Press Release: COINS Act in Senate Calls for $1 Coin Transition to Reduce Government Waste
Sens. Harkin, McCain, Coburn and Enzi Call for Elimination of $1 Bill to Save Taxpayers Billions
Washington, DC (January 31, 2011) A bipartisan group of senators led by Senator Tom Harkin (D-IA) and Senator John McCain (R-AZ) today introduced a bill to save our nation billions of dollars by eliminating the wasteful, inefficient $1 note. The Currency Optimization, Innovation and National Savings (COINS) Act calls for a transition to the more economical and environmentally friendly dollar coin, a change that the U.S. Government Accountability Office (GAO) has been advocating for more than two decades to help reduce government waste. Senators Harkin and McCain are joined in their effort by original co-sponsors, Senator Tom Coburn (R-OK) and Senator Mike Enzi (R-WY). This is a companion bill to the COINS Act in the House, HR 2977, introduced by Congressman David Schweikert (R-AZ). The House bill currently has the bipartisan support of eleven co-sponsors.
According to a report released last March by the GAO, hundreds of millions of taxpayer dollars are wasted each year by the continued use of the dollar note. The report, “Replacing the $1 Note with a $1 Coin Would Provide a Financial Benefit to the Government,” found that the transition would save the government an average of $184 million per year and approximately $5.5 billion over a 30 year period. Using more traditional assumptions in their analysis, savings could be as high as $11.1 billion. This was the fifth report the GAO has issued on the benefits of transitioning to the dollar coin, dating back to 1990. Estimates of annual cost savings in previous reports have been as high as $522 million.
“Everyone keeps talking about our debt crisis and we are all concerned about the deficit and government debt. We are certain that this White House and this Congress will take a serious look at the huge savings in the COINS Act,” said honorary chairman and former Congressman Jim Kolbe. “We think the introduction of this legislation in the Senate, together with the earlier introduction in the House, is a big step forward toward the passage of this cost-saving, currency modernization legislation.”
In December, the White House announced the end of the $1 coin program, claiming savings of $50 million per year over five years as compared to billions in savings by eliminating the $1 note. The decision also ignored the fact that the United States Mint is largely reliant on the $1 coin to operate profitably. In 2011, the $1 coin was responsible for 110% of the Mint’s circulating coin program profit and 73% of the Mint’s profit overall. If the Administration’s concern is reducing waste in our $1 currency supply, the smart solution is to eliminate the antiquated $1 bill.
“No stone should be left unturned in the fight for government savings,” added Kolbe. “Eliminating the $1 bill is a simple, easy way to pay down government debt without raising a single tax or cutting a single program.”
The COINS Act would require Federal Reserve Banks to stop issuing the $1 note four years after enactment of the legislation or when circulation of $1 coins exceeds 600 million annually – whichever comes first. This measure is necessary based on the experience of every country that has successfully transitioned to a low denomination coin. As the GAO reported, eliminating the dollar note was “essential to the success of [the] transition” to dollar coins in other countries. A January 2011 poll conducted by the Tarrance Group and Hart Research found that Americans favor the transition to a dollar coin by a two-to-one margin once the potential government savings are explained. This is consistent with public opinion findings reported previously by the GAO.
While dollar bills last only a few years, according to the GAO’s latest estimate, a $1 coin can remain in circulation for more than 30 years. This means a single dollar coin can replace up to 17 dollar notes during its lifetime. Additionally, while billions of dollar notes are shredded and sent to landfills each year, $1 coins are 100 percent recyclable – meaning that even after coins are pulled from circulation, they can be melted down and forged into new coins. The private sector also stands to benefit from a dollar coin transition. Jammed dollar bills in vending machines cost the industry hundreds of millions in annual repair costs and lost sales. Evidence from the transit industry indicates that it is six times less expensive for businesses with high levels of cash transactions to process $1 coins versus $1 bills.
The Dollar Coin Alliance is a coalition of American small businesses, budget watchdogs, trade associations and private companies with a singular focus of moving the United States toward an economical, environmentally friendly dollar coin. Members include Citizens Against Government Waste, the International Association of Machinists, the National Bulk Vendors Association, Southeastern Pennsylvania Transportation Authority, Tri-State Automatic Merchandising Council and United Steelworkers.
For more information, or to get involved, please visit www.DollarCoinAlliance.org.