The deficit-cutting super committee may try to scrap the greenback, in the hopes that Americans will finally embrace the little-loved dollar coin
Americans have pointedly rejected $1 coins for decades, but that was when they could pay with a greenback instead. Now a new proposal to phase out the dollar bill in favor of a new $1 coin is afoot. The congressional "super committee" charged with slashing the deficit says that such a move would save the government about $5.6 billion over 30 years, citing a Government Accountability Office estimate. Is it really time to kill the bill? Here's what you should know:
How would switching to coins save money?
It would actually cost more money at first: It costs about 15 cents to mint a $1 coin, versus 3 cents to print a bill. But since coins last at least 30 years — roughly ten times the lifespan of a bill — the government would have to spend a lot less money replacing currency over the long haul.
Would $5.6 billion really make such a big difference?
The super committee is struggling to cut $1.5 trillion, so yes, $5.6 billion would only be a small slice of the pie. But "you're not going to find that kind of savings that involves no tax increase and no cut to anybody's program," says former Rep. Jim Kolbe (R-Ariz.), a longtime coin advocate. It's a no-brainer, says the Wisconsin State Journal in an editorial. "If our dysfunctional Congress can't do something this easy to save money, how will it ever tackle our nation's soaring budget deficits and federal debt?"
Who wants to save the greenback?
Paper and ink manufacturers and armored car companies, largely. They and others have banded together to form Americans for George, a group fighting congressional efforts to kill the dollar bill. The group's ally on the super committee is Sen. John Kerry (D-Mass.), whose state is home to Crane & Co., maker of the special paper used to print money. Kerry has introduced a bill to do away with the unpopular $1 coins. "A nation's currency is more than just paper," says Tom Ferguson of Americans for George. "It is iconic. It is emblematic. It signifies the economy."
Who wants to rid us of the $1 bill?
The aptly named Dollar Coin Alliance, which includes mining interests, vending machine companies, and the United Steelworkers Union. Their ally on the super committee is Rep. Jeb Hensarling (R-Texas), who backs a bill by Rep. David Schweikert (R-Ariz.) that would replace the quarter-like Susan B. Anthony dollar with a new $1 coin and phase out the greenback over four years, if not sooner. "My fixation is, it's $184 million a year" in savings, says Schweikert. "You can't get around the math."
Would Americans finally accept a $1 coin?
Not according to a nationwide poll sponsored by, well, Americans for George. The telephone poll of 800 likely voters found that 77 percent find the greenback more convenient than the dollar coin, 75 percent think the dollar coin is unnecessary, and only 28 percent say it's environmentally friendly, versus 49 percent who say the $1 bill is green. "The transition would certainly be difficult," says Josh Sanburn at TIME. And if the $1.1 billion in unused $1 coins sitting in Federal Reserve vaults are any indication, it may be impossible. That said, Canada successfully switched from dollar bills to dollar coins in 1987 and has never looked back.
Are there other proposals?
There sure are. Why stop at the dollar bill? asks the Los Angeles Times in an editorial. We lose about $70 million a year minting 7 billion pennies, so let's get rid of that "copper-clad anachronism." And the nickel is "an even bigger loser, costing up to 9 cents each to produce." While we're at it, says HyperVocal, why not "consider introducing $5 and $10 coins? Heck, why don't we just get rid of paper currency altogether seeing as we've pretty much become a plastic currency country anyway."
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