Sens. McCain And Enzi Reintroduce Currency Optimization Measure

Posted On: 4/28/2017

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TAGS: vending, coin-op devices, bulk vending, John McCain, Mike Enzi, Currency Optimization Innovation and National Savings Act of 2017, updated COINS act, penny phaseout, dollar bill phaseout, dollar coin circulation

WASHINGTON -- Sens. John McCain (R-AZ) and Mike Enzi (R-WY) have updated the Currency Optimization, Innovation and National Savings (COINS) act and reintroduced it in the U.S. Senate as S.759. A bill of the same name had been introduced in 2012 as S.2049. | SEE STORY

As has been the case with such initiatives for more than 25 years, this one primarily is designed to save money by reducing the cost to the government of manufacturing currency.

A key provision of the bill is that, if it's passed and signed into law, the U.S. Treasury would stop printing $1 Federal Reserve notes two years after enactment. During that interval, the Board of Governors of the Federal Reserve System would make sure that there is an adequate supply of $1 coins available to meet the demand.

The $1 note would continue to circulate and would remain legal tender, but as the bills wore out, they would be destroyed.

The measure authorizes the Federal Reserve System to produce $1 notes, from time to time, in quantities sufficient for the needs of numismatic collectors.

The new COINS act also addresses the one- and five-cent coins, both of which cost more than their face value to produce. The bill would require the Secretary of the Treasury to cease production of pennies for a decade after passage, because there is an ample supply. Again, a limited quantity of pennies would continue to be produced, to meet the needs of numismatic collectors; these coins would be priced so that the net receipts from their sale would equal the cost of production. And the comptroller general of the United States would, within three years of enactment, study the effect of suspending 1¢ production and report its findings to Congress.

Regarding the five-cent coin, the act calls for the director of the U.S. Mint to modify the manufacture of the coin in accordance with a Mint analysis recommending that the coin be made with a cupronickel composition of 80% copper and 20% nickel, as long as the director (1) verifies that this change reduces costs to the taxpayer, (2) results in a coin that is "seamless" with existing production in terms of its recognition by coin validation equipment and (3) has no impact on the public or on stakeholders.

The website of Arizona's KTAR News 92.3 FM observed that legislative proposals like this one have been introduced regularly for a long time now, the first in 1991 by then-Rep. Jim Kolbe R.-AZ). The COINS act of 2017 is Sen. McCain's third attempt.

"The legislation cites 10 Government Accountability Office reports from the last two decades, all of which found benefits from switching dollar bills to dollar coins," KTAR reported. "The most recent GAO report, coupled with a March report by two former Senate economists, is where the estimate of $16 billion in savings comes from, an estimate that advocates say is conservative."