It looks like President Donald Trump has found a new target for budget cuts: the penny. In a social media post, he announced that he has instructed the Treasury Department to stop producing new pennies due to their high production cost.
“For far too long, the United States has been minting pennies that literally cost us more than two cents each. This is so wasteful!” Trump wrote. “I have instructed my Secretary of the Treasury to stop producing new pennies. Let’s cut waste from our great nation’s budget, even if it’s one penny at a time.“
While this is the first time Trump has directly mentioned the issue, his Department of Government Efficiency had already highlighted the problem last month. According to them, making a single penny costs more than three cents, and in 2023 alone, over $179 million was spent on production. In total, the U.S. Mint manufactured more than 4.5 billion pennies last year, accounting for nearly 40% of all circulating coins.
Can Trump Actually Do This?
Here’s the catch: even though Trump has given the order, the president doesn’t have the direct authority to eliminate the penny. Congress is responsible for overseeing the U.S. Mint and making decisions about coin production. In other words, for the penny to disappear, Congress would need to pass a law allowing it.
Some economists believe the Secretary of the Treasury could simply stop minting them without a law, but it’s unclear if that would be enough to retire the penny officially.
Is It a Good Idea?
The idea of getting rid of the penny isn’t new. Many economists have supported eliminating it for years, and several countries have already done so. For example, Canada stopped making pennies in 2012, and now cash transactions are rounded to the nearest nickel.
But not everyone agrees. Some groups, like “Americans for Common Sense,” argue that eliminating the penny could cause problems. They claim that without pennies, demand for nickels would increase, which could actually cost the government more since each nickel costs nearly 14 cents to produce.
How Much Does It Cost to Make a Penny?
Currently, pennies are made primarily of zinc with a copper coating. In the past, they were made of pure copper. Despite their low value, making a penny costs about 3.7 cents, meaning they are produced at a loss. In 2024, the U.S. Mint reported losing $85.3 million just from penny production.
Interestingly, nickels also cost more than their face value: each five-cent coin costs nearly 14 cents to produce.
What Happens Next?
Despite Trump’s order, nothing is set in stone yet. For the penny to officially disappear, Congress would need to take action. In the meantime, the debate over whether or not to retire it will continue.
What do you think? Should the U.S. follow other countries and say goodbye to the penny, or is it better to keep it around?
