Business

Congress looks at doing away with the $1 bill

WASHINGTON— American consumers have shown about as much appetite for the $1 coin as kids do their spinach. They may not know what’s best for them either. Congressional auditors say doing away with dollar bills entirely and replacing them with dollar coins could save taxpayers some $4.4 billion over the next 30 years.

Vending machine operators have long championed the use of $1 coins because they don’t jam the machines, cutting down on repair costs and lost sales. But most people don’t seem to like carrying them. In the past five years, the US Mint has produced 2.4 billion Presidential $1 coins. Most are stored by the Federal Reserve, and production was suspended about a year ago.

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The latest projection from the Government Accountability Office on the potential savings from switching to dollar coins entirely comes as lawmakers begin 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.

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The last time the government made major metallurgical changes in US coins was nearly 50 years ago when Congress directed the Mint to remove silver from dimes and quarters and to reduce its content in half dollar coins.

At a House subcommittee hearing this week, the focus was on two approaches:

 Moving to less expensive combinations of metals.

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 Gradually taking dollar bills out of the economy and replacing them with coins.

The GAO’s Lorelei St. James told the House Financial Services panel 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.

But over the years, the savings 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.

Even the $1 coin’s most ardent supporters recognize that they haven’t been popular. Philip Diehl, former director of the Mint, said, ‘‘We’ve never bitten the bullet to remove the $1 bill as every other Western economy has done. If you did, it would have the same success the Canadians have had.’’

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