President Donald Trump has ordered a halt to the production of new pennies, a move he asserts will curb "wasteful" government spending. The U.S. Mint currently spends 3.69 cents to produce each penny, a cost that has exceeded the coin's face value for 19 consecutive years. Trump announced this decision on Truth Social, emphasizing the need to eliminate inefficiencies in the national budget, even at the level of a single penny.
"For far too long the United States has minted pennies which literally cost us more than 2 cents," – President Donald Trump
The halt in penny production is poised to create a situation that may compel Congress to intervene. Despite federal law granting the Treasury Secretary the authority to mint and issue coins as needed, the U.S. Constitution entrusts Congress with the exclusive power to regulate coinage. This complex legal framework could lead to significant deliberations among policymakers.
Financial experts forecast varied outcomes from this decision. Jaret Seiberg of TD Cowen suggests that the production halt is likely to withstand judicial review and could result in a shortage of pennies. Seiberg also notes that the move might accelerate the transition toward electronic payments, potentially benefiting companies like Visa and MasterCard.
"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 nation's budget, even if it's a penny at a time," – President Donald Trump
The decision also draws attention to the production costs of other coins. The U.S. Mint spends 13.78 cents to manufacture each nickel, raising questions about the broader implications for coin production in the United States. As the cost of minting pennies has remained above their face value for nearly two decades, Trump's directive reflects a strategic shift to address these financial disparities.