Should the U.S. Mint be Allowed to Change the Metal Composition of Coins? (H.R. 7995)

What is H.R. 7995?

(Updated June 22, 2021)

This bill would authorize the United States Mint to modify the metallic composition of circulating coins if a study and analysis conducted by the Mint indicates that doing so would reduce costs to taxpayers, be seamless, and have a minimal adverse impact on the public and stakeholders.

Under this legislation, the Mint could prescribe reasonable manufacturing tolerances with respect to the production of coins. A “seamless” change would be determined by verifying that coins would continue to work interchangeably in most coin acceptors using electromagnetic signature technology.

The Mint would be required to notify Congress before making any modifications to coins and to provide a justification for any modifications.

This bill’s full title is the Coin Metal Modification Authorization and Cost Savings Act of 2020.

Argument in favor

It doesn’t make economic sense for the U.S. Mint to spend more producing pennies and nickels than these coins are worth. Allowing the Mint to change coins’ composition could save the federal government money and relieve the coin shortage prompted by COVID-19.

Argument opposed

The U.S. Mint hasn’t found a new alternative composition for pennies yet, so this legislation won’t have an immediate effect on coins’ composition even if enacted. Changing coins’ composition could be difficult and expensive, so the costs may outweigh the savings, at least in the short term.

Impact

Coins; composition of coins; and the U.S. Mint.

Cost of H.R. 7995

A CBO cost estimate is unavailable. However, the U.S. Mint estimates that adjusting the metal content of coins could save the federal government $10-17 million annually.

Additional Info

In-Depth: Sponsoring Rep. Mark Amodei (R-NV) introduced this bill to save taxpayer money by allowing the U.S. Mint to modify coins’ metallic composition. In a series of tweets on August 12, 2020, Rep. Amodei explained:

“[I] teamed up with Rep. Josh Gottheimer (D-NJ) to intro the Coin Metal Modification Authorization & Cost Savings Act, a common-sense and balanced approach that will save hardworking taxpayers millions of dollars annually by allowing the @usmint to modify the metallic composition of coins. In fact, the @USGAO has even recommended Congress take this approach, stating “the Mint might not be producing coins as cost-effectively as possible. Now more than ever, we must continue looking for solutions that ensure the most responsible use of your hard-earned taxpayer dollars, & this bill does so in a balanced, bipartisan, and efficient way.”

Sen. Maggie Hassan (D-NH), sponsor of this bill’s Senate companion, says:

“By tweaking the metal composition of our coins, the U.S. Mint could, in the short term, create more coins amid a temporary shortage and, in the long term, save millions of dollars every year without any significant changes to the coins’ weight or appearance. Given the severe strain that the COVID-19 pandemic has put on families and our economies, people and businesses cannot afford to literally be short-changed because there simply aren’t enough coins out in circulation. This is fiscally responsible and commonsense legislation, and I hope my colleagues will join Senator Enzi and me in moving this bill forward.”

In the past, the Coin Laundry Association (CLA) opposed efforts to change coins’ composition on the basis of concerns about the prohibitive cost — which could potentially reach hundreds of millions of dollars — of replacing every coin drop and coin slide in the laundromat industry. 

However, in this iteration of the legislation, CLA President CEO Brian Wallace worked with legislative staff for Rep. Amodei and Sen. Hassan, expressing the laundromat industry’s concerns over changes to coin composition. After reaching out to the legislative staff and the U.S. Mint, the CLA’s concerns were assuaged with the addition of language requiring industry stakeholder engagement and that any composition changes be “seamless.” With these changes, Wallace said in October 2020:

“There doesn’t appear to be an imminent threat to the quarter. The CLA has been talking directly with the offices of the cosponsors of the legislation, and we are working with other trade groups that also are invested in making sure any changes to coins aren’t disruptive to our respective industries. The language of the bill has been amended in such a way that we are comfortable with it and in a position to support it.”

This legislation has three bipartisan House cosponsors, including two Republicans and one Democrat. Its Senate companion, sponsored by Sen. Maggie Hassan (D-NH), has two Republican House cosponsors. As of November 1, 2020, neither bill had received a committee vote.

Of Note: Congress and the Mint have reviewed coin composition a number of times over the years. These reviews have been prompted by the fact that the production cost of some coins, including the cost of the raw materials, exceeds the face value of these coins’ denominations.

In fiscal year 2018, the costs for producing U.S. coins were as follows:

• 2.06 cents per penny
  
• 7.53 cents per nickel
• 3.73 cents per dime
• 8.87 cents per quarter

The U.S Mint’s research and development experts have been working to develop alternative compositions to replace those currently in use. Part of the goal is to find cheaper compositions, particularly for the two lowest denominations. However, as of 2019, Mint officials had not identified an alternative composition that would reduce the cost of producing and distributing the penny to less than face value.

Media:

• Sponsoring Rep. Mark Amodei (R-NV) Tweets
  
• Sen. Maggie Hassan (D-NH) Press Release
  
• Coin Laundry Association
  
• Coin World