Congress looking at steel pennies, nickels
WASHINGTON (AP) — Further evidence that times are tough: It now costs more than a penny to make a penny. And the cost of a nickel is more than 7 1/2 cents.
Surging prices for copper, zinc and nickel have some in Congress trying to bring back the steel-made pennies of World War II, and maybe using steel for nickels, as well.
Copper and nickel prices have tripled since 2003 and the price of zinc has quadrupled, said Rep. Luis Gutierrez, D-Ill., whose subcommittee oversees the U.S. Mint.
Keeping the coin content means “contributing to our national debt by almost as much as the coin is worth,” Gutierrez said.
A penny, which consists of 97.5 percent zinc and 2.5 percent copper, cost 1.26 cents to make as of Tuesday. And a nickel — 75 percent copper and the rest nickel — cost 7.7 cents, based on current commodity prices, according to the Mint.
That’s down from the end of the 2007, when even higher metal prices drove the penny’s cost to 1.67 cents, according to the Mint. The cost of making a nickel then was nearly a dime.
Gutierrez estimated that striking the two coins at costs well above their face value set the Treasury and taxpayers back about $100 million last year alone.
A lousy deal, lawmakers have concluded. On Tuesday, the House debated a bill that directs the Treasury secretary to “prescribe” — suggest — a new, more economical composition of the nickel and the penny. A vote was delayed because of Republican procedural moves and is expected later in the week.
Unsaid in the legislation is the Constitution’s delegation of power to Congress “to coin money (and) regulate the value thereof.”
The Bush administration, like others before, chafes at that.
Just a few hours before the House vote, Mint Director Edmund Moy told House Financial Services Chairman Barney Frank, D-Mass., that the Treasury Department opposes the bill as “too prescriptive” in part because it does not explicitly delegate the power to decide the new coin composition.
The bill also gives the public and the metal industry too little time to weigh in on the new coin composition, he said.
“We can’t wholeheartedly support that bill,” Moy said in a telephone interview. Moy said he could not say whether President Bush would veto the House version in the unlikely event that it survived the Senate.
Sen. Wayne Allard, R-Colo., who is retiring at the end of the year, is expected to present the Senate with a version more acceptable to the administration in the next few weeks. The proposals are alternatives to what many consider a more pragmatic, but politically impossible solution to the penny problem: getting rid of the penny altogether.
Published in The Messenger 5.7.08