “In fact, public opinion has consistently been opposed to the $1 coin.”
Citing a 2006 Gallup poll, St. James noted that 76 percent of Americans state opposition to $1 bill replacement by coins.
Of the $1 coins currently minted, over 40 percent are returned to the government unused, causing the U.S. Treasury to reduce their production last year.
About $8 million would need to be spent on a public promotion campaign, St. James said, should the coin-replacing-bill proposal go into effect.
The response from Subcommittee members seemed mixed, with some citing Canada’s success in switching to coin dollars, while others complained of inconveniences they could create for consumers.
The Subcommittee also seemed to focus more on the metals that would be used, not just for this $1 coin but on all U.S. coin currency, since costs of nickel and copper continue to increase.
How far the coin-switch proposal will go remains to be seen. GAO has provided the same request six times since 1990 with no success. And a House bill introduced last year to promote $1 coins – the Currency Optimization, Innovation, and National Savings (COIN) Act, introduced by Rep. David Schweikert (R-AZ) – has yet to make it out of committee. (The COIN Act has only a 4 percent chance of passing, notes Govtrack.us.)
What’s your opinion of $1 coins instead of $1 bills? Take the survey!
Dollar bill protest underway