NEW YORK — It’s still costing the U.S. government a pretty penny to make chump change. Thanks to rising metal prices, since 2006 the U.S. Mint has had to spend more money to produce and distribute nickels and pennies than the coins are actually worth.
How much more?
About 1.7 cents to make a penny and 8 cents to make a nickel, according to a new report from the U.S. Government Accountability Office.
That in turn has reduced the overall profits the federal government realizes from making and circulating new coins in the economy.
The obvious solution: Just use cheaper metals.
Simple, right? Not so much.
For one thing, the U.S. Mint hasn’t identified a metal composition cheaper than zinc, which makes up 97.5% of every penny.
Another problem is that the GAO reviewed various estimates and concluded that while the U.S. government could save some money by changing the composition of how it makes nickels, dimes and quarters, it would cost businesses more to use the newly made coinage.
That’s because any industry that relies heavily on coins — think vending machines and coin-operated laundry machines, for example — would have to change their equipment to accept the new-fangled versions.
Citing U.S. Mint estimates, the GAO noted that the government could save up to $39 million a year, depending on the changes made. That’s nothing to sneeze at, but no one should pretend those savings would have any discernible effect on the country’s annual deficits, which are counted in the hundreds of billions of dollars.
An industry group, meanwhile, estimates that changing the composition of nickels, dimes and quarters could cost businesses between $2.4 billion and $10 billion to modify coin machines.
But the GAO notes that those estimates are likely too high for a few reasons.
Among them, the industry group assumes nickels, dimes and quarters would have more steel in them. But the U.S. Mint has decided a steel quarter would be too easy to counterfeit and so has ruled that out.
Ultimately it will be up to lawmakers to decide when and if any changes should be made to current U.S. coins. There is no timeline for a decision, and the U.S. Mint has yet to make any concrete recommendations to Congress on the issue.