Eliminating the Humble Penny

Eliminating the Humble Penny

Elimination of the Lowly Penny

President Trump campaigned on a promise to make the federal government more efficient by reducing fraud, waste, and abuse. While many of those proposals stalled or were never implemented, one initiative did move forward: ending the production of the one‑cent coin.

The decision to stop minting the penny is long overdue. The penny has lost nearly all practical value in everyday commerce, yet it continues to cost taxpayers more to produce than it is worth. The result is a small but persistent drain on public resources that serves little economic purpose in a largely digital economy.

The Penny Costs Too Much to Mint

According to the U.S. Mint, the cost of producing and distributing a single penny has risen steadily over the past decade. By fiscal year 2024, each penny cost approximately 3.69 cents to manufacture—nearly four times its face value. In that year al

One, the Mint produced more than 3.2 billion pennies, resulting in a loss exceeding $85 million. Treasury officials estimate that halting penny production will generate annual savings of roughly $56 million in reduced material and manufacturing costs. [home.treasury.gov], [apnews.com]

In late 2025, the Treasury Department confirmed that the U.S. Mint had placed its final order for penny blanks and would stop producing new one‑cent coins once those supplies were exhausted. Pennies already in circulation—estimated at over 100 billion coins—remain legal tender and will continue to circulate until they naturally fall out of use. [home.treasury.gov], [apnews.com]

The case against the penny is not new. Economists have argued for decades that its purchasing power has eroded to the point of irrelevance. Businesses and consumers spend time counting, storing, transporting, and managing pennies that add little value to transactions. The costs are not just borne by the Mint but by retailers, banks, and consumers across the economy.

Eliminating the penny does not mean eliminating cents altogether. As seen in other countries, cash transactions can be rounded to the nearest five cents, while electronic payments continue to be processed to the exact amount. Canada adopted this approach in 2013, as did Australia and New Zealand earlier, with little evidence of sustained inflationary effects. Rounding rules typically balance out over time, with amounts rounded both up and down. [deloitte.com], [govmint.com]

The penny is also not the only U.S. coin that costs more to produce than it is worth. The nickel is even more expensive, costing nearly 14 cents to mint while retaining a face value of five cents. aIn contrast, dimes and quarters still cost less than their face value, though their production costs have also increased. [apnews.com]

This raises a broader question: should the United States continue minting low‑denomination coins at all?

One proposal would be for the federal government to cease minting circulating coins entirely and provide a defined transition period—such as one year—during which Americans could exchange coins for paper currency or deposits through financial institutions or coin‑counting services. After that period, coins would remain legal tender but would no longer be produced or actively distributed.

Such a transition would require careful coordination with states, retailers, and the banking system, particularly around sales‑tax calculations and cash‑handling practices. However, the experience of other countries suggests that these challenges are manageable and temporary.

Ending the production of the penny will not, by itself, balance the federal budget or transform public finances. But it does represent a small, concrete step toward aligning government operations with economic reality. When a coin costs more to make than it is worth, continuing to produce it is not thrift—it is inertia.

Sometimes efficiency really does begin with small change.

Endnotes

1. U.S. Department of the Treasury, Penny Production Cessation FAQs, December 23, 2025. [home.treasury.gov]
2. U.S. Mint, Penny FAQs, January 2026. [usmint.gov]
3. AP News, “The penny costs nearly 4 cents to make,” May 23, 2025. [apnews.com]
4. AP News, “US Mint moves forward with plans to kill the penny,” May 22, 2025. [apnews.com]
5. Deloitte, Discontinuing the Penny: Lessons, Legalities, and Practicalities, March 11, 2026. [deloitte.com]
6. GovMint, “How Many Countries Have Already Abolished the Penny?”, February 15, 2026. [govmint.com]

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