Should Congress do away with $1 bills and replace them with $1 coins?
Some say measure would save taxpayers $4.4 billion over next 30 years
They're often referred to as "wallet fillers" - pesky $1 bills that take up space in wallets and purses that in the end, don't amount to that much. A heavy wallet is nothing to brag about if it's merely 30 $1 bills crammed together. To this end, Congress is considering doing away with the one dollar bill altogether and replacing them with dollar coins. Some say it could save taxpayers $4.4 billion over the next 30 years.
Philip Diehl, former director of the Mint, said there was a huge demand for the Sacagawea dollar coin when production began in 2001, but as time wore on, people stayed with what they knew best.
Lawmakers have since begun exploring new ways for the government to save money by changing the money itself. The Mint is preparing a report for Congress showing how changes in the metal content of coins could save money.
Fifty years ago, the U.S. made the last major metallurgical changes in coins when Congress directed the Mint to remove silver from dimes and quarters and to reduce its content in half dollar coins. Congress is currently looking at new changes in response to rising prices for copper and nickel.
At a House subcommittee hearing this week, officials examined two items: Moving to less expensive combinations of metals like steel, aluminum and zinc and gradually taking dollar bills out the economy and replacing them with coins.
The GAO's Lorelei St. James told the House Financial Services panel noted that it would take several years for the benefits of switching from paper bills to dollar coins to catch up with the cost of making the change. Equipment would have to be bought or overhauled and more coins would have to be produced upfront to replace bills as they are taken out of circulation.
The savings over the long run would begin to accrue, she said, largely because a $1 coin could stay in circulation for 30 years while paper bills have to be replaced every four or five years on average.
"We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government," St. James says. She adds that such a change would work only if the note was completely eliminated and the public educated about the benefits of the switch.
One dollar coins have traditionally proved to be unpopular. Philip Diehl, former director of the Mint, said there was a huge demand for the Sacagawea dollar coin when production began in 2001, but as time wore on, people stayed with what they knew best.
"We've never bitten the bullet to remove the $1 bill as every other Western economy has done," Diehl said. "If you did, it would have the same success the Canadians have had."
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM
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