George Washington Presidential Dollar Coin
In an effort to save around $50,000,000 annually, the Treasury Department is stopping the new minting of dollar coins. It's estimated that there are over $1.4 million of these coins currently sitting in Federal Reserve vaults, which need to be circulated to the public. The United States Mint will continue to mint dollar coins for numismatic purposes.
If you collect dollar coins, you'll still be able to continue your coin collecting endeavor with the 2012 Chester A. Arthur Dollar Coin. As of this writing a price has not been set for this numismatic coin. It will be available at the United States Mint website in the spring of 2012.
The golden dollar coin program was suspended in an effort to support President Obama's objective of cutting waste and improving efficiency throughout the government sectors.
The question is, does this really say the government money in the long term? Has the government continued to look at the cost, and compare the expenditures of producing the dollar coin versus the currently popular dollar bill?
On October 21, 1997 Congress held hearings on the United States $1 Coin Act of 1997. One of the hot issues was the topic of amending the act to phase out the U.S. One dollar bill. Here are some excerpts from that discussion.
"Rep. Jack Metcalf then began questioning Allison about these issues in more detail. Allison explained that when the United States Mint produces a dollar coin, it spends 8 cents on production costs and issues the coin into circulation at face value (100 cents), depositing the coin in the Federal Reserve for 100 cents. The 92 cents difference is seignorage, essentially profit. In the case of a dollar bill, on the other hand, the cost of producing the bill is 4 cents, and the Federal Reserve issues the bill into circulation at face value, investing the 96 cents difference in U.S. Government bonds. The interest the Federal Reserve receives goes to Federal Reserve expenses (about $2 billion), retained earnings (a few hundred million), dividends to member banks (another few hundred million); the rest goes back to the Treasury. Metcalf noted, "It seems like an arcane system that could have been invented only by somebody who was mentally deranged."
The cost of processing dollar bills is also shown to be much higher than coins at some organizations.
"Alfred A. Outlaw of the Southeastern Pennsylvania Transportation Authority then spoke in favor of eliminating the dollar bill. He explained:
The cost to process one thousand dollars worth of one dollar bills at SEPTA is approximately $10.11. The cost to process the same amount in coins is $1.22. The reason for the large difference is that handling paper currency is more labor-intensive. Coin processing is more efficient due to the higher degree of technology and availability of counting machines. I don't know of any technology that will fully process paper currency and meet the Federal Reserve's acceptance requirements that all paper currency is faced when stacked. This simply means all one dollar bills must be stacked with the portrait of George Washington facing the same direction. Therefore, our note processors must stack and face all bills by hand."
Is the government really saving $50 million a year, are losing much more in the long term by suspending the production of dollar coins?