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Penny and nickel made from cheaper metal could be big change

penny042109_optBY JASON KIM
NEWJERSEYNEWSROOM.COM

The Obama administration asked Congress this week for permission to change the mix of metal which makes up pennies and nickels, within the 2013 White House budget proposal, under the umbrella of “making necessary cuts in a constrained fiscal environment” and in the effort of “modernizing the U.S. currency.”

Currently, the Treasury has “the authority to stop making the dollar coins on its own, but it can't change the mix of metals in pennies without permission," as Treasury spokesperson Matt Anderson described. The Obama Administration recently stopped the production of the $1 coin, estimated to have saved $50 million per year.

According to the administration, “a legislation to provide the Secretary of the Treasury flexibility to change the composition of coins to more cost-effective materials” would be recommended, because currently, “the cost of making the penny is 2.4 cents and the nickel is 11.2 cents.”

CNN Money reports most of the expense of the penny and the nickel lie in the labor and production, and not just the increasing cost of the natural raw materials. According to Time, the administrative costs alone adds 0.5 cents per penny, for example.

The final result, if the proposal passes, is purported to be a “change to the composition of coins for more cost-effective materials." The formula for coin materials has not changed in 30 years and is expected to save a minimum of $100 million per year, from certain estimates.

An opponent to the proposed changes, the Zinc Association, has resisted, saying: “cheaper coins could make them easier to counterfeit” as reported by Time. On the other hand, proponents of the “Digital Age” have pushed not using the two monetary mediums, all together.

The 2012 minted penny is made up of 97.5 percent zinc and 2.5 percent copper. The 2012 nickel is 25 percent nickel and the rest is made of copper, a cost saving measure enacted in 1982.

The U.S. penny has been in use since its first debuted in 1793, just 17 years after the United States emerged as an independent country. The U.S. nickel has been in circulation since 1866.

 
Comments (2)
2 Tuesday, 04 March 2014 20:07
Alan Pyle
As per article, note to the Zinc Association:
No one is going to attempt counterfeit of the penny or nickel. No one in their right mind would spend more than a penny to counterfeit a penny or more than a nickel to counterfeit a nickel.
It would be much more lucrative for counterfeiters to concentrate on the drug business.
Your feeble and unsuccessful attempt to protect your own interests with an inherently weak argument has been noted.
FAIL.
1 Sunday, 19 February 2012 23:48
MalachiJackson
The penny and nickel coins are a money pit, as both coins cost double their face value to make. That is why the Obama budget is calling for the composition of the coins to be modified to save cash, and finally deliver some change we can believe in. Article source: Obama calls for lower cost of making pennies and nickels

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