President Donald Trump doesn’t ever need a penny to offer his thoughts, and on Sunday during the Super Bowl, he shared his on the penny.
“For far too long the United States has minted pennies which literally cost us more than 2 cents,” Trump posted on his social media site Truth Social. “This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nations budget, even if it’s a penny at a time.”
It’s not the first time politicians have mulled the reform of the one-cent coin. “Anytime we’re spending more money on something that people don’t actually use, that’s an example of something we should probably change,” President Barack Obama said in 2013. A number of attempts to do that have been made in Congress—in 1989, legislation was introduced to round cash transactions to the nearest nickel; as recently as 2023, bills to change the composition of coins to cheaper materials have been introduced—but all have failed.
The debate over the penny has reemerged amid the Trump Administration’s focus on cost-cutting, with the Elon Musk-led Department of Government Efficiency posting about it on X during the first week of Trump’s second term.
But does making cents really make no sense? Here’s what to know.
Every penny counts: facts about the one-cent coin
The penny was one of the first coins the U.S. Mint made shortly after its establishment in 1792. Once larger and made of pure copper, the penny has since been downsized to three-quarters of an inch and is now 97.5% zinc and plated with copper. (In 1943, pennies were temporarily made of steel with zinc plating, because copper was needed for military production during World War II.) Because of the value of the materials, today it remains illegal to export or melt one-cent and five-cent coins.
The U.S. Mint, which manufactures currency coinage by Congress’ authorization, produces pennies in Philadelphia and Denver, and the penny remains the highest share of coins minted. An estimated 240 billion are in circulation, according to a 2024 New York Times Magazine article. In 2024, some 3.2 billion pennies were minted—more than 57% of all 5.61 billion coins produced last year.
A penny saved is a penny earned: arguments for eliminating the one-cent coin
The main argument against the penny is the one made by Trump: it costs more to make than its value. A 2024 U.S. Mint report says the unit cost for the one-cent coin is more than 3.69 cents and has exceeded its face value for 19 years. And according to a 2014 U.S. Mint report: “There are no alternative metal compositions that reduce the manufacturing unit cost of the penny below its face value.”
Producing pennies also takes a toll on the environment due to the carbon dioxide emissions, pollutants, and energy use associated with mining the ores to make the coins.
But even costs aside, Harvard economist N. Gregory Mankiw argued against the one-cent coin on the basis of its lack of everyday utility, writing in a 2006 Wall Street Journal editorial: “The purpose of the monetary system is to facilitate exchange, but I have to acknowledge that the penny no longer serves that purpose. When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful. I know that some people will be upset when their favorite aphorisms become anachronistic, but a nickel saved is also a nickel earned.”
Indeed, according to the Federal Reserve, the purchasing power of a penny declined more than 30-fold between 1900 and 2022. In 2015, former U.S. Mint Director Philip N. Diehl wrote, “Today, the value of a penny has shrunk to the point that, if you earn more than the minimum wage, you’re losing money stopping and picking up a penny on the sidewalk.”
A penny wise, a pound foolish: arguments against eliminating the one-cent coin
Not everyone is on board with pinching the penny. Mark Weller, executive director of the pro-penny group Americans for Common Cents (ACC), responded to DOGE on Jan. 23, asserting that the government “won’t save money if the penny is eliminated” and that such a move would instead “have a massive negative impact on the US Mint’s cost structure.” The group argues that eliminating the penny would require producing more nickels to “fill the gap in small-value transactions.” But nickels suffer from a similar “seigniorage” problem: the 2024 U.S. Mint report said the five-cent coins have a unit cost of 13.78 cents each.
ACC also points to polling that shows Americans generally favor keeping the penny in circulation. (Other polls, however, say otherwise). And even the anti-penny comedian John Oliver can’t deny the sentimental value of chucking a penny into a fountain to make a wish or spitefully paying someone in a stash of one-cent coins.
Other arguments against the elimination of the penny come from economists who say that eliminating the one-cent coin would have disproportionate impacts on the poor. Retired Pennsylvania State University Prof. Raymond Lombra, a former senior staff economist at the Federal Reserve Board, has argued that a resultant “rounding tax” on consumers who use cash would be regressive because the poor tend to use cash more. An economics student in Canada, which stopped minting one-cent coins in 2012, found in 2017 that rounding “imposes a tax of $3.27 million Canadian dollars from consumers to grocery stores on a yearly basis.”
Some defenders of the penny also point to charities, which have historically been able to collect huge sums of coins because of how easy many people find they are to give away, though according to the New York Times, charitable “roundups” on credit card transactions can be even more lucrative.
The penny dropped: precedent for eliminating small coins
If the Trump Administration succeeds in tossing out the penny, the one-cent coin would not be the first low-denomination coin to be discontinued in the U.S.: Congress ordered a stop to minting the half cent coin in 1857.
Outside the U.S., many countries have already eliminated their one-cent and other low-denomination coins for various reasons. Australia removed both its one-cent and two-cent coins from circulation in 1992. South Africa stopped the minting and distribution of one-cent and two-cent coins in March 2002. Singapore’s Monetary Authority stopped issuing one-cent coins from April 2002, though existing one-cent coins remain legal tender. And in January, Estonia became the latest E.U. nation—joining Finland, the Netherlands, Ireland, Italy, Belgium, and Slovakia—to phase out the use of one- and two-cent Euro coins by rounding cash transactions to the nearest five cents.
The post Trump Says Minting U.S. Pennies Is ‘Wasteful.’ Does Making Cents Really Make No Sense? appeared first on TIME.
