To suspend the production of the penny and nickel, to require the Comptroller General of the United States to carry out a study on pennies and nickels, and for other purposes.
- Bill Number
- H.R. 1270
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-02-12: Referred to the House Committee on Financial Services.
- Last Updated
- 2025-03-17T14:58:12Z
AI-Generated Summary
Purpose
This legislation, H.R. 1270, aims to reduce government spending by temporarily halting the production of one-cent coins (pennies) and five-cent coins (nickels) for a 10-year period, while requiring a study to evaluate the long-term effects. The goal is to save taxpayer money on minting costs without altering the legal status of existing coins.
Key Provisions
- Suspension of Production: The Secretary of the Treasury must stop producing pennies and nickels for general circulation starting on the date the bill is enacted, for a 10-year period.
- Exception for Collectors: Limited production continues solely for numismatic purposes (coins for collectors, not everyday use). These coins are sold under standard rules for collector items, with sales revenue covering all production costs, including fixed and variable expenses.
- Legal Tender Status: Existing pennies and nickels remain valid as legal tender (acceptable for paying debts, taxes, and other obligations), regardless of when they were made.
- Required Study: The Comptroller General of the United States (head of the Government Accountability Office, or GAO, an independent agency that audits government operations) must conduct a study within 3 years of enactment. This study, done in consultation with the Treasury Secretary, U.S. Mint Director, and Internal Revenue Service Commissioner, examines:
- The overall effects of the production suspension.
- Net financial savings to the government.
- Impacts of potentially rounding cash purchases to the nearest 10 cents (e.g., no pennies or nickels for change).
- Report to Congress: The GAO must submit a report to specified Senate and House committees (Budget and Banking/Financial Services) recommending whether to keep the suspension, end production permanently, or restart it.
Significant Changes to Existing Law
- Introduces a 10-year moratorium on producing pennies and nickels for circulation, overriding current laws that require ongoing minting to meet public demand.
- Shifts any limited production to numismatic sales only, ensuring costs are fully recovered through sales rather than taxpayer funding.
- Mandates a formal GAO study and report, which is a new oversight mechanism not previously required for these coins.
- Does not change the legal tender laws under Title 31 of the U.S. Code, preserving the value of minted coins.
Potential Impacts
- Government Agencies: The U.S. Mint and Treasury could save significant costs (estimated in billions over time due to high production expenses for low-value coins), freeing resources for other priorities. The GAO and IRS face added workload for the study.
- Citizens and Businesses: Everyday cash transactions may shift toward rounding to the nearest dime, potentially simplifying change but raising minor costs or inconveniences for consumers (e.g., slight overpayments on rounded totals). Existing coins in circulation (billions of pennies and nickels) would suffice for years, avoiding immediate shortages.
- International Relations: No direct impacts, as the bill focuses on domestic coin production and does not affect global trade or currency standards.
Main Stakeholders Affected
- U.S. Government Entities: Treasury Department, U.S. Mint (production halt affects operations), GAO (study responsibility), and congressional committees (receive report and decide future actions).
- Collectors and Numismatists: Benefit from continued limited production for hobbyist sales.
- General Public and Businesses: Retailers, consumers, and banks handling cash may adapt to fewer small-denomination coins, influencing transaction habits.
- Taxpayers: Potential savings from reduced minting costs, though indirect effects like rounding could influence small-scale economics.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces Congress's constitutional authority under Article I, Section 8 to coin money and regulate its value, without infringing on private rights. Maintains legal tender status to avoid challenges under contract or property laws.
- Constitutional: Aligns with federal powers over currency; no apparent conflicts with states' rights or individual liberties, as it does not mandate rounding (only studies it).
- Political: Could spark debate on fiscal efficiency versus tradition (pennies and nickels are iconic), consumer protection (rounding fairness), and economic equity (disproportionate effects on low-income cash users). The 10-year suspension and study provide a trial period, allowing data-driven decisions to mitigate controversy.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Schweikert, David [R-AZ-1]
Recent Actions
- 2025-02-12: Referred to the House Committee on Financial Services.
- 2025-02-12: Introduced in House
- 2025-02-12: Introduced in House
Bill Versions
- To suspend the production of the penny and nickel, to require the Comptroller General of the United States to carry out a study on pennies and nickels, and for other purposes. — issued 2025-02-12 — PDF (3 pages)